Cwalt Inc – ‘424B5’ on 11/1/05 re: Countrywide Home Loans 2005-J12

On:  Tuesday, 11/1/05, at 11:25am ET   ·   Accession #:  1125282-5-5624   ·   File #s:  333-125902, -29

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Prospectus   —   Rule 424(b)(5)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B5       Prospectus Supplement and Base                       219   1.28M 

Document Table of Contents

424B5
1st Page of 219
TOC
↑Top
Previous
Next
↓Bottom
Just 1st
 
PROSPECTUS SUPPLEMENT                                                           
(TO PROSPECTUS DATED OCTOBER 25, 2005)                                          

$604,102,100
(APPROXIMATE) 

CWALT, INC. 
DEPOSITOR 

 [Countrywide Home Loans LOGO]
Seller

Countrywide Home Loans Servicing LP 
Master Servicer 

Alternative Loan Trust 2005-J12 
Issuer

Mortgage Pass-Through Certificates, Series 2005-J12 
Distributions payable monthly, beginning November 25, 2005

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

The following classes of certificates are being offered pursuant to this        
prospectus supplement and the accompanying prospectus:                          

                                                        [Enlarge/Download Table]


                                             INITIAL CLASS      PASS-THROUGH                     INITIAL CLASS       PASS-THROUGH
                                          CERTIFICATE BALANCE       RATE                      CERTIFICATE BALANCE        RATE    
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                 
Class 1-A-1                                  $ 57,129,000         Variable      Class A-R         $       100            N/A     
---------------------------------------------------------------------------------------------------------------------------------
Class 1-A-2                                  $ 36,311,000          5.265%       Class 1-M-1       $ 3,030,000           5.676%   
---------------------------------------------------------------------------------------------------------------------------------
Class 1-A-3                                  $  7,467,000          5.574%       Class 1-M-2       $ 2,410,000           5.975%   
---------------------------------------------------------------------------------------------------------------------------------
Class 1-A-4                                  $ 13,776,000          5.853%       Class 1-M-3       $   964,000           6.250%   
---------------------------------------------------------------------------------------------------------------------------------
Class 1-A-5                                  $ 13,795,000          5.415%       Class 1-B-1       $ 1,377,000           6.250%   
---------------------------------------------------------------------------------------------------------------------------------
Class 1-A-6                                  $    522,000          5.853%       Class 2-M-1       $21,209,000          Variable  
---------------------------------------------------------------------------------------------------------------------------------
Class 2-A-1                                  $337,383,000         Variable      Class 2-M-2       $14,139,000          Variable  
---------------------------------------------------------------------------------------------------------------------------------
Class 2-A-2                                  $ 50,000,000         Variable      Class 2-B-1       $ 9,190,000          Variable  
---------------------------------------------------------------------------------------------------------------------------------
Class 2-A-3                                  $ 14,921,000         Variable      Class 2-B-2       $ 4,713,000          Variable  
---------------------------------------------------------------------------------------------------------------------------------
Class 2-A-4                                  $ 15,766,000         Variable                                                       
---------------------------------------------------------------------------------------------------------------------------------

The pass-through rates for the Class 1-A-1, Class 2-A-1, Class 2-A-2, Class     
2-A-3, Class 2-A-4, Class 2-M-1, Class 2-M-2, Class 2-B-1 and Class 2-B-2       
Certificates may adjust monthly and are calculated as described in this         
prospectus supplement under "Description of the Certificates -- Distributions --
Distributions of Interest." The pass-through rates for the offered certificates 
will be subject to an interest rate cap. The pass-through rates for the offered 
certificates will be subject to increase after the first possible optional      
termination date. The Class A-R Certificates are principal only certificates and
will not bear interest. See "Description of the Certificates -- Distributions --
Distributions of Interest" in this prospectus supplement.                       

The assets of the trust will consist primarily of a pool consisting of two      
loan groups: one group will consist of fixed-rate mortgage loans and the other  
group will consist of conventional hybrid adjustable-rate mortgage loans, all   
of which are secured by first liens on one- to four-family residential          
properties and have stated terms to maturity of up to 30 years.                 

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND    
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES   
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE      
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY       
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.                           

Countrywide Securities Corporation will offer the classes of certificates       
listed above (other than the Class A-R Certificates) to the public at varying   
prices to be determined at the time of sale. The proceeds to the depositor      
from the sale of the offered certificates are expected to be approximately      
$619,290,695, plus accrued interest with respect to the fixed rate              
certificates, before deducting expenses. The offered certificates will be       
purchased by Countrywide Securities Corporation on or about October 28, 2005.   
See "Method of Distribution" in this prospectus supplement. The offered         
certificates will be available for delivery to investors in book-entry form     
through the facilities of the Depository Trust Company, Clearstream,            
Luxembourg and the Euroclear System. The Class A-R Certificates will not be     
purchased by Countrywide Securities Corporation but, instead, will be           
transferred to Countrywide Home Loans, Inc. on or about October 28, 2005 as     
partial consideration for the sale of the mortgage loans to the depositor, See  
"Method of Distribution" in this prospectus supplement.                         

COUNTRYWIDE SECURITIES CORPORATION

October 26, 2005                                                                

CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE S-8 IN THIS PROSPECTUS    
SUPPLEMENT AND ON PAGE 5 IN THE PROSPECTUS                                      

424B5
2nd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 2nd
TABLE OF CONTENTS                         

PROSPECTUS SUPPLEMENT                             PAGE                          
---------------------                             ----                          
Summary............................................S-3                          
Risk Factors.......................................S-8                          
The Mortgage Pool.................................S-18                          
Servicing of the Mortgage Loans...................S-51                          
Description of the Certificates...................S-56                          
Yield, Prepayment and                                                           
Maturity Considerations.......................S-95                      
Use of Proceeds..................................S-109                          
Material Federal Income                                                         
Tax Consequences.............................S-109                      
Other Taxes......................................S-113                          
ERISA Considerations.............................S-113                          
Method of Distribution...........................S-115                          
Legal Matters....................................S-115                          
Ratings..........................................S-115                          
Index of Defined Terms...........................S-117                          
Annex I............................................I-1                          

PROSPECTUS                                       PAGE                           
----------                                       ----                           
Important Notice About Information in                                           
This Prospectus and Each Accompanying                                     
Prospectus Supplement............................4                        
Risk Factors........................................5                           
The Trust Fund.....................................12                           
Use of Proceeds....................................22                           
The Depositor......................................23                           
Mortgage Loan Program..............................23                           
Description of the Certificates....................25                           
Credit Enhancement.................................38                           
Yield and Prepayment Considerations................42                           
The Pooling and Servicing Agreement................43                           
Certain Legal Aspects of the Mortgage Loans........57                           
Material Federal Income Tax Consequences...........64                           
Other Tax Considerations...........................88                           
ERISA Considerations...............................88                           
Legal Investment...................................91                           
Method of Distribution.............................92                           
Legal Matters......................................93                           
Financial Information..............................93                           
Rating.............................................94                           
Index to Defined Terms.............................95                           

 S-2

424B5
3rd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 3rd
 SUMMARY

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

OFFERED CERTIFICATES                                                            

Alternative Loan Trust 2005-J12 will issue twenty-three classes of certificates,
nineteen of which are being offered by this prospectus supplement and the       
accompanying prospectus. The assets of the trust fund that will support both the
offered certificates and other classes of certificates will consist, on the     
closing date, of a pool of mortgage loans with an aggregate stated principal    
balance of approximately $609,069,154 as of October 1, 2005, and certain other  
property and assets described in this prospectus supplement.                    

The mortgage pool consists of two loan groups. Loan group 1 will consist of     
conventional fixed-rate mortgage loans with maturities of up to 30 years secured
by first liens on one- to four-family residential properties and are expected to
have an aggregate stated principal balance of approximately $137,738,406 as of  
the cut-off date. Loan group 2 will consist of mortgage loans with maturities of
up to 30 years secured by first liens on one- to four-family residential        
properties and that either generally (i) adjust monthly, semi-annually or       
annually or (ii) have fixed mortgage rates for approximately 1, 6, 12, 24, 36,  
60 or 84 months after the date of origination of each mortgage loan before the  
mortgage rates become subject to adjustment monthly, semi-annually or annually, 
in each case based on a specified index. Loan group 2 is expected to have an    
aggregate stated principal balance of $471,330,748 as of the cut-off date.      

Generally:                                                                      

o    the Class 1-A-1, Class 1-A-2, Class 1-A-3, Class 1-A-4, Class 1-A-5, Class 
   1-A-6, Class 1-M-1, Class 1-M-2, Class 1-M-3 and Class 1-B-1 Certificates
  (we sometimes refer to these certificates as the "group 1 certificates")
will be backed by the cashflows from the group 1 mortgage loans, and  

o    the Class 2-A-1, Class 2-A-2, Class 2-A-3, Class 2-A-4, Class 2-M-1, Class 
2-M-2, Class 2-B-1 and Class 2-B-2 Certificates (we sometimes refer to
 these certificates as the "group 2 certificates") will be backed by the
cashflows from the group 2 mortgage loans.                            

For a more detailed description of how the offered certificates will be backed  
by these cashflows, see "Description of the Certificates--Distributions" and    
"--Overcollateralization Provisions."                                           

The following chart lists certain characteristics of the classes of the offered 
certificates. The classes of certificates listed below will not be offered      
unless they receive the respective ratings at least as high as those set forth  
below by Standard & Poor's Ratings Services, a division of The McGraw-Hill      
Companies, Inc. ("S&P") and by Moody's Investors Service, Inc. ("MOODY'S"):     

MOODY'S                 
CLASS      S&P RATING    RATING         TYPE                              
------------  ----------- ----------- ----------------                          
Class 1-A-1      AAA         Aaa      Senior/Floating                           
        Pass-Through
Rate
Class 1-A-2      AAA         Aaa      Senior/Fixed                              
        Pass-Through
Rate
Class 1-A-3      AAA         Aaa      Senior/Fixed                              
        Pass-Through
Rate
Class 1-A-4      AAA         Aaa      Senior/Fixed                              
        Pass-Through
Rate
Class 1-A-5      AAA         Aaa      Senior/NAS/Fixed                          
        Pass-Through
Rate
Class 1-A-6      AAA         Aaa      Senior/Fixed                              
        Pass-Through
Rate
Class 2-A-1      AAA         Aaa      Senior/Floating                           
        Pass-Through
Rate
Class 2-A-2      AAA         Aaa      Senior/Floating                           
        Pass-Through
Rate
Class 2-A-3      AAA         Aaa      Senior/Floating                           
        Pass-Through
Rate
Class 2-A-4      AAA         Aaa      Senior/Floating                           
        Pass-Through
Rate
Class A-R        AAA         Aaa      Senior/Residual/                          
          Principal Only
Class 1-M-1       AA         Aa2      Subordinate/Fixed                         
        Pass-Through
Rate
Class 1-M-2       A           A2      Subordinate/Fixed                         
        Pass-Through
Rate
Class 1-M-3       A          Baa2     Subordinate/Fixed                         
        Pass-Through
Rate
Class 1-B-1      BBB-        Baa3     Subordinate/Fixed                         
        Pass-Through
Rate
Class 2-M-1       AA         Aa2      Subordinate/                              
    Floating
        Pass-Through
Rate
Class 2-M-2       A           A2      Subordinate/                              
    Floating
        Pass-Through
Rate
Class 2-B-1      BBB         Baa2     Subordinate/                              
    Floating
        Pass-Through
Rate
Class 2-B-2      BBB-        Baa3     Subordinate/                              
    Floating
        Pass-Through
Rate

S-3 

424B5
4th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 4th
A rating is not a recommendation to buy, sell or hold securities. These ratings 
may be lowered or withdrawn at any time by either of the rating agencies.       

See "Ratings," "Description of the Certificates -- General," "-- Book-Entry     
Certificates" and "The Mortgage Pool" in this prospectus supplement and "The    
Trust Fund -- The Mortgage Loans -- General" in the prospectus.                 

OTHER CERTIFICATES                                                              

In addition to the offered certificates, the trust fund will issue the Class CF,
Class PF, Class CV and Class PV Certificates, which are not being offered to the
public pursuant to this prospectus supplement and the prospectus. The Class PF  
and Class PV Certificates will each have an initial class certificate balance of
$100 and will not be entitled to distributions in respect of interest. The Class
PF and Class PV Certificates will be entitled to all prepayment charges received
in respect of the mortgage loans in loan group 1 and loan group 2, respectively.
Any information contained in this prospectus supplement with respect to the     
Class CF, Class PF, Class CV and Class PV Certificates is provided only to      
permit a better understanding of the offered certificates.                      

CUT-OFF DATE                                                                    

For each mortgage loan, the later of October 1, 2005 and the date of origination
for that mortgage loan (either of these dates is sometimes referred to in this  
prospectus supplement as the cut-off date).                                     

CLOSING DATE                                                                    

On or about October 28, 2005.                                                   

DEPOSITOR                                                                       

CWALT, Inc. is a limited purpose finance subsidiary of Countrywide Financial    
Corporation. Its address is 4500 Park Granada, Calabasas, California 91302, and 
its telephone number is (818) 225-3000.                                         

SELLERS                                                                         

Countrywide Home Loans, Inc. will be the seller of a portion of the mortgage    
loans. The remainder of the mortgage loans will be sold directly to the         
depositor by one or more special purpose entities that were established by      
Countrywide Financial Corporation, or one of its subsidiaries, which, in turn,  
acquired those mortgage loans directly from Countrywide Home Loans, Inc.        

MASTER SERVICER                                                                 

Countrywide Home Loans Servicing LP.                                            

TRUSTEE                                                                         

The Bank of New York, a New York banking corporation.                           

THE NIM INSURER                                                                 

After the closing date, a separate trust or trusts may be established to issue  
net interest margin securities secured by all or a portion of the Class CF,     
Class PF, Class CV and Class PV Certificates. Those net interest margin         
securities may or may not have the benefit of one or more financial guaranty    
insurance policies that guaranty payments on those securities. The insurer or   
insurers that would issue any such financial guaranty insurance policy are      
referred to in this prospectus supplement as the "NIM Insurer." The references  
to the NIM Insurer in this prospectus supplement are applicable only if the net 
interest margin securities are so insured.                                      

Any NIM Insurer will have a number of rights under the pooling and servicing    
agreement that will limit and otherwise affect the rights of the holders of the 
offered certificates. Any insurance policy issued by a NIM Insurer will not     
cover, and will not benefit in any manner whatsoever, the offered certificates. 

See "Risk Factors--Rights of the NIM Insurer" in this prospectus supplement.    

DISTRIBUTION DATES                                                              

We will make distributions on the 25th day of each month. If the 25th day of a  
month is not a business day, then we will make distributions on the next        
business day. The first distribution is scheduled for November 25, 2005.        

REGISTRATION OF CERTIFICATES                                                    

The offered certificates (other than the Class A-R Certificates) will initially 
be issued in book-entry form. Persons acquiring beneficial ownership interests  
in the offered certificates (other than the Class A-R Certificates) may elect to
hold their beneficial interests through The Depository Trust                    

S-4 

424B5
5th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 5th
Company, in the United States, or Clearstream, Luxembourg or the Euroclear      
System, in Europe. The Class A-R Certificates will be issued in fully registered
certificated form and will be subject to certain restrictions on transfer       
described in this prospectus supplement and as more fully provided for in the   
pooling and servicing agreement.                                                

See "Description of Certificates - Book-Entry Certificates" and "- Restrictions 
on Transfer of the Class A-R Certificates" in this prospectus supplement.       

RECORD DATE                                                                     

The record date for any distribution date and (x) the Fixed Rate Certificates   
and any certificate in definitive form will be the last business day of the     
month preceding the month of that distribution date and (y) the LIBOR           
Certificates so long as they are in book-entry form will be the business day    
preceding that distribution date.                                               

INTEREST PAYMENTS                                                               

On each distribution date, holders of each class of offered certificates (other 
than the Class A-R Certificates) will be entitled to receive:                   

o the interest that has accrued at the related pass-through rate during the     
related accrual period on the class certificate balance of that class of    
certificates immediately prior to that distribution date, and               

o any interest due on a prior distribution date that was not paid.              

The accrual period for the Class 1-A-2, Class 1-A-3, Class 1-A-4, Class 1-A-5,  
Class 1-A-6, Class 1-M-1, Class 1-M-2, Class 1-M-3 and Class 1-B-1 Certificates 
(we sometimes refer to these certificates as the "Fixed Rate Certificates") for 
any distribution date will be the calendar month before the month in which that 
distribution date occurs. Interest on the Fixed Rate Certificates will be       
calculated on the basis of a 360-day year divided into twelve 30-day months. The
accrual period for the Class 1-A-1, Class 2-A-1, Class 2-A-2, Class 2-A-3, Class
2-A-4, Class 2-M-1, Class 2-M-2, Class 2-B-1 and Class 2-B-2 Certificates (we   
sometimes refer to these certificates as the "LIBOR Certificates") for any      
distribution date will be the period commencing on the preceding distribution   
date (or the closing date, in the case of the first distribution date) and      
ending on the day immediately prior to that distribution date. Interest on the  
LIBOR Certificates will be calculated on the basis of a 360-day year and the    
actual number of days that elapsed in that interest accrual period.             

See "Description of the Certificates -- Distributions -- Distributions of       
Interest" in this prospectus supplement.                                        

PRINCIPAL PAYMENTS                                                              

On each distribution date, certificateholders will receive a distribution of    
principal on their certificates in accordance with the priorities of payment set
forth in this prospectus supplement to the extent there is cash available on    
that date.                                                                      

See "Description of the Certificates -- Distributions -- Distributions of       
Principal" in this prospectus supplement.                                       

OPTIONAL TERMINATION                                                            

The master servicer may purchase all of the remaining assets of the trust fund  
and retire all outstanding classes of certificates on or after the first        
distribution date on which the aggregate stated principal balance of the        
mortgage loans and any foreclosed real estate owned by the trust fund declines  
to 10% or less of the aggregate stated principal balance of the mortgage loans  
as of the cut-off date. The NIM Insurer may also have the right to purchase all 
of the remaining assets in the trust fund.                                      

See "Description of the Certificates -- Optional Termination" in this prospectus
supplement.                                                                     

ADVANCES                                                                        

The master servicer will make cash advances with respect to delinquent payments 
of principal and interest on the mortgage loans to the extent the master        
servicer reasonably believes that the cash advances can be repaid from future   
payments on the mortgage loans. These cash advances are only intended to        
maintain a regular flow of scheduled interest and principal payments on the     
certificates and are not intended to guarantee or insure against losses.        

See "Servicing of the Mortgage Loans -- Advances" in this prospectus supplement.

CREDIT ENHANCEMENT                                                              

Credit enhancements provide limited protection to holders of certain            
certificates against shortfalls in                                              

S-5 

424B5
6th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 6th
payments received on the mortgage loans. This transaction employs the following 
forms of credit enhancement:                                                    

OVERCOLLATERALIZATION                                                           

On the closing date, (a) the aggregate stated principal balance of the group 1  
mortgage loans is expected to exceed the initial aggregate class certificate    
balance of the group 1 certificates by approximately $957,406 and (b) the       
aggregate stated principal balance of the group 2 mortgage loans is expected to 
exceed the initial aggregate class certificate balance of the group 2           
certificates by approximately $4,009,748. These amounts are called              
"overcollateralization" and are approximately equal to the initial levels of    
overcollateralization required by the pooling and servicing agreement.          

On any distribution date, the amount of overcollateralization (if any) for a    
loan group will be available to absorb the losses from liquidated mortgage loans
if those losses are not otherwise covered by excess cashflow (if any) from the  
related mortgage loans. The required levels of overcollateralization may change 
over time.                                                                      

The mortgage loans in each loan group are expected to generate more interest    
than is needed to pay interest on the related classes of certificates because   
the weighted average interest rate of the mortgage loans is expected to be      
higher than the weighted average pass-through rate on the related classes of    
certificates, plus the weighted average expense fee rate.                       

See "Description of the Certificates--Overcollateralization Provisions" in this 
prospectus supplement.                                                          

SUBORDINATION                                                                   

The issuance of senior certificates and subordinated certificates by the trust  
fund is designed to increase the likelihood that senior certificateholders will 
receive regular payments of interest and principal.                             

The senior certificates in a senior certificate group will have a payment       
priority over the related subordinated certificates. With respect to a group of 
subordinated certificates, the classes with an M designation have a payment     
priority over the classes with a B designation. Within the classes with an M or 
B designation, the payment priority is in numerical order.                      

Subordination is designed to provide the holders of certificates having a higher
payment priority with protection against losses realized when the remaining     
unpaid principal balance on a mortgage loan exceeds the amount of proceeds      
recovered upon the liquidation of that mortgage loan. In general, this loss     
protection is accomplished by allocating realized losses on the mortgage loans  
in a loan group among the subordinated certificates related to that loan group, 
beginning with the related subordinated certificates with the lowest payment    
priority. Realized losses on the mortgage loans in a loan group will be         
allocated solely to the classes of subordinated certificates related to that    
loan group.                                                                     

Excess cashflow from a loan group will be available to restore the              
overcollateralization for the other loan group and, to pay unpaid realized loss 
amounts to the subordinated certificates related to the other loan group, to the
extent available and in the priority described in this prospectus supplement.   

See "Description of the Certificates -- Applied Realized Loss Amounts" in this  
prospectus supplement and "Credit Enhancement" in the prospectus.               

THE CORRIDOR CONTRACTS                                                          

Countrywide Home Loans has entered into two interest rate corridor contracts,   
(1) the Class 1-A-1 corridor contract and (2) the group 2 certificates corridor 
contract, each of which will be assigned to The Bank of New York, in its        
capacity as corridor contract administrator, on the closing date. The corridor  
contract administrator will allocate certain payments received under each       
interest rate corridor contract to the trustee on behalf of the trust fund. On  
or prior to the applicable corridor contract termination date, amounts allocated
to the trust fund in respect of a corridor contract will be available to the    
applicable class(es) of certificates, as described in this prospectus           
supplement, to cover net rate carryover resulting from the application of the   
applicable net rate cap to the related pass-through rate(s).                    

Payments under each corridor contract will be made to the corridor contract     
administrator and allocated between the trust fund and Countrywide Home Loans as
described in "Description of the Certificates -- The Corridor Contracts" in this
prospectus supplement. Any amounts received in respect of a corridor contract   
and allocated to the trust fund for a distribution date that are not used on    
that date to cover net rate carryover on the related certificates are           

S-6 

424B5
7th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 7th
expected to be distributed to the holders of the Class CF and Class CV          
Certificates as provided in the pooling and servicing agreement and will not be 
available thereafter for payment of net rate carryover on any class of          
certificates. See "Description of the Certificates -- The Corridor Contracts" in
this prospectus supplement.                                                     

TAX STATUS                                                                      

For federal income tax purposes, the trust fund (exclusive of rights under the  
corridor contracts and the assets held in the carryover reserve fund) will      
consist of one or more REMICs: one or more underlying REMICs (if any) and the   
master REMIC. The assets of the lowest underlying REMIC in this tiered structure
(or the master REMIC if there are no underlying REMICs) will consist of the     
mortgage loans and any other assets designated in the pooling and servicing     
agreement. The master REMIC will issue the several classes of certificates,     
which, other than the Class A-R Certificates, will represent the regular        
interests in the master REMIC. The offered certificates, other than the Class   
A-R Certificates, will also represent the right to receive payments from the    
carryover reserve fund. The Class A-R Certificates will represent ownership of  
both the residual interest in the master REMIC and the residual interests in any
underlying REMICs.                                                              

See "Material Federal Income Tax Consequences" in this prospectus supplement and
in the prospectus.                                                              

ERISA CONSIDERATIONS                                                            

The offered certificates (other than the Class A-R Certificates) may be         
purchased by a pension or other benefit plan subject to the Employee Retirement 
Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue
Code of 1986, as amended, or by an entity investing the assets of such a benefit
plan, so long as certain conditions are met.                                    

See "ERISA Considerations" in this prospectus supplement and in the prospectus. 

LEGAL INVESTMENT                                                                

The senior certificates and the Class 1-M-1 and Class 2-M-1 Certificates will be
mortgage related securities for purposes of the Secondary Mortgage Market       
Enhancement Act of 1984 as long as they are rated in one of the two highest     
rating categories by at least one nationally recognized statistical rating      
organization. None of the other classes of offered certificates will be         
"mortgage related securities" for purposes of the Secondary Mortgage Market     
Enhancement Act of 1984.                                                        

See "Legal Investment" in the prospectus.                                       

S-7 

424B5
8th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 8th
RISK FACTORS

THE FOLLOWING INFORMATION, WHICH YOU SHOULD CAREFULLY CONSIDER, IDENTIFIES      
CERTAIN SIGNIFICANT SOURCES OF RISK ASSOCIATED WITH AN INVESTMENT IN THE        
CERTIFICATES. YOU SHOULD ALSO CAREFULLY CONSIDER THE INFORMATION UNDER "RISK    
FACTORS" BEGINNING ON PAGE 5 IN THE PROSPECTUS.                                 

YOUR YIELD WILL BE AFFECTED BY PREPAYMENTS     Borrowers may, at their option,  
                                            prepay their mortgage loans in
                                              whole or in part at any time. We
                                              cannot predict the rate at which
                                        borrowers will repay their
                                               mortgage loans. A prepayment of a
                                          mortgage loan, however, will
                                               usually result in a prepayment on
                               the certificates.

                                               The rate and timing of prepayment
                                               of the mortgage loans will affect
                                        the yields to maturity and
                                           weighted average lives of the
                                              related classes of certificates.
                                         Any reinvestment risks from
                                             faster or slower prepayments of
                                          mortgage loans will be borne
                                            entirely by the holders of the
                                              related classes of certificates.

                                    o If you purchase your
                                                certificates at a discount and
                                                 principal is repaid slower than
                                                 you anticipate, then your yield
                                       may be lower than you
                             anticipate.

                                    o If you purchase your
                                               certificates at a premium and
                                                 principal is repaid faster than
                                                 you anticipate, then your yield
                                       may be lower than you
                             anticipate.

                                               o Approximately 70.40% and 70.60%
                                               of the mortgage loans in loan
                                           group 1 and loan group 2,
                                               respectively, in each case by
                                            aggregate stated principal
                                               balance of the mortgage loans
                                              in that loan group as of the
                                           cut-off date, require the
                                                 borrower to pay a charge if the
                                               borrower prepays the mortgage
                                             loan during periods ranging
                                              generally from six months to
                                               five years after the mortgage
                                        loan was originated. A
                                       prepayment charge may
                                            discourage a borrower from
                                             prepaying the mortgage loan
                                               during the applicable period.
                                            Prepayment charges will be
                                                distributed to the Class PF or
                                           Class PV Certificates, as
                                             applicable, and will not be
                                             available to the holders of
                                                other classes of certificates.

                                             You bear the reinvestment risks
                                               resulting from a faster or slower
                                             rate of principal payments than
                           you expected.

THE YIELDS ON THE LIBOR CERTIFICATES WILL      The pass-through rates on the    
BE AFFECTED BY THE LEVEL OF LIBOR              LIBOR Certificates for any       
                                             distribution date will be equal
                                             to the value of one-month LIBOR
                                          plus the related margin, but
                                         subject to a cap. For these
                                          classes of certificates your
                                         yield will be sensitive to:

                                               (1) the level of one-month LIBOR,

                                             (2) the timing of adjustment of
                                                   the pass-through rate on your
                                                  certificate as it relates to
                                               the interest rates on the
                                                 related mortgage loans and,
                                         with respect to the
                                              adjustable rate mortgage
                                             loans, the level of the
                                                   mortgage index, the timing of
                                                adjustment of the interest
                                                  rates on the adjustable rate
                                     mortgage loans,

S-8 

424B5
9th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 9th
                                               and periodic and lifetime
                                                  limits on those adjustments,
                         and

                                          (3) other limitations on the
                                                pass-through rates of such
                                               certificates as described
                                                further in this prospectus
                                 supplement.

                                     See "Description of the
                                         Certificates--Interest" and
                                             "Yield, Prepayment and Maturity
                                     Considerations" in this
                                         prospectus supplement for a
                                             description of factors that may
                                              influence the rate and timing of
                                         prepayments on the mortgage
                    loans.

THE SUBORDINATED CERTIFICATES HAVE A           The certificates are not insured 
GREATER RISK OF LOSS THAN THE SENIOR           by any financial guaranty        
CERTIFICATES AND SUBORDINATION MAY NOT BE      insurance policy. When certain   
SUFFICIENT TO PROTECT THE SENIOR CERTIFICATES  classes of certificates provide  
FROM LOSSES                                    credit enhancement for other     
                                             classes of certificates this is
                                      sometimes referred to as
                                  "subordination." The
                                               subordination feature is intended
                                            to enhance the likelihood that
                                            senior certificateholders will
                                         receive regular payments of
                                     interest and principal.

                                               Credit enhancement in the form of
                                            subordination will be provided
                                             for the certificates, first, by
                                             the right of the holders of the
                                            senior certificates to receive
                                          payments of principal on the
                                           mortgage loans in the related
                                             loan group prior to the related
                                               subordinated classes and, second,
                                       to the extent there is no
                                           overcollateralization for the
                                        related loan group, by the
                                              allocation of realized losses on
                                          the mortgage loans in a loan
                                       group to reduce the class
                                        certificate balance of the
                                           related subordinated classes,
                                            beginning with the Class 1-B-1
                                              Certificates in the case of loan
                                         group 1 and the Class 2-B-2
                                              Certificates in the case of loan
                      group 2.

                                             This type of credit enhancement
                                              is provided by using collections
                                             on the mortgage loans in a loan
                                            group otherwise payable to the
                                         holders of the subordinated
                                          classes related to that loan
                                             group to pay amounts due on the
                                            more senior classes related to
                                               that loan group. After the credit
                                            enhancement provided by excess
                          cashflow and
                                            overcollateralization (if any)
                                             has been exhausted, collections
                                             on the mortgage loans in a loan
                                            group otherwise payable to the
                                             subordinated classes related to
                                               that loan group will comprise the
                                             sole source of funds from which
                                        such credit enhancement is
                                    provided to the senior
                                               certificates related to that loan
                                           group. Realized losses on the
                                               mortgage loans in each loan group
                                               are allocated to the subordinated
                                               certificates related to that loan
                                       group, beginning with the
                                               subordinated certificates related
                                     to that loan group then
                                         outstanding with the lowest
                                               payment priority, until the class
                                               certificate balance of each class
                                          of subordinated certificates
                                            related to that loan group has
                                              been reduced to zero. This means
                                               that after the credit enhancement
                                             provided by excess cashflow and
                                            overcollateralization (if any)
                                          has been exhausted, realized
                                             losses on the mortgage loans in
                                        loan group 1 will first be
                                          allocated to the Class 1-B-1
                                           Certificates, until its class
                                               certificate balance is reduced to
                                             zero and realized losses on the
                                            mortgage loans in loan group 2
                                            will first be allocated to the
                                             Class 2-B-2 Certificates, until
                                              its class certificate balance is
                                         reduced to zero. Subsequent
                      realized

S-9 

424B5
10th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 10th
                                             losses will be allocated to the
                                       next most junior class of
                                               subordinated certificates related
                                           to that loan group, until its
                                          class certificate balance is
                                               reduced to zero. If the aggregate
                                              class certificate balance of the
                                               subordinated classes related to a
                                              loan group were to be reduced to
                                              zero, delinquencies and defaults
                                           on the mortgage loans in that
                                         loan group would reduce the
                                           amount of funds available for
                                              monthly distributions to holders
                                        of the senior certificates
                                         related to that loan group.

                                           You should fully consider the
                                     risks of investing in a
                                       subordinated certificate,
                                             including the risk that you may
                                            not fully recover your initial
                                       investment as a result of
                                           realized losses. In addition,
                                            investors in a class of senior
                                              certificates should consider the
                                         risk that, after the credit
                                            enhancement provided by excess
                          cashflow and
                                            overcollateralization (if any)
                                      have been exhausted, the
                                          subordination of the related
                                               subordinated certificates may not
                                          be sufficient to protect the
                                              senior certificates from losses.

                                     See "Description of the
                                              Certificates" in this prospectus
                         supplement.

EXCESS INTEREST FROM THE MORTGAGE LOANS        The amount by which the aggregate
MAY NOT PROVIDE ADEQUATE CREDIT                stated principal balance of the  
ENHANCEMENT                                    mortgage loans in a loan group   
                                         exceeds the aggregate class
                                        certificate balance of the
                                             related classes of certificates
                       is called
                                          "OVERCOLLATERALIZATION." The
                              initial level of
                                            overcollateralization for each
                                      loan group (that is, the
                                          overcollateralization on the
                                   closing date) will be
                                        approximately equal to the
                              initial level of
                                               overcollateralization required by
                                       the pooling and servicing
                                            agreement for each loan group.
                                          The mortgage loans in a loan
                                            group are expected to generate
                                             more interest than is needed to
                                         pay interest on the related
                                             classes of certificates because
                                           the weighted average interest
                                             rate on the mortgage loans in a
                                          loan group is expected to be
                                              higher than the weighted average
                                              pass-through rate on the related
                                              classes of certificates plus the
                                          weighted average expense fee
                                               rate. In the event that the level
                                            of overcollateralization for a
                                         loan group is reduced, such
                                               "EXCESS INTEREST" will be used to
                                       make additional principal
                                             payments on the related classes
                                           of certificates to the extent
                                          described in this prospectus
                                               supplement. Overcollateralization
                                            is intended to provide limited
                                              protection to the holders of the
                                               offered certificates by absorbing
                                             losses from liquidated mortgage
                                              loans in the related loan group.
                                           However, we cannot assure you
                                              that enough excess interest will
                                          be generated on the mortgage
                                            loans to maintain the required
                                              levels of overcollateralization.

                                              The excess interest available on
                                           any distribution date will be
                                              affected by the actual amount of
                                             interest received, collected or
                                        advanced in respect of the
                                     mortgage loans for that
                                            distribution date. Such amount
                                              will be influenced by changes in
                                         the weighted average of the
                                           mortgage rates resulting from
                                             prepayments and liquidations of
                                           the mortgage loans as well as
                                              from adjustments of the mortgage
                                               rates on adjustable-rate mortgage
                                              loans. The mortgage rates on the
                                              group 1 mortgage loans are fixed
                                           and the mortgage rates on the
                                           group 2 mortgage loans either
                                           generally (i) adjust monthly,
                              semi-annually or

S-10

424B5
11th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 11th
                                         annually or (ii) have fixed
                                              mortgage rates for approximately
                                               1, 6, 12, 24, 36, 60 or 84 months
                                              after the date of origination of
                                           each mortgage loan before the
                                              mortgage rates become subject to
                                               adjustment monthly, semi-annually
                                             or annually, in each case based
                                        on either one-month LIBOR,
                                           six-month LIBOR, twelve-month
                                            LIBOR or one-year CMT, each of
                                       which is referred to as a
                                              mortgage index. The pass-through
                                           rate of each class of offered
                                          certificates, other than the
                                        Class A-R Certificates, is
                                             subject to a net rate cap which
                                       generally is based on the
                                           weighted average adjusted net
                                           mortgage rates of the related
                                    mortgage loans. If the
                                              pass-through rate on one or more
                                       classes is limited by the
                                             applicable net rate cap, it may
                                            be necessary to apply all or a
                                             portion of the related interest
                                           funds available to distribute
                                          interest at the pass-through
                                       rates for such classes of
                                        certificates. As a result,
                                             interest may be unavailable for
                                any other purpose.

                                           If the protection afforded by
                                      overcollateralization is
                                               insufficient, then the holders of
                                            the offered certificates could
                                        experience a loss on their
                         investment.

EXCESS INTEREST WILL ALSO BE REDUCED BY        When a borrower makes a full or  
PREPAYMENTS ON THE MORTGAGE LOANS              partial prepayment on a mortgage 
                                               loan, the amount of interest that
                                             the borrower is required to pay
                                            may be less than the amount of
                                               interest certificateholders would
                                              otherwise be entitled to receive
                                          with respect to the mortgage
                                          loan. The master servicer is
                                           required to reduce its master
                                          servicing fee to offset this
                                              shortfall, but the reduction for
                                              any distribution date is limited
                                       to one-half of the master
                                           servicing fee for the related
                                               month. If the aggregate amount of
                                           interest shortfalls in a loan
                                              group resulting from prepayments
                                       exceeds the amount of the
                                               reduction in the master servicing
                                         fee, the amount of interest
                                             available to make distributions
                                        of interest to the related
                                            classes of certificates and to
                                             maintain or restore the related
                                            level of overcollateralization
                              will be reduced.

YOUR YIELD WILL BE AFFECTED BY THE INTEREST    Approximately 18.60% and 75.72%  
ONLY FEATURE OF SOME OF THE MORTGAGE           of the mortgage loans in loan    
LOANS                                          group 1 and loan group 2,        
                                            respectively, in each case, by
                                        aggregate stated principal
                                              balance of the mortgage loans in
                                               that loan group as of the cut-off
                                               date, require monthly payments of
                                         only accrued interest for a
                                               period ranging from six months to
                                              ten years after origination. The
                                             borrower is not required to pay
                                             any principal on the borrower's
                                            loan during this interest only
                                               period but thereafter is required
                                      to make monthly payments
                                             sufficient to amortize the loan
                                            over its remaining term. These
                                             loans are sometimes referred to
                                              as interest only loans. Interest
                                           only loans have only recently
                                            been originated in significant
                                       volumes. As a result, the
                                   long-term performance
                                              characteristics of interest only
                                        loans are largely unknown.

                                         Because interest only loans
                                        initially require only the
                                             payment of interest, a borrower
                                            may be able to borrow a larger
                                             amount than would have been the
                                         case for a fully amortizing
                            mortgage loan.

                                          Interest only loans may have
                                               risks and payment characteristics
                                             that are not present with fully
                                        amortizing mortgage loans,
                                      including the following:

S-11

424B5
12th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 12th
                                           o  no principal distributions
                                   will be made to
                                           certificateholders from
                                              interest only loans during
                                              their interest only period
                                           except in the case of a
                                                prepayment, which may extend
                                                 the weighted average lives of
                                     the certificates,

                                         o  during the interest only
                                               period, interest only loans
                                            may be less likely to be
                                               prepaid since the perceived
                                                  benefits of refinancing may be
                                          less than with a fully
                                             amortizing mortgage loan,

                                           o  as the end of the interest
                                              only period approaches, an
                                                  interest only loan may be more
                                              likely to be refinanced in
                                                  order to avoid the increase in
                                                the monthly payment required
                                                 to amortize the loan over its
                                   remaining term,

                                           o  interest only loans may be
                                               more likely to default than
                                                 fully amortizing loans at the
                                            end of the interest only
                                               period due to the increased
                                               monthly payment required to
                                              amortize the loan over its
                                       remaining term, and

                                         o  if an interest only loan
                                                  defaults, the severity of loss
                                             may be greater due to the
                                           larger unpaid principal
                            balance.

YOUR YIELD ON THE CERTIFICATES WILL BE         The pass-through rate on each    
AFFECTED BY THE MORTGAGE RATES OF THE          class of offered certificates for
RELATED MORTGAGE LOANS                         each distribution date, other    
                                              than the Class A-R Certificates,
                                          is subject to a net rate cap
                                           based on the weighted average
                                               adjusted net mortgage rate of the
                                               related mortgage loans. The Fixed
                                             Rate Certificates and the Class
                                               1-A-1 Certificates are related to
                                         the group 1 mortgage loans.
                                             Prepayments of group 1 mortgage
                                          loans with relatively higher
                                               mortgage rates than other group 1
                                            mortgage loans may reduce this
                                               net rate cap. If the net rate cap
                                              applies to a class of Fixed Rate
                                               Certificates, it may apply for an
                                              extended period or indefinitely.

                                          The pass-through rate on the
                                          Class 1-A-1 Certificates may
                                               adjust monthly based on one-month
                                               LIBOR while the mortgage rates on
                                            the group 1 mortgage loans are
                                             fixed. As a result, there is no
                                     correlation between the
                                            pass-through rate on the Class
                                        1-A-1 Certificates and the
                                           mortgage rates on the group 1
                                              mortgage loans, which may result
                                               in the imposition of the net rate
                                              cap on those certificates for an
                                      extended period of time.

                                           The pass-through rates on the
                                             group 2 certificates may adjust
                                      monthly and are based on
                                           one-month LIBOR. The mortgage
                                           rates on the group 2 mortgage
                                         loans, to which the group 2
                                              certificates are related, adjust
                                       monthly, semi-annually or
                                           annually based on the related
                                           mortgage index, but generally
                                              only after a period of 1, 6, 12,
                                           24, 36, 60 or 84 months after
                                               origination. Because the mortgage
                                             indices may respond to economic
                                               and market factors different than
                                              those affecting one-month LIBOR,
                                        there is not necessarily a
                                             correlation in movement between
                                       the interest rates on the
                                            adjustable rate mortgage loans
                                               and the pass-through rates of the
                                              related classes of certificates.
                                              For example, it is possible that
                                       the interest rates on the
                                            adjustable rate mortgage loans
                                   may decline while the
                                               pass-through rates on the related
                                               classes of LIBOR Certificates are
                                            stable or rising. In addition,
                                               although it is possible that both

S-12

424B5
13th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 13th
                                       the mortgage rates on the
                                            adjustable rate mortgage loans
                                               and the pass-through rates on the
                                      related classes of LIBOR
                                         Certificates may decline or
                                              increase during the same period,
                                       the mortgage rates on the
                                            adjustable rate mortgage loans
                                          may decline or increase more
                                          slowly than the pass-through
                                         rates of these certificates
                                               because of the difference between
                                              interest rate adjustment periods
                                       on the mortgage loans and
                                          pass-through rate adjustment
                                               periods on these certificates. In
                                               addition, prepayments of mortgage
                                          loans with relatively higher
                                           mortgage rates may reduce the
                                         applicable net rate cap and
                                     consequently reduce the
                                               pass-through rate for one or more
                                               of these classes of certificates.

                                               It is intended that the amount by
                                         which a certificateholder's
                                               interest payment has been reduced
                                            by operation of the applicable
                                              net rate cap will be paid first,
                                      in the case of the LIBOR
                                       Certificates from amounts
                                            allocated to the trust fund in
                                             respect of the related corridor
                                            contract prior to its corridor
                                            contract termination date, and
                                         then, from remaining excess
                                             cashflow (if any), in each case
                                             as described in this prospectus
                                            supplement. However, we cannot
                                        assure you that any excess
                                           cashflow or corridor contract
                                            proceeds will be available, or
                                          sufficient, to make any such
                       payments.

YOUR YIELD WILL BE AFFECTED BY HOW             The timing of principal payments 
DISTRIBUTIONS ARE ALLOCATED TO THE             on the certificates will be      
CERTIFICATES                                   affected by a number of factors, 
                        including:

                                             o  the extent of prepayments on
                                             the mortgage loans in the
                                       related loan group,

                                              o  how payments of principal are
                                                  allocated among the classes of
                                 certificates,

                                            o  whether the master servicer
                                               exercises its right, in its
                                                 sole discretion, to terminate
                                   the trust fund,

                                               o  the rate and timing of payment
                                              defaults and losses on the
                                                 mortgage loans in the related
                                   loan group, and

                                              o  repurchases of mortgage loans
                                                 in the related loan group for
                                        material breaches of
                                       representations and
                               warranties.

                                        Since distributions on the
                                             certificates are dependent upon
                                            the payments on the applicable
                                       mortgage loans, we cannot
                                         guarantee the amount of any
                                              particular payment or the amount
                                             of time that will elapse before
                                           the trust fund is terminated.

                                     See "Description of the
                                               Certificates -- Principal," and "
                                              -- Optional Termination" in this
                                         prospectus supplement for a
                                          description of the manner in
                                             which principal will be paid to
                                        the certificates. See "The
                                            Mortgage Pool -- Assignment of
                                         the Mortgage Loans" in this
                                            prospectus supplement for more
                                       information regarding the
                                           repurchase or substitution of
                             mortgage loans.

S-13

424B5
14th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 14th
THE CERTIFICATES MAY NOT BE APPROPRIATE FOR    The offered certificates may not 
SOME INVESTORS                                 be an appropriate investment for 
                                       investors who do not have
                                               sufficient resources or expertise
                                        to evaluate the particular
                                     characteristics of each
                                         applicable class of offered
                                           certificates. This may be the
                                               case because, among other things:

                                         o  the yield to maturity of
                                                  offered certificates purchased
                                                  at a price other than par will
                                                 be sensitive to the uncertain
                                                rate and timing of principal
                                               prepayments on the mortgage
                                             loans in the related loan
                          group;

                                      o  the rate of principal
                                             distributions on, and the
                                                  weighted average lives of, the
                                                offered certificates will be
                                              sensitive to the uncertain
                                                rate and timing of principal
                                               prepayments on the mortgage
                                             loans in the related loan
                                             group and the priority of
                                                 principal distributions among
                                                  the classes of certificates in
                                                  the related certificate group.
                                            Accordingly, the offered
                                          certificates may be an
                                               inappropriate investment if
                                                 you require a distribution of
                                          a particular amount of
                                                principal on a specific date
                                               or an otherwise predictable
                                                stream of distributions; and

                                           o  a secondary market for the
                                                offered certificates may not
                                      develop or provide
                                           certificateholders with
                                            liquidity of investment.

SEASONED MORTGAGE LOANS                        The loan ages of some of the     
                                            mortgage loans in loan group 1
                                  and loan group 2 are
                                              substantially greater than those
                                             of the other mortgage loans. In
                                            addition, some of the mortgage
                                            loans in loan group 1 and loan
                                              group 2 were previously included
                                       in securitizations of the
                                              depositor and were acquired upon
                                              exercise of the related optional
                                             termination right of the master
                                       servicer. Generally, well
                                         seasoned mortgage loans are
                                           believed to be less likely to
                                               prepay due to refinancing and are
                                               more likely to default than newly
                                        originated mortgage loans.
                                            However, the mortgage rates on
                                              the well seasoned mortgage loans
                                               generally are higher than current
                                           mortgage rates which suggests
                                              that those mortgage loans may be
                                          more likely to prepay due to
                                           refinancing. In any case, the
                                               prepayment and default experience
                                             on well seasoned mortgage loans
                                             will likely differ from that on
                                             the other mortgage loans. Since
                                           the subordinated certificates
                                            evidence an interest in all of
                                     the mortgage loans, the
                                               prepayment and default experience
                                        on those certificates will
                                          reflect a combination of the
                                              differing prepayment and default
                                               experience on all of the mortgage
                    loans.

GEOGRAPHIC CONCENTRATION OF MORTGAGED          Approximately 13.69% and 33.01%  
PROPERTIES INCREASES THE RISK THAT             of the mortgage loans in loan    
CERTIFICATE YIELDS COULD BE IMPAIRED           group 1 and loan group 2,        
                                            respectively, in each case, by
                                        aggregate stated principal
                                              balance of the mortgage loans in
                                               that loan group as of the cut-off
                                            date, are secured by mortgaged
                                            properties that are located in
                                     California. Property in
                                    California may be more
                                               susceptible than homes located in
                                           other parts of the country to
                                          certain types of uninsurable
                                           hazards, such as earthquakes,
                                         floods, mudslides and other
                                             natural disasters. In addition,

                                              o  economic conditions in states
                                    with significant
                                                concentrations (which may or
                                                may not affect real property

S-14

424B5
15th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 15th
                                                  values) may affect the ability
                                               of borrowers to repay their
                          loans;

                                            o  declines in the residential
                                                 real estate markets in states
                                    with significant
                                                 concentrations may reduce the
                                                values of properties located
                                               in such states, which would
                                                result in an increase in the
                                             loan-to-value ratios; and

                                           o  any increase in the market
                                                  value of properties located in
                                           states with significant
                                               concentrations would reduce
                                                the loan-to-value ratios and
                                          could, therefore, make
                                          alternative sources of
                                              financing available to the
                                               borrowers at lower interest
                                                rates, which could result in
                                        an increased rate of
                                              prepayment of the mortgage
                          loans.

IMPACT OF WORLD EVENTS                         The economic impact of the United
                                            States' military operations in
                                               Iraq, Afghanistan and other parts
                                          of the world, as well as the
                                              possibility of terrorist attacks
                                       domestically or abroad is
                                         uncertain, but could have a
                                        material effect on general
                                           economic conditions, consumer
                                               confidence, and market liquidity.
                                             No assurance can be given as to
                                           the effect of these events on
                                         consumer confidence and the
                                         performance of the mortgage
                                       loans. Any adverse impact
                                               resulting from these events would
                                            be borne by the holders of the
                                         certificates. United States
                                               military operations also increase
                                          the likelihood of shortfalls
                                            under the Servicemembers Civil
                                              Relief Act or similar state laws
                                         (referred to as the "RELIEF
                                            ACT"). The Relief Act provides
                                           relief to borrowers who enter
                                            active military service and to
                                             borrowers in reserve status who
                                             are called to active duty after
                                               the origination of their mortgage
                                           loan. The Relief Act provides
                                            generally that these borrowers
                                              may not be charged interest on a
                                               mortgage loan in excess of 6% per
                                            annum during the period of the
                                           borrower's active duty. These
                                               shortfalls are not required to be
                                         paid by the borrower at any
                                         future time and will not be
                                              advanced by the master servicer.
                                         In addition, the Relief Act
                                            imposes limitations that would
                                              impair the ability of the master
                                         servicer to foreclose on an
                                      affected loan during the
                                              borrower's period of active duty
                                     status, and, under some
                                      circumstances, during an
                                           additional period thereafter.

HURRICANE KATRINA MAY POSE SPECIAL RISKS       At the end of August 2005,       
                                      Hurricane Katrina caused
                                             catastrophic damage to areas in
                                          the Gulf Coast region of the
                                           United States. The trust fund
                                             will not include mortgage loans
                                               that are secured by properties in
                                      the states of Louisiana,
                                              Mississippi and Alabama that are
                                          located in a FEMA Individual
                                             Assistance designated area as a
                                          result of Hurricane Katrina.
                                           However, we cannot assure you
                                              that there are no mortgage loans
                                        secured by properties that
                                              experienced material damage from
                                            Hurricane Katrina in the trust
                   fund.

                                         Countrywide Home Loans will
                                             represent and warrant as of the
                                              closing date that each mortgaged
                                          property is free of material
                                               damage and in good repair. In the
                                       event of a breach of that
                                          representation and warranty,
                                            Countrywide Home Loans will be
                                        obligated to repurchase or
                                        substitute for the related
                                     mortgage loan. Any such
                                              repurchase would have the effect
                                       of increasing the rate of
                                      principal payment on the
                                         certificates. Any damage to

S-15

424B5
16th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 16th
                                               a mortgaged property that secures
                                               a mortgage loan in the trust fund
                                              occurring after the closing date
                                               as a result of any other casualty
                                              event will not cause a breach of
                                               this representation and warranty.

                                         The full economic impact of
                                            Hurricane Katrina is uncertain
                                           but may affect the ability of
                                           borrowers to make payments on
                                           their mortgage loans. Initial
                                        economic effects appear to
                      include:

                                          o  localized areas of nearly
                                               complete destruction of the
                                               economic infrastructure and
                                         cessation of economic
                             activity,

                                          o  regional interruptions in
                                              travel and transportation,
                                                 tourism and economic activity
                                  generally, and

                                        o  nationwide decreases in
                                                 petroleum availability with a
                                             corresponding increase in
                          price.

                                         We have no way to determine
                                               whether other effects will arise,
                                               how long any of these effects may
                                            last, or how these effects may
                                           impact the performance of the
                                           mortgage loans. Any impact of
                                             these events on the performance
                                       of the mortgage loans may
                                           increase the amount of losses
                                         borne by the holders of the
                                        certificates or impact the
                                           weighted average lives of the
                           certificates.

YOU MAY HAVE DIFFICULTY RESELLING THE          No market for any of the         
CERTIFICATES                                   certificates will exist before   
                                              they are issued. The underwriter
                                         intends to make a secondary
                                              market in the classes of offered
                                      certificates, but has no
                                            obligation to do so. We cannot
                                         assure you that a secondary
                                           market will develop or, if it
                                              develops, that it will continue.
                                               Consequently, you may not be able
                                               to sell your certificates readily
                                               or at prices that will enable you
                                            to realize your desired yield.
                                      The market values of the
                                        certificates are likely to
                                               fluctuate; these fluctuations may
                                             be significant and could result
                                           in significant losses to you.

                                       The secondary markets for
                                             mortgage backed securities have
                                    experienced periods of
                                             illiquidity and can be expected
                                     to do so in the future.
                                             Illiquidity can have a severely
                                             adverse effect on the prices of
                                            securities that are especially
                                              sensitive to prepayment, credit,
                                            or interest rate risk, or that
                                              have been structured to meet the
                                        investment requirements of
                                              limited categories of investors.

RIGHTS OF THE NIM INSURER                      If there is a NIM Insurer,       
                                         pursuant to the pooling and
                                             servicing agreement, unless the
                                         NIM Insurer fails to make a
                                               required payment under the policy
                                              insuring the net interest margin
                                           securities and the failure is
                                              continuing or the NIM Insurer is
                                         the subject of a bankruptcy
                                            proceeding (each such event, a
                                             "NIM Insurer Default"), the NIM
                                         Insurer will be entitled to
                                         exercise, among others, the
                                          following rights without the
                                               consent of holders of the offered
                                              certificates, and the holders of
                                          the offered certificates may
                                            exercise such rights only with
                                              the prior written consent of the
                          NIM Insurer:

                                             o  the right to provide notices
                                               of master servicer defaults
                                               and the right to direct the
                                            trustee to terminate the
                              rights and

S-16

424B5
17th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 17th
                                             obligations of the master
                                                  servicer under the pooling and
                                              servicing agreement upon a
                                         default by the master
                             servicer,

                                        o  the right to remove the
                                            trustee or any custodian
                                               pursuant to the pooling and
                                            servicing agreement, and

                                        o  the right to direct the
                                                  trustee to make investigations
                                                and take actions pursuant to
                                             the pooling and servicing
                              agreement.

                                               In addition, unless a NIM Insurer
                                      Default exists, such NIM
                                       Insurer's consent will be
                                          required before, among other
                     things,

                                          o  any removal of the master
                                           servicer, any successor
                                                servicer or the trustee, any
                                                  appointment of any co-trustee,

                                          o  any otherwise permissible
                                                 waivers of prepayment charges
                                                  or extensions of due dates for
                                                 payment granted by the master
                                                 servicer with respect to more
                                                  than 5% of the mortgage loans,
                      or

                                             o  any amendment to the pooling
                                            and servicing agreement.

                                      Investors in the offered
                                            certificates should note that:

                                               o  any insurance policy issued by
                                            the NIM Insurer will not
                                                  cover, and will not benefit in
                                              any manner whatsoever, the
                                         offered certificates,

                                              o  the rights granted to the NIM
                                          Insurer are extensive,

                                         o  the interests of the NIM
                                               Insurer may be inconsistent
                                             with, and adverse to, the
                                               interests of the holders of
                                                 the offered certificates, and
                                          the NIM Insurer has no
                                                  obligation or duty to consider
                                                the interests of the offered
                                              certificates in connection
                                        with the exercise or
                                          nonexercise of the NIM
                                         Insurer's rights, and

                                              o  the NIM Insurer's exercise of
                                               its rights and consents may
                                                 negatively affect the offered
                                                  certificates and the existence
                                                of the NIM Insurer's rights,
                                                 whether or not exercised, may
                                                  adversely affect the liquidity
                                                of the offered certificates,
                                                  relative to other asset-backed
                                          certificates backed by
                                                 comparable mortgage loans and
                                           with comparable payment
                                           priorities and ratings.

                                            See "Rights of the NIM Insurer
                                         under Pooling and Servicing
                                           Agreement" in this prospectus
                         supplement.

SOME STATEMENTS CONTAINED IN OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS    
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS CONSIST OF FORWARD-LOOKING STATEMENTS
RELATING TO FUTURE ECONOMIC PERFORMANCE OR PROJECTIONS AND OTHER FINANCIAL      
ITEMS. THESE STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING WORDS   
SUCH AS "MAY," "WILL," "SHOULD," "EXPECTS," "BELIEVES," "ANTICIPATES,"          
"ESTIMATES," OR OTHER COMPARABLE WORDS. FORWARD-LOOKING STATEMENTS ARE SUBJECT  
TO A VARIETY OF RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO      
DIFFER FROM THE PROJECTED RESULTS. THOSE RISKS AND UNCERTAINTIES INCLUDE, AMONG 
OTHERS, GENERAL ECONOMIC AND BUSINESS CONDITIONS, REGULATORY INITIATIVES AND    
COMPLIANCE WITH GOVERNMENTAL REGULATIONS, CUSTOMER PREFERENCES AND VARIOUS OTHER
MATTERS, MANY OF WHICH ARE BEYOND OUR CONTROL. BECAUSE WE CANNOT PREDICT THE    
FUTURE, WHAT ACTUALLY HAPPENS MAY BE VERY DIFFERENT FROM WHAT WE PREDICT IN OUR 
FORWARD-LOOKING STATEMENTS.                                                     

S-17

424B5
18th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 18th
 THE MORTGAGE POOL

GENERAL                                                                         

 The depositor, CWALT, Inc. (the "DEPOSITOR"), will purchase the
mortgage loans in the mortgage pool (which are together referred to in this     
prospectus supplement as the "MORTGAGE LOANS") from Countrywide Home Loans, Inc.
and one or more other sellers affiliated with Countrywide Financial Corporation 
(each of which is referred to in this prospectus supplement as a seller and     
together they are referred to as the sellers), pursuant to a pooling and        
servicing agreement dated as of October 1, 2005 (the "POOLING AND SERVICING     
AGREEMENT") among the sellers, Countrywide Home Loans Servicing LP, as master   
servicer (the "MASTER SERVICER"), the Depositor and The Bank of New York, as    
trustee (the "TRUSTEE"), and will cause the Mortgage Loans to be assigned to the
Trustee for the benefit of the holders of the certificates. In this prospectus  
supplement, the Mortgage Loans in Loan Group 1 are referred to as the "GROUP 1  
MORTGAGE LOANS" and the Mortgage Loans in Loan Group 2 are referred to as the   
"GROUP 2 MORTGAGE LOANS."                                                       

        Under the Pooling and Servicing Agreement, Countrywide Home Loans will
make certain representations, warranties and covenants to the Depositor relating
to, among other things, the due execution and enforceability of the Pooling and 
Servicing Agreement and certain characteristics of the Mortgage Loans. In       
addition, each of the sellers will represent and warrant that, prior to the sale
of the related Mortgage Loans to the Depositor, the applicable seller had good  
title to the Mortgage Loans sold by it. Subject to the limitations described in 
the next sentence and under "-- Assignment of the Mortgage Loans," Countrywide  
Home Loans (or the related seller, in the case of the representation regarding  
good title) will be obligated to repurchase or substitute a similar mortgage    
loan for any Mortgage Loan as to which there exists deficient documentation or  
as to which there has been an uncured breach of any representation or warranty  
relating to the characteristics of the Mortgage Loans that materially and       
adversely affects the interests of the certificateholders in that Mortgage Loan.
Countrywide Home Loans will represent and warrant to the Depositor in the       
Pooling and Servicing Agreement that the Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in Countrywide Home Loans'   
portfolio as to which the representations and warranties set forth in the       
Pooling and Servicing Agreement can be made and that the selection was not made 
in a manner intended to affect the interests of the certificateholders          
adversely. See "Mortgage Loan Program -- Representations by Sellers;            
Repurchases" in the prospectus. Under the Pooling and Servicing Agreement, the  
Depositor will assign all of its right, title and interest in the               
representations, warranties and covenants (including the sellers' repurchase or 
substitution obligations) to the Trustee for the benefit of the                 
certificateholders. The Depositor will make no representations or warranties    
with respect to the Mortgage Loans and will have no obligation to repurchase or 
substitute Mortgage Loans with deficient documentation or that are otherwise    
defective. The sellers are selling the Mortgage Loans without recourse and will 
have no obligation with respect to the certificates in their respective         
capacities as sellers other than the repurchase or substitution obligation      
described above. The obligations of the Master Servicer with respect to the     
certificates are limited to the Master Servicer's contractual servicing         
obligations under the Pooling and Servicing Agreement.                          

       The Depositor believes that the cut-off date information set forth in
this prospectus supplement regarding the Mortgage Loans is representative of the
characteristics of the Mortgage Loans. Certain Mortgage Loans, however, may     
prepay or may be determined not to meet the eligibility requirements for        
inclusion in the final pool. A limited number of mortgage loans may be added to 
or substituted for the Mortgage Loans described in this prospectus supplement,  
although any addition or substitution will not result in a material difference  
in the pool of Mortgage Loans. As a result, the cut-off date information        
regarding the Mortgage Loans delivered on the closing date will vary somewhat   
from the cut-off date information regarding the Mortgage Loans presented in this
prospectus supplement.                                                          

       As of the cut-off date, the aggregate Stated Principal Balance of the
Mortgage Loans in the mortgage pool was approximately $609,069,154, which is    
referred to as the "CUT-OFF DATE POOL PRINCIPAL BALANCE." The Mortgage Loans    
have been divided into two groups of mortgage loans -- "LOAN GROUP 1" which is  
expected to have a principal balance as of the cut-off date of approximately    
$137,738,406 and "LOAN GROUP 2" which is expected to have a principal balance as
of the cut-off date of approximately $471,330,748. All of the Mortgage Loans    
have original terms to maturity of up to 30 years. The "MORTGAGE RATE" with     
respect to a Mortgage Loan is the annual rate of interest borne by the Mortgage 
Loan pursuant to the terms of the related mortgage note. Approximately 13.71%   
and 5.98% of the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, 
in each                                                                         

S-18

424B5
19th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 19th
case, by aggregate Stated Principal Balance of the Mortgage Loans in the related
loan group as of the cut-off date, were originated by Countrywide Home Loans,   
Inc. Set forth below are the originators as of the date of this prospectus      
supplement of the Mortgage Loans in each loan group by aggregate Stated         
Principal Balance of the Mortgage Loans in that loan group as of the cut-off    
date:                                                                           

                                                        [Enlarge/Download Table]

                                                                                         % OF MORTGAGE LOANS IN    
                        ORIGINATOR                                 LOAN GROUP                THAT LOAN GROUP       
----------------------------------------------------------- -------------------------- ----------------------------
                                                                                                                   
Countrywide Home Loans                                                  1                       13.71              
                                                                        2                        5.98              
----------------------------------------------------------- -------------------------- ----------------------------
Decision One Mortgage                                                   1                       23.38              
                                                                        2                       34.56              
----------------------------------------------------------- -------------------------- ----------------------------
Equity Now                                                              1                       13.05              
----------------------------------------------------------- -------------------------- ----------------------------
MILA, Inc.                                                              2                       29.47              
----------------------------------------------------------- -------------------------- ----------------------------
SouthStar Funding, LLC                                                  1                       16.93              
----------------------------------------------------------- -------------------------- ----------------------------

        Approximately 79.43% of the Mortgage Loans in Loan Group 1, by cut-off
date principal balance of the Mortgage Loans in Loan Group 1, will provide for  
the amortization of the amount financed over a series of substantially equal    
monthly payments. Approximately 18.60% of the Mortgage Loans in Loan Group 1, by
cut-off date principal balance of the Mortgage Loans in Loan Group 1, will      
provide that the related mortgagors (pursuant to the terms of the related       
mortgage notes) pay only interest on the principal balances of these Mortgage   
Loans for the first 60 or 120 months after their origination, but require the   
entire principal balances of these Mortgage Loans to be fully amortized over the
related remaining term of the Mortgage Loans (such Mortgage Loans being referred
to as the "INTEREST ONLY LOANS"). Approximately 24.28% of the Mortgage Loans in 
Loan Group 2, by cut-off date principal balance of the Mortgage Loans in Loan   
Group 2, will provide for the amortization of the amount financed over a series 
of substantially equal monthly payments. The remaining approximately 75.72% of  
the Mortgage Loans in Loan Group 2, by cut-off date principal balance of the    
Mortgage Loans in Loan Group 2, are Interest Only Loans and will provide that   
the related mortgagors (pursuant to the terms of the related mortgage notes) pay
only interest on the principal balances of these Mortgage Loans for the first 6,
12, 24, 36, 60, 84 or 120 months after their origination. Scheduled monthly     
payments made by the mortgagors on the Mortgage Loans (referred to as scheduled 
payments) either earlier or later than their scheduled Due Dates will not affect
the amortization schedule or the relative application of the payments to        
principal and interest. Except for approximately 29.60% and 29.40% of the       
Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, in each case by  
cut-off date principal balance of the Mortgage Loans in that loan group, the    
mortgagors may prepay their mortgage loans at any time without charge. The      
holders of the Class PF and Class PV Certificates will be entitled to all       
prepayment charges received on the Mortgage Loans in Loan Group 1 and Loan Group
2, respectively, and those amounts will not be available for distribution on the
other classes of certificates.                                                  

         The Mortgage Loans in Loan Group 2 consist of 2/28 Mortgage Loans, 3/27
Mortgage Loans, 5/25 Mortgage Loans, 3/1 Mortgage Loans, 5/1 Mortgage Loans and 
7/1 Mortgage Loans, 30-Year CMT Mortgage Loans, 30-Year One-Month LIBOR Mortgage
Loans, 30-Year Six-Month LIBOR Mortgage Loans and 30-Year Twelve-Month LIBOR    
Mortgage Loans. A "2/28 MORTGAGE LOAN," has a Mortgage Rate (each, a "MORTGAGE  
RATE") that is fixed for approximately 24 months after origination thereof      
before the Mortgage Rate for that Mortgage Loan becomes subject to semi-annual  
adjustment based on a mortgage index. A "3/27 MORTGAGE LOAN" and a "3/1 MORTGAGE
LOAN" has a Mortgage Rate that is fixed for approximately 36 months after       
origination thereof before the Mortgage Rate for that Mortgage Loan becomes     
subject to semi-annual or annual adjustment based on a mortgage index. A "5/25  
MORTGAGE LOAN" and a "5/1 MORTGAGE LOAN" has a Mortgage Rate that is fixed for  
approximately 60 months after origination thereof before the Mortgage Rate for  
that Mortgage Loan becomes subject to semi-annual or annual adjustment based on 
a mortgage index. A "7/1 MORTGAGE LOAN" has a Mortgage Rate that is fixed for   
approximately 84 months after origination thereof before the Mortgage Rate for  
that Mortgage Loan becomes subject to annual adjustment based on a mortgage     
index. A "30-YEAR TWELVE-MONTH LIBOR MORTGAGE LOAN", a "30-YEAR SIX-MONTH LIBOR 
MORTGAGE LOAN", a "30-YEAR ONE-MONTH LIBOR MORTGAGE LOAN" and a "30-YEAR CMT    
MORTGAGE LOAN" has a Mortgage Rate that is fixed for approximately 1, 6 or 12   
months after origination thereof before the Mortgage Rate for that Mortgage Loan
becomes subject to annual adjustment based on a mortgage index. Each mortgage   
note for the Group 2 Mortgage Loans will provide for adjustments to the         

S-19

424B5
20th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 20th
Mortgage Rate thereon at the end of the initial fixed-rate period and, monthly, 
semi-annually or annually thereafter (each such date, an "ADJUSTMENT DATE") to  
equal the sum, rounded to the nearest 0.125%, of (1) (A) the average of the     
London interbank offered rates for one-month ("ONE-MONTH LIBOR"), six-month     
("SIX-MONTH LIBOR") or one-year ("TWELVE-MONTH LIBOR") U.S. dollar deposits in  
the London market, generally as set forth in either The Wall Street Journal or  
some other source generally accepted in the residential mortgage loan           
origination business and specified in the related mortgage note, or, if such    
rate ceases to be published in The Wall Street Journal or becomes unavailable   
for any reason, then based upon a new index selected by the Master Servicer,    
based on comparable information, in each case, as most recently announced as of 
either 45 days prior to, or the first business day of the month immediately     
preceding the month of, such Adjustment Date or (B) 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(19) and most recently available as of the date 45 days 
before the applicable Adjustment Date ("ONE-YEAR CMT" and together with         
One-Month LIBOR, Six-Month LIBOR and Twelve-Month LIBOR, each a "MORTGAGE       
INDEX") and (2) a fixed percentage amount specified in the related mortgage note
(the "GROSS MARGIN"); provided, however, that substantially all of the Mortgage 
Rates for the Group 2 Mortgage Loans will not increase or decrease by more than 
a certain amount specified in the mortgage note (each limit on adjustments in   
the Mortgage Rate is referred to as a "SUBSEQUENT PERIODIC RATE CAP"), with the 
exception of the initial Adjustment Date for which substantially all of the     
Mortgage Rates on the Group 2 Mortgage Loans will not increase or decrease by   
more than the certain amount specified in the related mortgage note (each limit 
on initial adjustments in the Mortgage Rate is referred to as an "INITIAL       
PERIODIC RATE CAP"). Adjustments to the Mortgage Rate for each Group 2 Mortgage 
Loan are subject to a lifetime maximum interest rate (the "MAXIMUM MORTGAGE     
RATE"). Each Group 2 Mortgage Loan specifies a lifetime minimum interest rate   
(the "MINIMUM MORTGAGE RATE"), which in some cases is equal to the Gross Margin 
for that Mortgage Loan.                                                         

      The earliest and latest stated maturity date of any Mortgage Loan in
Loan Group 1 are September 1, 2015 and October 1, 2035 , respectively. The      
earliest and latest stated maturity date of any Mortgage Loan in Loan Group 2   
are September 1, 2031 and October 1, 2035, respectively.                        

      As of the cut-off date, no Mortgage Loan was delinquent more than 30
days.                                                                           

   As of the cut-off date, no Mortgage Loan was subject to a buydown
agreement. No Mortgage Loan provides for deferred interest or negative          
amortization.                                                                   

    Except for 1 Mortgage Loan representing approximately 0.22% of the
Mortgage Loans in Loan Group 1 and 3 Mortgage Loans representing approximately  
0.10% of the Mortgage Loans in Loan Group 2, in each case, by aggregate Stated  
Principal Balance of the Mortgage Loans in that loan group as of the cut-off    
date, no Mortgage Loan will have had a Loan-to-Value Ratio at origination of    
more than 95.00%. Except for 18 Mortgage Loans representing approximately 1.83% 
of the Mortgage Loans in Loan Group 1 and 125 Mortgage Loans representing       
approximately 6.46% of the Mortgage Loans in Loan Group 2, in each case, by     
aggregate Stated Principal Balance of the Mortgage Loans in that loan group as  
of the cut-off date, each Mortgage Loan with a Loan-to-Value Ratio at           
origination of greater than 80% is covered by a primary mortgage guaranty       
insurance policy issued by a mortgage insurance company acceptable to Fannie Mae
or Freddie Mac. The policy provides coverage in an amount equal to a specified  
percentage multiplied by the sum of the remaining principal balance of the      
related Mortgage Loan, the accrued interest on it and the related foreclosure   
expenses. The specified coverage percentage for mortgage loans with terms to    
maturity of between 25 and 30 years is 12% for Loan-to-Value Ratios between     
80.01% and 85.00%, 25% for Loan-to-Value Ratios between 85.01% and 90.00%, 30%  
for Loan-to-Value Ratios between 90.01% and 95.00% and 35% for Loan-to-Value    
Ratios between 95.01% and 100%. The specified coverage percentage for mortgage  
loans with terms to maturity of up to 20 years ranges from 6% to 12% for        
Loan-to-Value Ratios between 80.01% to 85.00%; from 12% to 20% for Loan-to-Value
Ratios between 85.01% to 90.00% and 20% to 25% for Loan-to-Value Ratios between 
90.01% to 95.00%. The required coverage percentage of mortgage insurance is     
determined by the type, term and Loan-to-Value Ratio of the mortgage loan and   
may also vary based on occupancy type. However, under certain circumstances, the
specified coverage level may vary from the foregoing. With respect to           
approximately 0.55% and 1.62% of the Mortgage Loans in Loan Group 1 and Loan    
Group 2, respectively, in each case by aggregate Stated Principal Balance of the
Mortgage Loans in that loan group as of the cut-off date, the lender (rather    
than the borrower) acquired the primary mortgage guaranty insurance and charged 
the related borrower an interest premium. Except for these lender acquired      
mortgage insurance Mortgage Loans, no primary mortgage guaranty insurance policy
will be required with respect to any Mortgage Loan if maintaining the policy is 

S-20

424B5
21st Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 21st
prohibited by applicable law or after the date on which the related             
Loan-to-Value Ratio is 80% or less or, based on a new appraisal, the principal  
balance of the Mortgage Loan represents 80% or less of the new appraised value. 
The primary mortgage guaranty insurance policy will be maintained for the life  
of the lender acquired mortgage insurance mortgage loans, unless otherwise      
provided in the mortgage note or otherwise prohibited by law.                   

     The "LOAN-TO-VALUE RATIO" of a Mortgage Loan at any given time is a
fraction, expressed as a percentage, the numerator of which is the principal    
balance of the related Mortgage Loan at the date of determination and the       
denominator of which is                                                         

o  in the case of a purchase, the lesser of the selling price of the mortgaged  
property or its appraised value at the time of sale, or                   

o  in the case of a refinance, the appraised value of the mortgaged property at 
   the time of the refinance, except in the case of a mortgage loan underwritten
pursuant to Countrywide Home Loans' Streamlined Documentation Program as  
described under "-- Underwriting Process" in this prospectus supplement.  

With respect to mortgage loans originated pursuant to the Streamlined           
Documentation Program,                                                          

o  if the loan-to-value ratio at the time of the origination of the mortgage    
loan being refinanced was 80% or less and the loan amount of the new loan 
  being originated is $650,000 or less, then the "Loan-to-Value Ratio" will be
 the ratio of the principal amount of the new mortgage loan being originated
  divided by the appraised value of the related mortgaged property at the time
 of the origination of the mortgage loan being refinanced, as reconfirmed by
Countrywide Home Loans using an automated property valuation system; or   

o  if the loan-to-value ratio at the time of the origination of the mortgage    
   loan being refinanced was greater than 80% or the loan amount of the new loan
being originated is greater than $650,000, then the "Loan-to-Value Ratio" 
will be the ratio of the principal amount of the new mortgage loan being  
 originated divided by the appraised value of the related mortgaged property
  as determined by an appraisal obtained by Countrywide Home Loans at the time
   of the origination of the new mortgage loan. See "-- Underwriting Process" in
this prospectus supplement.                                               

        No assurance can be given that the value of any mortgaged property has
remained or will remain at the level that existed on the appraisal or sales     
date. If residential real estate values generally or in a particular geographic 
area decline, the Loan-to-Value Ratios might not be a reliable indicator of the 
rates of delinquencies, foreclosures and losses that could occur with respect to
the Mortgage Loans.                                                             

     The following information sets forth certain characteristics of the
Mortgage Loans as of the cut-off date. Other than with respect to rates of      
interest, percentages are approximate and are stated by Stated Principal Balance
of the Mortgage Loans as of the cut-off date. The sum in any column of any of   
the following tables may not equal the indicated total due to rounding. Each    
weighted average FICO credit score set forth below has been calculated without  
regard to any Mortgage Loan for which the FICO credit score is not available. In
addition, the FICO credit scores set forth below for Mortgage Loans originated  
within six months of the cut-off date are as of the date of origination thereof 
and for all other Mortgage Loans the FICO credit scores set forth below are as  
of the cut-off date.                                                            

[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

S-21

424B5
22nd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 22nd
LOAN GROUP 1

 MORTGAGE RATES(1)

                                                        [Enlarge/Download Table]

                                                  PERCENT                           WEIGHTED                            
                                                     OF       AVERAGE               AVERAGE                  WEIGHTED   
                          NUMBER     AGGREGATE    MORTGAGE   PRINCIPAL   WEIGHTED  REMAINING    WEIGHTED      AVERAGE   
                            OF       PRINCIPAL   LOANS IN     BALANCE     AVERAGE   TERM TO     AVERAGE      ORIGINAL   
RANGE OF                 MORTGAGE     BALANCE       LOAN    OUTSTANDING  MORTGAGE   MATURITY  FICO CREDIT  LOAN-TO-VALUE
MORTGAGE RATES (%)         LOANS    OUTSTANDING   GROUP 1       ($)      RATE (%)   (MONTHS)     SCORE       RATIO (%)  
------------------         -----    -----------   -------       ---      --------   --------     -----       ---------  
                                                                                                                        
5.001 - 5.500...........       7   $  1,521,726      1.10%    217,389       5.484      325         710          63.5    
5.501 - 6.000...........      92     23,484,672     17.05     255,268       5.887      341         705          68.4    
6.001 - 6.500...........     146     28,814,670     20.92     197,361       6.316      347         687          73.8    
6.501 - 7.000...........     225     44,035,761     31.97     195,714       6.825      341         684          74.6    
7.001 - 7.500...........     113     18,600,658     13.50     164,608       7.303      342         694          77.6    
7.501 - 8.000...........      82     13,492,129      9.80     164,538       7.747      338         679          72.4    
8.001 - 8.500...........      30      3,869,101      2.81     128,970       8.311      331         644          82.2    
8.501 - 9.000...........      12      2,773,233      2.01     231,103       8.908      335         689          70.5    
9.001 - 9.500...........       2         79,573      0.06      39,786       9.334      303         711          90.5    
9.501 - 10.000..........       3      1,066,883      0.77     355,628       9.779      283         734          59.1    
                             ---   ------------    ------                                                               
   Total................     712   $137,738,406    100.00%                                                              
                             ===   ============    ======                                                               

---------                                                                       
(1)  The lender acquired mortgage insurance mortgage loans are shown in the     
   preceding table inclusive of the rates of the interest premium charged by
    the related lenders. As of the cut-off date, the weighted average mortgage
rate of the Mortgage Loans in Loan Group 1 (net of such premiums) is  
    expected to be approximately 6.801% per annum. Without the adjustment, the
 weighted average mortgage rate of the Mortgage Loans in Loan Group 1 is
expected to be approximately 6.806% per annum.                        

 CURRENT MORTGAGE LOAN PRINCIPAL BALANCES(1)

                                                        [Enlarge/Download Table]

                                                       PERCENT                          WEIGHTED                             
                                                          OF       AVERAGE               AVERAGE                  WEIGHTED   
RANGE OF                      NUMBER      AGGREGATE    MORTGAGE   PRINCIPAL   WEIGHTED  REMAINING    WEIGHTED      AVERAGE   
CURRENT MORTGAGE                OF        PRINCIPAL   LOANS IN     BALANCE     AVERAGE   TERM TO     AVERAGE      ORIGINAL   
LOAN PRINCIPAL               MORTGAGE      BALANCE       LOAN    OUTSTANDING  MORTGAGE   MATURITY  FICO CREDIT  LOAN-TO-VALUE
BALANCES ($)                   LOANS     OUTSTANDING   GROUP 1       ($)      RATE (%)   (MONTHS)     SCORE       RATIO (%)  
------------                   -----     -----------   -------       ---      --------   --------     -----       ---------  
                                                                                                                             
$0.01 - $50,000.00.............   16   $    702,480       0.51%     43,905       7.787      338         711          77.8    
$50,000.01 - $100,000.00.......  162     12,687,206       9.21      78,316       7.179      333         678          75.9    
$100,000.01 - $150,000.00......  196     24,274,405      17.62     123,849       6.860      345         686          77.9    
$150,000.01 - $200,000.00......  117     20,439,068      14.84     174,693       6.666      346         685          75.5    
$200,000.01 - $250,000.00......   57     12,742,241       9.25     223,548       6.611      349         680          75.6    
$250,000.01 - $300,000.00......   42     11,533,019       8.37     274,596       6.764      348         689          77.4    
$300,000.01 - $350,000.00......   33     10,645,582       7.73     322,593       6.624      345         681          74.3    
$350,000.01 - $400,000.00......   35     13,158,314       9.55     375,952       6.790      343         700          71.4    
$400,000.01 - $450,000.00......   19      8,020,551       5.82     422,134       6.637      310         708          69.1    
$450,000.01 - $500,000.00......    8      3,795,816       2.76     474,477       6.885      339         669          70.1    
$500,000.01 - $550,000.00......    6      3,116,384       2.26     519,397       6.252      319         725          77.4    
$550,000.01 - $600,000.00......    6      3,488,561       2.53     581,427       6.387      349         716          76.1    
$600,000.01 - $650,000.00......    4      2,524,133       1.83     631,033       8.132      305         695          74.8    
$650,000.01 - $700,000.00......    1        680,727       0.49     680,727       6.750      357         627          65.0    
$700,000.01 - $750,000.00......    1        750,000       0.54     750,000       6.990      359         644          50.0    
$750,000.01 - $1,000,000.00....    7      6,183,035       4.49     883,291       6.902      341         714          56.6    
$1,000,000.01 - $1,500,000.00..    2      2,996,883       2.18   1,498,441       7.312      358         666          44.2    
                                 ---   ------------     ------                                                               
   Total..................       712   $137,738,406     100.00%                                                              
                                 ===   ============     ======                                                               

---------                                                                       
(1)   As of the cut-off date, the average current mortgage loan principal       
balance of the Mortgage Loans in Loan Group 1 is                    
approximately $193,453.                                             

S-22

424B5
23rd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 23rd
 FICO CREDIT SCORES(1)

                                                        [Enlarge/Download Table]

                                                                                    WEIGHTED                             
                                                PERCENT OF    AVERAGE                AVERAGE                   WEIGHTED  
                        NUMBER     AGGREGATE     MORTGAGE    PRINCIPAL    WEIGHTED  REMAINING    WEIGHTED      AVERAGE   
    RANGE OF              OF       PRINCIPAL    LOANS IN      BALANCE      AVERAGE   TERM TO     AVERAGE       ORIGINAL  
    FICO CREDIT        MORTGAGE     BALANCE        LOAN     OUTSTANDING   MORTGAGE  MATURITY   FICO CREDIT  LOAN-TO-VALUE
    SCORES               LOANS    OUTSTANDING    GROUP 1        ($)       RATE (%)  (MONTHS)      SCORE       RATIO (%)  
    ------               -----    -----------    -------        ---       --------  --------      -----       ---------  
                                                                                                                         
500 or less...........   1   $    616,457        0.45%    616,457        7.750      319         487          85.0        
521 - 540.............   2        442,648        0.32     221,324        6.750      357         531          71.2        
541 - 560.............   7      1,323,379        0.96     189,054        7.654      324         555          80.9        
561 - 580.............   3        313,545        0.23     104,515        6.590      317         569          76.4        
581 - 600.............   2        344,772        0.25     172,386        6.590      315         596          57.5        
601 - 620.............  12      2,025,368        1.47     168,781        6.734      353         614          74.6        
621 - 640.............  77     14,016,708       10.18     182,035        6.963      339         632          73.7        
641 - 660............. 134     24,042,431       17.46     179,421        6.831      346         650          72.7        
661 - 680............. 127     25,663,886       18.63     202,078        6.740      346         670          72.7        
681 - 700.............  99     17,992,905       13.06     181,747        6.845      343         690          74.0        
701 - 720.............  64     13,126,715        9.53     205,105        6.849      349         709          73.3        
721 - 740.............  76     12,268,550        8.91     161,428        6.723      333         730          75.9        
741 - 760.............  45     10,152,684        7.37     225,615        6.692      332         751          77.1        
761 - 780.............  32      6,607,334        4.80     206,479        6.610      344         768          74.5        
781 - 800.............  19      5,720,378        4.15     301,073        6.620      330         791          68.4        
801 - 820.............   9      2,347,309        1.70     260,812        7.038      320         805          60.9        
Not Available.........   3        733,338        0.53     244,446        7.203      287         N/A          68.9        
                       ---   ------------      ------                                                                    
                       712   $137,738,406      100.00%                                                                   
                       ===   ============      ======                                                                    

---------                                                                       
(1)   As of the cut-off date, the weighted average FICO Credit Score (where     
      available) of the mortgagors related to the Mortgage Loans in Loan Group 1
is approximately 689.                                               

DOCUMENTATION PROGRAM FOR MORTGAGE LOANS

                                                        [Enlarge/Download Table]

                                                     PERCENT                           WEIGHTED                             
                                                        OF        AVERAGE              AVERAGE                   WEIGHTED   
                              NUMBER     AGGREGATE    MORTGAGE   PRINCIPAL   WEIGHTED  REMAINING    WEIGHTED      AVERAGE   
                                OF       PRINCIPAL   LOANS IN     BALANCE     AVERAGE  TERM TO      AVERAGE      ORIGINAL   
                             MORTGAGE     BALANCE       LOAN    OUTSTANDING  MORTGAGE  MATURITY   FICO CREDIT  LOAN-TO-VALUE
TYPE OF PROGRAM                LOANS    OUTSTANDING   GROUP 1       ($)      RATE (%)   (MONTHS)     SCORE       RATIO (%)  
---------------                -----    -----------   -------       ---      --------   --------     -----       ---------  
                                                                                                                            
Reduced.....................     163   $ 28,028,068     20.35%    171,951       6.984       348        687          77.7    
Full/Alternative............     278     47,051,446     34.16     169,250       6.508       341        686          76.8    
No Ratio....................      92     26,002,014     18.88     282,631       6.849       342        689          63.5    
No Income/No Asset..........      86     15,868,840     11.52     184,521       7.104       350        683          72.3    
Stated Income/Stated Asset..      62      9,879,839      7.17     159,352       6.784       349        679          74.4    
Preferred...................      21      7,990,282      5.80     380,490       7.250       303        744          72.9    
Streamlined.................       4      1,465,362      1.06     366,340       7.151       283        683          68.6    
Full DU.....................       6      1,452,555      1.05     242,093       6.418       307        638          75.1    
                                 ---   ------------    ------                                                               
   Total....................     712   $137,738,406    100.00%                                                              
                                 ===   ============    ======                                                               

S-23

424B5
24th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 24th
 ORIGINAL LOAN-TO-VALUE RATIOS(1)(2)

                                                        [Enlarge/Download Table]

                                                                                  WEIGHTED                             
                                               PERCENT OF    AVERAGE               AVERAGE                   WEIGHTED  
                        NUMBER     AGGREGATE    MORTGAGE    PRINCIPAL   WEIGHTED  REMAINING    WEIGHTED      AVERAGE   
RANGE OF ORIGINAL         OF       PRINCIPAL   LOANS IN      BALANCE     AVERAGE   TERM TO     AVERAGE       ORIGINAL  
LOAN-TO-VALUE          MORTGAGE     BALANCE       LOAN     OUTSTANDING  MORTGAGE   MATURITY  FICO CREDIT  LOAN-TO-VALUE
RATIOS (%)               LOANS    OUTSTANDING   GROUP 1        ($)      RATE (%)   (MONTHS)     SCORE       RATIO (%)  
----------               -----    -----------   -------        ---      --------   --------     -----       ---------  
                                                                                                                       
50.00 and Below.......      35    $11,943,070      8.67%     341,231       6.874      333         694          41.7    
50.01 to 55.00........      10      1,604,335      1.16      160,433       6.150      320         702          53.4    
55.01 to 60.00........      28      8,644,523      6.28      308,733       6.753      338         690          58.2    
60.01 to 65.00........      34      8,316,996      6.04      244,618       6.367      348         673          63.9    
65.01 to 70.00........      46      9,221,739      6.70      200,473       6.843      328         704          68.5    
70.01 to 75.00........      59     11,761,730      8.54      199,351       6.773      342         696          73.4    
75.01 to 80.00........     423     73,185,479     53.13      173,015       6.736      344         689          79.7    
80.01 to 85.00........      15      2,781,857      2.02      185,457       7.524      336         638          84.0    
85.01 to 90.00........      43      7,163,049      5.20      166,583       7.327      338         680          89.9    
90.01 to 95.00........      18      2,818,040      2.05      156,558       7.988      343         697          94.6    
95.01 to 100.00.......       1        297,587      0.22      297,587       8.500      348         654         100.0    
                           ---   ------------    ------                                                                
   Total..............     712   $137,738,406    100.00%                                                               
                           ===   ============    ======                                                                

---------                                                                       
(1)   As of the cut-off date, the weighted average original Loan-to-Value Ratio 
of the Mortgage Loans in Loan Group 1 is approximately 73.46%.      
(2)   Does not take into account any secondary financing on the Mortgage Loans  
in Loan Group 1 that may exist at the time of origination.          

S-24

424B5
25th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 25th
 STATE DISTRIBUTION OF MORTGAGED PROPERTIES(1)

                                                        [Enlarge/Download Table]

                                                PERCENT                          WEIGHTED                             
                                                   OF       AVERAGE               AVERAGE                   WEIGHTED  
                        NUMBER     AGGREGATE    MORTGAGE   PRINCIPAL   WEIGHTED  REMAINING    WEIGHTED      AVERAGE   
                          OF       PRINCIPAL   LOANS IN     BALANCE     AVERAGE   TERM TO     AVERAGE       ORIGINAL  
                       MORTGAGE     BALANCE       LOAN    OUTSTANDING  MORTGAGE   MATURITY  FICO CREDIT  LOAN-TO-VALUE
STATE                    LOANS    OUTSTANDING   GROUP 1       ($)      RATE (%)   (MONTHS)     SCORE       RATIO (%)  
-----                    -----    -----------   -------       ---      --------   --------     -----       ---------  
                                                                                                                      
Alabama...............       3    $   628,759      0.46%    209,586       7.434      335         623          79.0    
Arkansas..............       3        243,361      0.18      81,120       7.247      297         673          89.8    
Arizona...............      22      5,345,534      3.88     242,979       6.854      335         712          77.6    
California............      59     18,862,756     13.69     319,708       6.515      333         715          69.5    
Colorado..............      12      2,850,940      2.07     237,578       6.850      336         713          77.5    
Connecticut...........      11      3,961,932      2.88     360,176       6.825      338         668          60.3    
District of Columbia..       2        497,108      0.36     248,554       6.412      354         688          46.8    
Delaware..............       9        907,381      0.66     100,820       6.365      328         650          74.3    
Florida...............      78     12,942,330      9.40     165,927       7.067      350         707          77.6    
Georgia...............      50      7,285,019      5.29     145,700       6.924      344         687          77.7    
Hawaii................       1        791,447      0.57     791,447       7.250      318         769          68.5    
Iowa..................       3        346,089      0.25     115,363       6.613      265         706          80.0    
Idaho.................       2        265,857      0.19     132,928       6.196      359         712          79.2    
Illinois..............      11      1,850,215      1.34     168,201       7.158      349         684          82.9    
Indiana...............      19      2,122,367      1.54     111,704       6.843      309         678          78.6    
Kansas................       2        170,863      0.12      85,432       6.745      359         712          71.1    
Kentucky..............       5        422,469      0.31      84,494       6.877      323         641          78.7    
Louisiana.............       1        134,426      0.10     134,426       6.875      355         675          69.2    
Massachusetts.........       7      1,896,563      1.38     270,938       7.006      357         677          80.4    
Maryland..............      12      2,517,970      1.83     209,831       6.835      344         676          76.0    
Maine.................       4      1,356,297      0.98     339,074       8.262      332         700          62.4    
Michigan..............      16      1,839,946      1.34     114,997       6.919      355         705          78.4    
Minnesota.............      13      2,464,422      1.79     189,571       6.473      318         697          79.8    
Missouri..............      12      1,010,605      0.73      84,217       7.128      308         664          78.1    
North Carolina........      20      2,892,402      2.10     144,620       6.821      345         688          81.0    
North Dakota..........       1         87,126      0.06      87,126       6.840      359         668          80.0    
Nebraska..............       1         95,694      0.07      95,694       7.250      356         692          80.0    
New Hampshire.........       7      1,192,118      0.87     170,303       6.339      354         691          77.1    
New Jersey............      17      4,266,515      3.10     250,971       6.756      350         696          71.2    
Nevada................       2        412,630      0.30     206,315       6.946      281         651          77.6    
New York..............      69     21,065,779     15.29     305,301       6.725      349         678          61.8    
Ohio..................      34      4,539,595      3.30     133,518       6.762      350         663          79.1    
Oklahoma..............      11      1,062,807      0.77      96,619       7.258      352         682          79.9    
Oregon................       7      1,437,548      1.04     205,364       6.637      289         640          78.2    
Pennsylvania..........      71     10,887,020      7.90     153,338       6.531      348         691          77.7    
Rhode Island..........       1        132,776      0.10     132,776       6.875      358         654          62.6    
South Carolina........      13      2,217,502      1.61     170,577       6.921      351         661          80.1    
Tennessee.............      17      2,076,709      1.51     122,159       7.256      357         673          79.0    
Texas.................      49      6,818,789      4.95     139,159       7.065      346         679          78.9    
Utah..................       3        887,456      0.64     295,819       7.627      323         537          84.8    
Virginia..............      23      5,414,116      3.93     235,396       6.689      334         687          77.2    
Washington............       5        903,246      0.66     180,649       7.209      301         661          71.6    
Wisconsin.............       3        518,522      0.38     172,841       6.415      299         697          76.2    
West Virginia.........       1        115,401      0.08     115,401       6.790      359         641          73.6    
                           ---   ------------    ------                                                               
   Total..............     712   $137,738,406    100.00%                                                              
                           ===   ============    ======                                                               

---------                                                                       
(1)   As of the cut-off date, no more than approximately 1.089% of the Mortgage 
    Loans in Loan Group 1 will be secured by mortgaged properties located in
any one postal zip code area.                                       

S-25

424B5
26th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 26th
 PURPOSE OF MORTGAGE LOANS

                                                        [Enlarge/Download Table]

                                                  PERCENT                          WEIGHTED                             
                                                     OF       AVERAGE               AVERAGE                  WEIGHTED   
                          NUMBER     AGGREGATE    MORTGAGE   PRINCIPAL   WEIGHTED  REMAINING    WEIGHTED      AVERAGE   
                            OF       PRINCIPAL   LOANS IN     BALANCE     AVERAGE   TERM TO     AVERAGE      ORIGINAL   
                         MORTGAGE     BALANCE       LOAN    OUTSTANDING  MORTGAGE  MATURITY   FICO CREDIT  LOAN-TO-VALUE
LOAN PURPOSE               LOANS    OUTSTANDING   GROUP 1       ($)      RATE (%)  (MONTHS)      SCORE       RATIO (%)  
------------               -----    -----------   -------       ---      --------  --------      -----       ---------  
                                                                                                                        
Purchase................     290   $ 48,420,052     35.15%    166,966       6.910      347         701         79.7     
Refinance (cash-out)....     294     64,585,696     46.89     219,679       6.725      342         679         68.6     
Refinance (rate/term)...     128     24,732,658     17.96     193,224       6.817      327         692         73.9     
                             ---   ------------    ------                                                               
   Total................     712   $137,738,406    100.00%                                                              
                             ===   ============    ======                                                               

TYPE OF MORTGAGED PROPERTIES

                                                        [Enlarge/Download Table]

                                                                                             WEIGHTED                          
                                                          PERCENT OF    AVERAGE              AVERAGE    WEIGHTED   WEIGHTED    
                                  NUMBER      AGGREGATE    MORTGAGE    PRINCIPAL   WEIGHTED  REMAINING   AVERAGE    AVERAGE    
                                    OF        PRINCIPAL   LOANS IN      BALANCE     AVERAGE  TERM TO     FICO       ORIGINAL   
                                 MORTGAGE      BALANCE       LOAN     OUTSTANDING  MORTGAGE  MATURITY    CREDIT   LOAN-TO-VALUE
PROPERTY TYPE                      LOANS     OUTSTANDING   GROUP 1        ($)      RATE (%)   (MONTHS)    SCORE    RATIO (%)   
-------------                      -----     -----------   -------        ---      --------   --------    -----    ---------   
                                                                                                                               
Single Family Residence........      517   $ 94,736,912      68.78%     183,244       6.826       339        687       74.3    
2-4 Family Residence...........       55     12,112,690       8.79      220,231       6.816       348        675       68.5    
Planned Unit Development.......       98     20,799,844      15.10      212,243       6.781       345        703       78.1    
Low-Rise Condominium...........       34      5,634,257       4.09      165,713       6.401       345        714       74.6    
High-Rise Condominium..........        4      2,629,192       1.91      657,298       6.456       357        683       53.7    
Cooperative....................        2      1,637,806       1.19      818,903       7.853       352        683       31.9    
Manufactured Housing(1)........        2        187,705       0.14       93,852       7.236       358        609       79.8    
                                     ---   ------------     ------                                                             
   Total........................     712   $137,738,406     100.00%                                                            
                                     ===   ============     ======                                                             

-----------                                                                     
(1) Treated as real property                                                    

OCCUPANCY TYPES(1)

                                                        [Enlarge/Download Table]

                                                                                     WEIGHTED                             
                                                  PERCENT OF    AVERAGE               AVERAGE                  WEIGHTED   
                           NUMBER     AGGREGATE    MORTGAGE    PRINCIPAL   WEIGHTED  REMAINING    WEIGHTED      AVERAGE   
                             OF       PRINCIPAL    LOANS IN     BALANCE     AVERAGE   TERM TO     AVERAGE      ORIGINAL   
                          MORTGAGE     BALANCE       LOAN     OUTSTANDING  MORTGAGE  MATURITY   FICO CREDIT  LOAN-TO-VALUE
OCCUPANCY TYPE              LOANS    OUTSTANDING    GROUP 1       ($)      RATE (%)  (MONTHS)      SCORE       RATIO (%)  
--------------              -----    -----------    -------       ---      --------  --------      -----       ---------  
                                                                                                                          
Primary Residence........     589   $118,060,386     85.71%     200,442       6.795      340         685         73.4     
Investment Property......     100     13,935,208     10.12      139,352       6.909      342         704         72.3     
Secondary Residence......      23      5,742,812      4.17      249,687       6.798      355         735         76.8     
                              ---   ------------    ------                                                                
   Total.................     712   $137,738,406    100.00%                                                               
                              ===   ============    ======                                                                

-----------                                                                     
(1) Based upon representations of the related borrowers at the time of          
origination.                                                                    

S-26

424B5
27th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 27th
REMAINING TERMS TO MATURITY(1)

                                                        [Enlarge/Download Table]

                                                                                           WEIGHTED                          
                                                        PERCENT OF    AVERAGE              AVERAGE    WEIGHTED   WEIGHTED    
                                 NUMBER     AGGREGATE    MORTGAGE    PRINCIPAL   WEIGHTED  REMAINING   AVERAGE    AVERAGE    
                                   OF       PRINCIPAL   LOANS IN      BALANCE     AVERAGE  TERM TO      FICO     ORIGINAL    
REMAINING TERM                  MORTGAGE     BALANCE       LOAN     OUTSTANDING  MORTGAGE  MATURITY    CREDIT   LOAN-TO-VALUE
TO MATURITY (MONTHS)              LOANS    OUTSTANDING   GROUP 1        ($)      RATE (%)   (MONTHS)    SCORE    RATIO (%)   
--------------------              -----    -----------   -------        ---      --------   --------    -----    ---------   
                                                                                                                             
360............................       6   $   729,400       0.53%     121,567       6.588      360        644       78.1     
359............................     249    40,721,288      29.56      163,539       6.734      359        679       77.4     
358............................      69    15,773,781      11.45      228,606       6.586      358        685       69.9     
357............................     109    24,891,937      18.07      228,366       6.527      357        689       68.6     
356............................      26     5,042,327       3.66      193,936       6.441      356        718       67.4     
355............................      54     8,832,676       6.41      163,568       7.036      355        695       78.8     
354............................      48     8,865,743       6.44      184,703       7.097      354        683       77.1     
353............................      16     2,603,254       1.89      162,703       6.906      353        696       76.7     
352............................       9     1,739,268       1.26      193,252       6.423      352        700       74.2     
351............................       1       594,630       0.43      594,630       6.125      351        762       80.0     
350............................       3       223,483       0.16       74,494       7.041      350        666       86.6     
348............................       4       605,639       0.44      151,410       7.922      348        662       79.8     
347............................       1        49,464       0.04       49,464       7.250      347        807       35.2     
346............................       2       251,403       0.18      125,701       6.648      346        676       72.2     
345............................       1        77,202       0.06       77,202       7.000      345        683       85.0     
341............................       1       138,247       0.10      138,247       7.125      341        740       58.5     
340............................       2       234,936       0.17      117,468       7.274      340        721       72.0     
336............................       1       364,942       0.26      364,942       5.750      336        673       73.5     
334............................       1       160,925       0.12      160,925       6.750      334        627       65.0     
329............................       1       268,158       0.19      268,158       6.875      329        697       80.0     
321............................       7     3,272,184       2.38      467,455       7.839      321        744       65.1     
320............................       2       258,564       0.19      129,282       7.000      320        737       70.2     
319............................       6     2,352,200       1.71      392,033       7.495      319        619       80.1     
318............................       4     2,086,071       1.51      521,518       7.325      318        699       75.3     
317............................       4     2,044,309       1.48      511,077       7.558      317        699       57.3     
315............................       4     1,710,824       1.24      427,706       7.009      315        727       74.7     
314............................       1       374,723       0.27      374,723       6.875      314        800       80.0     
312............................       3       206,366       0.15       68,789       8.213      312        708       89.7     
311............................       2       114,931       0.08       57,465       8.192      311        691       93.1     
310............................       3       506,811       0.37      168,937       7.743      310        708       76.7     
309............................       2       919,410       0.67      459,705       7.584      309        695       86.5     
307............................       1       429,772       0.31      429,772       6.875      307        711       79.9     
305............................       1       130,055       0.09      130,055       7.375      305        695       80.0     
304............................       4       417,115       0.30      104,279       7.940      304        720       74.4     
303............................       2       197,275       0.14       98,638       9.113      303        731       94.9     
301............................       1        65,311       0.05       65,311       8.375      301        629       89.4     
300............................       1       119,118       0.09      119,118       7.500      300        639       90.0     
298............................       1       247,349       0.18      247,349       6.625      298        600       48.6     
297............................       1       140,923       0.10      140,923       7.625      297        806       70.0     
296............................       1        78,669       0.06       78,669       7.625      296        706       89.8     
294............................       1       467,468       0.34      467,468       7.125      294        725       71.4     
292............................       1        89,912       0.07       89,912       8.000      292        667       90.0     
291............................       1       297,133       0.22      297,133       6.875      291        764       80.0     
271............................       1        52,555       0.04       52,555       8.250      271        681       95.0     
268............................       1       360,038       0.26      360,038       7.000      268        728       71.0     
239............................       4       413,743       0.30      103,436       6.398      239        636       79.8     
234............................       2       732,289       0.53      366,145       9.521      234        785       50.8     
228............................       1       230,201       0.17      230,201       7.000      228        N/A       55.6     
207............................       1        65,381       0.05       65,381       7.875      207        674       85.1     
201............................       2       824,566       0.60      412,283       7.001      201        767       51.0     
194............................       2       660,237       0.48      330,119       6.750      194        674       64.9     
179............................      23     3,721,621       2.70      161,810       6.372      179        676       77.2     
178............................       2       177,222       0.13       88,611       6.535      178        729       74.9     
177............................       9     1,219,445       0.89      135,494       6.032      177        682       61.4     

S-27

424B5
28th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 28th
                                                        [Enlarge/Download Table]

                                                                                             WEIGHTED                          
                                                          PERCENT OF    AVERAGE              AVERAGE    WEIGHTED   WEIGHTED    
                                  NUMBER      AGGREGATE    MORTGAGE    PRINCIPAL   WEIGHTED  REMAINING   AVERAGE    AVERAGE    
                                    OF        PRINCIPAL   LOANS IN      BALANCE     AVERAGE  TERM TO      FICO     ORIGINAL    
REMAINING TERM                   MORTGAGE      BALANCE       LOAN     OUTSTANDING  MORTGAGE  MATURITY    CREDIT   LOAN-TO-VALUE
TO MATURITY (MONTHS)               LOANS     OUTSTANDING   GROUP 1        ($)      RATE (%)   (MONTHS)    SCORE    RATIO (%)   
--------------------               -----     -----------   -------        ---      --------   --------    -----    ---------   
                                                                                                                               
176............................        2   $    253,181       0.18%     126,591       6.481      176        694       80.0     
175............................        2        200,459       0.15      100,230       7.957      175        643       85.8     
173............................        1         62,693       0.05       62,693       8.125      173        681       61.0     
119............................        1         69,579       0.05       69,579       6.250      119        663       30.2     
                                     ---   ------------     ------                                                             
   Total........................     712   $137,738,406     100.00%                                                            
                                     ===   ============     ======                                                             

------------                                                                    
(1)   As of the cut-off date, the weighted average remaining term to maturity of
the Mortgage Loans in Loan Group 1 is approximately 341 months.     

S-28

424B5
29th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 29th
LOAN GROUP 2

 MORTGAGE RATES(1)

                                                        [Enlarge/Download Table]

                                                                                      WEIGHTED                             
                                                   PERCENT OF    AVERAGE              AVERAGE                   WEIGHTED   
                            NUMBER     AGGREGATE    MORTGAGE    PRINCIPAL   WEIGHTED  REMAINING    WEIGHTED     AVERAGE    
                              OF       PRINCIPAL    LOANS IN     BALANCE     AVERAGE  TERM TO      AVERAGE      ORIGINAL   
RANGE OF                   MORTGAGE     BALANCE       LOAN     OUTSTANDING  MORTGAGE  MATURITY   FICO CREDIT  LOAN-TO-VALUE
MORTGAGE RATES (%)           LOANS    OUTSTANDING   GROUP 2        ($)      RATE (%)   (MONTHS)     SCORE      RATIO (%)   
------------------           -----    -----------   -------        ---      --------   --------     -----      ---------   
                                                                                                                           
3.001 - 3.500.............       1   $    280,932     0.06%      280,932       3.375      355         658          90.0    
3.501 - 4.000.............       9      1,466,083     0.31       162,898       3.906      355         686          78.8    
4.001 - 4.500.............      10      2,904,783     0.62       290,478       4.302      352         699          71.6    
4.501 - 5.000.............      67     19,485,338     4.13       290,826       4.828      336         709          77.6    
5.001 - 5.500.............     192     50,550,208    10.72       263,282       5.345      354         702          76.6    
5.501 - 6.000.............     570    130,204,551    27.62       228,429       5.812      357         698          79.6    
6.001 - 6.500.............     614    137,829,802    29.24       224,479       6.296      357         689          79.6    
6.501 - 7.000.............     427     88,136,158    18.70       206,408       6.736      357         684          79.8    
7.001 - 7.500.............     122     24,031,960     5.10       196,983       7.282      357         692          81.0    
7.501 - 8.000.............      58     10,535,347     2.24       181,644       7.741      357         679          80.9    
8.001 - 8.500.............      23      4,603,346     0.98       200,145       8.248      357         677          82.3    
8.501 - 9.000.............       7      1,202,386     0.26       171,769       8.710      357         718          86.2    
9.001 - 9.500.............       1         99,851     0.02        99,851       9.500      357         565          54.1    
                             -----   ------------   ------                                                                 
   Total.............        2,101   $471,330,748   100.00%                                                                
                             =====   ============   ======                                                                 

---------                                                                       
(1)   The lender acquired mortgage insurance mortgage loans are shown in the    
     preceding table inclusive of the rates of the interest premium charged by
      the related lenders. As of the cut-off date, the weighted average mortgage
rate of the Mortgage Loans in Loan Group 2 (net of such premiums) is
      expected to be approximately 6.156% per annum. Without the adjustment, the
   weighted average mortgage rate of the Mortgage Loans in Loan Group 2 is
expected to be approximately 6.169% per annum.                      

 CURRENT MORTGAGE LOAN PRINCIPAL BALANCES(1)

                                                        [Enlarge/Download Table]

                                                                                         WEIGHTED                             
                                                      PERCENT OF    AVERAGE              AVERAGE                   WEIGHTED   
RANGE OF                       NUMBER    AGGREGATE     MORTGAGE    PRINCIPAL   WEIGHTED  REMAINING    WEIGHTED     AVERAGE    
CURRENT MORTGAGE                 OF      PRINCIPAL     LOANS IN     BALANCE     AVERAGE  TERM TO      AVERAGE      ORIGINAL   
LOAN PRINCIPAL                MORTGAGE    BALANCE        LOAN     OUTSTANDING  MORTGAGE  MATURITY   FICO CREDIT  LOAN-TO-VALUE
BALANCES ($)                    LOANS   OUTSTANDING    GROUP 2        ($)      RATE (%)   (MONTHS)     SCORE      RATIO (%)   
------------                    -----   -----------    -------        ---      --------   --------     -----      ---------   
                                                                                                                              
0.01 - 50,000.00.............       5   $   203,830      0.04%       40,766       6.160      354         726          78.5    
50,000.01 - 100,000.00.......     215    17,526,084      3.72        81,517       6.546      357         686          78.8    
100,000.01 - 150,000.00......     457    57,895,258     12.28       126,685       6.227      356         689          80.1    
150,000.01 - 200,000.00......     448    78,052,843     16.56       174,225       6.219      357         689          79.4    
200,000.01 - 250,000.00......     282    63,454,116     13.46       225,015       6.174      356         691          79.8    
250,000.01 - 300,000.00......     239    65,658,417     13.93       274,721       6.187      357         691          80.4    
300,000.01 - 350,000.00......     172    55,887,561     11.86       324,928       6.171      355         691          79.9    
350,000.01 - 400,000.00......     114    42,918,780      9.11       376,481       6.190      357         694          79.3    
400,000.01 - 450,000.00......      66    28,088,810      5.96       425,588       6.053      355         704          78.8    
450,000.01 - 500,000.00......      42    19,840,115      4.21       472,384       6.248      357         696          79.8    
500,000.01 - 550,000.00......      29    15,266,213      3.24       526,421       6.036      350         699          76.3    
550,000.01 - 600,000.00......      14     8,113,565      1.72       579,540       5.951      350         685          79.6    
600,000.01 - 650,000.00......       6     3,835,487      0.81       639,248       5.641      352         698          77.3    
650,000.01 - 700,000.00......       3     2,030,911      0.43       676,970       6.809      357         700          78.1    
750,000.01 - 1,000,000.00....       6     5,308,638      1.13       884,773       5.369      344         704          74.7    
1,000,000.01 - 1,500,000.00..       1     1,336,927      0.28     1,336,927       4.875      329         759          75.0    
2,000,000.01 and above.......       2     5,913,193      1.25     2,956,596       5.438      345         734          65.3    
                                -----   ------------   ------                                                                 
   Total.............           2,101   $471,330,748   100.00%                                                                
                                =====   ============   ======                                                                 

---------                                                                       
(1)   As of the cut-off date, the average current mortgage loan principal       
    balance of the Mortgage Loans in Loan Group 2 is approximately $224,336.

S-29

424B5
30th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 30th
 FICO CREDIT SCORES(1)

                                                        [Enlarge/Download Table]

                                               PERCENT                          WEIGHTED                             
                                                  OF       AVERAGE               AVERAGE                   WEIGHTED  
                       NUMBER     AGGREGATE    MORTGAGE   PRINCIPAL   WEIGHTED  REMAINING    WEIGHTED      AVERAGE   
RANGE OF                 OF       PRINCIPAL   LOANS IN     BALANCE     AVERAGE   TERM TO     AVERAGE       ORIGINAL  
FICO CREDIT           MORTGAGE     BALANCE       LOAN    OUTSTANDING  MORTGAGE  MATURITY   FICO CREDIT  LOAN-TO-VALUE
SCORES                  LOANS    OUTSTANDING   GROUP 2       ($)      RATE (%)  (MONTHS)      SCORE       RATIO (%)  
------                  -----    -----------   -------       ---      --------  --------      -----       ---------  
                                                                                                                     
541 - 560............       2   $    742,540      0.16%    371,270       5.490      358         557          67.6    
561 - 580............       4      1,045,642      0.22     261,411       6.163      343         569          71.5    
581 - 600............       4        678,443      0.14     169,611       5.920      355         595          79.3    
601 - 620............      16      4,911,829      1.04     306,989       6.452      352         613          78.7    
621 - 640............     183     37,935,413      8.05     207,297       6.370      357         632          78.4    
641 - 660............     181     39,200,301      8.32     216,576       6.169      354         652          78.9    
661 - 680............     588    120,498,468     25.57     204,929       6.253      357         670          79.7    
681 - 700............     402     90,426,876     19.19     224,942       6.193      356         690          79.5    
701 - 720............     267     61,810,499     13.11     231,500       6.126      357         709          79.8    
721 - 740............     172     46,829,989      9.94     272,267       5.942      354         731          78.9    
741 - 760............     143     34,712,718      7.36     242,746       6.124      353         749          79.9    
761 - 780............      90     20,625,910      4.38     229,177       6.035      353         769          79.3    
781 - 800............      35      8,686,728      1.84     248,192       5.910      353         789          78.4    
801 - 820............      13      2,473,390      0.52     190,261       5.879      356         806          76.2    
Not Available........       1        752,000      0.16     752,000       6.000      359         N/A          61.1    
                        -----   ------------    ------                                                               
   Total.............   2,101   $471,330,748    100.00%                                                              
                        =====   ============    ======                                                               

---------                                                                       
(1)   As of the cut-off date, the weighted average FICO Credit Score (where     
      available) of the mortgagors related to the Mortgage Loans in Loan Group 2
is approximately 693.                                               

 DOCUMENTATION PROGRAMS FOR MORTGAGE LOANS

                                                        [Enlarge/Download Table]

                                                                                       WEIGHTED                          
                                                    PERCENT OF    AVERAGE              AVERAGE    WEIGHTED   WEIGHTED    
                             NUMBER     AGGREGATE    MORTGAGE    PRINCIPAL   WEIGHTED  REMAINING   AVERAGE    AVERAGE    
                               OF       PRINCIPAL   LOANS IN      BALANCE     AVERAGE  TERM TO      FICO     ORIGINAL    
                            MORTGAGE     BALANCE       LOAN     OUTSTANDING  MORTGAGE  MATURITY    CREDIT   LOAN-TO-VALUE
TYPE OF PROGRAM              LOANS     OUTSTANDING   GROUP 2        ($)      RATE (%)   (MONTHS)    SCORE    RATIO (%)   
---------------              -----     -----------   -------        ---      --------   --------    -----    ---------   
                                                                                                                         
Full/Alternative..........     808    $159,486,677     33.84%     197,385       5.893      354        691       79.6     
Reduced...................   1,214     291,807,557     61.91      240,369       6.281      357        693       79.2     
Stated Income/Stated Asset      21       5,722,816      1.21      272,515       6.537      356        700       77.8     
No Income/No Asset........      20       4,277,044      0.91      213,852       7.425      357        705       79.8     
Preferred.................       5       1,957,985      0.42      391,597       7.080      345        741       83.1     
No Ratio..................      19       4,840,646      1.03      254,771       6.944      356        698       80.4     
Streamlined...............       6       1,759,533      0.37      293,255       5.403      356        616       72.0     
FULL-DU...................       8       1,478,489      0.31      184,811       5.799      358        684       80.9     
                             -----    ------------    ------                                                             
   Total.............        2,101    $471,330,748    100.00%                                                            
                             =====    ============    ======                                                             

S-30

424B5
31st Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 31st
 ORIGINAL LOAN-TO-VALUE RATIOS(1)(2)

                                                        [Enlarge/Download Table]

                                                                                WEIGHTED                             
                                             PERCENT OF    AVERAGE               AVERAGE                   WEIGHTED  
RANGE OF              NUMBER     AGGREGATE    MORTGAGE    PRINCIPAL   WEIGHTED  REMAINING   WEIGHTED       AVERAGE   
ORIGINAL                OF       PRINCIPAL   LOANS IN      BALANCE     AVERAGE   TERM TO     AVERAGE       ORIGINAL  
LOAN-TO-VALUE        MORTGAGE     BALANCE       LOAN     OUTSTANDING  MORTGAGE  MATURITY   FICO CREDIT  LOAN-TO-VALUE
RATIOS (%)             LOANS    OUTSTANDING   GROUP 2        ($)      RATE (%)  (MONTHS)      SCORE       RATIO (%)  
----------             -----    -----------   -------        ---      --------  --------      -----       ---------  
                                                                                                                     
50.00 and Below......     16   $  2,798,624      0.59%     174,914       6.200     346         690           41.3    
50.01 - 55.00........      9      2,014,294      0.43      223,810       5.798     339         653           52.5    
55.01 - 60.00........     13      3,693,024      0.78      284,079       5.145     344         694           57.8    
60.01 - 65.00........     21      9,092,382      1.93      432,971       5.677     351         687           63.3    
65.01 - 70.00........     49     15,686,618      3.33      320,135       5.830     351         699           68.7    
70.01 - 75.00........     68     17,386,542      3.69      255,684       6.140     348         696           73.9    
75.01 - 80.00........  1,743    379,165,367     80.45      217,536       6.189     356         692           79.9    
80.01 - 85.00........     38      9,066,564      1.92      238,594       6.167     356         695           84.1    
85.01 - 90.00........    109     25,100,870      5.33      230,283       6.345     356         694           89.6    
90.01 - 95.00........     32      6,847,717      1.45      213,991       6.589     355         711           94.6    
95.01 - 100.00.......      3        478,745      0.10      159,582       5.299     350         662           98.0    
                       -----   ------------    ------                                                                
   Total...........    2,101   $471,330,748    100.00%                                                               
                       =====   ============    ======                                                                

---------                                                                       
(1)   As of the cut-off date, the weighted average original Loan-to-Value Ratio 
of the Mortgage Loans in Loan Group 2 is approximately 79.32%.      
(2)   Does not take into account any secondary financing on the Mortgage Loans  
in Loan Group 2 that may exist at the time of origination.          

S-31

424B5
32nd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 32nd
 STATE DISTRIBUTION OF MORTGAGED PROPERTIES(1)

                                                        [Enlarge/Download Table]

                                                PERCENT                          WEIGHTED                             
                                                   OF       AVERAGE               AVERAGE                   WEIGHTED  
                        NUMBER     AGGREGATE    MORTGAGE   PRINCIPAL   WEIGHTED  REMAINING    WEIGHTED      AVERAGE   
                          OF       PRINCIPAL   LOANS IN     BALANCE     AVERAGE   TERM TO     AVERAGE       ORIGINAL  
                       MORTGAGE     BALANCE       LOAN    OUTSTANDING  MORTGAGE   MATURITY  FICO CREDIT  LOAN-TO-VALUE
STATE                    LOANS    OUTSTANDING   GROUP 2       ($)      RATE (%)   (MONTHS)     SCORE       RATIO (%)  
-----                    -----    -----------   -------       ---      --------   --------     -----       ---------  
                                                                                                                      
Alabama...............     4   $   477,119       0.10%    119,280       5.744     357         669           87.2      
Arizona...............    79     14,773,603      3.13     187,008       6.252     356         691           79.6      
California............   474    155,587,944     33.01     328,245       5.965     356         697           78.8      
Colorado..............    64     10,728,447      2.28     167,632       5.896     354         682           79.0      
Connecticut...........    17      3,690,475      0.78     217,087       6.137     355         697           77.4      
District of Columbia..     2        638,800      0.14     319,400       7.501     357         691           80.0      
Delaware..............     5      1,054,899      0.22     210,980       6.189     358         683           87.1      
Florida...............   150     29,551,326      6.27     197,009       6.285     355         705           79.0      
Georgia...............    48      8,712,847      1.85     181,518       6.113     346         693           78.2      
Iowa..................     9      1,207,077      0.26     134,120       6.228     354         659           80.0      
Idaho.................    10      1,845,560      0.39     184,556       6.423     358         673           80.0      
Illinois..............   196     39,480,214      8.38     201,430       6.261     357         689           79.8      
Indiana...............    18      2,435,951      0.52     135,331       6.197     355         695           81.9      
Kansas................     8      1,136,133      0.24     142,017       7.047     358         688           84.1      
Kentucky..............    21      3,240,411      0.69     154,305       5.933     356         691           78.0      
Louisiana.............     2        136,313      0.03      68,157       6.251     357         686           80.0      
Massachusetts.........    24      6,211,563      1.32     258,815       6.336     357         683           81.2      
Maryland..............    99     24,746,888      5.25     249,969       6.549     357         684           80.1      
Maine.................     3        404,716      0.09     134,905       5.644     358         697           80.0      
Michigan..............    60      9,185,958      1.95     153,099       6.255     353         678           79.7      
Minnesota.............   105     18,972,707      4.03     180,692       6.243     357         687           80.0      
Missouri..............    35      5,354,055      1.14     152,973       6.381     358         687           77.9      
Mississippi...........     2        350,915      0.07     175,457       6.681     358         721           86.9      
Montana...............     3        554,720      0.12     184,907       6.067     356         675           80.0      
North Carolina........    43      5,742,720      1.22     133,552       5.987     350         699           78.0      
North Dakota..........     4        323,018      0.07      80,754       6.299     355         681           80.0      
Nebraska..............     3        369,047      0.08     123,016       6.055     358         706           83.5      
New Hampshire.........     6      1,328,508      0.28     221,418       5.920     348         676           74.8      
New Jersey............    21      6,907,213      1.47     328,915       5.997     354         690           76.5      
New Mexico............     2        243,000      0.05     121,500       6.645     358         676           77.4      
Nevada................    71     17,176,631      3.64     241,924       6.183     358         686           79.6      
New York..............    15      6,270,319      1.33     418,021       5.963     345         716           81.3      
Ohio..................    54      7,649,428      1.62     141,656       6.125     354         693           81.4      
Oklahoma..............     6        716,482      0.15     119,414       6.366     358         687           78.4      
Oregon................    45      7,575,213      1.61     168,338       6.169     356         695           80.1      
Pennsylvania..........    37      5,826,114      1.24     157,463       6.311     356         704           81.0      
Rhode Island..........     7      1,567,172      0.33     223,882       6.266     358         718           77.3      
South Carolina........    12      2,139,291      0.45     178,274       6.045     353         695           79.2      
South Dakota..........     5        719,953      0.15     143,991       6.007     356         703           80.0      
Tennessee.............    27      3,104,346      0.66     114,976       6.178     355         683           80.3      
Texas.................    60     10,162,141      2.16     169,369       6.214     351         692           79.9      
Utah..................    18      3,019,271      0.64     167,737       6.340     350         699           79.2      
Virginia..............    93     23,812,378      5.05     256,047       6.819     357         680           79.0      
Vermont...............     1        366,372      0.08     366,372       4.125     352         781           66.5      
Washington............   100     21,152,356      4.49     211,524       6.056     357         686           79.5      
Wisconsin.............    27      3,675,173      0.78     136,118       6.374     358         700           81.1      
West Virginia.........     6      1,005,958      0.21     167,660       6.855     356         719           79.1      
                       -----   ------------    ------                                                                 
   Total............   2,101   $471,330,748    100.00%                                                                
                       =====   ============    ======                                                                 

---------                                                                       
(1)   As of the cut-off date, no more than approximately 0.636% of the Mortgage 
    Loans in Loan Group 2 will be secured by mortgaged properties located in
any one postal zip code area.                                       

S-32

424B5
33rd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 33rd
 PURPOSE OF MORTGAGE LOANS

                                                        [Enlarge/Download Table]

                                                PERCENT                          WEIGHTED                             
                                                   OF       AVERAGE               AVERAGE                   WEIGHTED  
                        NUMBER     AGGREGATE    MORTGAGE   PRINCIPAL   WEIGHTED  REMAINING    WEIGHTED      AVERAGE   
                          OF       PRINCIPAL   LOANS IN     BALANCE     AVERAGE   TERM TO     AVERAGE       ORIGINAL  
                       MORTGAGE     BALANCE       LOAN    OUTSTANDING  MORTGAGE   MATURITY  FICO CREDIT  LOAN-TO-VALUE
LOAN PURPOSE             LOANS    OUTSTANDING   GROUP 2       ($)      RATE (%)   (MONTHS)     SCORE       RATIO (%)  
------------             -----    -----------   -------       ---      --------   --------     -----       ---------  
                                                                                                                      
Purchase..............   1,535   $343,370,599     72.85%    223,694       6.237     357          695          80.0    
Refinance (cash-out)..     351     85,027,363     18.04     242,243       6.016     355          687          77.3    
Refinance (rate/term).     215     42,932,786      9.11     199,687       5.923     350          685          78.3    
                         -----   ------------    ------                                                               
   Total.............    2,101   $471,330,748    100.00%                                                              
                         =====   ============    ======                                                               

TYPE OF MORTGAGED PROPERTIES

                                                        [Enlarge/Download Table]

                                                                                      WEIGHTED                             
                                                   PERCENT OF    AVERAGE               AVERAGE                 WEIGHTED    
                            NUMBER     AGGREGATE    MORTGAGE    PRINCIPAL   WEIGHTED  REMAINING   WEIGHTED      AVERAGE    
                              OF       PRINCIPAL   LOANS IN      BALANCE     AVERAGE   TERM TO     AVERAGE     ORIGINAL    
                           MORTGAGE     BALANCE       LOAN     OUTSTANDING  MORTGAGE  MATURITY   FICO CREDIT  LOAN-TO-VALUE
PROPERTY TYPE                LOANS    OUTSTANDING   GROUP 2        ($)      RATE (%)  (MONTHS)      SCORE      RATIO (%)   
-------------                -----    -----------   -------        ---      --------  --------      -----      ---------   
                                                                                                                           
Single Family Residence...   1,530   $337,641,552    71.64%      220,681       6.140     356         692           79.3    
Planned Unit Development..     290     77,489,185     16.44      267,204       6.208     354         689           78.5    
Low-Rise Condominium......     196     38,333,073      8.13      195,577       6.249     356         697           80.8    
2-4 Family Residence......      80     16,846,732      3.57      210,584       6.379     357         701           79.4    
High-Rise Condominium.....       3        618,109      0.13      206,036       6.802     358         740           87.0    
Manufactured Housing (1)..       2        402,097      0.09      201,049       5.349     358         649           84.7    
                             -----   ------------    ------                                                                
   Total.............        2,101   $471,330,748    100.00%                                                               
                             =====   ============    ======                                                                

-----------                                                                     
(1) Treated as real property.                                                   

OCCUPANCY TYPES(1)

                                                        [Enlarge/Download Table]

                                                                                  WEIGHTED                             
                                               PERCENT OF    AVERAGE               AVERAGE                  WEIGHTED   
                        NUMBER     AGGREGATE    MORTGAGE    PRINCIPAL   WEIGHTED  REMAINING    WEIGHTED      AVERAGE   
                          OF       PRINCIPAL    LOANS IN     BALANCE     AVERAGE   TERM TO     AVERAGE      ORIGINAL   
                       MORTGAGE     BALANCE       LOAN     OUTSTANDING  MORTGAGE  MATURITY   FICO CREDIT  LOAN-TO-VALUE
OCCUPANCY TYPE           LOANS    OUTSTANDING    GROUP 2       ($)      RATE (%)  (MONTHS)      SCORE       RATIO (%)  
--------------           -----    -----------    -------       ---      --------  --------      -----       ---------  
                                                                                                                       
Primary Residence....   1,968    $447,894,672     95.03%    227,589       6.134     356          692         79.4      
Investment Property..     118      20,275,702      4.30     171,828       6.942     356          706         78.0      
Secondary Residence..      15       3,160,374      0.67     210,692       6.158     354          722         80.4      
   ------------------   -----    ------------    -------                                                               
   Total.............   2,101    $471,330,748    100.00%                                                               
                        =====    ============    ======                                                                

-----------                                                                     
(1) Based upon representations of the related borrowers at the time of          
origination.                                                            

S-33

424B5
34th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 34th
REMAINING TERMS TO MATURITY(1)

                                                        [Enlarge/Download Table]

                                                                                  WEIGHTED                             
                                               PERCENT OF    AVERAGE               AVERAGE                  WEIGHTED   
                       NUMBER      AGGREGATE    MORTGAGE    PRINCIPAL   WEIGHTED  REMAINING    WEIGHTED      AVERAGE   
REMAINING TERM           OF        PRINCIPAL   LOANS IN      BALANCE     AVERAGE   TERM TO     AVERAGE      ORIGINAL   
TO MATURITY           MORTGAGE      BALANCE       LOAN     OUTSTANDING  MORTGAGE  MATURITY   FICO CREDIT  LOAN-TO-VALUE
(MONTHS)                LOANS     OUTSTANDING   GROUP 2        ($)      RATE (%)  (MONTHS)      SCORE       RATIO (%)  
--------                -----     -----------   -------        ---      --------  --------      -----       ---------  
                                                                                                                       
360                        76   $ 15,283,762       3.24%     201,102       6.537     360          697          79.1    
359                       230     57,540,986      12.21      250,178       6.270     359          687          79.7    
358                       860    184,999,762      39.25      215,116       6.106     358          692          80.1    
357                       586    126,381,762      26.81      215,669       6.413     357          692          79.5    
356                       167     35,288,843       7.49      211,310       6.392     356          690          79.5    
355                        23      5,544,669       1.18      241,073       5.673     355          701          79.8    
354                         5        544,867       0.12      108,973       6.303     354          652          79.9    
353                         2        483,120       0.10      241,560       5.585     353          733          85.7    
352                         2        510,378       0.11      255,189       4.901     352          749          68.5    
351                        19      4,296,279       0.91      226,120       5.620     351          706          78.8    
350                        21      3,739,324       0.79      178,063       5.618     350          708          82.0    
349                        21      3,991,405       0.85      190,067       5.507     349          686          75.5    
348                         2        403,355       0.09      201,678       4.750     348          697          96.2    
347                         8      2,553,300       0.54      319,162       5.606     347          689          76.6    
346                         4        945,454       0.20      236,364       5.673     346          701          83.2    
345                         3      6,037,541       1.28    2,012,514       5.442     345          731          65.8    
344                         1        271,237       0.06      271,237       4.625     344          700          79.9    
343                         1        244,625       0.05      244,625       4.875     343          635          95.0    
342                         2        410,438       0.09      205,219       5.852     342          621          91.4    
329                        16      4,966,124       1.05      310,383       4.875     329          736          77.8    
328                        26      7,959,007       1.69      306,116       4.907     328          690          74.8    
325                         1        449,443       0.10      449,443       5.750     325          734          70.6    
324                         2        563,156       0.12      281,578       4.750     324          730          74.3    
320                         3      1,375,418       0.29      458,473       6.109     320          676          70.4    
319                         2        224,283       0.05      112,142       6.125     319          745          76.0    
318                         1        102,863       0.02      102,863       5.750     318          696          80.0    
317                         1         53,824       0.01       53,824       5.500     317          640          95.0    
316                         1        320,554       0.07      320,554       6.375     316          642          42.8    
315                         6      2,353,610       0.50      392,268       5.399     315          670          69.8    
314                         5      1,814,946       0.39      362,989       5.618     314          733          72.7    
313                         1        328,372       0.07      328,372       4.750     313          578          80.0    
312                         1        515,585       0.11      515,585       6.375     312          741          74.9    
311                         2        832,458       0.18      416,229       6.926     311          728          75.4    
                        -----   ------------     ------                                                                
   Total.............   2,101   $471,330,748     100.00%                                                               
                        =====   ============     ======                                                                

------------                                                                    
(1)   As of the cut-off date, the weighted average remaining term to maturity of
the Mortgage Loans in Loan Group 2 is approximately 356 months.     

S-34

424B5
35th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 35th
MONTHS TO NEXT ADJUSTMENT DATE

                                                        [Enlarge/Download Table]

                                                                                   WEIGHTED                             
                                                PERCENT OF    AVERAGE               AVERAGE                  WEIGHTED   
                        NUMBER      AGGREGATE    MORTGAGE    PRINCIPAL   WEIGHTED  REMAINING    WEIGHTED      AVERAGE   
                          OF        PRINCIPAL    LOANS IN     BALANCE    AVERAGE   TERM TO      AVERAGE       ORIGINAL  
MONTHS TO NEXT         MORTGAGE      BALANCE       LOAN     OUTSTANDING  MORTGAGE  MATURITY   FICO CREDIT  LOAN-TO-VALUE
ADJUSTMENT DATE          LOANS     OUTSTANDING   GROUP 2        ($)      RATE (%)  (MONTHS)      SCORE       RATIO (%)  
---------------          -----     -----------   -------        ---      --------  --------      -----       ---------  
                                                                                                                        
1...................         9    $ 2,438,589       0.52%     270,954       5.421     344          678          75.5    
2...................         9      2,220,335       0.47      246,704       5.098     345          708          81.0    
3...................        12      9,528,509       2.02      794,042       5.330     341          710          68.1    
4...................        35      9,358,276       1.99      267,379       4.904     335          693          74.8    
5...................        19      5,346,615       1.13      281,401       4.845     331          731          77.7    
6...................         3        368,337       0.08      122,779       5.941     343          684          76.1    
7...................         7      2,352,913       0.50      336,130       4.853     352          740          81.1    
8...................         2      1,066,380       0.23      533,190       5.996     320          682          69.4    
9...................         8      1,985,227       0.42      248,153       5.535     356          721          82.0    
10..................         4        956,634       0.20      239,158       5.056     358          728          81.1    
11..................         2        832,458       0.18      416,229       6.926     311          728          75.4    
12..................         4      1,348,024       0.29      337,006       5.347     324          733          78.7    
13..................         1        467,667       0.10      467,667       4.250     349          702          56.1    
14..................         2        759,027       0.16      379,513       5.953     314          761          61.4    
15..................         1        296,978       0.06      296,978       5.875     315          742          80.0    
16..................         1        320,554       0.07      320,554       6.375     316          642          42.8    
17..................         1        300,720       0.06      300,720       4.500     353          748          80.0    
18..................         2        343,930       0.07      171,965       5.642     344          626          85.6    
19..................         7      1,581,640       0.34      225,949       6.048     353          703          79.2    
20..................       145     30,076,598       6.38      207,425       6.409     356          688          79.2    
21..................       518    111,321,991      23.62      214,907       6.432     357          693          79.7    
22..................       725    155,767,549      33.05      214,852       6.109     358          692          79.8    
23..................       170     44,039,766       9.34      259,057       6.222     358          681          79.8    
24..................        52     10,438,526       2.21      200,741       6.536     360          694          79.7    
25..................        18      3,304,824       0.70      183,601       5.687     349          678          77.8    
26..................        18      3,226,803       0.68      179,267       5.879     350          706          80.5    
27..................        14      2,881,704       0.61      205,836       5.907     351          705          76.3    
28..................         2      1,040,718       0.22      520,359       5.475     331          655          78.4    
29..................         1        182,400       0.04      182,400       7.375     353          708          95.0    
30..................         2        326,033       0.07      163,016       6.134     354          633          86.7    
31..................         3        352,965       0.07      117,655       6.070     355          699          82.2    
32..................        16      3,625,492       0.77      226,593       6.500     356          695          81.2    
33..................        47      9,173,074       1.95      195,172       6.389     357          687          79.2    
34..................       118     24,906,537       5.28      211,072       6.124     358          690          81.9    
35..................        46      9,608,549       2.04      208,881       6.086     359          711          78.8    
36..................        16      3,058,859       0.65      191,179       6.290     360          702          79.2    
38..................         1        567,847       0.12      567,847       5.750     314          690          80.0    
39..................         1        331,697       0.07      331,697       5.750     315          662          79.6    
44..................         1        271,237       0.06      271,237       4.625     344          700          79.9    
51..................         1        126,444       0.03      126,444       8.625     351          737          90.0    
54..................         1         89,800       0.02       89,800       7.750     354          706          78.2    
55..................         3        726,359       0.15      242,120       6.869     355          694          81.3    
56..................         3        676,050       0.14      225,350       6.443     356          738          88.3    
57..................        10      2,362,357       0.50      236,236       6.886     357          682          78.2    
58..................         8      2,384,887       0.51      298,111       6.717     358          685          79.8    
59..................        17      4,466,786       0.95      262,752       7.045     359          717          83.8    
60..................         8      1,770,450       0.38      221,306       6.950     360          707          78.3    
78..................         1         80,068       0.02       80,068       5.250     354          600          67.2    
79..................         3        619,049       0.13      206,350       6.020     355          566          72.0    
83..................         3      1,652,518       0.35      550,839       5.864     359          574          66.5    
                      ---------  -------------  ----------                                                              
   Total.............    2,101   $471,330,748     100.00%                                                               
                      =========  =============  ==========                                                              

S-35

424B5
36th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 36th
GROSS MARGINS(1)

                                                        [Enlarge/Download Table]

                                          PERCENT                          WEIGHTED                             
                                             OF       AVERAGE               AVERAGE                  WEIGHTED   
                  NUMBER     AGGREGATE    MORTGAGE   PRINCIPAL   WEIGHTED  REMAINING    WEIGHTED      AVERAGE   
RANGE OF            OF       PRINCIPAL   LOANS IN     BALANCE     AVERAGE   TERM TO     AVERAGE      ORIGINAL   
GROSS            MORTGAGE     BALANCE       LOAN    OUTSTANDING  MORTGAGE  MATURITY   FICO CREDIT  LOAN-TO-VALUE
MARGINS (%)        LOANS    OUTSTANDING   GROUP 2       ($)      RATE (%)  (MONTHS)      SCORE       RATIO (%)  
-----------        -----    -----------   -------       ---      --------  --------      -----       ---------  
                                                                                                                
1.001 - 2.000...      33   $ 15,605,491      3.31%    472,894       5.064     335          721         72.4     
2.001 - 3.000...     172     55,146,632     11.70     320,620       5.770     348          702         77.0     
3.001 - 4.000...     195     45,968,991      9.75     235,738       5.896     357          696         79.5     
4.001 - 5.000...     881    188,962,971     40.09     214,487       6.169     358          687         79.6     
5.001 - 6.000...     685    140,562,031     29.82     205,200       6.388     357          693         80.2     
6.001 - 7.000...     129     24,025,565      5.10     186,245       6.971     357          692         82.1     
7.001 - 8.000...       6      1,059,067      0.22     176,511       7.753     357          658         77.4     
                   -----   ------------    ------                                                               
   Total........   2,101   $471,330,748    100.00%                                                              
                   =====   ============    ======                                                               

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

(1) As of the cut-off date, the weighted average gross margin of the Mortgage   
Loans in Loan Group 2 was approximately 4.518%.                         

MAXIMUM MORTGAGE RATES

                                                        [Enlarge/Download Table]

                                           PERCENT                          WEIGHTED                             
                                              OF       AVERAGE               AVERAGE                   WEIGHTED  
RANGE OF           NUMBER     AGGREGATE    MORTGAGE   PRINCIPAL   WEIGHTED  REMAINING   WEIGHTED       AVERAGE   
MAXIMUM              OF       PRINCIPAL   LOANS IN     BALANCE     AVERAGE   TERM TO     AVERAGE       ORIGINAL  
MORTGAGE          MORTGAGE     BALANCE       LOAN    OUTSTANDING  MORTGAGE  MATURITY   FICO CREDIT  LOAN-TO-VALUE
RATES (%)           LOANS    OUTSTANDING   GROUP 2       ($)      RATE (%)  (MONTHS)      SCORE       RATIO (%)  
---------           -----    -----------   -------       ---      --------  --------      -----       ---------  
                                                                                                                 
 8.001 - 9.000...       2   $    537,310      0.11%    268,655       5.464     330         720           74.6    
 9.001 - 10.000..      14      2,834,343      0.60     202,453       4.320     347         668           81.3    
10.001 - 11.000..      84     25,419,477      5.39     302,613       4.944     337         704           76.1    
11.001 - 12.000..     533    126,201,183     26.78     236,775       5.687     355         703           78.6    
12.001 - 13.000..     895    195,750,698     41.53     218,716       6.282     357         691           79.8    
13.001 - 14.000..     523    111,898,082     23.74     213,954       6.710     358         682           80.0    
14.001 - 15.000..      49      8,589,804      1.82     175,302       7.838     358         678           80.5    
16.001 - 17.000..       1         99,851      0.02      99,851       9.500     357         565           54.1    
                    -----   ------------    ------                                                               
   Total.........   2,101   $471,330,748    100.00%                                                              
                    =====   ============    ======                                                               

INITIAL PERIODIC RATE CAPS

                                                        [Enlarge/Download Table]

                                             PERCENT                          WEIGHTED                             
                                                OF       AVERAGE               AVERAGE                  WEIGHTED   
                     NUMBER     AGGREGATE    MORTGAGE   PRINCIPAL   WEIGHTED  REMAINING    WEIGHTED      AVERAGE   
                       OF       PRINCIPAL   LOANS IN     BALANCE     AVERAGE   TERM TO     AVERAGE      ORIGINAL   
PERIODIC            MORTGAGE     BALANCE       LOAN    OUTSTANDING  MORTGAGE  MATURITY   FICO CREDIT  LOAN-TO-VALUE
RATE CAP (%)         LOANS     OUTSTANDING   GROUP 2       ($)      RATE (%)  (MONTHS)      SCORE       RATIO (%)  
------------         -----     -----------   -------       ---      --------  --------      -----       ---------  
                                                                                                                   
None...............      2    $  5,913,193      1.25%  2,956,596       5.438     345          734         65.3     
1.000..............     82      20,594,102      4.37     251,148       5.266     339          696         76.3     
2.000..............     74      20,999,821      4.46     283,781       5.514     346          701         79.5     
3.000..............  1,900     409,056,675     86.79     215,293       6.242     358          691         79.7     
5.000..............     37      12,140,302      2.58     328,116       6.675     341          690         77.2     
6.000..............      6       2,626,655      0.56     437,776       6.408     352          709         78.1     
                     -----    ------------    ------                                                               
   Total.........    2,101    $471,330,748    100.00%                                                              
                     =====    ============    ======                                                               

S-36

424B5
37th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 37th
 SUBSEQUENT PERIODIC RATE CAPS

                                                        [Enlarge/Download Table]

                                             PERCENT                           WEIGHTED                             
                                                OF       AVERAGE                AVERAGE                  WEIGHTED   
                     NUMBER    AGGREGATE     MORTGAGE   PRINCIPAL   WEIGHTED   REMAINING    WEIGHTED      AVERAGE   
SUBSEQUENT             OF      PRINCIPAL    LOANS IN     BALANCE     AVERAGE    TERM TO     AVERAGE      ORIGINAL   
PERIODIC            MORTGAGE    BALANCE        LOAN    OUTSTANDING  MORTGAGE   MATURITY   FICO CREDIT  LOAN-TO-VALUE
RATE CAP (%)         LOANS    OUTSTANDING    GROUP 2       ($)      RATE (%)   (MONTHS)      SCORE       RATIO (%)  
------------         -----    -----------    -------       ---      --------   --------      -----       ---------  
                                                                                                                    
None................      2   $  5,913,193      1.25%  2,956,596       5.438%     345          734         65.3     
1.000...............  1,998    434,385,949     92.16     217,410       6.186      357          692         79.6     
1.500...............      1         99,851      0.02      99,851       9.500      357          565         54.1     
2.000...............     99     30,484,046      6.47     307,920       6.043      344          698         78.6     
3.000...............      1        447,709      0.09     447,709       7.250      355          693         85.0     
                      -----   ------------    ------                                                                
   Total..........    2,101   $471,330,748    100.00%                                                               
                      =====   ============    ======                                                                

MINIMUM MORTGAGE RATES

                                                        [Enlarge/Download Table]

                                           PERCENT                          WEIGHTED                             
                                              OF       AVERAGE               AVERAGE                  WEIGHTED   
RANGE OF           NUMBER    AGGREGATE     MORTGAGE   PRINCIPAL   WEIGHTED  REMAINING    WEIGHTED      AVERAGE   
MINIMUM              OF      PRINCIPAL    LOANS IN     BALANCE     AVERAGE   TERM TO     AVERAGE      ORIGINAL   
MORTGAGE          MORTGAGE    BALANCE        LOAN    OUTSTANDING  MORTGAGE  MATURITY   FICO CREDIT  LOAN-TO-VALUE
RATES (%)           LOANS   OUTSTANDING    GROUP 2       ($)      RATE (%)  (MONTHS)      SCORE       RATIO (%)  
---------           -----   -----------    -------       ---      --------  --------      -----       ---------  
                                                                                                                 
1.001 - 2.000.....     33    $ 15,605,491     3.31%    472,894       5.064     335          721         72.4     
2.001 - 3.000.....    141      47,089,522     9.99     333,968       5.720     347          703         76.8     
3.001 - 4.000.....     98      22,817,825     4.84     232,835       6.173     356          698         79.9     
4.001 - 5.000.....    242      49,584,325    10.52     204,894       6.637     357          679         78.9     
5.001 - 6.000.....    672     146,361,867    31.05     217,800       5.792     358          695         79.8     
6.001 - 7.000.....    815     173,118,208    36.73     212,415       6.460     358          689         80.1     
7.001 - 8.000.....     98      16,415,159     3.48     167,502       7.331     358          683         80.5     
8.001 - 9.000.....      1         238,500     0.05     238,500       8.240     356          678         90.0     
9.001 - 10.000....      1          99,851     0.02      99,851       9.500     357          565         54.1     
                    -----    ------------   ------                                                               
   Total........    2,101    $471,330,748   100.00%                                                              
                    =====    ============   ======                                                               

S-37

424B5
38th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 38th
 NEXT ADJUSTMENT DATES

                                                        [Enlarge/Download Table]

                                                                              WEIGHTED                             
                                           PERCENT OF    AVERAGE               AVERAGE                   WEIGHTED  
                    NUMBER     AGGREGATE    MORTGAGE    PRINCIPAL   WEIGHTED  REMAINING   WEIGHTED       AVERAGE   
NEXT                  OF       PRINCIPAL   LOANS IN      BALANCE     AVERAGE   TERM TO     AVERAGE       ORIGINAL  
ADJUSTMENT         MORTGAGE     BALANCE       LOAN     OUTSTANDING  MORTGAGE  MATURITY   FICO CREDIT  LOAN-TO-VALUE
DATE                 LOANS    OUTSTANDING   GROUP 2        ($)      RATE (%)  (MONTHS)      SCORE       RATIO (%)  
----                 -----    -----------   -------        ---      --------  --------      -----       ---------  
                                                                                                                   
November 2005....        9   $  2,438,589      0.52%     270,954       5.421     344         678           75.5    
December 2005....        9      2,220,335      0.47      246,704       5.098     345         708           81.0    
January 2006.....       12      9,528,509      2.02      794,042       5.330     341         710           68.1    
February 2006....       35      9,358,276      1.99      267,379       4.904     335         693           74.8    
March 2006.......       19      5,346,615      1.13      281,401       4.845     331         731           77.7    
April 2006.......        3        368,337      0.08      122,779       5.941     343         684           76.1    
May 2006.........        7      2,352,913      0.50      336,130       4.853     352         740           81.1    
June 2006........        2      1,066,380      0.23      533,190       5.996     320         682           69.4    
July 2006........        8      1,985,227      0.42      248,153       5.535     356         721           82.0    
August 2006......        4        956,634      0.20      239,158       5.056     358         728           81.1    
September 2006...        2        832,458      0.18      416,229       6.926     311         728           75.4    
October 2006.....        4      1,348,024      0.29      337,006       5.347     324         733           78.7    
November 2006....        1        467,667      0.10      467,667       4.250     349         702           56.1    
December 2006....        2        759,027      0.16      379,513       5.953     314         761           61.4    
January 2007.....        1        296,978      0.06      296,978       5.875     315         742           80.0    
February 2007....        1        320,554      0.07      320,554       6.375     316         642           42.8    
March 2007.......        1        300,720      0.06      300,720       4.500     353         748           80.0    
April 2007.......        2        343,930      0.07      171,965       5.642     344         626           85.6    
May 2007.........        8      1,792,840      0.38      224,105       5.995     353         701           79.3    
June 2007........      146     30,130,774      6.39      206,375       6.413     356         689           79.2    
July 2007........      609    124,173,733     26.35      203,898       6.409     357         692           79.7    
August 2007......      632    142,650,431     30.27      225,713       6.099     358         693           79.8    
September 2007...      170     44,039,766      9.34      259,057       6.222     358         681           79.8    
October 2007.....       56     10,907,837      2.31      194,783       6.536     359         693           79.7    
November 2007....       20      3,704,587      0.79      185,229       5.643     349         681           78.6    
December 2007....       16      2,863,091      0.61      178,943       5.871     350         703           79.9    
January 2008.....       10      2,376,343      0.50      237,634       5.895     351         714           75.5    
February 2008....        2      1,040,718      0.22      520,359       5.475     331         655           78.4    
March 2008.......        1        182,400      0.04      182,400       7.375     353         708           95.0    
April 2008.......        2        326,033      0.07      163,016       6.134     354         633           86.7    
May 2008.........        3        352,965      0.07      117,655       6.070     355         699           82.2    
June 2008........       18      3,970,517      0.84      220,584       6.486     356         696           81.1    
July 2008........       52      9,848,933      2.09      189,403       6.387     357         685           79.0    
August 2008......      111     23,885,653      5.07      215,186       6.115     358         690           82.1    
September 2008...       46      9,608,549      2.04      208,881       6.086     359         711           78.8    
October 2008.....       16      3,058,859      0.65      191,179       6.290     360         702           79.2    
December 2008....        1        567,847      0.12      567,847       5.750     314         690           80.0    
January 2009.....        1        331,697      0.07      331,697       5.750     315         662           79.6    
June 2009........        1        271,237      0.06      271,237       4.625     344         700           79.9    
January 2010.....        1        126,444      0.03      126,444       8.625     351         737           90.0    
April 2010.......        1         89,800      0.02       89,800       7.750     354         706           78.2    
May 2010.........        3        726,359      0.15      242,120       6.869     355         694           81.3    
June 2010........        3        676,050      0.14      225,350       6.443     356         738           88.3    
July 2010........       10      2,362,357      0.50      236,236       6.886     357         682           78.2    
August 2010......        8      2,384,887      0.51      298,111       6.717     358         685           79.8    
September 2010...       17      4,466,786      0.95      262,752       7.045     359         717           83.8    
October 2010.....        8      1,770,450      0.38      221,306       6.950     360         707           78.3    
April 2012.......        1         80,068      0.02       80,068       5.250     354         600           67.2    
May 2012.........        3        619,049      0.13      206,350       6.020     355         566           72.0    
September 2012...        3      1,652,518      0.35      550,839       5.864     359         574           66.5    
                   --------- ------------  ----------                                                              
   Total..........   2,101   $471,330,748    100.00%                                                               
                   ========= ============  ==========                                                              

S-38

424B5
39th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 39th
ASSIGNMENT OF THE MORTGAGE LOANS                                                

       Pursuant to the Pooling and Servicing Agreement, on the closing date,
the Depositor will sell, transfer, assign, set over and otherwise convey without
recourse to the Trustee in trust for the benefit of the certificateholders all  
right, title and interest of the Depositor in and to each Mortgage Loan and all 
right, title and interest in and to all other assets included in Alternative    
Loan Trust 2005-J12, including all principal and interest received on or with   
respect to the Mortgage Loans, but not any principal and interest due on or     
before the cut-off date.                                                        

        In connection with the transfer and assignment of a Mortgage Loan, the
Depositor will deliver or cause to be delivered to the Trustee, or a custodian  
for the Trustee, the mortgage file, which contains among other things, the      
original mortgage note (and any modification or amendment to it) endorsed in    
blank without recourse, except that the Depositor may deliver or cause to be    
delivered a lost note affidavit in lieu of any original mortgage note that has  
been lost, the original instrument creating a first lien on the related         
mortgaged property with evidence of recording indicated thereon, an assignment  
in recordable form of the mortgage, the title policy with respect to the related
mortgaged property and, if applicable, all recorded intervening assignments of  
the mortgage and any riders or modifications to the mortgage note and mortgage  
(except for any documents not returned from the public recording office, which  
will be delivered to the Trustee as soon as the same is available to the        
Depositor). With respect to up to 50% of the Mortgage Loans, the Depositor may  
deliver all or a portion of each related mortgage file to the Trustee not later 
than thirty days after the closing date. Assignments of the mortgage loans to   
the Trustee (or its nominee) will be recorded in the appropriate public office  
for real property records, except in states such as California where in the     
opinion of counsel recording is not required to protect the Trustee's interests 
in the mortgage loan against the claim of any subsequent transferee or any      
successor to or creditor of the Depositor or any seller.                        

     The Trustee will review each mortgage file relating to the Mortgage
Loans within 90 days of the closing date (or promptly after the Trustee's       
receipt of any document permitted to be delivered after the closing date) and if
any document in a mortgage file is found to be missing or defective in a        
material respect and Countrywide Home Loans does not cure the defect within 90  
days of notice of the defect from the Trustee (or within such longer period not 
to exceed 720 days after the closing date as provided in the Pooling and        
Servicing Agreement in the case of missing documents not returned from the      
public recording office), Countrywide Home Loans will be obligated to repurchase
the related mortgage loan from the trust fund. Rather than repurchase the       
mortgage loan as provided above, Countrywide Home Loans may remove the mortgage 
loan (referred to as a "DELETED MORTGAGE LOAN") from the trust fund and         
substitute in its place another mortgage loan (referred to as a "REPLACEMENT    
MORTGAGE LOAN"); however, such a substitution is permitted only within two years
of the closing date and may not be made unless an opinion of counsel is provided
to the Trustee to the effect that such a substitution will not disqualify any   
REMIC or result in a prohibited transaction tax under the Code. Any replacement 
mortgage loan generally will, on the date of substitution, among other          
characteristics set forth in the Pooling and Servicing Agreement,               

 o  have a principal balance, after deduction of all scheduled payments due in
    the month of substitution, not in excess of, and not less than 90% of, the
  Stated Principal Balance of the deleted mortgage loan (the amount of any
shortfall to be deposited by Countrywide Home Loans in the Certificate
    Account and held for distribution to the certificateholders on the related
 Distribution Date (referred to as a "SUBSTITUTION ADJUSTMENT AMOUNT")),

o  if the deleted mortgage loan is an adjustable rate mortgage loan, have a 
    Maximum Mortgage Rate no lower than, and not more than 1% per annum higher
than the Maximum Mortgage Rate of the deleted mortgage loan,          

o  if the deleted mortgage loan is an adjustable rate mortgage loan, have a 
    Minimum Mortgage Rate no lower than, and not more than 1% per annum higher
than the Minimum Mortgage Rate of the deleted mortgage loan,          

o  if the Deleted Mortgage Loan that is being replaced is an Adjustable Rate
Mortgage Loan, have the same Mortgage Index and intervals between     
     Adjustment Dates as the Deleted Mortgage Loan, an Initial Periodic Rate Cap
  and a Subsequent Periodic Rate Cap each not more than 1% per annum lower
than that of the                                                      

S-39

424B5
40th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 40th
Deleted Mortgage Loan, and a Gross Margin not more than 1% per annum  
higher or lower than that of the Deleted Mortgage Loan,               

  o  have a current Mortgage Rate not lower than, and not more than 1% per annum
higher than that of the deleted mortgage loan,                        

o  have a Loan-to-Value Ratio not higher than that of the deleted mortgage  
loan,                                                                 

o  have a remaining term to maturity not greater than (and not more than one
year less than) that of the deleted mortgage loan, and                

o  comply with all of the representations and warranties set forth in the   
Pooling and Servicing Agreement as of the date of substitution.       

This cure, repurchase or substitution obligation constitutes the sole remedy    
available to certificateholders or the Trustee for omission of, or a material   
defect in, a mortgage loan document.                                            

       Notwithstanding the foregoing, in lieu of providing the duly executed
assignment of the mortgage to the Trustee and the original recorded assignment  
or assignments of the mortgage together with all interim recorded assignments of
such mortgage, above, the Depositor may at its discretion provide evidence that 
the related mortgage is held through the MERS(R) System. In addition, the       
mortgages for some or all of the mortgage loans in the trust fund that are not  
already held through the MERS(R) System may, at the discretion of the Master    
Servicer, in the future be held through the MERS(R) System. For any mortgage    
held through the MERS(R) System, the mortgage is recorded in the name of        
Mortgage Electronic Registration Systems, Inc., or MERS, as nominee for the     
owner of the mortgage loan, and subsequent assignments of the mortgage were, or 
in the future may be, at the discretion of the Master Servicer, registered      
electronically through the MERS(R) System. For each of these mortgage loans,    
MERS serves as mortgagee of record on the mortgage solely as a nominee in an    
administrative capacity on behalf of the Trustee, and does not have any interest
in the mortgage loan.                                                           

UNDERWRITING PROCESS - COUNTRYWIDE HOME LOANS, INC.                             

GENERAL                                                                         

         Approximately 13.71% of the Mortgage Loans in Loan Group 1 and 5.98% of
the Mortgage Loans in Loan Group 2, in each case, by aggregate Stated Principal 
Balance of the Mortgage Loans in the related loan group as of the cut-off date, 
were originated or acquired by Countrywide Home Loans in accordance with its    
credit, appraisal and underwriting standards. Countrywide Home Loans'           
underwriting standards are applied in accordance with applicable federal and    
state laws and regulations. Except as otherwise provided in this prospectus     
supplement, the underwriting procedures are consistent with those identified    
under "Mortgage Loan Program -- Underwriting Process" in the prospectus.        

UNDERWRITING STANDARDS                                                          

    As part of its evaluation of potential borrowers, Countrywide Home
Loans generally requires a description of income. If required by its            
underwriting guidelines, Countrywide Home Loans obtains employment verification 
providing current and historical income information and/or a telephonic         
employment confirmation. Such employment verification may be obtained, either   
through analysis of the prospective borrower's recent pay stub and/or W-2 forms 
for the most recent two years, relevant portions of the most recent two years'  
tax returns, or from the prospective borrower's employer, wherein the employer  
reports the length of employment and current salary with that organization.     
Self-employed prospective borrowers generally are required to submit relevant   
portions of their federal tax returns for the past two years.                   

     In assessing a prospective borrower's creditworthiness, Countrywide
Home Loans may use FICO Credit Scores. "FICO CREDIT SCORES" are statistical     
credit scores designed to assess a borrower's creditworthiness and likelihood to
default on a consumer obligation over a two-year period based on a borrower's   
credit history. FICO                                                            

S-40

424B5
41st Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 41st
Credit Scores were not developed to predict the likelihood of default on        
mortgage loans and, accordingly, may not be indicative of the ability of a      
mortgagor to repay its mortgage loan. FICO Credit Scores range from             
approximately 250 to approximately 900, with higher scores indicating an        
individual with a more favorable credit history compared to an individual with a
lower score. Under Countrywide Home Loans' underwriting guidelines, borrowers   
possessing higher FICO Credit Scores, which indicate a more favorable credit    
history, and who give Countrywide Home Loans the right to obtain the tax returns
they filed for the preceding two years may be eligible for Countrywide Home     
Loans' processing program (the "PREFERRED PROCESSING PROGRAM"). Approximately   
5.80% and 0.31% of the Mortgage Loans in Loan Group 1 and Loan Group 2,         
respectively, by aggregate Stated Principal Balance of the Mortgage Loans in    
that loan group as of the cut-off date, have been underwritten pursuant to      
Countrywide Home Loans' Preferred Processing Program. Countrywide Home Loans may
waive some documentation requirements for mortgage loans originated under the   
Preferred Processing Program.                                                   

      Periodically the data used by Countrywide Home Loans to complete the
underwriting analysis may be obtained by a third party, particularly for        
mortgage loans originated through a loan correspondent or mortgage broker. In   
those instances, the initial determination as to whether a mortgage loan        
complies with Countrywide Home Loans' underwriting guidelines may be made by an 
independent company hired to perform underwriting services on behalf of         
Countrywide Home Loans, the loan correspondent or mortgage broker. In addition, 
Countrywide Home Loans may acquire mortgage loans from approved correspondent   
lenders under a program pursuant to which Countrywide Home Loans delegates to   
the correspondent the obligation to underwrite the mortgage loans to Countrywide
Home Loans' standards. Under these circumstances, the underwriting of a mortgage
loan may not have been reviewed by Countrywide Home Loans before acquisition of 
the mortgage loan and the correspondent represents that Countrywide Home Loans' 
underwriting standards have been met. After purchasing mortgage loans under     
those circumstances, Countrywide Home Loans conducts a quality control review of
a sample of the mortgage loans. The number of loans reviewed in the quality     
control process varies based on a variety of factors, including Countrywide Home
Loans' prior experience with the correspondent lender and the results of the    
quality control review process itself.                                          

     Countrywide Home Loans' underwriting standards are applied by or on
behalf of Countrywide Home Loans to evaluate the prospective borrower's credit  
standing and repayment ability and the value and adequacy of the mortgaged      
property as collateral. Under those standards, a prospective borrower must      
generally demonstrate that the ratio of the borrower's monthly housing expenses 
(including principal and interest on the proposed mortgage loan and, as         
applicable, the related monthly portion of property taxes, hazard insurance and 
mortgage insurance) to the borrower's monthly gross income and the ratio of     
total monthly debt to the monthly gross income (the "DEBT-TO-INCOME" ratios) are
within acceptable limits. If the prospective borrower has applied for a 3/1     
Mortgage Loan and the Loan-to-Value Ratio is less than or equal to 75%, the     
interest component of the monthly housing expense is calculated based on the    
initial loan interest rate; if the Loan-to-Value Ratio exceeds 75%, the interest
component of the monthly housing expense calculation is based on the initial    
loan interest rate plus 2%. If the prospective borrower has applied for a 2/1   
Mortgage Loan, a 3/1 Mortgage Loan, a 5/1 Mortgage Loan, a 7/1 Mortgage Loan or 
a 10/1 Mortgage Loan, the interest component of the monthly housing expense is  
calculated based on the initial loan interest rate. The maximum acceptable      
debt-to-income ratio, which is determined on a loan-by-loan basis varies        
depending on a number of underwriting criteria, including the Loan-to-Value     
Ratio, loan purpose, loan amount and credit history of the borrower. In addition
to meeting the debt-to-income ratio guidelines, each prospective borrower is    
required to have sufficient cash resources to pay the down payment and closing  
costs. Exceptions to Countrywide Home Loans' underwriting guidelines may be made
if compensating factors are demonstrated by a prospective borrower.             

       Countrywide Home Loans may provide secondary financing to a mortgagor
contemporaneously with the origination of a mortgage loan, subject to the       
following limitations: the Loan-to-Value Ratio of the senior (i.e., first) lien 
may not exceed 80% and the combined Loan-to-Value Ratio may not exceed 100%.    
Countrywide Home Loans' underwriting guidelines do not prohibit or otherwise    
restrict a mortgagor from obtaining secondary financing from lenders other than 
Countrywide Home Loans, whether at origination of the mortgage loan or          
thereafter.                                                                     

       The nature of the information that a borrower is required to disclose
and whether the information is verified depends, in part, on the documentation  
program used in the origination process. In general under the Full Documentation
Loan Program (the "FULL DOCUMENTATION PROGRAM"), each prospective borrower is   
required to complete an application which includes information with respect to  
the applicant's assets, liabilities, income, credit                             

S-41

424B5
42nd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 42nd
history, employment history and other personal information. Self-employed       
individuals are generally required to submit their two most recent federal      
income tax returns. Under the Full Documentation Program, the underwriter       
verifies the information contained in the application relating to employment,   
income, assets or mortgages.                                                    

         A prospective borrower may be eligible for a loan approval process that
limits or eliminates Countrywide Home Loans' standard disclosure or verification
requirements or both. Countrywide Home Loans offers the following documentation 
programs as alternatives to its Full Documentation Program: an Alternative      
Documentation Loan Program (the "ALTERNATIVE DOCUMENTATION PROGRAM"), a Reduced 
Documentation Loan Program (the "REDUCED DOCUMENTATION PROGRAM"), a CLUES Plus  
Documentation Loan Program (the "CLUES PLUS DOCUMENTATION PROGRAM"), a No       
Income/No Asset Documentation Loan Program (the "NO INCOME/NO ASSET             
DOCUMENTATION PROGRAM"), a Stated Income/Stated Asset Documentation Loan Program
(the "STATED INCOME/STATED ASSET DOCUMENTATION PROGRAM") and a Streamlined      
Documentation Loan Program (the "STREAMLINED DOCUMENTATION PROGRAM").           

   For all mortgage loans originated or acquired by Countrywide Home
Loans, Countrywide Home Loans obtains a credit report relating to the applicant 
from a credit reporting company. The credit report typically contains           
information relating to such matters as credit history with local and national  
merchants and lenders, installment debt payments and any record of defaults,    
bankruptcy, dispossession, suits or judgments. All adverse information in the   
credit report is required to be explained by the prospective borrower to the    
satisfaction of the lending officer.                                            

  Except with respect to mortgage loans originated pursuant to its
Streamlined Documentation Program, Countrywide Home Loans obtains appraisals    
from independent appraisers or appraisal services for properties that are to    
secure mortgage loans. The appraisers inspect and appraise the proposed         
mortgaged property and verify that the property is in acceptable condition.     
Following each appraisal, the appraiser prepares a report which includes a      
market data analysis based on recent sales of comparable homes in the area and, 
when deemed appropriate, a replacement cost analysis based on the current cost  
of constructing a similar home. All appraisals are required to conform to Fannie
Mae or Freddie Mac appraisal standards then in effect.                          

        Countrywide Home Loans requires title insurance on all of its mortgage
loans secured by first liens on real property. Countrywide Home Loans also      
requires that fire and extended coverage casualty insurance be maintained on the
mortgaged property in an amount at least equal to the principal balance of the  
related single-family mortgage loan or the replacement cost of the mortgaged    
property, whichever is less.                                                    

         In addition to Countrywide Home Loans' standard underwriting guidelines
(the "STANDARD UNDERWRITING GUIDELINES"), which are consistent in many respects 
with the guidelines applied to mortgage loans purchased by Fannie Mae and       
Freddie Mac, Countrywide Home Loans uses underwriting guidelines featuring      
expanded criteria (the "EXPANDED UNDERWRITING GUIDELINES"). The Standard        
Underwriting Guidelines and the Expanded Underwriting Guidelines are described  
further under the next two headings.                                            

STANDARD UNDERWRITING GUIDELINES                                                

       Countrywide Home Loans' Standard Underwriting Guidelines for mortgage
loans with non-conforming original principal balances generally allow           
Loan-to-Value Ratios at origination of up to 95% for purchase money or rate and 
term refinance mortgage loans with original principal balances of up to         
$400,000, up to 90% for mortgage loans with original principal balances of up to
$650,000, up to 75% for mortgage loans with original principal balances of up to
$1,000,000, up to 65% for mortgage loans with original principal balances of up 
to $1,500,000, and up to 60% for mortgage loans with original principal balances
of up to $2,000,000.                                                            

         For cash-out refinance mortgage loans, Countrywide Home Loans' Standard
Underwriting Guidelines for mortgage loans with non-conforming original         
principal balances generally allow Loan-to-Value Ratios at origination of up to 
75% and original principal balances ranging up to $650,000. The maximum         
"cash-out" amount permitted is $200,000 and is based in part on the original    
Loan-to-Value Ratio of the related mortgage loan. As used in this prospectus    
supplement, a refinance mortgage loan is classified as a cash-out refinance     
mortgage loan by Countrywide Home Loans if the borrower retains an amount       
greater than the lesser of 2% of the entire amount of the proceeds from the     
refinancing of the existing loan or $2,000.                                     

S-42

424B5
43rd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 43rd
         Countrywide Home Loans' Standard Underwriting Guidelines for conforming
balance mortgage loans generally allow Loan-to-Value Ratios at origination on   
owner occupied properties of up to 95% on 1 unit properties with principal      
balances up to $359,650 ($539,475 in Alaska and Hawaii) and 2 unit properties   
with principal balances up to $460,400 ($690,600 in Alaska and Hawaii) and up to
80% on 3 unit properties with principal balances of up to $556,500 ($834,750 in 
Alaska and Hawaii) and 4 unit properties with principal balances of up to       
$691,600 ($1,037,400 in Alaska and Hawaii). On second homes, Countrywide Home   
Loans' Standard Underwriting Guidelines for conforming balance mortgage loans   
generally allow Loan-to-Value Ratios at origination of up to 95% on 1 unit      
properties with principal balances up to $359,650 ($539,475 in Alaska and       
Hawaii). Countrywide Home Loans' Standard Underwriting Guidelines for conforming
balance mortgage loans generally allow Loan-to-Value Ratios at origination on   
investment properties of up to 90% on 1 unit properties with principal balances 
up to $359,650 ($539,475 in Alaska and Hawaii) and 2 unit properties with       
principal balances up to $460,400 ($690,600 in Alaska and Hawaii) and up to 75% 
on 3 unit properties with principal balances of up to $556,500 ($834,750 in     
Alaska and Hawaii) and 4 unit properties with principal balances of up to       
$691,600 ($1,037,400 in Alaska and Hawaii).                                     

    Under its Standard Underwriting Guidelines, Countrywide Home Loans
generally permits a debt-to-income ratio based on the borrower's monthly housing
expenses of up to 33% and a debt-to-income ratio based on the borrower's total  
monthly debt of up to 38%.                                                      

      In connection with the Standard Underwriting Guidelines, Countrywide
Home Loans originates or acquires mortgage loans under the Full Documentation   
Program, the Alternative Documentation Program, the Reduced Documentation       
Program, the CLUES Plus Documentation Program or the Streamlined Documentation  
Program.                                                                        

         The Alternative Documentation Program permits a borrower to provide W-2
forms instead of tax returns covering the most recent two years, permits bank   
statements in lieu of verification of deposits and permits alternative methods  
of employment verification.                                                     

Under the Reduced Documentation Program, some underwriting    
documentation concerning income, employment and asset verification is waived.   
Countrywide Home Loans obtains from a prospective borrower either a verification
of deposit or bank statements for the two-month period immediately before the   
date of the mortgage loan application or verbal verification of employment.     
Since information relating to a prospective borrower's income and employment is 
not verified, the borrower's debt-to-income ratios are calculated based on the  
information provided by the borrower in the mortgage loan application. The      
maximum Loan-to-Value Ratio, including secondary financing, ranges up to 75%.   

  The CLUES Plus Documentation Program permits the verification of
employment by alternative means, if necessary, including verbal verification of 
employment or reviewing paycheck stubs covering the pay period immediately prior
to the date of the mortgage loan application. To verify the borrower's assets   
and the sufficiency of the borrower's funds for closing, Countrywide Home Loans 
obtains deposit or bank account statements from each prospective borrower for   
the month immediately prior to the date of the mortgage loan application. Under 
the CLUES Plus Documentation Program, the maximum Loan-to-Value Ratio is 75% and
property values may be based on appraisals comprising only interior and exterior
inspections. Cash-out refinances and investor properties are not permitted under
the CLUES Plus Documentation Program.                                           

      The Streamlined Documentation Program is available for borrowers who
are refinancing an existing mortgage loan that was originated or acquired by    
Countrywide Home Loans provided that, among other things, the mortgage loan has 
not been more than 30 days delinquent in payment during the previous            
twelve-month period. Under the Streamlined Documentation Program, appraisals are
obtained only if the loan amount of the loan being refinanced had a             
Loan-to-Value Ratio at the time of origination in excess of 80% or if the loan  
amount of the new loan being originated is greater than $650,000. In addition,  
under the Streamlined Documentation Program, a credit report is obtained but    
only a limited credit review is conducted, no income or asset verification is   
required, and telephonic verification of employment is permitted. The maximum   
Loan-to-Value Ratio under the Streamlined Documentation Program ranges up to    
95%.                                                                            

S-43

424B5
44th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 44th
         Approximately 8.10% and 4.38% of the Mortgage Loans in Loan Group 1 and
Loan Group 2, respectively, by aggregate Stated Principal Balance of the        
Mortgage Loans in that loan group as of the cut-off date, have been underwritten
pursuant to Countrywide Home Loans' Standard Underwriting Guidelines.           

EXPANDED UNDERWRITING GUIDELINES                                                

Mortgage loans which are underwritten pursuant to the Expanded
Underwriting Guidelines may have higher Loan-to-Value Ratios, higher loan       
amounts and different documentation requirements than those associated with the 
Standard Underwriting Guidelines. The Expanded Underwriting Guidelines also     
permit higher debt-to-income ratios than mortgage loans underwritten pursuant to
the Standard Underwriting Guidelines.                                           

       Countrywide Home Loans' Expanded Underwriting Guidelines for mortgage
loans with non-conforming original principal balances generally allow           
Loan-to-Value Ratios at origination of up to 95% for purchase money or rate and 
term refinance mortgage loans with original principal balances of up to         
$400,000, up to 90% for mortgage loans with original principal balances of up to
$650,000, up to 80% for mortgage loans with original principal balances of up to
$1,000,000, up to 75% for mortgage loans with original principal balances of up 
to $1,500,000 and up to 70% for mortgage loans with original principal balances 
of up to $3,000,000. Under certain circumstances, however, Countrywide Home     
Loans' Expanded Underwriting Guidelines allow for Loan-to-Value Ratios of up to 
100% for purchase money mortgage loans with original principal balances of up to
$375,000.                                                                       

         For cash-out refinance mortgage loans, Countrywide Home Loans' Expanded
Underwriting Guidelines for mortgage loans with non-conforming original         
principal balances generally allow Loan-to-Value Ratios at origination of up to 
90% and original principal balances ranging up to $1,500,000. The maximum       
"cash-out" amount permitted is $400,000 and is based in part on the original    
Loan-to-Value Ratio of the related mortgage loan.                               

         Countrywide Home Loans' Expanded Underwriting Guidelines for conforming
balance mortgage loans generally allow Loan-to-Value Ratios at origination on   
owner occupied properties of up to 100% on 1 unit properties with principal     
balances up to $359,650 ($539,475 in Alaska and Hawaii) and 2 unit properties   
with principal balances up to $460,400 ($690,600 in Alaska and Hawaii) and up to
85% on 3 unit properties with principal balances of up to $556,500 ($834,750 in 
Alaska and Hawaii) and 4 unit properties with principal balances of up to       
$691,600 ($1,037,400 in Alaska and Hawaii). On second homes, Countrywide Home   
Loans' Expanded Underwriting Guidelines for conforming balance mortgage loans   
generally allow Loan-to-Value Ratios at origination of up to 95% on 1 unit      
properties with principal balances up to $359,650 ($539,475 in Alaska and       
Hawaii). Countrywide Home Loans' Expanded Underwriting Guidelines for conforming
balance mortgage loans generally allow Loan-to-Value Ratios at origination on   
investment properties of up to 90% on 1 unit properties with principal balances 
up to $359,650 ($539,475 in Alaska and Hawaii) and 2 unit properties with       
principal balances up to $460,400 ($690,600 in Alaska and Hawaii) and up to 85% 
on 3 unit properties with principal balances of up to $556,500 ($834,750 in     
Alaska and Hawaii) and 4 unit properties with principal balances of up to       
$691,600 ($1,037,400 in Alaska and Hawaii).                                     

    Under its Expanded Underwriting Guidelines, Countrywide Home Loans
generally permits a debt-to-income ratio based on the borrower's monthly housing
expenses of up to 36% and a debt-to-income ratio based on the borrower's total  
monthly debt of up to 40%; provided, however, that if the Loan-to-Value Ratio   
exceeds 80%, the maximum permitted debt-to-income ratios are 33% and 38%,       
respectively.                                                                   

      In connection with the Expanded Underwriting Guidelines, Countrywide
Home Loans originates or acquires mortgage loans under the Full Documentation   
Program, the Alternative Documentation Program, the Reduced Documentation Loan  
Program, the No Income/No Asset Documentation Program and the Stated            
Income/Stated Asset Documentation Program. Neither the No Income/No Asset       
Documentation Program nor the Stated Income/Stated Asset Documentation Program  
is available under the Standard Underwriting Guidelines.                        

        The same documentation and verification requirements apply to mortgage
loans documented under the Alternative Documentation Program regardless of      
whether the loan has been underwritten under the Expanded Underwriting          
Guidelines or the Standard Underwriting Guidelines. However, under the          
Alternative Documentation Program, mortgage loans that have been underwritten   
pursuant to the Expanded Underwriting Guidelines may have higher loan balances  
and Loan-to-Value Ratios than those permitted under the Standard Underwriting   
Guidelines.                                                                     

S-44

424B5
45th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 45th
       Similarly, the same documentation and verification requirements apply
to mortgage loans documented under the Reduced Documentation Program regardless 
of whether the loan has been underwritten under the Expanded Underwriting       
Guidelines or the Standard Underwriting Guidelines. However, under the Reduced  
Documentation Program, higher loan balances and Loan-to-Value Ratios are        
permitted for mortgage loans underwritten pursuant to the Expanded Underwriting 
Guidelines than those permitted under the Standard Underwriting Guidelines. The 
maximum Loan-to-Value Ratio, including secondary financing, ranges up to 90%.   
The borrower is not required to disclose any income information for some        
mortgage loans originated under the Reduced Documentation Program, and          
accordingly debt-to-income ratios are not calculated or included in the         
underwriting analysis. The maximum Loan-to-Value Ratio, including secondary     
financing, for those mortgage loans ranges up to 85%.                           

      Under the No Income/No Asset Documentation Program, no documentation
relating to a prospective borrower's income, employment or assets is required   
and therefore debt-to-income ratios are not calculated or included in the       
underwriting analysis, or if the documentation or calculations are included in a
mortgage loan file, they are not taken into account for purposes of the         
underwriting analysis. This program is limited to borrowers with excellent      
credit histories. Under the No Income/No Asset Documentation Program, the       
maximum Loan-to-Value Ratio, including secondary financing, ranges up to 95%.   
Mortgage loans originated under the No Income/No Asset Documentation Program are
generally eligible for sale to Fannie Mae or Freddie Mac.                       

Mortgage Loans originated under either the No Income/No Asset 
Documentation Program or the Reduced Documentation Program pursuant to which    
debt-to-income ratios are not calculated as described above will comprise       
approximately 0.22% and 0.44% of the Mortgage Loans in Loan Group 1, and Loan   
Group 2, respectively, in each case by aggregate Stated Principal Balance of the
Mortgage Loans in that loan group as of the cut-off date.                       

 Under the Stated Income/Stated Asset Documentation Program, the
mortgage loan application is reviewed to determine that the stated income is    
reasonable for the borrower's employment and that the stated assets are         
consistent with the borrower's income. The Stated Income/Stated Asset           
Documentation Program permits maximum Loan-to-Value Ratios up to 90%. Mortgage  
loans originated under the Stated Income/Stated Asset Documentation Program are 
generally eligible for sale to Fannie Mae or Freddie Mac.                       

        Under the Expanded Underwriting Guidelines, Countrywide Home Loans may
also provide mortgage loans to borrowers who are not U.S. citizens, including   
permanent and non-permanent residents. The borrower is required to have a valid 
U.S. social security number or a certificate of foreign status (IRS form W-8).  
The borrower's income and assets must be verified under the Full Documentation  
Program or the Alternative Documentation Program. The maximum Loan-to-Value     
Ratio, including secondary financing, is 80%.                                   

         Approximately 5.61% and 1.59% of the Mortgage Loans in Loan Group 1 and
Loan Group 2, respectively, by aggregate Stated Principal Balance of the        
Mortgage Loans in that loan group as of the cut-off date, have been underwritten
pursuant to Countrywide Home Loans' Expanded Underwriting Guidelines.           

UNDERWRITING PROCESS - DECISION ONE MORTGAGE                                    

       Approximately 23.38% and 34.56% of the Mortgage Loans in Loan Group 1
and Loan Group 2, respectively, in each case by aggregate Stated Principal      
Balance of the Mortgage Loans in the related loan group as of the cut-off date, 
were originated or acquired in the ordinary course of business by Decision One  
Mortgage.                                                                       

GENERAL                                                                         

     Decision One Mortgage is a wholly owned subsidiary of HSBC Group, a
publicly traded company. Decision One Mortgage is a mortgage company that       
originates, purchases and sells first-lien and second-lien mortgage loans.      
Decision One Mortgage emphasizes the origination of mortgage loans that are     
commonly referred to as Alt-A lending options, and non conforming or sub-prime  
loans. Decision One Mortgage commenced lending operations on May of 1996. It is 
headquartered in Charlotte, NC.                                                 

S-45

424B5
46th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 46th
  Decision One Mortgage originates and purchases loans through its
wholesale network of 10,000 independent mortgage brokers and through its network
of 22 branch offices located in 18 states. Loans are processed, underwritten and
closed through the branch network. For the twelve months ending December 31,    
2004, Decision One Mortgage's wholesale division originated $12.6 billion in    
mortgages, As of August 2005, originations were $9.898 billion. As of July 31,  
2005, Decision One Mortgage employed 1,390 associates nationwide.               

UNDERWRITING STANDARDS.                                                         

 Mortgage loans originated or acquired by Decision One Mortgage,
referred to in this section as the originator, were done so in accordance with  
the underwriting guidelines established by it (collectively, the "Decision One  
Underwriting Guidelines"). The following is a general summary of the Decision   
One Underwriting Guidelines believed to be generally applied, with some         
variation, by the originator. This summary does not purport to be a complete    
description of the underwriting standards of Decision One Mortgage.             

    The Decision One Underwriting Guidelines are primarily intended to
assess the borrower's ability to repay the mortgage loan, to assess the value of
the mortgaged property and to evaluate the adequacy of the property as          
collateral for the mortgage loan. All of the mortgage loans in the mortgage loan
pool were also underwritten with a view toward the resale of the mortgage loans 
in the secondary mortgage market. While the originator's primary consideration  
in underwriting a mortgage loan is the value of the mortgaged property, the     
originator also considers, among other things, a mortgagor's credit history,    
repayment ability and debt-service-to-income ratio, as well as the type and use 
of the mortgaged property.                                                      

     The mortgage loans will have been originated in accordance with the
Decision One Underwriting Guidelines. On a case by case basis, exceptions to the
Decision One Underwriting Guidelines are made where compensating factors exist. 

         Each applicant completes an application which includes information with
respect to the applicant's liabilities, income, credit history, employment      
history and personal information. The Decision One Underwriting Guidelines      
require a credit report on each applicant from a credit reporting company. The  
report typically contains information relating to matters such as credit history
with local and national merchants and lenders, installment debt payments and any
record of defaults, bankruptcies, repossessions or judgments. Mortgaged         
properties that are to secure mortgage loans are appraised by qualified         
independent appraisers. These appraisers inspect and appraise the subject       
property and verify that the property is in acceptable condition. Following each
appraisal, the appraiser prepares a report which includes a market value        
analysis based on recent sales of comparable homes in the area, and when deemed 
appropriate, replacement cost analysis based on the current cost of constructing
a similar home. All appraisals are required to conform to the Uniform Standards 
of Professional Appraisal Practice adopted by the Appraisal Standards Board of  
the Appraisal Foundation and are generally on forms acceptable to Fannie Mae and
Freddie Mac.                                                                    

  The mortgage loans were originated consistent with and generally
conform to the Decision One Underwriting Guidelines' full documentation, limited
documentation and stated income documentation residential loan programs. Under  
each of the programs, the originator reviews the applicant's source of income,  
calculates the amount of income from sources indicated on the loan application  
or similar documentation, reviews the credit history of the applicant,          
calculates the debt service to income ratio to determine the applicant's ability
to repay the loan, reviews the type and use of the property being financed, and 
reviews the property. The Decision One Underwriting Guidelines require that     
mortgage loans be underwritten in a standardized procedure which complies with  
applicable federal and state laws and regulations and requires the originator's 
underwriters to be satisfied that the value of the property being financed, as  
indicated by an appraisal and a review of the appraisal, currently supports the 
outstanding loan balance. In general, the maximum loan amount for mortgage loans
originated under the programs is $750,000. The Decision One Underwriting        
Guidelines generally permit loans on one to four family residential properties  
to have a loan-to-value ratio at origination of up to 100% with respect to      
first-liens loans. The maximum loan-to-value ratio depends on, among other      
things, the purpose of the mortgage loan, a borrower's credit history, home     
ownership history, mortgage payment history or rental payment history, repayment
ability and debt-service-to-income ratio, as well as the type and use of the    
property.                                                                       

S-46

424B5
47th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 47th
     The Decision One Underwriting Guidelines require that the income of
each applicant for a mortgage loan be verified. The income documentation        
required for the originator's various programs is as follows: under the full    
documentation program, applicants are required to submit one form of            
verification from their employer(s) of stable income for at least 24 months;    
under the Bank Statement and Lite documentation programs, applicants are        
required to submit verification of stable income for at least 24 months along   
with consecutive and complete personal checking account bank statements; and    
under the stated income documentation program, an applicant may be qualified    
based upon monthly income as stated on the mortgage loan application (Fannie Mae
Form 1003) if the applicant meets certain criteria. All the abovementioned      
programs require telephone verification of all the applicants' employment.      

        In evaluating the credit quality of borrowers, the originator utilizes
credit bureau risk scores, or a FICO score, a statistical ranking of likely     
future credit performance developed by Fair, Isaac & Company and the three      
national credit data repositories: Equifax, TransUnion and Experian.            

     The Decision One Underwriting Guidelines are divided into two major
matrices. Below is a description of each matrix:                                

Core                                                                            

        The Core matrix is Decision One's all-inclusive Alt-A product offering
and traditional Sub-prime lending options.                                      

        o    A+ grade offers Alt-A product offerings and competitive pricing
            for high FICO borrowers. Proof of reserves and verification of
assets are required in most circumstances.        

 o    A through C grades provide lending options for Sub-prime
           borrowers with reductions in LTV's and loan amounts to offset
lower FICO scores.                                

Portfolio Plus                                                                  

        The Portfolio Plus matrix is Decision One's high LTV and niche product
offering. All credit grades target borrowers with proven payment ability by     
requiring credit depth and limited slow pay mortgage histories.                 

General Underwriting Procedures and Credit Risk Management                      

     In addition to the credit requirements outlined in each matrix, the
general underwriting procedures include:                                        

           o   Verbal verifications by a Decision One Mortgage employee of
employer and home phone numbers.            

           o   External data integrity score that validates name, address,
employment and social security number.      

 o   Automated Valuation Models (AVM's) and collateral
            investigation tools to ensure value and integrity of the
appraisal.                                  

             o Internal watch list of brokers, appraisers and title companies.

 Each underwriter receives training in Fraud Detection, Red Flag
Awareness and Investigation. Underwriters have access to internal and external  
resources to identify risk and confirm the integrity of data in areas of credit 
capacity and collateral.                                                        

EXCEPTIONS:                                                                     

As described above, the foregoing categories and criteria are 
guidelines only. On a case-by-case basis, it may be determined that an applicant
warrants a debt-service-to-income ratio exception, a pricing exception, a       
loan-                                                                           

S-47

424B5
48th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 48th
to-value ratio exception, an exception from certain requirements of a           
particular risk category, etc. An exception may be allowed if the application   
reflects compensating factors, such as: low loan-to-value ratio, pride of       
ownership, a maximum of one 30-day late payment on all mortgage loans during the
last 12 months, stable employment, and longevity of current residence ownership.

UNDERWRITING PROCESS - MILA, INC.                                               

         Approximately 29.47% of the Mortgage Loans in Loan Group 2 by aggregate
Stated Principal Balance of the Mortgage Loans in loan group 2 as of the cut-off
date, were originated or acquired in the ordinary course of business by MILA,   
INC.                                                                            

GENERAL.                                                                        

         The information set forth in the following paragraphs has been provided
by MILA, Inc., and none of the Depositor, the underwriter, the servicers, the   
trustee, or any other person makes any representation as to the accuracy or     
completeness of such information.                                               

        MILA, Inc. is a consumer finance and mortgage banking company that
originates, purchases, sells and services first-lien and second-lien mortgage   
loans.                                                                          

         MILA, Inc. originates and purchases loans through its wholesale network
of 30,000 independent mortgage brokers in 27 states.                            

UNDERWRITING STANDARDS.                                                         

  The mortgage loans originated by MILA, Inc., referred to in this
section as the originator, were done so in accordance with the underwriting     
guidelines established by it (collectively, the "MILA Underwriting Guidelines").
The following is a general summary of the MILA Underwriting Guidelines. This    
summary does not purport to be a complete description of the underwriting       
standards of the MILA, Inc.                                                     

       The MILA Underwriting Guidelines are primarily intended to assess the
borrower's income stability, credit history, and capacity to repay the mortgage 
loan as well as to assess the value of the mortgaged property and to evaluate   
the adequacy of the property as collateral for the mortgage loan. All of the    
mortgage loans in the mortgage loan pool were also underwritten with a view     
toward the resale of the mortgage loans in the secondary mortgage market. While 
the originator's primary consideration in underwriting a mortgage loan is the   
value of the mortgaged property, the originator also considers, among other     
things, a mortgagor's credit history, repayment ability and debt to income      
ratio, as well as the type and use of the mortgaged property. No assurance can  
be given that the values of the related mortgaged properties have remained or   
will remain at the levels in effect on the dates of origination of the related  
mortgage loans. In addition, there can be no assurance that the value of a      
mortgaged property estimated in any appraisal or review is equal to the actual  
value of that mortgaged property at the time of that appraisal or review.       

       The Mortgage Loans originated by MILA, Inc. will have been originated
in accordance with the MILA Underwriting Guidelines. On a case by case basis,   
exceptions to the MILA Underwriting Guidelines are made where compensating      
factors exist.                                                                  

         Each applicant completes an application which includes information with
respect to the applicant's liabilities, income, credit history, employment      
history and personal information. The MILA Underwriting Guidelines require a    
credit report on each applicant from an approved nationally recognized credit   
reporting company. The report typically contains information relating to matters
such as credit history with local and national merchants and lenders,           
installment debt payments and any record of defaults, bankruptcies,             
repossessions or judgments. Mortgaged properties that are to secure mortgage    
loans are appraised by qualified independent appraisers. These appraisers       
inspect and appraise the subject property and verify that the property is in    
acceptable condition. Following each appraisal, the appraiser prepares a report 
which includes a market value analysis based on recent sales of comparable homes
in the area and, when deemed appropriate, replacement cost analysis based on    

S-48

424B5
49th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 49th
the current cost of constructing a similar home. All appraisals are required to 
conform to the Uniform Standards of Professional Appraisal Practice adopted by  
the Appraisal Standards Board of the Appraisal Foundation and are generally on  
forms acceptable to Fannie Mae and Freddie Mac. The MILA Underwriting Guidelines
require a review of the appraisal by a qualified employee of the originator or  
by an appraiser retained by the originator.                                     

        The Mortgage Loans originated by MILA, Inc. were originated consistent
with and generally conform to the MILA Underwriting Guidelines' full            
documentation and stated income documentation residential loan programs. Under  
each of the programs, the originator reviews the applicant's source of income,  
calculates the amount of income from sources indicated on the loan application  
or similar documentation, reviews the credit history of the applicant,          
calculates the debt service to income ratio to determine the applicant's ability
to repay the loan, reviews the type and use of the property being financed, and 
reviews the property. In determining the ability of the applicant to repay the  
loan, a qualifying rate has been created under the MILA Underwriting Guidelines 
that generally is equal to the interest rate on that loan. The MILA Underwriting
Guidelines require that mortgage loans be underwritten in a standardized        
procedure which complies with applicable federal and state laws and regulations 
and requires the originator's underwriters to be satisfied that the value of the
property being financed, as indicated by an appraisal and a review of the       
appraisal, currently supports the outstanding loan balance. In general, the     
maximum loan amount for mortgage loans originated under the programs is         
$625,000. The MILA Underwriting Guidelines generally permit loans on one to four
family residential properties to have a loan-to-value ratio at origination of up
to 100% with respect to first-liens loans. The maximum loan-to-value ratio      
depends on, among other things, the purpose of the mortgage loan, a borrower's  
credit history, home ownership history, mortgage payment history or rental      
payment history, repayment ability and debt service to income ratio, level of   
income documentation, as well as the type and use of the property.              

  The MILA Underwriting Guidelines require that the income of each
applicant for a mortgage loan under the full documentation program be verified. 
The specific income documentation required for the originator's various programs
is as follows: under the full documentation program, applicants usually are     
required to submit one written form of verification from the employer of stable 
income for at least 12 months for salaried employees and 24 months for          
self-employed applicants. Under the stated income documentation program, an     
applicant may be qualified based upon monthly income as stated on the mortgage  
loan application if the applicant meets certain criteria. All the foregoing     
programs require that, with respect to salaried employees, there be a telephone 
verification of the applicant's employment. Verification of the source of funds,
if any, required to be deposited by the applicant into escrow in the case of a  
purchase money loan is required.                                                

        In evaluating the credit quality of borrowers, the originator utilizes
credit bureau risk scores, or a FICO score, a statistical ranking of likely     
future credit performance developed by Fair, Isaac & Company and the three      
national credit data repositories: Equifax, TransUnion and Experian.            

    The MILA Underwriting Guidelines have the following categories and
criteria for grading the potential likelihood that an applicant will satisfy the
repayment obligations of a mortgage loan:                                       

        FD1 or ST1: Under this program a borrower may borrow up to 100% LTV as
      long as they posses required FICO score at 600 on full documentation
   loans and 100% LTV if they have a 650 FICO score on Stated Income
     loans. FICO scores are permitted down to 500 with a maximum loan to
       value of 80%. The borrower must have no late mortgage payments in the
        last 12 months. No bankruptcy may have been active in the last 2 years
         and no notice of default filings may have occurred during the preceding
3 years.                                                      

       FD2 or ST2: Under this program a borrower may borrow up to 90% LTV as
      long as they posses required FICO score at 560 on full documentation
         loans and 80% LTV if they have a 540 FICO score on Stated Income loans.
       FICO scores are permitted down to 500 with a maximum loan to value of
    80%. The borrower may have 2 late mortgage payments in the last 12
       months. No bankruptcy may have been active in the last 2 years and no
    notice of default filings may have occurred during the preceding 2
years.                                                        

       FD3 or ST3: Under this program a borrower may borrow up to 90% LTV as
      long as they posses required FICO score at 580 on full documentation
         loans and 80% LTV if they have a 540 FICO score on Stated Income loans.
       FICO scores are permitted down to 500 with a maximum loan to value of
80%. The                                                      

S-49

424B5
50th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 50th
      borrower may have 3 late mortgage payments in the last 12 months. No
      bankruptcy may have been active in the last 2 years and no notice of
 default filings may have occurred during the preceding 2 years.

       FD4 or ST4: Under this program a borrower may borrow up to 85% LTV as
      long as they posses required FICO score at 560 on full documentation
         loans and 75% LTV if they have a 540 FICO score on Stated Income loans.
       FICO scores are permitted down to 540 with a maximum loan to value of
        75%. The borrower may have 1 60-day late mortgage payments in the last
       12 months. No bankruptcy may have been active in the last 2 years and
       no notice of default filings may have occurred during the preceding 2
years.                                                        

        FD5: Under this program a borrower may borrow up to 75% LTV as long as
     they posses required FICO score at 560 on full documentation loans.
       FICO scores are permitted down to 500 with a maximum loan to value of
        70%. The borrower may have 1 90-day late mortgage payments in the last
       12 months. No bankruptcy may have been active in the last 2 years and
       no notice of default filings may have occurred during the preceding 2
years.                                                        

         JFD1 or JST1: This Jumbo program allows for loan sizes up to $1,000,000
        on a Purchase or Rate-Term basis only. A borrower may borrow up to 85%
LTV as long as they posses required FICO score at 650 on full 
         documentation loans and 85% LTV if they have a 680 FICO score on Stated
         Income loans. FICO scores are permitted down to 625 with a maximum loan
      to value of 80%. The borrower must have no late mortgage payments in
      the last 24 months. No bankruptcy may have been active in the last 3
     years and no notice of default filings may have occurred during the
preceding 3 years.                                            

       JFD2 or JST2: This Jumbo program allows for loan sizes up to $800,000
        for cash out refinance. A borrower may borrow up to 85% LTV as long as
        they posses required FICO score at 680 on full documentation loans and
    80% LTV if they have a 650 FICO score on Stated Income loans. FICO
       scores are permitted down to 650 with a maximum loan to value of 80%.
         The borrower must have no late mortgage payments in the last 24 months.
         No bankruptcy may have been active in the last 3 years and no notice of
 default filings may have occurred during the preceding 3 years.

        AFD1 or AST1: Under this Alt-A program a borrower may borrow up to 80%
    LTV as long as they posses required FICO score at 625 on both full
        documentation and Stated Income loans. The borrower must provide proof
   of 2 months PITI and funds to close. The borrower may have 1 late
     mortgage payment in the last 12 months. No bankruptcy may have been
      active in the last 3 years and no notice of default filings may have
occurred during the preceding 3 years.                        

         NR1: Under this No Ratio program a borrower may borrow up to 95% LTV as
       long as they posses required FICO score at 680. Employment and Assets
   are verified and disclosed with no income disclosed on 1003. FICO
       scores are permitted down to 625 with a maximum loan to value of 85%.
    This program requires proof of 2 months PITI as well as source and
      seasoning of funds to close. The borrower must have no late mortgage
       payments in the last 12 months. No bankruptcy may have been active in
the last 3 years and no notice of default filings allowed.    

       ND1: Under this No Doc program a borrower may borrow up to 90% LTV as
        long as they posses required FICO score at 680. No employment, income,
  or assets are verified or disclosed on the 1003. FICO scores are
         permitted down to 625 with a maximum loan to value of 80%. No assets or
   reserves are required to be verified. No bankruptcy may have been
      active in the last 3 years and no notice of default filings allowed.

EXCEPTIONS.                                                                     

As described above, the foregoing categories and criteria are 
guidelines only. On a case by case basis, it may be determined that an applicant
warrants a debt service to income ratio exception, a pricing exception, a       
loan-to-value ratio exception, an exception from certain requirements of a      
particular risk category, etc. An exception may be allowed if the application   
reflects compensating factors.                                                  

S-50

424B5
51st Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 51st
UNDERWRITING PROCESS - GENERAL                                                  

     The mortgage loans that will be transferred to the trust fund other
than those originated or acquired by Countrywide Home Loans, Decision One       
Mortgage or MILA, Inc. have been originated or acquired in accordance with the  
procedures set forth in the prospectus under "Mortgage Loan Program-Underwriting
Process."                                                                       

 SERVICING OF THE MORTGAGE LOANS

GENERAL                                                                         

     Countrywide Home Loans Servicing LP ("COUNTRYWIDE SERVICING" or the
"MASTER SERVICER") will act as master servicer and will be responsible for      
servicing the mortgage loans in accordance with the terms set forth in the      
Pooling and Servicing Agreement. Countrywide Servicing may perform any of its   
obligations under the Pooling and Servicing Agreement through one or more       
subservicers, which may include Countrywide Home Loans, Inc. Notwithstanding any
subservicing arrangement, Countrywide Servicing will remain liable for its      
servicing duties and obligations under the Pooling and Servicing Agreement as if
Countrywide Servicing alone were servicing the Mortgage Loans. Set forth below  
are the direct servicers as of the date of this prospectus supplement of the    
Mortgage Loans in each loan group by aggregate Stated Principal Balance of the  
Mortgage Loans in that loan group as of the cut-off date:                       

                                                        [Enlarge/Download Table]

                                                                                    % OF MORTGAGE LOANS IN THAT  
                   PRIMARY SERVICER                             LOAN GROUP                   LOAN GROUP          
------------------------------------------------------- --------------------------- -----------------------------
                                                                                                                 
Bank of America, N.A.                                               2                            0.19            
------------------------------------------------------- --------------------------- -----------------------------
Countrywide Home Loans Servicing LP                                 1                           99.74            
                                                                    2                           99.30            
------------------------------------------------------- --------------------------- -----------------------------
IndyMac Bank, F.S.B.                                                2                            0.29            
------------------------------------------------------- --------------------------- -----------------------------
National City Mortgage Co.                                          1                            0.26            
                                                                    2                            0.22            
------------------------------------------------------- --------------------------- -----------------------------

THE MASTER SERVICER                                                             

         The principal executive offices of Countrywide Servicing are located at
7105 Corporate Drive, Plano, Texas 75024. Countrywide Servicing is a Texas      
limited partnership directly owned by Countrywide GP, Inc. and Countrywide LP,  
Inc., each a Nevada corporation and a direct wholly owned subsidiary of         
Countrywide Home Loans, Inc., a New York corporation ("COUNTRYWIDE HOME LOANS").
Countrywide Home Loans is a direct wholly owned subsidiary of Countrywide       
Financial Corporation, a Delaware corporation ("COUNTRYWIDE FINANCIAL").        
Countrywide GP, Inc. owns a 0.1% interest in Countrywide Servicing and is the   
general partner. Countrywide LP, Inc. owns a 99.9% interest in Countrywide      
Servicing and is a limited partner.                                             

      Countrywide Home Loans established Countrywide Servicing in February
2000 to service mortgage loans originated by Countrywide Home Loans that would  
otherwise have been serviced by Countrywide Home Loans. In January and February,
2001, Countrywide Home Loans transferred to Countrywide Servicing all of its    
rights and obligations relating to mortgage loans serviced on behalf of Freddie 
Mac and Fannie Mae, respectively. In October 2001, Countrywide Home Loans       
transferred to Countrywide Servicing all of its rights and obligations relating 
to the bulk of its non-agency loan servicing portfolio, including with respect  
to those mortgage loans formerly serviced by Countrywide Home Loans and         
securitized by CWMBS, Inc. or CWABS, Inc., affiliates of the Depositor. While   
Countrywide Home Loans expects to continue to directly service a portion of its 
loan portfolio, it is expected that the servicing rights for most newly         
originated Countrywide Home Loans mortgage loans will be transferred to         
Countrywide Servicing upon sale or securitization of the related mortgage loans.
Countrywide Servicing is engaged in the business of servicing mortgage loans and
will not originate or acquire loans, an activity that will continue to be       
performed by Countrywide Home Loans. In addition to acquiring mortgage servicing
rights from Countrywide Home Loans, it is expected that Countrywide Servicing   
will service mortgage loans for non-Countrywide Home Loans affiliated parties as
well as subservice mortgage loans on behalf of other master servicers.          

S-51

424B5
52nd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 52nd
        In connection with the establishment of Countrywide Servicing, certain
employees of Countrywide Home Loans became employees of Countrywide Servicing.  
Countrywide Servicing has engaged Countrywide Home Loans as a subservicer to    
perform certain loan servicing activities on its behalf.                        

        Countrywide Servicing is an approved mortgage loan servicer for Fannie
Mae, Freddie Mac, Ginnie Mae, HUD and VA and is licensed to service mortgage    
loans in each state where a license is required. Its loan servicing activities  
are guaranteed by Countrywide Financial and/or Countrywide Home Loans when      
required by the owner of the mortgage loans. As of June 30, 2005, Countrywide   
Servicing had a net worth of approximately $14.16 billion.                      

COUNTRYWIDE HOME LOANS                                                          

     Countrywide Home Loans is engaged primarily in the mortgage banking
business, and as such, originates, purchases, sells and services (either        
directly or through subsidiaries) mortgage loans. Countrywide Home Loans        
originates mortgage loans through a retail branch system and through mortgage   
loan brokers and correspondents nationwide. Loans originated, purchased, sold or
serviced by Countrywide Home Loans are principally first-lien, fixed or         
adjustable rate mortgage loans secured by single-family residences. Except as   
otherwise indicated, references in the remainder of this prospectus supplement  
to Countrywide Home Loans should be read to include Countrywide Home Loans, and 
its consolidated subsidiaries, including Countrywide Servicing.                 

       The principal executive offices of Countrywide Home Loans are located
at 4500 Park Granada, Calabasas, California 91302.                              

         Countrywide Home Loans services substantially all of the mortgage loans
it originates or acquires. In addition, Countrywide Home Loans has purchased in 
bulk the rights to service mortgage loans originated by other lenders.          
Countrywide Home Loans has in the past and may in the future sell to other      
mortgage bankers a portion of its portfolio of loan servicing rights. As of June
30, 2005, Countrywide Home Loans provided servicing for approximately $964.444  
billion aggregate principal amount of mortgage loans, substantially all of which
are being serviced for unaffiliated persons.                                    

MORTGAGE LOAN PRODUCTION                                                        

         The following table sets forth, by number and dollar amount of mortgage
loans, Countrywide Home Loans' residential mortgage loan production for the     
periods indicated.                                                              

S-52

424B5
53rd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 53rd
                                                        [Enlarge/Download Table]

                                                                     CONSOLIDATED MORTGAGE LOAN PRODUCTION                        
                                                                     -------------------------------------                        
                                                         TEN MONTHS                         YEARS ENDED                SIX MONTHS 
                                           YEAR ENDED       ENDED                          DECEMBER 31,                    ENDED  
                                          FEBRUARY 28,  DECEMBER 31,   ----------------------------------------------     JUNE 30 
                                              2001           2001            2002            2003          2004            2005   
                                         -------------  -------------  --------------- -------------- -------------    ---------- 
                                                             (DOLLARS IN MILLIONS, EXCEPT AVERAGE LOAN AMOUNT)                    
                                                                                                                                  
Conventional Conforming Loans                                                                                                     
  Number of Loans.......................     240,608        504,975         999,448       1,517,743         846,395       332,438 
  Volume of Loans....................... $    34,434    $    76,432    $    150,110   $     235,868   $     138,845  $     69,200 
     Percent of Total Dollar Volume.....        50.0%          61.7%           59.6%           54.2%           38.2%         32.6%
Conventional Non-conforming Loans                                                                                                 
  Number of Loans.......................      86,600        137,593         277,626         554,571         509,711       380,563 
  Volume of Loans....................... $    11,394    $    22,209    $     61,627   $     136,664   $     140,580  $     97,692 
     Percent of Total Dollar Volume.....        16.5%          17.9%           24.5%           31.4%           38.7%         46.1%
FHA/VA Loans                                                                                                                      
  Number of Loans.......................     118,673        118,734         157,626         196,063         105,562        37,268 
  Volume of Loans....................... $    13,075    $    14,109    $     19,093   $      24,402   $      13,247  $      4,837 
     Percent of Total Dollar Volume.....        18.9%          11.4%            7.6%            5.6%            3.6%          2.3%
Prime Home Equity Loans                                                                                                           
  Number of Loans.......................     119,045        164,503         316,049         453,817         587,046       326,712 
  Volume of Loans....................... $     4,660    $     5,639    $     11,650   $      18,103   $      30,893  $     19,822 
     Percent of Total Dollar Volume.....         6.8%           4.5%            4.6%            4.2%            8.5%          9.4%
Nonprime Mortgage Loans                                                                                                           
  Number of Loans.......................      51,706         43,359          63,195         124,205         250,030       129,375 
  Volume of Loans....................... $     5,360    $     5,580    $      9,421   $      19,827   $      39,441  $     20,256 
     Percent of Total Dollar Volume.....         7.8%           4.5%            3.7%            4.6%           11.0%          9.6%
Total Loans                                                                                                                       
  Number of Loans.......................     616,632        969,164       1,813,944       2,846,399       2,298,744     1,206,356 
  Volume of Loans....................... $    68,923    $   123,969    $    251,901   $     434,864   $     363,006  $    211,807 
  Average Loan Amount................... $   112,000    $   128,000    $    139,000   $     153,000   $     158,000  $    176,000 
  Non-Purchase Transactions(1)..........          33%            63%             66%             72%             51%           52%
  Adjustable-Rate Loans(1)..............          14%            12%             14%             21%             52%           55%

----------                                                                      
(1) Percentage of total loan production based on dollar volume.                 

FORECLOSURE, DELINQUENCY AND LOSS EXPERIENCE                                    

        Historically, a variety of factors, including the appreciation of real
estate values, have limited Countrywide Home Loans' loss and delinquency        
experience on its portfolio of serviced mortgage loans. There can be no         
assurance that factors beyond the control of Countrywide Home Loans, such as    
national or local economic conditions or downturns in the real estate markets of
its lending areas, will not result in increased rates of delinquencies and      
foreclosure losses in the future.                                               

        A general deterioration of the real estate market in regions where the
mortgaged properties are located may result in increases in delinquencies of    
loans secured by real estate, slower absorption rates of real estate into the   
market and lower sales prices for real estate. A general weakening of the       
economy may result in decreases in the financial strength of borrowers and      
decreases in the value of collateral serving as security for loans. If the real 
estate market and economy were to decline, Countrywide Home Loans may experience
an increase in delinquencies on the loans it services and higher net losses on  
liquidated loans.                                                               

      The following table summarizes the delinquency, foreclosure and loss
experience, respectively, on the dates indicated, of the mortgage loans         
originated or acquired by Countrywide Home Loans, serviced or master serviced by
Countrywide Home Loans and securitized in Alternative Loan Trusts by the        
Depositor or by CWMBS, Inc., an affiliate of the Depositor. The delinquency,    
foreclosure and loss percentages may be affected by the size and relative lack  
of seasoning in this portion of the servicing portfolio which increased from    
approximately $2.247 billion at February 28, 2001, to approximately $5.083      
billion at December 31, 2001, to approximately $9.862 billion at December 31,   
2002, to approximately $14.733 billion at December 31, 2003, to approximately   
$31.063 billion at                                                              

S-53

424B5
54th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 54th
December 31, 2004, and to approximately $54.133 billion at June 30, 2005.       
Accordingly, the information should not be considered as a basis for assessing  
the likelihood, amount or severity of delinquency or losses on the mortgage     
loans and no assurances can be given that the foreclosure, delinquency and loss 
experience presented in the following table will be indicative of the actual    
experience on the mortgage loans (totals may not add due to rounding):          

                                                        [Enlarge/Download Table]

                                          AT                                                                         AT      
                                     FEBRUARY 28,                        AT DECEMBER 31,                          JUNE 30,   
                                     ------------  ------------------------------------------------------------   --------   
                                         2001          2001           2002           2003            2004           2005     
                                     ------------  ------------------------------------------------------------   --------   
                                                                                                                             
Delinquent Mortgage Loans and                                                                                                
   Pending Foreclosures at                                                                                                   
   Period End:                                                                                                               
     30-59 days.....................     2.28%         2.92%          3.08%         2.63%            1.89%          1.44%    
     60-89 days.....................     0.51%         0.65%          0.86%         0.72%            0.39%          0.29%    
     90 days or more (excluding                                                                                              
        pending foreclosures).......     0.19%         0.21%          0.45%         0.53%            0.35%          0.24%    
                                       ---------    -----------    -----------    -----------    ------------    ----------- 
         Total delinquencies........     2.97%         3.77%          4.39%         3.87%            2.63%          1.98%    
                                       =========    ===========    ===========    ===========    ============    =========== 
Foreclosures pending................     0.47%         0.43%          0.45%         0.91%            0.28%          0.20%    
                                       =========    ===========    ===========    ===========    ============    =========== 

Total delinquencies and                                                                                                      
    foreclosures pending............     3.44%         4.21%          4.84%         4.78%            2.91%          2.17%    
                                       =========    ===========    ===========    ===========    ============    =========== 

Net Gains/(Losses) on liquidated                                                                                             
    loans(1)........................$(374,332)     $(1,057,748)   $(5,372,415)   $(9,334,817)   $(20,017,873)   $(4,424,225) 
Percentage of Net Gains/(Losses)                                                                                             
    on liquidated loans(1)(2).......   (0.017)%         (0.021)%       (0.054)%       (0.063)%        (0.064)%       (0.008)%
Percentage of Net Gains/(Losses)                                                                                             
    on liquidated loans (based on                                                                                            
    average outstanding principal                                                                                            
    balance)(1).....................   (0.018)%         (0.021)%       (0.057)%       (0.064)%        (0.072)%       (0.009)%

-------------------                                                             
(1) "Net Gains/(Losses)" are actual gains or losses incurred on liquidated      
  properties that are calculated as net liquidation proceeds less book value
(excluding loan purchase premium or discount).                          

(2) Based upon the total principal balance of the mortgage loans outstanding on 
the last day of the indicated period.                                   

SERVICING COMPENSATION AND PAYMENT OF EXPENSES                                  

        The "EXPENSE FEE RATE" is the rate at which the expense fee accrues on
the principal balance of each Mortgage Loan. The expense fees with respect to   
the mortgage pool are payable out of the interest payments on each Mortgage     
Loan. The total expense fee will vary from Mortgage Loan to Mortgage Loan. As of
the cut-off date, the weighted average Expense Fee Rate for Loan Group 1 is     
expected to be approximately 0.214% per annum. As of the cut-off date, the      
weighted average of the Expense Fee Rates of the Mortgage Loans in Loan Group 2 
that will be in effect before their Initial Adjustment Dates is expected to be  
approximately 0.389% per annum. As of the cut-off date, the weighted average of 
the Expense Fee Rates of the Mortgage Loans in Loan Group 2 that will be in     
effect after their Initial Adjustment Dates is expected to be approximately     
0.390% per annum.                                                               

     The total expense fees consist of (a) the master servicing fee (the
"MASTER SERVICING FEE") payable to the Master Servicer in respect of its direct 
servicing and master servicing activities, (b) fees payable to the trustee in   
respect of its activities as trustee under the Pooling and Servicing Agreement  
and (c) lender paid mortgage insurance premiums. In cases where a Mortgage Loan 
is being directly serviced by a subservicer, the subservicer will be entitled to
a portion of the Master Servicing Fee. The Master Servicer is obligated to pay  
some but not all ongoing expenses associated with the trust fund and incurred by
the Master Servicer in connection with its responsibilities under the Pooling   
and Servicing Agreement and those amounts will be paid by the Master Servicer   
out of the Master Servicing Fee. The amount of the Master Servicing Fee is      
subject to adjustment with respect to prepaid Mortgage Loans, as described under
"--Adjustment to Servicing Compensation in Connection with Certain Prepaid      
Mortgage Loans" in this prospectus supplement. The Master Servicer is also      
entitled to receive, as additional servicing                                    

S-54

424B5
55th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 55th
compensation, all late payment fees, assumption fees and other similar charges, 
prepayment interest excess, and all reinvestment income earned on amounts on    
deposit in the Certificate Account and Distribution Account. All prepayment     
charges will be collected by the Master Servicer, will be distributed to the    
Class P Certificates and will not be available for distribution to the classes  
of offered certificates.                                                        

     The weighted average Master Servicing Fee for each Mortgage Loan in
Loan Group 1 will be approximately 0.200% per annum. The weighted average Master
Servicing Fee for each mortgage loan type in Loan Group 2 before and on and     
after the related initial Adjustment Date will be approximately as follows:     

                                                        [Enlarge/Download Table]

    LOAN GROUP 2                                                                                               
                                                      WEIGHTED AVERAGE MASTER       WEIGHTED AVERAGE MASTER    
                                                     SERVICING FEE RATE BEFORE  SERVICING FEE RATE ON AND AFTER
                                                        THE RELATED INITIAL      THE RELATED INITIAL ADJUSTMENT
                                                          ADJUSTMENT DATE                     DATE             
                                                          ---------------                     ----             
                                                                                                               
2/28 Six-Month LIBOR Mortgage Loan..................          0.373%                         0.373%            
3/1 Twelve-Month LIBOR Mortgage Loan................          0.321%                         0.321%            
3/1 CMT Mortgage Loan...............................          0.375%                         0.375%            
3/27 Six-Month LIBOR Mortgage Loan..................          0.374%                         0.374%            
5/1 Twelve-Month LIBOR Mortgage Loan................          0.290%                         0.368%            
5/1 CMT Mortgage Loan...............................          0.320%                         0.357%            
5/25 Six-Month LIBOR Mortgage Loan..................          0.375%                         0.375%            
7/1 Twelve-Month LIBOR Mortgage Loan................          0.277%                         0.340%            
30-Year CMT Mortgage Loan...........................          0.375%                         0.375%            
30-Year One-Month LIBOR Mortgage Loan...............          0.375%                         0.375%            
30-Year Six-Month LIBOR Mortgage Loan...............          0.310%                         0.310%            
30-Year Twelve-Month LIBOR Mortgage Loan............          0.375%                         0.375%            

ADJUSTMENT TO SERVICING COMPENSATION IN CONNECTION WITH CERTAIN PREPAID MORTGAGE
LOANS                                                                           

         When a borrower prepays a Mortgage Loan between Due Dates, the borrower
is required to pay interest on the amount prepaid only to the date of prepayment
and not thereafter. Except with respect to the month of the cut-off date,       
principal prepayments by borrowers received by the Master Servicer from the     
first day through the fifteenth day of a calendar month will be distributed to  
certificateholders on the Distribution Date in the same month in which the      
prepayments are received and, accordingly, no shortfall in the amount of        
interest to be distributed to certificateholders with respect to the prepaid    
mortgage loans results. Conversely, principal prepayments by borrowers received 
by the Master Servicer from the sixteenth day (or, in the case of the first     
Distribution Date, from October 1, 2005) through the last day of a calendar     
month will be distributed to certificateholders on the Distribution Date in the 
month following the month of receipt and, accordingly, a shortfall in the amount
of interest to be distributed to certificateholders with respect to the prepaid 
mortgage loans would result. Pursuant to the Pooling and Servicing Agreement,   
the Master Servicing Fee for any month will be reduced, by an amount sufficient 
to pass through to certificateholders the full amount of interest to which they 
would be entitled for each prepaid Mortgage Loan on the related Distribution    
Date. However, the Master Servicing Fee on a Distribution Date will only be     
reduced by not more than one-half of the Master Servicing Fee for that          
Distribution Date (such reduction, "Compensating Interest"). If shortfalls in   
interest as a result of prepayments in any Prepayment Period exceed the amounts 
payable by the Master Servicer as Compensating Interest on the related          
Distribution Date, the amount of interest available to make distributions of    
interest to the certificates and to maintain or restore overcollateralization   
will be reduced. See "Description of the Certificates -- Interest" in this      
prospectus supplement.                                                          

ADVANCES                                                                        

         Subject to the following limitations, on the business day prior to each
Distribution Date, the Master Servicer will be required to advance from its own 
funds, or funds in the Certificate Account that are not required to be          
distributed on such Distribution Date, an amount equal to the aggregate of      
payments of principal and interest on the Mortgage Loans (with the Mortgage Rate
adjusted to a rate equal to the Mortgage Rate minus the Master Servicing Fee    
Rate (as so adjusted, the "NET MORTGAGE RATE")) that were due on the related Due
Date and delinquent on the related Determination Date, together with an amount  
equivalent to interest (adjusted to the Net Mortgage                            

S-55

424B5
56th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 56th
Rate) deemed due on each Mortgage Loan as to which the related Mortgaged        
Property has been acquired by the Master Servicer through foreclosure or        
deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan ("REO  
PROPERTY"), such latter amount to be calculated after taking into account any   
rental income from such Mortgaged Property (any such advance, an "Advance" and  
the date of any such Advance, as described in this prospectus supplement, a     
"MASTER SERVICER ADVANCE DATE"). The "Determination Date" is the 22nd day of    
each month or, if that day is not a business day, the preceding business day;   
provided that the Determination Date in each month will be at least two business
days before the related Distribution Date.                                      

        Advances are intended to maintain a regular flow of scheduled interest
and principal payments on the Certificates rather than to guarantee or insure   
against losses. The Master Servicer is obligated to make Advances to the extent 
that such Advances are, in its judgment, reasonably recoverable from future     
payments and collections or insurance payments or proceeds of liquidation of the
related Mortgage Loan. If the Master Servicer determines on any Determination   
Date to make an Advance, such Advance will be included with the distribution to 
holders of the Certificates on the related Distribution Date. Any failure by the
Master Servicer to make a deposit in the Certificate Account as required under  
the Pooling and Servicing Agreement, including any failure to make an Advance,  
will constitute an event of default under the Pooling and Servicing Agreement if
the failure remains unremedied for five days after written notice of the event  
of default. If the Master Servicer is terminated as a result of the occurrence  
of an event of default, the Trustee or the successor master servicer will be    
obligated to make any Advance, in accordance with the terms of the Pooling and  
Servicing Agreement.                                                            

CERTAIN MODIFICATIONS AND REFINANCINGS                                          

    The Master Servicer may modify any Mortgage Loan provided that the
Master Servicer purchases the Mortgage Loan from the trust fund immediately     
following the modification. A Mortgage Loan may not be modified unless the      
modification includes a change in the interest rate on the related Mortgage Loan
to approximately a prevailing market rate. Any purchase of a Mortgage Loan      
subject to a modification will be for a price equal to 100% of the Stated       
Principal Balance of that Mortgage Loan, plus accrued and unpaid interest on the
Mortgage Loan up to the next Due Date at the applicable net mortgage rate, net  
of any unreimbursed advances of principal and interest on the Mortgage Loan made
by the Master Servicer. The Master Servicer will deposit the purchase price in  
the Certificate Account within one business day of the purchase of that Mortgage
Loan. Purchases of Mortgage Loans may occur when prevailing interest rates are  
below the interest rates on the Mortgage Loans and mortgagors request           
modifications as an alternative to refinancings. The Master Servicer will       
indemnify the trust fund against liability for any prohibited transactions taxes
and related interest, additions or penalties incurred by any REMIC as a result  
of any modification or purchase.                                                

 DESCRIPTION OF THE CERTIFICATES

GENERAL                                                                         

       The certificates will be issued pursuant to the Pooling and Servicing
Agreement. The following summaries of the material terms pursuant to which the  
certificates will be issued do not purport to be complete and are subject to,   
and qualified in their entirety by reference to, the provisions of the Pooling  
and Servicing Agreement. When particular provisions or terms used in the Pooling
and Servicing Agreement are referred to, the actual provisions (including       
definitions of terms) are incorporated by reference. The certificates represent 
obligations of the trust fund only and do not represent an interest in or       
obligation of CWALT, Inc., Countrywide Home Loans, Inc. (or any other seller),  
Countrywide Home Loans Servicing LP or any of their affiliates.                 

         The Mortgage Pass-Through Certificates, Series 2005-J12 will consist of
the Class 1-A-1, Class 1-A-2, Class 1-A-3, Class 1-A-4, Class 1-A-5, Class      
1-A-6, Class 2-A-1, Class 2-A-2, Class 2-A-3, Class 2-A-4 and Class A-R         
Certificates (all of which are together referred to as "SENIOR CERTIFICATES"),  
the Class 1-M-1, Class 1-M-2, Class 1-M-3 and Class 1-B-1 Certificates (which   
are together referred to as the "FIXED RATE SUBORDINATED CERTIFICATES"), the    
Class 2-M-1, Class 2-M-2, Class 2-B-1 and Class 2-B-2 Certificates (which are   
together referred to as the "ADJUSTABLE RATE SUBORDINATED CERTIFICATES" and     
together with the Fixed Rate Subordinated Certificates are referred to as the   
"SUBORDINATED CERTIFICATES"), and the Class CF, Class CV, Class PF and Class PV 
Certificates. Only the classes of certificates identified on the cover page     
hereof as offered certificates are offered by this prospectus supplement (the   
"OFFERED CERTIFICATES").                                                        

S-56

424B5
57th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 57th
         The Class 1-A-1, Class 1-A-2, Class 1-A-3, Class 1-A-4, Class 1-A-5 and
Class 1-A-6 Certificates are also sometimes collectively referred to in this    
prospectus supplement as the "GROUP 1 SENIOR CERTIFICATES." The group 1 senior  
certificates and the Fixed Rate Subordinated Certificates are also sometimes    
collectively referred to in this prospectus supplement as the "GROUP 1          
CERTIFICATES." The Class 2-A-1, Class 2-A-2, Class 2-A-3 and Class 2-A-4        
Certificates are also sometimes collectively referred to in this prospectus     
supplement as the "GROUP 2 SENIOR CERTIFICATES." The group 2 senior certificates
and the Adjustable Rate Subordinated Certificates are also sometimes            
collectively referred to in this prospectus supplement as the "GROUP 2          
CERTIFICATES." The Class 1-A-2, Class 1-A-3, Class 1-A-4, Class 1-A-5 and Class 
1-A-6 Certificates and the Fixed Rate Subordinated Certificates are also        
sometimes collectively referred to in this prospectus supplement as the "FIXED  
RATE CERTIFICATES." The Class 1-A-1, Class 2-A-1, Class 2-A-2, Class 2-A-3 and  
Class 2-A-4 Certificates and the Adjustable Rate Subordinated Certificates are  
also sometimes collectively referred to in this prospectus supplement as the    
"LIBOR CERTIFICATES." The Class CF, Class CV, Class PF and Class PV Certificates
are not offered by this prospectus supplement and are sometimes referred to in  
this prospectus supplement as the "PRIVATE CERTIFICATES." The Class A-R and the 
private certificates will not bear interest. The Class PF and Class PV          
Certificates will be entitled to all prepayment charges received in respect of  
the Mortgage Loans in Loan Group 1 and Loan Group 2, respectively, and such     
amounts will not be available for distribution to the holders of the offered    
certificates and the other private certificates. The classes of offered         
certificates will have the respective initial Class Certificate Balances set    
forth on the cover page of this prospectus supplement or described below. The   
initial Class Certificate Balances may vary in the aggregate by plus or minus   
5%. Any information presented in this prospectus supplement with respect to the 
private certificates is provided only to permit a better understanding of the   
offered certificates.                                                           

         The "CLASS CERTIFICATE BALANCE" of any class of offered certificates as
of any Distribution Date is the initial Class Certificate Balance of the class  
reduced by the sum of:                                                          

o all amounts previously distributed to holders of certificates of the          
class as scheduled and unscheduled payments of principal; and               

o with respect to the subordinated certificates, the Applied Realized Loss      
Amounts allocated to the class;                                             

    provided, however, that if Applied Realized Loss Amounts have been
allocated to the Class Certificate Balance of any class of subordinated         
certificates, then the Class Certificate Balance thereof will be increased on   
each Distribution Date after such allocation of Applied Realized Loss Amounts   
sequentially by class in the order of payment priority by the amount of         
Subsequent Recoveries (if any) on the Mortgage Loans in the related loan group  
collected during the period beginning on the second day of the calendar month   
preceding the calendar month in which such Distribution Date occurs and ending  
on the Due Date in the month in which such Distribution Date occurs (but not by 
more than the amount of the Unpaid Realized Loss Amount for that class). After  
such allocation, a corresponding decrease will be made on such Distribution Date
to the Unpaid Realized Loss Amount for any class that had its Class Certificate 
Balance increased by such allocation of Subsequent Recoveries.                  

       Although Subsequent Recoveries, if any, will be allocated to increase
the Class Certificate Balance of a class of subordinated certificates, as       
described above, such Subsequent Recoveries will be included in the Principal   
Remittance Amount and will be distributed in the priority set forth below under 
"Distributions--Distributions of Principal," and therefore such Subsequent      
Recoveries may not to be used to make any principal payments on the class or    
classes of certificates for which the Class Certificate Balances have been      
increased by allocation of Subsequent Recoveries as described above.            
Additionally, holders of such certificates will not be entitled to any payment  
in respect of interest that would have accrued on the amount of the increase in 
Class Certificate Balance for any accrual period preceding the Distribution Date
on which such increase occurs.                                                  

      If the Overcollateralized Amount related to a loan group is zero and
there is a Realized Loss on a Mortgage Loan in such loan group, the Class       
Certificate Balance of the class of subordinated certificates related to such   
loan group then outstanding with the highest numerical class designation        
(beginning with the Class 1-B-1 Certificates in the case of Loan Group 1 and the
Class 2-B-2 Certificates in the case of Loan Group 2) will be reduced if and to 
the extent that the aggregate of the Class Certificate Balances of all the      
classes of certificates in the related certificate group, following all         
distributions on any Distribution Date, exceeds the aggregate Stated Principal  
Balance of the Mortgage Loans in the related loan group as of the Due Date      
occurring in the month of the Distribution Date (after giving effect to         
unscheduled receipts of principal in the Prepayment Period related to that Due  
Date).                                                                          

S-57

424B5
58th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 58th
       The offered certificates (other than the Class A-R Certificates) will
be issued in book-entry form as described below. The offered certificates (other
than the Class A-R Certificates) will be issued in minimum dollar denominations 
of $25,000 and integral multiples of $1,000 in excess thereof. The Class A-R    
Certificates will be issued as two certificates in the denominations specified  
in the Pooling and Servicing Agreement.                                         

BOOK-ENTRY CERTIFICATES                                                         

       The offered certificates (other than the Class A-R Certificates) will
be book-entry certificates (the "BOOK-ENTRY CERTIFICATES"). The Class A-R       
Certificates will be issued as two certificates in fully registered certificated
form. Persons acquiring beneficial ownership interests in the Book-Entry        
Certificates ("CERTIFICATE OWNERS") may elect to hold their Book-Entry          
Certificates through the Depository Trust Company ("DTC") in the United States, 
or Clearstream, Luxembourg (as defined in this prospectus supplement) or the    
Euroclear System ("EUROCLEAR"), in Europe, if they are participants of such     
systems, or indirectly through organizations which are participants in such     
systems. Each class of Book-Entry Certificates will be issued in one or more    
certificates which equal the aggregate principal balance of the applicable Class
of the Book-Entry Certificates and will initially be registered in the name of  
Cede & Co., the nominee of DTC. Clearstream, Luxembourg and Euroclear will hold 
omnibus positions on behalf of their participants through customers' securities 
accounts in Clearstream Banking's and Euroclear's names on the books of their   
respective depositaries which in turn will hold such positions in customers'    
securities accounts in the depositaries' names on the books of DTC. Citibank    
will act as depositary for Clearstream, Luxembourg and Chase will act as        
depositary for Euroclear (in such capacities, individually the "RELEVANT        
DEPOSITARY" and collectively the "EUROPEAN DEPOSITARIES"). Investors may hold   
such beneficial interests in the Book-Entry Certificates in minimum             
denominations representing an original principal amount or notional amount of   
$20,000 and integral multiples of $1,000 in excess thereof. One investor of each
class of book-entry certificates may hold a beneficial interest therein that is 
not an integral multiple of $1,000. Except as described below, no person        
acquiring a beneficial ownership in a Book-Entry Certificate (each, a           
"BENEFICIAL OWNER") will be entitled to receive a physical certificate          
representing such person's beneficial ownership interest in such Book-Entry     
Certificate (a "DEFINITIVE CERTIFICATE"). Unless and until Definitive           
Certificates are issued, it is anticipated that the only certificateholder of   
the Book-Entry Certificates will be Cede & Co., as nominee of DTC. Certificate  
Owners will not be certificateholders as that term is used in the Pooling and   
Servicing Agreement. Certificate Owners are only permitted to exercise their    
rights indirectly through the participating organizations that utilize the      
services of DTC, including securities brokers and dealers, banks and trust      
companies and clearing corporations and certain other organizations             
("PARTICIPANTS") and DTC.                                                       

      The beneficial owner's ownership of a Book-Entry Certificate will be
recorded on the records of the brokerage firm, bank, thrift institution or other
financial intermediary (each, a "FINANCIAL INTERMEDIARY") that maintains the    
beneficial owner's account for such purpose. In turn, the Financial             
Intermediary's ownership of such Book-Entry Certificate will be recorded on the 
records of DTC (or of a participating firm that acts as agent for the Financial 
Intermediary, whose interest will in turn be recorded on the records of DTC, if 
the beneficial owner's Financial Intermediary is not a DTC participant and on   
the records of Clearstream, Luxembourg or Euroclear, as appropriate).           

        Certificate Owners will receive all distributions of principal of, and
interest on, the Offered Certificates from the Trustee through DTC and DTC      
participants. While the Offered Certificates are outstanding (except under the  
circumstances described below), under the rules, regulations and procedures     
creating and affecting DTC and its operations (the "RULES"), DTC is required to 
make book-entry transfers among Participants on whose behalf it acts with       
respect to the Offered Certificates and is required to receive and transmit     
distributions of principal of, and interest on, the Offered Certificates.       
Participants and organizations which have indirect access to the DTC system,    
such as banks, brokers, dealers and trust companies that clear through or       
maintain a custodial relationship with a Participant, either directly or        
indirectly ("INDIRECT PARTICIPANTS"), with whom Certificate Owners have accounts
with respect to Offered Certificates are similarly required to make book-entry  
transfers and receive and transmit such distributions on behalf of their        
respective Certificate Owners. Accordingly, although Certificate Owners will not
possess certificates, the Rules provide a mechanism by which Certificate Owners 
will receive distributions and will be able to transfer their interest.         

Certificate Owners will not receive or be entitled to receive 
certificates representing their respective interests in the Offered             
Certificates, except under the limited circumstances described below. Unless and
until Definitive Certificates are issued, Certificate Owners who are not        
Participants may transfer ownership of Offered                                  

S-58

424B5
59th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 59th
Certificates only through Participants and Indirect Participants by instructing 
such Participants and Indirect Participants to transfer Book-Entry Certificates,
by book-entry transfer, through DTC for the account of the purchasers of such   
Book-Entry Certificates, which account is maintained with their respective      
Participants. Under the Rules and in accordance with DTC's normal procedures,   
transfers of ownership of Book-Entry Certificates will be executed through DTC  
and the accounts of the respective Participants at DTC will be debited and      
credited. Similarly, the Participants and Indirect Participants will make debits
or credits, as the case may be, on their records on behalf of the selling and   
purchasing Certificate Owners.                                                  

     Because of time zone differences, credits of securities received in
Clearstream, Luxembourg or Euroclear as a result of a transaction with a        
Participant will be made during, subsequent securities settlement processing and
dated the business day following, the DTC settlement date. Such credits or any  
transactions in such securities, settled during such processing will be reported
to the relevant Euroclear or Clearstream, Luxembourg Participants on such       
business day. Cash received in Clearstream, Luxembourg or Euroclear, as a result
of sales of securities by or through a Clearstream, Luxembourg Participant or   
Euroclear Participant to a DTC Participant, will be received with value on the  
DTC settlement date but will be available in the relevant Clearstream,          
Luxembourg or Euroclear cash account only as of the business day following      
settlement in DTC. For information with respect to tax documentation procedures,
relating to the Offered Certificates, see "Material Federal Income Tax          
Consequences -- Tax Treatment of Foreign Investors" in the prospectus and       
"Global, Clearance, Settlement And Tax Documentation Procedures -- Material U.S.
Federal Income Tax Documentation Requirements" in Annex I hereto.               

         Transfers between Participants will occur in accordance with DTC rules.
Transfers between Clearstream, Luxembourg Participants and Euroclear            
Participants will occur in accordance with their respective rules and operating 
procedures.                                                                     

       Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Clearstream,   
Luxembourg Participants or Euroclear Participants, on the other, will be        
effected in DTC in accordance with DTC rules on behalf of the relevant European 
international clearing system by the Relevant Depositary; however, such cross   
market transactions will require delivery of instructions to the relevant       
European international clearing system by the counterpart in such system in     
accordance with its rules and procedures and within its established deadlines   
(European time). The relevant European international clearing system will, if   
the transaction meets its settlement requirements, deliver instructions to the  
Relevant Depositary to take action to effect final settlement on its behalf by  
delivering or receiving securities in DTC, and making or receiving payment in   
accordance with normal procedures for same day funds settlement applicable to   
DTC. Clearstream, Luxembourg Participants and Euroclear Participants may not    
deliver instructions directly to the European Depositaries.                     

   DTC, which is a New York-chartered limited purpose trust company,
performs services for its participants, some of which (and/or their             
representatives) own DTC. In accordance with its normal procedures, DTC is      
expected to record the positions held by each DTC participant in the Book-Entry 
Certificates, whether held for its own account or as a nominee for another      
person. In general, beneficial ownership of Book-Entry Certificates will be     
subject to the rules, regulations and procedures governing DTC and DTC          
participants as in effect from time to time.                                    

        Clearstream Banking, societe anonyme, 67 Bd Grande-Duchesse Charlotte,
L-2967 Luxembourg ("CLEARSTREAM, LUXEMBOURG"), was incorporated in 1970 as      
"Clearstream, Luxembourg S.A." a company with limited liability under Luxembourg
law (a societe anonyme). Clearstream, Luxembourg S.A. subsequently changed its  
name to Cedelbank. On 10 January 2000, Cedelbank's parent company, Clearstream, 
Luxembourg International, societe anonyme ("CI") merged its clearing, settlement
and custody business with that of Deutsche Borse Clearing AG ("DBC"). The merger
involved the transfer by CI of substantially all of its assets and liabilities  
(including its shares in CB) to a new Luxembourg company, New Clearstream,      
Luxembourg International, societe anonyme ("NEW CI"), which is 50% owned by CI  
and 50% owned by DBC's parent company Deutsche Borse AG. The shareholders of    
these two entities are banks, securities dealers and financial institutions.    
Clearstream, Luxembourg International currently has 92 shareholders, including  
U.S. financial institutions or their subsidiaries. No single entity may own more
than 5 percent of Clearstream, Luxembourg International's stock.                

   Further to the merger, the Board of Directors of New Clearstream,
Luxembourg International decided to re-name the companies in the group in order 
to give them a cohesive brand name. The new brand name that was chosen          

S-59

424B5
60th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 60th
is "Clearstream" With effect from January 14, 2000 New CI has been renamed      
"Clearstream International, societe anonyme." On January 18, 2000, Cedelbank was
renamed "Clearstream Banking, societe anonyme" and Clearstream, Luxembourg      
Global Services was renamed "Clearstream Services, societe anonyme."            

    On January 17, 2000 DBC was renamed "Clearstream Banking AG." This
means that there are now two entities in the corporate group headed by          
Clearstream International which share the name "Clearstream Banking," the entity
previously named "Cedelbank" and the entity previously named "Deutsche Borse    
Clearing AG."                                                                   

Clearstream, Luxembourg holds securities for its customers and
facilitates the clearance and settlement of securities transactions between     
Clearstream, Luxembourg customers through electronic book-entry changes in      
accounts of Clearstream, Luxembourg customers, thereby eliminating the need for 
physical movement of certificates. Transactions may be settled by Clearstream,  
Luxembourg in any of 36 currencies, including United States Dollars.            
Clearstream, Luxembourg provides to its customers, among other things, services 
for safekeeping, administration, clearance and settlement of internationally    
traded securities and securities lending and borrowing. Clearstream, Luxembourg 
also deals with domestic securities markets in over 30 countries through        
established depository and custodial relationships. Clearstream, Luxembourg is  
registered as a bank in Luxembourg, and as such is subject to regulation by the 
Commission de Surveillance du Secteur Financier, "CSSF," which supervises       
Luxembourg banks. Clearstream, Luxembourg's customers are world-wide financial  
institutions including underwriters, securities brokers and dealers, banks,     
trust companies and clearing corporations. Clearstream, Luxembourg's U.S.       
customers are limited to securities brokers and dealers, and banks. Currently,  
Clearstream, Luxembourg has approximately 2,000 customers located in over 80    
countries, including all major European countries, Canada, and the United       
States. Indirect access to Clearstream, Luxembourg is available to other        
institutions that clear through or maintain a custodial relationship with an    
account holder of Clearstream, Luxembourg. Clearstream, Luxembourg has          
established an electronic bridge with Euroclear Bank S.A./N.V. as the Operator  
of the Euroclear System (the "EUROCLEAR OPERATOR") in Brussels to facilitate    
settlement of trades between Clearstream, Luxembourg and the Euroclear Operator.

      Euroclear was created in 1968 to hold securities for participants of
Euroclear ("EUROCLEAR PARTICIPANTS") and to clear and settle transactions       
between Euroclear Participants through simultaneous electronic book-entry       
delivery against payment, thereby eliminating the need for physical movement of 
certificates and any risk from lack of simultaneous transfers of securities and 
cash. Transactions may now be settled in any of 32 currencies, including United 
States dollars. Euroclear includes various other services, including securities 
lending and borrowing and interfaces with domestic markets in several countries 
generally similar to the arrangements for cross-market transfers with DTC       
described above. Euroclear is operated by the Brussels, Belgium office of the   
Euroclear Operator, under contract with Euroclear Clearance Systems S.C., a     
Belgian cooperative corporation (the "COOPERATIVE"). All operations are         
conducted by the Euroclear Operator, and all Euroclear securities clearance     
accounts and Euroclear cash accounts are accounts with the Euroclear Operator,  
not the Cooperative. The Cooperative establishes policy for Euroclear on behalf 
of Euroclear Participants. Euroclear Participants include banks (including      
central banks), securities brokers and dealers and other professional financial 
intermediaries. Indirect access to Euroclear is also available to other firms   
that clear through or maintain a custodial relationship with a Euroclear        
Participant, either directly or indirectly.                                     

       The Euroclear Operator has a banking license from the Belgian Banking
and Finance Commission. This license authorizes the Euroclear Operator to carry 
out banking activities on a global basis.                                       

    Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of Euroclear and
the related Operating Procedures of the Euroclear System and applicable Belgian 
law (collectively, the "TERMS AND CONDITIONS"). The Terms and Conditions govern 
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear, and receipts of payments with respect to securities in     
Euroclear. All securities in Euroclear are held on a fungible basis without     
attribution of specific certificates to specific securities clearance accounts. 
The Euroclear Operator acts under the Terms and Conditions only on behalf of    
Euroclear Participants, and has no record of or relationship with persons       
holding through Euroclear Participants.                                         

   Distributions on the Book-Entry Certificates will be made on each
Distribution Date by the Trustee to DTC. DTC will be responsible for crediting  
the amount of such payments to the accounts of the applicable DTC               

S-60

424B5
61st Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 61st
participants in accordance with DTC's normal procedures. Each DTC participant   
will be responsible for disbursing such payments to the beneficial owners of the
Book-Entry Certificates that it represents and to each Financial Intermediary   
for which it acts as agent. Each such Financial Intermediary will be responsible
for disbursing funds to the beneficial owners of the Book-Entry Certificates    
that it represents.                                                             

Under a book-entry format, beneficial owners of the Book-Entry
Certificates may experience some delay in their receipt of payments, since such 
payments will be forwarded by the Trustee to Cede & Co. Distributions with      
respect to Offered Certificates held through Clearstream, Luxembourg or         
Euroclear will be credited to the cash accounts of Clearstream, Luxembourg      
Participants or Euroclear Participants in accordance with the relevant system's 
rules and procedures, to the extent received by the Relevant Depositary. Such   
distributions will be subject to tax reporting in accordance with relevant      
United States tax laws and regulations. See "Material Federal Income Tax        
Consequences -- Tax Treatment of Foreign Investors" and "Miscellaneous Tax      
Aspects -- Backup Withholding" in the prospectus. Because DTC can only act on   
behalf of Financial Intermediaries, the ability of a beneficial owner to pledge 
Book-Entry Certificates to persons or entities that do not participate in the   
depository system, or otherwise take actions in respect of such Book-Entry      
Certificates, may be limited due to the lack of physical certificates for such  
Book-Entry Certificates. In addition, issuance of the Book-Entry Certificates in
book-entry form may reduce the liquidity of such Certificates in the secondary  
market since certain potential investors may be unwilling to purchase           
certificates for which they cannot obtain physical certificates.                

     Monthly and annual reports on the trust fund provided by the Master
Servicer to Cede & Co., as nominee of DTC, may be made available to beneficial  
owners upon request, in accordance with the rules, regulations and procedures   
creating and affecting DTC or the Relevant Depositary, and to the Financial     
Intermediaries to whose DTC accounts the Book-Entry Certificates of such        
beneficial owners are credited.                                                 

      DTC has advised the Depositor and the Trustee that, unless and until
Definitive Certificates are issued, DTC will take any action permitted to be    
taken by the holders of the Book-Entry Certificates under the Pooling and       
Servicing Agreement only at the direction of one or more Financial              
Intermediaries to whose DTC accounts the Book-Entry Certificates are credited,  
to the extent that such actions are taken on behalf of Financial Intermediaries 
whose holdings include such Book-Entry Certificates. Clearstream, Luxembourg or 
the Euroclear Operator, as the case may be, will take any other action permitted
to be taken by a holder of a Book-Entry Certificate under the Pooling and       
Servicing Agreement on behalf of a Clearstream, Luxembourg Participant or       
Euroclear Participant only in accordance with its relevant rules and procedures 
and subject to the ability of the Relevant Depositary to effect such actions on 
its behalf through DTC. DTC may take actions, at the direction of the related   
Participants, with respect to some Book-Entry Certificates which conflict with  
actions taken with respect to other Book-Entry Certificates.                    

    Definitive Certificates will be issued to beneficial owners of the
Book-Entry Certificates, or their nominees, rather than to DTC, only if (a) DTC 
or the Depositor advises the Trustee in writing that DTC is no longer willing,  
qualified or able to discharge properly its responsibilities as nominee and     
depositary with respect to the Book-Entry Certificates and the Depositor or the 
Trustee is unable to locate a qualified successor, or (b) after the occurrence  
of an event of default (as defined in the Pooling and Servicing Agreement),     
beneficial owners having not less than 51% of the voting rights evidenced by the
Offered Certificates advise the Trustee and DTC through the Financial           
Intermediaries and the DTC participants in writing that the continuation of a   
book-entry system through DTC (or a successor thereto) is no longer in the best 
interests of beneficial owners of such class.                                   

       Upon the occurrence of any of the events described in the immediately
preceding paragraph, the Trustee will be required to notify all beneficial      
owners of the occurrence of such event and the availability through DTC of      
Definitive Certificates. Upon surrender by DTC of the global certificate or     
certificates representing the Book-Entry Certificates and instructions for      
re-registration, the Trustee will issue Definitive Certificates, and thereafter 
the Trustee will recognize the holders of such Definitive Certificates as       
holders of the related Offered Certificates under the Pooling and Servicing     
Agreement.                                                                      

        Although DTC, Clearstream, Luxembourg and Euroclear have agreed to the
foregoing procedures in order to facilitate transfers of Certificates among     
participants of DTC, Clearstream, Luxembourg and Euroclear, they are under no   
obligation to perform or continue to perform such procedures and such procedures
may be discontinued at any time. See "Description of the Certificates -         
Book-Entry Certificates" in the prospectus.                                     

S-61

424B5
62nd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 62nd
PAYMENTS ON MORTGAGE LOANS; ACCOUNTS                                            

      On or before the closing date, the Master Servicer will establish an
account (the "CERTIFICATE ACCOUNT"), which will be maintained in trust for the  
benefit of the certificateholders. The Certificate Account will be established  
by the master servicer initially at Countrywide Bank, N.A., which is an         
affiliate of the Depositor, the sellers and the master servicer. The Master     
Servicer will deposit or cause to be deposited in the Certificate Account all   
amounts required to be deposited therein, within two business days after receipt
(or, on a daily basis, if the long-term credit rating of Countrywide Home Loans 
has been reduced below the rating specified in the Pooling and Servicing        
Agreement). Funds credited to the Certificate Account may be invested for the   
benefit and at the risk of the Master Servicer in permitted investments, as     
defined in the Pooling and Servicing Agreement, that are scheduled to mature on 
or before the business day preceding the next Distribution Date. On or before   
the business day immediately preceding each Distribution Date, the Master       
Servicer will withdraw from the Certificate Account the sum of the Interest     
Remittance Amount and the Principal Remittance Amount and will deposit them in  
an account established and maintained with the Trustee on behalf of the         
certificateholders (the "DISTRIBUTION ACCOUNT").                                

DISTRIBUTIONS                                                                   

      Distributions on the certificates will be made by the Trustee on the
25th day of each month or, if that day is not a business day, on the first      
business day thereafter, commencing in November 2005 (each, a "DISTRIBUTION     
DATE"), to the persons in whose names the certificates are registered at the    
close of business on the applicable Record Date. The record date for any        
distribution date and (x) the Fixed Rate Certificates and any certificate in    
definitive form will be the last business day of the month preceding the month  
of that distribution date and (y) the LIBOR Certificates so long as they are in 
book-entry form will be the business day preceding that distribution date (the  
"RECORD DATE").                                                                 

         Distributions will be made by check mailed to the address of the person
entitled thereto as it appears on the applicable certificate register or, in the
case of any certificateholder who holds 100% of a class of certificates or who  
holds certificates with an aggregate initial certificate balance of $1,000,000  
or more and who has so notified the Trustee in writing in accordance with the   
Pooling and Servicing Agreement, by wire transfer in immediately available funds
to the account of the certificateholder at a bank or other depository           
institution having appropriate wire transfer facilities; provided, however, that
the final distribution in retirement of the certificates will be made only upon 
presentation and surrender of the certificates at the corporate trust office of 
the Trustee.                                                                    

     The "INTEREST REMITTANCE AMOUNT" for any Distribution Date and loan
group is equal to:                                                              

(a) the sum, without duplication, of:       

                         (1) all scheduled interest on the Mortgage Loans in
                  that loan group due on the related Due Date and received on or
             prior to the related Determination Date, less the related
             Master Servicing Fees and any payments made in respect of
     premiums on lender paid insurance mortgage loans,

                           (2) all interest on prepayments on the Mortgage Loans
              in that loan group, other than Prepayment Interest Excess,

                         (3) all Advances relating to interest in respect of
the Mortgage Loans in that loan group,      

                           (4) amounts paid by the Master Servicer in respect of
  Compensating Interest for that loan group, and

                       (5) liquidation proceeds on the Mortgage Loans in
                 that loan group received during the related Prepayment Period
                 (to the extent such liquidation proceeds relate to interest),

minus                                       

S-62

424B5
63rd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 63rd
               (b) all non-recoverable Advances in respect of the Mortgage
    Loans in that loan group relating to interest and certain expenses
reimbursed since the prior Due Date.                          

      The "PRINCIPAL REMITTANCE AMOUNT" for any Distribution Date and loan
group is equal to:                                                              

(a) the sum, without duplication, of:       

                          (1) the scheduled principal collected or advanced on
             the Mortgage Loans in that loan group with respect to the
related Due Date,                           

                        (2) prepayments on the Mortgage Loans in that loan
     group collected in the related Prepayment Period,

                       (3) the Stated Principal Balance of each Mortgage
               Loan in that loan group that was repurchased by a seller or
         purchased by the Master Servicer with respect to that
Distribution Date,                          

                           (4) any Substitution Adjustment Amounts in respect of
Mortgage Loans in that loan group, and      

                         (5) all liquidation proceeds in respect of Mortgage
            Loans in that loan group (to the extent such liquidation
                proceeds related to principal) and all Subsequent Recoveries
            in respect of Mortgage Loans in that loan group received
during the related Prepayment Period,       

minus                                       

                 (b) all non-recoverable Advances relating to principal on the
         Mortgage Loans in that loan group and certain expenses reimbursed since
the prior Due Date.                                           

      "PREPAYMENT INTEREST EXCESS" means with respect to any Mortgage Loan
and principal prepayment received by the Master Servicer from the first day     
through the fifteenth day of any calendar month (other than the calendar month  
in which the cut-off date occurs), all amounts paid by the related mortgagor in 
respect of interest on such principal prepayment.                               

INTEREST                                                                        

       On each Distribution Date, the interest distributable with respect to
the offered certificates (other than the Class A-R Certificates) is the interest
which has accrued on the Class Certificate Balances thereof immediately prior to
that Distribution Date at the then applicable related Pass-Through Rate during  
the applicable Accrual Period.                                                  

         For any Distribution Date, the "ACCRUAL PERIOD" for each class of Fixed
Rate Certificates will be the calendar month before the month in which that     
Distribution Date occurs. Interest on the Fixed Rate Certificates will be       
calculated on the basis of a 360-day year divided into twelve 30-day months. The
Accrual Period for the LIBOR Certificates for any Distribution Date will be the 
period commencing on the Distribution Date in the month prior to the month in   
which that Distribution Date occurs (or the closing date, in the case of the    
first Distribution Date) and ending on day immediately prior to that            
Distribution Date. Interest on the LIBOR Certificates will be calculated on the 
basis of a 360-day year and the actual number of days that elapsed in that      
Accrual Period.                                                                 

     On each Distribution Date, the Interest Funds for such Distribution
Date are required to be distributed in the following order of priority, until   
such Interest Funds have been fully distributed:                                

        Distributions of Interest Funds For Loan Group 1. On each Distribution
Date, the Interest Funds for such Distribution Date for Loan Group 1 are        
required to be distributed in the following order of priority, until such       
Interest Funds have been fully distributed:                                     

S-63

424B5
64th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 64th
     (1) concurrently, to each class of group 1 senior
      certificates, the Current Interest and Interest Carry Forward Amount
        for each such class and such Distribution Date, pro rata, based on the
   amount of interest each such class is entitled to receive on that
Distribution Date;                                            

                  (2) sequentially, to the Class 1-M-1, Class 1-M-2, Class 1-M-3
       and Class 1-B-1 Certificates, in that order, the Current Interest for
each such class and such Distribution Date; and               

                (3) any remainder, as part of the Fixed Rate Excess Cashflow
described under "--Overcollateralization Provisions" below.   

        Distributions of Interest Funds For Loan Group 2. On each Distribution
Date, the Interest Funds for such Distribution Date for Loan Group 2 are        
required to be distributed in the following order of priority, until such       
Interest Funds have been fully distributed:                                     

     (1) concurrently, to each class of group 2 senior
      certificates, the Current Interest and Interest Carry Forward Amount
        for each such class and such Distribution Date, pro rata, based on the
   amount of interest each such class is entitled to receive on that
Distribution Date;                                            

                  (2) sequentially, to the Class 2-M-1, Class 2-M-2, Class 2-B-1
       and Class 2-B-2 Certificates, in that order, the Current Interest for
each such class and such Distribution Date; and               

            (3) any remainder, as part of the Adjustable Rate Excess
      Cashflow described under "--Overcollateralization Provisions" below.

         The "INTEREST FUNDS" for any Distribution Date and loan group are equal
to the Interest Remittance Amount for that loan group minus the related portion 
of the Trustee Fee for such Distribution Date.                                  

        "CURRENT INTEREST," with respect to each class of offered certificates
(other than the Class A-R Certificates) and each Distribution Date, is the      
interest accrued at the applicable Pass-Through Rate for the applicable Accrual 
Period on the Class Certificate Balance of such class immediately prior to such 
Distribution Date.                                                              

        "INTEREST CARRY FORWARD AMOUNT," with respect to each class of offered
certificates (other than the Class A-R Certificates) and each Distribution Date,
is the excess of:                                                               

             (a) Current Interest for such class with respect to prior
Distribution Dates, over                                      

                  (b) the amount actually distributed to such class with respect
to interest on prior Distribution Dates.                      

      The "PASS-THROUGH RATE" with respect to each Accrual Period and each
class of LIBOR Certificates will be a per annum rate equal to the least of:     

 (1)      One-Month LIBOR for such Accrual Period (calculated as
described below under "-- Calculation of One-Month LIBOR") plus the Pass-Through
Margin for such class and Accrual Period,                                       

(2)      the applicable Net Rate Cap for such class for such  
Distribution Date, and                                                          

(3)      11.00%                                               

S-64

424B5
65th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 65th
      The "PASS-THROUGH MARGIN" for each class of LIBOR Certificates is as
follows:                                                                        

                                                                [Download Table]

CLASS OF LIBOR CERTIFICATES                            PASS-THROUGH MARGIN    
---------------------------                            -------------------    
                                                       (1)              (2)   
                                                       ---              ---   
                                                                              
Class 1-A-1.......................................... 0.170%            0.340%
Class 2-A-1.......................................... 0.270%            0.540%
Class 2-A-2.......................................... 0.120%            0.240%
Class 2-A-3.......................................... 0.270%            0.540%
Class 2-A-4.......................................... 0.400%            0.800%
Class 2-M-1.......................................... 0.520%            0.780%
Class 2-M-2.......................................... 0.730%            1.095%
Class 2-B-1.......................................... 1.500%            2.250%
Class 2-B-2.......................................... 2.000%            3.000%

----------                                                                      
(1) For the Accrual Period related to any Distribution Date occurring on or     
prior to the first possible Optional Termination Date.                  
(2) For the Accrual Period related to any Distribution Date occurring after the 
first possible Optional Termination Date.                               

        The Pass-Through Rates for the classes of Fixed Rate Certificates with
respect to each Accrual Period will be a per annum rate equal to the lesser of: 
(x) the applicable fixed rate set forth in the table below and (y) the Net Rate 
Cap on the Fixed Rate Certificates.                                             

                                                                [Download Table]

CLASS OF FIXED RATE CERTIFICATES                           FIXED RATE        
--------------------------------                           ----------        
                                                       (1)              (2)  
                                                       ---              ---  
                                                                             
Class 1-A-2.......................................... 5.265%           5.765%
Class 1-A-3.......................................... 5.574%           6.074%
Class 1-A-4.......................................... 5.853%           6.353%
Class 1-A-5.......................................... 5.415%           5.915%
Class 1-A-6.......................................... 5.853%           6.353%
Class 1-M-1.......................................... 5.676%           6.176%
Class 1-M-2.......................................... 5.975%           6.475%
Class 1-M-3.......................................... 6.250%           6.750%
Class 1-B-1.......................................... 6.250%           6.750%

----------                                                                      
(1) For the Accrual Period related to any Distribution Date occurring on or     
prior to the first possible Optional Termination Date.                  
(2) For the Accrual Period related to any Distribution Date occurring after the 
first possible Optional Termination Date.                               

       The Class A-R, Class PF, Class PV, Class CF and Class CV Certificates
do not have a Pass-Through Rate.                                                

      "ADJUSTED NET MORTGAGE RATE," with respect to each Mortgage Loan and
any Distribution Date is equal to the Mortgage Rate on that Mortgage Loan as of 
the Due Date related to that Distribution Date minus the related Expense Fee    
Rate.                                                                           

The "NET RATE CAP" for each Distribution Date and the group 1 
certificates is equal to the weighted average Adjusted Net Mortgage Rate on the 
Group 1 Mortgage Loans as of the Due Date in the prior calendar month (after    
giving effect to principal prepayments received in the Prepayment Period related
to that prior Due Date). With respect to the Class 1-A-1 Certificates, the Net  
Rate Cap is adjusted to an effective rate reflecting the accrual of interest on 
the basis of a 360-day year and the actual number of days that elapsed in that  
interest accrual period.                                                        

The "NET RATE CAP" for each Distribution Date and the group 2 
certificates is equal to the weighted average Adjusted Net Mortgage Rate on the 
Group 2 Mortgage Loans as of the Due Date in the prior calendar month (after    

S-65

424B5
66th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 66th
giving effect to principal prepayments received in the Prepayment Period related
to that prior Due Date) adjusted to an effective rate reflecting the accrual of 
interest on the basis of a 360-day year and the actual number of days that      
elapsed in that interest accrual period.                                        

     The "NET RATE CARRYOVER" for a class of offered certificates, other
than the Class A-R Certificates, on any Distribution Date is the excess of:     

                 (1) the amount of interest that such class would have accrued
         for such Distribution Date had the Pass-Through Rate for that class and
        the related Accrual Period not been calculated based on the applicable
        Net Rate Cap (in the case of the LIBOR Certificates, up to a per annum
rate of 11.00%), over                                         

         (2) the amount of interest such class accrued on such
Distribution Date based on the applicable Net Rate Cap,       

    plus the unpaid portion of any such excess from prior Distribution
Dates (and interest accrued thereon at the then applicable Pass-Through Rate,   
without giving effect to the applicable Net Rate Cap, and in the case of the    
LIBOR Certificates, up to a per annum rate of 11.00%).                          

Distributions of Funds from the Corridor Contracts. On each   
Distribution Date on or prior to the related Corridor Contract Termination Date,
amounts allocated to the trust fund in respect of the Corridor Contract for the 
Class 1-A-1 Certificates or the Corridor Contract for the group 2 certificates, 
in each case for such Distribution Date, will be deposited in the Carryover     
Reserve Fund and then distributed to pay any unpaid Net Rate Carryover,         
concurrently, to each of the related class or classes of certificates, pro rata,
first based on their respective Class Certificate Balances and second based on  
any remaining unpaid Net Rate Carryover. Any amounts remaining after the        
application of such amounts as specified in the preceding sentence received from
the Class 1-A-1 Corridor Contract and the Group 2 Certificates Corridor Contract
will be distributed to the holders of the Class CF and Class CV Certificates,   
respectively, and, in each case, will not be available for the payment of any   
Net Rate Carryover on any class of certificates on future Distribution Dates    
unless a Corridor Contract is subject to an early termination, in which case the
portion of any early termination payment allocated to the trust fund in respect 
of such Corridor Contract will be deposited by the Trustee in the Carryover     
Reserve Fund to cover any Net Rate Carryover on the class or classes of         
certificates specifically benefiting from such Corridor Contract until the      
Corridor Contract Termination Date. See "--The Corridor Contracts" and          
"Carryover Reserve Fund" below.                                                 

PRINCIPAL                                                                       

       On each Distribution Date, the Principal Distribution Amount for such
Distribution Date with respect to each loan group is required to be distributed 
as follows until such Principal Distribution Amount has been fully distributed  
(with the Principal Distribution Amount exclusive of the portion thereof        
consisting of the Extra Principal Distribution Amount being applied first and   
the Extra Principal Distribution Amount being applied thereafter):              

DISTRIBUTIONS WITH RESPECT TO LOAN GROUP 1                    

         (1) For each Distribution Date prior to the Fixed Rate Stepdown Date or
on which a Fixed Rate Trigger Event is in effect, from the Principal            
Distribution Amount for Loan Group 1, sequentially:                             

                 (A) to the group 1 senior certificates, in the order, amounts
and priorities set forth in clause (3) below,                 

                  (B) sequentially, to the Class 1-M-1, Class 1-M-2, Class 1-M-3
       and Class 1-B-1 Certificates, in that order, in each case until their
respective Class Certificate Balances are reduced to zero, and

                  (C) any remainder as part of the Fixed Rate Excess Cashflow to
      be allocated as described under "--Overcollateralization Provisions"
below.                                                        

S-66

424B5
67th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 67th
         (2) For each Distribution Date on or after the Fixed Rate Stepdown Date
and so long as a Fixed Rate Trigger Event is not in effect, from the Principal  
Distribution Amount for Loan Group 1, sequentially:                             

       (A) in an amount up to the Group 1 Senior Principal
      Distribution Amount, to the group 1 senior certificates in the order
      and priorities set forth in clause (3) below, until their respective
Class Certificate Balances are reduced to zero,               

                  (B) sequentially, to the Class 1-M-1, Class 1-M-2, Class 1-M-3
and Class 1-B-1 Certificates, in that order, the Fixed Rate   
       Subordinated Class Principal Distribution Amount for each such class,
        until their respective Class Certificate Balances are reduced to zero,
and                                                           

                  (C) any remainder as part of the Fixed Rate Excess Cashflow to
      be allocated as described under "--Overcollateralization Provisions"
below.                                                        

         (3) For each Distribution Date on which any principal amounts are to be
distributed to the group 1 certificates pursuant to clauses (1)(A) or (2)(A)    
above, such amounts will be allocated in the following order of priority:       

     (A)      to the Class A-R Certificates, until its Class Certificate
Balance is reduced to zero;                 

      (B)      to the Class 1-A-5 Certificates, the Priority Amount, until
     its Class Certificate Balance is reduced to zero;

        (C)      sequentially, to the Class 1-A-1, Class 1-A-2 and Class 1-A-3
             Certificates, in that order, until their respective Class
Certificate Balances are reduced to zero;   

         (D)      concurrently, to the Class 1-A-4 and Class 1-A-6 Certificates,
               pro rata, until their respective Class Certificate Balances
are reduced to zero; and                    

 (E)      to the Class 1-A-5 Certificates, without regard to the
           Priority Amount, until its Class Certificate Balance is
reduced to zero.                            

      Notwithstanding the foregoing order of priority, on any Distribution
Date on which the aggregate Class Certificate Balance of the group 1 senior     
certificates is greater than the aggregate Stated Principal Balance of the Group
1 Mortgage Loans, any Principal Distribution Amount for Loan Group 1 that is to 
be distributed to the group 1 senior certificates will be distributed pro rata  
(based on the Class Certificate Balances thereof) and not as described above.   

DISTRIBUTIONS WITH RESPECT TO LOAN GROUP 2                    

      (1) For each Distribution Date prior to the Adjustable Rate Stepdown
Date or on which an Adjustable Rate Trigger Event is in effect, from the        
Principal Distribution Amount for Loan Group 2, sequentially:                   

                 (A) to the group 2 senior certificates, in the order, amounts
and priorities set forth in clause (3) below,                 

                  (B) sequentially, to the Class 2-M-1, Class 2-M-2, Class 2-B-1
       and Class 2-B-2 Certificates, in that order, in each case until their
respective Class Certificate Balances are reduced to zero, and

           (C) any remainder as part of the Adjustable Rate Excess
      Cashflow to be allocated as described under "--Overcollateralization
Provisions" below.                                            

S-67

424B5
68th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 68th
         (2) For each Distribution Date on or after the Adjustable Rate Stepdown
Date and so long as a Adjustable Rate Trigger Event is not in effect, from the  
Principal Distribution Amount for Loan Group 2, sequentially:                   

       (A) in an amount up to the Group 2 Senior Principal
      Distribution Amount, to the group 2 senior certificates in the order
      and priorities set forth in clause (3) below, until their respective
Class Certificate Balances are reduced to zero,               

                  (B) sequentially, to the Class 2-M-1, Class 2-M-2, Class 2-B-1
  and Class 2-B-2 Certificates, in that order, the Adjustable Rate
       Subordinated Class Principal Distribution Amount for each such class,
        until their respective Class Certificate Balances are reduced to zero,
and                                                           

           (C) any remainder as part of the Adjustable Rate Excess
      Cashflow to be allocated as described under "--Overcollateralization
Provisions" below.                                            

         (3) For each Distribution Date on which any principal amounts are to be
distributed to the group 2 certificates pursuant to clauses (1)(A) or (2)(A)    
above, such amounts will be distributed to the group 2 senior certificates      
concurrently:                                                                   

                 (A) 80.7001219891% to the Class 2-A-1 Certificates, until its
Class Certificate Balance is reduced to zero; and             

               (B) 19.2998780109%, sequentially, to the Class 2-A-2, Class
2-A-3 and Class 2-A-4 Certificates, in that order, until their
respective Class Certificate Balances are reduced to zero.    

      Notwithstanding the foregoing order of priority, on any Distribution
Date on which the aggregate Class Certificate Balance of the group 2 senior     
certificates is greater than the aggregate Stated Principal Balance of the Group
2 Mortgage Loans, any Principal Distribution Amount for Loan Group 2 that is to 
be distributed to the group 2 senior certificates will be distributed pro rata  
(based on the Class Certificate Balances thereof) and not as described above.   

      "STATED PRINCIPAL BALANCE" means for any Mortgage Loan and Due Date,
the unpaid principal balance of the Mortgage Loan as of that Due Date, as       
specified in its amortization schedule at that time (before any adjustment to   
the amortization schedule for any moratorium or similar waiver or grace period),
after giving effect to (i) the payment of principal due on that Due Date,       
irrespective of any delinquency in payment by the related mortgagor, and (ii)   
prepayments of principal and the principal portion of liquidation proceeds      
received with respect to that Mortgage Loan through the last day of the related 
Prepayment Period. The Stated Principal Balance of a Liquidated Mortgage Loan is
zero. The "POOL PRINCIPAL BALANCE" equals the aggregate of the Stated Principal 
Balances of the Mortgage Loans.                                                 

      "PREPAYMENT PERIOD" means, with respect to any Distribution Date and
related Due Date, the period from the sixteenth day of the calendar month       
immediately preceding the month in which the Distribution Date occurs (or in the
case of the first Distribution Date, from October 1, 2005) through the fifteenth
day of the calendar month in which the Distribution Date occurs.                

        "PRINCIPAL DISTRIBUTION AMOUNT" with respect to each Distribution Date
and loan group is the sum of:                                                   

               (1) the Principal Remittance Amount for such loan group and
Distribution Date, and                                        

             (2) the Extra Principal Distribution Amount for such loan
group and Distribution Date;                                  

minus                                       

S-68

424B5
69th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 69th
        (3) (a) with respect to Loan Group 1, the Fixed Rate
                Overcollateralization Reduction Amount for such Distribution
                  Date and (b) with respect to Loan group 2, the Adjustable Rate
                Overcollateralization Reduction Amount for such Distribution
date.                                       

       "PRIORITY AMOUNT" for any Distribution Date will equal the product of
(A) any principal amounts that are available to be distributed to the group 1   
senior certificates pursuant to clauses (1)(A) or (2)(A) under this section     
entitled "--Principal--Distributions with respect to Loan Group 1" above, (B)   
the Shift Percentage and (C) the Priority Percentage.                           

"PRIORITY PERCENTAGE" for any Distribution Date will equal the
percentage equivalent of a fraction, the numerator of which is the Class        
Certificate Balance of the Class 1-A-5 Certificates immediately prior to such   
Distribution Date, and the denominator of which is the aggregate Class          
Certificate Balance of the group 1 senior certificates immediately preceding    
that Distribution Date.                                                         

  "SHIFT PERCENTAGE" for any Distribution Date will be as follows:

DISTRIBUTION DATE                                         SHIFT PERCENTAGE      
-----------------                                         ----------------      

November 2005 - October 2008.......................              0%             
November 2008 - October 2010.......................              45%            
November 2010 - October 2011.......................              80%            
November 2011 - October 2012.......................             100%            
November 2012 and thereafter.......................             300%            

     "GROUP 1 SENIOR PRINCIPAL DISTRIBUTION AMOUNT" for any Distribution
Date, will equal the excess of:                                                 

   (1) the aggregate Class Certificate Balance of the group 1 senior
certificates immediately prior to such Distribution Date, over                  

        (2) the lesser of (x) 87.30% of the aggregate Stated Principal Balance
of the Mortgage Loans in Loan Group 1 as of the Due Date in the month of that   
Distribution Date (after giving effect to principal prepayments received in the 
related Prepayment Period) and (y) the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 1 as of the Due Date in the month of that          
Distribution Date (after giving effect to principal prepayments received in the 
related Prepayment Period) minus the Fixed Rate OC Floor.                       

     "GROUP 2 SENIOR PRINCIPAL DISTRIBUTION AMOUNT" for any Distribution
Date, will equal the excess of:                                                 

   (1) the aggregate Class Certificate Balance of the group 2 senior
certificates immediately prior to such Distribution Date, over                  

        (2) the lesser of (x) 77.40% of the aggregate Stated Principal Balance
of the Mortgage Loans in Loan Group 2 as of the Due Date in the month of that   
Distribution Date (after giving effect to principal prepayments received in the 
related Prepayment Period) and (y) the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 2 as of the Due Date in the month of that          
Distribution Date (after giving effect to principal prepayments received in the 
related Prepayment Period) minus the Adjustable Rate OC Floor.                  

       "FIXED RATE SUBORDINATED CLASS PRINCIPAL DISTRIBUTION AMOUNT" for any
class of Fixed Rate Subordinated Certificates and Distribution Date will equal  
the excess of:                                                                  

(1) the sum of:                                               

                 (a)      the aggregate Class Certificate Balance of the group
                          1 senior certificates (after taking into account the
                  distribution of the Group 1 Senior Principal
                      Distribution Amount for such Distribution Date),

S-69

424B5
70th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 70th
           (b)      the aggregate Class Certificate Balance of any
                       class(es) of Fixed Rate Subordinated Certificates
                         that are senior to the subject class (in each case,
                       after taking into account the distribution of the
                          Fixed Rate Subordinated Class Principal Distribution
                 Amount(s) for such more senior class(es) of
                   certificates for such Distribution Date), and

                 (c)      the Class Certificate Balance of such class of Fixed
                         Rate Subordinated Certificates immediately prior to
         the subject Distribution Date, over

         (2) the lesser of (a) the product of (x) 100% minus the Stepdown Target
Subordination Percentage for the subject class of Certificates and (y) the      
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 1 for    
such Distribution Date and (b) the aggregate Stated Principal Balance of the    
Mortgage Loans in Loan Group 1 for such Distribution Date minus the Fixed Rate  
OC Floor;                                                                       

provided, however, that if such class of Fixed Rate Subordinated Certificates is
the only class of Fixed Rate Subordinated Certificates outstanding on such      
Distribution Date, that class will be entitled to receive the entire remaining  
Principal Distribution Amount for Loan Group 1 until its Class Certificate      
Balance is reduced to zero.                                                     

        "ADJUSTABLE RATE SUBORDINATED CLASS PRINCIPAL DISTRIBUTION AMOUNT" for
any class of Adjustable Rate Subordinate Certificates and Distribution Date will
equal the excess of:                                                            

(1) the sum of:                                               

                 (a)      the aggregate Class Certificate Balance of the group
                          2 senior certificates (after taking into account the
                  distribution of the Group 2 Senior Principal
                      Distribution Amount for such Distribution Date),

           (b)      the aggregate Class Certificate Balance of any
                           class(es) of Adjustable Rate Subordinate Certificates
                         that are senior to the subject class (in each case,
                       after taking into account the distribution of the
                  Adjustable Rate Subordinated Class Principal
                           Distribution Amount(s) for such more senior class(es)
                      of Certificates for such Distribution Date), and

                  (c)      the Class Certificate Balance of the subject class of
                          Adjustable Rate Subordinate Certificates immediately
           prior to such Distribution Date, over

         (2) the lesser of (a) the product of (x) 100% minus the Stepdown Target
Subordination Percentage for the subject class of Certificates and (y) the      
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2 for    
such Distribution Date and (b) the aggregate Stated Principal Balance of the    
Mortgage Loans in Loan Group 2 for such Distribution Date minus the Adjustable  
Rate OC Floor;                                                                  

provided, however, that if such class of Adjustable Rate Subordinate            
Certificates is the only class of Adjustable Rate Subordinate Certificates      
outstanding on such Distribution Date, that class will be entitled to receive   
the entire remaining Principal Distribution Amount for Loan Group 2 until its   
Class Certificate Balance is reduced to zero.                                   

    The "Initial Target Subordination Percentage" and "Stepdown Target
Subordination Percentage" for each class of subordinated certificates will equal
the respective percentages indicated in the following table:                    

                                                                [Download Table]

                                       Initial Target            Stepdown Target    
                                  Subordination Percentage  Subordination Percentage
                                  ------------------------  ------------------------
                                                                                    
Class 1-M-1......................            4.15%                     8.30%        
Class 1-M-2......................            2.40%                     4.80%        
Class 1-M-3......................            1.70%                     3.40%        
Class 1-B-1......................            0.70%                     1.40%        
Class 2-M-1......................            6.80%                    13.60%        
Class 2-M-2......................            3.80%                     7.60%        
Class 2-B-1......................            1.85%                     3.70%        
Class 2-B-2......................            0.85%                     1.70%        

S-70

424B5
71st Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 71st
  The Initial Target Subordination Percentages will not be used to
calculate distributions on the subordinated certificates, but rather are        
presented in order to provide a better understanding of the credit enhancement  
provided by the subordinated certificates and the related overcollateralization 
amount. The Initial Target Subordination Percentage for any class of            
subordinated certificates is equal to a fraction, expressed as a percentage, the
numerator of which is equal to the aggregate original Class Certificate Balance 
of any class(es) of certificates subordinate to the subject class plus the      
initial related Overcollateralization Target Amount and the denominator of which
is equal to the sum of the aggregate Stated Principal Balance of the Mortgage   
Loans in the related loan group as of the cut-off date.                         

        "EXTRA PRINCIPAL DISTRIBUTION AMOUNT" with respect to any Distribution
Date and (A) Loan Group 1, is the lesser of (1) the Fixed Rate                  
Overcollateralization Deficiency Amount and (2) the Fixed Rate Excess Cashflow  
available for payment thereof in the priority set forth in this prospectus      
supplement and (B) Loan Group 2, is the lesser of (1) the Adjustable Rate       
Overcollateralization Deficiency Amount and (2) the Adjustable Rate Excess      
Cashflow available for payment thereof in the priority set forth in this        
prospectus supplement.                                                          

       "FIXED RATE OC FLOOR" means an amount equal to 0.50% of the aggregate
Stated Principal Balance of the Mortgage Loans in Loan Group 1 as of the cut-off
date.                                                                           

         "FIXED RATE OVERCOLLATERALIZATION DEFICIENCY AMOUNT," with respect to
any Distribution Date equals the amount, if any, by which the Fixed Rate        
Overcollateralization Target Amount exceeds the Fixed Rate Overcollateralized   
Amount on such Distribution Date (after giving effect to distributions in       
respect of the Principal Remittance Amount for Loan Group 1 on such Distribution
Date).                                                                          

        "FIXED RATE OVERCOLLATERALIZATION TARGET AMOUNT" means with respect to
any Distribution Date (a) prior to the Fixed Rate Stepdown Date, an amount equal
to 0.70% of the aggregate Stated Principal Balance of the Mortgage Loans in Loan
Group 1 as of the cut-off date and (b) on or after the Fixed Rate Stepdown Date,
the greater of (i) an amount equal to 1.40% of the aggregate Stated Principal   
Balance of the Mortgage Loans in Loan Group 1 for the current Distribution Date 
and (ii) the Fixed Rate OC Floor; provided, however, that if a Fixed Rate       
Trigger Event is in effect on any Distribution Date, the Fixed Rate             
Overcollateralization Target Amount will be the Fixed Rate Overcollateralization
Target Amount as in effect for the prior Distribution Date.                     

         "FIXED RATE OVERCOLLATERALIZED AMOUNT" for any Distribution Date is the
amount, if any, by which (x) the aggregate Stated Principal Balance of the      
Mortgage Loans in Loan Group 1 as of the Due Date in the month of that          
Distribution Date (after giving effect to principal prepayments, the principal  
portion of any liquidation proceeds and any Subsequent Recoveries received in   
the related Prepayment Period related to Loan Group 1) exceeds (y) the aggregate
Class Certificate Balance of the group 1 certificates (after giving effect to   
distributions of the Principal Remittance Amount for Loan Group 1 to be made on 
such Distribution Date).                                                        

"FIXED RATE OVERCOLLATERALIZATION REDUCTION AMOUNT" for any   
Distribution Date is an amount equal to the lesser of (i) the Fixed Rate Excess 
Overcollateralization Amount for such Distribution Date and (ii) the Principal  
Remittance Amount for Loan Group 1 for such Distribution Date.                  

       "FIXED RATE EXCESS OVERCOLLATERALIZATION AMOUNT" for any Distribution
Date, is the excess, if any, of the Fixed Rate Overcollateralized Amount for    
such Distribution Date over the Fixed Rate Overcollateralization Target Amount  
for such Distribution Date.                                                     

"FIXED RATE STEPDOWN DATE" is the earlier to occur of:        

          (1) the Distribution Date on which the aggregate Class
      Certificate Balance of the group 1 senior certificates is reduced to
zero, and                                                     

          (2) the later to occur of (x) the Distribution Date in
November 2008 and (y) the first Distribution Date on which the
        aggregate Class Certificate Balance of the group 1 senior certificates
         (after calculating anticipated distributions on such Distribution Date)
   is less than or equal to 87.30% of the aggregate Stated Principal
         Balance of the Mortgage Loans in Loan Group 1 as of the Due Date in the

S-71

424B5
72nd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 72nd
   month of that Distribution Date (after giving effect to principal
    prepayments, the principal portion of liquidation proceeds and any
         Subsequent Recoveries received in the Prepayment Period related to that
prior Due Date).                                              

       A "FIXED RATE TRIGGER EVENT" with respect to any Distribution Date on
or after the Fixed Rate Stepdown Date consists of either a Fixed Rate           
Delinquency Trigger Event with respect to that Distribution Date or a Fixed Rate
Cumulative Loss Trigger Event with respect to that Distribution Date.           

A "FIXED RATE DELINQUENCY TRIGGER EVENT" with respect to any  
Distribution Date on or after the Fixed Rate Stepdown Date exists if the Rolling
Sixty-Day Delinquency Rate for the outstanding Mortgage Loans in Loan Group 1   
equals or exceeds the product of (x) the Fixed Rate Senior Enhancement          
Percentage for such Distribution Date and (y) the applicable percentage listed  
below for the most senior class of outstanding group 1 senior certificates and  
Fixed Rate Subordinated Certificates:                                           

Class                Percentage 
-----                ---------- 
group 1 senior                                    
certificates..........          50.00%            
1-M-1.................          76.51%            
1-M-2.................          132.30%           
1-M-3.................          186.77%           
1-B-1.................          453.51%           

  The "FIXED RATE SENIOR ENHANCEMENT PERCENTAGE" with respect to a
Distribution Date on or after the Stepdown Date is equal to a fraction          
(expressed as a percentage) of:                                                 

(1) the numerator of which is the excess of:

                       (a) the aggregate Stated Principal Balance of the
                 Mortgage Loans in Loan Group 1 for the preceding Distribution
Date over                                   

                          (b) (i) before the Class Certificate Balances of the
              group 1 senior certificates have been reduced to zero, the
             aggregate Class Certificate Balance of the group 1 senior
                certificates, or (ii) after such time, the Class Certificate
               Balance of the most senior class of Fixed Rate Subordinated
                 Certificates outstanding, as of the preceding Master Servicer
Advance Date, and                           

                  (2) the denominator of which is the aggregate Stated Principal
 Balance of the Mortgage Loans in Loan Group 1 for the preceding
Distribution Date.                                            

  A "FIXED RATE CUMULATIVE LOSS TRIGGER EVENT" with respect to any
Distribution Date on or after the Fixed Rate Stepdown Date occurs if the        
aggregate amount of Realized Losses on the Mortgage Loans in Loan Group 1 from  
the cut-off date for each such Mortgage Loan to (and including) the related Due 
Date (reduced by the aggregate amount of Subsequent Recoveries related to Loan  
Group 1 received from the cut-off date through the Prepayment Period related to 
that Due Date) exceeds the applicable percentage, for such Distribution Date, of
the aggregate State Principal Balance of the Mortgage Loans in Loan Group 1, as 
set forth below:                                                                

S-72

424B5
73rd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 73rd
                                                        [Enlarge/Download Table]

DISTRIBUTION DATE                               PERCENTAGE                                                   
-----------------                               ----------                                                   
                                                                                                             
November 2007 - October 2008................... 0.30% with respect to November 2007, plus an additional      
                                                    1/12th of 0.45% for each month thereafter through October
                                                    2008                                                     
November 2008 - October 2009................... 0.75% with respect to November 2008, plus an additional      
                                                    1/12th of 0.35% for each month thereafter through October
                                                    2009                                                     
November 2009 - October 2010................... 1.10% with respect to November 2009, plus an additional      
                                                    1/12th of 0.35% for each month thereafter through October
                                                    2010                                                     
November 2010 - October 2011................... 1.45% with respect to November 2010, plus an additional      
                                                    1/12th of 0.15% for each month thereafter through October
                                                    2011                                                     
November 2011 and thereafter................... 1.60%                                                        

  "ADJUSTABLE RATE OC FLOOR" means an amount equal to 0.50% of the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2 as of  
the cut-off date.                                                               

        "ADJUSTABLE RATE OVERCOLLATERALIZATION DEFICIENCY AMOUNT, with respect
to any Distribution Date equals the amount, if any, by which the Adjustable Rate
Overcollateralization Target Amount exceeds the Adjustable Rate                 
Overcollateralized Amount on such Distribution Date (after giving effect to     
distributions in respect of the Principal Remittance Amount for Loan Group 2 on 
such Distribution Date).                                                        

  "ADJUSTABLE RATE OVERCOLLATERALIZATION TARGET AMOUNT" means with
respect to any Distribution Date (a) prior to the Adjustable Rate Stepdown Date,
an amount equal to 0.85% of the aggregate Stated Principal Balance of the       
Mortgage Loans in Loan Group 2 as of the cut-off date and (b) on or after the   
Adjustable Rate Stepdown Date, the greater of (i) an amount equal to 1.70% of   
the aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2 for
the current Distribution Date and (ii) the Adjustable Rate OC Floor; provided,  
however, that if an Adjustable Rate Trigger Event is in effect on any           
Distribution Date, the Adjustable Rate Overcollateralization Target Amount will 
be the Adjustable Rate Overcollateralization Target Amount as in effect for the 
prior Distribution Date.                                                        

       "ADJUSTABLE RATE OVERCOLLATERALIZED AMOUNT" for any Distribution Date
is the amount, if any, by which (x) the aggregate Stated Principal Balance of   
the Mortgage Loans in Loan Group 2 as of the Due Date in the month of that      
Distribution Date (after giving effect to principal prepayments, the principal  
portion of any liquidation proceeds and any Subsequent Recoveries received in   
the related Prepayment Period related to Loan Group 2) exceeds (y) the aggregate
Class Certificate Balance of the group 2 certificates (after giving effect to   
distributions of the Principal Remittance Amount for Loan Group 2 to be made on 
such Distribution Date).                                                        

  "ADJUSTABLE RATE OVERCOLLATERALIZATION REDUCTION AMOUNT" for any
Distribution Date is an amount equal to the lesser of (i) the Adjustable Rate   
Excess Overcollateralization Amount for such Distribution Date and (ii) the     
Principal Remittance Amount for Loan Group 2 for such Distribution Date.        

"ADJUSTABLE RATE EXCESS OVERCOLLATERALIZATION AMOUNT" for any 
Distribution Date, is the excess, if any, of the Adjustable Rate                
Overcollateralized Amount for such Distribution Date over the Adjustable Rate   
Overcollateralization Target Amount for such Distribution Date.                 

"ADJUSTABLE RATE STEPDOWN DATE" is the earlier to occur of:   

          (1) the Distribution Date on which the aggregate Class
      Certificate Balance of the Group 2 senior certificates is reduced to
zero, and                                                     

          (2) the later to occur of (x) the Distribution Date in
November 2008 and (y) the first Distribution Date on which the
        aggregate Class Certificate Balance of the group 2 senior certificates
(after                                                        

S-73

424B5
74th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 74th
     calculating anticipated distributions on such Distribution Date) is
        less than or equal to 77.40% of the aggregate Stated Principal Balance
       of the Mortgage Loans in Loan Group 2 as of the Due Date in the month
of that Distribution Date (after giving effect to principal   
    prepayments, the principal portion of liquidation proceeds and any
         Subsequent Recoveries received in the Prepayment Period related to that
prior Due Date).                                              

     An "ADJUSTABLE RATE TRIGGER EVENT" with respect to any Distribution
Date on or after the Adjustable Rate Stepdown Date consists of either a         
Adjustable Rate Delinquency Trigger Event with respect to that Distribution Date
or a Adjustable Rate Cumulative Loss Trigger Event with respect to that         
Distribution Date.                                                              

    An "ADJUSTABLE RATE DELINQUENCY TRIGGER EVENT" with respect to any
Distribution Date on or after the Adjustable Rate Stepdown Date exists if the   
Rolling Sixty Day Delinquency Rate for the outstanding Mortgage Loans in Loan   
Group 2 equals or exceeds equals or exceeds the product of (x) the Adjustable   
Rate Senior Enhancement Percentage for such Distribution Date and (y) the       
applicable percentage listed below for the most senior class of outstanding     
group 1 senior certificates and Adjustable Rate Subordinated Certificates:      

Class                Percentage 
-----                ---------- 
group 2 senior                                    
certificates..........          40.00%            
2-M-1.................          66.47%            
2-M-2.................          118.95%           
2-B-1.................          244.32%           
2-B-2.................          531.73%           

         The "ADJUSTABLE RATE SENIOR ENHANCEMENT PERCENTAGE" with respect to any
Distribution Date on or after the Stepdown Date is equal to a fraction          
(expressed as a percentage) of:                                                 

(1) the numerator of which is the excess of:

                       (a) the aggregate Stated Principal Balance of the
                 Mortgage Loans in Loan Group 2 for the preceding Distribution
Date over                                   

                          (b) (i) before the Class Certificate Balances of the
              group 2 senior certificates have been reduced to zero, the
             aggregate Class Certificate Balance of the group 2 senior
                certificates, or (ii) after such time, the Class Certificate
       Balance of the most senior class of Adjustable Rate
              Subordinated Certificates outstanding, as of the preceding
Master Servicer Advance Date, and           

                  (2) the denominator of which is the aggregate Stated Principal
 Balance of the Mortgage Loans in Loan Group 2 for the preceding
Distribution Date.                                            

        An "ADJUSTABLE RATE CUMULATIVE LOSS TRIGGER EVENT" with respect to any
Distribution Date on or after the Adjustable Rate Stepdown Date occurs if the   
aggregate amount of Realized Losses on the Mortgage Loans in Loan Group 2 from  
the cut-off date for each such Mortgage Loan to the related Due Date (reduced by
the aggregate amount of Subsequent Recoveries related to Loan Group 2 received  
from the cut-off date through the Prepayment Period related to that Due Date)   
exceeds the applicable percentage, for such Distribution Date, of the aggregate 
States Principal Balance of the Mortgage Loans in Loan Group 2, as set forth    
below:                                                                          

S-74

424B5
75th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 75th
                                                        [Enlarge/Download Table]

DISTRIBUTION DATE                               PERCENTAGE                                                   
-----------------                               ----------                                                   
                                                                                                             
November 2007 - October 2008................... 0.60% with respect to November 2007, plus an additional      
                                                    1/12th of 0.70% for each month thereafter through October
                                                    2008                                                     
November 2008 - October 2009................... 1.30% with respect to November 2008, plus an additional      
                                                    1/12th of 0.70% for each month thereafter through October
                                                    2009                                                     
November 2009 - October 2010................... 2.00% with respect to November 2009, plus an additional      
                                                    1/12th of 0.60% for each month thereafter through October
                                                    2010                                                     
November 2010 - October 2011................... 2.60% with respect to November 2010, plus an additional      
                                                    1/12th of 0.50% for each month thereafter through October
                                                    2011                                                     
November 2011 and thereafter................... 3.10%                                                        

   "UNPAID REALIZED LOSS AMOUNT" means for any class of subordinated
certificates, (x) the portion of the aggregate Applied Realized Loss Amount     
previously allocated to that class remaining unpaid from prior Distribution     
Dates minus (y) any increase in the Class Certificate Balance of that class due 
to the allocation of Subsequent Recoveries to the Class Certificate Balance of  
that class.                                                                     

The "ROLLING SIXTY-DAY DELINQUENCY RATE," with respect to any 
Distribution Date on or after the Fixed Rate Stepdown Date or the Adjustable    
Rate Stepdown Date, as applicable, and any loan group, is the average of the    
Sixty-Day Delinquency Rates for such loan group and Distribution Date and the   
two immediately preceding Distribution Dates.                                   

         The "SIXTY-DAY DELINQUENCY RATE," with respect to any Distribution Date
on or after the Fixed Rate Stepdown Date or the Adjustable Rate Stepdown Date,  
as applicable, and any loan group, is a fraction, expressed as a percentage, the
numerator of which is the aggregate Stated Principal Balance for such           
Distribution Date of all Mortgage Loans in such loan group 60 or more days      
delinquent as of the close of business on the last day of the calendar month    
preceding such Distribution Date (including Mortgage Loans in foreclosure,      
bankruptcy and REO Properties) and the denominator of which is the aggregate    
Stated Principal Balance for such Distribution Date of the Mortgage Loans in    
such loan group as of the related Due Date (after giving effect to principal    
prepayments, the principal portion of any liquidation proceeds and any          
Subsequent Recoveries received in the related Prepayment Period).               

 A "REALIZED LOSS" with respect to any Distribution Date and any
defaulted Mortgage Loan, is the excess of the Stated Principal Balance of such  
defaulted Mortgage Loan over the liquidation proceeds allocated to principal    
that have been received with respect to such Mortgage Loan on or at any time    
prior to the Due Date after such Mortgage Loan has been liquidated.             

      "SUBSEQUENT RECOVERIES" are unexpected recoveries received after the
determination by the Master Servicer that it has received all proceeds it       
expects to receive, with respect to the liquidation of a Mortgage Loan that     
resulted in a Realized Loss (other than the amount of such net recoveries       
representing any profit realized by the Master Servicer in connection with the  
liquidation of any Mortgage Loan and net of reimbursable expenses) in a month   
prior to the month of the receipt of such recoveries.                           

RESIDUAL CERTIFICATES                                                           

The Class A-R Certificates do not bear interest. The Class A-R
Certificates will receive a distribution of $100 of principal on the first      
Distribution Date, after which their Class Certificate Balance will equal zero. 
The Class A-R Certificates will remain outstanding for so long as the trust fund
will exist. In addition to the distribution of principal on the first           
Distribution Date, on each Distribution Date the holders of the Class A-R       
Certificates will be entitled to receive certain additional distributions as    
provided in the Pooling and Servicing Agreement. It is not anticipated that     
there will be any significant amounts remaining for such distribution to the    
Class A-R Certificates.                                                         

S-75

424B5
76th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 76th
OVERCOLLATERALIZATION PROVISIONS                                                

        The weighted average Adjusted Net Mortgage Rate for the Mortgage Loans
in a loan group is generally expected to be higher than the weighted average of 
the Pass-Through Rates on the related classes of certificates. As a result,     
interest collections on the Mortgage Loans in a loan group are expected to be   
generated in excess of the amount of interest payable to the holders of the     
related certificates and the related fees and expenses payable by the trust     
fund. The Fixed Rate Excess Cashflow and the Adjustable Rate Excess Cashflow, as
applicable, if any, will be applied on each Distribution Date as a payment of   
principal on the related class or classes of certificates then entitled to      
receive distributions in respect of principal, but only to the limited extent   
hereafter described.                                                            

        The "FIXED RATE EXCESS CASHFLOW" with respect to any Distribution Date
is the sum of (i) the amounts remaining as set forth in clause (3) in           
"Description of the Certificates--Interest--Distributions of Interest Funds for 
Loan Group 1" for such Distribution Date and clauses (1)(C) or (2)(C), as       
applicable, in "Description of the Certificates--Principal--Distributions with  
respect to Loan Group 1" for such Distribution Date and (ii) the Fixed Rate     
Overcollateralization Reduction Amount for such Distribution Date, if any.      

       With respect to any Distribution Date, any Fixed Rate Excess Cashflow
will be paid to the classes of certificates in the following order of priority, 
in each case to the extent of the remaining Fixed Rate Excess Cashflow:         

                 1.       to the classes of group 1 certificates then entitled
                          to receive distributions in respect of principal, in
                         an amount equal to the Extra Principal Distribution
                         Amount for Loan Group 1, payable to such classes of
                        certificates as part of the Principal Distribution
                Amount for Loan Group 1 as described under
                      "--Principal--Distributions with respect to Loan
Group 1" above;           

             2.       sequentially, to the holders of the Class 1-M-1,
              Class 1-M-2, Class 1-M-3 and Class 1-B-1
                           Certificates, in that order, in each case first in an
                           amount equal to any Interest Carry Forward Amount for
                          such class and then in an amount equal to the Unpaid
          Realized Loss Amount for such class;

               3.       to each class of group 1 certificates (in the case
                          of the Class 1-A-1 Certificates after application of
                           any amounts allocated to the trust fund in respect of
                         the Class 1-A-1 Corridor Contract to cover Net Rate
                         Carryover), pro rata based on the Class Certificate
                       Balances thereof, to the extent needed to pay any
                        unpaid Net Rate Carryover for each such class; and
                         then any Fixed Rate Excess Cashflow remaining after
                        such allocation to pay Net Rate Carryover based on
                          the Class Certificate Balances of those Certificates
                  will be distributed to each class of group 1
                          Certificates with respect to which there remains any
                       unpaid Net Rate Carryover, pro rata, based on the
               amount of such unpaid Net Rate Carryover;

                 4.       to the classes of group 2 certificates then entitled
                       to receive distributions in respect of principal,
                        payable to such classes of certificates as part of
                          the Principal Distribution Amount as described under
                      "--Principal--Distributions with respect to Loan
                    Group 2" to the extent that an Adjustable Rate
                          Overcollateralization Deficiency Amount exists after
                          distribution of the Adjustable Rate Excess Cashflow;

             5.       sequentially, to the holders of the Class 2-M-1,
              Class 2-M-2, Class 2-B-1 and Class 2-B-2
                     Certificates, in that order, in each case in an
                         amount equal to the Unpaid Realized Loss Amount for
                          such class remaining undistributed after application
                 of the Adjustable Rate Excess Cashflow; and

                 6.       to fund distributions to the holders of the Class CF
                    and Class A-R Certificates in each case in the
                    amounts specified in the Pooling and Servicing
Agreement.                

        The "ADJUSTABLE RATE EXCESS CASHFLOW" with respect to any Distribution
Date is the sum of (i) the amounts remaining as set forth in clause (3) in      
"Description of the Certificates--Interest--Distributions of Interest Funds for 
Loan Group 2" for such Distribution Date and clauses (1)(C) or (2)(C), as       
applicable, in "Description of the                                              

S-76

424B5
77th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 77th
Certificates--Principal--Distributions with respect to Loan Group 2" for such   
Distribution Date and (ii) the Adjustable Rate Overcollateralization Reduction  
Amount for such Distribution Date, if any.                                      

   With respect to any Distribution Date, any Adjustable Rate Excess
Cashflow will be paid to the classes of certificates in the following order of  
priority, in each case to the extent of the remaining Adjustable Rate Excess    
Cashflow:                                                                       

                 1.       to the classes of group 2 certificates then entitled
                          to receive distributions in respect of principal, in
                         an amount equal to the Extra Principal Distribution
                         Amount for Loan Group 2, payable to such classes of
                        certificates as part of the Principal Distribution
                Amount for Loan Group 2 as described under
                      "--Principal--Distributions with respect to Loan
Group 2" above;           

             2.       sequentially, to the holders of the Class 2-M-1,
              Class 2-M-2, Class 2-B-1 and Class 2-B-2
                           Certificates, in that order, in each case first in an
                           amount equal to any Interest Carry Forward Amount for
                          such class and then in an amount equal to the Unpaid
          Realized Loss Amount for such class;

                 3.       to each class of group 2 certificates (in each case,
                       after application of any amounts allocated to the
                       trust fund in respect of the Group 2 Certificates
                         Corridor Contract to cover Net Rate Carryover), pro
                           rata based on the Class Certificate Balances thereof,
                     to the extent needed to pay any unpaid Net Rate
                 Carryover for each such class; and then any
                          Adjustable Rate Excess Cashflow remaining after such
                       allocation to pay Net Rate Carryover based on the
                           Class Certificate Balances of those Certificates will
                          be distributed to each class of group 2 Certificates
                        with respect to which there remains any unpaid Net
                           Rate Carryover, pro rata, based on the amount of such
unpaid Net Rate Carryover;

                 4.       to the classes of group 1 certificates then entitled
                       to receive distributions in respect of principal,
                        payable to such classes of certificates as part of
                          the Principal Distribution Amount as described under
                      "--Principal--Distributions with respect to Loan
              Group 1" to the extent that a Fixed Rate
                          Overcollateralization Deficiency Amount exists after
                     distribution of the Fixed Rate Excess Cashflow;

             5.       sequentially, to the holders of the Class 1-M-1,
              Class 1-M-2, Class 1-M-3 and Class 1-B-1
                     Certificates, in that order, in each case in an
                         amount equal to the Unpaid Realized Loss Amount for
                          such class remaining undistributed after application
            of the Fixed Rate Excess Cashflow; and

                 6.       to fund distributions to the holders of the Class CV
                    and Class A-R Certificates in each case in the
                    amounts specified in the Pooling and Servicing
Agreement.                

THE CORRIDOR CONTRACTS                                                          

    Countrywide Home Loans has entered into two interest rate corridor
transactions with Bear Stearns Financial Products Inc. (the "CORRIDOR CONTRACT  
COUNTERPARTY"), each as evidenced by a confirmation between Countrywide Home    
Loans and the Corridor Contract Counterparty (respectively, the "CLASS 1-A-1    
CORRIDOR CONTRACT," and the "GROUP 2 CERTIFICATES CORRIDOR CONTRACT," together  
the "CORRIDOR CONTRACTS" and each, a "CORRIDOR CONTRACT"). Pursuant to each     
Corridor Contract, the terms of an ISDA Master Agreement were incorporated into 
the confirmation of the Corridor Contract, as if the ISDA Master Agreement had  
been executed by Countrywide Home Loans and the Corridor Contract Counterparty  
on the date that each Corridor Contract was executed. Each Corridor Contract is 
subject to certain ISDA definitions. On the closing date, Countrywide Home Loans
will assign its rights under each Corridor Contract to The Bank of New York, as 
corridor contract administrator (in such capacity, the "CORRIDOR CONTRACT       
ADMINISTRATOR"), and Countrywide Home Loans, the Corridor Contract Administrator
and the Trustee will enter into a corridor contract administration agreement    
(the "CORRIDOR CONTRACT ADMINISTRATION AGREEMENT") pursuant to which the        
Corridor Contract Administrator will allocate any payments received under each  
Corridor Contract between the Trustee and Countrywide Home Loans as described   
below.                                                                          

S-77

424B5
78th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 78th
   On or prior to the applicable Corridor Contract Termination Date,
amounts (if any) received under each Corridor Contract by the Corridor Contract 
Administrator and allocated to the Trustee for the benefit of the trust fund    
will be used to pay Net Rate Carryover on the related class or classes of       
certificates as described above under "--Interest--Distributions of Funds from  
the Corridor Contracts." Amounts allocated to the Trustee in respect of the     
Corridor Contracts will not be available to pay Net Rate Carryover on any class 
of certificates other than the related class or classes of certificates. On any 
Distribution Date, after application of any amounts allocated to the Trustee in 
respect of the Corridor Contracts to pay Net Rate Carryover, any remaining      
amounts will be distributed as described above under "--Interest--Distributions 
of Funds from the Corridor Contracts" and will not thereafter be available for  
payments of Net Rate Carryover for any class of certificates, unless such       
remaining amounts are allocated to the Trustee in connection with an early      
termination of the related Corridor Contract in which case such amounts will be 
held by the Trustee until the applicable Corridor Contract Termination Date for 
distribution as described above under "--Interest--Distributions of Funds from  
the Corridor Contracts."                                                        

        With respect to each Corridor Contract and any Distribution Date on or
prior to the applicable Corridor Contract Termination Date, the amount payable  
by the Corridor Contract Counterparty under a Corridor Contract will equal the  
product of:                                                                     

      (i) the excess (if any) of (x) the lesser of (A) One-Month LIBOR (as
determined by the applicable Corridor Contract Counterparty) and (B) the        
applicable Corridor Contract Ceiling Rate for such Distribution Date over (y)   
the applicable Corridor Contract Strike Rate for such Distribution Date,        

 (ii) the applicable Corridor Contract Notional Balance for such
Distribution Date, and                                                          

        (iii) the actual number of days in the related Accrual Period, divided
by 360.                                                                         

         Pursuant to the Corridor Contract Administration Agreement, on or prior
to each Distribution Date, the Corridor Contract Administrator will allocate any
payment received from the Corridor Contract Counterparty with respect to each   
Corridor Contract and such Distribution Date (other than any termination        
payment, which will be allocated as described below) first, to the Trustee, up  
to the amount that would be payable under each Corridor Contract if clause (ii) 
of the preceding sentence were equal to the lesser of the Corridor Contract     
Notional Balance for such Distribution Date and the aggregate Class Certificate 
Balance of the related class or classes of certificates immediately prior to    
such Distribution Date (any such amount, a "NET CORRIDOR CONTRACT PAYMENT"), and
second, to Countrywide Home Loans, the remainder, if any (any such remainder, an
"EXCESS CORRIDOR CONTRACT Payment"). Excess Corridor Contract Payments will not 
be available to cover Net Rate Carryover on the Certificates.                   

S-78

424B5
79th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 79th
        The "CLASS 1-A-1 CORRIDOR CONTRACT NOTIONAL BALANCE," the "CLASS 1-A-1
CORRIDOR CONTRACT STRIKE RATE" and the "CLASS 1-A-1 CORRIDOR CONTRACT CEILING   
RATE" are as described in the following table:                                  

                                     CLASS
                                    CLASS 1-A-1        1-A-1       CLASS 1-A-1
                                    CORRIDOR       CORRIDOR       CORRIDOR
                                    CONTRACT       CONTRACT       CONTRACT
                   MONTH OF           NOTIONAL      STRIKE RATE   CEILING RATE
          DISTRIBUTION DATE     BALANCE ($)         (%)            (%)
          -----------------     -----------         ---            ---
           November 2005....   57,129,000.00        8.699         10.830
           December 2005....   54,870,520.82        8.133         10.830
           January 2006.....   52,526,024.88        7.937         10.830
           February 2006....   50,099,925.51        8.018         10.830
           March 2006.......   47,595,180.25        8.999         10.830
           April 2006.......   45,015,153.94        8.220         10.830
           May 2006.........   42,364,604.68        8.628         10.830
           June 2006........   39,648,585.88        8.490         10.830
           July 2006........   36,873,295.96        8.956         10.830
           August 2006......   34,072,122.99        8.863         10.830
           September 2006...   31,271,942.11        9.101         10.830
           October 2006.....   28,526,195.38        9.698         10.830
           November 2006....   25,847,227.22        9.709         10.830
           December 2006....   23,233,424.17       10.446         10.830
           January 2007.....   20,683,211.57       10.585         10.830

[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

S-79

424B5
80th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 80th
    The "GROUP 2 CERTIFICATES CORRIDOR CONTRACT NOTIONAL BALANCE," the
"GROUP 2 CERTIFICATES CORRIDOR CONTRACT STRIKE RATE" and the "GROUP 2           
CERTIFICATES CORRIDOR CONTRACT CEILING RATE" are as described in the following  
table:                                                                          

                                                        [Enlarge/Download Table]

                      GROUP 2        GROUP 2      GROUP 2                           GROUP 2       GROUP 2       GROUP 2   
                   CERTIFICATES   CERTIFICATES  CERTIFICATES                     CERTIFICATES   CERTIFICATES  CERTIFICATES
                     CORRIDOR       CORRIDOR     CORRIDOR                          CORRIDOR       CORRIDOR      CORRIDOR  
                     CONTRACT       CONTRACT     CONTRACT                          CONTRACT       CONTRACT      CONTRACT  
     MONTH OF        NOTIONAL      STRIKE RATE    CEILING         MONTH OF         NOTIONAL     STRIKE RATE   CEILING RATE
DISTRIBUTION DATE   BALANCE ($)        (%)       RATE (%)     DISTRIBUTION DATE   BALANCE ($)       (%)            (%)    
-----------------   -----------        ---       --------     -----------------   -----------       ---            ---    
                                                                                                                          
December 2005....  453,229,075.49     5.296       10.499      August 2007......  246,925,633.49     6.202        10.176   

January 2006.....  439,718,547.29     5.116       10.497      September 2007...  239,500,135.96     7.290        10.067   

February 2006....  426,605,982.11     5.118       10.495      October 2007.....  232,288,519.53     7.574        10.036   

March 2006.......  413,880,087.64     5.766       10.492      November 2007....  225,289,837.00     7.319        10.047   

April 2006.......  401,530,479.53     5.173       10.483      December 2007....  218,497,951.35     7.587        10.031   

May 2006.........  389,546,798.75     5.373       10.481      January 2008.....  211,906,800.70     7.342        10.040   

June 2006........  377,917,423.47     5.191       10.480      February 2008....  205,510,238.87     7.485         9.802   

July 2006........  366,631,644.03     5.395       10.473      March 2008.......  199,305,145.93     8.189         9.442   

August 2006......  355,676,741.53     5.209       10.473      April 2008.......  193,290,367.81     7.636         9.486   

September 2006...  345,045,201.13     5.246       10.470      May 2008.........  187,453,647.53     7.921         9.442   

October 2006.....  334,727,837.22     5.449       10.469      June 2008........  181,789,243.93     7.711         9.465   

November 2006....  324,715,484.70     5.260       10.437      July 2008........  176,293,895.50     8.034         9.409   

December 2006....  315,000,113.51     5.455       10.435      August 2008......  170,961,429.71     7.934         9.094   

January 2007.....  305,571,413.95     5.266       10.433      September 2008...  165,787,734.43     8.004         8.683   

February 2007....  296,421,161.62     5.269       10.432      October 2008.....  160,770,848.78     8.297         8.611   

March 2007.......  287,540,940.12     5.901       10.394      November 2008....  155,901,931.00     8.022         8.671   

April 2007.......  278,923,087.03     5.288       10.387      December 2008....  152,543,258.32     8.254         8.622   

May 2007.........  270,560,447.71     5.487       10.377      January 2009.....  148,035,475.57     7.985         8.666   

June 2007........  262,444,953.11     5.307       10.373      February 2009....  143,660,959.29     8.045         8.316   

July 2007........  254,568,915.71     5.511       10.344                                                                  

[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

S-80

424B5
81st Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 81st
      The Class 1-A-1 Corridor Contract Notional Balance and the Group 2
Certificates Corridor Contract Notional Balance are also referred to as the     
"CORRIDOR CONTRACT NOTIONAL BALANCE." The Class 1-A-1 Corridor Contract Strike  
Rate and the Group 2 Certificates Corridor Contract Strike Rate are also        
referred to as the "CORRIDOR CONTRACT STRIKE RATE." The Class 1-A-1 Corridor    
Contract Ceiling Rate and the Group 2 Certificates Corridor Contract Ceiling    
Rate are also referred to as the "CORRIDOR CONTRACT CEILING RATE."              

    The Class 1-A-1 Corridor Contract is scheduled to remain in effect
until the Distribution Date in January 2007 (the "CLASS 1-A-1 CORRIDOR CONTRACT 
TERMINATION DATE"). The Group 2 Certificates Corridor Contract is scheduled to  
remain in effect until the Distribution Date in February 2009 (the "GROUP 2     
CERTIFICATES CORRIDOR CONTRACT TERMINATION DATE"). The Class 1-A-1 Corridor     
Contract Termination Date and the Group 2 Certificates Corridor Contract        
Termination Date are also referred to as the "CORRIDOR CONTRACT TERMINATION     
DATE." Each Corridor Contract will be subject to early termination only in      
limited circumstances. Such circumstances generally include certain insolvency  
or bankruptcy events in relation to the Corridor Contract Counterparty or the   
Corridor Contract Administrator, the failure by the Corridor Contract           
Counterparty (three business days after notice of such failure is received by   
the Corridor Contract Counterparty) to make a payment due under such Corridor   
Contract, the failure by the Corridor Contract Counterparty or the Corridor     
Contract Administrator (30 days after notice of such failure is received) to    
perform any other agreement made by it under such Corridor Contract and such    
Corridor Contract becoming illegal or subject to certain kinds of taxation.     

If any Corridor Contract is terminated, the Corridor Contract 
Counterparty may owe a termination payment, payable in a lump sum. Any          
termination payment will be allocated by the Corridor Contract Administrator    
between the Trustee and Countrywide Home Loans, based on, with respect to the   
Trustee, a fraction, the numerator of which is the lesser of (x) the related    
Corridor Contract Notional Balance at the time of termination and (y) the       
aggregate Class Certificate Balance of the related class or classes of          
certificates at the time of termination, and the denominator of which is the    
related Corridor Contract Notional Balance at the time of termination, and with 
respect to Countrywide Home Loans, a fraction, the numerator of which is the    
excess, if any, of (x) the related Corridor Contract Notional Balance at the    
time of termination over (y) the aggregate Class Certificate Balance of the     
related class or classes of certificates at the time of termination, and the    
denominator of which is the Corridor Contract Notional Balance at the time of   
termination. The portion of any termination payment that is allocated to the    
trust fund will be held by the Trustee until the Corridor Contract Termination  
Date to pay any Net Rate Carryover on the related class or classes of           
certificates. However, if such termination occurs, there can be no assurance    
that any such termination payment will be owing to the Trustee.                 

  The long-term, unsecured, unsubordinated debt obligations of the
Corridor Contract Counterparty are rated "Aaa" and "AAA" by Moody's and S&P,    
respectively.                                                                   

 The certificates do not represent an obligation of the Corridor
Contract Counterparty or the Corridor Contract Administrator. The holders of the
certificates are not parties to or beneficiaries under any Corridor Contract or 
the Corridor Contract Administration Agreement and will not have any right to   
proceed directly against the Corridor Contract Counterparty in respect of its   
obligations under any Corridor Contract or against the Corridor Contract        
Administrator in respect of its obligations under the Corridor Contract         
Administration Agreement.                                                       

CALCULATION OF ONE-MONTH LIBOR                                                  

     On the second LIBOR Business Day preceding the commencement of each
Accrual Period for the LIBOR Certificates (each such date, an "INTEREST         
DETERMINATION DATE"), the Trustee will determine the London interbank offered   
rate for one-month United States dollar deposits ("ONE-MONTH LIBOR") for such   
Accrual Period on the basis of such rate as it appears on Telerate Screen Page  
3750, as of 11:00 a.m. (London time) on such Interest Determination Date. If    
such rate does not appear on such page (or such other page as may replace that  
page on that service, or if such service is no longer offered, such other       
service for displaying LIBOR or comparable rates as may be reasonably selected  
by the Trustee), One-Month LIBOR for the applicable Accrual Period will be the  
Reference Bank Rate as defined in this prospectus supplement. If no such        
quotations can be obtained and no Reference Bank Rate is available, One-Month   
LIBOR will be the One-Month LIBOR applicable to the preceding Accrual Period.   
The "REFERENCE BANK RATE" with respect to any Accrual Period, means the         
arithmetic mean (rounded upwards, if necessary, to the nearest whole multiple of
0.0125%) of the offered rates for United States dollar deposits for one month   
that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on 
the related Interest                                                            

S-81

424B5
82nd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 82nd
Determination Date to prime banks in the London interbank market for a period of
one month in amounts approximately equal to the aggregate Class Certificate     
Balance of all LIBOR Certificates for such Accrual Period, provided that at     
least two such Reference Banks provide such rate. If fewer than two offered     
rates appear, the Reference Bank Rate will be the arithmetic mean (rounded      
upwards, if necessary, to the nearest whole multiple of 0.03125%) of the rates  
quoted by one or more major banks in New York City, selected by the Trustee, as 
of 11:00 a.m., New York City time, on such date for loans in U.S. dollars to    
leading European banks for a period of one month in amounts approximately equal 
to the aggregate Class Certificate Balance of all LIBOR Certificates for such   
Accrual Period. As used in this section, "LIBOR BUSINESS DAY" means a day on    
which banks are open for dealing in foreign currency and exchange in London and 
New York City; and "REFERENCE BANKS" means leading banks selected by the Trustee
and engaged in transactions in Eurodollar deposits in the international         
Eurocurrency market:                                                            

             (1)      with an established place of business in London,

                  (2)      which have been designated as such by the Trustee and

               (3)      which are not controlling, controlled by, or under
                     common control with, the Depositor, Countrywide
                 Servicing or any successor Master Servicer.

     The establishment of One-Month LIBOR on each Interest Determination
Date by the Trustee and the Trustee's calculation of the rate of interest       
applicable to the LIBOR Certificates for the related Accrual Period will (in the
absence of manifest error) be final and binding.                                

CARRYOVER RESERVE FUND                                                          

 The Pooling and Servicing Agreement establishes an account (the
"CARRYOVER RESERVE FUND"), which is held in trust by the Trustee on behalf of   
the holders of the offered certificates. On the closing date, the Depositor will
deposit or cause to be deposited $1,000 in the Carryover Reserve Fund. The      
Carryover Reserve Fund will not be an asset of any REMIC.                       

      On each Distribution Date, the Trustee will deposit in the Carryover
Reserve Fund amounts allocated to the trust fund in respect of each Corridor    
Contract. On each Distribution Date, such amounts received in respect of the    
Corridor Contracts will be distributed to related class or classes of LIBOR     
Certificates to pay any Net Rate Carryover on such Certificates as described    
under "--Interest--Distributions of Funds from the Corridor Contracts" above.   

     On each Distribution Date, to the extent that any Fixed Rate Excess
Cashflow or Adjustable Rate Excess Cashflow, as applicable, is available as     
described under "--Overcollateralization Provisions" above, the Trustee will    
deposit in the Carryover Reserve Fund the amount needed to pay any Net Rate     
Carryover on the offered certificates as described under                        
"--Overcollateralization Provisions" above.                                     

APPLIED REALIZED LOSS AMOUNTS                                                   

       If on any Distribution Date, after giving effect to the distributions
described above, the aggregate Class Certificate Balance of the Group 1         
Certificates exceeds the aggregate Stated Principal Balance of the Mortgage     
Loans in Loan Group 1, the amount of such excess will be applied to reduce the  
Class Certificate Balances of the Class 1-B-1, Class 1-M-3, Class 1-M-2 and     
Class 1-M-1 Certificates, in that order, in each case until their respective    
Class Certificate Balances are reduced to zero.                                 

       If on any Distribution Date, after giving effect to the distributions
described above, the aggregate Class Certificate Balance of the group 2         
certificates exceeds the aggregate Stated Principal Balance of the Mortgage     
Loans in Loan Group 2, the amount of such excess will be applied to reduce the  
Class Certificate Balances of the Class 2-B-2, Class 2-B-1, Class 2-M-2 and     
Class 2-M-1 Certificates, in that order, in each case until their respective    
Class Certificate Balances are reduced to zero. Any such reduction described in 
this paragraph or the immediately preceding paragraph is an "APPLIED REALIZED   
LOSS AMOUNT." Applied Realized Loss Amounts will not be allocated to the senior 
certificates.                                                                   

S-82

424B5
83rd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 83rd
         Interest on any class of certificates, the Class Certificate Balance of
which has been reduced through the application of Applied Realized Loss Amounts 
as described above will accrue for the related class of certificates on the     
Class Certificate Balance as so reduced unless the Class Certificate Balance is 
subsequently increased due to the allocation of Subsequent Recoveries to the    
Class Certificate Balance of such class as described in the definition of "Class
Certificate Balance" above.                                                     

REPORTS TO CERTIFICATEHOLDERS                                                   

       The Trustee may, at its option, make the information described in the
prospectus under "Description of the Certificates--Reports to                   
Certificateholders" available to certificateholders on the Trustee's website    
(assistance in using the website service may be obtained by calling the         
trustee's customer service desk at (800) 254-2826). Parties that are unable to  
use the above distribution option are entitled to have a copy mailed to them via
electronic mail by notifying the Trustee at its corporate trust office.         

[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

S-83

424B5
84th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 84th
STRUCTURING ASSUMPTIONS                                                         

   Unless otherwise specified, the information in the tables in this
prospectus supplement has been prepared on the basis of the following assumed   
characteristics of the Mortgage Loans and the following additional assumptions, 
which combined are the structuring assumptions:                                 

o Loan Group 1 consists of 87 Mortgage Loans with the following characteristics:

                                                        [Enlarge/Download Table]

                                          ADJUSTED                  REMAINING                            
                                            NET                       TERM TO                            
                               MORTGAGE  MORTGAGE   REMAINING TERM   STATED                  ORIGINAL    
                  PRINCIPAL      RATE       RATE       TO MATURITY   MATURITY  LOAN AGE    INTEREST ONLY 
 LOAN PROGRAM    BALANCE ($)     (%)        (%)         (MONTHS)     (MONTHS)   (MONTHS)  PERIOD (MONTHS)
 ------------    -----------     ---        ---         --------     --------   --------  ---------------
                                                                                                         
10 Year Fixed      69,578.62  6.250000   6.041000          119          119         1           N/A      
15 Year Fixed     335,070.71  6.237970   6.028970          178          178         2           N/A      
15 Year Fixed     197,814.95  5.375000   5.166000          177          177         3           N/A      
15 Year Fixed     361,407.76  6.153173   5.944173          177          177         3           N/A      
15 Year Fixed     158,410.11  6.500000   6.291000          177          177         4           N/A      
15 Year Fixed     178,229.74  6.875000   6.666000          179          179         1           N/A      
15 Year Fixed     110,870.42  8.125000   7.916000          175          175         5           N/A      
15 Year Fixed      63,811.75  7.800000   7.591000          179          179         1           N/A      
15 Year Fixed      54,858.67  6.500000   6.291000          179          179         1           N/A      
15 Year Fixed     118,716.06  5.625000   5.416000          177          177         3           N/A      
15 Year Fixed     553,214.78  6.795990   6.586990          176          176         4           N/A      
15 Year Fixed     607,619.01  6.171545   5.962545          179          179         1           N/A      
15 Year Fixed     107,168.17  6.625000   6.416000          176          176         3           N/A      
20 Year Fixed   1,659,557.82  6.893791   6.684791          201          201        39           N/A      
20 Year Fixed     130,134.10  6.500000   6.291000          239          239         1           N/A      
20 Year Fixed     264,281.07  6.868491   6.659491          237          237         3           N/A      
25 Year Fixed     388,271.71  6.987950   6.778950          298          298         2           N/A      
30 Year Fixed  32,208,173.95  7.187899   6.956635          339          339        20           N/A      
30 Year Fixed   5,032,753.13  7.180038   6.971038          356          356         4           N/A      
30 Year Fixed   1,496,882.77  7.875000   7.666000          357          357         3           N/A      
30 Year Fixed     400,700.24  7.500000   7.291000          357          357         3           N/A      
30 Year Fixed     314,237.96  6.202426   5.993426          355          355         5           N/A      
30 Year Fixed  12,000,168.54  6.303515   6.094515          356          356         3           N/A      
30 Year Fixed     519,202.91  7.016869   6.807869          355          355         5           N/A      
30 Year Fixed   5,374,209.57  6.053261   5.844261          356          356         4           N/A      
30 Year Fixed     401,159.70  7.082035   6.873035          321          321        36           N/A      
30 Year Fixed     134,140.14  7.250000   7.041000          269          269         1           N/A      
30 Year Fixed   6,881,574.72  6.965758   6.756758          325          325        30           N/A      
30 Year Fixed     412,101.48  6.193054   5.984054          359          359         1           N/A      
30 Year Fixed     229,818.47  7.191087   6.982087          359          359         1           N/A      
30 Year Fixed   1,374,133.32  6.901927   6.692927          359          359         1           N/A      
30 Year Fixed     410,223.21  6.998236   6.789236          357          357         2           N/A      
30 Year Fixed     125,398.50  7.125000   6.916000          358          358         1           N/A      
30 Year Fixed     497,108.36  6.411991   6.202991          354          354         6           N/A      
30 Year Fixed     763,209.33  6.703864   6.494864          359          359         1           N/A      

S-84

424B5
85th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 85th
                                                        [Enlarge/Download Table]

                                                          ADJUSTED                  REMAINING                            
                                                            NET                       TERM TO                            
                                               MORTGAGE  MORTGAGE   REMAINING TERM   STATED                  ORIGINAL    
                                  PRINCIPAL      RATE       RATE       TO MATURITY   MATURITY  LOAN AGE    INTEREST ONLY 
 LOAN PROGRAM                    BALANCE ($)     (%)        (%)         (MONTHS)     (MONTHS)   (MONTHS)  PERIOD (MONTHS)
 ------------                    -----------     ---        ---         --------     --------   --------  ---------------
                                                                                                                         
30 Year Fixed                     242,349.47  6.380000   6.171000          358          358         2           N/A      
30 Year Fixed                     151,047.74  5.940000   5.731000          359          359         1           N/A      
30 Year Fixed                   3,429,526.86  6.662797   6.453797          358          358         2           N/A      
30 Year Fixed                     203,482.71  7.742535   7.533535          357          357         3           N/A      
30 Year Fixed                     113,479.09  6.500000   6.291000          355          355         5           N/A      
30 Year Fixed                     100,019.99  8.500000   8.291000          348          348         6           N/A      
30 Year Fixed                     285,828.51  6.259280   6.050280          359          359         1           N/A      
30 Year Fixed                   3,300,411.13  6.685298   6.476298          358          358         2           N/A      
30 Year Fixed                     739,060.09  6.574239   6.365239          359          359         1           N/A      
30 Year Fixed                     749,272.41  5.857788   5.648788          353          353         7           N/A      
30 Year Fixed                     148,337.52  6.875000   6.666000          354          354         6           N/A      
30 Year Fixed                     523,669.20  6.875000   6.666000          357          357         3           N/A      
30 Year Fixed                   8,853,857.41  6.862038   6.653038          355          355         4           N/A      
30 Year Fixed                  11,126,400.77  6.560783   6.351783          358          358         2           N/A      
30 Year Fixed                     199,819.19  6.500000   6.291000          359          359         1           N/A      
30 Year Fixed                   1,811,705.06  6.810582   6.601582          357          357         3           N/A      
30 Year Fixed                     311,950.63  7.160534   6.951534          357          357         2           N/A      
30 Year Fixed                     109,485.57  5.750000   5.541000          359          359         1           N/A      
30 Year Fixed                   2,678,453.94  7.009470   6.800470          355          355         4           N/A      
30 Year Fixed                     268,067.49  6.931142   6.722142          355          355         5           N/A      
30 Year Fixed                     118,290.33  6.375000   6.166000          359          359         1           N/A      
30 Year Fixed - Interest Only     244,000.00  6.990000   6.781000          358          358         2            60      
30 Year Fixed - Interest Only     114,399.76  6.890000   6.681000          358          358         2            60      
30 Year Fixed - Interest Only     356,000.00  6.946180   6.737180          358          358         2            60      
30 Year Fixed - Interest Only   6,130,921.27  7.019748   6.810748          358          358         2           120      
30 Year Fixed - Interest Only   1,782,997.35  6.729204   6.520204          358          358         2           120      
30 Year Fixed - Interest Only     432,570.00  7.093778   6.884778          359          359         1           120      
30 Year Fixed - Interest Only      89,000.00  7.000000   6.791000          355          355         5           120      
30 Year Fixed - Interest Only     443,400.00  6.528642   6.319642          358          358         2           120      
30 Year Fixed - Interest Only     181,600.00  6.250000   6.041000          357          357         3           120      
30 Year Fixed - Interest Only      74,240.00  6.125000   5.916000          357          357         3           120      
30 Year Fixed - Interest Only     795,906.00  6.375641   6.166641          357          357         3           120      
30 Year Fixed - Interest Only     188,000.00  6.750000   6.541000          359          359         1           120      
30 Year Fixed - Interest Only     261,100.00  6.875910   6.666910          359          359         1           120      
30 Year Fixed - Interest Only   1,000,000.00  5.875000   5.666000          358          358         2           120      
30 Year Fixed - Interest Only     256,000.00  6.625000   6.416000          359          359         1           120      
30 Year Fixed - Interest Only     850,000.00  6.500000   6.291000          358          358         2           120      
30 Year Fixed - Interest Only   4,620,000.00  6.353220   6.144220          358          358         2           120      
30 Year Fixed - Interest Only     399,200.00  6.875000   6.666000          359          359         1           120      
30 Year Fixed - Interest Only   2,410,341.42  6.964732   6.755732          358          358         2           120      
30 Year Fixed - Interest Only     141,200.00  7.375000   7.166000          359          359         1           120      
30 Year Fixed - Interest Only     255,400.00  6.106597   5.897597          359          359         1           120      

S-85

424B5
86th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 86th
                                                        [Enlarge/Download Table]

                                                           ADJUSTED                  REMAINING                            
                                                             NET                       TERM TO                            
                                                MORTGAGE  MORTGAGE   REMAINING TERM   STATED                  ORIGINAL    
                                   PRINCIPAL      RATE       RATE       TO MATURITY   MATURITY  LOAN AGE    INTEREST ONLY 
 LOAN PROGRAM                     BALANCE ($)     (%)        (%)         (MONTHS)     (MONTHS)   (MONTHS)  PERIOD (MONTHS)
 ------------                     -----------     ---        ---         --------     --------   --------  ---------------
                                                                                                                          
30 Year Fixed - Interest Only      308,000.00  6.875000   6.666000          359          359         1           120      
30 Year Fixed - Interest Only    3,823,166.49  7.029904   6.820904          358          358         2           120      
30 Year Fixed - Interest Only       89,800.00  6.125000   5.916000          359          359         1           120      
30Yr Year Fixed - Interest Only    372,000.00  7.534946   7.325946          357          357         3           120      
30/15 Fixed Balloon                372,342.62  6.218841   6.009841          359          179         1           N/A      
30/15 Fixed Balloon                509,949.84  6.659503   6.450503          359          179         1           N/A      
30/15 Fixed Balloon                 94,314.65  6.500000   6.291000          359          179         1           N/A      
30/15 Fixed Balloon                269,378.66  6.997191   6.788191          359          179         1           N/A      
30/15 Fixed Balloon                523,417.57  5.640000   5.431000          359          179         1           N/A      
30/15 Fixed Balloon                951,033.77  6.363577   6.154577          359          179         1           N/A      

S-86

424B5
87th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 87th
o Loan Group 2 consists of 192 Mortgage Loans with the following                
characteristics:                                                            

                                                        [Enlarge/Download Table]

                                                   CURRENT            SUBSE-                      ORIGINAL                    
                                                   ADJUSTED  INITIAL  QUENT    REMAINING          INTEREST          MONTHS    
                                         CURRENT   NET       EXPENSE  EXPENSE  TERM TO   LOAN     ONLY      GROSS   TO NEXT   
                           PRINCIPAL     MORTGAGE  MORTGAGE  FEE      FEE RATE MATURITY  AGE      PERIOD    MARGIN  ADJUSTMENT
      LOAN PROGRAM        BALANCE ($)    RATE (%)  RATE (%)  RATE (%)    (%)   (MONTHS)  (MONTHS) (MONTHS)    (%)     DATE    
      ------------        -----------    --------  --------  --------    ---   --------  -----------------    ---     ----    
                                                                                                                              
30 Year One Month LIBOR    523,210.67    5.500000  5.116000  0.384000  N/A       357       3       N/A    2.250000      1     
30 Year One Month LIBOR    538,000.00    5.250000  4.866000  0.384000  N/A       357       3       120    2.250000      1     
- Interest Only                                                                                                               
30 Year Six Month LIBOR    967,365.17    5.290457  4.641327  0.649130  N/A       340      20       N/A    3.068155      3     
30 Year Six Month LIBOR    498,110.74    5.137033  4.753033  0.384000  N/A       359       1       N/A    4.362589      5     
30 Year Six Month LIBOR    285,155.85    6.150000  5.766000  0.384000  N/A       358       2       N/A    5.440000      4     
30 Year Six Month LIBOR  1,061,502.98    4.222756  3.709021  0.513735  N/A       358       2       N/A    3.232714      4     
30 Year Six Month LIBOR     87,866.97    4.000000  2.926000  1.074000  N/A       355       5       N/A    4.000000      1     
30 Year Six Month LIBOR     88,559.16    6.500000  6.116000  0.384000  N/A       358       2       N/A    5.960000      4     
30 Year Six Month LIBOR    398,741.52    6.330000  5.946000  0.384000  N/A       358       2       N/A    6.080000      4     
30 Year Six Month LIBOR  1,020,900.00    5.948195  5.564195  0.384000  N/A       356       4        6     3.000000      2     
- Interest Only                                                                                                               
30 Year Six Month LIBOR    330,000.00    5.375000  4.991000  0.384000  N/A       357       3        6     3.250000      3     
- Interest Only                                                                                                               
30 Year Six Month LIBOR 10,229,127.31    4.897070  4.636073  0.260997  N/A       329      31       120    2.060016      4     
- Interest Only                                                                                                               
30 Year Six Month LIBOR  5,913,192.69    5.438418  5.054418  0.384000  N/A       345      15       120    1.938418      3     
- Interest Only                                                                                                               
30 Year Six Month LIBOR  2,086,588.04    5.134598  4.859289  0.275309  N/A       332      28       120    2.193007      4     
- Interest Only                                                                                                               
30 Year Six Month LIBOR    148,337.12    5.000000  4.741000  0.259000  N/A       328      32       120    2.250000      4     
- Interest Only                                                                                                               
2/28 Six Month LIBOR    23,721,699.51    6.212798  5.825964  0.386834  N/A       358       2       N/A    4.865960     22     
2/28 Six Month LIBOR       259,764.95    6.500000  6.116000  0.384000  N/A       359       1       N/A    4.790000     23     
2/28 Six Month LIBOR     8,974,048.49    6.356147  5.972147  0.384000  N/A       358       2       N/A    4.794628     22     
2/28 Six Month LIBOR     4,822,584.56    6.130302  5.750773  0.379529  N/A       358       2       N/A    4.382888     22     
2/28 Six Month LIBOR       333,152.46    6.211371  5.827371  0.384000  N/A       359       1       N/A    4.507512     23     
2/28 Six Month LIBOR       369,408.07    5.689784  5.305784  0.384000  N/A       358       2       N/A    4.431043     22     
2/28 Six Month LIBOR       415,835.16    6.614944  6.230944  0.384000  N/A       359       1       N/A    5.864944     23     
2/28 Six Month LIBOR     1,059,104.94    6.367979  5.983979  0.384000  N/A       358       2       N/A    4.695463     22     
2/28 Six Month LIBOR       149,586.99    6.450000  6.066000  0.384000  N/A       357       3       N/A    4.910000     21     
2/28 Six Month LIBOR       102,395.17    6.950000  6.566000  0.384000  N/A       359       1       N/A    5.030000     23     
2/28 Six Month LIBOR       674,445.19    6.064464  5.680464  0.384000  N/A       358       2       N/A    5.064464     22     
2/28 Six Month LIBOR       227,363.12    6.375000  5.991000  0.384000  N/A       357       3       N/A    4.000000     21     
2/28 Six Month LIBOR     2,550,375.18    6.221406  5.837406  0.384000  N/A       358       2       N/A    5.042927     22     
2/28 Six Month LIBOR       667,554.84    6.402152  6.018152  0.384000  N/A       358       2       N/A    5.182933     22     
2/28 Six Month LIBOR     2,027,547.40    6.578513  6.194513  0.384000  N/A       358       2       N/A    5.438195     22     
2/28 Six Month LIBOR       137,718.61    5.888000  5.504000  0.384000  N/A       358       2       N/A    5.638000     22     
2/28 Six Month LIBOR       372,016.79    6.302557  5.918557  0.384000  N/A       358       2       N/A    4.939314     22     
2/28 Six Month LIBOR       215,249.81    6.750000  6.366000  0.384000  N/A       356       4       N/A    5.500000     20     
2/28 Six Month LIBOR     3,622,858.51    6.390715  6.006715  0.384000  N/A       358       2       N/A    5.055378     22     
2/28 Six Month LIBOR     2,010,455.51    6.517259  6.133259  0.384000  N/A       357       3       N/A    4.600801     21     
2/28 Six Month LIBOR        83,869.59    7.290000  6.906000  0.384000  N/A       358       2       N/A    6.290000     22     
2/28 Six Month LIBOR       669,986.70    6.076249  5.692249  0.384000  N/A       358       2       N/A    5.322026     22     
2/28 Six Month LIBOR    17,620,159.98    6.132292  5.748292  0.384000  N/A       358       2       N/A    5.363423     22     
2/28 Six Month LIBOR       747,327.26    5.859130  5.475130  0.384000  N/A       358       2       N/A    5.184093     22     
2/28 Six Month LIBOR       374,322.75    5.982348  5.598348  0.384000  N/A       358       2       N/A    5.732348     22     
2/28 Six Month LIBOR        51,913.15    6.920000  6.536000  0.384000  N/A       358       2       N/A    5.920000     22     
2/28 Six Month LIBOR       190,339.68    4.990000  4.606000  0.384000  N/A       358       2       N/A    4.740000     22     
2/28 Six Month LIBOR -  19,549,168.24    6.314698  5.934637  0.380061  N/A       358       2       24     4.349499     22     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -   3,660,404.00    6.536406  6.169371  0.367035  N/A       358       2       24     4.57731      22     


                                              SUBSE-                                                                          
                                   INITIAL    QUENT                                                                           
                         RESET     PERIODIC   PERIODIC   MAXIMUM    MINIMUM                                                   
                         FREQUENCY RATE CAP   RATE CAP   MORTGAGE   MORTGAGE                                                  
      LOAN PROGRAM       (MONTHS)     (%)        (%)      RATE (%)   RATE (%)                                                 
      ------------       --------     ---        ---      --------   --------                                                 
                                                                                                                              
30 Year One Month LIBOR    1       1.000000   1.000000   11.500000   2.250000                                                 
30 Year One Month LIBOR    1       1.000000   1.000000   11.250000   2.250000                                                 
- Interest Only                                                                                                               
30 Year Six Month LIBOR    6       1.000000   1.000000    9.715977   3.068155                                                 
30 Year Six Month LIBOR    6       1.000000   1.000000   12.137033   5.017515                                                 
30 Year Six Month LIBOR    6       1.000000   1.000000   13.150000   6.150000                                                 
30 Year Six Month LIBOR    6       1.000000   1.000000   10.373102   3.313901                                                 
30 Year Six Month LIBOR    6       1.000000   1.000000    9.000000   4.000000                                                 
30 Year Six Month LIBOR    6       1.000000   1.000000   13.500000   6.500000                                                 
30 Year Six Month LIBOR    6       2.000000   1.000000   12.330000   6.330000                                                 
30 Year Six Month LIBOR    6       1.000000   1.000000   11.948195   3.000000                                                 
- Interest Only                                                                                                               
30 Year Six Month LIBOR    6       1.000000   1.000000   11.375000   5.380000                                                 
- Interest Only                                                                                                               
30 Year Six Month LIBOR    6       1.000000   1.000000   11.020115   2.060016                                                 
- Interest Only                                                                                                               
30 Year Six Month LIBOR    6     N/A        N/A          12.000000   1.938418                                                 
- Interest Only                                                                                                               
30 Year Six Month LIBOR    6       1.000000   1.000000   11.148493   2.682292                                                 
- Interest Only                                                                                                               
30 Year Six Month LIBOR    6       1.000000   1.000000   10.750000   2.250000                                                 
- Interest Only                                                                                                               
2/28 Six Month LIBOR       6       2.946133   1.000000   12.674571   5.862264                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   13.500000   6.500000                                                 
2/28 Six Month LIBOR       6       2.972383   1.000000   12.863876   5.561823                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   13.094535   5.991679                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   13.211371   6.211371                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   11.971025   5.689784                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   12.614944   5.864944                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   13.367979   6.100326                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   13.450000   4.913000                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   13.950000   6.950000                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   12.064464   6.064464                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   12.375000   4.000000                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   12.682969   6.059737                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   12.761033   6.402152                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   13.043374   6.463641                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   11.888000   5.888000                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   12.701726   5.540545                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   12.750000   5.500000                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   12.674754   6.057435                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   12.805616   5.909438                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   13.290000   7.290000                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   12.076249   6.076249                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   12.138797   6.132292                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   11.859130   5.859130                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   11.982348   5.982348                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   12.920000   6.920000                                                 
2/28 Six Month LIBOR       6       3.000000   1.000000   10.990000   4.990000                                                 
2/28 Six Month LIBOR -     6       2.945991   1.000000   13.160112   5.674174                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       2.760682   1.000000   13.333341   6.114969                                                 

S-87

424B5
88th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 88th
                                                        [Enlarge/Download Table]

                                                   CURRENT            SUBSE-                      ORIGINAL                    
                                                   ADJUSTED  INITIAL  QUENT    REMAINING          INTEREST          MONTHS    
                                         CURRENT   NET       EXPENSE  EXPENSE  TERM TO   LOAN     ONLY      GROSS   TO NEXT   
                           PRINCIPAL     MORTGAGE  MORTGAGE  FEE      FEE RATE MATURITY  AGE      PERIOD    MARGIN  ADJUSTMENT
      LOAN PROGRAM        BALANCE ($)    RATE (%)  RATE (%)  RATE (%)    (%)   (MONTHS)  (MONTHS) (MONTHS)    (%)     DATE    
      ------------        -----------    --------  --------  --------    ---   --------  -----------------    ---     ----    
                                                                                                                              
Interest Only                                                                                                                 
2/28 Six Month LIBOR -   3,938,192.00    6.451550  6.067550  0.384000  N/A       359       1       24     4.724616     23     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -  22,627,722.26    6.179748  5.797940  0.381808  N/A       358       2       24     4.229516     22     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -  35,747,719.81    6.175333  5.797247  0.378086  N/A       358       2       24     4.391329     22     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -   4,192,337.12    5.923415  5.539415  0.384000  N/A       357       3       24     4.132713     21     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -   5,247,416.94    5.974013  5.611567  0.362447  N/A       358       2       24     4.174987     22     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     400,000.00    6.625000  6.366000  0.259000  N/A       357       3       24     2.875000     21     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -   2,595,555.77    6.417034  6.033034  0.384000  N/A       359       1       24     4.471457     23     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -   1,086,776.89    6.186753  5.802753  0.384000  N/A       358       2       24     4.470736     22     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     710,799.83    7.122398  6.738398  0.384000  N/A       357       3       24     4.049803     21     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -   1,268,798.81    6.740306  6.356306  0.384000  N/A       356       4       24     4.210404     20     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -   1,128,800.00    6.747865  6.363865  0.384000  N/A       358       2       24     4.858017     22     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     861,916.87    5.838366  5.454366  0.384000  N/A       358       2       24     4.170180     22     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     356,800.00    6.808744  6.424744  0.384000  N/A       359       1       24     5.021973     23     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     239,200.00    6.665886  6.281886  0.384000  N/A       358       2       24     4.180803     22     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -   1,641,600.00    6.792785  6.408785  0.384000  N/A       357       3       24     4.190589     21     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -   1,527,550.00    7.473311  7.089311  0.384000  N/A       357       3       24     4.530716     21     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     705,144.00    6.074753  5.690753  0.384000  N/A       357       3       24     4.562213     21     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     305,200.00    6.037497  5.653497  0.384000  N/A       358       2       24     5.037497     22     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     218,400.00    5.500000  5.116000  0.384000  N/A       358       2       36     4.500000     22     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -  14,526,993.48    6.614613  6.230613  0.384000  N/A       357       3       60     5.686911     21     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -   1,903,139.52    6.781848  6.397848  0.384000  N/A       358       2       60     5.909860     22     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -  25,707,490.81    6.107396  5.723396  0.384000  N/A       358       2       60     5.189455     22     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     420,000.00    6.250000  5.866000  0.384000  N/A       358       2       60     4.540000     22     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -   1,152,500.00    5.605180  5.221180  0.384000  N/A       358       2       60     4.605180     22     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     139,200.00    5.640000  5.256000  0.384000  N/A       357       3       60     4.640000     21     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     668,250.00    6.463954  6.079954  0.384000  N/A       359       1       60     5.713954     23     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -   2,569,605.88    6.438577  6.054577  0.384000  N/A       358       2       60     5.688577     22     
Interest Only                                                                                                                 
2/28 Six Month LIBOR -                                                                                                        
Interest Only              122,960.00    5.640000  5.256000  0.384000  N/A       358       2       60     4.640000     22     
2/28 Six Month LIBOR -                                                                                                        


                                              SUBSE-                                                                          
                                   INITIAL    QUENT                                                                           
                         RESET     PERIODIC   PERIODIC   MAXIMUM    MINIMUM                                                   
                         FREQUENCY RATE CAP   RATE CAP   MORTGAGE   MORTGAGE                                                  
      LOAN PROGRAM       (MONTHS)     (%)        (%)      RATE (%)   RATE (%)                                                 
      ------------       --------     ---        ---      --------   --------                                                 
                                                                                                                              
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   13.451550   6.451550                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       2.965776   1.000000   12.990457   5.284659                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   13.115465   6.129007                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   12.708071   4.665503                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   12.801585   5.908423                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   12.625000   6.630000                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       2.855881   1.000000   13.355314   5.946445                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   13.186753   5.960100                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   13.122398   4.049803                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   12.740306   4.210404                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   13.624194   6.055502                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   12.838366   5.043697                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   13.808744   6.808744                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   13.665886   6.151839                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       2.884990   1.000000   13.108575   5.340117                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   13.562342   4.713675                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   12.856925   6.074753                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   12.037497   6.037497                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   11.500000   5.500000                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   12.618660   6.548761                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   12.781848   6.397811                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   12.107396   5.871302                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   13.250000   6.250000                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   11.605180   5.605180                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   11.640000   5.640000                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   12.463954   5.713954                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -     6       3.000000   1.000000   12.438577   5.688577                                                 
Interest Only                                                                                                                 
2/28 Six Month LIBOR -                                                                                                        
Interest Only              6       3.000000   1.000000   11.640000   5.640000                                                 
2/28 Six Month LIBOR -                                                                                                        


S-88

424B5
89th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 89th
                                                        [Enlarge/Download Table]

                                                   CURRENT            SUBSE-                      ORIGINAL                    
                                                   ADJUSTED  INITIAL  QUENT    REMAINING          INTEREST          MONTHS    
                                         CURRENT   NET       EXPENSE  EXPENSE  TERM TO   LOAN     ONLY      GROSS   TO NEXT   
                           PRINCIPAL     MORTGAGE  MORTGAGE  FEE      FEE RATE MATURITY  AGE      PERIOD    MARGIN  ADJUSTMENT
      LOAN PROGRAM        BALANCE ($)    RATE (%)  RATE (%)  RATE (%)    (%)   (MONTHS)  (MONTHS) (MONTHS)    (%)     DATE    
      ------------        -----------    --------  --------  --------    ---   --------  -----------------    ---     ----    
                                                                                                                              
Interest Only            3,624,879.15    6.440154  6.056154  0.384000  N/A       356       4       60     5.440154     20     
2/28 Six Month LIBOR -                                                                                                        
Interest Only              164,000.00    7.290000  6.906000  0.384000  N/A       356       4       60     6.290000     20     
2/28 Six Month LIBOR -                                                                                                        
Interest Only            7,969,846.48    6.327475  5.943475  0.384000  N/A       357       3       60     5.327475     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only            2,625,776.33    6.325227  5.941227  0.384000  N/A       357       3       60     5.351505     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only              167,000.00    5.790000  5.406000  0.384000  N/A       358       2       60     4.790000     22     
2/28 Six Month LIBOR -                                                                                                        
Interest Only            1,347,339.80    6.074196  5.690196  0.384000  N/A       357       3       60     5.148787     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only              161,200.00    6.340000  5.956000  0.384000  N/A       358       2       60     5.340000     22     
2/28 Six Month LIBOR -                                                                                                        
Interest Only              428,800.00    6.134403  5.750403  0.384000  N/A       358       2       60     5.134403     22     
2/28 Six Month LIBOR -                                                                                                        
Interest Only           20,662,378.25    6.020480  5.636480  0.384000  N/A       357       3       60     4.995821     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only            2,839,309.73    6.185358  5.801358  0.384000  N/A       358       2       60     5.187408     22     
2/28 Six Month LIBOR -                                                                                                        
Interest Only              507,920.00    6.290047  5.906047  0.384000  N/A       358       2       60     5.290047     22     
2/28 Six Month LIBOR -                                                                                                        
Interest Only            2,182,346.28    6.478190  6.094190  0.384000  N/A       357       3       60     5.912678     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only           39,573,909.09    6.188473  5.804473  0.384000  N/A       357       3       60     5.331141     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only              445,920.00    6.138698  5.754698  0.384000  N/A       357       3       60     5.138698     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only              125,999.95    5.99      5.606     0.384000  N/A       358       2       60     5.740000     22     
2/28 Six Month LIBOR -                                                                                                        
Interest Only               84,400.00    5.84      5.456     0.384000  N/A       357       3       60     4.840000     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only              405,754.23    6.396931  6.012931  0.384000  N/A       356       4       60     5.534643     20     
2/28 Six Month LIBOR -                                                                                                        
Interest Only           17,765,138.06    6.136453  5.753786  0.382667  N/A       357       3       120    3.053010     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only              374,027.00    7.182315  6.821175  0.361140  N/A       357       3       120    4.728593     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only            2,745,725.67    7.557589  7.185061  0.372528  N/A       357       3       120    4.339387     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only            1,714,752.04    6.432742  6.106411  0.326331  N/A       357       3       120    3.692636     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only            1,028,866.77    5.709227  5.350497  0.358730  N/A       357       3       120    2.550540     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only               73,500.00    7.625     7.241     0.384000  N/A       357       3       120    4.500000     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only              135,717.28    7         6.616     0.384000  N/A       357       3       120    4.500000     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only               88,800.00    6.5       6.116     0.384000  N/A       357       3       120    4.500000     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only              134,350.00    6.25      5.866     0.384000  N/A       357       3       120    2.500000     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only              408,000.00    7.455882  7.071882  0.384000  N/A       357       3       120    4.343137     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only            6,865,613.15    6.750722  6.366722  0.384000  N/A       357       3       120    4.170143     21     
2/28 Six Month LIBOR -                                                                                                        


                                               SUBSE-                                                                         
                                    INITIAL    QUENT                                                                          
                          RESET     PERIODIC   PERIODIC   MAXIMUM    MINIMUM                                                  
                          FREQUENCY RATE CAP   RATE CAP   MORTGAGE   MORTGAGE                                                 
      LOAN PROGRAM        (MONTHS)     (%)        (%)      RATE (%)   RATE (%)                                                
      ------------        --------     ---        ---      --------   --------                                                
                                                                                                                              
Interest Only               6       3.000000   1.000000   12.440154   6.440154                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   13.290000   7.290000                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   12.327475   6.327475                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   12.325227   6.325227                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   11.790000   5.790000                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   12.074196   6.074196                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   12.340000   6.340000                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   12.134403   6.134403                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   12.020480   6.011333                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   12.185358   6.185358                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   12.290047   6.290047                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   12.478190   6.478190                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   12.188473   6.188473                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   12.138698   6.138698                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   11.990000   5.990000                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   11.840000   5.840000                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   12.396931   6.396931                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       2.996454   1.003546   12.136453   3.085014                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   13.182315   5.094342                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   13.557589   4.626196                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   12.432742   5.130870                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   11.709227   3.182293                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   13.625000   4.500000                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   13.000000   4.500000                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   12.500000   4.500000                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   12.250000   2.500000                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   13.455882   4.343137                                                
2/28 Six Month LIBOR -                                                                                                        
Interest Only               6       3.000000   1.000000   12.750722   4.170143                                                
2/28 Six Month LIBOR -                                                                                                        


S-89

424B5
90th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 90th
                                                        [Enlarge/Download Table]

                                                   CURRENT            SUBSE-                      ORIGINAL                    
                                                   ADJUSTED  INITIAL  QUENT    REMAINING          INTEREST          MONTHS    
                                         CURRENT   NET       EXPENSE  EXPENSE  TERM TO   LOAN     ONLY      GROSS   TO NEXT   
                           PRINCIPAL     MORTGAGE  MORTGAGE  FEE      FEE RATE MATURITY  AGE      PERIOD    MARGIN  ADJUSTMENT
      LOAN PROGRAM        BALANCE ($)    RATE (%)  RATE (%)  RATE (%)    (%)   (MONTHS)  (MONTHS) (MONTHS)    (%)     DATE    
      ------------        -----------    --------  --------  --------    ---   --------  -----------------    ---     ----    
                                                                                                                              
Interest Only              228,150.46    7.333129  6.949129  0.384000  N/A       357       3       120    4.500000     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only              240,000.00    6.375000  5.991000  0.384000  N/A       357       3       120    4.500000     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only              482,300.00    7.149725  6.765725  0.384000  N/A       357       3       120    4.500000     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only            1,021,600.00    6.719558  6.335558  0.384000  N/A       357       3       120    4.500000     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only            4,937,687.35    6.796775  6.412775  0.384000  N/A       357       3       120    4.500000     21     
2/28 Six Month LIBOR -                                                                                                        
Interest Only              625,199.98    5.750000  5.366000  0.384000  N/A       357       3       120    2.500000     21     
3/27 Six Month LIBOR     6,815,768.27    5.991360  5.609434  0.381926  N/A       353       7       N/A    4.802668     29     
3/27 Six Month LIBOR        79,926.97    6.450000  6.066000  0.384000  N/A       359       1       N/A    2.990000     35     
3/27 Six Month LIBOR     3,073,627.60    5.784760  5.400760  0.384000  N/A       354       6       N/A    5.245119     30     
3/27 Six Month LIBOR       765,193.76    6.168316  5.784316  0.384000  N/A       358       2       N/A    4.495623     34     
3/27 Six Month LIBOR       304,512.85    6.287271  5.903271  0.384000  N/A       359       1       N/A    5.537271     35     
3/27 Six Month LIBOR       667,978.82    5.620988  5.236988  0.384000  N/A       357       3       N/A    4.199266     33     
3/27 Six Month LIBOR       668,154.79    6.288082  5.904082  0.384000  N/A       356       4       N/A    5.502969     32     
3/27 Six Month LIBOR     1,665,026.54    6.315483  5.931483  0.384000  N/A       357       3       N/A    5.646912     33     
3/27 Six Month LIBOR        84,537.43    6.875000  6.616000  0.259000  N/A       354       6       N/A    2.250000     30     
3/27 Six Month LIBOR       111,800.47    6.590000  6.206000  0.384000  N/A       358       2       N/A    6.340000     34     
3/27 Six Month LIBOR       485,618.02    6.500000  6.116000  0.384000  N/A       358       2       N/A    4.790000     34     
3/27 Six Month LIBOR       487,151.24    5.951207  5.567207  0.384000  N/A       356       4       N/A    5.122013     32     
3/27 Six Month LIBOR       132,508.61    5.500000  5.116000  0.384000  N/A       358       2       N/A    4.500000     34     
3/27 Six Month LIBOR       415,135.77    6.453223  6.069223  0.384000  N/A       352       8       N/A    5.998550     28     
3/27 Six Month LIBOR     3,842,611.56    6.118143  5.734143  0.384000  N/A       354       6       N/A    5.668859     30     
3/27 Six Month LIBOR -                                                                                                        
Interest Only              179,997.50    6.650000  6.266000  0.384000  N/A       358       2       24     4.940000     34     
3/27 Six Month LIBOR -                                                                                                        
Interest Only            4,915,293.90    6.162538  5.784759  0.377779  N/A       358       2       36     4.258499     34     
3/27 Six Month LIBOR -                                                                                                        
Interest Only             203,200.00     6.250000  5.866000  0.384000  N/A       358       2       36     4.540000     34     
3/27 Six Month LIBOR -                                                                                                        
Interest Only            2,504,737.17    6.114941  5.730941  0.384000  N/A       357       3       36     4.073858     33     
3/27 Six Month LIBOR -                                                                                                        
Interest Only            2,756,552.00    5.784189  5.400189  0.384000  N/A       359       1       36     3.990386     35     
3/27 Six Month LIBOR -                                                                                                        
Interest Only              776,679.00    6.647654  6.263654  0.384000  N/A       359       1       36     4.851773     35     
3/27 Six Month LIBOR -                                                                                                        
Interest Only              216,983.89    6.625000  6.241000  0.384000  N/A       350      10       36     3.500000     26     
3/27 Six Month LIBOR -                                                                                                        
Interest Only               87,960.00    6.500000  6.116000  0.384000  N/A       358       2       36     4.960000     34     
3/27 Six Month LIBOR -                                                                                                        
Interest Only              184,120.29    6.025407  5.641407  0.384000  N/A       358       2       36     4.485407     34     
3/27 Six Month LIBOR -                                                                                                        
Interest Only              119,800.00    5.550000  5.166000  0.384000  N/A       358       2       36     3.840000     34     
3/27 Six Month LIBOR -                                                                                                        
Interest Only            3,795,541.81    6.171200  5.787200  0.384000  N/A       357       3       60     5.250219     33     
3/27 Six Month LIBOR -                                                                                                        
Interest Only              876,307.52    4.977406  4.593406  0.384000  N/A       349      11       60     4.564712     25     
3/27 Six Month LIBOR -                                                                                                        
Interest Only            1,572,578.49    5.965134  5.581134  0.384000  N/A       354       6       60     5.162835     30     
3/27 Six Month LIBOR -                                                                                                        
Interest Only              127,300.00    6.300000  5.916000  0.384000  N/A       359       1       60     5.550000     35     


                                             SUBSE-                                                                           
                                  INITIAL    QUENT                                                                            
                        RESET     PERIODIC   PERIODIC   MAXIMUM    MINIMUM                                                    
                        FREQUENCY RATE CAP   RATE CAP   MORTGAGE   MORTGAGE                                                   
      LOAN PROGRAM      (MONTHS)     (%)        (%)      RATE (%)   RATE (%)                                                  
      ------------      --------     ---        ---      --------   --------                                                  
                                                                                                                              
Interest Only             6       3.000000   1.000000   13.333129   4.500000                                                  
2/28 Six Month LIBOR -                                                                                                        
Interest Only             6       3.000000   1.000000   12.375000   4.500000                                                  
2/28 Six Month LIBOR -                                                                                                        
Interest Only             6       3.000000   1.000000   13.149725   4.500000                                                  
2/28 Six Month LIBOR -                                                                                                        
Interest Only             6       3.000000   1.000000   12.719558   4.500000                                                  
2/28 Six Month LIBOR -                                                                                                        
Interest Only             6       3.000000   1.000000   12.796775   4.500000                                                  
2/28 Six Month LIBOR -                                                                                                        
Interest Only             6       3.000000   1.000000   11.750000   2.500000                                                  
3/27 Six Month LIBOR      6       2.867821   1.000000   12.478476   5.638447                                                  
3/27 Six Month LIBOR      6       3.000000   1.000000   13.450000   6.450000                                                  
3/27 Six Month LIBOR      6       2.806761   1.000000   11.975355   5.527798                                                  
3/27 Six Month LIBOR      6       3.000000   1.000000   13.168316   5.826392                                                  
3/27 Six Month LIBOR      6       3.000000   1.000000   12.287271   5.537271                                                  
3/27 Six Month LIBOR      6       3.000000   1.000000   12.425913   5.226345                                                  
3/27 Six Month LIBOR      6       3.000000   1.000000   12.288082   6.288082                                                  
3/27 Six Month LIBOR      6       3.000000   1.000000   12.456907   6.201327                                                  
3/27 Six Month LIBOR      6       3.000000   2.000000   12.875000   6.875000                                                  
3/27 Six Month LIBOR      6       3.000000   1.000000   12.590000   6.590000                                                  
3/27 Six Month LIBOR      6       3.000000   1.000000   13.500000   6.500000                                                  
3/27 Six Month LIBOR      6       3.000000   1.000000   12.179047   5.453997                                                  
3/27 Six Month LIBOR      6       3.000000   1.000000   11.500000   5.500000                                                  
3/27 Six Month LIBOR      6       3.000000   1.000000   12.453223   6.453223                                                  
3/27 Six Month LIBOR      6       3.000000   1.000000   12.144853   6.118143                                                  
3/27 Six Month LIBOR -                                                                                                        
Interest Only             6       3.000000   1.000000   13.650000   6.650000                                                  
3/27 Six Month LIBOR -                                                                                                        
Interest Only             6       3.000000   1.000000   12.984960   5.526223                                                  
3/27 Six Month LIBOR -                                                                                                        
Interest Only             6       3.000000   1.000000   13.250000   6.250000                                                  
3/27 Six Month LIBOR -                                                                                                        
Interest Only             6       3.000000   1.000000   12.735160   4.663052                                                  
3/27 Six Month LIBOR -                                                                                                        
Interest Only             6       3.000000   1.000000   12.784189   5.775076                                                  
3/27 Six Month LIBOR -                                                                                                        
Interest Only             6       3.000000   1.000000   13.647654   6.647654                                                  
3/27 Six Month LIBOR -                                                                                                        
Interest Only             6       3.000000   1.000000   12.625000   3.500000                                                  
3/27 Six Month LIBOR -                                                                                                        
Interest Only             6       3.000000   1.000000   13.500000   4.963000                                                  
3/27 Six Month LIBOR -                                                                                                        
Interest Only             6       3.000000   1.000000   13.025407   5.209657                                                  
3/27 Six Month LIBOR -                                                                                                        
Interest Only             6       3.000000   1.000000   12.550000   3.840000                                                  
3/27 Six Month LIBOR -                                                                                                        
Interest Only             6       3.000000   1.000000   12.247078   6.060297                                                  
3/27 Six Month LIBOR -                                                                                                        
Interest Only             6       3.000000   1.000000   10.977406   4.652017                                                  
3/27 Six Month LIBOR -                                                                                                        
Interest Only             6       3.000000   1.000000   11.965134   5.965134                                                  
3/27 Six Month LIBOR -                                                                                                        
Interest Only             6       3.000000   1.000000   12.300000   5.550000                                                  

S-90

424B5
91st Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 91st
                                                        [Enlarge/Download Table]

                                                   CURRENT            SUBSE-                      ORIGINAL                    
                                                   ADJUSTED  INITIAL  QUENT    REMAINING          INTEREST          MONTHS    
                                         CURRENT   NET       EXPENSE  EXPENSE  TERM TO   LOAN     ONLY      GROSS   TO NEXT   
                           PRINCIPAL     MORTGAGE  MORTGAGE  FEE      FEE RATE MATURITY  AGE      PERIOD    MARGIN  ADJUSTMENT
      LOAN PROGRAM        BALANCE ($)    RATE (%)  RATE (%)  RATE (%)    (%)   (MONTHS)  (MONTHS) (MONTHS)    (%)     DATE    
      ------------        -----------    --------  --------  --------    ---   --------  -----------------    ---     ----    
                                                                                                                              
3/27 Six Month LIBOR -                                                                                                        
Interest Only            2,081,100.00    5.955208  5.571208  0.384000  N/A       359       1       60     5.205208     35     
3/27 Six Month LIBOR -                                                                                                        
Interest Only              558,673.56    5.859035  5.475035  0.384000  N/A       356       4       60     4.859035     32     
3/27 Six Month LIBOR -                                                                                                        
Interest Only            1,409,504.14    6.170603  5.786603  0.384000  N/A       357       3       60     5.170603     33     
3/27 Six Month LIBOR -                                                                                                        
Interest Only            1,499,755.00    6.213186  5.829186  0.384000  N/A       357       3       60     5.341588     33     
3/27 Six Month LIBOR -                                                                                                        
Interest Only              181,600.00    5.990000  5.606000  0.384000  N/A       357       3       60     4.990000     33     
3/27 Six Month LIBOR -                                                                                                        
Interest Only              877,575.66    5.776294  5.392294  0.384000  N/A       351       9       60     5.291852     27     
3/27 Six Month LIBOR -                                                                                                        
Interest Only              469,272.18    6.072118  5.688118  0.384000  N/A       357       3       60     5.072118     33     
3/27 Six Month LIBOR -                                                                                                        
Interest Only              267,045.00    6.490000  6.106000  0.384000  N/A       358       2       60     6.240000     34     
3/27 Six Month LIBOR -                                                                                                        
Interest Only              428,319.77    6.114991  5.730991  0.384000  N/A       354       6       60     5.424572     30     
3/27 Six Month LIBOR -                                                                                                        
Interest Only           11,316,681.63    6.111878  5.727878  0.384000  N/A       357       3       60     5.591786     33     
3/27 Six Month LIBOR -                                                                                                        
Interest Only              335,198.29    5.125000  4.741000  0.384000  N/A       358       2       60     4.875000     34     
3/27 Six Month LIBOR -                                                                                                        
Interest Only              999,999.00    5.750000  5.366000  0.384000  N/A       347      13       120    2.750000     23     
5/25 Six Month LIBOR       674,209.98    7.548391  6.934685  0.613706  N/A       355       5       N/A    5.202130     55     
5/25 Six Month LIBOR       175,063.44    8.125000  6.651000  1.474000  N/A       357       3       N/A    2.875000     57     
5/25 Six Month LIBOR       301,288.08    5.800000  5.416000  0.384000  N/A       359       1       N/A    4.090000     59     
5/25 Six Month LIBOR       419,400.00    6.700191  6.316191  0.384000  N/A       358       2       N/A    5.258870     58     
5/25 Six Month LIBOR       456,595.80    6.676290  6.292290  0.384000  N/A       359       1       N/A    4.377567     59     
5/25 Six Month LIBOR       391,164.61    7.750000  7.366000  0.384000  N/A       357       3       N/A    7.625000     57     
5/25 Six Month LIBOR       127,768.98    5.850000  5.466000  0.384000  N/A       359       1       N/A    5.100000     59     
5/25 Six Month LIBOR       154,522.06    6.550000  6.166000  0.384000  N/A       358       2       N/A    5.012500     58     
5/25 Six Month LIBOR       119,540.99    6.250000  5.866000  0.384000  N/A       356       4       N/A    3.500000     56     
5/25 Six Month LIBOR -                                                                                                        
Interest Only              991,447.00    6.275859  5.891859  0.384000  N/A       358       2       60     4.517849     58     
5/25 Six Month LIBOR -                                                                                                        
Interest Only              320,000.00    6.500000  6.116000  0.384000  N/A       360       0       60     4.576000     60     
5/25 Six Month LIBOR -                                                                                                        
Interest Only            2,581,898.00    5.837361  5.453361  0.384000  N/A       358       2       60     3.567549     58     
5/25 Six Month LIBOR -                                                                                                        
Interest Only              955,899.28    6.107726  5.723726  0.384000  N/A       358       2       60     4.007229     58     
5/25 Six Month LIBOR -                                                                                                        
Interest Only              130,000.00    6.600000  6.216000  0.384000  N/A       358       2       60     4.890000     58     
5/25 Six Month LIBOR -                                                                                                        
Interest Only              186,400.00    7.000000  6.616000  0.384000  N/A       357       3       60     4.000000     57     
5/25 Six Month LIBOR -                                                                                                        
Interest Only              116,800.00    6.550000  6.166000  0.384000  N/A       360       0       60     4.626000     60     
5/25 Six Month LIBOR -                                                                                                        
Interest Only               89,800.00    7.750000  7.366000  0.384000  N/A       354       6       120    2.750000     54     
5/25 Six Month LIBOR -                                                                                                        
Interest Only              132,999.60    7.500000  7.116000  0.384000  N/A       357       3       120    3.000000     57     
30 Year Twelve Month                                                0  N/A                         N/A                        
LIBOR                      936,695.52    5.342735  4.958735  0.38400             355       5              2.250000      7     
30Y Twelve Month LIBOR                                                                                                        
- Interest Only          3,148,690.01    5.165497  4.781497  0.384000  N/A       356       4       12     2.250000      8     
30Y Twelve Month LIBOR                                                                                                        
- Interest Only            860,000.00    4.750000  4.366000  0.384000  N/A       351       9       120    2.500000      3     


                                              SUBSE-                                                                          
                                   INITIAL    QUENT                                                                           
                         RESET     PERIODIC   PERIODIC   MAXIMUM    MINIMUM                                                   
                         FREQUENCY RATE CAP   RATE CAP   MORTGAGE   MORTGAGE                                                  
      LOAN PROGRAM       (MONTHS)     (%)        (%)      RATE (%)   RATE (%)                                                 
      ------------       --------     ---        ---      --------   --------                                                 
                                                                                                                              
3/27 Six Month LIBOR -                                                                                                        
Interest Only              6       3.000000   1.000000   11.955208   5.205208                                                 
3/27 Six Month LIBOR -                                                                                                        
Interest Only              6       3.000000   1.000000   11.859035   5.859035                                                 
3/27 Six Month LIBOR -                                                                                                        
Interest Only              6       3.000000   1.000000   12.170603   6.170603                                                 
3/27 Six Month LIBOR -                                                                                                        
Interest Only              6       3.000000   1.000000   12.213186   6.213186                                                 
3/27 Six Month LIBOR -                                                                                                        
Interest Only              6       3.000000   1.000000   11.990000   5.990000                                                 
3/27 Six Month LIBOR -                                                                                                        
Interest Only              6       3.000000   1.000000   11.776294   5.776294                                                 
3/27 Six Month LIBOR -                                                                                                        
Interest Only              6       3.000000   1.000000   12.072118   6.072118                                                 
3/27 Six Month LIBOR -                                                                                                        
Interest Only              6       3.000000   1.000000   12.490000   6.490000                                                 
3/27 Six Month LIBOR -                                                                                                        
Interest Only              6       3.000000   1.000000   12.114991   6.114991                                                 
3/27 Six Month LIBOR -                                                                                                        
Interest Only              6       3.000000   1.000000   12.111878   6.111878                                                 
3/27 Six Month LIBOR -                                                                                                        
Interest Only              6       3.000000   1.000000   11.125000   5.125000                                                 
3/27 Six Month LIBOR -                                                                                                        
Interest Only              6       6.000000   1.000000   11.750000   2.750000                                                 
5/25 Six Month LIBOR       6       5.586217   2.526122   14.212441   6.038833                                                 
5/25 Six Month LIBOR       6       6.000000   2.000000   14.125000   2.875000                                                 
5/25 Six Month LIBOR       6       3.000000   1.000000   12.800000   5.800000                                                 
5/25 Six Month LIBOR       6       3.000000   1.119041   13.224395   6.343344                                                 
5/25 Six Month LIBOR       6       3.000000   1.000000   13.676290   6.676290                                                 
5/25 Six Month LIBOR       6       3.000000   1.000000   13.750000   7.625000                                                 
5/25 Six Month LIBOR       6       3.000000   1.000000   11.850000   5.100000                                                 
5/25 Six Month LIBOR       6       3.000000   1.000000   13.550000   6.550000                                                 
5/25 Six Month LIBOR       6       3.000000   1.000000   12.250000   3.500000                                                 
5/25 Six Month LIBOR -                                                                                                        
Interest Only              6       3.000000   1.000000   12.854253   5.682787                                                 
5/25 Six Month LIBOR -                                                                                                        
Interest Only              6       3.000000   1.000000   13.500000   6.500000                                                 
5/25 Six Month LIBOR -                                                                                                        
Interest Only              6       3.000000   1.000000   12.273939   4.563759                                                 
5/25 Six Month LIBOR -                                                                                                        
Interest Only              6       3.000000   1.000000   13.107726   6.107726                                                 
5/25 Six Month LIBOR -                                                                                                        
Interest Only              6       3.000000   1.000000   13.600000   4.890000                                                 
5/25 Six Month LIBOR -                                                                                                        
Interest Only              6       5.000000   1.000000   12.000000   4.000000                                                 
5/25 Six Month LIBOR -                                                                                                        
Interest Only              6       3.000000   1.000000   13.550000   6.550000                                                 
5/25 Six Month LIBOR -                                                                                                        
Interest Only              6       5.000000   1.000000   12.750000   2.750000                                                 
5/25 Six Month LIBOR -                                                                                                        
Interest Only              6       5.000000   1.000000   12.500000   3.000000                                                 
30 Year Twelve Month                                                                                                          
LIBOR                      12      2.000000   2.000000   11.342735   2.250000                                                 
30Y Twelve Month LIBOR                                                                                                        
- Interest Only            12      2.000000   2.000000   11.165497   2.250000                                                 
30Y Twelve Month LIBOR                                                                                                        
- Interest Only            12      2.000000   2.000000   10.750000   2.500000                                                 

S-91

424B5
92nd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 92nd
                                                        [Enlarge/Download Table]

                                                  CURRENT            SUBSE-                      ORIGINAL                    
                                                  ADJUSTED  INITIAL  QUENT    REMAINING          INTEREST          MONTHS    
                                        CURRENT   NET       EXPENSE  EXPENSE  TERM TO   LOAN     ONLY      GROSS   TO NEXT   
                          PRINCIPAL     MORTGAGE  MORTGAGE  FEE      FEE RATE MATURITY  AGE      PERIOD    MARGIN  ADJUSTMENT
      LOAN PROGRAM       BALANCE ($)    RATE (%)  RATE (%)  RATE (%)    (%)   (MONTHS)  (MONTHS) (MONTHS)    (%)     DATE    
      ------------       -----------    --------  --------  --------    ---   --------  -----------------    ---     ----    
                                                                                                                             
3/1 Twelve Month LIBOR  4,538,912.23    5.650575  5.195979  0.454597  N/A       322      38       N/A    2.353756      8     
3/1 Twelve Month LIBOR    146,470.43    7.250000  6.106000  1.144000  N/A       358       2       N/A    3.250000     34     
3/1 Twelve Month LIBOR    314,419.25    6.375000  5.991000  0.384000  N/A       357       3       N/A    2.750000     33     
3/1 Twelve Month LIBOR                                                                                                       
- Interest Only         2,953,547.05    6.741224  6.029807  0.711417  N/A       356       4       36     2.931192     32     
3/1 Twelve Month LIBOR                                                                                                       
- Interest Only           822,500.00    6.360334  6.064556  0.295778  N/A       358       2       36     2.250000     34     
3/1 Twelve Month LIBOR                                                                                                       
- Interest Only           400,000.00    7.250000  5.866000  1.384000  N/A       358       2       36     3.250000     34     
3/1 Twelve Month LIBOR                                                                                                       
- Interest Only           174,527.43    6.500000  6.116000  0.384000  N/A       357       3       36     2.250000     33     
3/1 Twelve Month LIBOR                                                                                                       
- Interest Only            79,200.00    5.875000  5.491000  0.384000  N/A       355       5       36     2.250000     31     
3/1 Twelve Month LIBOR                                                                                                       
- Interest Only           523,125.00    6.250000  5.991000  0.259000  N/A       359       1       120    2.500000     35     
3/1 Twelve Month LIBOR                                                                                                       
- Interest Only           295,953.18    6.250000  5.991000  0.259000  N/A       358       2       120    2.250000     34     
5/1 Twelve-Month LIBOR  2,170,763.52    5.902834  5.528640  0.374194 0.480736   332      28       N/A    2.357457     32     
5/1 Twelve-Month LIBOR    150,586.40    7.875000  7.491000  0.384000  N/A       357       3       N/A    3.250000     57     
5/1 Twelve-Month LIBOR                                                                                                       
- Interest Only         3,754,526.19    7.915431  7.185001  0.730430 0.795344   359       1       60     2.769218     59     
7/1 Twelve-Month LIBOR  1,068,120.37    5.691803  5.413075  0.278728  N/A       321      39       N/A    2.250000     45     
7/1 Twelve Month LIBOR    227,540.47    5.750000  5.366000  0.384000  N/A       355       5       N/A    2.250000     79     
7/1 Twelve-Month LIBOR                                                                                                       
- Interest Only         1,955,518.13    5.942792  5.664424  0.278368 0.384000   358       2       84     2.250000     82     
30 Year CMT One Year    2,409,613.58    4.660329  3.835830  0.824499  N/A       345      15       N/A    3.237616      8     
30 Year CMT One Year      167,555.38    4.375000  3.811000  0.564000  N/A       355       5       N/A    3.250000      7     
30 Year CMT One Year      247,402.80    5.000000  4.616000  0.384000  N/A       358       2       N/A    2.875000     10     
30 Year CMT One Year      337,110.90    3.832404  2.991811  0.840593  N/A       350      10       N/A    3.460193      2     
30 Year CMT One Year      149,924.29    3.875000  3.491000  0.384000  N/A       357       3       N/A    2.625000      9     
30 Year CMT One Year       31,873.10    4.500000  4.116000  0.384000  N/A       357       3       N/A    2.875000      9     
3/1 CMT One Year          362,406.87    5.315025  4.931025  0.384000  N/A       347      13       N/A    2.250000     23     
5/1 CMT One Year        2,404,047.66    6.370787  6.041695  0.329092 0.365892   313      47       N/A    2.750000     13     


                                             SUBSE-                                                                          
                                  INITIAL    QUENT                                                                           
                        RESET     PERIODIC   PERIODIC   MAXIMUM    MINIMUM                                                   
                        FREQUENCY RATE CAP   RATE CAP   MORTGAGE   MORTGAGE                                                  
      LOAN PROGRAM      (MONTHS)     (%)        (%)      RATE (%)   RATE (%)                                                 
      ------------      --------     ---        ---      --------   --------                                                 
                                                                                                                             
3/1 Twelve Month LIBOR    12      2.000000   2.000000   11.693090   2.353756                                                 
3/1 Twelve Month LIBOR    12      2.000000   2.000000   13.250000   3.250000                                                 
3/1 Twelve Month LIBOR    12      3.000000   2.000000   12.375000   2.750000                                                 
3/1 Twelve Month LIBOR                                                                                                       
- Interest Only           12      2.000000   2.000000   12.741224   2.931192                                                 
3/1 Twelve Month LIBOR                                                                                                       
- Interest Only           12      2.000000   2.000000   12.360334   2.250000                                                 
3/1 Twelve Month LIBOR                                                                                                       
- Interest Only           12      2.000000   2.000000   13.250000   3.250000                                                 
3/1 Twelve Month LIBOR                                                                                                       
- Interest Only           12      2.000000   2.000000   12.500000   2.250000                                                 
3/1 Twelve Month LIBOR                                                                                                       
- Interest Only           12      2.000000   2.000000   11.875000   2.250000                                                 
3/1 Twelve Month LIBOR                                                                                                       
- Interest Only           12      6.000000   2.000000   12.250000   2.500000                                                 
3/1 Twelve Month LIBOR                                                                                                       
- Interest Only           12      2.000000   2.000000   12.250000   2.250000                                                 
5/1 Twelve-Month LIBOR    12      5.000000   2.000000   10.902834   2.357457                                                 
5/1 Twelve-Month LIBOR    12      5.000000   2.000000   12.875000   3.250000                                                 
5/1 Twelve-Month LIBOR                                                                                                       
- Interest Only           12      5.000000   2.000000   12.915431   2.769218                                                 
7/1 Twelve-Month LIBOR    12      5.000000   2.000000   10.691803   2.250000                                                 
7/1 Twelve Month LIBOR    12      5.000000   2.000000   10.750000   2.250000                                                 
7/1 Twelve-Month LIBOR                                                                                                       
- Interest Only           12      5.000000   2.000000   10.942792   2.250000                                                 
30 Year CMT One Year      12      1.900114   1.900114   10.740142   2.976964                                                 
30 Year CMT One Year      12      2.000000   2.000000   10.375000   3.250000                                                 
30 Year CMT One Year      12      2.000000   2.000000   11.000000   2.875000                                                 
30 Year CMT One Year      12      2.000000   2.000000    9.832404   3.460193                                                 
30 Year CMT One Year      12      2.000000   2.000000    9.875000   2.625000                                                 
30 Year CMT One Year      12      2.000000   2.000000   10.500000   2.875000                                                 
3/1 CMT One Year          12      1.000000   1.000000   10.315025   2.250000                                                 
5/1 CMT One Year          12      5.000000   2.000000   11.793736   2.750000                                                 

S-92

424B5
93rd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 93rd
o        the Mortgage Loans prepay at the specified constant percentages of the 
applicable Prepayment Assumption,                             

o        no defaults or delinquencies in the payment by mortgagors of principal 
of and interest on the Mortgage Loans are experienced,        

o        scheduled payments on the Mortgage Loans are received on the first day 
      of each month commencing in the calendar month following the closing
       date and are computed before giving effect to prepayments received on
the last day of the prior month,                              

o        there are no Net Interest Shortfalls and prepayments represent         
      prepayments in full of individual Mortgage Loans and are received on
     the last day of each month, commencing in the calendar month of the
closing date,                                                 

o        the scheduled monthly payment for each Mortgage Loan, except for the   
balloon loans and Interest Only Loans during their respective 
         interest-only periods, has been calculated such that each Mortgage Loan
         will amortize in amounts sufficient to repay the current balance of the
Mortgage Loan by its respective remaining term to maturity,   

o        the balloon loan will amortize over its remaining amortization term    
       with the final balloon payment being paid at the end of its remaining
term to maturity,                                             

o        any Mortgage Loan with a remaining interest-only term greater than zero
       does not amortize during the remaining interest-only term. At the end
  of the remaining interest-only term, any such Mortgage Loan will
    amortize in amounts sufficient to repay the current balance of any
     Mortgage Loan over the remaining term to maturity calculated at the
expiration of the remaining interest-only term,               

o        the initial Class Certificate Balance of each class of offered         
       certificates is as set forth on the cover page hereof or as described
        under "Description of the Certificates" in this prospectus supplement,

o        the level of One-Month LIBOR remains constant at 4.06% per annum,      
   Six-Month LIBOR remains constant at 4.39% per annum, One-Year CMT
    remains constant at 4.22% per annum and Twelve-Month LIBOR remains
constant at 4.60% per annum,                                  

o        distributions in respect of the certificates are received in cash on   
       the 25th day of each month commencing in the calendar month following
the closing date,                                             

o        the closing date of the sale of the certificates is October 28, 2005,  

o        no seller is required to repurchase or substitute for any Mortgage     
Loan,                                                         

o        the Class CF and Class CV Certificates do not have initial Class       
Certificate Balances,                                         

o        the Master Servicer does not exercise the option to repurchase the     
    Mortgage Loans described under "Servicing of the Mortgage Loans --
   Certain Modifications and Refinancings," "-- Optional Purchase of
   Defaulted Loans" and "-- Optional Termination" in this prospectus
supplement,                                                   

o        the Mortgage Rate on each Group 2 Mortgage Loan will be adjusted on    
      each Adjustment Date (as necessary) to a rate equal to the One-Month
        LIBOR, Six-Month LIBOR Index, Twelve-Month LIBOR Index or One-Year CMT
   Index, as applicable (as described above), plus the Gross Margin,
    subject to Maximum Mortgage Rates, Minimum Mortgage Rates, Initial
       Periodic Rate Caps and Subsequent Periodic Rate Caps (as applicable),
and                                                           

S-93

424B5
94th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 94th
o        scheduled monthly payments on each Group 2 Mortgage Loan will be       
     adjusted in the month immediately following the interest adjustment
date (as necessary) for such Mortgage Loan to equal the fully 
amortizing payment described above.                           

   Prepayments of mortgage loans commonly are measured relative to a
prepayment standard or model. The model used in this prospectus supplement      
represents an assumed rate of prepayment each month of the then outstanding     
principal balance of a pool of new mortgage loans. The Prepayment Assumption    
does not purport to be either a historical description of the prepayment        
experience of any pool of mortgage loans or a prediction of the anticipated rate
of any prepayment of any pool of mortgage loans, including the mortgage loans.  
With respect to Loan Group 1, a 100% prepayment assumption (the "PREPAYMENT     
ASSUMPTION") assumes a Constant Prepayment Rate ("CPR") of 10.0% per annum of   
the then outstanding principal balance of such mortgage loans in the first month
of the life of the mortgage loans and an additional 1.3636363636% (precisely    
15/11%) per annum in the second through eleventh months. Beginning in the       
twelfth month and in each month thereafter during the life of the mortgage      
loans, a 100% Prepayment Assumption assumes a CPR of 25.0% per annum each month.
A 100% Prepayment Assumption for Loan Group 2 assumes a constant prepayment rate
of 30% CPR. 0% of the Prepayment Assumption assumes no prepayments. There is no 
assurance that prepayments on the Mortgage Loans in a loan group will occur at  
any of the related Prepayment Assumption rate or at any other constant rate. As 
used in the decrement tables for the subordinated certificates, 100% Prepayment 
Assumption means 100% of the Prepayment Assumption for Loan Group 1 and 30% CPR 
for Loan Group 2.                                                               

    While it is assumed that each of the Mortgage Loans prepays at the
specified constant percentages, this is not likely to be the case. Moreover,    
discrepancies may exist between the characteristics of the actual Mortgage Loans
which will be delivered to the Trustee and characteristics of the Mortgage Loans
used in preparing the tables.                                                   

OPTIONAL PURCHASE OF DEFAULTED LOANS                                            

      The Master Servicer may, at its option but subject to the conditions
set forth in the Pooling and Servicing Agreement, purchase from the trust fund  
any Mortgage Loan which is delinquent in payment by 151 days or more. Any       
purchase shall be at a price equal to 100% of the Stated Principal Balance of   
the Mortgage Loan plus accrued interest on it at the applicable Mortgage Rate   
from the date through which interest was last paid by the related mortgagor or  
advanced (and not reimbursed) to the first day of the month in which the amount 
is to be distributed.                                                           

OPTIONAL TERMINATION                                                            

   The Master Servicer may purchase all remaining mortgage loans and
foreclosed or otherwise repossessed properties in the trust fund and thereby    
effect early retirement of the certificates, subject to the aggregate Stated    
Principal Balance of the Mortgage Loans and foreclosed or otherwise repossessed 
properties at the time of repurchase being less than or equal to 10% of the     
Cut-off Date Pool Principal Balance (the first such date, the "OPTIONAL         
TERMINATION DATE"). If the Master Servicer exercises the option, the purchase   
price distributed with respect to each certificate will be 100% of its then     
outstanding principal balance and any unpaid accrued interest thereon at the    
applicable pass-through rate, in each case subject to reduction as provided in  
the Pooling and Servicing Agreement if the purchase price is based in part on   
the appraised value of any foreclosed or otherwise repossessed properties and   
the appraised value is less than the Stated Principal Balance of the related    
Mortgage Loans; provided, however, that unless the NIM Insurer otherwise        
consents, the purchase price will in no event be less than an amount that would 
result in (x) a final distribution on any NIM Insurer guaranteed notes that is  
sufficient to pay such notes in full and (y) payment of any amounts due and     
payable to the NIM Insurer pursuant to the indenture related to such notes. The 
NIM Insurer may also have the right to purchase all remaining Mortgage Loans and
REO Properties in the trust fund. Distributions on the certificates in respect  
of any optional termination will first be paid to the senior certificates and   
then to the subordinated certificates. The proceeds from any optional           
termination distribution may not be sufficient to distribute the full amount to 
which each class of certificates is entitled if the purchase price is based in  
part on the appraised value of any foreclosed or otherwise repossessed property 
and the appraised value is less than the Stated Principal Balance of the related
Mortgage Loan.                                                                  

S-94

424B5
95th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 95th
THE TRUSTEE                                                                     

The Bank of New York will be the Trustee under the Pooling and
Servicing Agreement. The Depositor, the sellers and the Master Servicer may     
maintain other banking relationships in the ordinary course of business with The
Bank of New York. Offered certificates may be surrendered at the corporate trust
office of the Trustee located at 101 Barclay Street, 8W, New York, New York     
10286, Attention: Corporate Trust Administration or at any other address the    
Trustee designates from time to time.                                           

RESTRICTIONS ON TRANSFER OF THE CLASS A-R CERTIFICATES                          

   The Class A-R Certificates will be subject to the restrictions on
transfer described in the prospectus under "Material Federal Income Tax         
Consequences -- REMIC Certificates--b. Residual Certificates--Tax-Related       
Restrictions on Transfers of Residual Certificates--Disqualified Organizations,"
"--Noneconomic Residual Certificates" and "--Foreign Investors." The Class A-R  
Certificates (in addition to other ERISA restricted classes of certificates, as 
described in the Pooling and Servicing Agreement) may not be acquired by a Plan 
or with assets of a Plan unless certain conditions are met. See "ERISA          
Considerations" in this prospectus supplement. The Class A-R Certificates will  
contain a legend describing the foregoing restrictions.                         

RIGHTS OF THE NIM INSURER UNDER THE POOLING AND SERVICING AGREEMENT             

       After the closing date, a separate trust or trusts may be established
to issue net interest margin securities secured by all or a portion of the Class
PF, Class PV, Class CF and Class CV Certificates. Those net interest margin     
securities may or may not have the benefit of a financial guaranty insurance    
policy. The insurer or insurers (the "NIM INSURER") that would issue a policy   
will be a third party beneficiary of the Pooling and Servicing Agreement and    
will have a number of rights under the Pooling and Servicing Agreement, which   
will include the following:                                                     

 o the right to consent to the Master Servicer's exercise of its
           discretion to waive assumption fees, late payment or other charges in
        connection with a Mortgage Loan or to arrange for the extension of
        due dates for payments due on a mortgage note for no more than 270
      days, if the waivers or extensions relate to more than 5% of the
Mortgage Loans;                                           

      o the right to direct the Trustee to terminate all of the rights and
        obligations of the Master Servicer under the Pooling and Servicing
           Agreement relating to the trust fund and the assets of the trust fund
           following the occurrence of an event of default under the Pooling and
Servicing Agreement;                                      

   o the right to approve or reject the appointment of any successor
       master servicer other than the Trustee, if the Master Servicer is
           required to be replaced and the Trustee is unwilling or unable to act
as successor master servicer;                             

      o the right to consent to any amendment to the Pooling and Servicing
Agreement; and                                            

         o each of the rights under "Risk Factors--Rights of the NIM Insurer" in
this prospectus supplement.                               

You should note the rights that the NIM Insurer would have and
carefully evaluate its potential impact on your investment.                     

 YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS

GENERAL                                                                         

The effective yield to the holders of each class of offered   
certificates, other than the LIBOR Certificates, will be lower than the yield   
otherwise produced by the applicable rate at which interest is passed through to
the holders and the purchase price of the certificates because monthly          
distributions will not be payable to the holders until the 25th day (or, if that
day is not a business day, the following business day) of the month following   
the month                                                                       

S-95

424B5
96th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 96th
in which interest accrues on the mortgage loans (without any additional         
distribution of interest or earnings on them for the delay).                    

PREPAYMENT CONSIDERATIONS AND RISKS                                             

 The rate of principal payments on the offered certificates, the
aggregate amount of distributions on the offered certificates and the yield to  
maturity of the offered certificates will be related to the rate and timing of  
payments of principal on the related Mortgage Loans. The rate of principal      
payments on the Mortgage Loans will in turn be affected by the amortization     
schedules of the Mortgage Loans and by the rate of principal prepayments,       
including for this purpose prepayments resulting from refinancing, liquidations 
of the Mortgage Loans due to defaults, casualties, condemnations and repurchases
by the related seller or purchases by the Master Servicer. Except for certain of
the Mortgage Loans, each of which has a prepayment charge if the related        
mortgagor prepays such Mortgage Loan during a period ranging from six months to 
five years after origination, the Mortgage Loans may be prepaid by the          
mortgagors at any time without a prepayment charge. Because certain of the      
Mortgage Loans contain prepayment charges, the rate of principal prepayments may
be less than the rate of principal payments for Mortgage Loans that did not have
prepayment charges. The holders of the Class PF and Class PV Certificates will  
be entitled to all prepayment charges received on the Mortgage Loans in Loan    
Group 1 and Loan Group 2, respectively, and those amounts will not be available 
for distribution on the other classes of certificates. In addition, many of the 
Mortgage Loans do not provide for any payments of principal for an extended     
period following their origination. These Interest Only Loans may involve a     
greater degree of risk because, if the related mortgagor defaults, the          
outstanding principal balance of the Mortgage Loans will be higher than for     
amortizing Mortgage Loans. During their interest-only periods, these Interest   
Only Loans may be less likely to prepay as the interest-only feature may reduce 
the perceived benefits of refinancing due to the smaller monthly payment.       
However, as an Interest Only Loan approaches the end of its interest-only       
period, it may be more likely to be prepaid, even if market interest rates at   
the time are only slightly higher or lower than the interest rate on the        
Interest Only Loans as the related borrowers seek to avoid increases in their   
respective monthly mortgage payment. The Mortgage Loans are subject to the      
"due-on-sale" provisions included therein.                                      

         Prepayments, liquidations and purchases of the Mortgage Loans in a loan
group will result in distributions on the related offered certificates of       
principal amounts which would otherwise be distributed over the remaining terms 
of these Mortgage Loans. This includes any optional repurchase by the related   
seller of a defaulted Mortgage Loans and any optional purchase of the remaining 
Mortgage Loans in connection with the termination of the trust fund, in each    
case as described in this prospectus supplement. Since the rate of payment of   
principal of the Mortgage Loans will depend on future events and a variety of   
factors, no assurance can be given as to the rate of payment of principal of the
Mortgage Loans or the rate of principal prepayments. The extent to which the    
yield to maturity of a class of offered certificates may vary from the          
anticipated yield will depend upon the degree to which the offered certificate  
is purchased at a discount or premium, and the degree to which the timing of    
payments thereon is sensitive to prepayments, liquidations and purchases of the 
related Mortgage Loans. Further, an investor should consider the risk that, in  
the case of any offered certificate purchased at a discount, a slower than      
anticipated rate of principal payments (including prepayments) on the related   
Mortgage Loans could result in an actual yield to the investor that is lower    
than the anticipated yield and, in the case of any offered certificate purchased
at a premium, a faster than anticipated rate of principal payments could result 
in an actual yield to the investor that is lower than the anticipated yield. The
Class 1-A-5 Certificates generally will not receive distributions of principal  
for the first three years following the closing date.                           

    The rate of principal payments (including prepayments) on pools of
Mortgage Loans may vary significantly over time and may be influenced by a      
variety of economic, geographic, social and other factors, including changes in 
mortgagors' housing needs, job transfers, unemployment, mortgagors' net equity  
in the mortgaged properties, servicing decisions, as well as the characteristics
of the Mortgage Loans included in the mortgage pool as described under "The     
Mortgage Pool -- General" and "-- Underwriting Process" in this prospectus      
supplement. In addition, Countrywide Home Loans' Streamlined Documentation      
Program may affect the rate of prepayments on the Mortgage Loans. In general, if
prevailing interest rates were to fall significantly below the Mortgage Rates on
the Mortgage Loans, the Mortgage Loans could be subject to higher prepayment    
rates than if prevailing interest rates were to remain at or above the Mortgage 
Rates on the Mortgage Loans. Conversely, if prevailing interest rates were to   
rise significantly, the rate of prepayments on the Mortgage Loans would         
generally be expected to decrease. No assurances can be given as to the rate of 
prepayments on the Mortgage Loans in stable or changing interest rate           

S-96

424B5
97th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 97th
environments. With respect to mortgage loans that are balloon loans, such       
balloon loans involve a greater degree of risk than fully amortizing mortgage   
loans because typically the borrower must be able to refinance the loan or sell 
the property to make the balloon payment at maturity. The ability of the        
borrower to do this will depend on such factors as mortgage rates at the time of
the sale or refinancing, the borrower's equity in the property, the relative    
strengths of the local housing market, the financial condition of the borrower  
and tax laws. Furthermore, with respect to up to 50% of the Mortgage Loans, the 
Depositor may deliver all or a portion of each related mortgage file to the     
Trustee after the closing date. Should Countrywide Home Loans or any other      
seller fail to deliver all or a portion of any mortgage files to the Depositor  
or other designee of the Depositor or, at the Depositor's direction, to the     
Trustee, within that period, Countrywide Home Loans will be required to use its 
best efforts to deliver a replacement Mortgage Loan for the related delayed     
delivery Mortgage Loan or repurchase the related delayed delivery Mortgage Loan.
Any repurchases pursuant to this provision would also have the effect of        
accelerating the rate of prepayments on the Mortgage Loans.                     

       The Group 1 Mortgage Loans will consist of fixed rate mortgage loans.
In general with respect to fixed rate mortgage loans, if prevailing interest    
rates fall significantly below the interest rates on such mortgage loans, such  
mortgage loans are likely to be subject to higher prepayment rates than if      
prevailing rates remain at or above the interest rates on such mortgage loans.  
Conversely, if prevailing interest rates rise appreciably above the interest    
rates on fixed rate mortgage loans, such mortgage loans are likely to experience
a lower prepayment rate than if prevailing rates remain at or below the interest
rates on such mortgage loans. In the event that Mortgage Loans in Loan Group 1  
with higher Mortgage Rates prepay at rates higher than other Mortgage Loans in  
Loan Group 1, the applicable Net Rate Cap may be lower than otherwise would be  
the case. As a result, the interest payable on the related offered certificates 
on a Distribution Date could be reduced because of the imposition of the        
applicable Net Rate Cap. No assurance can be given as to the level of prepayment
that the Group 1 Mortgage Loans will experience.                                

     The Group 2 Mortgage Loans will consist of adjustable rate mortgage
loans subject to initial fixed rate periods of varying lengths. Adjustable rate 
mortgage loans may be subject to a greater rate of principal prepayments in a   
declining interest rate environment. For example, if prevailing interest rates  
fall significantly, adjustable rate mortgage loans could be subject to higher   
prepayment rates than if prevailing interest rates remain constant because the  
availability of fixed rate mortgage loans at lower interest rates may encourage 
mortgagors to refinance their adjustable rate mortgage loans to a lower fixed   
interest rate. Prepayments on the Group 2 Mortgage Loans may differ as they     
approach their respective first Adjustment Dates. No assurance can be given as  
to the level of prepayment that the Group 2 Mortgage Loans will experience.     

       Although the Mortgage Rates on the Group 2 Mortgage Loans are subject
to adjustment, such Mortgage Rates adjust less frequently than the Pass-Through 
Rates on the LIBOR Certificates and adjust by reference to the relative Mortgage
Index. Changes in One-Month LIBOR may not correlate with changes in the         
applicable Mortgage Index and also may not correlate with prevailing interest   
rates. It is possible that an increased level of One-Month LIBOR could occur    
simultaneously with a lower level of prevailing interest rates which would be   
expected to result in faster prepayments, thereby reducing the weighted average 
lives of the related classes of LIBOR Certificates. The Mortgage Rate applicable
to all or substantially all of the Group 2 Mortgage Loans and any Adjustment    
Date will be based on the Mortgage Index value most recently announced generally
as of a date 45 days prior to such Adjustment Date. Thus, if the related        
Mortgage Index value with respect to a Group 2 Mortgage Loan rises, the lag in  
time before the corresponding Mortgage Rate increases will, all other things    
being equal, slow the upward adjustment of the applicable Net Rate Cap. In      
addition, certain of the Group 2 Mortgage Loans will have Mortgage Rates which  
will not adjust for a substantial period of time after origination. See "The    
Mortgage Pool" in this prospectus supplement.                                   

         The rate of prepayment may affect the pass-through rates on the offered
certificates. Prepayments of Mortgage Loans with Mortgage Rates in excess of the
then-current Net Rate Cap may reduce or limit the pass-through rate on the      
related classes of offered certificates. Mortgage loans with higher Mortgage    
Rates may prepay at faster rates than Mortgage Loans with relatively lower      
Mortgage Rates in response to a given change in market interest rates.          

        The timing of changes in the rate of prepayments on the Mortgage Loans
may significantly affect an investor's actual yield to maturity, even if the    
average rate of principal payments is consistent with an investor's             

S-97

424B5
98th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 98th
expectation. In general, the earlier a prepayment of principal on the Mortgage  
Loans, the greater the effect on an investor's yield to maturity. The effect on 
an investor's yield as a result of principal payments occurring at a rate higher
(or lower) than the rate anticipated by the investor during the period          
immediately following the issuance of the offered certificates may not be offset
by a subsequent like decrease (or increase) in the rate of principal payments.  

    The portion of any proceeds of the Corridor Contracts that will be
payable to the trust fund under the Corridor Contract Administration Agreement  
are intended to provide the Class 1-A-1 Certificates and the Group 2            
certificates some protection against any Net Rate Carryover. However, payments  
that will be allocated to the trust fund in respect of each Corridor Contract   
will be allocated based on the lesser of their respective Corridor Notional     
Balances and the aggregate Class Certificate Balance of the related class(es) of
certificates, and not on the actual Stated Principal Balances of the Mortgage   
Loans. Therefore, the Corridor Contracts may not provide sufficient funds to    
cover such Net Rate Carryover. In addition, payments under the Corridor         
Contracts are limited to a corridor of specified rates and are only available to
the certificates to the extent described under "Description of the Certificates 
-- The Corridor Contracts" above.                                               

         Although amounts allocated to the trust fund in respect of the Corridor
Contracts will be available to pay Net Rate Carryover on the related classes of 
certificates to the extent described under "Description of the Certificates --  
Interest--Distributions of Funds from the Corridor Contracts" on or prior to the
related Corridor Contract Termination Date, there is no assurance that funds    
will be available or sufficient to pay such amounts. The ratings assigned to the
offered certificates do not address the likelihood of the payment of Net Rate   
Carryover.                                                                      

ADDITIONAL INFORMATION                                                          

       The Depositor has filed and in the future may file certain additional
yield tables and other computational materials with respect to the offered      
certificates with the Securities and Exchange Commission in a report on Form    
8-K. The tables and materials were prepared by the underwriter at the request of
prospective investors, based on assumptions provided by, and satisfying the     
special requirements of, such prospective investors. The tables and assumptions 
may be based on assumptions that differ from the structuring assumptions.       
Accordingly, the tables and other materials may not be relevant to or           
appropriate for investors other than those specifically requesting them.        

WEIGHTED AVERAGE LIVES OF THE OFFERED CERTIFICATES                              

      The weighted average life of an offered certificate is determined by
(a) multiplying the amount of the net reduction, if any, of the Class           
Certificate Balance of the certificate on each Distribution Date by the number  
of years from the date of issuance to the Distribution Date, (b) summing the    
results and (c) dividing the sum by the aggregate amount of the net reductions  
in Class Certificate Balance of the class of certificates referred to in clause 
(a).                                                                            

 For a discussion of the factors which may influence the rate of
payments (including prepayments) of the Mortgage Loans, see "-- Prepayment      
Considerations and Risks" in this prospectus supplement and "Yield and          
Prepayment Considerations" in the prospectus.                                   

         In general, the weighted average lives of the offered certificates will
be shortened if the level of prepayments of principal of the Mortgage Loans     
increases. However, the weighted average lives of the offered certificates will 
depend upon a variety of other factors, including the timing of changes in the  
rate of principal payments, the priority sequence of distributions of principal 
of the classes of certificates. See "Description of the Certificates --         
Principal" in this prospectus supplement.                                       

        The interaction of the foregoing factors may have different effects on
various classes of offered certificates and the effects on any class may vary at
different times during the life of the class. Accordingly, no assurance can be  
given as to the weighted average life of any class of offered certificates.     
Further, to the extent the prices of the offered certificates represent         
discounts or premiums to their respective original Class Certificate Balances,  
variability in the weighted average lives of the classes of offered certificates
will result in variability in the related yields to maturity. For an example of 
how the weighted average lives of the classes of offered certificates may be    

S-98

424B5
99th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 99th
affected at various constant percentages of the related Prepayment Assumption,  
see the decrement tables under the next heading.                                

DECREMENT TABLES                                                                

    The following tables indicate the percentages of the initial Class
Certificate Balances of the classes of offered certificates (other than the     
Class A-R Certificates) that would be outstanding after each of the dates shown 
at various constant percentages of the related Prepayment Assumption and the    
corresponding weighted average lives of the classes. The tables have been       
prepared on the basis of the structuring assumptions. It is not likely that the 
Mortgage Loans will have the precise characteristics described in this          
prospectus supplement or all of the Mortgage Loans will prepay at the constant  
percentages of the related Prepayment Assumption specified in the tables or at  
any other constant rate. Moreover, the diverse remaining terms to maturity of   
the Mortgage Loans could produce slower or faster principal distributions than  
indicated in the tables, which have been prepared using the specified constant  
percentages of the related Prepayment Assumption, even if the remaining term to 
maturity of the Mortgage Loans is consistent with the remaining terms to        
maturity of the mortgage loans specified in the structuring assumptions.        

[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

S-99

424B5
100th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 100th
 PERCENTAGE OF INITIAL CLASS CERTIFICATE BALANCES OUTSTANDING*

                                                        [Enlarge/Download Table]

                                    CLASS 1-A-1                                 CLASS 1-A-2                
                         PERCENTAGE OF PREPAYMENT ASSUMPTION        PERCENTAGE OF PREPAYMENT ASSUMPTION    
  -----------------   -----------------------------------------  ------------------------------------------
  DISTRIBUTION DATE     0%      80%     100%     120%     150%     0%       80%     100%     120%     150% 
  -----------------     --      ---     ----     ----     ----     --       ---     ----     ----     ---- 
                                                                                                           
Initial Percent....     100     100      100      100      100     100      100      100      100      100 
October 2006.......      98      56       45       35       19     100      100      100      100      100 
October 2007.......      95      15        0        0        0     100      100       95       70       34 
October 2008.......      92       0        0        0        0     100       72       39       10        0 
October 2009.......      89       0        0        0        0     100       39       11        0        0 
October 2010.......      86       0        0        0        0     100       15        0        0        0 
October 2011.......      83       0        0        0        0     100        0        0        0        0 
October 2012.......      80       0        0        0        0     100        0        0        0        0 
October 2013.......      77       0        0        0        0     100        0        0        0        0 
October 2014.......      74       0        0        0        0     100        0        0        0        0 
October 2015.......      71       0        0        0        0     100        0        0        0        0 
October 2016.......      67       0        0        0        0     100        0        0        0        0 
October 2017.......      62       0        0        0        0     100        0        0        0        0 
October 2018.......      57       0        0        0        0     100        0        0        0        0 
October 2019.......      51       0        0        0        0     100        0        0        0        0 
October 2020.......      43       0        0        0        0     100        0        0        0        0 
October 2021.......      36       0        0        0        0     100        0        0        0        0 
October 2022.......      30       0        0        0        0     100        0        0        0        0 
October 2023.......      22       0        0        0        0     100        0        0        0        0 
October 2024.......      15       0        0        0        0     100        0        0        0        0 
October 2025.......       6       0        0        0        0     100        0        0        0        0 
October 2026.......       0       0        0        0        0      95        0        0        0        0 
October 2027.......       0       0        0        0        0      81        0        0        0        0 
October 2028.......       0       0        0        0        0      66        0        0        0        0 
October 2029.......       0       0        0        0        0      50        0        0        0        0 
October 2030.......       0       0        0        0        0      32        0        0        0        0 
October 2031.......       0       0        0        0        0      13        0        0        0        0 
October 2032.......       0       0        0        0        0       0        0        0        0        0 
October 2033.......       0       0        0        0        0       0        0        0        0        0 
October 2034.......       0       0        0        0        0       0        0        0        0        0 
October 2035.......       0       0        0        0        0       0        0        0        0        0 
Weighted Average                                                                                           
   Life (in years)**   12.9     1.2      1.0      0.8      0.7    23.9      3.8      3.0      2.4      1.9 

-------------------                                                             
*  Rounded to the nearest whole percentage.                                     
** Determined as specified under "Weighted Average Lives of the Offered         
Certificates" in this prospectus supplement.                              

S-100 

424B5
101st Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 101st
 PERCENTAGE OF INITIAL CLASS CERTIFICATE BALANCES OUTSTANDING*

                                                        [Enlarge/Download Table]

                                     CLASS 1-A-3                        CLASS 1-A-4 AND CLASS 1-A-6        
                         PERCENTAGE OF PREPAYMENT ASSUMPTION        PERCENTAGE OF PREPAYMENT ASSUMPTION    
  -----------------   -----------------------------------------  ------------------------------------------
  DISTRIBUTION DATE     0%      80%     100%     120%     150%     0%       80%     100%     120%     150% 
  -----------------     --      ---     ----     ----     ----     --       ---     ----     ----     ---- 
                                                                                                           
Initial Percent....     100     100      100      100      100     100      100      100      100      100 
October 2006.......     100     100      100      100      100     100      100      100      100      100 
October 2007.......     100     100      100      100      100     100      100      100      100      100 
October 2008.......     100     100      100      100        0     100      100      100      100       86 
October 2009.......     100     100      100       36        0     100      100      100      100       48 
October 2010.......     100     100       40        0        0     100      100      100       69       14 
October 2011.......     100      89        0        0        0     100      100       86       44        4 
October 2012.......     100      29        0        0        0     100      100       63       30        3 
October 2013.......     100      12        0        0        0     100      100       61       30        3 
October 2014.......     100       0        0        0        0     100       91       51       26        3 
October 2015.......     100       0        0        0        0     100       75       40       19        3 
October 2016.......     100       0        0        0        0     100       60       30       12        0 
October 2017.......     100       0        0        0        0     100       47       21        6        0 
October 2018.......     100       0        0        0        0     100       37       14        3        0 
October 2019.......     100       0        0        0        0     100       28        9        0        0 
October 2020.......     100       0        0        0        0     100       20        5        0        0 
October 2021.......     100       0        0        0        0     100       14        2        0        0 
October 2022.......     100       0        0        0        0     100        9        0        0        0 
October 2023.......     100       0        0        0        0     100        6        0        0        0 
October 2024.......     100       0        0        0        0     100        3        0        0        0 
October 2025.......     100       0        0        0        0     100        1        0        0        0 
October 2026.......     100       0        0        0        0     100        0        0        0        0 
October 2027.......     100       0        0        0        0     100        0        0        0        0 
October 2028.......     100       0        0        0        0     100        0        0        0        0 
October 2029.......     100       0        0        0        0     100        0        0        0        0 
October 2030.......     100       0        0        0        0     100        0        0        0        0 
October 2031.......     100       0        0        0        0     100        0        0        0        0 
October 2032.......      60       0        0        0        0     100        0        0        0        0 
October 2033.......       0       0        0        0        0      78        0        0        0        0 
October 2034.......       0       0        0        0        0      33        0        0        0        0 
October 2035.......       0       0        0        0        0       0        0        0        0        0 
Weighted Average                                                                                           
   Life (in years)**   27.1     6.8      5.0      3.9      2.7    28.6     12.4      9.4      7.0      4.3 

-------------------                                                             
*  Rounded to the nearest whole percentage.                                     
** Determined as specified under "Weighted Average Lives of the Offered         
Certificates" in this prospectus supplement.                              

S-101 

424B5
102nd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 102nd
 PERCENTAGE OF INITIAL CLASS CERTIFICATE BALANCES OUTSTANDING*

                                                        [Enlarge/Download Table]

                                     CLASS 1-A-5                                 CLASS 2-A-1               
                         PERCENTAGE OF PREPAYMENT ASSUMPTION        PERCENTAGE OF PREPAYMENT ASSUMPTION    
  -----------------   -----------------------------------------  ------------------------------------------
  DISTRIBUTION DATE     0%      80%     100%     120%     150%     0%       80%     100%     120%     150% 
  -----------------     --      ---     ----     ----     ----     --       ---     ----     ----     ---- 
                                                                                                           
Initial Percent....     100     100      100      100      100     100      100      100      100      100 
October 2006.......     100     100      100      100      100     100       73       66       59       49 
October 2007.......     100     100      100      100      100      99       52       42       33       21 
October 2008.......     100     100      100      100      100      99       36       26       16        6 
October 2009.......      99      90       88       87       86      98       29       21       14        6 
October 2010.......      99      81       77       74       70      97       22       14        9        4 
October 2011.......      97      67       61       55       47      96       16       10        6        2 
October 2012.......      96      53       45       38       29      95       12        7        4        1 
October 2013.......      90      25       18       16       15      94        9        5        2        0 
October 2014.......      85      12        7        5        6      92        7        3        1        0 
October 2015.......      79       6        3        1        1      91        5        2        1        0 
October 2016.......      72       3        1        0        0      89        4        1        0        0 
October 2017.......      64       1        0        0        0      86        3        1        0        0 
October 2018.......      57       1        0        0        0      84        2        0        0        0 
October 2019.......      50       0        0        0        0      81        1        0        0        0 
October 2020.......      41       0        0        0        0      78        1        0        0        0 
October 2021.......      35       0        0        0        0      75        1        0        0        0 
October 2022.......      30       0        0        0        0      72        0        0        0        0 
October 2023.......      24       0        0        0        0      68        0        0        0        0 
October 2024.......      20       0        0        0        0      64        0        0        0        0 
October 2025.......      15       0        0        0        0      59        0        0        0        0 
October 2026.......      12       0        0        0        0      54        0        0        0        0 
October 2027.......       9       0        0        0        0      49        0        0        0        0 
October 2028.......       6       0        0        0        0      43        0        0        0        0 
October 2029.......       4       0        0        0        0      38        0        0        0        0 
October 2030.......       2       0        0        0        0      33        0        0        0        0 
October 2031.......       1       0        0        0        0      27        0        0        0        0 
October 2032.......       0       0        0        0        0      20        0        0        0        0 
October 2033.......       0       0        0        0        0      13        0        0        0        0 
October 2034.......       0       0        0        0        0       6        0        0        0        0 
October 2035.......       0       0        0        0        0       0        0        0        0        0 
Weighted Average                                                                                           
   Life (in years)**   14.4     6.9      6.5      6.3      6.1    20.5      3.2      2.5      2.0      1.4 

-------------------                                                             
*  Rounded to the nearest whole percentage.                                     
** Determined as specified under "Weighted Average Lives of the Offered         
Certificates" in this prospectus supplement.                              

S-102 

424B5
103rd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 103rd
 PERCENTAGE OF INITIAL CLASS CERTIFICATE BALANCES OUTSTANDING*

                                                        [Enlarge/Download Table]

                                     CLASS 2-A-2                                CLASS 2-A-3                
                         PERCENTAGE OF PREPAYMENT ASSUMPTION        PERCENTAGE OF PREPAYMENT ASSUMPTION    
  -----------------   -----------------------------------------  ------------------------------------------
  DISTRIBUTION DATE     0%      80%     100%     120%     150%     0%       80%     100%     120%     150% 
  -----------------     --      ---     ----     ----     ----     --       ---     ----     ----     ---- 
                                                                                                           
Initial Percent....     100     100      100      100      100     100      100      100      100      100 
October 2006.......      99      56       45       34       18     100      100      100      100      100 
October 2007.......      99      22        7        0        0     100      100      100       74        9 
October 2008.......      98       0        0        0        0     100       90       32        0        0 
October 2009.......      97       0        0        0        0     100       49        6        0        0 
October 2010.......      96       0        0        0        0     100       11        0        0        0 
October 2011.......      94       0        0        0        0     100        0        0        0        0 
October 2012.......      92       0        0        0        0     100        0        0        0        0 
October 2013.......      90       0        0        0        0     100        0        0        0        0 
October 2014.......      88       0        0        0        0     100        0        0        0        0 
October 2015.......      85       0        0        0        0     100        0        0        0        0 
October 2016.......      82       0        0        0        0     100        0        0        0        0 
October 2017.......      78       0        0        0        0     100        0        0        0        0 
October 2018.......      74       0        0        0        0     100        0        0        0        0 
October 2019.......      70       0        0        0        0     100        0        0        0        0 
October 2020.......      65       0        0        0        0     100        0        0        0        0 
October 2021.......      60       0        0        0        0     100        0        0        0        0 
October 2022.......      54       0        0        0        0     100        0        0        0        0 
October 2023.......      48       0        0        0        0     100        0        0        0        0 
October 2024.......      41       0        0        0        0     100        0        0        0        0 
October 2025.......      34       0        0        0        0     100        0        0        0        0 
October 2026.......      26       0        0        0        0     100        0        0        0        0 
October 2027.......      18       0        0        0        0     100        0        0        0        0 
October 2028.......       8       0        0        0        0     100        0        0        0        0 
October 2029.......       0       0        0        0        0     100        0        0        0        0 
October 2030.......       0       0        0        0        0      71        0        0        0        0 
October 2031.......       0       0        0        0        0      39        0        0        0        0 
October 2032.......       0       0        0        0        0       4        0        0        0        0 
October 2033.......       0       0        0        0        0       0        0        0        0        0 
October 2034.......       0       0        0        0        0       0        0        0        0        0 
October 2035.......       0       0        0        0        0       0        0        0        0        0 
Weighted Average                                                                                           
   Life (in years)**   16.5     1.3      1.0      0.8      0.6    25.7      4.1      3.0      2.3      1.7 

-------------------                                                             
*  Rounded to the nearest whole percentage.                                     
** Determined as specified under "Weighted Average Lives of the Offered         
Certificates" in this prospectus supplement.                              

S-103 

424B5
104th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 104th
 PERCENTAGE OF INITIAL CLASS CERTIFICATE BALANCES OUTSTANDING*

                                                        [Enlarge/Download Table]

                                    CLASS 2-A-4                                CLASS 1-M-1                 
                         PERCENTAGE OF PREPAYMENT ASSUMPTION        PERCENTAGE OF PREPAYMENT ASSUMPTION    
  -----------------   -----------------------------------------  ------------------------------------------
  DISTRIBUTION DATE     0%      80%     100%     120%     150%     0%       80%     100%     120%     150% 
  -----------------     --      ---     ----     ----     ----     --       ---     ----     ----     ---- 
                                                                                                           
Initial Percent....     100     100      100      100      100     100      100      100      100      100 
October 2006.......     100     100      100      100      100     100      100      100      100      100 
October 2007.......     100     100      100      100      100     100      100      100      100      100 
October 2008.......     100     100      100       84       30     100      100      100      100      100 
October 2009.......     100     100      100       74       30     100       81       63       48       31 
October 2010.......     100     100       73       47       22     100       64       47       33       19 
October 2011.......     100      83       51       30       12     100       50       34       23       12 
October 2012.......     100      63       35       19        6     100       39       25       16        0 
October 2013.......     100      47       24       12        2     100       31       19        9        0 
October 2014.......     100      35       17        7        0     100       24       14        0        0 
October 2015.......     100      26       12        3        0     100       19        6        0        0 
October 2016.......     100      20        7        1        0     100       15        0        0        0 
October 2017.......     100      15        4        0        0     100       10        0        0        0 
October 2018.......     100      11        2        0        0     100        3        0        0        0 
October 2019.......     100       7        0        0        0     100        0        0        0        0 
October 2020.......     100       5        0        0        0     100        0        0        0        0 
October 2021.......     100       3        0        0        0     100        0        0        0        0 
October 2022.......     100       1        0        0        0     100        0        0        0        0 
October 2023.......     100       0        0        0        0     100        0        0        0        0 
October 2024.......     100       0        0        0        0     100        0        0        0        0 
October 2025.......     100       0        0        0        0     100        0        0        0        0 
October 2026.......     100       0        0        0        0      97        0        0        0        0 
October 2027.......     100       0        0        0        0      87        0        0        0        0 
October 2028.......     100       0        0        0        0      78        0        0        0        0 
October 2029.......     100       0        0        0        0      67        0        0        0        0 
October 2030.......     100       0        0        0        0      56        0        0        0        0 
October 2031.......     100       0        0        0        0      44        0        0        0        0 
October 2032.......     100       0        0        0        0      31        0        0        0        0 
October 2033.......      69       0        0        0        0      18        0        0        0        0 
October 2034.......      31       0        0        0        0       0        0        0        0        0 
October 2035.......       0       0        0        0        0       0        0        0        0        0 
Weighted Average                                                                                           
   Life (in years)**   28.5     8.7      6.8      5.4      3.5    25.4      6.9      5.5      4.7      4.0 

-------------------                                                             
*  Rounded to the nearest whole percentage.                                     
** Determined as specified under "Weighted Average Lives of the Offered         
Certificates" in this prospectus supplement.                              

S-104 

424B5
105th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 105th
 PERCENTAGE OF INITIAL CLASS CERTIFICATE BALANCES OUTSTANDING*

                                                        [Enlarge/Download Table]

                                     CLASS 1-M-2                                CLASS 1-M-3                
                         PERCENTAGE OF PREPAYMENT ASSUMPTION        PERCENTAGE OF PREPAYMENT ASSUMPTION    
  -----------------   -----------------------------------------  ------------------------------------------
  DISTRIBUTION DATE     0%      80%     100%     120%     150%     0%       80%     100%     120%     150% 
  -----------------     --      ---     ----     ----     ----     --       ---     ----     ----     ---- 
                                                                                                           
Initial Percent....     100     100      100      100      100     100      100      100      100      100 
October 2006.......     100     100      100      100      100     100      100      100      100      100 
October 2007.......     100     100      100      100      100     100      100      100      100      100 
October 2008.......     100     100      100      100      100     100      100      100      100      100 
October 2009.......     100      81       63       48       31     100       81       63       48       31 
October 2010.......     100      64       47       33       17     100       64       47       33        0 
October 2011.......     100      50       34       23        0     100       50       34        7        0 
October 2012.......     100      39       25        9        0     100       39       15        0        0 
October 2013.......     100      31       16        0        0     100       31        0        0        0 
October 2014.......     100      24        4        0        0     100       12        0        0        0 
October 2015.......     100      17        0        0        0     100        0        0        0        0 
October 2016.......     100       6        0        0        0     100        0        0        0        0 
October 2017.......     100       0        0        0        0     100        0        0        0        0 
October 2018.......     100       0        0        0        0     100        0        0        0        0 
October 2019.......     100       0        0        0        0     100        0        0        0        0 
October 2020.......     100       0        0        0        0     100        0        0        0        0 
October 2021.......     100       0        0        0        0     100        0        0        0        0 
October 2022.......     100       0        0        0        0     100        0        0        0        0 
October 2023.......     100       0        0        0        0     100        0        0        0        0 
October 2024.......     100       0        0        0        0     100        0        0        0        0 
October 2025.......     100       0        0        0        0     100        0        0        0        0 
October 2026.......      97       0        0        0        0      97        0        0        0        0 
October 2027.......      87       0        0        0        0      87        0        0        0        0 
October 2028.......      78       0        0        0        0      78        0        0        0        0 
October 2029.......      67       0        0        0        0      67        0        0        0        0 
October 2030.......      56       0        0        0        0      56        0        0        0        0 
October 2031.......      44       0        0        0        0      44        0        0        0        0 
October 2032.......      31       0        0        0        0      31        0        0        0        0 
October 2033.......      15       0        0        0        0       0        0        0        0        0 
October 2034.......       0       0        0        0        0       0        0        0        0        0 
October 2035.......       0       0        0        0        0       0        0        0        0        0 
Weighted Average                                                                                           
   Life (in years)**   25.3     6.6      5.3      4.5      3.8    25.1      6.3      5.0      4.3      3.6 

-------------------                                                             
*  Rounded to the nearest whole percentage.                                     
** Determined as specified under "Weighted Average Lives of the Offered         
Certificates" in this prospectus supplement.                              

S-105 

424B5
106th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 106th
 PERCENTAGE OF INITIAL CLASS CERTIFICATE BALANCES OUTSTANDING*

                                                        [Enlarge/Download Table]

                                     CLASS 1-B-1                                 CLASS 2-M-1               
                         PERCENTAGE OF PREPAYMENT ASSUMPTION        PERCENTAGE OF PREPAYMENT ASSUMPTION    
  -----------------   -----------------------------------------  ------------------------------------------
  DISTRIBUTION DATE     0%      80%     100%     120%     150%     0%       80%     100%     120%     150% 
  -----------------     --      ---     ----     ----     ----     --       ---     ----     ----     ---- 
                                                                                                           
Initial Percent....     100     100      100      100      100     100      100      100      100      100 
October 2006.......     100     100      100      100      100     100      100      100      100      100 
October 2007.......     100     100      100      100      100     100      100      100      100      100 
October 2008.......     100     100      100      100      100     100      100      100      100      100 
October 2009.......     100      81       57       32        3     100       66       47       33       58 
October 2010.......     100      58       29        7        0     100       50       33       21       10 
October 2011.......     100      35        8        0        0     100       37       23       13        2 
October 2012.......     100      17        0        0        0     100       28       16        8        0 
October 2013.......     100       3        0        0        0     100       21       11        2        0 
October 2014.......     100       0        0        0        0     100       16        8        0        0 
October 2015.......     100       0        0        0        0     100       12        2        0        0 
October 2016.......     100       0        0        0        0     100        9        0        0        0 
October 2017.......     100       0        0        0        0     100        5        0        0        0 
October 2018.......     100       0        0        0        0     100        1        0        0        0 
October 2019.......     100       0        0        0        0     100        0        0        0        0 
October 2020.......     100       0        0        0        0     100        0        0        0        0 
October 2021.......     100       0        0        0        0     100        0        0        0        0 
October 2022.......     100       0        0        0        0     100        0        0        0        0 
October 2023.......     100       0        0        0        0     100        0        0        0        0 
October 2024.......     100       0        0        0        0     100        0        0        0        0 
October 2025.......     100       0        0        0        0     100        0        0        0        0 
October 2026.......      97       0        0        0        0     100        0        0        0        0 
October 2027.......      87       0        0        0        0     100        0        0        0        0 
October 2028.......      78       0        0        0        0      99        0        0        0        0 
October 2029.......      64       0        0        0        0      87        0        0        0        0 
October 2030.......      45       0        0        0        0      75        0        0        0        0 
October 2031.......      25       0        0        0        0      61        0        0        0        0 
October 2032.......       3       0        0        0        0      46        0        0        0        0 
October 2033.......       0       0        0        0        0      31        0        0        0        0 
October 2034.......       0       0        0        0        0      14        0        0        0        0 
October 2035.......       0       0        0        0        0       0        0        0        0        0 
Weighted Average                                                                                           
   Life (in years)**   24.5     5.5      4.4      3.7      3.2    26.7      5.9      4.8      4.3      4.3 

-------------------                                                             
*  Rounded to the nearest whole percentage.                                     
** Determined as specified under "Weighted Average Lives of the Offered         
Certificates" in this prospectus supplement.                              

S-106 

424B5
107th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 107th
 PERCENTAGE OF INITIAL CLASS CERTIFICATE BALANCES OUTSTANDING*

                                                        [Enlarge/Download Table]

                                    CLASS 2-M-2                                 CLASS 2-B-1                
                         PERCENTAGE OF PREPAYMENT ASSUMPTION        PERCENTAGE OF PREPAYMENT ASSUMPTION    
  -----------------   -----------------------------------------  ------------------------------------------
  DISTRIBUTION DATE     0%      80%     100%     120%     150%     0%       80%     100%     120%     150% 
  -----------------     --      ---     ----     ----     ----     --       ---     ----     ----     ---- 
                                                                                                           
Initial Percent....     100     100      100      100      100     100      100      100      100      100 
October 2006.......     100     100      100      100      100     100      100      100      100      100 
October 2007.......     100     100      100      100      100     100      100      100      100      100 
October 2008.......     100     100      100      100      100     100      100      100      100      100 
October 2009.......     100      66       47       33       18     100       66       47       33        9 
October 2010.......     100      50       33       21        6     100       50       33       15        0 
October 2011.......     100      37       23       13        0     100       37       19        0        0 
October 2012.......     100      28       16        2        0     100       28        5        0        0 
October 2013.......     100      21        8        0        0     100       15        0        0        0 
October 2014.......     100      16        0        0        0     100        5        0        0        0 
October 2015.......     100      10        0        0        0     100        0        0        0        0 
October 2016.......     100       3        0        0        0     100        0        0        0        0 
October 2017.......     100       0        0        0        0     100        0        0        0        0 
October 2018.......     100       0        0        0        0     100        0        0        0        0 
October 2019.......     100       0        0        0        0     100        0        0        0        0 
October 2020.......     100       0        0        0        0     100        0        0        0        0 
October 2021.......     100       0        0        0        0     100        0        0        0        0 
October 2022.......     100       0        0        0        0     100        0        0        0        0 
October 2023.......     100       0        0        0        0     100        0        0        0        0 
October 2024.......     100       0        0        0        0     100        0        0        0        0 
October 2025.......     100       0        0        0        0     100        0        0        0        0 
October 2026.......     100       0        0        0        0     100        0        0        0        0 
October 2027.......     100       0        0        0        0     100        0        0        0        0 
October 2028.......      99       0        0        0        0      99        0        0        0        0 
October 2029.......      87       0        0        0        0      87        0        0        0        0 
October 2030.......      75       0        0        0        0      75        0        0        0        0 
October 2031.......      61       0        0        0        0      61        0        0        0        0 
October 2032.......      46       0        0        0        0      46        0        0        0        0 
October 2033.......      31       0        0        0        0      31        0        0        0        0 
October 2034.......      14       0        0        0        0       2        0        0        0        0 
October 2035.......       0       0        0        0        0       0        0        0        0        0 
Weighted Average                                                                                           
   Life (in years)**   26.6     5.8      4.7      4.1      3.7    26.6      5.5      4.4      3.8      3.4 

-------------------                                                             
*  Rounded to the nearest whole percentage.                                     
** Determined as specified under "Weighted Average Lives of the Offered         
Certificates" in this prospectus supplement.                              

S-107 

424B5
108th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 108th
 PERCENTAGE OF INITIAL CLASS CERTIFICATE BALANCES OUTSTANDING*

                                                                [Download Table]

                                       CLASS 2-B-2               
                        -----------------------------------------
                           PERCENTAGE OF PREPAYMENT ASSUMPTION   
  -----------------     -----------------------------------------
  DISTRIBUTION DATE       0%      80%     100%     120%     150% 
  -----------------     -----------------------------------------
                                                                 
Initial Percent....       100     100      100      100      100 
October 2006.......       100     100      100      100      100 
October 2007.......       100     100      100      100      100 
October 2008.......       100     100      100      100      100 
October 2009.......       100      66       37       11        0 
October 2010.......       100      42       11        0        0 
October 2011.......       100      19        0        0        0 
October 2012.......       100       2        0        0        0 
October 2013.......       100       0        0        0        0 
October 2014.......       100       0        0        0        0 
October 2015.......       100       0        0        0        0 
October 2016.......       100       0        0        0        0 
October 2017.......       100       0        0        0        0 
October 2018.......       100       0        0        0        0 
October 2019.......       100       0        0        0        0 
October 2020.......       100       0        0        0        0 
October 2021.......       100       0        0        0        0 
October 2022.......       100       0        0        0        0 
October 2023.......       100       0        0        0        0 
October 2024.......       100       0        0        0        0 
October 2025.......       100       0        0        0        0 
October 2026.......       100       0        0        0        0 
October 2027.......       100       0        0        0        0 
October 2028.......        99       0        0        0        0 
October 2029.......        87       0        0        0        0 
October 2030.......        75       0        0        0        0 
October 2031.......        61       0        0        0        0 
October 2032.......        36       0        0        0        0 
October 2033.......         7       0        0        0        0 
October 2034.......         0       0        0        0        0 
October 2035.......         0       0        0        0        0 
Weighted Average                                                 
   Life (in years)**     26.2     4.7      3.8      3.4      3.1 

-------------------                                                             
*  Rounded to the nearest whole percentage.                                     
** Determined as specified under "Weighted Average Lives of the Offered         
Certificates" in this prospectus supplement.                              

S-108 

424B5
109th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 109th
LAST SCHEDULED DISTRIBUTION DATE                                                

       Assuming that, among other things, (1) no prepayments are received on
the Mortgage Loans and (2) scheduled monthly payments of principal and interest 
on each of the Mortgage Loans are timely received, the Distribution Date (the   
"LAST SCHEDULED DISTRIBUTION DATE") that occurs one month following the         
Distribution Date (or, in the case of the Class A-R Certificates, zero months)  
on which the Class Certificate Balance of the applicable class of certificates  
would be reduced to zero is:                                                    

             CLASS OF CERTIFICATES                 DISTRIBUTION DATE
             ---------------------                 -----------------
            Class 1-A-1                            July 2026
            Class 1-A-2                            July 2032
            Class 1-A-3                            July 2033
             Class 1-A-4                           August 2035
            Class 1-A-5                             May 2035
             Class 1-A-6                           August 2035
              Class 1-M-1                          November 2034
            Class 1-M-2                            June 2034
               Class 1-M-3                          September 2033
              Class 1-B-1                           January 2033
             Class 2-A-1                           August 2035
              Class 2-A-2                          December 2029
              Class 2-A-3                           January 2033
             Class 2-A-4                           August 2035
            Class 2-M-1                            June 2035
             Class 2-M-2                            April 2035
              Class 2-B-1                          December 2034
              Class 2-B-2                          February 2034
              Class A-R                            December 2005

        The actual final Distribution Date with respect to each class of these
certificates could occur significantly earlier than its Last Scheduled          
Distribution Date because:                                                      

                (1) prepayments are likely to occur which will be applied to
the payment of the Class Certificate Balances thereof, and    

                  (2) the Master Servicer may purchase all the Mortgage Loans in
   the trust fund when the aggregate Stated Principal Balance of the
     Mortgage Loans and REO Properties in the trust fund is less than or
     equal to 10% of the sum of the Cut-off Date Pool Principal Balance.

 USE OF PROCEEDS

      We expect the proceeds to the Depositor from the sale of the offered
certificates to be approximately $619,290,695, plus accrued interest in the case
of the Fixed Rate Certificates, before deducting issuance expenses payable by   
the Depositor. The Depositor will apply the net proceeds of the sale of these   
classes of certificates against the purchase price of the Mortgage Loans.       

MATERIAL FEDERAL INCOME TAX CONSEQUENCES

         For federal income tax purposes, the trust fund (exclusive of the trust
fund's rights with respect to payments received under the Corridor Contracts and
the Carryover Reserve Fund) will consist of one or more REMICs in a tiered      
structure. The highest REMIC will be referred to as the "MASTER REMIC," and each
REMIC below the Master REMIC (if any) will be referred to as an "underlying     
REMIC." Each underlying REMIC (if any)                                          

S-109 

424B5
110th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 110th
will issue multiple classes of uncertificated, regular interests (the           
"UNDERLYING REMIC REGULAR INTERESTS") that will be held by another REMIC above  
it in the tiered structure. The assets of the lowest underlying REMIC (or the   
Master REMIC if there are no underlying REMICs) will consist of the mortgage    
loans and any other assets designated in the Pooling and Servicing Agreement.   
The Master REMIC will issue the senior certificates and the subordinated        
certificates (together, excluding the Class A-R Certificate, the "REGULAR       
CERTIFICATES"). The Regular Certificates will be designated as the regular      
interests in the Master REMIC. The Class A-R Certificates (also, the "RESIDUAL  
CERTIFICATES") will represent the beneficial ownership of the residual interest 
in each underlying REMIC (if any) and the residual interest in the Master REMIC.
The assets of the Master REMIC will consist of the underlying REMIC Regular     
Interests (or, if there are no underlying REMICs, the Mortgage Loans and any    
other assets designated in the Pooling and Servicing Agreement). Aggregate      
distributions on the underlying REMIC Regular Interests held by the Master REMIC
(if any) will equal the aggregate distributions on the Regular Certificates     
issued by the Master REMIC.                                                     

         All classes of the Regular Certificates will be treated as representing
interests in REMIC Regular Interests and entitlement to receive payments of Net 
Rate Carryover. Holders of the Regular Certificates must allocate the purchase  
price for their Regular Certificates between the REMIC Regular Interest         
component and the Net Rate Carryover component.                                 

       Upon the issuance of the Certificates, Sidley Austin Brown & Wood LLP
("TAX COUNSEL"), will deliver its opinion concluding, assuming compliance with  
the Pooling and Servicing Agreement, for federal income tax purposes, that each 
REMIC created under the Pooling and Servicing Agreement will qualify as a REMIC 
within the meaning of Section 860D of the Internal Revenue Code of 1986, as     
amended (the "CODE"), and that the Regular Certificates will represent regular  
interests in a REMIC. Moreover, Tax Counsel will deliver an opinion concluding  
that the interests of the holders of the Regular Certificates with respect to   
Net Rate Carryover will represent, for federal income tax purposes, contractual 
rights coupled with regular interests within the meaning of Treasury regulations
ss.1.860G-2(i).                                                                 

TAXATION OF THE REMIC REGULAR INTEREST COMPONENTS OF THE REGULAR CERTIFICATES   

        The REMIC Regular Interest components of the Regular Certificates will
be treated as debt instruments issued by the Master REMIC for federal income tax
purposes. Income on the REMIC Regular Interest components of the Regular        
Certificates must be reported under an accrual method of accounting. Under an   
accrual method of accounting, interest income may be required to be included in 
a holder's gross income in advance of the holder's actual receipt of that       
interest income.                                                                

         The REMIC Regular Interest components of the other Regular Certificates
may be treated for federal income tax purposes as having been issued with       
original issue discount ("OID"). For purposes of determining the amount and rate
of accrual of OID and market discount, the trust fund intends to assume that    
there will be prepayments on the Mortgage Loans at a rate equal to 100% of the  
applicable Prepayment Assumption. No representation is made regarding whether   
the Mortgage Loans will prepay at the foregoing rate or at any other rate. See  
"Material Federal Income Tax Consequences" in the prospectus. Computing accruals
of OID in the manner described in the prospectus may (depending on the actual   
rate of prepayments during the accrual period) result in the accrual of negative
amounts of OID on the certificates issued with OID in an accrual period. Holders
will be entitled to offset negative accruals of OID only against future OID     
accruals on their certificates.                                                 

         If the holders of any Regular Certificates are treated as acquiring the
REMIC Regular Interest components of their Regular Certificates at a premium,   
the holders are encouraged to consult their tax advisors regarding the election 
to amortize bond premium and the method to be employed. See "Material Federal   
Income Tax Consequences -- REMIC Certificates -- a. Regular Certificates" in the
prospectus.                                                                     

Disposition of Regular Certificates                                             

     Assuming that the Regular Certificates are held as "capital assets"
within the meaning of section 1221 of the Code, gain or loss on the disposition 
of the REMIC Regular Interest component of a Regular Certificate should result  
in capital gain or loss. Such gain, however, will be treated as ordinary income,
to the extent it does not exceed the excess (if any) of:                        

S-110 

424B5
111th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 111th
     (1)      the amount that would have been includible in the holder's
gross income with respect to the REMIC Regular Interest component had income    
thereon accrued at a rate equal to 110% of the applicable federal rate as       
defined in section 1274(d) of the Code determined as of the date of purchase of 
the Certificate                                                                 

over                                                                            

(2)      the amount actually included in such holder's income.

Tax Treatment For Certain Purposes                                              

As described more fully under "Material Federal Income Tax    
Consequences" in the prospectus, the REMIC Regular Interest components of the   
Regular Certificates will represent "real estate assets" under Section          
856(c)(5)(B) of the Code and qualifying assets under Section 7701(a)(19)(C) of  
the Code in the same proportion or greater that the assets of the trust fund    
will be so treated, and income on the REMIC Regular Interest components of the  
Regular Certificates will represent "interest on obligations secured by         
mortgages on real property or on interests in real property" under Section      
856(c)(3)(B) of the Code in the same proportion or greater that the income on   
the assets of the trust fund will be so treated. The REMIC Regular Interest     
components of the Regular Certificates (but not the Net Rate Carryover          
components) will represent qualifying assets under Section 860G(a)(3) of the    
Code if acquired by a REMIC within the prescribed time periods of the Code.     

NET RATE CARRYOVER                                                              

         The following discussions assume that the rights and obligations of the
holders of the Regular and Class CF and Class CV Certificates with respect to   
Net Rate Carryover will be treated as rights and obligations under a notional   
principal contract rather than as interests in a partnership for federal income 
tax purposes. If these rights and obligations were treated as representing      
interests in an entity taxable as a partnership for federal income tax purposes,
then there could be different tax timing consequences to all such               
certificateholders and different withholding tax consequences on payments to    
certificateholders who are non-U.S. Persons. Prospective investors in the       
Regular Certificates are encouraged to consult their tax advisors regarding the 
appropriate tax treatment.                                                      

The Rights of the Regular Certificates With Respect to Net Rate Carryover       

        For tax information reporting purposes, the Trustee (1) will treat the
Net Rate Carryover rights of the Regular Certificates as rights to receive      
payments under a notional principal contract (specifically, an interest rate cap
contract) and (2) anticipates assuming that these rights will have an           
insubstantial value relative to the value of the REMIC Regular Interest         
components of the Regular Certificates. The IRS could, however, successfully    
argue that the Net Rate Carryover component of one or more classes of Regular   
Certificates has a greater value. Similarly, the Trustee could determine that   
the Net Rate Carryover component of one or more classes of Regular Certificates 
has a greater value. In either case, the REMIC Regular Interest component of the
Regular Certificates could be viewed as having been issued with either an       
additional amount of OID (which could cause the total amount of discount to     
exceed a statutorily defined de minimis amount) or with less premium (which     
would reduce the amount of premium available to be used as an offset against    
interest income). See "Material Federal Income Tax Consequences -- REMIC        
Certificates --a. Regular Certificates" in the prospectus. In addition, the Net 
Rate Carryover component could be viewed as having been purchased at a higher   
cost. These changes could affect the timing and amount of income and deductions 
on the REMIC Regular Interest component and Net Rate Carryover component.       

    The portion of the overall purchase price of a Regular Certificate
attributable to the Net Rate Carryover component must be amortized over the life
of the Regular Certificate, taking into account the declining balance of the    
related REMIC Regular Interest component. Treasury regulations concerning       
notional principal contracts provide alternative methods for amortizing the     
purchase price of an interest rate cap contract. Under one method -- the level  
yield constant interest method -- the price paid for an interest rate cap       
agreement is amortized over the life of the cap as though it were the principal 
amount of a loan bearing interest at a reasonable rate. Holders are urged to    
consult their tax advisors concerning the methods that can be employed to       
amortize the portion of the purchase price paid for the Net Rate Carryover      
component of a Regular Certificate.                                             

S-111 

424B5
112th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 112th
        Any payments received by a holder of a Regular Certificate as Net Rate
Carryover will be treated as periodic payments received under a notional        
principal contract. For any taxable year, to the extent the sum of the periodic 
payments received exceeds the amortization of the purchase price of the Net Rate
Carryover component, such excess will be ordinary income. Conversely, to the    
extent the amortization of the purchase price exceeds the periodic payments,    
such excess will be allowable as an ordinary deduction. In the case of an       
individual, such deduction will be subject to the 2-percent floor imposed on    
miscellaneous itemized deductions under section 67 of the Code and may be       
subject to the overall limitation on itemized deductions imposed under section  
68 of the Code. In addition, miscellaneous itemized deductions are not allowed  
for purposes of computing the alternative minimum tax.                          

Dispositions of Net Rate Carryover                                              

         Upon the sale, exchange, or other disposition of a Regular Certificate,
the holders of the Regular Certificates must allocate the amount realized       
between the Regular Interest component and the Net Rate Carryover component     
based on the relative fair market values of those components at the time of     
sale. Assuming a Regular Certificate is held as a "capital asset" within the    
meaning of section 1221 of the Code, any gain or loss on the disposition of the 
Net Rate Carryover component should be capital gain or loss.                    

Tax Treatment For Certain Purposes                                              

        The Net Rate Carryover components of the Regular Certificates will not
qualify as assets described in Section 7701(a)(19)(C) of the Code or as real    
estate assets under Section 856(c)(5)(B) of the Code and income on the Net Rate 
Carryover components of the Regular Certificates will not represent "interest on
obligations secured by mortgages on real property on or interest in real        
property" under Section 856(c)(3)(B) of the Code. In addition, because of the   
Net Rate Carryover component, holders of the Certificates should consult with   
their tax advisors before resecuritizing those Certificates in a REMIC.         

THE CARRYOVER RESERVE FUND                                                      

      Holders of the Class CF and Class CV Certificates will be taxable on
the earnings of the Carryover Reserve Fund whether those earnings are           
distributed directly to the holders of the Class CF and Class CV Certificates or
paid to the holders of the Regular Certificates and taxable to the holders of   
the Regular Certificates as part of Net Rate Carryover.                         

RESIDUAL CERTIFICATES                                                           

   The holders of the Residual Certificates must include the taxable
income of each underlying REMIC (if any) and the Master REMIC in their federal  
taxable income. The resulting tax liability of the holders may exceed cash      
distributions to them during certain periods. All or a portion of the taxable   
income from a Residual Certificate recognized by a holder may be treated as     
"excess inclusion" income, which with limited exceptions, cannot be reduced by  
deductions (including net operating losses) and in all cases, is subject to U.S.
federal income tax.                                                             

   In computing alternative minimum taxable income, the special rule
providing that taxable income cannot be less than the sum of the taxpayer's     
excess inclusions for the year does not apply. However, a taxpayer's alternative
minimum taxable income cannot be less than the sum of the taxpayer's excess     
inclusions for the year. In addition, the amount of any alternative minimum tax 
net operating loss is determined without regard to any excess inclusions.       

     Purchasers of a Residual Certificate (that is, one of the Class A-R
Certificates) are encouraged to consider carefully the tax consequences of an   
investment in Residual Certificates discussed in the prospectus and consult     
their own tax advisors with respect to those consequences. See "Material Federal
Income Tax Consequences -- REMIC Certificates -- b. Residual Certificates" in   
the prospectus. In particular, prospective holders of the Residual Certificates 
are encouraged to consult their tax advisors regarding whether a Residual       
Certificate will be treated as a "noneconomic" residual interest, as a "tax     
avoidance potential" residual interest, or as both. Among other things, holders 
of the Residual Certificates should be aware of REMIC regulations that may      
affect their ability to transfer their Residual Certificates. See "Material     
Federal Income Tax Consequences -- Tax-Related Restrictions on                  

S-112 

424B5
113th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 113th
Transfer of Residual Certificates -- Noneconomic Residual Certificates,"        
"Material Federal Income Tax Consequences -- b. Residual Certificates -- Mark to
Market Rules," "-- Excess Inclusions" and "Material Federal Income Tax          
Consequences -- Tax Related Restrictions on Transfers of Residual Certificates  
--Treatment of Inducement Fees" and "-- Foreign Investors" in the prospectus.   

     Additionally, for information regarding Prohibited Transactions and
Treatment of Realized Losses, see "Material Federal Income Tax Consequences --  
Prohibited Transactions and Other Taxes" and "-- REMIC Certificates -- a.       
Regular Certificates -- Treatment of Realized Losses" in the prospectus.        

         As a result of the Economic Growth and Tax Relief Reconciliation Act of
2001 (the "2001 ACT"), limitations imposed by section 68 of the Code on claiming
itemized deductions will be phased-out commencing in 2006, which will affect    
individuals holding Residual Certificates. In addition, as a result of the Jobs 
and Growth Tax Relief Reconciliation Act of 2003 (the "2003 ACT"), the backup   
withholding rate has been reduced to 28%. Unless they are amended, these        
provisions of the 2001 Act and the 2003 Act will no longer apply for taxable    
years beginning on or after December 31, 2010. See "Material Federal Income Tax 
Consequences" in the prospectus. Investors are encouraged to consult their tax  
advisors with respect to both statutes.                                         

 OTHER TAXES

   No representations are made regarding the tax consequences of the
purchase, ownership or disposition of the certificates under any state, local or
foreign tax law.                                                                

      ALL INVESTORS ARE ENCOURAGED TO CONSULT THEIR TAX ADVISORS REGARDING
THE FEDERAL, STATE, LOCAL OR FOREIGN TAX CONSEQUENCES OF PURCHASING, OWNING OR  
DISPOSING OF THE CERTIFICATES.                                                  

ERISA CONSIDERATIONS

         Any fiduciary of an employee benefit or other plan or arrangement (such
as an individual retirement account or Keogh plan) that is subject to the       
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or to    
Section 4975 of the Code (a "PLAN"), that proposes to cause the Plan to acquire 
any of the offered certificates (directly or indirectly through investment by an
entity or account holding assets of the Plan) is encouraged to consult with its 
counsel with respect to the potential consequences of the Plan's acquisition and
ownership of the certificates under ERISA and Section 4975 of the Code. See     
"ERISA Considerations" in the prospectus. Section 406 of ERISA prohibits        
"parties in interest" with respect to an employee benefit plan subject to ERISA 
from engaging in various different types of transactions involving the Plan and 
its assets unless a statutory, regulatory or administrative exemption applies to
the transaction. Section 4975 of the Code imposes excise taxes on prohibited    
transactions involving "disqualified persons" and Plans described under that    
Section. ERISA authorizes the imposition of civil penalties for prohibited      
transactions involving Plans not subject to the requirements of Section 4975 of 
the Code.                                                                       

    Some employee benefit plans, including governmental plans and some
church plans, are not subject to ERISA's requirements. Accordingly, assets of   
those plans may be invested in the offered certificates without regard to the   
ERISA considerations described in this prospectus supplement and in the         
prospectus, subject to the provisions of other applicable federal and state law.
Any of those plans that is qualified and exempt from taxation under Sections    
401(a) and 501(a) of the Code may be subject to the prohibited transaction rules
set forth in Section 503 of the Code.                                           

        Investments by Plans or with assets of Plans that are subject to ERISA
must satisfy ERISA's general fiduciary requirements, including the requirement  
of investment prudence and diversification and the requirement that a Plan's    
investments be made in accordance with the documents governing the Plan. A      
fiduciary that decides to invest the assets of a Plan in the offered            
certificates should consider, among other factors, the extreme sensitivity of   
the investment to the rate of principal payments (including prepayments) on the 
Mortgage Loans. It is anticipated that the certificates will constitute "equity 
interests" for the purpose of the Plan Assets Regulation.                       

S-113 

424B5
114th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 114th
The U.S. Department of Labor has granted the underwriter an   
administrative exemption (the "EXEMPTION") from some of the prohibited          
transaction rules of ERISA and the related excise tax provisions of Section 4975
of the Code with respect to the initial purchase, the holding and the subsequent
resale by Plans of securities, including certificates, in pass-through trusts   
that consist of specified receivables, loans and other obligations that meet the
conditions and requirements of the Exemption. The Exemption applies to mortgage 
loans such as the Mortgage Loans in the trust fund. The Exemption extends       
exemptive relief to certificates, including subordinated certificates, rated in 
the four highest generic rating categories in certain designated transactions   
when the conditions of the Exemption, including the requirement that an         
investing Plan be an "accredited investor" as defined in Rule 501(a)(1) of      
Regulation D under the Securities Act of 1933, as amended, are met.             

         For a general description of the Exemption and the conditions that must
be satisfied for the Exemption to apply, see "ERISA Considerations" in the      
prospectus.                                                                     

     It is expected that the Exemption will apply to the acquisition and
holding by Plans of the offered certificates (other than the Class A-R          
Certificates) and that all conditions of the Exemption other than those within  
the control of the investors will be met. In addition, as of the date of this   
prospectus supplement, there is no single mortgagor that is the obligor on five 
percent (5%) of the Mortgage Loans included in the trust fund by aggregate      
unamortized principal balance of the assets of the trust fund.                  

       The rating of a certificate may change. If a class of certificates no
longer has a rating of at least BBB- or its equivalent from at least one of S&P,
Fitch or Moody's, certificates of that class will no longer be eligible for     
relief under the Exemption (although a Plan that had purchased the certificate  
when it had an investment-grade rating would not be required by the Exemption to
dispose of it). An offered certificate that satisfies the requirements of the   
Exemption other than the rating requirement may be eligible for purchase by an  
insurance company general account that includes plan assets in reliance on      
Sections I and III of Prohibited Transaction Class Exemption 95-60.             

   BECAUSE THE CLASS A-R CERTIFICATES ARE NOT BEING PURCHASED BY ANY
UNDERWRITER TO WHOM AN EXEMPTION SIMILAR TO THE EXEMPTION HAS BEEN GRANTED, THE 
CLASS A-R CERTIFICATES DO NOT CURRENTLY MEET THE REQUIREMENTS OF THE EXEMPTION  
OR ANY COMPARABLE INDIVIDUAL ADMINISTRATIVE EXEMPTION GRANTED TO ANY            
UNDERWRITER. CONSEQUENTLY, THE CLASS A-R CERTIFICATES MAY BE TRANSFERRED ONLY IF
THE TRUSTEE RECEIVES:                                                           

      o A REPRESENTATION FROM THE TRANSFEREE OF THE CERTIFICATE, ACCEPTABLE TO
 AND IN FORM AND SUBSTANCE SATISFACTORY TO THE TRUSTEE, THAT THE
     TRANSFEREE IS NOT A PLAN, OR A PERSON ACTING ON BEHALF OF A PLAN OR
USING A PLAN'S ASSETS TO EFFECT THE TRANSFER; OR              

       o AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE AND
         HOLDING OF THE CERTIFICATE BY A PLAN, OR A PERSON ACTING ON BEHALF OF A
PLAN OR USING A PLAN'S ASSETS, WILL NOT RESULT IN A NON-EXEMPT
         PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE AND WILL
     NOT SUBJECT THE TRUSTEE OR THE MASTER SERVICER TO ANY OBLIGATION IN
      ADDITION TO THOSE UNDERTAKEN IN THE POOLING AND SERVICING AGREEMENT.

         IF THE REPRESENTATION IS NOT TRUE, OR ANY ATTEMPT TO TRANSFER TO A PLAN
OR PERSON ACTING ON BEHALF OF A PLAN OR USING A PLAN'S ASSETS IS INITIATED      
WITHOUT THE REQUIRED OPINION OF COUNSEL, THE ATTEMPTED TRANSFER OR ACQUISITION  
SHALL BE VOID.                                                                  

       Prospective Plan investors are encouraged to consult with their legal
advisors concerning the impact of ERISA and the Code, the effect of the Plan    
Assets Regulation and the applicability of the Exemption described in the       
prospectus, and the potential consequences in their specific circumstances,     
before making an investment in any of the offered certificates. Moreover, each  
Plan fiduciary is encouraged to determine whether, under the general fiduciary  
standards of investment prudence and diversification, an investment in any of   
the offered certificates is appropriate for the Plan, taking into account the   
overall investment policy of the Plan and the composition of the Plan's         
investment portfolio.                                                           

S-114 

424B5
115th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 115th
         The sale of certificates to a Plan is in no respect a representation by
the issuer or any underwriter of the certificates that this investment meets all
relevant legal requirements with respect to investments by Plans generally or   
any particular Plan, or that this investment is appropriate for Plans generally 
or any particular Plan.                                                         

METHOD OF DISTRIBUTION

   Subject to the terms and conditions set forth in the underwriting
agreement between the Depositor and Countrywide Securities Corporation, an      
affiliate of the Depositor, the sellers and the Master Servicer ("CSC" or the   
"UNDERWRITER"), the Depositor has agreed to sell to the underwriter and the     
underwriter has agreed to purchase from the Depositor the offered certificates, 
other than the Class A-R Certificates (the "UNDERWRITTEN CERTIFICATES").        

   Distribution of the Underwritten Certificates will be made by the
underwriter from time to time in negotiated transactions or otherwise at varying
prices to be determined at the time of sale. The underwriter may effect such    
transactions by selling the Underwritten Certificates to or through dealers and 
such dealers may receive from the underwriter, for which they act as agent,     
compensation in the form of underwriting discounts, concessions or commissions. 
The underwriter and any dealers that participate with the underwriter in the    
distribution of the Underwritten Certificates may be deemed to be underwriters, 
and any discounts, commissions or concessions received by them, and any profits 
on resale of the Underwritten Certificates purchased by them, may be deemed to  
be underwriting discounts and commissions under the Securities Act of 1933, as  
amended.                                                                        

      The Depositor has been advised by the underwriter that it intends to
make a market in the Underwritten Certificates, but the underwriter has no      
obligation to do so. There can be no assurance that a secondary market for the  
Underwritten Certificates will develop or, if it does develop, that it will     
continue or that it will provide certificateholders with a sufficient level of  
liquidity of investment.                                                        

        The Depositor has agreed to indemnify the underwriter against, or make
contributions to the underwriter with respect to, liabilities, customarily      
indemnified against, including liabilities under the Securities Act of 1933, as 
amended.                                                                        

         The Class A-R Certificates will not be purchased by the underwriter but
will be transferred to Countrywide Home Loans on the closing date as partial    
consideration for the sale of the Mortgage Loans to the Depositor. The Class A-R
Certificates may be offered by the Depositor from time to time directly or      
through underwriters or agents (either of which may include CSC) in one or more 
negotiated transactions, or otherwise, at varying prices to be determined at the
time of sale, in one or more separate transactions at prices to be negotiated at
the time of each sale. Any underwriters or agents that participate in the       
distribution of the Class A-R Certificates may be deemed to be "underwriters"   
within the meaning or the Securities Act and any profit on the sale of the      
certificates by them and any discounts, commissions, concessions or other       
compensation received by any of them may be deemed to be underwriting discounts 
and commissions under the Securities Act.                                       

 LEGAL MATTERS

    The validity of the certificates, including their material federal
income tax consequences, will be passed upon for the Depositor by Sidley Austin 
Brown & Wood LLP, New York, New York. Certain legal matters will be passed upon 
for the underwriter by McKee Nelson LLP.                                        

 RATINGS

         It is a condition to the issuance of the offered certificates that they
be assigned the respective ratings set forth in the Summary of this prospectus  
supplement.                                                                     

       The ratings assigned by Moody's to mortgage pass-through certificates
address the likelihood of the receipt of all distributions on the Mortgage Loans
by the related certificateholders under the agreements pursuant to which the    
certificates are issued. Moody's ratings take into consideration the credit     
quality of the related mortgage pool, including any credit support providers,   
structural and legal aspects associated with the certificates, and the extent to
which the payment stream on the mortgage pool is adequate to make the payments  
required by the certificates.                                                   

S-115 

424B5
116th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 116th
   The ratings assigned by S&P to mortgage pass-through certificates
address the likelihood of the receipt of all distributions on the Mortgage Loans
by the related certificateholders under the agreements pursuant to which the    
certificates are issued. S&P's ratings take into consideration the credit       
quality of the related mortgage pool, including any credit support providers,   
structural and legal aspects associated with the certificates, and the extent to
which the payment stream on the mortgage pool is adequate to make the payments  
required by the certificates.                                                   

    The ratings of the rating agencies listed above do not address the
possibility that, as a result of principal prepayments, certificateholders may  
receive a lower than anticipated yield.                                         

     The security ratings assigned to the offered certificates should be
evaluated independently from similar ratings on other types of securities. 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 rating agencies.        

         The Depositor has not requested a rating of the offered certificates by
any rating agency other than the rating agencies listed above; there can be no  
assurance, however, as to whether any other rating agency will rate the offered 
certificates or, if it does, what rating would be assigned by the other rating  
agency. The ratings assigned by the other rating agency to the offered          
certificates could be lower than the respective ratings assigned by the rating  
agencies listed above.                                                          

[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

S-116 

424B5
117th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 117th
INDEX OF DEFINED TERMS

2/28 Mortgage Loan...............................S-19                           
2001 Act........................................S-113                           
2003 Act........................................S-113                           
3/1 Mortgage Loan................................S-19                           
3/27 Mortgage Loan...............................S-19                           
30-Year CMT Mortgage Loan........................S-19                           
30-Year One-Month LIBOR Mortgage Loan............S-19                           
30-Year Six-Month LIBOR Mortgage Loan............S-19                           
30-Year Twelve-Month LIBOR Mortgage Loan.........S-19                           
5/1 Mortgage Loan................................S-19                           
5/25 Mortgage Loan...............................S-19                           
7/1 Mortgage Loan................................S-19                           
Accrual Period...................................S-63                           
Adjustable Rate Cumulative Loss Trigger Event....S-74                           
Adjustable Rate Delinquency Trigger Event........S-74                           
Adjustable Rate Excess Cashflow..................S-76                           
Adjustable Rate Excess Overcollateralization                                    
Amount..........................................S-73                          
Adjustable Rate OC Floor.........................S-73                           
Adjustable Rate Overcollateralization                                           
Deficiency Amount...............................S-73                          
Adjustable Rate Overcollateralization                                           
Reduction Amount................................S-73                          
Adjustable Rate Overcollateralization Target                                    
Amount..........................................S-73                          
Adjustable Rate Overcollateralized Amount........S-73                           
Adjustable Rate Senior Enhancement Percentage....S-74                           
Adjustable Rate Stepdown Date....................S-73                           
Adjustable Rate Subordinated Certificates........S-56                           
Adjustable Rate Subordinated Class Principal                                    
Distribution Amount.............................S-70                          
Adjustable Rate Trigger Event....................S-74                           
Adjusted Net Mortgage Rate.......................S-65                           
Adjustment Date..................................S-20                           
Alternative Documentation Program................S-42                           
Applied Realized Loss Amount.....................S-82                           
beneficial owner.................................S-58                           
Book-Entry Certificates..........................S-58                           
Carryover Reserve Fund...........................S-82                           
Certificate Account..............................S-62                           
Certificate Owners...............................S-58                           
CI...............................................S-59                           
Class 1-A-1 Corridor Contract....................S-77                           
Class 1-A-1 Corridor Contract Ceiling Rate.......S-79                           
Class 1-A-1 Corridor Contract Notional Balance...S-79                           
Class 1-A-1 Corridor Contract Strike Rate........S-79                           
Class 1-A-1 Corridor Contract Termination Date...S-81                           
Class Certificate Balance........................S-57                           
Clearstream, Luxembourg..........................S-59                           
CLUES Plus Documentation Program.................S-42                           
Code............................................S-110                           
Cooperative......................................S-60                           
Corridor Contract................................S-77                           
Corridor Contract Administration Agreement.......S-77                           
Corridor Contract Administrator..................S-77                           
Corridor Contract Ceiling Rate...................S-81                           
Corridor Contract Counterparty...................S-77                           
Corridor Contract Notional Balance...............S-81                           
Corridor Contract Strike Rate....................S-81                           
Corridor Contract Termination Date...............S-81                           
Corridor Contracts...............................S-77                           
Countrywide Financial............................S-51                           
Countrywide Home Loans...........................S-51                           
Countrywide Servicing............................S-51                           
CPR..............................................S-94                           
CSC.............................................S-115                           
Current Interest.................................S-64                           
Cut-off Date Pool Principal Balance..............S-18                           
DBC..............................................S-59                           
debt-to-income...................................S-41                           
Definitive Certificate...........................S-58                           
deleted mortgage loan............................S-39                           
Depositor........................................S-18                           
Distribution Account.............................S-62                           
Distribution Date................................S-62                           
DTC..............................................S-58                           
ERISA...........................................S-113                           
Euroclear........................................S-58                           
Euroclear Operator...............................S-60                           
Euroclear Participants...........................S-60                           
European Depositaries............................S-58                           
Excess Corridor Contract Payment.................S-78                           
excess interest..................................S-10                           
Exemption.......................................S-114                           
Expanded Underwriting Guidelines.................S-42                           
Expense Fee Rate.................................S-54                           
Extra Principal Distribution Amount..............S-71                           
FICO Credit Scores...............................S-40                           
Financial Intermediary...........................S-58                           
Fixed Rate Certificates..........................S-57                           
Fixed Rate Cumulative Loss Trigger Event.........S-72                           
Fixed Rate Delinquency Trigger Event.............S-72                           
Fixed Rate Excess Cashflow.......................S-76                           
Fixed Rate Excess Overcollateralization Amount...S-71                           
Fixed Rate OC Floor..............................S-71                           
Fixed Rate Overcollateralization Deficiency                                     
Amount..........................................S-71                          
Fixed Rate Overcollateralization Reduction                                      
Amount..........................................S-71                          
Fixed Rate Overcollateralization Target Amount...S-71                           
Fixed Rate Overcollateralized Amount.............S-71                           
Fixed Rate Senior Enhancement Percentage.........S-72                           
Fixed Rate Stepdown Date.........................S-71                           
Fixed Rate Subordinated Certificates.............S-56                           
Fixed Rate Subordinated Class Principal                                         
Distribution Amount.............................S-69                          

S-117 

424B5
118th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 118th
Fixed Rate Trigger Event.........................S-72                           
Full Documentation Program.......................S-41                           
Global Securities...................................1                           
Gross Margin.....................................S-20                           
group 1 certificates.............................S-57                           
Group 1 Mortgage Loans...........................S-18                           
Group 1 Principal Distribution Target Amount.....S-69                           
group 1 senior certificates......................S-57                           
group 2 certificates.............................S-57                           
Group 2 Certificates Corridor Contract...........S-77                           
Group 2 Certificates Corridor Contract Ceiling                                  
Rate............................................S-80                          
Group 2 Certificates Corridor Contract Notional                                 
Balance.........................................S-80                          
Group 2 Certificates Corridor Contract Strike                                   
Rate............................................S-80                          
Group 2 Certificates Corridor Contract                                          
Termination Date................................S-81                          
Group 2 Mortgage Loans...........................S-18                           
Group 2 Principal Distribution Amount............S-69                           
group 2 senior certificates......................S-57                           
Indirect Participants............................S-58                           
Initial Periodic Rate Cap........................S-20                           
Interest Carry Forward Amount....................S-64                           
Interest Determination Date......................S-81                           
Interest Funds...................................S-64                           
Interest Only Loans..............................S-19                           
Interest Remittance Amount.......................S-62                           
Last Scheduled Distribution Date................S-109                           
LIBOR Business Day...............................S-82                           
LIBOR Certificates...............................S-57                           
Loan Group 1.....................................S-18                           
Loan Group 2.....................................S-18                           
Loan-to-Value Ratio..............................S-21                           
Master REMIC....................................S-109                           
Master Servicer............................S-18, S-51                           
Master Servicing Fee.............................S-54                           
Maximum Mortgage Rate............................S-20                           
MILA, Inc........................................S-48                           
Minimum Mortgage Rate............................S-20                           
Moody's...........................................S-3                           
Mortgage Index...................................S-20                           
Mortgage Loans...................................S-18                           
Mortgage Rate....................................S-19                           
Net Corridor Contract Payment....................S-78                           
Net Rate Cap.....................................S-65                           
Net Rate Carryover...............................S-66                           
New CI...........................................S-59                           
NIM Insurer......................................S-95                           
No-Income/No Asset Documentation Program.........S-42                           
offered certificates.............................S-56                           
OID.............................................S-110                           
One-Month LIBOR............................S-20, S-81                           
Optional Termination Date........................S-94                           
overcollateralization............................S-10                           
Participants.....................................S-58                           
Pass-Through Margin..............................S-65                           
Pass-Through Rate................................S-64                           
Plan............................................S-113                           
Pool Principal Balance...........................S-68                           
Pooling and Servicing Agreement..................S-18                           
Preferred Processing Program.....................S-41                           
Prepayment Assumption............................S-94                           
Prepayment Interest Excess.......................S-63                           
Prepayment Period................................S-68                           
Principal Distribution Amount....................S-68                           
Principal Remittance Amount......................S-63                           
Priority Amount..................................S-69                           
Priority Percentage..............................S-69                           
private certificates.............................S-57                           
Realized Loss....................................S-75                           
Record Date......................................S-62                           
Reduced Documentation Program....................S-42                           
Reference Bank Rate..............................S-81                           
Reference Banks..................................S-82                           
Regular Certificates............................S-110                           
Relevant Depositary..............................S-58                           
replacement mortgage loan........................S-39                           
Residual Certificates...........................S-110                           
Rolling Sixty-Day Delinquency Rate...............S-75                           
Rules............................................S-58                           
S&P...............................................S-3                           
senior certificates..............................S-56                           
Shift Percentage.................................S-69                           
Six-Month LIBOR..................................S-20                           
Sixty-Day Delinquency Rate.......................S-75                           
Standard Underwriting Guidelines.................S-42                           
Stated Income/Stated Asset Documentation.........S-42                           
Stated Principal Balance.........................S-68                           
Streamlined Documentation Program................S-42                           
subordinated certificates........................S-56                           
Subsequent Periodic Rate Cap.....................S-20                           
Subsequent Recoveries............................S-75                           
Substitution Adjustment Amount...................S-39                           
Tax Counsel.....................................S-110                           
Terms and Conditions.............................S-60                           
Trustee..........................................S-18                           
Twelve-Month LIBOR...............................S-20                           
U.S. Person.........................................3                           
underlying REMIC Regular Interests..............S-110                           
underwriter.....................................S-115                           
Underwritten Certificates.......................S-115                           
Unpaid Realized Loss Amount......................S-75                           

S-118 

424B5
119th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 119th
                                                                         ANNEX I

 GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES

        Except in certain limited circumstances, the Offered Certificates will
be offered globally (the "GLOBAL SECURITIES") and will be available only in     
book-entry form. Investors in the Global Securities may hold Such Global        
Securities through any of The Depository Trust Company ("DTC"), Clearstream or  
Euroclear. The Global Securities will be tradable as home market instruments in 
both the European and U.S. domestic markets. Initial settlement and all         
secondary trades will settle in same-day funds.                                 

      Secondary market trading between investors holding Global Securities
through Clearstream and Euroclear will be conducted in the ordinary way in      
accordance with their normal rules and operating procedures and in accordance   
with conventional eurobond practice (i.e., seven calendar day settlement).      

      Secondary market trading between investors holding Global Securities
through DTC will be conducted according to the rules and procedures applicable  
to U.S. corporate debt obligations.                                             

         Secondary cross-market trading between Clearstream or Euroclear and DTC
Participants holding Certificates will be effected on a delivery-against-payment
basis through the respective Depositaries of Clearstream and Euroclear (in such 
capacity) and as DTC Participants.                                              

    Non-U.S. holders (as described below) of Global Securities will be
Subject to U.S. withholding taxes unless such holders meet certain requirements 
and deliver appropriate U.S. tax documents to the securities clearing           
organizations or their participants.                                            

INITIAL SETTLEMENT                                                              

     All Global Securities will be held in book-entry form by DTC in the
name of Cede & Co. as nominee of DTC. Investors' interests in the Global        
Securities will be represented through financial institutions acting on their   
behalf as direct and indirect Participants in DTC. As a result, Clearstream and 
Euroclear will hold positions on behalf of their participants through their     
respective Depositaries, which in turn will hold such positions in accounts as  
DTC Participants.                                                               

     Investors electing to hold their Global Securities through DTC will
follow the settlement practices applicable to conventional eurobonds, except    
that there will be no temporary global Security and no "lock-up" or restricted  
period. Investor securities custody accounts will be credited with their        
holdings against payment in same-day funds on the settlement date.              

        Investors electing to hold their Global Securities through Clearstream
or Euroclear accounts will follow the settlement procedures applicable to       
conventional eurobonds, except that there will be no temporary global security  
and no "lock-up" or restricted period. Global Securities will be credited to the
securities custody accounts on the settlement date against payment in same-day  
funds.                                                                          

SECONDARY MARKET TRADING                                                        

       Since the purchaser determines the place of delivery, it is important
to establish at the time of the trade where both the purchaser's and seller's   
accounts are located to ensure that settlement can be made on the desired value 
date.                                                                           

        Trading between DTC Participants. Secondary market trading between DTC
Participants will be settled using the procedures applicable to prior mortgage  
loan asset-backed certificates issues in same-day funds.                        

      Trading between Clearstream and/or Euroclear Participants. Secondary
market trading between Clearstream Participants or Euroclear Participants will  
be settled using the procedures applicable to conventional eurobonds in same-day
funds.                                                                          

         Trading between DTC Seller and Clearstream or Euroclear purchaser. When
Global Securities are to be transferred from the account of a DTC Participant to
the account of a Clearstream Participant or a Euroclear Participant, the        
purchaser will send instructions to Clearstream or Euroclear through a          
Clearstream Participant or                                                      

 I-1

424B5
120th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 120th
Euroclear Participant at least one business day prior to settlement. Clearstream
or Euroclear will instruct the respective Depositary, as the case may be, to    
receive the Global Securities against payment. Payment will include interest    
accrued on the Global Securities from and including the last coupon payment date
to and excluding the settlement date, on the basis of a 360-day year and either 
twelve 30-day months or the actual number of days in the related accrual period,
as applicable. For transactions settling on the 31st of the month, payment will 
include interest accrued to and excluding the first day of the following month. 
Payment will then be made by the respective Depositary of the DTC Participant's 
account against delivery of the Global Securities. After settlement has been    
completed, the Global Securities will be credited to the respective clearing    
system and by the clearing system, in accordance with its usual procedures, to  
the Clearstream Participant's or Euroclear Participant's account. The Securities
credit will appear the next day (European time) and the cash debt will be       
back-valued to, and the interest on the Global Securities will accrue from, the 
value date (which would be the preceding day when settlement occurred in New    
York). If settlement is not completed on the intended value date (i.e., the     
trade fails), the Clearstream or Euroclear cash debt will be valued instead as  
of the actual settlement date.                                                  

       Clearstream Participants and Euroclear Participants will need to make
available to the respective clearing systems the funds necessary to process     
same-day funds settlement. The most direct means of doing so is to preposition  
funds for settlement, either from cash on hand or existing lines of credit, as  
they would for any settlement occurring within Clearstream or Euroclear. Under  
this approach, they may take on credit exposure to Clearstream or Euroclear     
until the Global Securities are credited to their accounts one day later.       

        As an alternative, if Clearstream or Euroclear has extended at line of
credit to them, Clearstream Participants or Euroclear Participants can elect not
to preposition funds and allow that credit line to be drawn upon the finance    
settlement. Under this procedure, Clearstream Participants or Euroclear         
Participants purchasing Global Securities would incur overdraft charges for one 
day, assuming they cleared the overdraft when the Global Securities were        
credited to their accounts. However, interest on the Global Securities would    
accrue from the value date. Therefore, in many cases the investment income on   
the Global Securities earned during that one-day period may substantially reduce
or offset the amount of such overdraft charges, although this result will depend
on each Clearstream Participant's or Euroclear Participant's particular cost of 
funds.                                                                          

      Since the settlement is taking place during New York business hours,
DTC Participants can employ their usual procedures for sending Global Securities
to the respective European Depositary for the benefit of Clearstream            
Participants or Euroclear Participants. The sale proceeds will be available to  
the DTC seller on the settlement date. Thus, to the DTC Participants a          
cross-market transaction will settle no differently than a trade between two DTC
Participants.                                                                   

        Trading between Clearstream or Euroclear Seller and DTC Purchaser. Due
to time zone differences in their favor, Clearstream Participants and Euroclear 
Participants may employ their customary procedures for transactions in which    
Global Securities are to be transferred by the respective clearing system,      
through the respective Depositary, to a DTC Participant. The seller will send   
instructions to Clearstream or Euroclear through a Clearstream Participant or   
Euroclear Participant at least one business day prior to settlement. In these   
cases Clearstream or Euroclear will instruct the respective Depositary, as      
appropriate, to deliver the Global Securities to the DTC Participant's account  
against payment. Payment will include interest accrued on the Global Securities 
from and including the last Coupon payment to and excluding the settlement date 
on the basis of a 360-day year and either twelve 30-day months or the actual    
number of days in the related accrual period, as applicable. For transactions   
settling on the 31st of the month, payment will include interest accrued to and 
excluding the first day of the following month. The payment will then be        
reflected in the account of the Clearstream Participant or Euroclear Participant
the following day, and receipt of the cash proceeds in the Clearstream          
Participant's or Euroclear Participant's account would be back-valued to the    
value date (which would be the preceding day, when settlement occurred in New   
York). Should the Clearstream Participant or Euroclear Participant have a line  
of credit with its respective clearing system and elect to be in debt in        
anticipation of receipt of the sale proceeds in its account, the back-valuation 
will extinguish any overdraft incurred over that one-day period. If settlement  
is not completed on the intended value date (i.e., the trade fails), receipt of 
the cash proceeds in the Clearstream Participant's or Euroclear Participant's   
account would instead be valued as of the actual settlement date.               

 Finally, day traders that use Clearstream or Euroclear and that
purchase Global Securities from DTC Participants for delivery to Clearstream    
Participants or Euroclear Participants should note that these trades would      

 I-2

424B5
121st Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 121st
automatically fail on the sale side unless affirmative action were taken. At    
least three techniques should be readily available to eliminate this potential  
problem:                                                                        

               1. borrowing through Clearstream or Euroclear accounts) for
         one day (until the purchase side of the day trade is reflected in their
    Clearstream or Euroclear accounts) in accordance with the clearing
System's Customary procedures;                                

             2. borrowing the Global Securities in the U.S. from a DTC
         Participant no later than one day prior to settlement, which would give
the Global Securities sufficient time to be reflected in their
      Clearstream or Euroclear account in order to settle the sale side of
the trade; or                                                 

               3. staggering the value dates for the buy and sell sides of
the trade so that the value date for the purchase from the DTC
         Participant is at least one day prior to the value date for the sale to
the Clearstream Participant or Euroclear Participant.         

CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS                      

    A beneficial owner of Global Securities holding Securities through
Clearstream or Euroclear (or through DTC if the holder has an address outside   
the U.S.) will be subject to the 30% U.S. withholding tax (which will be reduced
through 2006) that generally applies to payments of interest (including original
issue discount) on registered debt issued by U.S. Persons, unless (i) each      
clearing system, bank or other financial institution that holds customers'      
securities in the ordinary course of its trade or business in the chain of      
intermediaries between Such beneficial owner and the U.S. entity required to    
withhold tax complies with applicable certification requirements and (ii) such  
beneficial owner takes one of the following steps to obtain an exemption or     
reduced tax rate:                                                               

    Exemption for non-U.S. Persons (Form W-8BEN). Beneficial owners of
Global Securities that are non-U.S. Persons can obtain a complete exemption from
the withholding tax by filing a signed Form W-8BEN (Certificate of Foreign      
Status of Beneficial Owner for United States Tax Withholding). Non-U.S. Persons 
that are Certificate Owners residing in a country that has a tax treaty with the
United States can obtain an exemption or reduced tax rate (depending on the     
treaty terms) by filing Form W-8BEN (Certificate of Foreign Status of Beneficial
Owner for United States Tax Withholding). If the information shown on Form      
W-8BEN changes, a new Form W-8BEN must be filed within 30 days of such change.  

        Exemption for non-U.S. Persons with effectively connected income (Form
W-8ECI). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S.
branch, for which the interest income is effectively connected with its conduct 
of a trade or business in the United States, can obtain an exemption from the   
withholding tax by filing Form W-8ECI (Certificate of Foreign Person's Claim for
Exemption from Withholding on Income Effectively Connected with the Conduct of a
Trade or Business in the United States).                                        

   Exemptions for U.S. Persons (Form W-9). U.S. Persons can obtain a
complete exemption from the withholding tax by filing Form W-9 (Payer's Request 
for Taxpayer Identification Number and Certification).                          

         U.S. Federal Income Tax Reporting Procedure. The Certificate Owner of a
Global Security files by submitting the appropriate form to the person through  
whom it holds (the clearing agency, in the case of persons holding directly on  
the books of the clearing agency). Form W-8BEN and Form W-8ECI are effective    
until the third succeeding calendar year from the date such form is signed.     

      The term "U.S. PERSON" means (i) a citizen or resident of the United
States, (ii) a corporation, partnership or other entity treated as a corporation
or partnership for United States federal income tax purposes organized in or    
under the laws of the United States or any state thereof or the District of     
Columbia (unless, in the case of a partnership, Treasury regulations provide    
otherwise) or (iii) an estate the income of which is includible in gross income 
for United States tax purposes, regardless of its source, or (iv) a trust if a  
Court within the United States is able to exercise primary Supervision over the 
administration of the trust and one or more United States persons have authority
to control all substantial decisions of the trust. Notwithstanding the preceding
sentence, to the extent provided in Treasury regulations, certain trusts in     
existence on August 20, 1996, and treated as United States persons prior to such
date, that elect to continue to be treated as United States persons will also be
a U.S. Person. This Summary does not deal with all aspects of U.S. Federal      
income tax withholding that may be relevant to foreign holders of the Global    
Securities. Investors are advised to consult their own tax advisors for specific
tax advice concerning their holding and disposing of the Global Securities.     

 I-3

424B5
122nd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 122nd
[This page intentionally left blank]

424B5
123rd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 123rd
PROSPECTUS                                                                      

 CWALT, INC.
 DEPOSITOR

MORTGAGE PASS-THROUGH CERTIFICATES
(ISSUABLE IN SERIES)

--------------------------------------------------------------------------------
PLEASE CAREFULLY CONSIDER OUR DISCUSSION OF SOME OF THE RISKS OF INVESTING IN 
THE CERTIFICATES UNDER "RISK FACTORS" BEGINNING ON PAGE 5.                  
--------------------------------------------------------------------------------

THE TRUSTS                                                                      

Each trust will be established to hold assets in its trust fund transferred to  
it by CWALT, Inc. The assets in each trust fund will be specified in the        
prospectus supplement for the particular trust and will generally consist of:   

o  first lien mortgage loans secured by one- to four-family residential         
properties or participations in that type of loan,                        

o  mortgage pass-through securities issued or guaranteed by Ginnie Mae,         
Fannie Mae, or Freddie Mac, or                                            

o  private mortgage-backed securities backed by first lien mortgage loans       
secured by one- to four-family residential properties or participations in
that type of loan.                                                        

THE CERTIFICATES                                                                

CWALT, Inc. will sell the certificates pursuant to a prospectus supplement. The 
certificates will be grouped into one or more series, each having its own       
distinct designation. Each series will be issued in one or more classes and each
class will evidence beneficial ownership of a specified portion of future       
payments on the assets in the trust fund that the series relates to. A          
prospectus supplement for a series will specify all of the terms of the series  
and of each of the classes in the series.                                       

OFFERS OF CERTIFICATES                                                          

The certificates may be offered through several different methods, including    
offerings through underwriters.                                                 

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND    
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES   
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE      
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.                                                               

OCTOBER 25, 2005                                                                

424B5
124th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 124th
TABLE OF CONTENTS                           

                  PAGE
                  ----

Important Notice About Information in this                                      
Prospectus and Each Accompanying                                      
Prospectus Supplement........................4                        
Risk Factors......................................5                             
Limited Source Of Payments -- No                                      
Recourse To Sellers, Depositor Or Servicer...5                        
Credit Enhancement May Not Be                                         
Sufficient To Protect You From Losses........6                        
Losses On Balloon Payment Mortgages                                   
Are Borne By You.............................6                        
Nature Of Mortgages..........................6                        
You Could Be Adversely Affected By                                    
Violations Of Environmental Laws.............8                        
Ratings Of The Certificates Do Not                                    
Assure Their Payment.........................9                        
Book-Entry Registration......................9                        
Bankruptcy Or Insolvency May Affect                                   
The Timing And Amount Of                                              
Distributions On The Certificates...........10                        
The Trust Fund...................................12                             
The Mortgage Loans -- General...............13                        
Agency Securities...........................15                        
Private Mortgage-Backed Securities..........20                        
Pre-Funding.................................21                        
Substitution of Mortgage Assets.............22                        
Available Information.......................22                        
Incorporation of Certain Documents by                                 
Reference...................................22                        
Use of Proceeds..................................22                             
The Depositor....................................23                             
Mortgage Loan Program............................23                             
Underwriting Process........................23                        
Qualifications of Sellers...................24                        
Representations by Sellers; Repurchases.....24                        
Description of the Certificates..................25                             
General.....................................26                        
Distributions on Certificates...............28                        
Advances....................................29                        
Reports to Certificateholders...............30                        
Categories of Classes of Certificates.......31                        
Indices Applicable to Floating Rate and                               
Inverse Floating Rate Classes...............33                        
Book-Entry Certificates.....................36                        
Credit Enhancement...............................38                             
General.....................................38                        
Subordination...............................38                        
Mortgage Pool Insurance Policies............39                        
Special Hazard Insurance Policies...........40                        
Bankruptcy Bonds............................41                        
Reserve Fund................................41                        
Cross Support...............................41                        

                  PAGE
                  ----
Insurance Policies, Surety Bonds and                                  
Guaranties..................................42                        
Over-Collateralization......................42                        
Financial Instruments.......................42                        
Yield and Prepayment Considerations..............42                             
The Pooling and Servicing Agreement..............44                             
Assignment of Mortgage Assets...............44                        
Payments on Mortgage Assets; Deposits                                 
to Certificate Account......................45                        
Collection Procedures.......................47                        
Hazard Insurance............................48                        
Realization Upon Defaulted Mortgage Loans...49                        
Servicing and Other Compensation and                                  
Payment of Expenses.........................53                        
Evidence as to Compliance...................53                        
List of Certificateholders..................54                        
Certain Matters Regarding the Master                                  
Servicer and the Depositor..................54                        
Events of Default...........................54                        
Rights Upon Event of Default................55                        
Amendment...................................55                        
Termination; Optional Termination...........56                        
The Trustee.................................57                        
Certain Legal Aspects of the Mortgage Loans......57                             
General.....................................57                        
Foreclosure and Repossession................58                        
Rights of Redemption........................60                        
Anti-Deficiency Legislation and Other                                 
Limitations on Lenders......................60                        
Environmental Risks.........................61                        
Due-on-Sale Clauses.........................62                        
Prepayment Charges..........................63                        
Applicability of Usury Laws.................63                        
Servicemembers Civil Relief Act.............63                        
Consumer Protection Laws....................63                        
Material Federal Income Tax Consequences.........64                             
General.....................................64                        
Non-REMIC Certificates......................64                        
REMIC Certificates..........................71                        
Prohibited Transactions and Other Taxes.....84                        
Liquidation and Termination.................84                        
Administrative Matters......................85                        
Tax-Exempt Investors........................85                        
Non-U.S. Persons............................85                        
Tax-Related Restrictions on Transfers                                 
of Residual Certificates....................86                        
Other Tax Considerations.........................88                             
ERISA Considerations.............................88                             
Legal Investment.................................91                             

2 

424B5
125th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 125th
Method of Distribution...........................92                             
Legal Matters....................................94                             
Financial Information............................94                             
Rating...........................................94                             
Index to Defined Terms...........................95                             

3 

424B5
126th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 126th
 IMPORTANT NOTICE ABOUT INFORMATION IN THIS PROSPECTUS
 AND EACH ACCOMPANYING PROSPECTUS SUPPLEMENT

    Information about each series of certificates is contained in two separate
documents:                                                                      

o        this prospectus, which provides general information, some of which may 
not apply to a particular series; and                         

o        the accompanying prospectus supplement for a particular series, which  
  describes the specific terms of the certificates of that series.

The prospectus supplement will contain information about a particular series    
that supplements the information contained in this prospectus, and you should   
rely on that supplementary information in the prospectus supplement.            

You should rely only on the information in this prospectus and the    
accompanying prospectus supplement. We have not authorized anyone to provide you
with information that is different from that contained in this prospectus and   
the accompanying prospectus supplement.                                         

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

     If you require additional information, the mailing address of our principal
executive offices is CWALT, Inc., 4500 Park Granada, Calabasas, California 91302
and the telephone number is (818) 225-3000. For other means of acquiring        
additional information about us or a series of securities, see "The Trust Fund -
Incorporation of Certain Documents by Reference" beginning on page 22.          

4 

424B5
127th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 127th
RISK FACTORS

You should carefully consider the following information since it identifies     
significant risks associated with an investment in the certificates.            

LIMITED SOURCE OF PAYMENTS -- NO          The applicable prospectus supplement  
RECOURSE TO SELLERS, DEPOSITOR OR         may provide that certificates will be 
SERVICER                                  payable from other trust funds in     
                                      addition to their associated trust
                                          fund, but if it does not, they will be
                                        payable solely from their associated
                                          trust fund. If the trust fund does not
                                        have sufficient assets to distribute
                                   the full amount due to you as a
                                         certificateholder, your yield will be
                                         impaired, and perhaps even the return
                                      of your principal may be impaired,
                                          without your having recourse to anyone
                                   else. Furthermore, at the times
                                          specified in the applicable prospectus
                                     supplement, certain assets of the
                                       trust fund may be released and paid
                                    out to other people, such as the
                                   depositor, a servicer, a credit
                                      enhancement provider, or any other
                                        person entitled to payments from the
                                    trust fund. Those assets will no
                                        longer be available to make payments
                                        to you. Those payments are generally
                                       made after other specified payments
                                that may be set forth in the
                                         applicable prospectus supplement have
              been made.

                                          You will not have any recourse against
                                        the depositor or any servicer if you
                                          do not receive a required distribution
                                          on the certificates. Nor will you have
                                      recourse against the assets of the
                                     trust fund of any other series of
                 certificates.

                                          The certificates will not represent an
                                  interest in the depositor, any
                                          servicer, any seller to the depositor,
                                         or anyone else except the trust fund.
                                        The only obligation of the depositor
                                      to a trust fund comes from certain
                                          representations and warranties made by
                                      it about assets transferred to the
                                        trust fund. If these representations
                                         and warranties turn out to be untrue,
                                    the depositor may be required to
                                      repurchase some of the transferred
           assets.

                                        CWALT, Inc., which is the depositor,
                                        does not have significant assets and
                                          is unlikely to have significant assets
                                      in the future. So if the depositor
                                      were required to repurchase a loan
                            because of a breach of a
                                       representation, its only sources of
                                      funds for the repurchase would be:

                                            o    funds obtained from enforcing
                                                 a corresponding obligation of
                                                 a seller or originator of the
                            loan, or

                                           o    funds from a reserve fund or
                                              similar credit enhancement
                                               established to pay for loan
                                repurchases.

                                      The only obligations of the master
                                       servicer to a trust fund consist of
                                          its obligations to service the related
                                         mortgage loans in accordance with the
                                    terms of the related pooling and
                        servicing agreement.

                                        The only obligations to a trust fund
                                         of a seller of loans to the depositor
                                          comes from certain representations and
                                       warranties made by it in connection
                                          with its sale of the loans and certain
                                      document delivery requirements. If
                                        these representations and warranties
                                        turn out to be untrue, or the seller
                                        fails to deliver required documents,
                                         it may be required to repurchase some
                                         of the loans. However, the seller may
                                          not have the financial ability to make
                            the required repurchase.

5 

424B5
128th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 128th
CREDIT ENHANCEMENT MAY NOT BE             Credit enhancement is intended to     
SUFFICIENT TO PROTECT YOU FROM            reduce the effect of loan losses. But 
LOSSES                                    credit enhancements may benefit only  
                               some classes of a series of
                                      certificates and the amount of any
                                         credit enhancement will be limited as
                                          described in the applicable prospectus
                                          supplement. Furthermore, the amount of
                                         a credit enhancement may decline over
                                          time pursuant to a schedule or formula
                                       or otherwise, and could be depleted
                                      from payments or for other reasons
                                          before the certificates covered by the
                                        credit enhancement are paid in full.
                                         In addition, a credit enhancement may
                                      not cover all potential sources of
                               loss. For example, a credit
                                          enhancement may or may not cover fraud
                                         or negligence by a loan originator or
                                        other parties. Also, the trustee may
                                      be permitted to reduce, substitute
                                   for, or even eliminate all or a
                                      portion of a credit enhancement so
                                         long as the rating agencies that have
                                         rated the certificates at the request
                                       of the depositor indicate that that
                                  would not cause them to change
                                 adversely their rating of the
                               certificates. Consequently,
                                        certificateholders may suffer losses
                                    even though a credit enhancement
                                    exists and its provider does not
            default.

LOSSES ON BALLOON PAYMENT                 Some of the underlying loans may not  
MORTGAGES ARE BORNE BY YOU                be fully amortizing over their terms  
                                       to maturity and, thus, will require
                                        substantial principal payments (that
                                         is, balloon payments) at their stated
                                         maturity. Loans with balloon payments
                                         involve a greater degree of risk than
                                  fully amortizing loans because
                                          typically the borrower must be able to
                                  refinance the loan or sell the
                                        property to make the balloon payment
                                          at maturity. The ability of a borrower
                                          to do this will depend on such factors
                                         as mortgage rates at the time of sale
                                         or refinancing, the borrower's equity
                                          in the property, the relative strength
                                    of the local housing market, the
                                        financial condition of the borrower,
                                       and tax laws. Losses on these loans
                                       that are not otherwise covered by a
                                       credit enhancement will be borne by
                                         the holders of one or more classes of
                 certificates.

  Your Risk Of Loss May Be               The trust fund may include loans that
Higher Than You Expect If your         were originated with loan-to-value 
 Certificates Are Backed By             ratios in excess of the value of the
Partially Unsecured Loans              related mortgaged property. Under  
                                       these circumstances, the trust fund
                                 could be treated as a general
                                          unsecured creditor as to the unsecured
                                       portion of any related loan. In the
                                        event of a default under a loan that
                                        is unsecured in part, the trust fund
                                       will have recourse only against the
                                       borrower's assets generally for the
                                        unsecured portion of the loan, along
                                    with all other general unsecured
                              creditors of the borrower.

NATURE OF MORTGAGES                       The value of the properties underlying
                                        the loans held in the trust fund may
 Declines in Property Values May        decline over time. Among the factors
  Adversely Affect You                   that could adversely affect the value
                          of the properties are:

                                        o    an overall decline in the
                                                  residential real estate market
                                                  in the areas in which they are
                            located,

                                         o    a decline in their general
                                                 condition from the failure of
                                               borrowers to maintain their
                                            property adequately, and

                                             o    natural disasters that are not
                                                 covered by insurance, such as
                                           earthquakes and floods.

                                          If property values decline, the actual
                                         rates of delinquencies, foreclosures,
                                      and losses on all underlying loans
                                        could be higher than those currently
                                       experienced in the mortgage lending
                                         industry in general. These losses, to
                                         the extent not otherwise covered by a
                                        credit enhancement, will be borne by
                                        the holder of one or more classes of
                 certificates.

6 

424B5
129th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 129th
  Delays in Liquidation May              Even if the properties underlying the
 Adversely Affect You                   loans held in the trust fund provide
                                    adequate security for the loans,
                                         substantial delays could occur before
                                      defaulted loans are liquidated and
                                   their proceeds are forwarded to
                                   investors. Property foreclosure
                                  actions are regulated by state
                                         statutes and rules and are subject to
                                      many of the delays and expenses of
                                 other lawsuits if defenses or
                                     counterclaims are made, sometimes
                                        requiring several years to complete.
                                      Furthermore, in some states if the
                                   proceeds of the foreclosure are
                                       insufficient to repay the loan, the
                                  borrower is not liable for the
                                          deficit. Thus, if a borrower defaults,
                                     these restrictions may impede the
                                     trust's ability to dispose of the
                                  property and obtain sufficient
                                          proceeds to repay the loan in full. In
                                  addition, the servicer will be
                                       entitled to deduct from liquidation
                                    proceeds all expenses reasonably
                                        incurred in attempting to recover on
                                       the defaulted loan, including legal
                                          fees and costs, real estate taxes, and
                                         property maintenance and preservation
             expenses.

Disproportionate Effect of             Liquidation expenses of defaulted  
 Liquidation Expenses May               loans generally do not vary directly
   Adversely Affect You                   with the outstanding principal balance
                                       of the loan at the time of default.
                                      Therefore, if a servicer takes the
                                          same steps for a defaulted loan having
                                          a small remaining principal balance as
                                         it does for a defaulted loan having a
                                          large remaining principal balance, the
                                     amount realized after expenses is
                                  smaller as a percentage of the
                                        outstanding principal balance of the
                                 small loan than it is for the
                                 defaulted loan having a large
                                remaining principal balance.

Consumer Protection Laws May           Federal, state and local laws      
 Adversely Affect You                   extensively regulate various aspects
                                        of brokering, originating, servicing
                                        and collecting mortgage loans. Among
                                         other things, these laws may regulate
                                     interest rates and other charges,
                                         require disclosures, impose financial
                                          privacy requirements, mandate specific
                                    business practices, and prohibit
                                         unfair and deceptive trade practices.
                                       In addition, licensing requirements
                                          may be imposed on persons that broker,
                                          originate, service or collect mortgage
          loans.

                                          Additional requirements may be imposed
                                         under federal, state or local laws on
                                         so-called "high cost" mortgage loans,
                                        which typically are defined as loans
                               that have interest rates or
                                  origination costs in excess of
                                     prescribed levels. These laws may
                                     limit certain loan terms, such as
                                        prepayment penalties, or the ability
                                     of a creditor to refinance a loan
                                  unless it is in the borrower's
                                     interest. In addition, certain of
                                       these laws may allow claims against
                                         loan brokers or mortgage originators,
                                      including claims based on fraud or
                                      misrepresentations, to be asserted
                                          against persons acquiring the mortgage
                             loans, such as the trust.

                                      The federal laws that may apply to
                                       loans held in the trust include the
              following:

                                           o    the Truth in Lending Act and
                                                 its regulations, which (among
                                         other things) require
                                            disclosures to borrowers
                                          regarding the terms of
                                              mortgage loans and provide
                                      property owners in
                                      non-purchase money
                                                transactions with a right of
                                             rescission that generally
                                                extends for three days after
                                                proper disclosures are given
                                              (but in no event more than
                                 three years);

                                            o    the Home Ownership and Equity
                                          Protection Act and its
                                             regulations, which (among
                                        other things) impose
                                         additional disclosure
                                                requirements and limitations
                                                 on loan terms with respect to
                                              nonpurchase money mortgage
                                                loans with interest rates or
                                                  origination costs in excess of
                                      prescribed levels;

7 

424B5
130th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 130th
                                         o    the Real Estate Settlement
                                          Procedures Act and its
                                             regulations, which (among
                                              other things) prohibit the
                                                payment of referral fees for
                                          real estate settlement
                                                services and regulate escrow
                                          accounts for taxes and
                                         insurance and billing
                                                inquiries made by borrowers;

                                           o    the Equal Credit Opportunity
                                                  Act and its regulations, which
                                                  (among other things) generally
                                                  prohibit discrimination in any
                                                  aspect of a credit transaction
                                                on certain enumerated basis,
                                                  such as age, race, color, sex,
                                             religion, marital status,
                                                 national origin or receipt of
                                          public assistance; and

                                             o    the Fair Credit Reporting Act,
                                              which (among other things)
                                                 regulates the use of consumer
                                                  reports obtained from consumer
                                              reporting agencies and the
                                                  reporting of payment histories
                                         to consumer reporting
                             agencies.

                                     The penalties for violating these
                                      federal, state, or local laws vary
                                       depending on the applicable law and
                                          the particular facts of the situation.
                                         However, private plaintiffs typically
                                        may assert claims for actual damages
                                        and, in some cases, also may recover
                                       civil money penalties or exercise a
                                       right to rescind the mortgage loan.
                                        Violations of certain laws may limit
                                         the ability to collect all or part of
                                  the principal or interest on a
                                     mortgage loan and, in some cases,
                                       borrowers even may be entitled to a
                                      refund of amounts previously paid.
                            Federal, state and local
                                     administrative or law enforcement
                                          agencies also may be entitled to bring
                                        legal actions, including actions for
                                         civil money penalties or restitution,
                                      for violations of certain of these
         laws.

                                       Depending on the particular alleged
                                          misconduct, it is possible that claims
                                   may be asserted against various
                                          participants in the secondary mortgage
                                         market, including assignees that hold
                                         the mortgage loan, such as the trust.
                                        Losses on loans from the application
                                          of these federal, state and local laws
                                         that are not otherwise covered by one
                                       or more forms of credit enhancement
                                          will be borne by the holders of one or
                                 more classes of certificates.

YOU COULD BE ADVERSELY AFFECTED           Federal, state, and local laws and    
BY VIOLATIONS OF ENVIRONMENTAL            regulations impose a wide range of    
LAWS                                      requirements on activities that may   
                                       affect the environment, health, and
                                     safety. In certain circumstances,
                                     these laws and regulations impose
                                          obligations on "owners" or "operators"
                                     of residential properties such as
                                       those that secure the loans held in
                                          the trust fund. Failure to comply with
                                         these laws and regulations can result
                                        in fines and penalties that could be
                                         assessed against the trust if it were
                                  to be considered an "owner" or
                                         "operator" of the related property. A
                                      property "owner" or "operator" can
                                       also be held liable for the cost of
                                 investigating and remediating
                                       contamination, regardless of fault,
                                       and for personal injury or property
                                   damage arising from exposure to
                 contaminants.

                                          In some states, a lien on the property
                                          due to contamination has priority over
                                     the lien of an existing mortgage.
                                       Also, a mortgage lender may be held
                                          liable as an "owner" or "operator" for
                                        costs associated with the release of
                                        hazardous substances from a site, or
                                         petroleum from an underground storage
                                         tank, under certain circumstances. If
                                       the trust were to be considered the
                                        "owner" or "operator" of a property,
                                        it will suffer losses as a result of
                             any liability imposed for
                                          environmental hazards on the property.

8 

424B5
131st Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 131st
RATINGS OF THE CERTIFICATES DO NOT        Any class of certificates issued under
ASSURE THEIR PAYMENT                      this prospectus and the accompanying  
                                          prospectus supplement will be rated in
                                  one of the four highest rating
                                         categories of at least one nationally
                                         recognized rating agency. A rating is
                                         based on the adequacy of the value of
                                   the trust assets and any credit
                                   enhancement for that class, and
                                reflects the rating agency's
                                       assessment of how likely it is that
                                        holders of the class of certificates
                                      will receive the payments to which
                                        they are entitled. A rating does not
                                          constitute an assessment of how likely
                                       it is that principal prepayments on
                                          the underlying loans will be made, the
                               degree to which the rate of
                                      prepayments might differ from that
                                  originally anticipated, or the
                                         likelihood that the certificates will
                                        be redeemed early. A rating is not a
                                        recommendation to purchase, hold, or
                                         sell certificates because it does not
                                   address the market price of the
                                          certificates or the suitability of the
                                   certificates for any particular
             investor.

                                         A rating may not remain in effect for
                                    any given period of time and the
                                         rating agency could lower or withdraw
                                          the rating entirely in the future. For
                                          example, the rating agency could lower
                                  or withdraw its rating due to:

                                            o    a decrease in the adequacy of
                                                 the value of the trust assets
                                         or any related credit
                                enhancement,

                                       o    an adverse change in the
                                                financial or other condition
                                           of a credit enhancement
                                provider, or

                                            o    a change in the rating of the
                                                 credit enhancement provider's
                                   long-term debt.

                                          The amount, type, and nature of credit
                                          enhancement established for a class of
                                          certificates will be determined on the
                                         basis of criteria established by each
                                       rating agency rating classes of the
                                    certificates. These criteria are
                                     sometimes based upon an actuarial
                                       analysis of the behavior of similar
                                          loans in a larger group. That analysis
                                      is often the basis upon which each
                                          rating agency determines the amount of
                                     credit enhancement required for a
                                         class. The historical data supporting
                                  any actuarial analysis may not
                                         accurately reflect future experience,
                                          and the data derived from a large pool
                                       of similar loans may not accurately
                                         predict the delinquency, foreclosure,
                                        or loss experience of any particular
                                     pool of mortgage loans. Mortgaged
                                   properties may not retain their
                                      values. If residential real estate
                                         markets experience an overall decline
                                    in property values such that the
                                         outstanding principal balances of the
                                         loans held in a particular trust fund
                                      and any secondary financing on the
                                       related mortgaged properties become
                                         equal to or greater than the value of
                                          the mortgaged properties, the rates of
                                    delinquencies, foreclosures, and
                                         losses could be higher than those now
                                         generally experienced in the mortgage
                                          lending industry. In addition, adverse
                                         economic conditions may affect timely
                                        payment by mortgagors on their loans
                                        whether or not the conditions affect
                                          real property values and, accordingly,
                               the rates of delinquencies,
                                         foreclosures, and losses in any trust
                                       fund. Losses from this that are not
                                        covered by a credit enhancement will
                                      be borne, at least in part, by the
                                     holders of one or more classes of
                 certificates.

BOOK-ENTRY REGISTRATION                   Certificates issued in book-entry form
   Limit on Liquidity                     may have only limited liquidity in the
                                         resale market, since investors may be
                                          unwilling to purchase certificates for
                                     which they cannot obtain physical
                instruments.

9 

424B5
132nd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 132nd
Limit on Ability to Transfer or        Transactions in book-entry         
Pledge                                 certificates can be effected only  
                                         through The Depository Trust Company,
                                        its participating organizations, its
                                      indirect participants, and certain
                                     banks. Therefore, your ability to
                                          transfer or pledge certificates issued
                                      in book-entry form may be limited.

 Delays in Distributions                You may experience some delay in the
                                          receipt of distributions on book-entry
                                        certificates since the distributions
                                       will be forwarded by the trustee to
                                          The Depository Trust Company for it to
                              credit the accounts of its
                                participants. In turn, these
                                     participants will then credit the
                                        distributions to your account either
                                  directly or indirectly through
                          indirect participants.

BANKRUPTCY OR INSOLVENCY MAY              The seller and the depositor will take
AFFECT THE TIMING AND AMOUNT OF           steps to structure the transfer of    
DISTRIBUTIONS ON THE CERTIFICATES         the loans held in the trust fund by   
                                          the seller to the depositor as a sale.
                                         The depositor and the trust fund will
                                        take steps to structure the transfer
                                          of the loans from the depositor to the
                                  trust fund as a sale. If these
                                          characterizations are correct, then if
                                       the seller were to become bankrupt,
                                      the loans would not be part of the
                                        seller's bankruptcy estate and would
                                    not be available to the seller's
                                        creditors. On the other hand, if the
                                seller becomes bankrupt, its
                                    bankruptcy trustee or one of its
                            creditors may attempt to
                                        recharacterize the sale of the loans
                                         as a borrowing by the seller, secured
                                        by a pledge of the loans. Presenting
                                       this position to a bankruptcy court
                                        could prevent timely payments on the
                                    certificates and even reduce the
                                 payments on the certificates.
                                          Similarly, if the characterizations of
                                       the transfers as sales are correct,
                                        then if the depositor were to become
                                         bankrupt, the loans would not be part
                                        of the depositor's bankruptcy estate
                                     and would not be available to the
                                       depositor's creditors. On the other
                                  hand, if the depositor becomes
                                       bankrupt, its bankruptcy trustee or
                                       one of its creditors may attempt to
                                        recharacterize the sale of the loans
                                    as a borrowing by the depositor,
                                     secured by a pledge of the loans.
                                 Presenting this position to a
                                         bankruptcy court could prevent timely
                                         payments on the certificates and even
                              reduce the payments on the
                 certificates.

                                  If the master servicer becomes
                                        bankrupt, the bankruptcy trustee may
                                 have the power to prevent the
                                     appointment of a successor master
                                          servicer. The period during which cash
                                          collections may be commingled with the
                                      master servicer's own funds before
                              each distribution date for
                                         certificates will be specified in the
                                        applicable prospectus supplement. If
                                        the master servicer becomes bankrupt
                                  and cash collections have been
                                         commingled with the master servicer's
                                          own funds, the trust fund may not have
                                 a perfected interest in those
                                       collections. In this case the trust
                                         might be an unsecured creditor of the
                                        master servicer as to the commingled
                                          funds and could recover only its share
                                         as a general creditor, which might be
                                     nothing. Collections that are not
                                         commingled but still in an account of
                                     the master servicer might also be
                                        included in the bankruptcy estate of
                                       the master servicer even though the
                                       trust may have a perfected security
                                        interest in them. Their inclusion in
                                       the bankruptcy estate of the master
                                    servicer may result in delays in
                                          payment and failure to pay amounts due
                        on the certificates.

10

424B5
133rd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 133rd
                                          Federal and state statutory provisions
                                     affording protection or relief to
                                       distressed borrowers may affect the
                                          ability of the secured mortgage lender
                                         to realize upon its security in other
                                         situations as well. For example, in a
                                proceeding under the federal
                                     Bankruptcy Code, a lender may not
                                     foreclose on a mortgaged property
                                 without the permission of the
                                    bankruptcy court. And in certain
                                          instances a bankruptcy court may allow
                                    a borrower to reduce the monthly
                                          payments, change the rate of interest,
                                         and alter the mortgage loan repayment
                                     schedule for under collateralized
                                       mortgage loans. The effect of these
                                        types of proceedings can be to cause
                                       delays in receiving payments on the
                                          loans underlying certificates and even
                                     to reduce the aggregate amount of
                                    payments on the loans underlying
                 certificates.

                                         Certain capitalized terms are used in
                                    this prospectus to assist you in
                                  understanding the terms of the
                                       certificates. The capitalized terms
                                          used in this prospectus are defined on
                                         the pages indicated under the caption
                                        "Index to Defined Terms" on page 94.

11

424B5
134th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 134th
THE TRUST FUND* 

      This prospectus relates to Mortgage Pass-Through Certificates, which
may be sold from time to time in one or more series by the depositor, CWALT,    
Inc., on terms determined at the time of sale and described in this prospectus  
and the related prospectus supplement. Each series will be issued under a       
separate pooling and servicing agreement to be entered into with respect to each
series. The certificates of a series will evidence beneficial ownership of a    
trust fund. The trust fund for a series of certificates will include certain    
mortgage related assets (the "Mortgage Assets") consisting of                   

       o     a pool of first lien mortgage loans (or participation interests
             in them) secured by one- to four-family residential properties,

         o     mortgage pass-through securities (the "Agency Securities") issued
       or guaranteed by Ginnie Mae, Fannie Mae or Freddie Mac or

  o     other mortgage pass-through certificates or collateralized
             mortgage obligations (the "Private Mortgage-Backed Securities")
             evidencing an interest in, or secured by, mortgage loans of the
         type that would otherwise be eligible to be mortgage loans.

The Mortgage Assets will be acquired by the depositor, either directly or       
indirectly, from one or more institutions, which may be affiliates of the       
depositor, and conveyed by the depositor to the related trust fund. The trustee 
for each series of certificates will be specified in the related prospectus     
supplement. See "The Pooling and Servicing Agreement" for a description of the  
trustee's rights and obligations. The entity or entities named as master        
servicer in the related prospectus supplement, which may be an affiliate of the 
depositor. See "The Pooling and Servicing Agreement - Certain Matters Regarding 
the Master Servicer and the Depositor." The mortgage loans will be secured by   
first mortgage liens on one- to four-family residential properties and, if so   
specified in the related prospectus supplement, may include cooperative         
apartment loans secured by security interests in shares issued by private,      
nonprofit, cooperative housing corporations and in the related proprietary      
leases or occupancy agreements granting exclusive rights to occupy specific     
dwelling units in the cooperatives' buildings. In addition, the Mortgage Assets 
of the related trust fund may include mortgage participation certificates       
evidencing interests in mortgage loans. The mortgage loans may be conventional  
loans (i.e., loans that are not insured or guaranteed by any governmental       
agency), insured by the FHA or partially guaranteed by the VA as specified in   
the related prospectus supplement. All or a portion of the mortgage loans in a  
mortgage pool may be insured by FHA insurance and may be partially guaranteed by
the VA.                                                                         

     The certificates will be entitled to payment from the assets of the
related trust fund or other assets pledged for the benefit of the holders of the
certificates as specified in the related prospectus supplement and will not be  
entitled to payments in respect of the assets of any other trust fund           
established by the depositor. The applicable prospectus supplement may specify  
the Mortgage Assets that a trust fund will consist of, but if it does not, the  
Mortgage Assets of any trust fund will consist of mortgage loans, Agency        
Securities or Private Mortgage-Backed Securities but not a combination of them. 
Mortgage loans acquired by the depositor will have been originated in accordance
with the underwriting criteria specified below under "Mortgage Loan Program -   
Underwriting Standards" or as otherwise described in a related prospectus       
supplement.                                                                     

         The following is a brief description of the Mortgage Assets expected to
be included in the trust funds. If specific information about the Mortgage      
Assets is not known at the time the related series of certificates initially is 
offered, more general information of the nature described below will be provided
in the related prospectus supplement, and specific information will be set forth
in a report on Form 8-K to be filed with the SEC within fifteen days after the  
initial issuance of the certificates. A maximum of 5% of the Mortgage Assets as 
they will be constituted at the time that the applicable detailed description of
Mortgage Assets is filed will deviate in any material respect from the Mortgage 
Asset pool characteristics described in the related prospectus supplement, other

-----------                                                                     
*  Whenever the terms mortgage pool and certificates are used in this           
prospectus, those terms will be considered to apply, unless the context   
indicates otherwise, to one specific mortgage pool and the certificates   
representing certain undivided interests in a single trust fund consisting
primarily of the Mortgage Assets in the mortgage pool. Similarly, the term
pass-through rate will refer to the pass-through rate borne by the        
certificate of one specific series and the term trust fund will refer     
to one specific trust fund.                                               

12

424B5
135th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 135th
than the aggregate number or amount of mortgage loans. A schedule of the        
Mortgage Assets relating to the series will be attached to the pooling and      
servicing agreement delivered to the trustee upon delivery of the certificates. 

THE MORTGAGE LOANS -- GENERAL                                                   

   The real property that secures repayment of the mortgage loans is
referred to collectively as mortgaged properties. The mortgaged properties will 
be located in any one of the fifty states, the District of Columbia, Guam,      
Puerto Rico or any other territory of the United States. Mortgage loans with    
certain Loan-to-Value Ratios or certain principal balances or both may be       
covered wholly or partially by primary mortgage guaranty insurance policies. The
existence, extent and duration of coverage will be described in the applicable  
prospectus supplement.                                                          

   The applicable prospectus supplement may specify the day on which
monthly payments on the mortgage loans in a mortgage pool will be due, but if it
does not, all of the mortgage loans in a mortgage pool will have monthly        
payments due on the first day of each month. The payment terms of the mortgage  
loans to be included in a trust fund will be described in the related prospectus
supplement and may include any of the following features or combination thereof 
or other features described in the related prospectus supplement:               

       o     Interest may be payable at a fixed rate, a rate adjustable from
              time to time in relation to an index (which will be specified in
            the related prospectus supplement), a rate that is fixed for a
              period of time or under certain circumstances and is followed by
           an adjustable rate, a rate that otherwise varies from time to
              time, or a rate that is convertible from an adjustable rate to a
         fixed rate. Changes to an adjustable rate may be subject to
     periodic limitations, maximum rates, minimum rates or a
              combination of the limitations. Accrued interest may be deferred
            and added to the principal of a loan for the periods and under
             the circumstances as may be specified in the related prospectus
supplement.                                       

       o     Principal may be payable on a level debt service basis to fully
            amortize the mortgage loan over its term, may be calculated on
   the basis of an assumed amortization schedule that is
              significantly longer than the original term to maturity or on an
              interest rate that is different from the interest rate specified
          in its mortgage note or may not be amortized during all or a
           portion of the original term. Payment of all or a substantial
             portion of the principal may be due on maturity, called balloon
             payments. Principal may include interest that has been deferred
      and added to the principal balance of the mortgage loan.

       o     Monthly payments of principal and interest may be fixed for the
             life of the mortgage loan, may increase over a specified period
         of time or may change from period to period. The terms of a
       mortgage loan may include limits on periodic increases or
         decreases in the amount of monthly payments and may include
maximum or minimum amounts of monthly payments.   

       o     The mortgage loans generally may be prepaid at any time without
               the payment of any prepayment fee. If so specified in the related
         prospectus supplement, some prepayments of principal may be
             subject to a prepayment fee, which may be fixed for the life of
               the mortgage loan or may decline over time, and may be prohibited
             for the life of the mortgage loan or for certain periods, which
           are called lockout periods. Certain mortgage loans may permit
               prepayments after expiration of the applicable lockout period and
            may require the payment of a prepayment fee in connection with
        any subsequent prepayment. Other mortgage loans may permit
               prepayments without payment of a fee unless the prepayment occurs
  during specified time periods. The loans may include
               "due-on-sale" clauses that permit the mortgagee to demand payment
        of the entire mortgage loan in connection with the sale or
        certain transfers of the related mortgaged property. Other
         mortgage loans may be assumable by persons meeting the then
applicable underwriting standards of the seller.  

        A trust fund may contain buydown loans that include provisions whereby
a third party partially subsidizes the monthly payments of the obligors on the  
mortgage loans during the early years of the mortgage loans, the difference to  
be made up from a buydown fund contributed by the third party at the time of    
origination of the mortgage loan. A buydown fund will be in an amount equal     
either to the discounted value or full aggregate amount of future payment       
subsidies. Thereafter, buydown funds are applied to the applicable mortgage     

13

424B5
136th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 136th
loan upon receipt by the master servicer of the mortgagor's portion of the      
monthly payment on the mortgage loan. The master servicer administers the       
buydown fund to ensure that the monthly allocation from the buydown fund        
combined with the monthly payment received from the mortgagor equals the        
scheduled monthly payment on the applicable mortgage loan. 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 fulfilled, the possibility of defaults on buydown loans 
is increased.                                                                   

        Each prospectus supplement will contain information, as of the date of
the prospectus supplement and to the extent then specifically known to the      
depositor, with respect to the mortgage loans contained in the related mortgage 
pool, including                                                                 

   o     the aggregate outstanding principal balance and the average
           outstanding principal balance of the mortgage loans as of the
         first day of the month of issuance of the related series of
              certificates or another date specified in the related prospectus
supplement called a cut-off date,                 

        o     the type of property securing the mortgage loans (e.g., separate
               residential properties, individual units in condominium apartment
           buildings or in buildings owned by cooperatives, vacation and
second homes),                                    

o     the original terms to maturity of the mortgage loans,   

        o     the largest principal balance and the smallest principal balance
of any of the mortgage loans,                     

        o     the earliest origination date and latest maturity date of any of
the mortgage loans,                               

o     the aggregate principal balance of mortgage loans having
Loan-to-Value Ratios at origination exceeding 80%,

o     the maximum and minimum per annum mortgage rates and    

o     the geographical distribution of the mortgage loans.    

       If specific information respecting the mortgage loans is not known to
the depositor at the time the related certificates are initially offered, more  
general information of the nature described above will be provided in the       
detailed description of Mortgage Assets.                                        

       The "Loan-to-Value Ratio" of a mortgage loan at any given time is the
fraction, expressed as a percentage, the numerator of which is the original     
principal balance of the related mortgage loan and the denominator of which is  
the collateral value of the related mortgaged property. The applicable          
prospectus supplement may specify how the collateral value of a mortgaged       
property will be calculated, but if it does not, the collateral value of a      
mortgaged property is the lesser of the sales price for the property and the    
appraised value determined in an appraisal obtained by the originator at        
origination of the mortgage loan.                                               

        No assurance can be given that values of the mortgaged properties have
remained or will remain at their levels on the dates of origination of the      
related mortgage loans. If the residential real estate market should experience 
an overall decline in property values such that the outstanding principal       
balances of the mortgage loans, and any secondary financing on the mortgaged    
properties, in a particular mortgage pool become equal to or greater than the   
value of the mortgaged properties, the actual rates of delinquencies,           
foreclosures and losses could be higher than those now generally experienced in 
the mortgage lending industry. In addition, adverse economic conditions and     
other factors (which may or may not affect real property values) may affect the 
timely payment by mortgagors of scheduled payments of principal and interest on 
the mortgage loans and, accordingly, the actual rates of delinquencies,         
foreclosures and losses with respect to any mortgage pool. To the extent that   
the losses are not covered by subordination provisions or alternative           
arrangements, the losses will be borne, at least in part, by the holders of the 
certificates of the related series.                                             

      The depositor will cause the mortgage loans comprising each mortgage
pool to be assigned to the trustee named in the related prospectus supplement   
for the benefit of the certificateholders of the related series. The master     
servicer named in the related prospectus supplement will service the mortgage   
loans, either directly or through sub-servicers, pursuant to the pooling and    
servicing agreement, and will receive a fee for its services. See "Mortgage Loan
Program" and "The Pooling and Servicing Agreement." With respect to mortgage    
loans serviced by the                                                           

14

424B5
137th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 137th
master servicer through a sub-servicer, the master servicer will remain liable  
for its servicing obligations under the related pooling and servicing agreement 
as if the master servicer alone were servicing the mortgage loans.              

 The applicable prospectus supplement may provide for additional
obligations of the depositor, but if it does not, the only obligations of the   
depositor with respect to a series of certificates will be to obtain certain    
representations and warranties from the sellers and to assign to the trustee for
the series of certificates the depositor's rights with respect to the           
representations and warranties. See "The Pooling and Servicing Agreement -      
Assignment of Mortgage Assets." The obligations of the master servicer with     
respect to the mortgage loans will consist principally of its contractual       
servicing obligations under the related pooling and servicing agreement         
(including its obligation to enforce the obligations of the sub-servicers or    
sellers, or both, as more fully described under "Mortgage Loan Program -        
Representations by Sellers; Repurchases") and its obligation to make cash       
advances upon delinquencies in payments on or with respect to the mortgage loans
in the amounts described under "Description of the Certificates - Advances." The
obligations of the master servicer to make advances may be subject to           
limitations, to the extent provided in this prospectus and in the related       
prospectus supplement. The master servicer may also be a seller in which case a 
breach of its obligations in one capacity will not constitute a breach of its   
obligations in the other capacity.                                              

      The mortgage loans will consist of mortgage loans, deeds of trust or
participations or other beneficial interests therein, secured by first liens on 
one- to four-family residential properties and, if so specified in the related  
prospectus supplement, may include cooperative apartment loans secured by       
security interests in shares issued by private, non-profit, cooperative housing 
corporations and in the related proprietary leases or occupancy agreements      
granting exclusive rights to occupy specific dwelling units in the cooperatives'
buildings. In addition, Mortgage Assets of the related trust fund may include   
mortgage participation certificates evidencing interests in mortgage loans.     
These loans may be conventional loans (i.e., loans that are not insured or      
guaranteed by any governmental agency) or loans insured by the FHA or partially 
guaranteed by the VA, as specified in the related prospectus supplement. The    
mortgaged properties relating to mortgage loans will consist of detached or     
semi-detached one-family dwelling units, two- to four-family dwelling units,    
townhouses, rowhouses, individual condominium units, individual units in planned
unit developments and certain other dwelling units. The mortgaged properties may
include vacation and second homes, investment properties and leasehold          
interests. In the case of leasehold interests, the applicable prospectus        
supplement may specify that the term of the leasehold may be less than five     
years beyond the scheduled maturity of the mortgage loan, but if it does not,   
the term of the leasehold will exceed the scheduled maturity of the mortgage    
loan by at least five years.                                                    

AGENCY SECURITIES                                                               

        Government National Mortgage Association. Ginnie Mae is a wholly-owned
corporate instrumentality of the United States with the United States Department
of Housing and Urban Development. Section 306(g) of Title II of the National    
Housing Act of 1934, as amended, authorizes Ginnie Mae to guarantee the timely  
payment of the principal of and interest on certificates that represent an      
interest in a pool of mortgage loans insured by the FHA under the National      
Housing Act of 1934 or Title V of the Housing Act of 1949, or partially         
guaranteed by the VA under the Servicemen's Readjustment Act of 1944, as        
amended, or Chapter 37 of Title 38, United States Code.                         

       Section 306(g) of the National Housing Act of 1934 provides that "the
full faith and credit of the United States is pledged to the payment of all     
amounts which may be required to be paid under any guaranty under this          
subsection." In order to meet its obligations under that guaranty, Ginnie Mae   
may, under Section 306(d) of the National Housing Act of 1934, borrow from the  
United States Treasury in an unlimited amount which is at any time sufficient to
enable Ginnie Mae to perform its obligations under its guarantee.               

      Ginnie Mae Certificates. Each Ginnie Mae certificate held in a trust
fund will be a "fully modified pass-through" mortgage backed certificate issued 
and serviced by a Ginnie Mae issuer approved by Ginnie Mae or by Fannie Mae as a
seller-servicer of FHA loans or VA loans. The Ginnie Mae certificates may be    
issued under either the Ginnie Mae I program or the Ginnie Mae II program. The  
mortgage loans underlying the Ginnie Mae certificates will consist of FHA loans 
or VA loans. Each mortgage loan is secured by a one-to four-family or           
multifamily residential property. Ginnie Mae will approve the issuance of each  
Ginnie Mae certificate in accordance with a guaranty agreement between Ginnie   
Mae and the Ginnie Mae issuer. Pursuant to its guaranty agreement, a Ginnie Mae 
issuer will be required to advance its own funds in order to make timely        
payments of all                                                                 

15

424B5
138th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 138th
amounts due on each Ginnie Mae certificate if the payments received by the      
Ginnie Mae issuer on the FHA loans or VA loans underlying each Ginnie Mae       
certificate are less than the amounts due on each Ginnie Mae certificate.       

         The full and timely payment of principal of and interest on each Ginnie
Mae certificate will be guaranteed by Ginnie Mae, which obligation is backed by 
the full faith and credit of the United States. Each Ginnie Mae certificate will
have an original maturity of not more than 30 years (but may have original      
maturities of substantially less than 30 years). Each Ginnie Mae certificate    
will be based on and backed by a pool of FHA loans or VA loans secured by one to
four-family residential properties and will provide for the payment by or on    
behalf of the Ginnie Mae issuer to the registered holder of the Ginnie Mae      
certificate of scheduled monthly payments of principal and interest equal to the
registered holder's proportionate interest in the aggregate amount of the       
monthly principal and interest payment on each FHA loan or VA loan underlying   
the Ginnie Mae certificate, less the applicable servicing and guaranty fee,     
which together equal the difference between the interest on the FHA loan or VA  
loan and the pass-through rate on the Ginnie Mae certificate. In addition, each 
payment will include proportionate pass-through payments of any prepayments of  
principal on the FHA loans or VA loans underlying the Ginnie Mae certificate and
liquidation proceeds upon a foreclosure or other disposition of the FHA loans or
VA loans.                                                                       

       If a Ginnie Mae issuer is unable to make the payments on a Ginnie Mae
certificate as it becomes due, it must promptly notify Ginnie Mae and request   
Ginnie Mae to make the payment. Upon notification and request, Ginnie Mae will  
make the payments directly to the registered holder of the Ginnie Mae           
certificate. If no payment is made by a Ginnie Mae issuer and the Ginnie Mae    
issuer fails to notify and request Ginnie Mae to make the payment, the holder of
the Ginnie Mae certificate will have recourse only against Ginnie Mae to obtain 
the payment. The trustee or its nominee, as registered holder of the Ginnie Mae 
certificates held in a trust fund, will have the right to proceed directly      
against Ginnie Mae under the terms of the guaranty agreements relating to the   
Ginnie Mae certificates for any amounts that are not paid when due.             

     All mortgage loans underlying a particular Ginnie Mae I certificate
must have the same interest rate over the term of the loan, except in pools of  
mortgage loans secured by manufactured homes. The interest rate on the Ginnie   
Mae I certificate will equal the interest rate on the mortgage loans included in
the pool of mortgage loans underlying the Ginnie Mae I certificate, less        
one-half percentage point per annum of the unpaid principal balance of the      
mortgage loans.                                                                 

      Mortgage loans underlying a particular Ginnie Mae II certificate may
have per annum interest rates that vary from each other by up to one percentage 
point. The interest rate on each Ginnie Mae II certificate will be between one  
half percentage point and one and one-half percentage points lower than the     
highest interest rate on the mortgage loans included in the pool of mortgage    
loans underlying the Ginnie Mae II certificate, except for pools of mortgage    
loans secured by manufactured homes.                                            

     Regular monthly installment payments on each Ginnie Mae certificate
held in a trust fund will be comprised of interest due as specified on the      
Ginnie Mae certificate plus the scheduled principal payments on the FHA loans or
VA loans underlying the Ginnie Mae certificate due on the first day of the month
in which the scheduled monthly installments on the Ginnie Mae certificate are   
due. The regular monthly installments on each Ginnie Mae certificate are        
required to be paid to the trustee as registered holder by the 15th day of each 
month in the case of a Ginnie Mae I certificate and are required to be mailed to
the trustee by the 20th day of each month in the case of a Ginnie Mae II        
certificate. Any principal prepayments on any FHA loans or VA loans underlying a
Ginnie Mae certificate held in a trust fund or any other early recovery of      
principal on the loans will be passed through to the trustee as the registered  
holder of the Ginnie Mae certificate.                                           

     Ginnie Mae certificates may be backed by graduated payment mortgage
loans or by buydown loans for which funds will have been provided (and deposited
into escrow accounts) for application to the payment of a portion of the        
borrowers' monthly payments during the early years of the mortgage loan.        
Payments due the registered holders of Ginnie Mae certificates backed by pools  
containing buydown loans will be computed in the same manner as payments derived
from other Ginnie Mae certificates and will include amounts to be collected from
both the borrower and the related escrow account. The graduated payment mortgage
loans will provide for graduated interest payments that, during the early years 
of the mortgage loans, will be less than the amount of stated interest on the   
mortgage loans. The interest not so paid will be added to the principal of the  
graduated payment mortgage loans and, together with interest on them, will be   
paid in subsequent years. The obligations of Ginnie Mae and of a Ginnie Mae     
issuer will be the same irrespective of whether the Ginnie Mae certificates are 
backed by                                                                       

16

424B5
139th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 139th
graduated payment mortgage loans or buydown loans. No statistics comparable to  
the FHA's prepayment experience on level payment, non-buydown mortgage loans are
available for graduated payment or buydown loans. Ginnie Mae certificates       
related to a series of certificates may be held in book-entry form.             

       The Ginnie Mae certificates included in a trust fund, and the related
underlying mortgage loans, may have characteristics and terms different from    
those described above. Any different characteristics and terms will be described
in the related prospectus supplement.                                           

    Federal Home Loan Mortgage Corporation. Freddie Mac is a corporate
instrumentality of the United States created pursuant to Title III of the       
Emergency Home Finance Act of 1970, as amended. The common stock of Freddie Mac 
is owned by the Federal Home Loan Banks and its preferred stock is owned by     
stockholders of the Federal Home Loan Banks. Freddie Mac was established        
primarily to increase the availability of mortgage credit to finance urgently   
needed housing. It seeks to provide an enhanced degree of liquidity for         
residential mortgage investments primarily by assisting in the development of   
secondary markets for conventional mortgages. The principal activity of Freddie 
Mac currently consists of the purchase of first lien conventional mortgage loans
or participation interests in mortgage loans and the sale of the mortgage loans 
or participations so purchased in the form of mortgage securities, primarily    
mortgage participation certificates issued and either guaranteed as to timely   
payment of interest or guaranteed as to timely payment of interest and ultimate 
payment of principal by Freddie Mac. Freddie Mac is confined to purchasing, so  
far as practicable, mortgage loans that it deems to be of such quality, type and
class as to meet generally the purchase standards imposed by private            
institutional mortgage investors.                                               

      Freddie Mac Certificates. Each Freddie Mac certificate represents an
undivided interest in a pool of mortgage loans that may consist of first lien   
conventional loans, FHA loans or VA loans. Freddie Mac certificates are sold    
under the terms of a Mortgage Participation Certificate Agreement. A Freddie Mac
certificate may be issued under either Freddie Mac's Cash Program or Guarantor  
Program.                                                                        

        Mortgage loans underlying the Freddie Mac certificates held by a trust
fund will consist of mortgage loans with original terms to maturity of between  
10 and 40 years. Each mortgage loan must meet the applicable standards set forth
in the Emergency Home Finance Act of 1970. A Freddie Mac certificate group may  
include whole loans, participation interests in whole loans and undivided       
interests in whole loans and participations comprising another Freddie Mac      
certificate group. Under the Guarantor Program, a Freddie Mac certificate group 
may include only whole loans or participation interests in whole loans.         

   Freddie Mac guarantees to each registered holder of a Freddie Mac
certificate the timely payment of interest on the underlying mortgage loans to  
the extent of the applicable certificate interest rate on the registered        
holder's pro rata share of the unpaid principal balance outstanding on the      
underlying mortgage loans in the Freddie Mac certificate group represented by   
the Freddie Mac certificate, whether or not received. Freddie Mac also          
guarantees to each registered holder of a Freddie Mac certificate collection by 
the holder of all principal on the underlying mortgage loans, without any offset
or deduction, to the extent of the holder's pro rata share of it, but does not, 
except if and to the extent specified in the related prospectus supplement for a
series of certificates, guarantee the timely payment of scheduled principal.    
Under Freddie Mac's Gold PC Program, Freddie Mac guarantees the timely payment  
of principal based on the difference between the pool factor published in the   
month preceding the month of distribution and the pool factor published in the  
month of distribution. Pursuant to its guaranties, Freddie Mac indemnifies      
holders of Freddie Mac certificates against any diminution in principal from    
charges for property repairs, maintenance and foreclosure. Freddie Mac may remit
the amount due on account of its guaranty of collection of principal at any time
after default on an underlying mortgage loan, but not later than 30 days        
following foreclosure sale, 30 days following payment of the claim by any       
mortgage insurer or 30 days following the expiration of any right of redemption,
whichever occurs later, but in any event no later than one year after demand has
been made upon the mortgagor for accelerated payment of principal. In taking    
actions regarding the collection of principal after default on the mortgage     
loans underlying Freddie Mac certificates, including the timing of demand for   
acceleration, Freddie Mac reserves the right to exercise its judgment with      
respect to the mortgage loans in the same manner as for mortgage loans that it  
has purchased but not sold. The length of time necessary for Freddie Mac to     
determine that a mortgage loan should be accelerated varies with the particular 
circumstances of each mortgagor, and Freddie Mac has not adopted standards which
require that the demand be made within any specified period.                    

17

424B5
140th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 140th
        Freddie Mac certificates are not guaranteed by the United States or by
any Federal Home Loan Bank and do not constitute debts or obligations of the    
United States or any Federal Home Loan Bank. The obligations of Freddie Mac     
under its guaranty are obligations solely of Freddie Mac and are not backed by, 
or entitled to, the full faith and credit of the United States. If Freddie Mac  
were unable to satisfy its obligations, distributions to holders of Freddie Mac 
certificates would consist solely of payments and other recoveries on the       
underlying mortgage loans and, accordingly, monthly distributions to holders of 
Freddie Mac certificates would be affected by delinquent payments and defaults  
on the mortgage loans.                                                          

        Registered holders of Freddie Mac certificates are entitled to receive
their monthly pro rata share of all principal payments on the underlying        
mortgage loans received by Freddie Mac, including any scheduled principal       
payments, full and partial prepayments of principal and principal received by   
Freddie Mac by virtue of condemnation, insurance, liquidation or foreclosure,   
and repurchases of the mortgage loans by Freddie Mac or their seller. Freddie   
Mac is required to remit each registered Freddie Mac certificateholder's pro    
rata share of principal payments on the underlying mortgage loans, interest at  
the Freddie Mac pass-through rate and any other sums such as prepayment fees,   
within 60 days of the date on which the payments are deemed to have been        
received by Freddie Mac.                                                        

        Under Freddie Mac's Cash Program, there is no limitation on the amount
by which interest rates on the mortgage loans underlying a Freddie Mac          
certificate may exceed the pass-through rate on the Freddie Mac certificate.    
Under that program, Freddie Mac purchases groups of whole mortgage loans from   
sellers at specified percentages of their unpaid principal balances, adjusted   
for accrued or prepaid interest, which when applied to the interest rate of the 
mortgage loans and participations purchased results in the yield required by    
Freddie Mac. The required yield, which includes a minimum servicing fee retained
by the servicer, is calculated using the outstanding principal balance. The     
range of interest rates on the mortgage loans and participations in a Freddie   
Mac certificate group under the Cash Program will vary since mortgage loans and 
participations are purchased and assigned to a Freddie Mac certificate group    
based upon their yield to Freddie Mac rather than on the interest rate on the   
underlying mortgage loans. Under Freddie Mac's Guarantor Program, the           
pass-through rate on a Freddie Mac certificate is established based upon the    
lowest interest rate on the underlying mortgage loans, minus a minimum servicing
fee and the amount of Freddie Mac's management and guaranty income as agreed    
upon between the seller and Freddie Mac.                                        

       Freddie Mac certificates duly presented for registration of ownership
on or before the last business day of a month are registered effective as of the
first day of the month. The first remittance to a registered holder of a Freddie
Mac certificate will be distributed so as to be received normally by the 15th   
day of the second month following the month in which the purchaser became a     
registered holder of the Freddie Mac certificate. Thereafter, the remittance    
will be distributed monthly to the registered holder so as to be received       
normally by the 15th day of each month. The Federal Reserve Bank of New York    
maintains book-entry accounts for Freddie Mac certificates sold by Freddie Mac  
on or after January 2, 1985, and makes payments of principal and interest each  
month to their registered holders in accordance with the holders' instructions. 

  Federal National Mortgage Association. Fannie Mae is a federally
chartered and privately owned corporation organized and existing under the      
Federal National Mortgage Association Charter Act, as amended. Fannie Mae was   
originally established in 1938 as a United States government agency to provide  
supplemental liquidity to the mortgage market and was transformed into a        
stockholder owned and privately-managed corporation by legislation enacted in   
1968.                                                                           

Fannie Mae provides funds to the mortgage market primarily by 
purchasing mortgage loans from lenders, thereby replenishing their funds for    
additional lending. Fannie Mae acquires funds to purchase mortgage loans from   
many capital market investors that may not ordinarily invest in mortgages,      
thereby expanding the total amount of funds available for housing. Operating    
nationwide, Fannie Mae helps to redistribute mortgage funds from capital-surplus
to capital-short areas.                                                         

     Fannie Mae Certificates. These are guaranteed mortgage pass-through
certificates issued and guaranteed as to timely payment of principal and        
interest by Fannie Mae representing fractional undivided interests in a pool of 
mortgage loans formed by Fannie Mae. Each mortgage loan must meet the applicable
standards of the Fannie Mae purchase program. Mortgage loans comprising a pool  
are either provided by Fannie Mae from its own portfolio or purchased pursuant  
to the criteria of the Fannie Mae purchase program.                             

18

424B5
141st Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 141st
      Mortgage loans underlying Fannie Mae certificates held by a trust fund
will consist of conventional mortgage loans, FHA loans or VA loans. Original    
maturities of substantially all of the conventional, level payment mortgage     
loans underlying a Fannie Mae certificate are expected to be between either 8 to
15 years or 20 to 40 years. The original maturities of substantially all of the 
fixed rate, level payment FHA loans or VA loans are expected to be 30 years.    
Mortgage loans underlying a Fannie Mae certificate may have annual interest     
rates that vary by as much as two percentage points from each other. The rate of
interest payable on a Fannie Mae certificate is equal to the lowest interest    
rate of any mortgage loan in the related pool, less a specified minimum annual  
percentage representing servicing compensation and Fannie Mae's guaranty fee.   
Under a regular servicing option, the annual interest rates on the mortgage     
loans underlying a Fannie Mae certificate will be between 50 basis points and   
250 basis points greater than is its annual pass through rate. Under this option
the mortgagee or each other servicer assumes the entire risk of foreclosure     
losses. Under a special servicing option, the annual interest rates on the      
mortgage loans underlying a Fannie Mae certificate will generally be between 55 
basis points and 255 basis points greater than the annual Fannie Mae certificate
pass-through rate. Under this option Fannie Mae assumes the entire risk for     
foreclosure losses. If specified in the related prospectus supplement, Fannie   
Mae certificates may be backed by adjustable rate mortgages.                    

Fannie Mae guarantees to each registered holder of a Fannie Mae 
certificate that it will distribute amounts representing the holder's           
proportionate share of scheduled principal and interest payments at the         
applicable pass through rate provided for by the Fannie Mae certificate on the  
underlying mortgage loans, whether or not received, and the holder's            
proportionate share of the full principal amount of any foreclosed or other     
finally liquidated mortgage loan, whether or not the principal amount is        
actually recovered. The obligations of Fannie Mae under its guaranties are      
obligations solely of Fannie Mae and are not backed by, or entitled to, the full
faith and credit of the United States. Although the Secretary of the Treasury of
the United States has discretionary authority to lend Fannie Mae up to $2.25    
billion outstanding at any time, neither the United States nor any of its       
agencies is obligated to finance Fannie Mae's operations or to assist Fannie Mae
in any other manner. If Fannie Mae were unable to satisfy its obligations,      
distributions to holders of Fannie Mae certificates would consist solely of     
payments and other recoveries on the underlying mortgage loans and, accordingly,
monthly distributions to holders of Fannie Mae certificates would be affected by
delinquent payments and defaults on the mortgage loans.                         

         Except for Fannie Mae certificates backed by pools containing graduated
payment mortgage loans or mortgage loans secured by multifamily projects, Fannie
Mae certificates evidencing interests in pools of mortgage loans formed on or   
after May 1, 1985 are available in book-entry form only. Distributions of       
principal and interest on each Fannie Mae certificate will be made by Fannie Mae
on the 25th day of each month to the persons in whose name the Fannie Mae       
certificate is entered in the books of the Federal Reserve Banks or registered  
on the Fannie Mae certificate register as of the close of business on the last  
day of the preceding month. Distributions on Fannie Mae certificates issued in  
book-entry form will be made by wire. Distributions on fully registered Fannie  
Mae certificates will be made by check.                                         

       The Fannie Mae certificates included in a trust fund, and the related
underlying mortgage loans, may have characteristics and terms different from    
those described above. Any different characteristics and terms will be described
in the related prospectus supplement.                                           

       Stripped Mortgage-Backed Securities. Agency Securities may consist of
one or more stripped mortgage-backed securities, each as described in this      
prospectus and in the related prospectus supplement. Each Agency Security will  
represent an undivided interest in all or part of either the principal          
distributions (but not the interest distributions) or the interest distributions
(but not the principal distributions), or in some specified portion of the      
principal and interest distributions (but not all the distributions) on certain 
Freddie Mac, Fannie Mae or Ginnie Mae certificates. The underlying securities   
will be held under a trust agreement by Freddie Mac, Fannie Mae or Ginnie Mae,  
each as trustee, or by another trustee named in the related prospectus          
supplement. The applicable prospectus supplement may specify that Freddie Mac,  
Fannie Mae or Ginnie Mae will not guarantee each stripped Agency Security to the
same extent it guarantees the underlying securities backing the stripped Agency 
Security, but if it does not, then Freddie Mac, Fannie Mae or Ginnie Mae will   
guarantee each stripped Agency Security to the same extent it guarantees the    
underlying securities backing the stripped Agency Security.                     

 Other Agency Securities. If specified in the related prospectus
supplement, a trust fund may include other mortgage pass-through certificates   
issued or guaranteed by Ginnie Mae, Fannie Mae or Freddie Mac. The              

19

424B5
142nd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 142nd
characteristics of those mortgage pass-through certificates will be described in
the prospectus supplement. If so specified, a combination of different types of 
Agency Securities may be held in a trust fund.                                  

PRIVATE MORTGAGE-BACKED SECURITIES                                              

         Private Mortgage-Backed Securities may consist of mortgage pass-through
certificates or participation certificates evidencing an undivided interest in a
pool of mortgage loans or collateralized mortgage obligations secured by        
mortgage loans. Private Mortgage-Backed Securities may include stripped         
mortgage-backed securities representing an undivided interest in all or a part  
of either the principal distributions (but not the interest distributions) or   
the interest distributions (but not the principal distributions) or in some     
specified portion of the principal and interest distributions (but not all the  
distributions) on certain mortgage loans. Private Mortgage-Backed Securities    
will have been issued pursuant to a pooling and servicing agreement, an         
indenture or similar agreement. The applicable prospectus supplement may provide
that the seller/servicer of the underlying mortgage loans will not have entered 
into a pooling and servicing agreement with a private trustee, but if it does   
not, the seller/servicer of the underlying mortgage loans will have entered into
the pooling and servicing agreement with a private trustee. The private trustee 
or its agent, or a custodian, will possess the mortgage loans underlying the    
Private Mortgage-Backed Security. Mortgage loans underlying a Private           
Mortgage-Backed Security will be serviced by a private servicer directly or by  
one or more subservicers who may be subject to the supervision of the private   
servicer.                                                                       

The issuer of the Private Mortgage-Backed Securities will be a
financial institution or other entity engaged generally in the business of      
mortgage lending, a public agency or instrumentality of a state, local or       
federal government, or a limited purpose corporation organized for the purpose  
of, among other things, establishing trusts and acquiring and selling housing   
loans to the trusts and selling beneficial interests in the trusts. If so       
specified in the related prospectus supplement, the issuer of Private           
Mortgage-Backed Securities may be an affiliate of the depositor. The obligations
of the issuer of Private Mortgage-Backed Securities will generally be limited to
certain representations and warranties with respect to the assets conveyed by it
to the related trust fund. The issuer of Private Mortgage-Backed Securities will
not have guaranteed any of the assets conveyed to the related trust fund or any 
of the Private Mortgage-Backed Securities issued under the pooling and servicing
agreement. Additionally, although the mortgage loans underlying the Private     
Mortgage-Backed Securities may be guaranteed by an agency or instrumentality of 
the United States, the Private Mortgage-Backed Securities themselves will not be
so guaranteed.                                                                  

     Distributions of principal and interest will be made on the Private
Mortgage-Backed Securities on the dates specified in the related prospectus     
supplement. The Private Mortgage-Backed Securities may be entitled to receive   
nominal or no principal distributions or nominal or no interest distributions.  
Principal and interest distributions will be made on the Private Mortgage-Backed
Securities by the private trustee or the private servicer. The issuer of Private
Mortgage-Backed Securities or the private servicer may have the right to        
repurchase assets underlying the Private Mortgage-Backed Securities after a     
certain date or under other circumstances specified in the related prospectus   
supplement.                                                                     

      The mortgage loans underlying the Private Mortgage-Backed Securities
may consist of fixed rate, level payment, fully amortizing loans or graduated   
payment mortgage loans, buydown loans, adjustable rate mortgage loans or loans  
having balloon or other special payment features. The mortgage loans may be     
secured by single family property or multifamily property or by an assignment of
the proprietary lease or occupancy agreement relating to a specific dwelling    
within a cooperative and the related shares issued by the cooperative.          

 The prospectus supplement for a series for which the trust fund
includes Private Mortgage-Backed Securities will specify                        

  o     the aggregate approximate principal amount and type of the
            Private Mortgage-Backed Securities to be included in the trust
fund;                                             

       o     certain characteristics of the mortgage loans that comprise the
          underlying assets for the Private Mortgage-Backed Securities
including                                         

o    the payment features of the mortgage loans,  

20

424B5
143rd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 143rd
            o    the approximate aggregate principal balance, if known, of
            underlying mortgage loans insured or guaranteed by a
governmental entity,                    

               o    the servicing fee or range of servicing fees with respect to
the mortgage loans and                  

              o    the minimum and maximum stated maturities of the underlying
mortgage loans at origination;          

   o     the maximum original term-to-stated maturity of the Private
Mortgage-Backed Securities;                       

   o     the weighted average term-to stated maturity of the Private
Mortgage-Backed Securities;                       

o     the pass-through or certificate rate of the Private     
Mortgage-Backed Securities;                       

    o     the weighted average pass-through or certificate rate of the
Private Mortgage-Backed Securities;               

     o     the issuer of Private Mortgage-Backed Securities, the private
           servicer (if other than the issuer of Private Mortgage-Backed
 Securities) and the private trustee for the Private
Mortgage-Backed Securities;                       

         o     certain characteristics of credit support, if any, the as reserve
           funds, insurance policies, surety bonds, letters of credit or
              guaranties relating to the mortgage loans underlying the Private
          Mortgage-Backed Securities or to the Private Mortgage-Backed
Securities themselves;                            

        o     the terms on which the underlying mortgage loans for the Private
              Mortgage-Backed Securities may, or are required to, be purchased
        before their stated maturity or the stated maturity of the
Private Mortgage-Backed Securities; and           

      o     the terms on which mortgage loans may be substituted for those
           originally underlying the Private Mortgage-Backed Securities.

     Private Mortgage-Backed Securities included in the trust fund for a
series of certificates that were issued by an issuer of Private Mortgage-Backed 
Securities that is not affiliated with the depositor must be acquired in bona   
fide secondary market transactions or either have been previously registered    
under the Securities Act of 1933 or have been held for at least the holding     
period required to be eligible for sale under Rule 144(k) under the Securities  
Act of 1933.                                                                    

PRE-FUNDING                                                                     

  If stated in the related prospectus supplement, a portion of the
issuance proceeds of the certificates of a particular series will be deposited  
in a pre-funding account to be established with the trustee, which will be used 
to acquire additional mortgage assets from time to time during the time period  
specified in the related prospectus supplement. Prior to the investment of      
amounts on deposit in the related pre-funding account in additional mortgage    
assets, those amounts may be invested in one or more permitted investments, or  
other investments that may be specified in the related prospectus supplement.   
Additional mortgage assets that are purchased with amounts on deposit in a      
pre-funding account will be required to satisfy certain eligibility criteria    
more fully set forth in the related prospectus supplement. The eligibility      
criteria for additional mortgage assets will be consistent with the eligibility 
criteria of the mortgage assets included in the related trust fund as of the    
related closing date, subject to the exceptions that are stated in the related  
prospectus supplement. Although the specific parameters of a pre-funding account
with respect to any issuance of certificates will be specified in the related   
prospectus supplement, it is anticipated that:                                  

o    the period during which additional mortgage assets may be purchased from   
  amounts on deposit in the related pre-funding account will not exceed 90
days from the related closing date; and                               

o    the additional mortgage assets to be acquired by the related trust fund    
    will be subject to the same representations and warranties as the mortgage
assets included in the related trust fund on the related closing date,
although additional criteria may also be required to be satisfied, as 
described in the related prospectus supplement.                       

21

424B5
144th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 144th
SUBSTITUTION OF MORTGAGE ASSETS                                                 

    Substitution of Mortgage Assets will be permitted upon breaches of
representations and warranties with respect to any original Mortgage Asset or if
the documentation with respect to any Mortgage Asset is determined by the       
trustee to be incomplete. The period during which the substitution will be      
permitted generally will be indicated in the related prospectus supplement. The 
related prospectus supplement will describe any other conditions upon which     
Mortgage Assets may be substituted for Mortgage Assets initially included in the
trust fund.                                                                     

AVAILABLE INFORMATION                                                           

         The depositor has filed with the SEC a Registration Statement under the
Securities Act of 1933, as amended, covering the certificates. This prospectus, 
which forms a part of the Registration Statement, and the prospectus supplement 
relating to each series of certificates contain summaries of the material terms 
of the documents referred to in this prospectus and in the prospectus           
supplement, but do not contain all of the information in the Registration       
Statement pursuant to the rules and regulations of the SEC. For further         
information, reference is made to the Registration Statement and its exhibits.  
The Registration Statement and exhibits can be inspected and copied at          
prescribed rates at the public reference facilities maintained by the SEC at its
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may    
obtain information on the operation of the Public Reference Room by calling the 
SEC at 1-800-SEC-0330. The SEC maintains an Internet Web site that contains     
reports, information statements and other information regarding the registrants 
that file electronically with the SEC, including the depositor. The address of  
that Internet Web site is http://www.sec.gov.                                   

 This prospectus and any applicable prospectus supplement do not
constitute an offer to sell or a solicitation of an offer to buy any securities 
other than the certificates offered by this prospectus and the prospectus       
supplement nor an offer of the certificates to any person in any state or other 
jurisdiction in which the offer would be unlawful.                              

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE                                 

        All documents filed for the trust fund referred to in the accompanying
prospectus supplement after the date of this prospectus and before the end of   
the related offering with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) 
of the Securities Exchange Act of 1934, as amended, are incorporated by         
reference in this prospectus and are a part of this prospectus from the date of 
their filing. Any statement contained in a document incorporated by reference in
this prospectus is modified or superseded for all purposes of this prospectus to
the extent that a statement contained in this prospectus (or in the accompanying
prospectus supplement) or in any other subsequently filed document that also is 
incorporated by reference differs from that statement. Any statement so modified
or superseded shall not, except as so modified or superseded, constitute a part 
of this prospectus.                                                             

        The trustee on behalf of any trust fund will provide without charge to
each person to whom this prospectus is delivered, on the person's written or    
oral request, a copy of any or all of the documents referred to above that have 
been or may be incorporated by reference in this prospectus (not including      
exhibits to the information that is incorporated by reference unless the        
exhibits are specifically incorporated by reference into the information that   
this prospectus incorporates). Requests should be directed to the corporate     
trust office of the trustee specified in the accompanying prospectus supplement.

 USE OF PROCEEDS

        The net proceeds to be received from the sale of the certificates will
be applied by the depositor to the purchase of Mortgage Assets or will be used  
by the depositor for general corporate purposes. The depositor expects to sell  
certificates in series from time to time, but the timing and amount of offerings
of certificates will depend on a number of factors, including the volume of     
Mortgage Assets acquired by the depositor, prevailing interest rates,           
availability of funds and general market conditions.                            

         The depositor will not receive any proceeds from the sale of any of the
certificates in any market making transaction by Countrywide Securities         
Corporation, an affiliate of the depositor.                                     

22

424B5
145th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 145th
 THE DEPOSITOR

        CWALT, Inc., a Delaware corporation, was organized on May 22, 2003 for
the limited purpose of acquiring, owning and transferring Mortgage Assets and   
selling interests in them or bonds secured by them. The depositor is a          
subsidiary of Countrywide Financial Corporation, a Delaware corporation. The    
depositor maintains its principal office at 4500 Park Granada, Calabasas,       
California 91302. Its telephone number is (818) 225-3000.                       

         Neither the depositor nor any of the depositor's affiliates will ensure
or guarantee distributions on the certificates of any series.                   

 MORTGAGE LOAN PROGRAM

      The mortgage loans will have been purchased by the depositor, either
directly or through affiliates, from one or more mortgage loan sellers. The     
applicable prospectus supplement will specify the underwriting criteria pursuant
to which the mortgage loans were originated or will indicate that the mortgage  
loans were originated pursuant to the underwriting criteria specified under     
"Underwriting Process."                                                         

UNDERWRITING PROCESS                                                            

   Underwriting standards are applied by or on behalf of a lender to
evaluate the borrower's credit standing and repayment ability, and the value and
adequacy of the mortgaged property as collateral. In general, a prospective     
borrower applying for a mortgage loan is required to fill out a detailed        
application designed to provide to the underwriting officer pertinent credit    
information. As part of the description of the borrower's financial condition,  
the borrower generally is required to provide a current list of assets and      
liabilities and a statement of income and expenses, as well as an authorization 
to apply for a credit report which summarizes the borrower's credit history with
local merchants and lenders and any record of bankruptcy. In most cases, an     
employment verification is obtained from an independent source, typically the   
borrower's employer. The verification reports the length of employment with that
organization, the borrower's current salary and whether it is expected that the 
borrower will continue employment in the future. If a prospective borrower is   
self-employed, the borrower may be required to submit copies of signed tax      
returns. The borrower may also be required to authorize verification of deposits
at financial institutions where the borrower has demand or savings accounts.    

         In determining the adequacy of the mortgaged property as collateral, an
appraisal may be made of each property considered for financing. In instances   
where an appraisal is required, the appraiser is required to inspect the        
property and verify that it is in good repair and that construction, if new, has
been completed. The appraisal is based on the market value of comparable homes, 
the estimated rental income (if considered applicable by the appraiser) and the 
cost of replacing the home.                                                     

    Once all applicable employment, credit and property information is
received, a determination generally is made as to whether the prospective       
borrower has sufficient monthly income available to meet monthly housing        
expenses and other financial obligations and monthly living expenses and to meet
the borrower's monthly obligations on the proposed mortgage loan (generally     
determined on the basis of the monthly payments due in the year of origination) 
and other expenses related to the mortgaged property such as property taxes and 
hazard insurance). The underwriting standards applied by sellers, particularly  
with respect to the level of loan documentation and the mortgagor's income and  
credit history, may be varied in appropriate cases where factors as low         
Loan-to-Value Ratios or other favorable credit factors exist.                   

        In the case of a mortgage loan secured by a leasehold interest in real
property, the title to which is held by a third party lessor, the seller will   
represent and warrant, among other things, that the remaining term of the lease 
and any sublease is at least as long as the remaining term on the loan agreement
or promissory note for the mortgage loan.                                       

        Certain of the types of mortgage loans that may be included in a trust
fund are recently developed and may involve additional uncertainties not present
in traditional types of loans. For example, certain of the mortgage loans may   
provide for escalating or variable payments by the mortgagor. These types of    
mortgage loans are underwritten on the basis of a judgment that the mortgagors  
have the ability to make the monthly payments required initially. In some       
instances, however, a mortgagor's income may not be sufficient to permit        
continued loan payments as the                                                  

23

424B5
146th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 146th
payments increase. These types of mortgage loans may also be underwritten       
primarily on the basis of Loan-to-Value Ratios or other favorable credit        
factors.                                                                        

QUALIFICATIONS OF SELLERS AND ORIGINATORS                                       

   Each seller must be an institution experienced in originating and
servicing mortgage loans of the type contained in the related mortgage pool and 
must maintain satisfactory facilities to originate and service (either directly 
or through qualified subservicers) those mortgage loans. If a seller does not   
meet the foregoing qualifications, the related originator must satisfy such     
qualifications.                                                                 

REPRESENTATIONS BY SELLERS; REPURCHASES                                         

     One or more of each seller or, in some cases, originator, will have
made representations and warranties in respect of the mortgage loans sold by    
such seller or originator and evidenced by a series of certificates. The        
applicable prospectus supplement may specify the different representations and  
warranties, but if it does not, the representations and warranties will         
generally include, among other things:                                          

o     that title insurance (or other similar form of policy of
               insurance or an attorney's certificate of title) and any required
           hazard insurance policy and primary mortgage insurance policy
           were effective at the origination of each mortgage loan other
             than cooperative loans, and that each policy (or certificate of
title as applicable) remained in effect;          

    o     that the seller had good title to each mortgage loan and the
        mortgage loan was subject to no valid offsets, defenses or
counterclaims;                                    

       o     that each mortgage loan constituted a valid first lien on, or a
              first perfected security interest with respect to, the mortgaged
               property (subject only to permissible title insurance exceptions,
          if applicable, and certain other exceptions described in the
pooling and servicing agreement);                 

         o     that there were no delinquent tax or assessment liens against the
mortgaged property; and                           

   o     that each mortgage loan was made in compliance with, and is
          enforceable under, all applicable state and federal laws and
            regulations in all material respects (subject, with respect to
        enforceability, to bankruptcy, insolvency, reorganization,
          moratorium or other similar laws affecting creditors' rights
generally and to general principles of equity).   

       In addition, if any required payment on a mortgage loan was more than
31 days delinquent at any time during the twelve months before the cut-off date,
the related prospectus supplement shall so indicate.                            

       As to any mortgage loan insured by the FHA or partially guaranteed by
the VA, the seller will represent that it has complied with underwriting        
policies of the FHA or the VA, as the case may be.                              

  As indicated in the related pooling and servicing agreement, the
representations and warranties of a seller or originator in respect of a        
mortgage loan will be made as of the date of initial issuance of the series of  
certificates, the related cut-off date, the date on which the seller or         
originator sold the mortgage loan to the depositor or one of its affiliates, or 
the date of origination of the related mortgage loan, as the case may be. If    
representations and warranties are made as of a date other than the closing date
or cut-off date, a substantial period of time may have elapsed between the other
date and the date of initial issuance of the series of certificates evidencing  
an interest in the mortgage loan. Since the representations and warranties of a 
seller or originator do not address events that may occur following the sale of 
a mortgage loan by the seller or originator or following the origination of the 
mortgage loan, as the case may be, its repurchase obligation will not arise if  
the relevant event that would otherwise have given rise to a repurchase         
obligation with respect to a mortgage loan occurs after the date of sale of the 
mortgage loan by the seller or originator to the depositor or its affiliates or 
after the origination of the mortgage loan, as the case may be. In addition,    
certain representations, including the condition of the related mortgaged       
property, will be limited to the extent the seller or originator has knowledge  
and the seller or originator will be under no obligation to investigate the     
substance of the representation. However, the depositor will not include any    
mortgage loan in the trust fund for any series of certificates if anything has  
come to the depositor's attention that would cause it to believe                

24

424B5
147th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 147th
that the representations and warranties of a seller or originator will not be   
accurate and complete in all material respects in respect of the mortgage loan  
as of the date of initial issuance of the related series of certificates. If the
master servicer is also a seller or originator of mortgage loans with respect to
a particular series, the representations will be in addition to the             
representations and warranties made by the master servicer in its capacity as   
the master servicer.                                                            

         The trustee, if the master servicer is the seller or originator, or the
master servicer will promptly notify the relevant seller or originator of any   
breach of any representation or warranty made by it in respect of a mortgage    
loan that materially and adversely affects the interests of the                 
certificateholders in the mortgage loan. The applicable prospectus supplement   
may specify that the seller has a different repurchase or substitution          
obligation, but if it does not, then if the seller or originator cannot cure the
breach within 90 days after notice from the master servicer or the trustee, as  
the case may be, then the seller or originator will be obligated to either      
repurchase the mortgage loan from the trust fund at a price equal to 100% of the
outstanding principal balance of the mortgage as of the date of the repurchase  
plus accrued interest on it to the first day of the month in which the purchase 
price is to be distributed at the mortgage rate, less any unreimbursed advances 
or amount payable as related servicing compensation if the seller or originator 
is the master servicer with respect to the mortgage loan, or to substitute for  
such loan a replacement loan that satisfies the criteria specified in the       
related prospectus supplement. If an election is made to treat a trust fund or  
designated portions of it as one or more "real estate mortgage investment       
conduits" (or "REMICs") as defined in the Internal Revenue Code of 1986, as     
amended (the "Code"), the master servicer or a holder of the related residual   
certificates will be obligated to pay any prohibited transaction tax that may   
arise in connection with the repurchase. The applicable prospectus supplement   
may contain different reimbursement options, but if it does not, the master     
servicer will be entitled to reimbursement for that payment from the assets of  
the related trust fund or from any holder of the related residual certificate.  
See "Description of the Certificates - General" and in the related prospectus   
supplement. Except in those cases in which the master servicer is the seller or 
originator, the master servicer will be required under the applicable pooling   
and servicing agreement to enforce this obligation for the benefit of the       
trustee and the certificateholders, following the practices it would employ in  
its good faith business judgment were it the owner of the mortgage loan. This   
repurchase or substitution obligation will constitute the sole remedy available 
to certificateholders or the trustee for a breach of representation by a seller 
or originator.                                                                  

    Neither the depositor nor the master servicer will be obligated to
purchase a mortgage loan if a seller defaults on its obligation to do so, and no
assurance can be given that sellers will carry out their respective repurchase  
obligations with respect to mortgage loans. However, to the extent that a breach
of a representation and warranty of a seller may also constitute a breach of a  
representation made by the master servicer, the master servicer may have a      
repurchase obligation as described under "The Pooling and Servicing Agreement - 
Assignment of Mortgage Assets."                                                 

 DESCRIPTION OF THE CERTIFICATES

       The prospectus supplement relating to the certificates of each series
to be offered under this prospectus will, among other things, set forth for the 
certificates, as appropriate:                                                   

     o     a description of the class or classes of certificates and the
              rate at which interest will be passed through to holders of each
         class of certificates entitled to interest or the method of
              determining the amount of interest, if any, to be passed through
to each class;                                    

  o     the initial aggregate certificate balance of each class of
     certificates included in the series, the dates on which
    distributions on the certificates will be made and, if
            applicable, the initial and final scheduled distribution dates
for each class;                                   

         o     information as to the assets comprising the trust fund, including
            the general characteristics of the Mortgage Assets included in
             the trust fund and, if applicable, the insurance, surety bonds,
              guaranties, letters of credit or other instruments or agreements
          included in the trust fund, and the amount and source of any
reserve fund;                                     

    o     the circumstances, if any, under which the trust fund may be
subject to early termination;                     

25

424B5
148th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 148th
  o     the method used to calculate the amount of principal to be
     distributed with respect to each class of certificates;

        o     the order of application of distributions to each of the classes
            within the series, whether sequential, pro rata, or otherwise;

o     the distribution dates with respect to the series;      

       o     additional information with respect to the plan of distribution
of the certificates;                              

        o     whether one or more REMIC elections will be made and designation
of the regular interests and residual interests;  

         o     the aggregate original percentage ownership interest in the trust
 fund to be evidenced by each class of certificates;

     o     information as to the nature and extent of subordination with
               respect to any class of certificates that is subordinate in right
of payment to any other class; and                

 o     information as to the seller, the master servicer and the
trustee.                                          

      Each series of certificates will be issued pursuant to a pooling and
servicing agreement, dated as of the related cut-off date, among the depositor, 
the master servicer and the trustee for the benefit of the holders of the       
certificates of the series. The provisions of each pooling and servicing        
agreement will vary depending upon the nature of the certificates to be issued  
thereunder and the nature of the related trust fund. A form of a pooling and    
servicing agreement is an exhibit to the Registration Statement of which this   
prospectus is a part.                                                           

      The prospectus supplement for a series of certificates will describe
any provision of the pooling and servicing agreement relating to the series that
materially differs from its description contained in this prospectus. The       
summaries 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 and        
servicing agreement for each series of certificates and the applicable          
prospectus supplement. The depositor will provide a copy of the pooling and     
servicing agreement (without exhibits) relating to any series without charge    
upon written request of a holder of record of a certificate of the series       
addressed to CWALT, Inc., 4500 Park Granada, Calabasas, California 91302,       
Attention: Secretary. The following summaries describe material provisions that 
may appear in each pooling and servicing agreement.                             

GENERAL                                                                         

The certificates of each series will be issued in either fully
registered or book-entry form in the authorized denominations specified in the  
related prospectus supplement, will evidence specified beneficial ownership     
interests in the related trust fund created pursuant to the related pooling and 
servicing agreement and will not be entitled to payments in respect of the      
assets included in any other trust fund established by the depositor. The       
applicable prospectus supplement may provide for guarantees by a governmental   
entity or other person, but if it does not, the Mortgage Assets will not be     
insured or guaranteed by any governmental entity or other person. Each trust    
fund will consist of, to the extent provided in the related pooling and         
servicing agreement,                                                            

     o     the Mortgage Assets that from time to time are subject to the
              related pooling and servicing agreement (exclusive of any amount
          specified in the related prospectus supplement as a retained
interest);                                        

      o     the assets required to be deposited in the related Certificate
Account or Distribution Account from time to time;

     o     property that secured a mortgage loan and that is acquired on
             behalf of the certificateholders by foreclosure or deed in lieu
of foreclosure; and                               

26

424B5
149th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 149th
     o     any primary mortgage insurance policies, FHA insurance and VA
            guaranties, and any other insurance policies or other forms of
          credit enhancement required to be maintained pursuant to the
related pooling and servicing agreement.          

        If so specified in the related prospectus supplement, a trust fund may
also include one or more of the following: reinvestment income on payments      
received on the Mortgage Assets, a reserve fund, a mortgage pool insurance      
policy, a special hazard insurance policy, a bankruptcy bond, one or more       
letters of credit, a surety bond, guaranties or similar instruments or other    
agreements.                                                                     

         Each series of certificates will be issued in one or more classes. Each
class of certificates of a series will evidence beneficial ownership of a       
specified percentage or portion of future interest payments and a specified     
percentage or portion of future principal payments on the Mortgage Assets in the
related trust fund. These specified percentages may be 0%. A series of          
certificates may include one or more classes that are senior in right to payment
to one or more other classes of certificates of the series. Certain series or   
classes of certificates may be covered by insurance policies, surety bonds or   
other forms of credit enhancement, in each case as described in this prospectus 
and in the related prospectus supplement. One or more classes of certificates of
a series may be entitled to receive distributions of principal, interest or any 
combination of principal and interest. Distributions on one or more classes of a
series of certificates may be made before one or more other classes, after the  
occurrence of specified events, in accordance with a schedule or formula, on the
basis of collections from designated portions of the Mortgage Assets in the     
related trust fund, or on a different basis, in each case as specified in the   
related prospectus supplement. The timing and amounts of the distributions may  
vary among classes or over time as specified in the related prospectus          
supplement.                                                                     

  Distributions of either or both of principal and interest on the
related certificates will be made by the trustee on each distribution date      
(i.e., monthly, quarterly, semi-annually or at other intervals and on the dates 
specified in the prospectus supplement) in proportion to the percentages        
specified in the related prospectus supplement. Distributions will be made to   
the persons in whose names the certificates are registered at the close of      
business on the dates specified in the related prospectus supplement.           
Distributions will be made by check or money order mailed to the persons        
entitled to them at the address appearing in the certificates register          
maintained for holders of certificates or, if specified in the related          
prospectus supplement, in the case of certificates that are of a certain minimum
denomination, upon written request by the certificateholder, by wire transfer or
by another means described in the prospectus supplement; provided, however, that
the final distribution in retirement of the certificates will be made only upon 
presentation and surrender of the certificates at the office or agency of the   
trustee or other person specified in the notice to certificateholders of the    
final distribution.                                                             

      The certificates will be freely transferable and exchangeable at the
corporate trust office of the trustee as set forth in the related prospectus    
supplement. No service charge will be made for any registration of exchange or  
transfer of certificates of any series, but the trustee may require payment of a
sum sufficient to cover any related tax or other governmental charge.           

   Under current law the purchase and holding by or on behalf of any
employee benefit plan or other retirement arrangement subject to provisions of  
the Employee Retirement Income Security Act of 1974, as amended, or the Code of 
certain classes of certificates may result in "prohibited transactions" within  
the meaning of ERISA and the Code. See "ERISA Considerations." Retirement       
arrangements subject to these provisions include individual retirement accounts 
and annuities, Keogh plans and collective investment funds in which the plans,  
accounts or arrangements are invested. The applicable prospectus supplement may 
specify other conditions under which transfers of this type would be permitted, 
but if it does not, transfer of the certificates will not be registered unless  
the transferee represents that it is not, and is not purchasing on behalf of, a 
plan, account or other retirement arrangement or provides an opinion of counsel 
satisfactory to the trustee and the depositor that the purchase of the          
certificates by or on behalf of a plan, account or other retirement arrangement 
is permissible under applicable law and will not subject the trustee, the master
servicer or the depositor to any obligation or liability in addition to those   
undertaken in the pooling and servicing agreement.                              

       As to each series, an election may be made to treat the related trust
fund or designated portions of it as one or more real estate mortgage investment
conduits or "REMICs" as defined in the Code. The related prospectus supplement  
will specify whether one or more REMIC elections are to be made. Alternatively, 
the pooling and servicing agreement for a series may provide that one or more   
REMIC elections may be made at the discretion of                                

27

424B5
150th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 150th
the depositor or the master servicer and may be made only if certain conditions 
are satisfied. The terms applicable to the making of a REMIC election, as well  
as any material federal income tax consequences to certificateholders not       
described in this prospectus, will be set forth in the related prospectus       
supplement. If one or more REMIC elections are made with respect to a series,   
one of the classes will be designated as evidencing the sole class of residual  
interests in the related REMIC (or in each related REMIC in the case of two or  
more REMICs). All other classes of certificates in the series will constitute   
regular interests in the related REMIC or REMICs, as applicable, as defined in  
the Code. As to each series with respect to which one or more REMIC elections   
are to be made, the master servicer or a holder of the related residual         
certificate will be obligated to take all actions required to comply with       
applicable laws and regulations and will be obligated to pay any prohibited     
transaction taxes. The applicable prospectus supplement may restrict the master 
servicer's reimbursement rights, but if it does not, the master servicer will be
entitled to reimbursement for that payment from the assets of the trust fund or 
from any holder of the related residual certificate.                            

DISTRIBUTIONS ON CERTIFICATES                                                   

General. In general, the method of determining the amount of  
distributions on a particular series of certificates will depend on the type of 
credit support, if any, that is used with respect to the series. See "Credit    
Enhancement" and in the related prospectus supplement. Various methods that may 
be used to determine the amount of distributions on the certificates of a       
particular series. The prospectus supplement for each series of certificates    
will describe the method to be used in determining the amount of distributions  
on the certificates of its series.                                              

Distributions allocable to principal of and interest on the   
certificates will be made by the trustee out of, and only to the extent of,     
funds in the related Certificate Account, including any funds transferred from  
any reserve fund or prefunding account. As between certificates of different    
classes and as between distributions of principal (and, if applicable, between  
distributions of principal prepayments and scheduled payments of principal) and 
interest, distributions made on any distribution date will be applied as        
specified in the related prospectus supplement. The applicable prospectus       
supplement may provide for payment distinctions within classes, but if it does  
not, distributions to any class of certificates will be made pro rata to all    
certificateholders of that class.                                               

       Available Funds. All distributions on the certificates of each series
on each distribution date will be made from the Available Funds, in accordance  
with the terms described in the related prospectus supplement and specified in  
the pooling and servicing agreement. The applicable prospectus supplement may   
define Available Funds with reference to different accounts or different        
amounts, but if it does not, "Available Funds" for each distribution date will  
generally equal the amount on deposit in the related Certificate Account on the 
distribution date (net of related fees and expenses payable by the related trust
fund) other than amounts to be held in the Certificate Account for distribution 
on future distribution dates.                                                   

  Distributions of Interest. Interest will accrue on the aggregate
original balance of the certificates (or, in the case of certificates entitled  
only to distributions allocable to interest, the aggregate notional amount) of  
each class of certificates (the initial "Class Certificate Balance") entitled to
interest at the pass-through rate (which may be a fixed rate or a rate that is  
adjustable as specified in the prospectus supplement) from the date and for the 
periods specified in the prospectus supplement. To the extent funds are         
available therefor, interest accrued during each specified period on each class 
of certificates entitled to interest (other than a class of certificates that   
provides for interest that accrues, but is not currently payable) will be       
distributable on the distribution dates specified in the related prospectus     
supplement until the Class Certificate Balance of the class has been distributed
in full or, in the case of certificates entitled only to distributions allocable
to interest, until the aggregate notional amount of the certificates is reduced 
to zero or for the period of time designated in the related prospectus          
supplement. The original certificate balance of each certificate will equal the 
aggregate distributions allocable to principal to which the certificate is      
entitled. The applicable prospectus supplement may specify some other basis for 
these distributions, but if it does not, distributions allocable to interest on 
each certificate that is not entitled to distributions allocable to principal   
will be calculated based on the notional amount of the certificate. The notional
amount of a certificate will not evidence an interest in or entitlement to      
distributions allocable to principal but will be used for convenience in        
expressing the calculation of interest and for certain other purposes.          

      With respect to any class of accrual certificates, any interest that
has accrued but is not paid on a given distribution date will be added to the   
Class Certificate Balance of the class of certificates on that distribution     
date.                                                                           

28

424B5
151st Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 151st
The applicable prospectus supplement may specify some other basis for these     
distributions, but if it does not, distributions of interest on each class of   
accrual certificates will commence only after the occurrence of the events      
specified in the prospectus supplement and, before that time, the beneficial    
ownership interest of the class of accrual certificates in the trust fund, as   
reflected in the Class Certificate Balance of the class of accrual certificates,
will increase on each distribution date by the amount of interest that accrued  
on the class of accrual certificates during the preceding interest accrual      
period but that was not required to be distributed to the class on the          
distribution date. The class of accrual certificates will thereafter accrue     
interest on its outstanding Class Certificate Balance as so adjusted.           

    Distributions of Principal. The related prospectus supplement will
specify the method by which the amount of principal to be distributed on the    
certificates on each distribution date will be calculated and the manner in     
which that amount will be allocated among the classes of certificates entitled  
to distributions of principal. The Class Certificate Balance of any class of    
certificates entitled to distributions of principal will be the original Class  
Certificate Balance of the class of certificates specified in the prospectus    
supplement, reduced by all distributions reported to the holders of the         
certificates as allocable to principal and in the case of accrual certificates, 
unless otherwise specified in the related prospectus supplement, increased by   
all interest accrued but not then distributable on the accrual certificates and 
in the case of adjustable rate certificates, unless otherwise specified in the  
related prospectus supplement, subject to the effect of negative amortization.  
The related prospectus supplement will specify the method by which the amount of
principal to be distributed on the certificates on each distribution date will  
be calculated and the manner in which that amount will be allocated among the   
classes of certificates entitled to distributions of principal.                 

    A series of certificates may include one or more classes of senior
certificates and one or more classes of subordinate certificates. If so provided
in the related prospectus supplement, one or more classes of senior certificates
will be entitled to receive all or a disproportionate percentage of the payments
of principal that are received from borrowers in advance of their scheduled due 
dates and are not accompanied by amounts representing scheduled interest due    
after the month of the payments in the percentages and under the circumstances  
or for the periods specified in the prospectus supplement. Any disproportionate 
allocation of these principal prepayments to senior certificates will have the  
effect of accelerating the amortization of the senior certificates while        
increasing the interests evidenced by the subordinated certificates in the trust
fund. Increasing the interests of the subordinated certificates relative to that
of the senior certificates is intended to preserve the availability of the      
subordination provided by the subordinated certificates. See "Credit Enhancement
- Subordination" and "Credit Enhancement - Subordination of the Subordinated    
Certificates" in the related prospectus supplement.                             

   Unscheduled Distributions. If specified in the related prospectus
supplement, the certificates will be subject to receipt of distributions before 
the next scheduled distribution date. If applicable, the trustee will be        
required to make unscheduled distributions on the day and in the amount         
specified in the related prospectus supplement if, due to substantial payments  
of principal (including principal prepayments) on the Mortgage Assets, the      
trustee or the master servicer determines that the funds available or           
anticipated to be available from the Certificate Account and, if applicable, any
reserve fund, may be insufficient to make required distributions on the         
certificates on the distribution date. The applicable prospectus supplement may 
specify some other basis for these distributions, but if it does not, the amount
of the unscheduled distribution that is allocable to principal will not exceed  
the amount that would otherwise have been required to be distributed as         
principal on the certificates on the next distribution date. The applicable     
prospectus supplement may provide that unscheduled distributions will not       
include interest or that interest will be computed on a different basis, but if 
it does not, all unscheduled distributions will include interest at the         
applicable pass-through rate on the amount of the unscheduled distribution      
allocable to principal for the period and to the date specified in the          
prospectus supplement.                                                          

ADVANCES                                                                        

         To the extent provided in the related prospectus supplement, the master
servicer will be required to advance on or before each distribution date (from  
its own funds, funds advanced by sub-servicers or funds held in the Certificate 
Account for future distributions to certificateholders), an amount equal to the 
aggregate of payments of principal and interest that were delinquent on the     
related Determination Date, subject to the master servicer's determination that 
the advances will be recoverable out of late payments by obligors on the        
Mortgage Assets, liquidation proceeds, insurance proceeds not used to restore   
the property or otherwise. In the case of cooperative                           

29

424B5
152nd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 152nd
loans, the master servicer also will be required to advance any unpaid          
maintenance fees and other charges under the related proprietary leases as      
specified in the related prospectus supplement.                                 

     In making advances, the master servicer will endeavor to maintain a
regular flow of scheduled interest and principal payments to certificateholders,
rather than to guarantee or insure against losses. If advances are made by the  
master servicer from cash being held for future distribution to                 
certificateholders, the master servicer will replace the funds on or before any 
future distribution date to the extent that funds in the applicable Certificate 
Account on the distribution date would be less than the amount required to be   
available for distributions to certificateholders on the Distribution Date. Any 
advances will be reimbursable to the master servicer out of recoveries on the   
specific Mortgage Assets with respect to which the advances were made (e.g.,    
late payments made by the related obligors, any related insurance proceeds,     
liquidation proceeds or proceeds of any mortgage loan repurchased by the        
depositor, a sub-servicer or a seller pursuant to the related pooling and       
servicing agreement). In addition, advances by the master servicer or           
sub-servicer also will be reimbursable to the master servicer or a sub-servicer 
from cash otherwise distributable to certificateholders to the extent that the  
master servicer determines that the advances previously made are not ultimately 
recoverable as described in the preceding sentence. The master servicer also    
will be obligated to make advances, to the extent recoverable out of insurance  
proceeds not used to restore the property, liquidation proceeds or otherwise,   
for certain taxes and insurance premiums not paid by mortgagors on a timely     
basis. Funds so advanced are reimbursable to the master servicer to the extent  
permitted by the pooling and servicing agreement. If specified in the related   
prospectus supplement, the obligations of the master servicer to make advances  
may be supported by a cash advance reserve fund, a surety bond or other         
arrangement, in each case as described in the prospectus supplement.            

REPORTS TO CERTIFICATEHOLDERS                                                   

        The applicable prospectus supplement may specify different items to be
reported, but if it does not, before or concurrently with each distribution on a
distribution date the master servicer or the trustee will furnish to each       
certificateholder of record of the related series a statement setting forth, to 
the extent applicable to the series of certificates, among other things:        

         o     the amount of the distribution allocable to principal, separately
           identifying the aggregate amount of any principal prepayments
        and, if so specified in the related prospectus supplement,
prepayment penalties;                             

o     the amount of the distribution allocable to interest;   

o     the amount of any advance;                              

    o     the aggregate amount otherwise allocable to the subordinated
           certificateholders on the distribution date and the aggregate
              amount withdrawn from the reserve fund or prefunding account, if
     any, that is included in the amounts distributed to the
certificateholders;                               

         o     the Class Certificate Balance or notional amount of each class of
           the related series after giving effect to the distribution of
principal on the distribution date;               

   o     the percentage of principal payments on the Mortgage Assets
       (excluding prepayments), if any, which each class will be
     entitled to receive on the following distribution date;

   o     the percentage of principal prepayments with respect to the
           Mortgage Assets, if any, which each class will be entitled to
receive on the following distribution date;       

    o     the related amount of the servicing compensation retained or
            withdrawn from the Certificate Account by the master servicer,
             and the amount of additional servicing compensation received by
         the master servicer attributable to penalties, fees, excess
       liquidation proceeds and other similar charges and items;

         o     the number and aggregate principal balances of mortgage loans (A)
            delinquent exclusive of mortgage loans in foreclosure) 1 to 30
               days, 31 to 60 days, 61 to 90 days and 91 or more days and (B) in
              foreclosure and delinquent 1 to 30 days, 31 to 60 days, 61 to 90
               days and 91 or more days, as of the close of business on the last
        day of the calendar month preceding the distribution date;

30

424B5
153rd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 153rd
         o     the book value of any real estate acquired through foreclosure or
grant of a deed in lieu of foreclosure;           

    o     the pass-through rate, if adjusted from the date of the last
         statement, of a class expected to be applicable to the next
distribution to the class;                        

  o     if applicable, the amount remaining in the reserve fund or
             prefunding account at the close of business on the distribution
date;                                             

o     the pass-through rate as of the day before the preceding
distribution date; and                            

       o     any amounts remaining under letters of credit, pool policies or
other forms of credit enhancement.                

    Where applicable, any amount set forth above may be expressed as a
dollar amount per single certificate of the relevant class having the percentage
interest specified in the related prospectus supplement. The report to          
certificateholders for any series of certificates may include additional or     
other information of a similar nature to that specified above.                  

       In addition, within a reasonable period of time after the end of each
calendar year, the master servicer or the trustee will mail to each             
certificateholder of record at any time during the calendar year a report as to 
the aggregate of amounts reported pursuant to the first two items for the       
calendar year or, if the person was a certificateholder of record during a      
portion of the calendar year, for the applicable portion of the year and other  
customary information deemed appropriate for certificateholders to prepare their
tax returns.                                                                    

CATEGORIES OF CLASSES OF CERTIFICATES                                           

      In general, classes of pass-through certificates fall into different
categories. The following chart identifies and generally defines the more       
typical categories. The prospectus supplement for a series of certificates may  
identify the classes which comprise the series by reference to the following    
categories.                                                                     

                                                        [Enlarge/Download Table]

CATEGORIES OF CLASSES                                                DEFINITION                               
                                                                  PRINCIPAL TYPES                             

                                                                                                              
Accretion Directed.................. A class that receives principal payments from the accreted interest from 
                                     specified accrual classes.  An accretion directed class also may receive 
                                     principal payments from principal paid on the underlying Mortgage Assets 
                                     or other assets of the trust fund for the related series.                

Companion Class .................... A class that receives principal payments on any distribution date only if
                                     scheduled payments have been made on specified planned principal classes,
                                     targeted principal classes or scheduled principal classes.               

Component Certificates.............. A class consisting of "components."  The components of a class of        
                                     component certificates may have different principal and interest payment 
                                     characteristics but together constitute a single class.  Each component  
                                     of a class of component certificates may be identified as falling into   
                                     one or more of the categories in this chart.                             

Non-Accelerated Senior or NAS....... A class that, for the period of time specified in the related prospectus 
                                     supplement, generally will not receive (in other words, is locked out of)
                                     (1) principal prepayments on the underlying Mortgage Assets that are     
                                     allocated disproportionately to the senior certificates because of the   
                                     shifting interest structure of the certificates in the trust and/or (2)  
                                     scheduled principal payments on the underlying Mortgage Assets, as       
                                     specified in the related prospectus supplement.  During the lock-out     
                                     period, the portion of the principal distributions on the underlying     
                                     Mortgage Assets that the NAS class is locked out of will be distributed  
                                     to the other classes of senior certificates.                             

                                        31

424B5
154th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 154th
                                                        [Enlarge/Download Table]
                                                                                                                  
Notional Amount Certificates........ A class having no principal balance and bearing interest on the related      
                                     notional amount.  The notional amount is used for purposes of the            
                                     determination of interest distributions.                                     

Planned Principal Class                                                                                           
     or PACs........................ A class that is designed to receive principal payments using a               
                                     predetermined principal balance schedule derived by assuming two constant    
                                     prepayment rates for the underlying Mortgage Assets.  These two rates are    
                                     the endpoints for the "structuring range" for the planned principal          
                                     class.  The planned principal classes in any series of certificates may      
                                     be subdivided into different categories (e.g., primary planned principal     
                                     classes, secondary planned principal classes and so forth) having            
                                     different effective structuring ranges and different principal payment       
                                     priorities.  The structuring range for the secondary planned principal       
                                     class of a series of certificates will be narrower than that for the         
                                     primary planned principal class of the series.                               

Scheduled Principal Class........... A class that is designed to receive principal payments using a               
                                     predetermined principal balance schedule but is not designated as a          
                                     planned principal class or targeted principal class.  In many cases, the     
                                     schedule is derived by assuming two constant prepayment rates for the        
                                     underlying Mortgage Assets.  These two rates are the endpoints for the       
                                     "structuring range" for the scheduled principal class.                       

Sequential Pay...................... Classes that receive principal payments in a prescribed sequence, that do    
                                     not have predetermined principal balance schedules and that under all        
                                     circumstances receive payments of principal continuously from the first      
                                     distribution date on which they receive principal until they are             
                                     retired.  A single class that receives principal payments before or after    
                                     all other classes in the same series of certificates may be identified as    
                                     a sequential pay class.                                                      

Strip............................... A class that receives a constant proportion, or "strip," of the principal    
                                     payments on the underlying Mortgage Assets or other assets of the trust fund.

Super Senior........................ A class that will not bear its proportionate share of realized losses        
                                     (other than excess losses) as its share is directed to another class,        
                                     referred to as the "support class" until the class certificate balance of    
                                     the support class is reduced to zero.                                        

Support Class....................... A class that absorbs the realized losses other than excess losses that       
                                     would otherwise be allocated to a Super Senior class after the related       
                                     classes of subordinated certificates are no longer outstanding.              

Targeted Principal Class                                                                                          
     or TACs........................ A class that is designed to receive principal payments using a               
                                     predetermined principal balance schedule derived by assuming a single        
                                     constant prepayment rate for the underlying Mortgage Assets.                 

                                                                   INTEREST TYPES                                 

Fixed Rate.......................... A class with an interest rate that is fixed throughout the life of the       
                                     class.                                                                       

                                        32

424B5
155th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 155th
                                                        [Enlarge/Download Table]
                                                                                                              
Floating Rate....................... A class with an interest rate that resets periodically based upon a      
                                     designated index and that varies directly with changes in the index.     

Inverse Floating Rate............... A class with an interest rate that resets periodically based upon a      
                                     designated index and that varies inversely with changes in the index.    

Variable Rate....................... A class with an interest rate that resets periodically and is calculated 
                                     by reference to the rate or rates of interest applicable to specified    
                                     assets or instruments (e.g., the mortgage rates borne by the underlying  
                                     mortgage loans).                                                         

Interest Only....................... A class that receives some or all of the interest payments made on the   
                                     underlying Mortgage Assets or other assets of the trust fund and little  
                                     or no principal.  Interest only classes have either a nominal principal  
                                     balance or a notional amount.  A nominal principal balance represents    
                                     actual principal that will be paid on the class.  It is referred to as   
                                     nominal since it is extremely small compared to other classes.  A        
                                     notional amount is the amount used as a reference to calculate the amount
                                     of interest due on an interest only class that is not entitled to any    
                                     distributions of principal.                                              

Principal Only...................... A class that does not bear interest and is entitled to receive only      
                                     distributions of principal.                                              

Partial Accrual..................... A class that accretes a portion of the amount of accrued interest on it, 
                                     which amount will be added to the principal balance of the class on each 
                                     applicable distribution date, with the remainder of the accrued interest 
                                     to be distributed currently as interest on the class.  The accretion may 
                                     continue until a specified event has occurred or until the partial       
                                     accrual class is retired.                                                

Accrual............................. A class that accretes the amount of accrued interest otherwise           
                                     distributable on the class, which amount will be added as principal to   
                                     the principal balance of the class on each applicable distribution date. 
                                     The accretion may continue until some specified event has occurred or    
                                     until the accrual class is retired.                                      

INDICES APPLICABLE TO FLOATING RATE AND INVERSE FLOATING RATE CLASSES           

LIBOR                                                                           

       The applicable prospectus supplement may specify some other basis for
determining LIBOR, but if it does not, on the LIBOR determination date (as      
defined in the related prospectus supplement) for each class of certificates of 
a series for which the applicable interest rate is determined by reference to an
index denominated as LIBOR, the person designated in the related pooling and    
servicing agreement as the calculation agent will determine LIBOR in accordance 
with one of the two methods described below (which method will be specified in  
the related prospectus supplement):                                             

LIBO METHOD                                                                     

     If using this method to calculate LIBOR, the calculation agent will
determine LIBOR by reference to the quotations, as set forth on Telerate page   
3750 of the Moneyline Telerate Service, offered by the principal London office  
of each of the designated reference banks meeting the criteria set forth in this
prospectus for making one-month United States dollar deposits in leading banks  
in the London Interbank market, as of 11:00 a.m. (London time) on the LIBOR     
determination date. In lieu of relying on the quotations for those reference    
banks that appear at the time on Telerate page 3750 of the Moneyline Telerate   
Service, the calculation agent will request each of the reference banks to      
provide the offered quotations at the time.                                     

33

424B5
156th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 156th
         Under this method LIBOR will be established by the calculation agent on
each LIBOR determination date as follows:                                       

    (a) If on any LIBOR determination date two or more reference banks
provide offered quotations, LIBOR for the next interest accrual period
    shall be the arithmetic mean of the offered quotations (rounded upwards if
necessary to the nearest whole multiple of [OBJECT OMITTED]%).        

(b) If on any LIBOR determination date only one or none of the
  reference banks provides offered quotations, LIBOR for the next interest
accrual period shall be whichever is the higher of                    

       o     LIBOR as determined on the previous LIBOR determination date or

o     the reserve interest rate.                              

     The reserve interest rate shall be the rate per annum which the calculation
agent determines to be either                                                   

        o     the arithmetic mean (rounded upwards if necessary to the nearest
            whole multiple of 1/32%) of the one-month United States dollar
    lending rates that New York City banks selected by the
  calculation agent are quoting, on the relevant LIBOR
             determination date, to the principal London offices of at least
            two of the reference banks to which the quotations are, in the
opinion of the calculation agent being so made, or

      o     if the calculation agent cannot determine the arithmetic mean,
              the lowest one-month United States dollar lending rate which New
              York City banks selected by the calculation agent are quoting on
     the LIBOR determination date to leading European banks.

     (c) If on any LIBOR determination date for a class specified in the
 related prospectus supplement, the calculation agent is required but is
 unable to determine the reserve interest rate in the manner provided in
  paragraph (b) above, LIBOR for the next interest accrual period shall be
   LIBOR as determined on the preceding LIBOR determination date, or, in the
     case of the first LIBOR determination date, LIBOR shall be considered to be
    the per annum rate specified as such in the related prospectus supplement.

        Each reference bank shall be a leading bank engaged in transactions in
Eurodollar deposits in the international Eurocurrency market; shall not control,
be controlled by, or be under common control with the calculation agent; and    
shall have an established place of business in London. If reference bank should 
be unwilling or unable to act as such or if appointment of a reference bank is  
terminated, another leading bank meeting the criteria specified above will be   
appointed.                                                                      

BBA METHOD                                                                      

       If using this method of determining LIBOR, the calculation agent will
determine LIBOR on the basis of the British Bankers' Association "Interest      
Settlement Rate" for one-month deposits in United States dollars as found on    
Telerate page 3750 as of 11:00 a.m. London time on each LIBOR determination     
date. Interest Settlement Rates currently are based on rates quoted by eight    
British Bankers' Association designated banks as being, in the view of the      
banks, the offered rate at which deposits are being quoted to prime banks in the
London interbank market. The Interest Settlement Rates are calculated by        
eliminating the two highest rates and the two lowest rates, averaging the four  
remaining rates, carrying the result (expressed as a percentage) out to six     
decimal places, and rounding to five decimal places.                            

        If on any LIBOR determination date, the calculation agent is unable to
calculate LIBOR in accordance with the method set forth in the immediately      
preceding paragraph, LIBOR for the next interest accrual period shall be        
calculated in accordance with the LIBOR method described under "LIBO Method."   

    The establishment of LIBOR on each LIBOR determination date by the
calculation agent and its calculation of the rate of interest for the applicable
classes for the related interest accrual period shall (in the absence of        
manifest error) be final and binding.                                           

34

424B5
157th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 157th
COFI                                                                            

        The Eleventh District Cost of Funds Index is designed to represent the
monthly weighted average cost of funds for savings institutions in Arizona,     
California and Nevada that are member institutions of the Eleventh Federal Home 
Loan Bank District (the "Eleventh District"). The Eleventh District Cost of     
Funds Index for a particular month reflects the interest costs paid on all types
of funds held by Eleventh District member institutions and is calculated by     
dividing the cost of funds by the average of the total amount of those funds    
outstanding at the end of that month and of the prior month and annualizing and 
adjusting the result to reflect the actual number of days in the particular     
month. If necessary, before these calculations are made, the component figures  
are adjusted by the Federal Home Loan Bank of San Francisco ("FHLBSF") to       
neutralize the effect of events such as member institutions leaving the Eleventh
District or acquiring institutions outside the Eleventh District. The Eleventh  
District Cost of Funds Index is weighted to reflect the relative amount of each 
type of funds held at the end of the relevant month. The major components of    
funds of Eleventh District member institutions are: savings deposits, time      
deposits, FHLBSF advances, repurchase agreements and all other borrowings.      
Because the component funds represent a variety of maturities whose costs may   
react in different ways to changing conditions, the Eleventh District Cost of   
Funds Index does not necessarily reflect current market rates.                  

     A number of factors affect the performance of the Eleventh District
Cost of Funds Index, which may cause it to move in a manner different from      
indices tied to specific interest rates, such as United States Treasury Bills or
LIBOR. Because the liabilities upon which the Eleventh District Cost of Funds   
Index is based were issued at various times under various market conditions and 
with various maturities, the Eleventh District Cost of Funds Index may not      
necessarily reflect the prevailing market interest rates on new liabilities of  
similar maturities. Moreover, as stated above, the Eleventh District Cost of    
Funds Index is designed to represent the average cost of funds for Eleventh     
District savings institutions for the month before the month in which it is due 
to be published. Additionally, the Eleventh District Cost of Funds Index may not
necessarily move in the same direction as market interest rates at all times,   
since as longer term deposits or borrowings mature and are renewed at prevailing
market interest rates, the Eleventh District Cost of Funds Index is influenced  
by the differential between the prior and the new rates on those deposits or    
borrowings. In addition, movements of the Eleventh District Cost of Funds Index,
as compared to other indices tied to specific interest rates, may be affected by
changes instituted by the FHLBSF in the method used to calculate the Eleventh   
District Cost of Funds Index.                                                   

       The FHLBSF publishes the Eleventh District Cost of Funds Index in its
monthly Information Bulletin. Any individual may request regular receipt by mail
of Information Bulletins by writing the Federal Home Loan Bank of San Francisco,
P.O. Box 7948, 600 California Street, San Francisco, California 94120, or by    
calling (415) 616-1000. The Eleventh District Cost of Funds Index may also be   
obtained by calling the FHLBSF at (415) 616-2600.                               

     The FHLBSF has stated in its Information Bulletin that the Eleventh
District Cost of Funds Index for a month "will be announced on or near the last 
working day" of the following month and also has stated that it "cannot         
guarantee the announcement" of the index on an exact date. So long as the index 
for a month is announced on or before the tenth day of the second following     
month, the interest rate for each class of certificates of a series for which   
the applicable interest rate is determined by reference to an index denominated 
as COFI for the interest accrual period commencing in the second following month
will be based on the Eleventh District Cost of Funds Index for the second       
preceding month. If publication is delayed beyond the tenth day, the interest   
rate will be based on the Eleventh District Cost of Funds Index for the third   
preceding month.                                                                

       The applicable prospectus supplement may specify some other basis for
determining COFI, but if it does not, then if on the tenth day of the month in  
which any interest accrual period commences for a class of COFI certificates the
most recently published Eleventh District Cost of Funds Index relates to a month
before the third preceding month, the index for the current interest accrual    
period and for each succeeding interest accrual period will, except as described
in the next to last sentence of this paragraph, be based on the National Monthly
Median Cost of Funds Ratio to SAIF-Insured Institutions (the "National Cost of  
Funds Index") published by the Office of Thrift Supervision (the "OTS") for the 
third preceding month (or the fourth preceding month if the National Cost of    
Funds Index for the third preceding month has not been published on the tenth   
day of an interest accrual period). Information on the National Cost of Funds   
Index may be obtained by writing the OTS at 1700 G Street, N.W., Washington,    
D.C. 20552 or calling (202) 906-6677, and the current National Cost of Funds    
Index may be obtained by calling (202) 906-6988. If on the tenth day of the     
month in which an interest accrual period commences the most recently published 
National Cost of Funds Index relates to a month before the fourth preceding     
month, the                                                                      

35

424B5
158th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 158th
applicable index for the interest accrual period and each succeeding interest   
accrual period will be based on LIBOR, as determined by the calculation agent in
accordance with the pooling and servicing agreement relating to the series of   
certificates. A change of index from the Eleventh District Cost of Funds Index  
to an alternative index will result in a change in the index level and could    
increase its volatility, particularly if LIBOR is the alternative index.        

        The establishment of COFI by the calculation agent and its calculation
of the rates of interest for the applicable classes for the related interest    
accrual period shall (in the absence of manifest error) be final and binding.   

TREASURY INDEX                                                                  

       The applicable prospectus supplement may specify some other basis for
determining and defining the Treasury index, but if it does not, on the Treasury
index determination date for each class of certificates of a series for which   
the applicable interest rate is determined by reference to an index denominated 
as a Treasury index, the calculation agent will ascertain the Treasury index for
Treasury securities of the maturity and for the period (or, if applicable, date)
specified in the related prospectus supplement. The Treasury index for any      
period means the average of the yield for each business day during the specified
period (and for any date means the yield for the date), expressed as a per annum
percentage rate, on U.S. Treasury securities adjusted to the "constant maturity"
specified in the prospectus supplement or if no "constant maturity" is so       
specified, U.S. Treasury securities trading on the secondary market having the  
maturity specified in the prospectus supplement, in each case as published by   
the Federal Reserve Board in its Statistical Release No. H.15 (519). Statistical
Release No. H.15 (519) is published on Monday or Tuesday of each week and may be
obtained by writing or calling the Publications Department at the Board of      
Governors of the Federal Reserve System, 21st and C Streets, Washington, D.C.   
20551 (202) 452-3244. If the calculation agent has not yet received Statistical 
Release No. H.15 (519) for a week, then it will use the Statistical Release from
the preceding week.                                                             

       Yields on U.S. Treasury securities at "constant maturity" are derived
from the U.S. Treasury's daily yield curve. This curve, which relates the yield 
on a security to its time to maturity, is based on the closing market bid yields
on actively traded Treasury securities in the over-the-counter market. These    
market yields are calculated from composites of quotations reported by five     
leading U.S. Government securities dealers to the Federal Reserve Bank of New   
York. This method provides a yield for a given maturity even if no security with
that exact maturity is outstanding. If the Treasury index is no longer          
published, a new index based upon comparable data and methodology will be       
designated in accordance with the pooling and servicing agreement relating to   
the particular series of certificates. The calculation agent's determination of 
the Treasury index, and its calculation of the rates of interest for the        
applicable classes for the related interest accrual period shall (in the absence
of manifest error) be final and binding.                                        

PRIME RATE                                                                      

       The applicable prospectus supplement may specify some other basis for
determining and defining the prime rate, but if it does not, on the prime rate  
determination date for each class of certificates of a series for which the     
applicable interest rate is determined by reference to an index denominated as  
the prime rate, the calculation agent will ascertain the prime rate for the     
related interest accrual period. The prime rate for an interest accrual period  
will be the "prime rate" as published in the "Money Rates" section of The Wall  
Street Journal on the related prime rate determination date, or if not so       
published, the "prime rate" as published in a newspaper of general circulation  
selected by the calculation agent in its sole discretion. If a prime rate range 
is given, then the average of the range will be used. If the prime rate is no   
longer published, a new index based upon comparable data and methodology will be
designated in accordance with the pooling and servicing agreement relating to   
the particular series of certificates. The calculation agent's determination of 
the prime rate and its calculation of the rates of interest for the related     
interest accrual period shall (in the absence of manifest error) be final and   
binding.                                                                        

BOOK-ENTRY CERTIFICATES                                                         

   If so specified in the related prospectus supplement, one or more
classes of the certificates of any series may be initially issued through the   
book-entry facilities of The Depository Trust Company. Each class of book-entry 
certificates of a series will be issued in one or more certificates which equal 
the aggregate initial Class Certificate Balance of each class and which will be 
held by a nominee of the depository. The applicable prospectus supplement may   
specify other procedures for book-entry certificates, but if it does not, the   
following generally describes the procedures that will be applicable to any     
class of book-entry certificates.                                               

36

424B5
159th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 159th
         Beneficial interests in the book-entry certificates of a series will be
held indirectly by investors through the book-entry facilities of the           
depository, as described in this prospectus. Accordingly, the depository or its 
nominee is expected to be the holder of record of the book-entry certificates.  
Except as described below, no person acquiring a beneficial interest in a       
book-entry certificate will be entitled to receive a physical certificate       
representing the certificate.                                                   

      The beneficial owner's ownership of a book-entry certificate will be
recorded on the records of the brokerage firm, bank, thrift institution or other
financial intermediary that maintains the beneficial owner's account for that   
purpose. In turn, the financial intermediary's ownership of a book-entry        
certificate will be recorded on the records of the depository (or of a          
participating firm that acts as agent for the financial intermediary, whose     
interest will in true be recorded on the records of the depository, if the      
beneficial owner's financial intermediary is not a depository participant).     
Therefore, the beneficial owner must rely on the foregoing procedures to        
evidence its beneficial ownership of a book-entry certificate. Beneficial       
ownership of a book-entry certificate may only be transferred by compliance with
the procedures of the financial intermediaries and depository participants.     

         In accordance with its normal procedures, the depository is expected to
record the positions held by each depository participant in the book-entry      
certificates, whether held for its own account or as a nominee for another      
person. In general, beneficial ownership of book-entry certificates will be     
subject to the rules, regulations and procedures governing the depository and   
depository participants as in effect from time to time.                         

   Distributions on the book-entry certificates will be made on each
distribution date by the trustee to the depository. The depository will be      
responsible for crediting the amount of the payments to the accounts of the     
applicable depository participants in accordance with the depository's normal   
procedures. Each depository participant will be responsible for disbursing the  
payments to the beneficial owners of the book-entry certificates that it        
represents and to each financial intermediary for which it acts as agent. Each  
financial intermediary will be responsible for disbursing funds to the          
beneficial owners of the book-entry certificates that it represents.            

Under a book-entry format, beneficial owners of the book-entry
certificates may experience some delay in their receipt of payments, since      
payments will be forwarded by the trustee to the depository or its nominee, as  
the case may be, as holder of record of the book-entry certificates. Because the
depository can act only on behalf of financial intermediaries, the ability of a 
beneficial owner to pledge book-entry certificates to persons or entities that  
do not participate in the depository system, or otherwise take actions in       
respect of the book-entry certificates, may be limited due to the lack of       
physical certificates for the book-entry certificates. In addition, issuance of 
the book-entry certificates in book-entry form may reduce the liquidity of the  
certificates in the secondary market since some potential investors may be      
unwilling to purchase certificates for which they cannot obtain physical        
certificates.                                                                   

      Until definitive certificates are issued, it is anticipated that the
only "certificateholder" of the book-entry certificates will be the depository  
or its nominee. Beneficial owners of the book-entry certificates will not be    
certificateholders, as that term will be used in the pooling and servicing      
agreement relating to the series of certificates. Beneficial owners are only    
permitted to exercise the rights of certificateholders indirectly through       
financial intermediaries and the depository. Monthly and annual reports on the  
related trust fund provided to the depository or its nominee, as the case may   
be, as holder of record of the book-entry certificates, may be made available to
beneficial owners upon request, in accordance with the rules, regulations and   
procedures creating and affecting the depository, and to the financial          
intermediaries to whose depository accounts the book-entry certificates of the  
beneficial owners are credited.                                                 

        Until definitive certificates are issued, the depository will take any
action permitted to be taken by the holders of the book-entry certificates of a 
particular series under the related pooling and servicing agreement only at the 
direction of one or more financial intermediaries to whose depository accounts  
the book-entry certificates are credited to the extent that the actions are     
taken on behalf of financial intermediaries whose holdings include the          
book-entry certificates.                                                        

    The applicable prospectus supplement may specify when and for what
reasons definitive certificates may be issued, but if it does not, definitive   
certificates will be issued to beneficial owners of book-entry certificates, or 
their nominees, rather than to the depository, only if the depository or the    
depositor advises the trustee in writing that the depository is no longer       
willing, qualified or able to discharge properly its responsibilities as nominee
and depository with respect to the book-entry certificates and the depositor or 
the trustee is unable to locate a qualified                                     

37

424B5
160th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 160th
successor or after the occurrence of an event of default, beneficial owners of  
certificates representing not less than 51% of the aggregate percentage         
interests evidenced by each class of certificates of the related series issued  
as book-entry certificates advise the trustee and the depository through the    
financial intermediaries in writing that the continuation of a book-entry system
through the depository (or a successor to it) is no longer in the best interests
of the beneficial owners.                                                       

     Upon the occurrence of any of the events described in the preceding
paragraph, the trustee will be required to notify all beneficial owners of the  
occurrence of the event and the availability of definitive certificates. Upon   
surrender by the depository of the global certificate or certificates           
representing the book-entry certificates and instructions for re-registration,  
the trustee will issue the definitive certificates, and thereafter the trustee  
will recognize the holders of the definitive certificates as certificateholders 
under the pooling and servicing agreement relating to the series of             
certificates.                                                                   

CREDIT ENHANCEMENT

GENERAL                                                                         

        Credit enhancement may be provided for one or more classes of a series
of certificates or with respect to the Mortgage Assets in the related trust     
fund. Credit enhancement may be in the form of a limited financial guaranty     
policy issued by an entity named in the related prospectus supplement, the      
subordination of one or more classes of the certificates of the series, the     
establishment of one or more reserve funds, the use of a cross-support feature, 
use of a mortgage pool insurance policy, bankruptcy bond, special hazard        
insurance policy, surety bond, letter of credit, guaranteed investment contract 
or other method of credit enhancement described in the related prospectus       
supplement, or any combination of them. Credit enhancement may not provide      
protection against all risks of loss or guarantee repayment of the entire       
principal balance of the certificates and interest on them. If losses occur     
which exceed the amount covered by credit enhancement or which are not covered  
by the credit enhancement, certificateholders will bear their allocable share of
any deficiencies.                                                               

SUBORDINATION                                                                   

     If so specified in the related prospectus supplement, the rights of
holders of one or more classes of subordinated certificates will be subordinate 
to the rights of holders of one or more other classes of senior certificates of 
the series to distributions of scheduled principal, principal prepayments,      
interest or any combination of them that otherwise would have been payable to   
holders of subordinated certificates under the circumstances and to the extent  
specified in the related prospectus supplement. If specified in the related     
prospectus supplement, delays in receipt of scheduled payments on the Mortgage  
Assets and losses with respect to the Mortgage Assets 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 related prospectus supplement. The aggregate
distributions of delinquent payments on the Mortgage Assets over the lives of   
the certificates or at any time, the aggregate losses on Mortgage Assets 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 related prospectus     
supplement. If aggregate distributions of delinquent payments on the Mortgage   
Assets or aggregate losses on the Mortgage Assets were to exceed the amount     
specified in the related prospectus supplement, senior certificateholders would 
experience losses on the certificates.                                          

       If specified in the related 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 the classes in  
the order of their scheduled final distribution dates, in accordance with a     
schedule or formula, in relation to the occurrence of events, or otherwise, in  
each case as specified in the related prospectus supplement. As between classes 
of subordinated certificates, payments to senior certificateholders on account  
of delinquencies or losses and payments to the reserve fund will be allocated as
specified in the related prospectus supplement.                                 

38

424B5
161st Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 161st
MORTGAGE POOL INSURANCE POLICIES                                                

 If specified in the related prospectus supplement relating to a
mortgage pool, a separate mortgage pool insurance policy will be obtained for   
the mortgage pool and issued by the insurer named in the prospectus supplement. 
Each mortgage pool insurance policy will, subject to policy limitations, cover  
loss from default in payment on mortgage loans in the mortgage pool in an amount
equal to a percentage specified in the prospectus supplement of the aggregate   
principal balance of the mortgage loans on the cut-off date that are not covered
as to their entire outstanding principal balances by primary mortgage insurance 
policies. As more fully described below, the master servicer will present claims
under the insurance to the pool insurer on behalf of itself, the trustee and the
certificateholders. The mortgage pool insurance policies, however, are not      
blanket policies against loss, since claims under them may be made only for     
particular defaulted mortgage loans and only upon satisfaction of conditions    
precedent in the policy. The applicable prospectus supplement may specify that  
mortgage pool insurance will cover the failure to pay or the denial of a claim  
under a primary mortgage insurance policy, but if it does not, the mortgage pool
insurance policies will not cover losses due to a failure to pay or denial of a 
claim under a primary mortgage insurance policy.                                

      In general, each mortgage pool insurance policy will provide that no
claims may be validly presented unless                                          

       o     any required primary mortgage insurance policy is in effect for
       the defaulted mortgage loan and a claim under it has been
submitted and settled;                            

        o     hazard insurance on the related mortgaged property has been kept
     in force and real estate taxes and other protection and
preservation expenses have been paid;             

  o     if there has been physical loss or damage to the mortgaged
      property, it has been restored to its physical condition
            (reasonable wear and tear excepted) at the time of issuance of
the policy; and                                   

   o     the insured has acquired good and merchantable title to the
       mortgaged property free and clear of liens except certain
permitted encumbrances.                           

       Upon satisfaction of these conditions, the pool insurer will have the
option either to purchase the mortgaged property at a price equal to the        
principal balance of the related mortgage loan plus accrued and unpaid interest 
at the mortgage rate to the date of the purchase and certain expenses incurred  
by the master servicer on behalf of the trustee and certificateholders or to pay
the amount by which the sum of the principal balance of the defaulted mortgage  
loan plus accrued and unpaid interest at the mortgage rate to the date of       
payment of the claim and the aforementioned expenses exceeds the proceeds       
received from an approved sale of the mortgaged property, in either case net of 
certain amounts paid or assumed to have been paid under the related primary     
mortgage insurance policy. If any mortgaged property is damaged, and proceeds,  
if any, from the related hazard insurance policy or a special hazard insurance  
policy or policies maintained for a series are insufficient to restore the      
damaged property to a condition sufficient to permit recovery under the mortgage
pool insurance policy, the master servicer will not be required to expend its   
own funds to restore the damaged property unless it determines that the         
restoration will increase the proceeds to certificateholders on liquidation of  
the mortgage loan after reimbursement of the master servicer for its expenses   
and the expenses will be recoverable by it through proceeds of the sale of the  
mortgaged property or proceeds of the related mortgage pool insurance policy or 
any related primary mortgage insurance policy.                                  

     The applicable prospectus supplement may specify that mortgage pool
insurance will cover various origination and servicing defaults, but if it does 
not, then no mortgage pool insurance policy will insure (and many primary       
mortgage insurance policies do not insure) against loss sustained from a default
arising from, among other things, fraud or negligence in the origination or     
servicing of a mortgage loan, including misrepresentation by the mortgagor, the 
originator or persons involved in its origination, or failure to construct a    
mortgaged property in accordance with plans and specifications. A failure of    
coverage for one of these reasons might result in a breach of the related       
seller's representations and, in that case, might result in an obligation on the
part of the seller to repurchase the defaulted mortgage loan if the breach      
cannot be cured by the seller. No mortgage pool insurance policy will cover (and
many primary mortgage insurance policies do not cover) a claim with respect to a
defaulted                                                                       

39

424B5
162nd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 162nd
mortgage loan occurring when the servicer of the mortgage loan, at the time of  
default or thereafter, was not approved by the applicable insurer.              

    The original amount of coverage under each mortgage pool insurance
policy will be maintained to the extent provided in the related prospectus      
supplement and may be reduced over the life of the related certificates by the  
aggregate dollar amount of claims paid less the aggregate of the net amounts    
realized by the pool insurer upon disposition of all foreclosed properties. The 
applicable prospectus supplement may provide that the claims paid will be net of
master servicer expenses and accrued interest, but if it does not, then the     
amount of claims paid will include certain expenses incurred by the 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 under  
that mortgage pool insurance policy will be exhausted and any further losses    
will be borne by the certificateholders.                                        

SPECIAL HAZARD INSURANCE POLICIES                                               

       If specified in the related prospectus supplement, a separate special
hazard insurance policy will be obtained for the mortgage pool and will be      
issued by the insurer named in the prospectus supplement. Each special hazard   
insurance policy will, subject to policy limitations, protect holders of the    
related certificates from loss caused by the application of the coinsurance     
clause contained in hazard insurance policies and loss from damage to mortgaged 
properties caused by certain hazards not insured against under the standard form
of hazard insurance policy in the states where the mortgaged properties are     
located or under a flood insurance policy if the mortgaged property is located  
in a federally designated flood area. Some of the losses covered include        
earthquakes and, to a limited extent, tidal waves and related water damage or as
otherwise specified in the related prospectus supplement. See "The Pooling and  
Servicing Agreement - Hazard Insurance." No special hazard insurance policy will
cover losses from fraud or conversion by the trustee or master servicer, war,   
insurrection, civil war, certain governmental action, errors in design, faulty  
workmanship or materials (except under certain circumstances), nuclear or       
chemical reaction, flood (if the mortgaged property is located in a federally   
designated flood area), nuclear or chemical contamination and certain other     
risks. The amount of coverage under any special hazard insurance policy will be 
specified in the related prospectus supplement. Each special hazard insurance   
policy will provide that no claim may be paid unless hazard and, if applicable, 
flood insurance on the property securing the mortgage loan have been kept in    
force and other protection and preservation expenses have been paid.            

    The applicable prospectus supplement may provide for other payment
coverage, but if it does not, then, subject to these limitations, each special  
hazard insurance policy will provide that where there has been damage to        
property securing a foreclosed mortgage loan (title to which has been acquired  
by the insured) and to the extent the damage is not covered by the hazard       
insurance policy or flood insurance policy, if any, maintained by the mortgagor 
or the master servicer, the special hazard insurer will pay the lesser of the   
cost of repair or replacement of the property or, upon transfer of the property 
to the special hazard insurer, the unpaid principal balance of the mortgage loan
at the time of acquisition of the property by foreclosure or deed in lieu of    
foreclosure, plus accrued interest to the date of claim settlement and certain  
expenses incurred by the master servicer with respect to the property. If the   
unpaid principal balance of a mortgage loan plus accrued interest and certain   
expenses is paid by the special hazard insurer, the amount of further coverage  
under the related special hazard insurance policy will be reduced by that amount
less any net proceeds from the sale of the property. Any amount paid to repair  
the property will further reduce coverage by that amount. So long as a mortgage 
pool insurance policy remains in effect, the payment by the special hazard      
insurer of the cost of repair or of the unpaid principal balance of the related 
mortgage loan plus accrued interest and certain expenses will not affect the    
total insurance proceeds paid to certificateholders, but will affect the        
relative amounts of coverage remaining under the related special hazard         
insurance policy and mortgage pool insurance policy.                            

  To the extent specified in the prospectus supplement, the master
servicer may deposit cash, an irrevocable letter of credit, or any other        
instrument acceptable to each nationally recognized rating agency rating the    
certificates of the related series at the request of the depositor in a special 
trust account to provide protection in lieu of or in addition to that provided  
by a special hazard insurance policy. The amount of any special hazard insurance
policy or of the deposit to the special trust account relating to the           
certificates may be reduced so long as the reduction will not result in a       
downgrading of the rating of the certificates by a rating agency rating         
certificates at the request of the depositor.                                   

40

424B5
163rd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 163rd
BANKRUPTCY BONDS                                                                

         If specified in the related prospectus supplement, a bankruptcy bond to
cover losses resulting from proceedings under the federal Bankruptcy Code with  
respect to a mortgage loan will be issued by an insurer named in the prospectus 
supplement. Each bankruptcy bond will cover, to the extent specified in the     
related prospectus supplement, certain losses resulting from a reduction by a   
bankruptcy court of scheduled payments of principal and interest on a mortgage  
loan or a reduction by the court of the principal amount of a mortgage loan and 
will cover certain unpaid interest on the amount of a principal reduction from  
the date of the filing of a bankruptcy petition. The required amount of coverage
under each bankruptcy bond will be set forth in the related prospectus          
supplement. Coverage under a bankruptcy bond may be cancelled or reduced by the 
master servicer if the cancellation or reduction would not adversely affect the 
then current rating or ratings of the related certificates. See "Certain Legal  
Aspects of the Mortgage Loans - Anti-Deficiency Legislation and Other           
Limitations on Lenders."                                                        

  To the extent specified in the prospectus supplement, the master
servicer may deposit cash, an irrevocable letter of credit or any other         
instrument acceptable to each nationally recognized rating agency rating the    
certificates of the related series at the request of the depositor in a special 
trust account to provide protection in lieu of or in addition to that provided  
by a bankruptcy bond. The amount of any bankruptcy bond or of the deposit to the
special trust account relating to the certificates may be reduced so long as the
reduction will not result in a downgrading of the rating of the certificates by 
a rating agency rating certificates at the request of the depositor.            

RESERVE FUND                                                                    

      If so specified in the related prospectus supplement, credit support
with respect to a series of certificates may be provided by one or more reserve 
funds held by the trustee, in trust, for the series of certificates. The related
prospectus supplement will specify whether or not a reserve fund will be        
included in the trust fund for a series.                                        

         The reserve fund for a series will be funded by a deposit of cash, U.S.
Treasury securities or instruments evidencing ownership of principal or interest
payments on U.S. Treasury securities, letters of credit, demand notes,          
certificates of deposit, or a combination of them in an aggregate amount        
specified in the related prospectus supplement; by the deposit from time to time
of amounts specified in the related prospectus supplement to which the          
subordinated certificateholders, if any, would otherwise be entitled; or in any 
other manner specified in the related prospectus supplement.                    

    Any amounts on deposit in the reserve fund and the proceeds of any
other instrument deposited in it upon maturity will be held in cash or will be  
invested in permitted investments. The applicable prospectus supplement may     
specify a different definition of permitted investments, but if it does not,    
then permitted investments will include obligations of the United States and    
specified agencies of the United States, certificates of deposit, specified     
commercial paper, time deposits and bankers acceptances sold by eligible        
commercial banks, and specified repurchase agreements for United States         
government securities with eligible commercial banks. If a letter of credit is  
deposited with the trustee, the letter of credit will be irrevocable. Generally,
any deposited instrument will name the trustee, in its capacity as trustee for  
the certificateholders, as beneficiary and will be issued by an entity          
acceptable to each rating agency that rates the certificates at the request of  
the depositor. Additional information about the instruments deposited in the    
reserve funds will be set forth in the related prospectus supplement.           

        Any amounts so deposited and payments on instruments so deposited will
be available for withdrawal from the reserve fund for distribution to the       
certificateholders for the purposes, in the manner and at the times specified in
the related prospectus supplement.                                              

CROSS SUPPORT                                                                   

   If specified in the related prospectus supplement, the beneficial
ownership of separate groups of assets included in a trust fund may be evidenced
by separate classes of the related series of certificates. In that case, credit 
support may be provided by a cross support feature that requires that           
distributions be made on certificates evidencing a beneficial ownership interest
in other asset groups within the same trust fund. The related prospectus        
supplement for a series that includes a cross support feature will describe the 
manner and conditions for applying the cross support feature.                   

41

424B5
164th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 164th
 If specified in the related prospectus supplement, the coverage
provided by one or more forms of credit support may apply concurrently to two or
more related trust funds. If applicable, the related prospectus supplement will 
identify the trust funds to which the credit support relates and the manner of  
determining the amount of the coverage provided by it and of the application of 
the coverage to the identified trust funds.                                     

INSURANCE POLICIES, SURETY BONDS AND GUARANTIES                                 

If so provided in the prospectus supplement for a series of   
certificates, deficiencies in amounts otherwise payable on the certificates or  
certain of their classes will be covered by insurance policies or surety bonds  
provided by one or more insurance companies or sureties. These instruments may  
cover timely distributions of interest or full distributions of principal or    
both on the basis of a schedule of principal distributions set forth in or      
determined in the manner specified in the related prospectus supplement. In     
addition, if specified in the related prospectus supplement, a trust fund may   
also include bankruptcy bonds, special hazard insurance policies, other         
insurance or guaranties for the purpose of maintaining timely payments or       
providing additional protection against losses on the assets included in the    
trust fund, paying administrative expenses, or establishing a minimum           
reinvestment rate on the payments made on the assets or principal payment rate  
on the assets. These arrangements may include agreements under which            
certificateholders are entitled to receive amounts deposited in various accounts
held by the trustee on the terms specified in the prospectus supplement.        

OVERCOLLATERALIZATION                                                           

If so specified in the prospectus supplement for a series of  
certificates, the aggregate principal balance of the underlying Trust Fund      
Assets as of the cut-off date may exceed the principal balance of the securities
being issued, thereby resulting in overcollateralization. In addition, if       
specified in the prospectus supplement, a portion of the interest payment on    
each Mortgage Asset may be applied as an additional distribution of principal to
reduce the principal balance of a particular class or classes of certificates   
and, thus, accelerate the rate of payment of principal on the class or classes  
of certificates. Reducing the principal balance of the certificates without a   
corresponding reduction in the principal balance of the underlying Mortgage     
Assets will result in or increase the level of overcollateralization.           

FINANCIAL INSTRUMENTS                                                           

       If specified in the related prospectus supplement, the trust fund may
include one or more swap arrangements or other financial instruments that are   
intended to meet the following goals:                                           

         o     to convert the payments on some or all of the mortgage loans from
            fixed to floating payments, or from floating to fixed, or from
               floating based on a particular index to floating based on another
index;                                            

      o     to provide payments in the event that any index rises above or
falls below specified levels; or                  

         o     to provide protection against interest rate changes, certain type
         of losses, including reduced market value, or other payment
      shortfalls to one or more classes of the related series.

  If a trust fund includes financial instruments of this type, the
instruments may be structured to be exempt from the registration requirements of
the Securities Act of 1933, as amended.                                         

YIELD AND PREPAYMENT CONSIDERATIONS 

       The yields to maturity and weighted average lives of the certificates
will be affected primarily by the amount and timing of principal payments       
received on or in respect of the Mortgage Assets included in the related trust  
fund. The original terms to maturity of the underlying mortgage loans of the    
Mortgage Assets in a given mortgage pool will vary depending upon the type of   
mortgage loans included in it, and each prospectus supplement will contain      
information about the type and maturities of the mortgage loans. The applicable 
prospectus supplement may indicate that some mortgage loans provide for         
prepayment penalties, but if it does not, then the mortgage loans may be prepaid
without penalty in full or in part at any time. The prepayment experience on the
underlying mortgage loans of the Mortgage Assets will affect the life of the    
related series of certificates.                                                 

42

424B5
165th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 165th
      A number of factors may affect the prepayment experience of mortgage
loans, including homeowner mobility, economic conditions, the presence and      
enforceability of due-on-sale clauses, mortgage market interest rates and the   
availability of mortgage funds.                                                 

The applicable prospectus supplement may indicate that some   
conventional mortgage loans do not have due-on-sale provisions, but if it does  
not, then all conventional mortgage loans will contain due-on-sale provisions   
permitting the mortgagee to accelerate the maturity of the loan upon sale or    
specified transfers by the mortgagor of the underlying mortgaged property.      
Mortgage loans insured by the FHA and mortgage loans partially guaranteed by the
VA are assumable with the consent of the FHA and the VA, respectively. Thus, the
rate of prepayments on those mortgage loans may be lower than that on           
conventional mortgage loans bearing comparable interest rates. The master       
servicer generally will enforce any due-on-sale or due-on-encumbrance clause, to
the extent it has knowledge of the conveyance or further encumbrance or the     
proposed conveyance or proposed further encumbrance of the mortgaged property   
and reasonably believes that it is entitled to do so under applicable law.      
However, the master servicer will not take any enforcement action that would    
impair or threaten to impair any recovery under any related insurance policy.   
See "The Pooling and Servicing Agreement - Collection Procedures" and "Certain  
Legal Aspects of the Mortgage Loans" for a description of certain provisions of 
each pooling and servicing agreement and certain legal developments that may    
affect the prepayment experience on the mortgage loans.                         

       The rate of prepayments of conventional mortgage loans has fluctuated
significantly in recent years. In general, if prevailing rates fall             
significantly below the mortgage rates borne by the mortgage loans, the mortgage
loans are likely to be subject to higher prepayment rates than if prevailing    
interest rates remain at or above those mortgage rates. Conversely, if          
prevailing interest rates rise appreciably above the mortgage rates borne by the
mortgage loans, the mortgage loans are likely to experience a lower prepayment  
rate than if prevailing rates remain at or below those mortgage rates. However, 
there can be no assurance that this will be the case.                           

     When a full prepayment is made on a mortgage loan, the mortgagor is
charged interest on the principal amount of the mortgage loan prepaid only for  
the number of days in the month actually elapsed up to the date of the          
prepayment rather than for a full month. Thus, in most instances, the effect of 
prepayments in full will be to reduce the amount of interest passed through in  
the following month to certificateholders. Partial prepayments in a given month 
may be applied to the outstanding principal balances of the mortgage loans so   
prepaid in the month of receipt or the month following receipt. In the latter   
case, partial prepayments will not reduce the amount of interest passed through 
in the month.                                                                   

     Interest payable on the certificates on any given distribution date
will include all interest accrued during their related interest accrual period. 
The interest accrual period for the certificates of each series will be         
specified in the applicable prospectus supplement. If the interest accrual      
period ends two or more days before the related distribution date, your         
effective yield will be less than it would be if the interest accrual period    
ended the day before the distribution date, and your effective yield at par     
would be less than the indicated coupon rate.                                   

      Under specified circumstances, the master servicer or the holders of
the residual interests in a REMIC may have the option to purchase the assets of 
a trust fund thereby effecting earlier retirement of the related series of      
certificates. See "The Pooling and Servicing Agreement - Termination; Optional  
Termination."                                                                   

   Factors other than those identified in this prospectus and in the
related prospectus supplement could significantly affect principal prepayments  
at any time and over the lives of the certificates. The relative contribution of
the various factors affecting prepayment may also vary from time to time. There 
can be no assurance as to the rate of payment of principal of the Mortgage      
Assets at any time or over the lives of the certificates.                       

     The prospectus supplement relating to a series of certificates will
discuss in greater detail the effect of the rate and timing of principal        
payments (including principal prepayments), delinquencies and losses on the     
yield, weighted average lives and maturities of the certificates.               

 THE POOLING AND SERVICING AGREEMENT

      The following is a summary of the material provisions of the pooling
and servicing agreement which are not described elsewhere in this prospectus.   
Where particular provisions or terms used in the pooling and servicing agreement
are referred to, the provisions or terms are as specified in the related pooling
and servicing agreement.                                                        

43

424B5
166th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 166th
ASSIGNMENT OF MORTGAGE ASSETS                                                   

  Assignment of the Mortgage Loans. At the time of issuance of the
certificates of a series, the depositor will cause the mortgage loans comprising
the related trust fund to be assigned to the trustee, together with all         
principal and interest received by or on behalf of the depositor on or with     
respect to the mortgage loans after the cut-off date, other than principal and  
interest due on or before the cut-off date and other than any retained interest 
specified in the related prospectus supplement. The trustee will, concurrently  
with the assignment, deliver the certificates to the depositor in exchange for  
the mortgage loans. Each mortgage loan will be identified in a schedule         
appearing as an exhibit to the related pooling and servicing agreement. The     
schedule will include information as to the outstanding principal balance of    
each mortgage loan after application of payments due on the cut-off date, as    
well as information regarding the mortgage rate, the current scheduled monthly  
payment of principal and interest, the maturity of the loan, the Loan-to-Value  
Ratio at origination and other specified information.                           

         In addition, the depositor will deliver or cause to be delivered to the
trustee (or to the custodian) for each mortgage loan                            

      o     the mortgage note endorsed without recourse in blank or to the
            order of the trustee, except that the depositor may deliver or
        cause to be delivered a lost note affidavit in lieu of any
original mortgage note that has been lost,        

       o     the mortgage, deed of trust or similar instrument with evidence
       of recording indicated on it (except for any mortgage not
          returned from the public recording office, in which case the
           depositor will deliver or cause to be delivered a copy of the
           mortgage together with a certificate that the original of the
          mortgage was delivered to the recording office or some other
arrangement will be provided for),                

       o     an assignment of the mortgage to the trustee in recordable form
and                                               

        o     any other security documents specified in the related prospectus
        supplement or the related pooling and servicing agreement.

The applicable prospectus supplement may provide other arrangements for assuring
the priority of the assignments, but if it does not, then the depositor will    
promptly cause the assignments of the related loans to be recorded in the       
appropriate public office for real property records, except in states in which  
in the opinion of counsel recording is not required to protect the trustee's    
interest in the loans against the claim of any subsequent transferee or any     
successor to or creditor of the depositor or the originator of the loans.       

    With respect to any mortgage loans that are cooperative loans, the
depositor will cause to be delivered to the trustee                             

       o     the related original cooperative note endorsed without recourse
            in blank or to the order of the trustee (or, to the extent the
              related pooling and servicing agreement so provides, a lost note
affidavit),                                       

o     the original security agreement,                        

o     the proprietary lease or occupancy agreement,           

o     the recognition agreement,                              

o     an executed financing agreement and                     

      o     the relevant stock certificate, related blank stock powers and
    any other document specified in the related prospectus
supplement.                                       

   The depositor will cause to be filed in the appropriate office an
assignment and a financing statement evidencing the trustee's security interest 
in each cooperative loan.                                                       

44

424B5
167th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 167th
        The trustee (or the custodian) will review the mortgage loan documents
within the time period specified in the related prospectus supplement after     
receipt of them, and the trustee will hold the documents in trust for the       
benefit of the certificateholders. Generally, if the document is found to be    
missing or defective in any material respect, the trustee (or the custodian)    
will notify the master servicer and the depositor, and the master servicer will 
notify the related seller. If the seller cannot cure the omission or defect     
within the time period specified in the related prospectus supplement after     
receipt of the notice, the seller will be obligated to purchase the related     
mortgage loan from the trustee at the purchase price or, if so specified in the 
related prospectus supplement, replace the mortgage loan with another mortgage  
loan that meets specified requirements. There can be no assurance that a seller 
will fulfill this purchase obligation. Although the master servicer may be      
obligated to enforce the obligation to the extent described under "Mortgage Loan
Program - Representations by Sellers; Repurchases," neither the master servicer 
nor the depositor will be obligated to purchase the mortgage loan if the seller 
defaults on its purchase obligation, unless the breach also constitutes a breach
of the representations or warranties of the master servicer or the depositor.   
The applicable prospectus supplement may provide other remedies but if it does  
not, then this purchase obligation constitutes the sole remedy available to the 
certificateholders or the trustee for omission of, or a material defect in, a   
constituent document.                                                           

     The trustee will be authorized to appoint a custodian pursuant to a
custodial agreement to maintain possession of and, if applicable, to review the 
documents relating to the mortgage loans as agent of the trustee.               

 Notwithstanding these provisions, unless the related prospectus
supplement otherwise provides, no mortgage loan will be purchased from a trust  
fund for which one or more REMIC elections are made if the purchase would result
in the imposition of a prohibited transaction tax under the Code.               

      Assignment of Agency Securities. The depositor will cause the Agency
Securities to be registered in the name of the trustee or its nominee, and the  
trustee concurrently will execute, countersign and deliver the certificates.    
Each Agency Security will be identified in a schedule appearing as an exhibit to
the pooling and servicing agreement, which will specify as to each Agency       
Security the original principal amount and outstanding principal balance as of  
the cut-off date, the annual pass-through rate and the maturity date.           

      Assignment of Private Mortgage-Backed Securities. The depositor will
cause the Private Mortgage- Backed Securities to be registered in the name of   
the trustee. The trustee (or the custodian) will have possession of any         
certificated Private Mortgage-Backed Securities. Generally, the trustee will not
be in possession of or be assignee of record of any underlying assets for a     
Private Mortgage-Backed Security. See "The Trust Fund - Private Mortgage-Backed 
Securities." Each Private Mortgage-Backed Security will be identified in a      
schedule appearing as an exhibit to the related pooling and servicing agreement 
which will specify the original principal amount, outstanding principal balance 
as of the cut-off date, annual pass-through rate or interest rate and maturity  
date and other specified pertinent information for each Private Mortgage-Backed 
Security conveyed to the trustee.                                               

PAYMENTS ON MORTGAGE ASSETS; DEPOSITS TO CERTIFICATE ACCOUNT                    

The master servicer will establish and maintain or cause to be
established and maintained for the related trust fund a separate account or     
accounts for the collection of payments on the related Mortgage Assets in the   
trust fund (the "Certificate Account"). The applicable prospectus supplement may
provide for other requirements for the Certificate Account, but if it does not, 
then the Certificate Account must be either                                     

         o     maintained with a depository institution the short-term unsecured
           debt obligations of which are rated in the highest short-term
             rating category by the nationally recognized statistical rating
            organizations (other than Standard & Poor's) that rated one or
               more classes of the related series of certificates at the request
            of the depositor, or one of the two highest short-term ratings
            categories if the related certificates are rated by Standard &
            Poor's, or in the case of a depository institution that is the
            principal subsidiary of a holding company, the short-term debt
obligations of the holding company are so rated,  

       o     an account or accounts the deposits in which are insured by the
             FDIC or SAIF to the limits established by the FDIC or the SAIF,
            and the uninsured deposits in which are otherwise secured such
that, as evidenced by an opinion of counsel, the  
              certificateholders have a claim with respect to the funds in the
        Certificate Account or a perfected first priority security
        interest against any collateral securing the funds that is

45

424B5
168th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 168th
       superior to the claims of any other depositors or general
    creditors of the depository institution with which the
Certificate Account is maintained,                

        o     a trust account or accounts maintained with the trust department
               of a federal or a state chartered depository institution or trust
company, acting in a fiduciary capacity or        

         o     an account or accounts otherwise acceptable to each rating agency
     that rated one or more classes of the related series of
certificates at the request of the depositor.     

The collateral eligible to secure amounts in the Certificate Account is limited 
to defined permitted investments. A Certificate Account may be maintained as an 
interest bearing account or the funds held in it may be invested pending each   
succeeding distribution date in defined permitted investments. To the extent    
provided in the related prospectus supplement, the master servicer or its       
designee will be entitled to receive the interest or other income earned on     
funds in the Certificate Account as additional compensation and will be         
obligated to deposit in the Certificate Account the amount of any loss          
immediately as realized. The Certificate Account may be maintained with the     
master servicer or with a depository institution that is an affiliate of the    
master servicer, provided it meets the standards set forth above.               

  The master servicer will deposit or cause to be deposited in the
Certificate Account for each trust fund within two days following its receipt or
on a daily basis, to the extent the master servicer's or its parent's long term 
credit rating does not satisfy the requirements set forth in the related pooling
and servicing agreement, the following payments and collections received or     
advances made by or on behalf of it after the cut-off date (other than payments 
due on or before the cut-off date and exclusive of any amounts representing any 
retained interest specified in the related prospectus supplement):              

 o     all payments on account of principal, including principal
     prepayments and, if specified in the related prospectus
      supplement, prepayment penalties, on the mortgage loans;

         o     all payments on account of interest on the mortgage loans, net of
applicable servicing compensation;                

     o     all proceeds (net of unreimbursed payments of property taxes,
       insurance premiums and similar items ("Insured Expenses")
               incurred, and unreimbursed advances made, by the master servicer)
       of the hazard insurance policies and any primary mortgage
               insurance policies, to the extent the proceeds are not applied to
             the restoration of the property or released to the mortgagor in
               accordance with the master servicer's normal servicing procedures
               and all other cash amounts (net of unreimbursed expenses incurred
            in connection with liquidation or foreclosure and unreimbursed
            advances, if any) received and retained in connection with the
        liquidation of defaulted mortgage loans, by foreclosure or
             otherwise, together with any net proceeds received on a monthly
            basis with respect to any properties acquired on behalf of the
               certificateholders by foreclosure or deed in lieu of foreclosure;

        o     all proceeds of any mortgage loan or property in respect thereof
              purchased by the master servicer, the depositor or any seller as
         described under "Mortgage Loan Program - Representations by
             Sellers; Repurchases" or "The Pooling and Servicing Agreement -
          Assignment of Mortgage Assets" above and all proceeds of any
           mortgage loan repurchased as described under "The Pooling and
       Servicing Agreement - Termination; Optional Termination";

        o     all payments required to be deposited in the Certificate Account
            with respect to any deductible clause in any blanket insurance
policy described under "- Hazard Insurance";      

     o     any amount required to be deposited by the master servicer in
               connection with losses realized on investments for the benefit of
               the master servicer of funds held in the Certificate Account and,
               to the extent specified in the related prospectus supplement, any
               payments required to be made by the master servicer in connection
with prepayment interest shortfalls; and          

     o     all other amounts required to be deposited in the Certificate
      Account pursuant to the pooling and servicing agreement.

46

424B5
169th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 169th
        The master servicer (or the depositor, as applicable) may from time to
time direct the institution that maintains the Certificate Account to withdraw  
funds from the Certificate Account for the following purposes:                  

         o     to pay to the master servicer the servicing fees described in the
               related prospectus supplement, the master servicing fees (subject
               to reduction) and, as additional servicing compensation, earnings
             on or investment income with respect to funds in the amounts in
the Certificate Account credited thereto;         

   o     to reimburse the master servicer for advances, the right of
              reimbursement with respect to any mortgage loan being limited to
            amounts received that represent late recoveries of payments of
       principal and interest on the mortgage loan (or insurance
           proceeds or liquidation proceeds from the mortgage loan) with
respect to which the advance was made;            

         o     to reimburse the master servicer for any advances previously made
           that the master servicer has determined to be nonrecoverable;

         o     to reimburse the master servicer from insurance proceeds not used
         to restore the property for expenses incurred by the master
     servicer and covered by the related insurance policies;

         o     to reimburse the master servicer for unpaid master servicing fees
               and unreimbursed out-of-pocket costs and expenses incurred by the
              master servicer in the performance of its servicing obligations,
          the right of reimbursement being limited to amounts received
        representing late recoveries of the payments for which the
advances were made;                               

         o     to pay to the master servicer, with respect to each mortgage loan
             or property acquired in respect thereof that has been purchased
          by the master servicer pursuant to the pooling and servicing
        agreement, all amounts received on them and not taken into
             account in determining the principal balance of the repurchased
mortgage loan;                                    

      o     to reimburse the master servicer or the depositor for expenses
             incurred and reimbursable pursuant to the pooling and servicing
agreement;                                        

        o     to withdraw any amount deposited in the Certificate Account that
was not required to be deposited in it; and       

       o     to clear and terminate the Certificate Account upon termination
of the pooling and servicing agreement.           

         In addition, the pooling and servicing agreement will generally provide
that on or before the business day preceding each distribution date, the master 
servicer shall withdraw from the Certificate Account the amount of Available    
Funds, to the extent on deposit, for deposit in an account maintained by the    
trustee for the related series of certificates.                                 

COLLECTION PROCEDURES                                                           

     The master servicer, directly or through one or more sub-servicers,
will make reasonable efforts to collect all payments called for under the       
mortgage loans and will, consistent with each pooling and servicing agreement   
and any mortgage pool insurance policy, primary mortgage insurance policy, FHA  
insurance, VA guaranty and bankruptcy bond or alternative arrangements, follow  
the collection procedures it customarily follows for mortgage loans that are    
comparable to the mortgage loans. Consistent with the above, the master servicer
may, in its discretion, waive any assumption fee, late payment or other charge  
in connection with a mortgage loan and arrange with a mortgagor a schedule for  
the liquidation of delinquencies running for no more than 125 days after the    
applicable due date for each payment to the extent not inconsistent with the    
coverage of the mortgage loan by a mortgage pool insurance policy, primary      
mortgage insurance policy, FHA insurance, VA guaranty or bankruptcy bond or     
alternative arrangements, if applicable. To the extent the master servicer is   
obligated to make or to cause to be made advances, the obligation will remain   
during any period of such an arrangement.                                       

         The applicable prospectus supplement may provide for other alternatives
regarding due-on-sale clauses, but if it does not, then in any case in which    
property securing a conventional mortgage loan has been, or is about to be,     

47

424B5
170th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 170th
conveyed by the mortgagor, the master servicer will, to the extent it has       
knowledge of the conveyance or proposed conveyance, exercise or cause to be     
exercised its rights to accelerate the maturity of the mortgage loan under any  
due-on-sale clause applicable to it, but only if permitted by applicable law and
the exercise will not impair or threaten to impair any recovery under any       
related primary mortgage insurance policy. If these conditions are not met or if
the master servicer reasonably believes it is unable under applicable law to    
enforce the due-on-sale clause or if the mortgage loan is insured by the FHA or 
partially guaranteed by the VA, the master servicer will enter into or cause to 
be entered into an assumption and modification agreement with the person to whom
the property has been or is about to be conveyed, pursuant to which that person 
becomes liable for repayment of the mortgage loan and, to the extent permitted  
by applicable law, the mortgagor also remains liable on it. Any fee collected by
or on behalf of the master servicer for entering into an assumption agreement   
will be retained by or on behalf of the master servicer as additional servicing 
compensation. See "Certain Legal Aspects of the Mortgage Loans - Due-on-Sale    
Clauses." The terms of the related mortgage loan may not be changed in          
connection with an assumption.                                                  

     Any prospective purchaser of a cooperative apartment will generally
have to obtain the approval of the board of directors of the relevant           
cooperative before purchasing the shares and acquiring rights under the related 
proprietary lease or occupancy agreement. See "Certain Legal Aspects of the     
Mortgage Loans." This approval is usually based on the purchaser's income and   
net worth and numerous other factors. Although the cooperative's approval is    
unlikely to be unreasonably withheld or delayed, the necessity of acquiring the 
approval could limit the number of potential purchasers for those shares and    
otherwise limit the trust fund's ability to sell and realize the value of shares
securing a cooperative loan.                                                    

In general, a "tenant-stockholder" (as defined in Code Section
216(b)(2)) of a corporation that qualifies as a "cooperative housing            
corporation" within the meaning of Code Section 216(b)(1) is allowed a deduction
for amounts paid or accrued within his taxable year to the corporation          
representing his proportionate share of certain interest expenses and certain   
real estate taxes allowable as a deduction under Code Section 216(a) to the     
corporation under Code Sections 163 and 164. In order for a corporation to      
qualify under Code Section 216(b)(1) for its taxable year in which the items are
allowable as a deduction to the corporation, the Section requires, among other  
things, that at least 80% of the gross income of the corporation be derived from
its tenant-stockholders (as defined in Code Section 216(b)(2)). By virtue of    
this requirement, the status of a corporation for purposes of Code Section      
216(b)(1) 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 Section 216(b)(1) for any particular year. If 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 Code Section 216(a) with respect to those
years. In view of the significance of the tax benefits accorded                 
tenant-stockholders of a corporation that qualifies under Code Section          
216(b)(1), the likelihood that a failure to qualify would be permitted to       
continue over a period of years appears remote.                                 

HAZARD INSURANCE                                                                

         The master servicer will require the mortgagor on each mortgage loan to
maintain a hazard insurance policy providing for no less than the coverage of   
the standard form of fire insurance policy with extended coverage customary for 
the type of mortgaged property in the state in which the mortgaged property is  
located. The coverage will be in an amount that is at least equal to the lesser 
of                                                                              

    o     the maximum insurable value of the improvements securing the
mortgage loan or                                  

o     the greater of                                          

             o    the outstanding principal balance of the mortgage loan and

          o    an amount such that the proceeds of the policy shall be
                 sufficient to prevent the mortgagor or the mortgagee from
becoming a co-insurer.                  

All amounts collected by the master servicer 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 master servicer's normal       
servicing procedures) will be deposited in the related Certificate Account. If  
the master servicer maintains a blanket policy insuring against hazard losses on
all the mortgage loans comprising part of a trust fund, it will have            

48

424B5
171st Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 171st
satisfied its obligation relating to the maintenance of hazard insurance. The   
blanket policy may contain a deductible clause, in which case the master        
servicer will be required to deposit from its own funds into the related        
Certificate Account the amounts that would have been deposited therein but for  
the clause.                                                                     

    In general, the standard form of fire and extended coverage policy
covers physical damage to or destruction of the improvements securing a mortgage
loan by fire, lightning, explosion, smoke, windstorm and hail, riot, strike and 
civil commotion, subject to the conditions and exclusions particularized in each
policy. Although the policies relating to the mortgage loans may have been      
underwritten by different insurers under different state laws in accordance with
different applicable forms and therefore may not contain identical terms, their 
basic terms are dictated by the respective state laws, and most policies        
typically do not cover any physical damage resulting from 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. This list is merely indicative of certain kinds of uninsured risks   
and is not all inclusive. If the mortgaged property securing a mortgage loan is 
located in a federally designated special flood area at the time of origination,
the master servicer will require the mortgagor to obtain and maintain flood     
insurance.                                                                      

         The hazard insurance policies covering properties securing the mortgage
loans typically contain a clause that 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 insured property in order to recover the full     
amount of any partial loss. If the insured's coverage falls below this specified
percentage, then the insurer's liability upon partial loss will not exceed the  
larger of the actual cash value (generally defined as replacement cost at the   
time and place of loss, less physical depreciation) of the improvements damaged 
or destroyed and the proportion of the loss that the amount of insurance carried
bears to the specified percentage of the full replacement cost of the           
improvements. Since the amount of hazard insurance the master servicer may cause
to be maintained on the improvements securing the mortgage loans declines as the
principal balances owing on them decrease, and since improved real estate       
generally has appreciated in value over time in the past, the effect of this    
requirement upon partial loss may be that hazard insurance proceeds will be     
insufficient to fully restore the damaged property. If specified in the related 
prospectus supplement, a special hazard insurance policy will be obtained to    
insure against certain of the uninsured risks described above. See "Credit      
Enhancement - Special Hazard Insurance Policies" and "Credit Enhancements -     
Insurance - Special Hazard Insurance Policy" in the related prospectus          
supplement.                                                                     

      The master servicer will not require that a standard hazard or flood
insurance policy be maintained on the cooperative dwelling relating to any      
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 that cooperative do not maintain individual hazard   
insurance policies. To the extent, however, that a cooperative and the related  
borrower on a cooperative loan do not maintain insurance or do not maintain     
adequate coverage or any insurance proceeds are not applied to the restoration  
of damaged property, any damage to the borrower's cooperative dwelling or the   
cooperative's building could significantly reduce the value of the collateral   
securing the cooperative loan.                                                  

REALIZATION UPON DEFAULTED MORTGAGE LOANS                                       

        Primary Mortgage Insurance Policies. The master servicer will maintain
or cause to be maintained, as the case may be, in effect, to the extent         
specified in the related prospectus supplement, a primary mortgage insurance    
policy with regard to each mortgage loan for which coverage is required. The    
master servicer will not cancel or refuse to renew any primary mortgage         
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  
and servicing agreement unless the replacement primary mortgage insurance policy
for the cancelled or nonrenewed policy is maintained with an insurer whose      
claims-paying ability is sufficient to maintain the current rating of the       
classes of certificates of the series that have been rated.                     

        Although the terms of primary mortgage insurance vary, the amount of a
claim for benefits under a primary mortgage insurance policy covering a mortgage
loan will consist of the insured percentage of the unpaid principal amount of   
the covered mortgage loan and accrued and unpaid interest on it and             
reimbursement of certain expenses, less all rents or other payments collected or
received by the insured (other than the proceeds of hazard insurance) that are  
derived from or in any way related to the mortgaged property, hazard insurance  
proceeds in excess of the                                                       

49

424B5
172nd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 172nd
amount required to restore the mortgaged property and which have not been       
applied to the payment of the mortgage loan, amounts expended but not approved  
by the issuer of the related primary mortgage insurance policy, claim payments  
previously made by the primary insurer and unpaid premiums.                     

        Primary mortgage insurance policies reimburse certain losses sustained
from defaults in payments by borrowers. Primary mortgage insurance policies will
not insure against, and exclude from coverage, a loss sustained from a default  
arising from or involving certain matters, including fraud or negligence in     
origination or servicing of the mortgage loans, including misrepresentation by  
the originator, mortgagor or other persons involved in the origination of the   
mortgage loan; failure to construct the mortgaged property subject to the       
mortgage loan in accordance with specified plans; physical damage to the        
mortgaged property; and the related sub-servicer not being approved as a        
servicer by the primary insurer.                                                

     Recoveries Under A Primary Mortgage Insurance Policy. As conditions
precedent to the filing of or payment of a claim under a primary mortgage       
insurance policy covering a mortgage loan, the insured will be required to      

o     advance or discharge                                    

            o    all hazard insurance policy premiums and as necessary and
               approved in advance by the primary insurer, real estate
             property taxes, all expenses required to maintain the
                  related mortgaged property in at least as good a condition
                as existed at the effective date of the primary mortgage
                    insurance policy, ordinary wear and tear excepted, mortgaged
                   property sales expenses, any specified outstanding liens on
               the mortgaged property and foreclosure costs, including
   court costs and reasonable attorneys' fees;

        o     upon any physical loss or damage to the mortgaged property, have
              the mortgaged property restored and repaired to at least as good
         a condition as existed at the effective date of the primary
             mortgage insurance policy, ordinary wear and tear excepted; and

        o     tender to the primary insurer good and merchantable title to and
possession of the mortgaged property.             

The master servicer, on behalf of itself, the trustee and the 
certificateholders, will present claims to the insurer under each primary       
mortgage insurance policy, and will take any reasonable steps consistent with   
its practices regarding comparable mortgage loans and necessary to receive      
payment or to permit recovery under the policy with respect to defaulted        
mortgage loans. As set forth above, all collections by or on behalf of the      
master servicer under any primary mortgage insurance policy and, when the       
mortgaged property has not been restored, the hazard insurance policy, are to be
deposited in the Certificate Account, subject to withdrawal as heretofore       
described.                                                                      

         If the mortgaged property securing a defaulted mortgage loan is damaged
and proceeds, if any, from the related hazard insurance policy are insufficient 
to restore the damaged mortgaged property to a condition sufficient to permit   
recovery under the related primary mortgage insurance policy, if any, the master
servicer is not required to expend its own funds to restore the damaged         
mortgaged property unless it determines that the restoration will increase the  
proceeds to certificateholders on liquidation of the mortgage loan after        
reimbursement of the master servicer for its expenses and that the expenses will
be recoverable by it from related insurance proceeds or liquidation proceeds.   

    If recovery on a defaulted mortgage loan under any related primary
mortgage insurance policy is not available for the reasons set forth in the     
preceding paragraph, or if the defaulted mortgage loan is not covered by a      
primary mortgage insurance policy, the master servicer will be obligated to     
follow or cause to be followed the normal practices and procedures that it deems
appropriate to realize upon the defaulted mortgage loan. If the proceeds of any 
liquidation of the mortgaged property securing the defaulted mortgage loan are  
less than the principal balance of the mortgage loan plus interest accrued on it
that is payable to certificateholders, the trust fund will realize a loss in the
amount of the difference plus the aggregate of expenses incurred by the master  
servicer in connection with the proceedings that are reimbursable under the     
pooling and servicing agreement. In the unlikely event that the proceedings     
result in a total recovery which is, after reimbursement to the master servicer 
of its expenses, in excess of the principal balance of the mortgage loan plus   
interest accrued on it that is payable to certificateholders, the master        
servicer will be entitled to withdraw or retain from the Certificate Account    
amounts                                                                         

50

424B5
173rd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 173rd
representing its normal servicing compensation with respect to the mortgage loan
and, unless otherwise specified in the related prospectus supplement, amounts   
representing the balance of the excess, exclusive of any amount required by law 
to be forwarded to the related mortgagor, as additional servicing compensation. 

        If the master servicer or its designee recovers insurance proceeds not
used to restore the property which, when added to any related liquidation       
proceeds and after deduction of certain expenses reimbursable to the master     
servicer, exceed the principal balance of a mortgage loan plus interest accrued 
thereon that is payable to certificateholders, the master servicer will be      
entitled to withdraw or retain from the Certificate Account amounts representing
its normal servicing compensation with respect to the mortgage loan. If the     
master servicer has expended its own funds to restore the damaged mortgaged     
property and the funds have not been reimbursed under the related hazard        
insurance policy, it will be entitled to withdraw from the Certificate Account  
out of related liquidation proceeds or insurance proceeds an amount equal to the
expenses incurred by it, in which event the trust fund may realize a loss up to 
the amount so charged. Since insurance proceeds cannot exceed deficiency claims 
and certain expenses incurred by the master servicer, no insurance payment or   
recovery will result in a recovery to the trust fund that exceeds the principal 
balance of the defaulted mortgage loan together with accrued interest on it. See
"Credit Enhancement" in this prospectus and in the related prospectus           
supplement.                                                                     

        FHA Insurance; VA Guaranties. Mortgage loans designated in the related
prospectus supplement as insured by the FHA will be insured by the FHA as       
authorized under the National Housing Act of 1934, as amended, and the United   
States Housing Act of 1937, as amended. Those mortgage loans will be insured    
under various FHA programs including the standard FHA 203(b) program to finance 
the acquisition of one-to four-family housing units and the FHA 245 graduated   
payment mortgage program. These programs generally limit the principal amount   
and interest rates of the mortgage loans insured. Mortgage loans insured by the 
FHA generally require a minimum down payment of approximately 5% of the original
principal amount of the loan. No FHA-insured mortgage loans relating to a series
may have an interest rate or original principal amount exceeding the applicable 
FHA limits at the time of origination of the loan.                              

  The insurance premiums for mortgage loans insured by the FHA are
collected by lenders approved by the HUD or by the master servicer or any       
sub-servicers and are paid to the FHA. The regulations governing FHA            
single-family mortgage insurance programs provide that insurance benefits are   
payable either upon foreclosure (or other acquisition of possession) and        
conveyance of the mortgaged premises to HUD or upon assignment of the defaulted 
mortgage loan to HUD. With respect to a defaulted FHA-insured mortgage loan, the
master servicer or any sub-servicer is limited in its ability to initiate       
foreclosure proceedings. When it is determined, either by the master servicer or
any sub-servicer or HUD, that default was caused by circumstances beyond the    
mortgagor's control, the master servicer or any sub-servicer is expected to make
an effort to avoid foreclosure by entering, if feasible, into one of a number of
available forms of forbearance plans with the mortgagor. These plans may involve
the reduction or suspension of regular mortgage payments for a specified period,
with the payments to be made up on or before the maturity date of the mortgage, 
or the recasting of payments due under the mortgage up to or beyond the maturity
date. In addition, when a default caused by circumstances beyond the mortgagor's
control is accompanied by certain other criteria, HUD may provide relief by     
making payments to the master servicer or any sub-servicer in partial or full   
satisfaction of amounts due `under the mortgage loan (which payments are to be  
repaid by the mortgagor to HUD) or by accepting assignment of the loan from the 
master servicer or any sub-servicer. With certain exceptions, at least three    
full monthly installments must be due and unpaid under the mortgage loan and HUD
must have rejected any request for relief from the mortgagor before the master  
servicer or any sub-servicer may initiate foreclosure proceedings.              

       HUD has the option, in most cases, to pay insurance claims in cash or
in debentures issued by HUD. Currently, claims are being paid in cash, and      
claims have not been paid in debentures since 1965. HUD debentures issued in    
satisfaction of FHA insurance claims bear interest at the applicable HUD        
debentures interest rate. The master servicer of any sub-servicer of each       
FHA-insured mortgage loan will be obligated to purchase the debenture issued in 
satisfaction of the mortgage loan upon default for an amount equal to the       
principal amount of the debenture.                                              

        The amount of insurance benefits generally paid by the FHA is equal to
the entire unpaid principal amount of the defaulted mortgage loan adjusted to   
reimburse the master servicer or sub-servicer for certain costs and expenses and
to deduct certain amounts received or retained by the master servicer or        
sub-servicer after default. When entitlement to insurance benefits results from 
foreclosure (or other acquisition of possession) and conveyance                 

51

424B5
174th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 174th
to HUD, the master servicer or sub-servicer is compensated for no more than     
two-thirds of its foreclosure costs, and is compensated for accrued and unpaid  
interest but in general only to the extent it was allowed pursuant to a         
forbearance plan approved by HUD. When entitlement to insurance benefits results
from assignment of the mortgage loan to HUD, the insurance payment includes full
compensation for interest accrued and unpaid to the assignment date. The        
insurance payment itself, upon foreclosure of an FHA-insured mortgage loan,     
bears interest from a date 30 days after the mortgagor's first uncorrected      
failure to perform any obligation to make any payment due under the mortgage    
loan and, upon assignment, from the date of assignment to the date of payment of
the claim, in each case at the same interest rate as the applicable HUD         
debenture interest rate as described above.                                     

   Mortgage loans designated in the related prospectus supplement as
guaranteed by the VA will be partially guaranteed by the VA under the           
Serviceman's Readjustment Act of 1944, as amended. The Serviceman's Readjustment
Act of 1944, as amended, permits a veteran (or in certain instances the spouse  
of a veteran) to obtain a mortgage loan guaranty by the VA covering mortgage    
financing of the purchase of a one- to four-family dwelling unit at interest    
rates permitted by the VA. The program has no mortgage loan limits, requires no 
down payment from the purchaser and permits the guarantee of mortgage loans of  
up to 30 years' duration. However, no mortgage loan guaranteed by the VA will   
have an original principal amount greater than five times the partial VA        
guaranty for the mortgage loan.                                                 

         The liability on the guaranty may be 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.  
The VA, at its option and without regard to the guaranty, may make full payment 
to a mortgage holder of unsatisfied indebtedness on a mortgage upon its         
assignment to the VA.                                                           

     With respect to a defaulted VA guaranteed mortgage loan, the master
servicer or sub-servicer is, absent exceptional circumstances, authorized to    
announce its intention to foreclose only when the default has continued for     
three months. Generally, a claim for the guaranty is submitted after liquidation
of the mortgaged property.                                                      

     The amount payable under the guaranty will be the percentage of the
VA-insured mortgage loan originally guaranteed applied to indebtedness          
outstanding as of the applicable date of computation specified in the VA        
regulations. Payments under the guaranty will be equal to the unpaid principal  
amount of the loan, interest accrued on the unpaid balance of the loan to the   
appropriate date of computation and limited expenses of the mortgagee, but in   
each case only to the extent that the amounts have not been recovered through   
liquidation of the mortgaged property. The amount payable under the guaranty may
in no event exceed the amount of the original guaranty.                         

     Application of Liquidation Proceeds. Unless the related pooling and
servicing agreement provides for a different application of liquidation         
proceeds, the proceeds from any liquidation of a mortgage loan will be applied  
in the following order of priority:                                             

       first, to reimburse the master servicer for any unreimbursed expenses
incurred by it to restore the related mortgaged property and any      
 unreimbursed servicing compensation payable to the master servicer with
respect to the mortgage loan;                                         

        second, to reimburse the master servicer for any unreimbursed advances
with respect to the mortgage loan;                                    

     third, to accrued and unpaid interest (to the extent no advance has
been made for the amount) on the mortgage loan; and                   

fourth, as a recovery of principal of the mortgage loan.      

       If a final liquidation of a mortgage loan resulted in a realized loss
and thereafter the master servicer receives a recovery specifically related to  
that mortgage loan, such recovery (net of any reimbursable expenses) shall be   
distributed to the certificateholders in the same manner as prepayments received
in the prior calendar month, to the extent that the related realized loss was   
allocated to any class of certificates. In addition, the class certificate      
balance of each class of certificates to which realized losses have been        
allocated, will be increased, sequentially in the order of payment priority, to 
the extent that such subsequent recoveries are distributed as principal to any  
class of certificates. However, the class certificate balance of each such class
of certificates will not be increased by more than the amount of realized losses
previously applied to reduce the class certificate balance of each such class of

52

424B5
175th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 175th
certificates. Holders of certificates whose class certificate balance is        
increased in this manner will not be entitled to interest on the increased      
balance for any interest accrual period preceding the Distribution Date on which
the increase occurs. The foregoing provisions will apply even if the class      
certificate balance of a class of certificates was previously reduced to zero.  
Accordingly, each class of certificates will be considered to remain outstanding
until the termination of the related trust.                                     

SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES                        

        The principal servicing compensation to be paid to the master servicer
in respect of its master servicing activities for each series of certificates   
will be equal to the percentage per annum described in the related prospectus   
supplement (which may vary under certain circumstances) of the outstanding      
principal balance of each mortgage loan, and the compensation will be retained  
by it from collections of interest on the mortgage loan in the related trust    
fund. As compensation for its servicing duties, a sub-servicer or, if there is  
no sub-servicer, the master servicer will be entitled to a monthly servicing fee
as described in the related prospectus supplement. In addition, generally the   
master servicer or a sub-servicer will retain all prepayment charges, assumption
fees and late payment charges, to the extent collected from mortgagors, and any 
benefit that may accrue as a result of the investment of funds in the applicable
Certificate Account.                                                            

         The master servicer will, to the extent provided in the related pooling
and servicing agreement, pay or cause to be paid certain ongoing expenses       
associated with each trust fund and incurred by it in connection with its       
responsibilities under the related pooling and servicing agreement, including,  
without limitation, payment of the fees and disbursements of the trustee, any   
custodian appointed by the trustee, the certificate registrar and any paying    
agent, and payment of expenses incurred in enforcing the obligations of         
sub-servicers and sellers. The master servicer will be entitled to reimbursement
of expenses incurred in enforcing the obligations of sub-servicers and sellers  
under certain limited circumstances. In addition, as indicated in the preceding 
section, the master servicer will be entitled to reimbursement for certain      
expenses incurred by it in connection with any defaulted mortgage loan as to    
which it has determined that all recoverable liquidation proceeds and insurance 
proceeds have been received (a "Liquidated Mortgage"), and in connection with   
the restoration of mortgaged properties, the right of reimbursement being before
the rights of certificateholders to receive any related liquidation proceeds    
(including insurance proceeds).                                                 

EVIDENCE AS TO COMPLIANCE                                                       

       Each pooling and servicing agreement will provide that on or before a
specified date in each year, a firm of independent public accountants will      
furnish a statement to the trustee to the effect that, on the basis of the      
examination by the firm conducted substantially in compliance with the Uniform  
Single Attestation Program for Mortgage Bankers or the Audit Program for        
Mortgages serviced for Freddie Mac, the servicing by or on behalf of the master 
servicer of mortgage loans, Private Mortgage-Backed Securities or Agency        
Securities, under pooling and servicing agreements substantially similar to each
other (including the related pooling and servicing agreement) was conducted in  
compliance with those agreements except for any significant exceptions or errors
in records that, in the opinion of the firm, the Audit Program for Mortgages    
serviced for Freddie Mac or the Uniform Single Attestation Program for Mortgage 
Bankers requires it to report. In rendering its statement the firm may rely, as 
to matters relating to the direct servicing of mortgage loans, Private          
Mortgage-Backed Securities or Agency Securities by sub-servicers, upon          
comparable statements for examinations conducted substantially in compliance    
with the Uniform Single Attestation Program for Mortgage Bankers or the Audit   
Program for Mortgages serviced for Freddie Mac (rendered within one year of the 
statement) of firms of independent public accountants with respect to the       
related sub-servicer.                                                           

        Each pooling and servicing agreement will also provide for delivery to
the trustee, on or before a specified date in each year, of an annual statement 
signed by two officers of the master servicer to the effect that the master     
servicer has fulfilled its obligations under the pooling and servicing agreement
throughout the preceding year.                                                  

  Copies of the annual accountants' statement and the statement of
officers of the master servicer may be obtained by certificateholders of the    
related series without charge upon written request to the master servicer at the
address set forth in the related prospectus supplement.                         

53

424B5
176th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 176th
LIST OF CERTIFICATEHOLDERS                                                      

      Each pooling and servicing agreement will provide that three or more
holders of certificates of any series may, by written request to the trustee,   
obtain access to the list of all certificateholders maintained by the trustee   
for the purpose of communicating with other certificateholders with respect to  
their rights under the pooling and servicing agreement and the certificates.    

CERTAIN MATTERS REGARDING THE MASTER SERVICER AND THE DEPOSITOR                 

        The master servicer under each pooling and servicing agreement will be
named in the related prospectus supplement. The entity serving as master        
servicer may be an affiliate of the depositor and may have other business       
relationships with the depositor or the depositor's affiliates.                 

   Each pooling and servicing agreement will provide that the master
servicer may not resign from its obligations and duties under the pooling and   
servicing agreement except upon a determination that the performance by it of   
its duties under the pooling and servicing agreement is no longer permissible   
under applicable law. No resignation will become effective until the trustee or 
a successor servicer has assumed the master servicer's obligations and duties   
under the pooling and servicing agreement.                                      

        Each pooling and servicing agreement will further provide that neither
the master servicer, the depositor nor any director, officer, employee, or agent
of the master servicer or the depositor will be under any liability to the      
related trust fund or certificateholders for any action taken or for refraining 
from the taking of any action in good faith pursuant to the pooling and         
servicing agreement, or for errors in judgment. However, neither the master     
servicer, the depositor nor any director, officer, employee, or agent of the    
master servicer or the depositor will be protected against any liability that   
would otherwise be imposed for willful misfeasance, bad faith or negligence in  
the performance of duties under the pooling and servicing agreement or for      
reckless disregard of obligations and duties under the pooling and servicing    
agreement. Each pooling and servicing agreement will further provide that the   
master servicer, the depositor and any director, officer, employee or agent of  
the master servicer or the depositor will be entitled to indemnification by the 
related trust fund and will be held harmless against any loss, liability or     
expense incurred in connection with any legal action relating to the pooling and
servicing agreement or the certificates, other than any loss, liability or      
expense related to any specific Mortgage Asset or Mortgage Assets (except any   
loss, liability or expense otherwise reimbursable pursuant to the pooling and   
servicing agreement) and any loss, liability or expense incurred for willful    
misfeasance, bad faith or negligence in the performance of duties under the     
pooling and servicing agreement or for reckless disregard of obligations and    
duties under the pooling and servicing agreement. In addition, each pooling and 
servicing agreement will provide that neither the master servicer nor the       
depositor will be under any obligation to appear in, prosecute or defend any    
legal action that is not incidental to its respective responsibilities under the
pooling and servicing agreement and that in its opinion may involve it in any   
expense or liability. The master servicer or the depositor may, however, in its 
discretion undertake any action that it deems appropriate with respect to the   
pooling and servicing agreement and the rights and duties of the parties to the 
pooling and servicing agreement and the interests of the certificateholders     
under the pooling and servicing agreement. In that event, the legal expenses and
costs of the action and any liability resulting from it will be expenses, costs 
and liabilities of the trust fund, and the master servicer or the depositor, as 
the case may be, will be entitled to be reimbursed for them out of funds        
otherwise distributable to certificateholders.                                  

Any person into which the master servicer may be merged or    
consolidated, or any person resulting from any merger or consolidation to which 
the master servicer is a party, or any person succeeding to the business of the 
master servicer, will be the successor of the master servicer under each pooling
and servicing agreement, provided that the person is qualified to sell mortgage 
loans to, and service mortgage loans on behalf of, Fannie Mae or Freddie Mac.   

EVENTS OF DEFAULT                                                               

      The applicable prospectus supplement may provide for other events of
default, but if it does not, then events of default under each pooling and      
servicing agreement will consist of                                             

o   any failure by the master servicer to deposit in the Certificate  
        Account or remit to the trustee any payment which continues unremedied
        for five days after the giving of written notice of the failure to the
master                                                        

54

424B5
177th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 177th
         servicer by the trustee or the depositor, or to the master servicer and
        the trustee by the holders of certificates having not less than 25% of
the voting rights evidenced by the certificates;              

o   any failure by the master servicer to observe or perform in any   
  material respect any of its other covenants or agreements in the
      pooling and servicing agreement which failure materially affects the
       rights of certificateholders that continues unremedied for sixty days
 after the giving of written notice of the failure to the master
         servicer by the trustee or the depositor, or to the master servicer and
        the trustee by the holders of certificates of any class evidencing not
      less than 25% of the voting rights evidenced by the certificate; and

o   certain events of insolvency, readjustment of debt, marshalling of
        assets and liabilities or similar proceeding and certain actions by or
on behalf of the master servicer indicating its insolvency,   
reorganization or inability to pay its obligations.           

"Voting rights" are the portion of voting rights of all of the certificates that
is allocated to any certificate pursuant to the terms of the pooling and        
servicing agreement.                                                            

    If specified in the related prospectus supplement, the pooling and
servicing agreement will permit the trustee to sell the Mortgage Assets and the 
other assets of the trust fund if payments on them are insufficient to make     
payments required in the pooling and servicing agreement. The assets of the     
trust fund will be sold only under the circumstances and in the manner specified
in the related prospectus supplement.                                           

RIGHTS UPON EVENT OF DEFAULT                                                    

        So long as an event of default under a pooling and servicing agreement
remains unremedied, the depositor or the trustee may, and at the direction of   
holders of certificates having not less than 66?% of the voting rights and under
any other circumstances specified in the pooling and servicing agreement, the   
trustee shall, terminate all of the rights and obligations of the master        
servicer under the pooling and servicing agreement relating to the trust fund   
and in the Mortgage Assets, whereupon the trustee will succeed to all of the    
responsibilities, duties and liabilities of the master servicer under the       
pooling and servicing agreement, including, if specified in the related         
prospectus supplement, the obligation to make advances, and will be entitled to 
similar compensation arrangements. If the trustee is unwilling or unable so to  
act, it may appoint, or petition a court of competent jurisdiction for the      
appointment of, a mortgage loan servicing institution with a net worth of at    
least $10,000,000 to act as successor to the master servicer under the pooling  
and servicing agreement. Pending appointment, the trustee is obligated to act as
master servicer. The trustee and any successor may agree upon the servicing     
compensation to be paid to the successor servicer, which may not be greater than
the compensation payable to the master servicer under the pooling and servicing 
agreement.                                                                      

No certificateholder, solely by virtue of its status as a     
certificateholder, will have any right under any pooling and servicing agreement
to institute any proceeding with respect to the pooling and servicing agreement,
unless the holder previously has given to the trustee written notice of default 
and unless the holders of any class of certificates of the series evidencing not
less than 25% of the voting rights have requested the trustee in writing to     
institute a proceeding in its own name as trustee and have offered to the       
trustee reasonable indemnity, and the trustee for 60 days has neglected or      
refused to institute the proceeding.                                            

AMENDMENT                                                                       

  The applicable prospectus supplement may specify other amendment
provisions, but if it does not, then each pooling and servicing agreement may be
amended by the depositor, the master servicer and the trustee, without the      
consent of any of the certificateholders,                                       

(a) to cure any ambiguity or mistake;                         

     (b) to correct any defective provision therein or to supplement any
   provision in the pooling and servicing agreement that may be inconsistent
with any other provision in it;                                       

      (c) to conform the pooling and servicing agreement to the prospectus
and prospectus supplement provided to investors in accordance with the
initial offering of the certificates;                                 

55

424B5
178th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 178th
     (d) to add to the duties of the depositor, the seller or the master
servicer;                                                             

    (e) to modify, alter, amend, add to or rescind any of the terms or
    provisions contained in the pooling and servicing agreement to comply with
any rules or regulations promulgated by the Securities and Exchange   
Commission from time to time;                                         

      (f) to add any other provisions with respect to matters or questions
arising under the pooling and servicing agreement; or                 

    (g) to modify, alter, amend, add to or rescind any of the terms or
provisions contained in the pooling and servicing agreement.          

        However, no action pursuant to clauses (f) or (g) may, as evidenced by
an opinion of counsel, adversely affect in any material respect the interests of
any certificateholder. But no opinion of counsel will be required if the person 
requesting the amendment obtains a letter from each rating agency requested to  
rate the class or classes of certificates of the series stating that the        
amendment will not result in the downgrading or withdrawal of the respective    
ratings then assigned to the certificates.                                      

In addition, to the extent provided in the related pooling and
servicing agreement, a pooling and servicing agreement may be amended without   
the consent of any of the certificateholders to change the manner in which the  
Certificate Account is maintained, if the change does not adversely affect the  
then current rating of the class or classes of certificates of the series that  
have been rated at the request of the depositor. Moreover, if one or more REMIC 
elections are made with respect to the trust fund, the related pooling and      
servicing agreement may be amended to modify, eliminate or add to any of its    
provisions to the extent necessary to maintain the qualification of any REMIC,  
to avoid or minimize the risk of imposition of any tax on any REMIC or to comply
with any other requirements of the Code, if the trustee has received an opinion 
of counsel to the effect that the action is necessary or helpful to maintain the
qualification, avoid or minimize that risk or comply with those requirements, as
applicable.                                                                     

  The applicable prospectus supplement may specify other amendment
provisions, but if it does not, then each pooling and servicing agreement may   
also be amended by the depositor, the master servicer and the trustee with the  
consent of holders of certificates of the series evidencing a majority in       
interest of each class affected thereby for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of the pooling
and servicing agreement or of modifying in any manner the rights of the holders 
of the related certificates. However, no amendment may                          

 (a) reduce in any manner the amount of, or delay the timing of,
     payments received on Mortgage Assets that are required to be distributed on
any certificate without the consent of the holder of the certificate, 

   (b) adversely affect in any material respect the interests of the
     holders of any class of certificates in a manner other than as described in
(a), without the consent of the holders of certificates of the class  
evidencing, as to the class, percentage interests aggregating 66?%, or

     (c) reduce the aforesaid percentage of certificates of any class of
     holders that is required to consent to the amendment without the consent of
 the holders of all certificates of the class covered by the pooling and
servicing agreement then outstanding.                                 

If one or more REMIC elections are made with respect to a trust fund, the       
trustee will not be entitled to consent to an amendment to the related pooling  
and servicing agreement without having first received an opinion of counsel to  
the effect that the amendment will not cause any REMIC to fail to qualify as a  
REMIC.                                                                          

TERMINATION; OPTIONAL TERMINATION                                               

  Generally, the obligations created by each pooling and servicing
agreement for each series of certificates will terminate upon the payment to the
related certificateholders of all amounts held in the Certificate Account or by 
the master servicer and required to be paid to them pursuant to the pooling and 
servicing agreement following the later of                                      

56

424B5
179th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 179th
o   the final payment or other liquidation of the last of the Mortgage
       Assets subject to it or the disposition of all property acquired upon
    foreclosure of the Mortgage Assets remaining in the trust fund and

 o   the purchase by the master servicer or, if REMIC treatment has been
       elected and if specified in the related prospectus supplement, by the
      holder of the residual interest in the REMICs (see "Material Federal
Income Tax Consequences" in this prospectus and in the related
   prospectus supplement), from the related trust fund of all of the
       remaining Mortgage Assets and all property acquired in respect of the
Mortgage Assets.                                              

     Any purchase of Mortgage Assets and property acquired in respect of
Mortgage Assets evidenced by a series of certificates will be made at the option
of the master servicer or the party specified in the related prospectus         
supplement, including the holder of the REMIC residual interest, at a price, and
in accordance with the procedures, specified in the related prospectus          
supplement. The exercise of that right will effect early retirement of the      
certificates of that series, but the right of the master servicer or the other  
party or, if applicable, the holder of the REMIC residual interest, to so       
purchase is subject to the principal balance of the related Mortgage Assets     
being less than the percentage specified in the related prospectus supplement of
the aggregate principal balance of the Mortgage Assets at the cut-off date for  
the series. The foregoing is subject to the provision that if one or more REMIC 
elections are made with respect to a trust fund, any repurchase pursuant to the 
second bulleted item above will not be made if such repurchase would result in a
"prohibited transaction tax" (within the meaning of Section 860F(a)(1) of the   
Code) being imposed on any REMIC.                                               

THE TRUSTEE                                                                     

         The trustee under each pooling and servicing agreement will be named in
the applicable prospectus supplement. The commercial bank or trust company      
serving as trustee may have normal banking relationships with the depositor, the
master servicer and any of their respective affiliates.                         

CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS                                     

   The following discussion contains summaries, which are general in
nature, of certain legal matters relating to the mortgage loans. Because the    
legal aspects are governed primarily by applicable state law (which laws may    
differ substantially), the summaries do not purport to be complete or to reflect
the laws of any particular state or to encompass the laws of all states in which
the security for the mortgage loans is situated.                                

GENERAL                                                                         

  The mortgage loans will be secured by deeds of trust, mortgages,
security deeds or deeds to secure debt, depending upon the prevailing practice  
in the state in which the property subject to the loan is located. Deeds of     
trust are used almost exclusively in California instead of mortgages. A mortgage
creates a lien upon the real property encumbered by the mortgage, which lien is 
generally not before the lien for real estate taxes and assessments. Priority   
between mortgages depends on their terms and generally on the order of recording
with a state or county office. There are two parties to a mortgage, the         
mortgagor, who is the borrower and owner of the mortgaged property, 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-property owner called the trustor (similar to a mortgagor), a lender   
(similar to a mortgagee) called the beneficiary, and a third-party grantee      
called the trustee. Under a deed of trust, the borrower 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. A security deed and a deed to  
secure debt are special types of deeds which indicate on their face that they   
are granted to secure an underlying debt. By executing a security deed or deed  
to secure debt, the grantor conveys title to, as opposed to merely creating a   
lien upon, the subject property to the grantee until the underlying debt is     
repaid. The trustee's authority under a deed of trust, the mortgagee's authority
under a mortgage and the grantee's authority under a security deed or deed to   
secure debt are governed by law and, with respect to some deeds of trust, the   
directions of the beneficiary.                                                  

         In this prospectus, we generally use the term "mortgage" to generically
describe real-estate security instruments, however, if certain information      
relates to a particular security instrument, we will refer to that security     
instrument.                                                                     

57

424B5
180th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 180th
       Cooperatives. Certain of the mortgage loans may be cooperative loans.
The cooperative owns all the real property that comprises the project, including
the land, separate dwelling units and all common areas. The cooperative is      
directly responsible for project management and, in most cases, payment of real 
estate taxes and hazard and liability insurance. If there is a blanket mortgage 
on the cooperative or underlying land or both, as is generally the case, the    
cooperative, as project mortgagor, is also responsible for meeting these        
mortgage obligations. A blanket mortgage is ordinarily incurred by the          
cooperative in connection with the construction or purchase of the cooperative's
apartment building. The interest of the occupant under proprietary leases or    
occupancy agreements to which that cooperative is a party are generally         
subordinate to the interest of the holder of the blanket mortgage in that       
building. If the cooperative is unable to meet the payment obligations arising  
under its blanket mortgage, the mortgagee holding the blanket mortgage could    
foreclose on that mortgage and terminate all subordinate proprietary leases and 
occupancy agreements. In addition, the blanket 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 lump sum at final maturity.   
The inability of the cooperative to refinance this mortgage and its consequent  
inability to make the final payment could lead to foreclosure by the mortgagee  
providing the financing. A foreclosure in either event by the holder of the     
blanket mortgage could eliminate or significantly diminish the value of any     
collateral held by the lender who financed the purchase by an individual        
tenant-stockholder of cooperative shares or, in the case of a trust fund        
including cooperative loans, the collateral securing the cooperative loans.     

        The cooperative is owned by tenant-stockholders who, through ownership
of stock, shares or membership certificates in the corporation, receive         
proprietary leases or occupancy agreements which confer exclusive rights to     
occupy specific units. Generally, a tenant-stockholder of a cooperative must    
make a monthly payment to the cooperative representing the tenant-stockholder's 
pro rata share of the cooperative's payments for its blanket mortgage, real     
property taxes, maintenance expenses and other capital or ordinary expenses. An 
ownership interest in a cooperative and accompanying rights is financed through 
a cooperative share loan evidenced by a promissory note and secured by a        
security interest in the occupancy agreement or proprietary lease and in the    
related cooperative shares. The lender 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 promissory 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.                                                                         

FORECLOSURE AND REPOSSESSION                                                    

         Deed of Trust. Foreclosure of a deed of trust is generally accomplished
by a non-judicial sale under a specific provision in the deed of trust which    
authorizes the trustee to sell the property at public auction upon any material 
default by the borrower under the terms of the note or deed of trust. In certain
states, foreclosure also may be accomplished by judicial action in the manner   
provided for foreclosure of mortgages. In some states, such as California, the  
trustee must record a notice of default and send a copy to the borrower-trustor 
and to any person who has recorded a request for a copy of any notice of default
and notice of sale. In addition, the trustee must provide notice in some states 
to any other individual having an interest of record in the real property,      
including any junior lien holders. If the deed of trust is not reinstated within
any applicable cure period, a notice of sale must be posted in a public place   
and, in most states, including California, published for a specified period of  
time in one or more newspapers. In addition, these notice provisions require    
that a copy of the notice of sale be posted on the property and sent to all     
parties having an interest of record in the property. In California, the entire 
process from recording a notice of default to a non-judicial sale usually takes 
four to five months.                                                            

    In some states, including California, the borrower-trustor has the
right to reinstate the loan at any time following default until shortly before  
the trustee's sale. In general, the borrower, 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. Certain state laws control the amount of  
foreclosure expenses and costs, including attorney's fees, which may be         
recoverable by a lender.                                                        

   Mortgages. Foreclosure of a mortgage is generally 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. Judicial foreclosure proceedings                                       

58

424B5
181st Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 181st
are often not contested by any of the parties. When the mortgagee's right to    
foreclosure is contested, the legal proceedings necessary to resolve the issue  
can be time consuming. After the completion of a judicial foreclosure           
proceeding, the court generally issues a judgment of foreclosure and appoints a 
referee or other court officer to conduct the sale of the property. In general, 
the borrower, or any other person having a junior encumbrance on the real       
estate, may, during a statutorily prescribed reinstatement period, cure a       
monetary default by paying the entire amount in arrears plus other designated   
costs and expenses incurred in enforcing the obligation. Generally, state law   
controls the amount of foreclosure expenses and costs, including attorney's     
fees, which may be recovered by a lender. After the reinstatement period has    
expired without the default having been cured, the borrower or junior lienholder
no longer has the right to reinstate the loan and must pay the loan in full to  
prevent the scheduled foreclosure sale. If the deed of trust is not reinstated, 
a notice of sale must be posted in a public place and, in most states, published
for a specific 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.                    

      Although foreclosure sales are typically public sales, frequently no
third party purchaser bids in excess of the lender's lien because of the        
difficulty of determining the exact status of title to the property, the        
possible deterioration of the property during the foreclosure proceedings and a 
requirement that the purchaser pay for the property in cash or by cashier's     
check. Thus the foreclosing lender often purchases the property from the trustee
or referee for an amount equal to the principal amount outstanding under the    
loan, accrued and unpaid interest and the expenses of foreclosure. Thereafter,  
the lender will assume the burden of ownership, including obtaining hazard      
insurance and making repairs at its own expense 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,
which are generally designed to mitigate the legal consequences to the borrower 
of the borrower's defaults under the loan documents. Some courts have been faced
with the issue of whether federal or state constitutional provisions reflecting 
due process concerns for fair notice require that borrowers under deeds of trust
receive notice longer than that prescribed by statute. For the most part, these 
cases have upheld the notice provisions as being reasonable or have found that  
the sale by a trustee under a deed of trust does not involve sufficient state   
action to afford constitutional protection to the borrower.                     

Cooperative Loans. The cooperative shares owned by the        
tenant-stockholder and pledged to the lender are, in almost all cases, subject  
to restrictions on transfer as set forth in the cooperative's certificate of    
incorporation and bylaws, as well as the proprietary lease or occupancy         
agreement, and may be cancelled by the cooperative for failure by the           
tenant-stockholder to pay rent or other obligations or charges owed by the      
tenant-stockholder, including mechanics' liens against the cooperative apartment
building incurred by the tenant-stockholder. The proprietary lease or occupancy 
agreement generally permits the cooperative to terminate the lease or agreement 
if an obligor fails to make payments or defaults in the performance of covenants
required under it. Typically, the lender and the cooperative enter into a       
recognition agreement, which establishes the rights and obligations of both     
parties upon 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, if the     
tenant-stockholder has defaulted under the proprietary lease or occupancy       
agreement, the cooperative will take no action to terminate the lease or        
agreement until the lender has been provided with 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 the sale of the cooperative apartment,      
subject, however, to the cooperative's right to sums due under 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 value of the collateral below the outstanding         
principal balance of the cooperative loan and accrued and unpaid interest on it.

Recognition agreements also provide that upon foreclosure of a
cooperative loan, the lender must obtain the approval or consent of the         
cooperative as required by the proprietary lease before transferring the        
cooperative shares or assigning the proprietary lease. Generally, the lender is 
not limited in any rights it may have to dispossess the tenant-stockholders.    

59

424B5
182nd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 182nd
       In some states, foreclosure on the cooperative shares is accomplished
by a sale in accordance with the provisions of Article 9 of 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 foreclosure
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 foreclosure. Generally, a sale conducted according to the usual practice of 
banks 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 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."                                                        

  In the case of foreclosure on a building converted from a rental
building to a building owned by a cooperative under a non-eviction plan, some   
states require that a purchaser at a foreclosure sale take the property subject 
to rent control and rent stabilization laws that apply to certain tenants who   
elected to remain in the building but who did not purchase shares in the        
cooperative when the building was so converted.                                 

RIGHTS OF REDEMPTION                                                            

        In some states after a sale pursuant to a deed of trust or foreclosure
of a mortgage, the borrower and certain foreclosed junior lienors are given a   
statutory period in which to redeem the property from the foreclosure sale. In  
certain other states, including California, this right of redemption applies    
only to sales following judicial foreclosure, and not to sales pursuant to a    
non-judicial power of sale. In most states where the right of redemption is     
available, statutory redemption may occur upon payment of the foreclosure       
purchase price, accrued interest and taxes. In some states, the right to redeem 
is an equitable right. The effect of a right of redemption is to diminish the   
ability of the lender to sell the foreclosed property. The exercise of a right  
of redemption would defeat the title of any purchaser at a foreclosure sale, or 
of any purchaser from the lender after judicial foreclosure or sale under a deed
of trust. Consequently, the practical effect of the redemption right is to force
the lender 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 restrictions that limit the
remedies of a beneficiary under a deed of trust or a mortgagee under a mortgage.
In some states, including California, statutes limit the right of the           
beneficiary or mortgagee to obtain a deficiency judgment against the borrower   
following foreclosure or a sale under a deed of trust. A deficiency judgment is 
a personal judgment against the borrower equal in most cases to the difference  
between the amount due to the lender and the current fair market value of the   
property at the time of the foreclosure sale. As a result of these prohibitions,
it is anticipated that in most instances the master servicer will utilize the   
non-judicial foreclosure remedy and will not seek deficiency judgments against  
defaulting mortgagors.                                                          

         Some state statutes may require the beneficiary or mortgagee 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  
borrower. In certain other states, the lender has the option of bringing a      
personal action against the borrower on the debt without first exhausting that  
security. However, in some of these states, following judgment on a personal    
action, the lender may be considered to have elected a remedy and may be        
precluded from exercising other remedies with respect to the security.          
Consequently, the practical effect of the election requirement, when applicable,
is that lenders will usually proceed first against the security rather than     
bringing a personal action against the borrower.                                

         In some states, exceptions to the anti-deficiency statutes are provided
for in certain instances where the value of the lender's security has been      
impaired by acts or omissions of the borrower, for example, upon waste of the   
property.                                                                       

60

424B5
183rd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 183rd
        In addition to anti-deficiency and related legislation, numerous other
federal and state statutory provisions, including the federal bankruptcy laws,  
the federal Servicemembers Civil Relief Act and state laws affording relief to  
debtors, may interfere with or affect the ability of the secured mortgage lender
to realize on its security. For example, in a proceeding under the federal      
Bankruptcy Code, a lender may not foreclose on a mortgaged property without the 
permission of the bankruptcy court. And in certain instances a bankruptcy court 
may allow a borrower to reduce the monthly payments, change the rate of         
interest, and alter the mortgage loan repayment schedule for under              
collateralized mortgage loans. The effect of these types of proceedings can be  
to cause delays in receiving payments on the loans underlying certificates and  
even to reduce the aggregate amount of payments on the loans underlying         
certificates.                                                                   

     The federal tax laws provide priority to certain tax liens over the
lien of a mortgage or secured party. Numerous federal and state consumer        
protection laws impose substantive requirements upon mortgage lenders in        
connection with the origination, servicing and enforcement 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 and regulations. These federal and    
state laws impose specific statutory liabilities on lenders who fail to comply  
with the provisions of the law. In some cases, this liability may affect        
assignees of the loans or contracts.                                            

    Generally, Article 9 of the UCC governs foreclosure on cooperative
shares and the related proprietary lease or occupancy agreement. Some courts    
have interpreted section 9-504 of the UCC to prohibit a deficiency award unless 
the creditor establishes that the sale 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 conducted in a commercially       
reasonable manner.                                                              

ENVIRONMENTAL RISKS                                                             

 Real property pledged as security to a lender may be subject to
unforeseen environmental risks. Environmental remedial costs can be substantial 
and can potentially exceed the value of the property. Under the laws of certain 
states, contamination of a property may give rise to a lien on the property to  
assure the payment of the 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 federal Comprehensive Environmental Response, Compensation  
and Liability Act of 1980 ("CERCLA"), the EPA may impose a lien on property     
where EPA has incurred clean-up costs. However, a CERCLA lien is subordinate to 
pre-existing, perfected security interests.                                     

         Under the laws of some states, and under CERCLA, it is conceivable that
a secured lender may be held liable as an "owner" or "operator" for the costs of
addressing releases or threatened releases of hazardous substances at a         
mortgaged property, even though the environmental damage or threat was caused by
a prior or current owner or operator. CERCLA imposes liability for such costs on
any and all "potentially responsible parties," including "owners" or            
"operators". However, CERCLA excludes from the definition of "owner or operator"
a secured creditor who holds indicia of ownership primarily to protect its      
security interest (the "secured creditor exemption") but without "participating 
in the management" of the property. Thus, if a lender's activities encroach on  
the actual management of a contaminated facility or property, the lender may    
incur liability as an "owner or operator" under CERCLA. Similarly, if a lender  
forecloses and takes title to a contaminated facility or property, the lender   
may incur CERCLA liability in various circumstances, including, but not limited 
to, when it fails to market the property in a timely fashion.                   

         Whether actions taken by a lender would constitute participation in the
management of a mortgaged property so as to render the secured creditor         
exemption unavailable to a lender, was historically a matter of judicial        
interpretation of the statutory language. Court decisions were inconsistent and,
in fact, in 1990, the Court of Appeals for the Eleventh Circuit suggested 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 a borrower's business to deny the protection of the secured creditor         
exemption to the lender. In 1996, Congress enacted the Asset Conservation,      
Lender Liability and Deposit Insurance Protection Act ("Asset Conservation      
Act"), which 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. 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 exemption only
if it (a) exercises                                                             

61

424B5
184th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 184th
decision-making control over the borrower's environmental compliance and        
hazardous substance handling and disposal practices at the property, or (b)     
exercises control comparable to the manager of the property, so that the lender 
has assumed responsibility for (i) "the overall management of the facility      
encompassing day-to-day decision-making with respect to environmental           
compliance" or (ii) "over all or substantially all of the operational functions"
of the property other than environmental compliance.                            

         If a lender is or becomes liable, it may be able to bring an action for
contribution under CERCLA or other statutory or common laws against any other   
"potentially responsible parties," including a previous owner or operator, who  
created the environmental hazard and who has not settled its liability with the 
government, but those persons or entities may be bankrupt or otherwise judgment 
proof. The costs associated with environmental cleanup may be substantial. It is
conceivable that such costs arising from the circumstances set forth above would
result in a loss to securityholders.                                            

       CERCLA does not apply to petroleum products, and the secured creditor
exclusion does not govern liability for cleanup costs under state laws or under 
federal laws other than CERCLA, including Subtitle I of the federal Resource    
Conservation and Recovery Act ("RCRA"), which regulates underground petroleum   
storage tanks (except heating oil tanks). However, under the Asset Conservation 
Act, protections accorded to lenders under CERCLA are also accorded to holders  
of security interests in underground petroleum storage tanks or the properties  
on which they are located. A lender will lose the protections accorded to       
secured creditors under federal law for petroleum underground storage tanks by  
"participating in the management" of the tank or tank system if the lender      
either: (a) "exercises decisionmaking control over the operational" aspects of  
the tank or tank system; or (b) exercises control comparable to a manager of the
property, so that the lender has assumed responsibility for overall management  
of the property including day-to-day decision-making with regard to all, or     
substantially all, operational aspects. It should be noted, however, that       
liability for cleanup of petroleum contamination may be governed by state law,  
which may not provide for any specific protection for secured creditors.        

   While the "owner" or "operator" of contaminated property may face
liability for investigating and cleaning up the property, regardless of fault,  
it may also be required to comply with environmental regulatory requirements,   
such as those governing asbestos. In addition, the presence of asbestos, mold,  
lead-based paint, lead in drinking water, and/or radon at a real property may   
lead to the incurrence of costs for remediation, mitigation or the              
implementation of an operations and maintenance plan. Furthermore, the presence 
of asbestos, mold, lead-based paint, lead in drinking water, radon and/or       
contamination at a property may present a risk that third parties will seek     
recovery from "owners" or "operators" of that property for personal injury or   
property damage. Environmental regulatory requirements for property "owners" or 
"operators," or law that is the basis for claims of personal injury or property 
damage, may not have exemptions for secured creditors.                          

    In general, at the time the loans were originated no environmental
assessment, or a very limited environmental assessment, of the mortgaged        
properties was conducted.                                                       

DUE-ON-SALE CLAUSES                                                             

       Generally, each conventional mortgage loan will contain a due-on-sale
clause which will generally provide that if the mortgagor or obligor sells,     
transfers or conveys the mortgaged property, the loan may be accelerated by the 
mortgagee. In recent years, court decisions and legislative actions have placed 
substantial restriction on the right of lenders to enforce these clauses in many
states. For instance, the California Supreme Court in August 1978 held that     
due-on-sale clauses were generally unenforceable. However, the Garn-St Germain  
Depository Institutions Act of 1982 (the "Garn-St Germain Act"), subject to     
specified exceptions, preempts state constitutional, statutory and case law     
prohibiting the enforcement of due-on-sale clauses. As to loans secured by an   
owner-occupied residence, the Garn-St Germain Act sets forth nine specific      
instances in which a mortgagee covered by the Garn-St Germain Act may not       
exercise its rights under a due-on-sale clause, notwithstanding the fact that a 
transfer of the property may have occurred. The inability to enforce a          
due-on-sale clause may result in transfer of the related mortgaged property to  
an uncreditworthy person, which could increase the likelihood of default or may 
result in a mortgage bearing an interest rate below the current market rate     
being assumed by a new home buyer, which may affect the average life of the     
mortgage loans and the number of mortgage loans which may extend to maturity.   

62

424B5
185th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 185th
PREPAYMENT CHARGES                                                              

         Under certain state laws, prepayment charges may not be imposed after a
certain period of time following the origination of mortgage loans with respect 
to prepayments on loans secured by liens encumbering owner-occupied residential 
properties. Since many of the mortgaged properties will be owner-occupied, it is
anticipated that prepayment charges may not be imposed on many of the mortgage  
loans. The absence of this a restraint on prepayment, particularly with respect 
to fixed rate mortgage loans having higher mortgage rates, may increase the     
likelihood of refinancing or other early retirement of the loans or contracts.  

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. The Office of Thrift  
Supervision, as successor to the Federal Home Loan Bank Board, is authorized to 
issue rules and regulations and to publish interpretations governing            
implementation of Title V. The statute authorized the states to reimpose        
interest rate limits by adopting, before April 1, 1983, a law or constitutional 
provision that expressly rejects an application of the federal law. In addition,
even where Title V is not so rejected, any state is authorized by the law to    
adopt a provision limiting discount points or other charges on mortgage loans   
covered by Title V. Certain states have taken action to reimpose interest rate  
limits or to limit discount points or other charges, or both.                   

SERVICEMEMBERS CIVIL RELIEF ACT                                                 

        Generally, under the terms of the Servicemembers Civil Relief Act (the
"Relief Act"), a borrower who enters military service after the origination of  
the borrower's mortgage loan (including a borrower 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 the borrower's active duty      
status, unless a court orders otherwise upon application of the lender. It is   
possible that this interest rate limitation could have an effect, for an        
indeterminate period of time, on the ability of the master servicer to collect  
full amounts of interest on some of the mortgage loans. Unless the applicable   
prospectus supplement provides a special feature for a particular trust fund,   
any shortfall in interest collections resulting from the application of the     
Relief Act could result in losses to the holders of the certificates. In        
addition, the Relief Act imposes limitations which would impair the ability of  
the master servicer to foreclose on an affected mortgage loan during the        
borrower's period of active duty status. Thus, if an affected 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.                        

CONSUMER PROTECTION LAWS                                                        

       Federal, state and local laws extensively regulate various aspects of
brokering, originating, servicing and collecting mortgage loans. Among other    
things, these laws may regulate interest rates and other charges, require       
disclosures, impose financial privacy requirements, mandate specific business   
practices, and prohibit unfair and deceptive trade practices. In addition,      
licensing requirements may be imposed on persons that broker, originate, service
or collect such loans.                                                          

      Additional requirements may be imposed under federal, state or local
laws on so-called "high cost mortgage loans," which typically are defined as    
loans that have interest rates or origination costs in excess of prescribed     
levels. These laws may limit certain loan terms, such as prepayment penalties,  
or the ability of a creditor to refinance a loan unless it is in the borrower's 
interest. In addition, certain of these laws may allow claims against loan      
brokers or originators, including claims based on fraud or misrepresentations,  
to be asserted against persons acquiring the loans, such as the trust fund.     

         The federal laws that may apply to loans held in the trust fund include
the following:                                                                  

        o     the Truth in Lending Act and its regulations, which (among other
             things) require disclosures to borrowers regarding the terms of
          mortgage loans and provide property owners in a non-purchase
         money transaction with a right of rescission that generally
               extends for three days after proper disclosures are given (but in
no event more than three years);                  

63

424B5
186th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 186th
         o     the Home Ownership and Equity Protection Act and its regulations,
      which (among other things) imposes additional disclosure
        requirements and limitations on loan terms with respect to
      non-purchase money mortgage loans with interest rates or
origination costs in excess of prescribed levels; 

      o     the Real Estate Settlement Procedures Act and its regulations,
              which (among other things) prohibit the payment of referral fees
              for real estate settlement services and regulate escrow accounts
              for taxes and insurance and billing inquiries made by borrowers;

   o     the Equal Credit Opportunity Act and its regulations, which
            (among other things) generally prohibits discrimination in any
              aspect of a credit transaction on certain enumerated basis, such
          as age, race, color, sex, religion, marital status, national
origin or receipt of public assistance; and       

 o     the Fair Credit Reporting Act, which (among other things)
          regulates the use of consumer reports obtained from consumer
          reporting agencies and the reporting of payment histories to
consumer reporting agencies.                      

      The penalties for violating these federal, state, or local laws vary
depending on the applicable law and the particular facts of the situation.      
However, private plaintiffs typically may assert claims for actual damages and, 
in some cases, also may recover civil money penalties or exercise a right to    
rescind the mortgage loan. Violations of certain laws may limit the ability to  
collect all or part of the principal or interest on a mortgage loan and, in some
cases, borrowers even may be entitled to a refund of amounts previously paid.   
Federal, state and local administrative or law enforcement agencies also may be 
entitled to bring legal actions, including actions for civil money penalties or 
restitution, for violations of certain of these laws.                           

     Depending on the particular alleged misconduct, it is possible that
claims may be asserted against various participants in secondary mortgage market
transactions, including assignees that hold the mortgage loan, such as the trust
fund. Losses on loans from the application of these federal, state and local    
laws that are not otherwise covered by a credit enhancement will be borne by the
holders of one or more classes of certificates.                                 

MATERIAL FEDERAL INCOME TAX CONSEQUENCES

       The following discussion is the opinion of Sidley Austin Brown & Wood
LLP, counsel to the depositor, on the material federal income tax consequences  
of the purchase, ownership, and disposition of certificates. The opinion of     
Sidley Austin Brown & Wood LLP is based on laws, regulations, administrative    
rulings, and judicial decisions now in effect, all of which are subject to      
change either prospectively or retroactively. The following discussion does not 
describe aspects of federal tax law that are unique to special taxpayers such as
insurance companies and securities dealers and investors who hold certificates  
as part of a straddle within the meaning of Code Section 1092. Prospective      
investors should consult their tax advisors regarding the federal, state, local,
and any other tax consequences to them of the purchase, ownership, and          
disposition of certificates.                                                    

GENERAL                                                                         

     The federal income tax consequences to certificateholders will vary
depending on whether the trust fund relating to those certificates is treated   
under the Code as a "grantor trust" or an election is made to treat the trust   
fund as one or more real estate mortgage investment conduits ("REMICs").        

NON-REMIC CERTIFICATES                                                          

    If no REMIC election is made, a trust fund relating to a series of
certificates will be classified as a "grantor trust" under subpart E, Part I of 
subchapter J of chapter 1 of subtitle A of the Code, in which case,             
certificateholders will be treated for federal income tax purposes as owning    
directly all of or a portion of the trust fund's assets. Sidley Austin Brown &  
Wood LLP will issue an opinion confirming the above-stated conclusions for each 
trust fund for which no REMIC election is made.                                 

A.       SINGLE CLASS OF CERTIFICATES                                           

   Characterization. The trust fund may be created with one class of
certificates, in which case, each certificateholder will be treated as the owner
of a pro rata undivided interest in each of the mortgage loans in the           

64

424B5
187th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 187th
Pool. Any amount received by a certificateholder in lieu of an amount due with  
respect to any mortgage loan because of a default or delinquency in payment will
be treated for federal income tax purposes as having the same character as the  
payment it replaces.                                                            

         Except for original issue discount ("OID"), each certificateholder will
be required to report on its federal income tax return in accordance with its   
method of accounting its pro rata share of the income from the mortgage loans in
the trust fund, including interest, if any, prepayment fees, assumption fees,   
any gain recognized upon an assumption and late payment charges received by the 
master servicer. A certificateholder using the cash method of accounting must   
take into account its pro rata share of income when collected by or paid to the 
master servicer and a certificateholder using an accrual method of accounting   
must take into account its pro rata share of income as it accrues, or when      
received if the income is received before it accrues. Each certificateholder    
will also be required to report its pro-rata share of OID on an accrual basis   
regardless of how the certificateholder otherwise reports income.               

         Under Code Sections 162 or 212, each certificateholder will be entitled
to claim deductions for its pro rata share of servicing fees, prepayment fees,  
assumption fees and late payment charges retained by the master servicer,       
provided that the amounts represent reasonable compensation for services        
rendered to the trust fund. A certificateholder using the cash method of        
accounting may claim its pro rata share of deductions as and when paid by the   
master servicer and a certificateholder using an accrual method of accounting   
may claim its share of deductions as they accrue. If a certificateholder is an  
individual, estate or trust, the certificateholder will be entitled to deduct a 
share of trust expenses only to the extent the share plus the                   
certificateholder's other miscellaneous itemized deductions (as defined in the  
Code) exceeds two percent of the certificateholder's adjusted gross income. If  
the servicing fees paid to the master servicer are deemed to exceed reasonable  
servicing compensation, the amount of any excess could be considered as an      
ownership interest retained by the master servicer (or any person to whom the   
master servicer assigned for value all or a portion of the servicing fees) in a 
portion of the interest payments on the mortgage loans. The mortgage loans could
then be subject to the "coupon stripping" rules of the Code discussed below.    

Generally, with respect to each series of certificates:       

         o     a certificate owned by a "domestic building and loan association"
             within the meaning of Code Section 7701(a)(19) and representing
       principal and interest payments on mortgage loans will be
          considered to represent loans secured by an interest in real
       property which is residential property under Code Section
             7701(a)(19)(C)(v), to the extent that the mortgage loans in the
      trust fund are of a type described in that Code section;

o     a certificate owned by a real estate investment trust   
              representing an interest in mortgage loans will be considered to
               represent "real estate assets" within the meaning of Code Section
              856(c)(4)(A), to the extent that the mortgage loans in the trust
             fund are of a type described in that Code section, and interest
          income on the mortgage loans will be considered "interest on
           obligations secured by mortgages on real property" within the
               meaning of Code Section 856(c)(3)(B), to the extent income on the
trust fund is described in that Code section; and 

        o     a certificate owned by a REMIC will represent an "obligation . .
           . which is principally secured, directly or indirectly, by an
             interest in real property" under Code Section 860G(a)(3) to the
       extent the mortgage loans in the trust fund are of a type
described in that Code Section.                   

        Buydown Loans. Certain trust funds may hold buydown loans. These loans
can be secured not only by a lien on real property but also by a pledged account
that is drawn upon to subsidize the mortgagor's monthly mortgage payments for a 
limited period of time. For purposes of the conclusions described immediately   
above, so long as the value of the underlying real property at least equals the 
amount of the loan, the loan will be treated as fully secured by real property. 
If the value of the underlying real property is less than the amount of the     
loan, then the loan will be treated as secured by an interest in real property  
only to the extent of the value of the real property. The related prospectus    
supplement for any series of certificates will specify whether such             
apportionment would be required.                                                

65

424B5
188th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 188th
Premium. The price paid for a certificate by a holder will be 
allocated, at the time of purchase, to the holder's undivided interest in each  
mortgage loan based on each mortgage loan's relative fair market value, so that 
the holder's undivided interest in each mortgage loan will have its own tax     
basis. A certificateholder that acquires an interest in mortgage loans at a     
premium may elect, under Code Section 171, to amortize the premium under a      
constant yield method. Amortizable bond premium will be treated as an offset to 
interest income on the mortgage loans to which it relates. The basis for the    
certificate will be reduced to the extent that amortizable premium is applied to
offset interest payments. It is not clear whether a prepayment assumption should
be used in computing amortization of premium allowable under Code Section 171.  
The legislative history ("Legislative History") accompanying the enactment of   
the OID rules as part of the Tax Reform Act of 1986 (the "1986 Act") indicates  
that if a prepayment assumption is applied to an instrument for purposes of the 
OID rules, that prepayment assumption should be applied in amortizing bond      
premium.                                                                        

       If a premium is not amortized using a prepayment assumption, then the
holder of a certificate acquired at a premium may recognize a loss if a mortgage
loan prepays in full. The amount of the loss (if any) will equal the excess of  
the certificateholder's adjusted basis in the prepaid mortgage loan over the    
certificateholder's share of principal paid on the mortgage loan. If a          
prepayment assumption is used to amortize premium, then a loss should be        
available to the extent that the premium has not been amortized at the time a   
mortgage loan prepays. It is not clear whether any other adjustments would be   
required to reflect differences between an assumed prepayment rate and the      
actual rate of prepayments. In addition, amounts received on the redemption of  
an obligation issued by a natural person are considered received in exchange for
the obligation if the debt obligation is purchased or issued after June 8, 1997 
(that is, treated the same as obligations issued by corporations). This change  
could affect the character of any loss (for example, cause the loss to be       
treated as capital if the assets are held as capital assets by the taxpayer).   

        The Internal Revenue Service ("IRS") has issued final regulations (the
"Amortizable Bond Premium Regulations") dealing with amortizable bond premium,  
but these regulations specifically do not apply to prepayable debt instruments  
subject to Code Section 1272(a)(6). Absent further guidance from the IRS, the   
trustee intends to account for amortizable bond premium in the manner described 
above. Prospective purchasers of the certificates should consult their tax      
advisors regarding the possible application of the Amortizable Bond Premium     
Regulations.                                                                    

         Original Issue Discount. A certificateholder that acquires an undivided
interest in a pool of mortgage loans will be subject to the original issue      
discount ("OID") rules of Code Sections 1271 through 1273 and 1275 to the extent
of the certificateholder's undivided interest in any mortgage loans in the pool 
that were issued with OID. OID generally must be reported as ordinary gross     
income as it accrues under a constant yield method. See "- Certificates         
Representing Interests in Loans Other Than ARM Loans."                          

 Market Discount. A certificateholder that acquires an undivided
interest in a pool of mortgage loans will be subject to the market discount     
rules of Code Sections 1276 through 1278 to the extent the certificateholder    
purchases its undivided interest in one or more of the underlying mortgage loans
at a "market discount." Provided a mortgage loan is not issued with OID, the    
amount of market discount (if any) equals the excess of the certificateholder's 
proportionate interest in the principal amount of the mortgage loan over the    
certificateholder's proportionate tax basis in the mortgage loan. Market        
discount with respect to a certificate will be considered to be zero if the     
amount allocable to the certificate is less than 0.25% of the certificate's     
stated redemption price at maturity multiplied by the weighted average maturity 
remaining after the date of purchase. Treasury regulations implementing the     
market discount rules have not yet been issued, therefore, investors are advised
to consult their tax advisors regarding the application of these rules and the  
advisability of making any of the elections allowed under Code Sections 1276    
through 1278.                                                                   

   The Code provides that any principal payment (whether a scheduled
payment or a prepayment) or any gain on disposition of a market discount bond   
shall be treated as ordinary income to the extent that it does not exceed the   
accrued market discount at the time of the payment. The amount of accrued market
discount for purposes of determining the tax treatment of subsequent principal  
payments or dispositions of the market discount bond is to be reduced by the    
amount so treated as ordinary income.                                           

       The Code also authorizes the Treasury Department to issue regulations
providing for the computation of accrued market discount on debt instruments the
principal of which is payable in more than one installment. Although no         
regulations have been issued the relevant legislative history describes how     
market discount should be                                                       

66

424B5
189th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 189th
accrued. According to the legislative history, the holder of a market discount  
bond may elect to accrue market discount either on the basis of a constant yield
or according to one of the following methods. If a certificate is issued with   
OID, the amount of market discount that accrues during any accrual period would 
be equal to the product of the total remaining market discount and a fraction,  
the numerator of which is the OID accruing during the period and the denominator
of which is the total remaining OID at the beginning of the accrual period. For 
certificates issued without OID, the amount of market discount that accrues     
during a period would be equal to the product of the total remaining market     
discount and 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 accrual period. 
For purposes of calculating market discount under any of these methods in the   
case of instruments that provide for payments that may be accelerated due to    
prepayments of other obligations securing the instruments, the same prepayment  
assumption applicable to calculating the accrual of OID will apply. The         
Legislative History states Congress intends that if a prepayment assumption     
would be used to calculate OID it should also be used to accrue marked discount.
Because the regulations described above have not been issued, what effect those 
regulations might have on the tax treatment of a certificate purchased at a     
discount or premium in the secondary market cannot be predicted.                

        A holder who acquires a certificate at a market discount may also have
to defer taking a deduction for some of the interest paid or accrued on any     
indebtedness incurred or maintained to purchase or carry the certificate. For   
any taxable year, the amount deferred equals the excess of (1) the interest paid
or accrued on such indebtedness for the year over (2) the interest (including   
original issue discount) from the certificate included in gross income for the  
year. If the certificateholder elects, the amount deferred from an earlier year 
may be deducted in a later year to the extent that (1) the income from the      
certificate in the later year exceeds (2) the interest paid or accrued on such  
indebtedness for the later year. Any remaining deferred deduction is to be taken
into account in the taxable year in which the certificate matures or is disposed
of in a taxable transaction. In the case of a disposition in which gain or loss 
is not recognized in whole or in part, any remaining deferred deduction will be 
allowed to the extent of gain recognized on the disposition. This deferral rule 
does not apply if the certificateholder elects to include the market discount in
income currently as it accrues on all market discount obligations acquired by   
the certificateholder in that taxable year or thereafter.                       

        Election to Treat All Interest as OID. The Treasury regulations issued
under Code Sections 1271 through 1273 and 1275 (the "OID Regulations") permit a 
certificateholder to elect to accrue all interest (including stated interest),  
discount (including de minimis market discount and de minimis original issue    
discount) and premium in income using a constant yield method. If this election 
is made with respect to a certificate having market discount, the               
certificateholder is deemed to have made an election to include market discount 
in income currently with respect to all other market discount debt instruments  
that the certificateholder acquires during the year of the election and         
thereafter. 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 with respect to all premium debt instruments that the certificateholder 
owns as of the first day of the taxable year and acquires thereafter. See "-    
Single Class of Certificates - Premium." The election to accrue interest,       
discount and premium using a constant yield method with respect to a certificate
cannot be revoked without the consent of the IRS. Prospective investors should  
consult their tax advisors regarding the election.                              

    Certificates Representing Interests in Loans Other Than ARM Loans.
Under the OID Regulations, a mortgage loan may be issued with OID for a variety 
of reasons. These include situations in which the lender charges the borrower   
origination points (whether or not the borrower may deduct the points           
immediately) or offers the loan at a "teaser" rate (that is, the initial rate of
interest on the mortgage loan is significantly lower than the subsequent rate or
rates on the mortgage loan).                                                    

         OID on each certificate must be included in the owner's ordinary income
for federal income tax purposes as it accrues, in accordance with a constant    
yield method that takes into account the semi-annual (or more frequent)         
compounding of interest, in advance of receipt of the cash attributable to the  
income. The amount of OID required to be included in an owner's income in any   
taxable year with respect to a certificate representing an interest in mortgage 
loans other than mortgage loans with interest rates that adjust periodically    
("ARM Loans") likely will be computed as described under "- Accrual of Original 
Issue Discount." The following discussion is based on the OID Regulations and on
the provisions of the 1986 Act. The holder of a certificate should be aware,    
however, that the OID Regulations may not adequately address certain issues     
relevant to prepayable securities.                                              

67

424B5
190th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 190th
        Under the Code, each mortgage loan underlying the certificates will be
treated as having been issued on the date it was originated with an amount of   
OID equal to the excess, if any, of the mortgage loan's stated redemption price 
at maturity over its issue price. The issue price of a mortgage loan is         
generally the amount lent to the mortgagee, which may be adjusted to take into  
account certain loan origination fees. The stated redemption price at maturity  
of a mortgage loan is the sum of all payments to be made on the mortgage loan   
other than payments that are treated as qualified stated interest ("QSI")       
payments. The accrual of OID, as described under "- Accrual of Original Issue   
Discount," will, unless otherwise specified in the related prospectus           
supplement, utilize the original yield to maturity of the certificates          
calculated based on an assumed prepayment rate for the mortgage loans underlying
the certificates (the "Prepayment Assumption"), and will take into account      
events that occur during the calculation period. There are no regulations       
dictating how the Prepayment Assumption is determined. The Legislative History  
provides, however, that the regulations will require that the Prepayment        
Assumption be the prepayment assumption that is used in determining the offering
price of the certificates. No representation is made that any certificate will  
prepay at the Prepayment Assumption or at any other rate. The requirement of    
using a prepayment assumption for the purpose of calculating OID only applies to
debt instruments collateralized by other debt instruments that are subject to   
prepayment rather than direct ownership interests in debt instruments, (and, in 
tax years beginning after August 5, 1997, to any pool of debt instruments the   
yield on which may be affected by reason of prepayments.) However, no other     
legal authority provides guidance with regard to the proper method for accruing 
OID on obligations that are subject to prepayment, and, until further guidance  
is issued, the master servicer intends to calculate and report OID under the    
method described in "- Accrual of Original Issue Discount."                     

Accrual of Original Issue Discount. Generally, the owner of a 
certificate must include in gross income the sum of the "daily portions," as    
defined below, of the OID on any certificate for each day on which it owns the  
certificate, including the date of purchase but excluding the date of           
disposition. In the case of an original owner, the daily portions of OID will   
generally be determined as set forth under the OID Regulations. In the case of  
each full accrual period, this will be done by (i) adding (A) the present value 
of all remaining payments, determined as of the end of the accrual period and   
(B) any payments received during the accrual period, and (ii) subtracting from  
that total the "adjusted issue price" at the beginning of the accrual period.   
The present value of the remaining payments are determined first by using the   
Prepayment Assumption to calculate the amount and timing of the remaining       
payments and then by discounting the payments so determined using the original  
yield to maturity. The adjusted issue price of a certificate at the beginning of
the first accrual period is its issue price; the adjusted issue price of a      
certificate at the beginning of a subsequent accrual period is the adjusted     
issue price at the beginning of the immediately preceding accrual period plus   
the amount of OID allocable to that accrual period reduced by the amount of any 
payment (other than QSI) made at the end of or during that accrual period. The  
OID accruing during the accrual period will then be divided by the number of    
days in the period to determine the daily portion of OID for each day in the    
period. With respect to an initial accrual period shorter than a full monthly   
accrual period, the daily portions of OID must be determined according to an    
appropriate allocation under any reasonable method.                             

      Original issue discount generally must be reported as ordinary gross
income as it accrues under a constant yield method that takes into account the  
compounding of interest as it accrues rather than when it is received. However, 
the amount of original issue discount includible in the income of a holder of an
obligation is reduced when the obligation is acquired after its initial issuance
at a price greater than the sum of the original issue price and the previously  
accrued original issue discount, less prior payments of principal. Accordingly, 
if mortgage loans acquired by a certificateholder are purchased at a price equal
to the then unpaid principal amount of those mortgage loans, no original issue  
discount attributable to the difference between the issue price and the original
principal amount of those mortgage loans (for example, due to points) will be   
includible by the holder. Other original issue discount on the mortgage loans   
(that is, OID attributable to factors other than a difference between the issue 
price and original principal amount, such as interest payments that increase    
after an initial "teaser" rate) would still need to be accrued.                 

       Certificates Representing Interests in ARM Loans. The OID Regulations
do not address the treatment of instruments, such as the certificates, which    
represent interests in ARM Loans. In the absence of any authority, the master   
servicer will report OID on certificates attributable to ARM Loans to holders in
a manner it believes is consistent with the rules described under the heading "-
Certificates Representing Interests in Loans Other Than ARM Loans" and with the 
OID Regulations. As such, for purposes of projecting both the remaining payments
and future yield, the "assumed rate payable" on the ARM Loans will be the "fixed
rate equivalent" on the issue date. Further, the addition to the principal      
balance of an ARM Loan of interest deferred due to negative amortization        

68

424B5
191st Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 191st
("Deferred Interest") may require the inclusion of the interest in the income of
the certificateholder when the interest accrues. Furthermore, the addition of   
Deferred Interest to the certificate's principal balance will result in         
additional income (including possibly OID income) to the certificateholder over 
the remaining life of the certificates.                                         

         The "assumed rate payable" and the "fixed rate equivalent" will be used
solely for making tax compulations. No representation is made that any loan will
actually pay at either rate.                                                    

         The treatment of ARM obligations is uncertain. Investors should consult
their tax advisors regarding how income will be includible with respect to the  
certificates.                                                                   

B.       MULTIPLE CLASSES OF CERTIFICATES                                       

         Stripped Bonds and Stripped Coupons. Pursuant to Code Section 1286, the
separation of ownership of the right to receive some or all of the interest     
payments on an obligation from ownership of the right to receive some or all of 
the principal payments on the obligation results in the creation of "stripped   
bonds" with respect to principal payments and "stripped coupons" with respect to
interest payments. For purposes of Code Sections 1271 through 1288, Code Section
1286 treats a stripped bond or a stripped coupon as an obligation issued on the 
date that the stripped interest is created. If a trust fund is created with two 
classes of certificates, one class of certificates may represent the right to   
principal and interest, or principal only, on all or a portion of the mortgage  
loans (the "Stripped Bond Certificates"), while the other class of certificates 
may represent the right to some or all of the interest on the same mortgage     
loans (the "Stripped Coupon Certificates").                                     

   In certain situations, Code Section 1286 does not apply to a real
estate mortgage even if some of the interest on the real estate mortgage has    
been separated from the principal. Specifically, the stripping rules are not    
implicated if following the separation of interest, either (1) the amount of    
discount on the real estate mortgage is less than the de minimis (measured using
the rules for calculating de minimis OID) or (2) no more than 100 basis points  
(that is, 1% interest on the mortgage loan principal balance) has been separated
from the real estate mortgage. Among other instances, the 100 basis points      
exception may apply if a servicer retains "excess servicing" (that is, the right
to servicing income in excess of an IRS-determined amount of reasonable         
servicing) that does not exceed 100 basis points.                               

The IRS appears to apply the exceptions described above on a  
loan-by-loan basis, which could result in some mortgage loans held by a trust   
being treated as having been stripped and others as not. See "- Non-REMIC       
Certificates" and "- Multiple Classes of Senior Certificates - Stripped Bonds   
and Stripped Coupons." If the exceptions apply, then a stripped real estate     
mortgage is nevertheless not treated as a newly issued instrument with OID. Any 
discount on such mortgage loan will have to be treated as a market discount if  
the discount exceeds a de minimis amount (measured using the rules for          
calculating de minimis discount). The remaining discussion assumes that the none
of these exceptions are available to the mortgage loans held by a trust.        

   Although current authority is not entirely clear, for purposes of
calculating OID, a Stripped Bond Certificate should be treated as an interest in
mortgage loans issued on the day the certificate is purchased. Generally, if the
discount on a particular mortgage loan is larger than a de minimis amount (as   
calculated for purposes of the discount), then a purchaser of the certificate   
will have to accrue the discount on the mortgage loan under the OID rules of the
Code regardless of the certificate purchaser's ordinary method of accounting.   
See "- Non-REMIC Certificates" and "- Single Class of Certificates - Original   
Issue Discount." In addition, although the Code could be interpreted otherwise, 
based on IRS guidance, it appears that all payments related to a mortgage loan  
underlying a Stripped Coupon Certificate should be treated as a single          
installment obligation subject to the OID rules of the Code, in which case, all 
payments from the mortgage loan should be included in the mortgage loan's stated
redemption price at maturity for purposes of calculating income on the Stripped 
Coupon Certificate under the OID rules of the Code.                             

       Based on current authority it is unclear under what circumstances, if
any, the prepayment of a mortgage loan will result in a deductible loss to the  
holder of a Stripped Bond Certificate purchased at a premium. If the certificate
is treated as a single instrument (rather than an interest in discrete mortgage 
loans) and the effect of prepayments is taken into account in computing yield   
with respect to the certificate, it appears that no loss will be available as a 
result of any particular prepayment unless prepayments occur at a rate faster   
than the assumed                                                                

69

424B5
192nd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 192nd
prepayment rate. However, if a certificate is treated as an interest in discrete
mortgage loans, or if no prepayment assumption is used, then when a mortgage    
loan is prepaid, any certificate so treated should be able to recognize a loss  
equal to the portion of the unrecovered premium of the certificate that is      
allocable to the mortgage loan. In addition, if the debt instrument of a natural
person is either purchased or issued after June 8, 1997, then amounts received  
on retirement of the debt instrument are treated as received in exchange for the
debt instrument. Consequently, any loss realized on the retirement of a debt    
instrument could be capital rather than ordinary.                               

         The IRS has not issued guidance under the Code's coupon stripping rules
with respect to instruments that represent interests in ARM Loans. In the       
absence of any authority, the master servicer will report OID on certificates   
attributable to ARM Loans ("Stripped ARM Obligations") to holders in a manner it
believes is consistent with the rules described under the heading "-            
Certificates Representing Interests in Loans Other Than ARM Loans" and with the 
OID Regulations. In this connection, for purposes of projecting both the        
remaining payments on and future yield of, an ARM Loan, the interest rate       
payable on the ARM Loan will be assumed to be the fixed rate equivalent of the  
adjustable rate as determined on the issue date. Applying these rules may       
require the interest on a Stripped ARM Obligation to be included before the     
interest is received, even if the interest is added to principal because of     
negative amortization. Further, increasing the principal by deferred interest   
may result in additional income (including OID) over the remaining life of the  
certificates.                                                                   

         The "assumed rate payable" and the "fixed rate equivalent" will be used
solely for making tax computations. No representation is made that any loan will
actually pay at either rate.                                                    

        Holders of Stripped Bond Certificates and Stripped Coupon Certificates
are encouraged to consult with their tax advisors regarding the proper treatment
of their certificates for federal income tax purposes.                          

C.       SALE OR EXCHANGE OF A CERTIFICATE                                      

      Sale or exchange of a certificate before its maturity will result in
gain or loss equal to the difference, if any, between the amount received and   
the adjusted basis in the certificate. In general, a holder's adjusted basis in 
a certificate will equal the amount paid for the certificate (1) increased by   
the OID and market discount (if any) included in the seller's gross income with 
respect to the certificate, and (2) reduced by amortized premiums (if any) and  
payments on the certificate previously received by the seller (other than QSI). 
Except for the amount of any market discount not previously included in income  
and accrued but unpaid QSI, the gain or loss will be capital gain or loss to an 
owner for which a certificate is a "capital asset" within the meaning of Code   
Section 1221, and will be long-term or short-term depending on whether the      
certificate has been owned for the long-term capital gain holding period        
(currently more than one year).                                                 

         The certificates will be "evidences of indebtedness" within the meaning
of Code Section 582(c)(1) , so that gain or loss recognized from the sale of a  
certificate by a bank or a thrift institution to which that section applies will
be ordinary income or loss.                                                     

D.       NON-U.S. PERSONS                                                       

As used in this prospectus, a "U.S. Person" means             

o     a citizen or resident of the United States,             

        o     a corporation or a partnership (including an entity treated as a
              corporation or partnership for U.S. federal income tax purposes)
            organized in or created under the laws of the United States or
               any State thereof or the District of Columbia (unless in the case
       of a partnership Treasury Regulations provide otherwise),

      o     an estate, the income of which from sources outside the United
         States is includible in gross income for federal income tax
               purposes regardless of its connection with the conduct of a trade
or business within the United States, or          

70

424B5
193rd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 193rd
       o     a trust if a court within the United States is able to exercise
              primary supervision over the administration of the trust and one
         or more United States persons have authority to control all
substantial decisions of the trust.               

In addition, U.S. Persons would include certain trusts that can elect to be     
treated as U.S. Persons. A "Non-U.S. Person" is a person other than a U.S.      
Person.                                                                         

         Interest paid (or accrued) on the mortgage loans to a certificateholder
who is a non-U.S. Person will be considered "portfolio interest," and generally 
will not be subject to United States federal income tax and withholding tax,    
provided, that (1) the interest is not effectively connected with the conduct of
a trade or business within the United States by the non-U.S. Person, and (2) the
non-U.S. Person provides the trust or other person who is otherwise required to 
withhold U.S. tax with respect to the mortgage loans with an appropriate        
statement (on IRS Form W-8BEN or other similar form), signed under penalties of 
perjury, certifying that the beneficial owner of the mortgage loan is a foreign 
person and providing that non-U.S. person's name and address. If an interest in 
a mortgage loan is held through a securities clearing organization or certain   
other financial institutions, the organization or institution may provide the   
relevant signed statement to the withholding agent. In that case, however, the  
signed statement must be accompanied by an IRS Form W-8BEN or substitute form   
provided by the non-U.S. Person that owns that interest in the mortgage loan. If
interest does not constitute portfolio interest, then it will be subject to U.S.
federal income and withholding tax at a rate of 30%, unless reduced or          
eliminated pursuant to an applicable income tax treaty and the non-U.S. Person  
provides the trust, or an organization or financial institution described above,
with an appropriate statement (for example, an IRS Form W-8BEN), signed under   
penalties of perjury, to that effect. Any foreclosure property owned by the     
trust fund could be treated as a U.S. real property interest owned by           
certificateholders and subject to withholding under section 1445 of the Code.   

E.       INFORMATION REPORTING AND BACKUP WITHHOLDING                           

         The master servicer will furnish or make available, within a reasonable
time after the end of each calendar year, to each person who was a              
certificateholder at any time during the year, the information deemed           
appropriate to assist certificateholders in preparing their federal income tax  
returns, or to enable holders to make any information available to beneficial   
owners or financial intermediaries that hold certificates as nominees on behalf 
of beneficial owners. If a holder, beneficial owner, financial intermediary or  
other recipient of a payment on behalf of a beneficial owner fails to supply a  
certified taxpayer identification number or if the Secretary of the Treasury    
determines that the person has not reported all interest and dividend income    
required to be shown on its federal income tax return, backup withholding may be
required with respect to any payments. Any amounts deducted and withheld from a 
distribution to a recipient would be allowed as a credit against a recipient's  
federal income tax liability provided the required information is supplied to   
the IRS.                                                                        

F.       PROPOSED REPORTING REGULATIONS.                                        

 In June 2002 the IRS and Treasury Department proposed new rules
concerning the reporting of tax information with respect to "Widely Held        
Mortgage Trusts." If these rules are finalized, the Trustee may be compelled, or
have an opportunity, to adopt new ways of calculating and reporting tax items   
(such as OID, market discount, sale proceeds and premium) to the                
certificateholders, which changes may affect the timing of when a               
Certificateholder reports such items.                                           

REMIC CERTIFICATES                                                              

     The trust fund relating to a series of certificates may elect to be
treated as one or more REMICs. REMIC qualification requires ongoing compliance  
with certain conditions. Although a REMIC is not generally subject to federal   
income tax (see, however "- Residual Certificates" and "- Prohibited            
Transactions"), if during any taxable year a trust fund with respect to which a 
REMIC election is made fails to comply with one or more of the ongoing          
requirements of the Code for REMIC status, including the implementation of      
restrictions on the purchase and transfer of the residual interests in a REMIC  
as described under "Residual Certificates," then the trust fund will not be     
treated as a REMIC for that year and thereafter. In that event, the entity may  
be taxable as a separate corporation, and the related certificates (the "REMIC  
Certificates") may not be accorded the status or given the tax treatment        
described below. While the Code authorizes the Treasury Department to issue     
regulations providing relief upon an                                            

71

424B5
194th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 194th
inadvertent termination of the status of a trust fund as a REMIC, no such       
regulations have been issued. Any relief, moreover, 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 in which the requirements for REMIC status were   
not satisfied. Assuming compliance with all provisions of the related pooling   
and servicing agreement, each trust fund that elects REMIC status will qualify  
as a REMIC, and the related certificates will be considered to be regular       
interests ("Regular Certificates") or residual interests ("Residual             
Certificates") in the REMIC. The related prospectus supplement for each series  
of certificates will indicate whether the trust fund will make any REMIC        
elections and whether a class of certificates will be treated as a regular or   
residual interest in a REMIC. With respect to each trust fund for which any     
REMIC election is to be made, Sidley Austin Brown & Wood llp will issue an      
opinion confirming the conclusions expressed above concerning the REMIC status  
of the trust fund and the status of the certificates as representing regular or 
residual interests in a REMIC.                                                  

       In general, with respect to each series of certificates for which any
REMIC election is made, certificates held by a thrift institution taxed as a    
"domestic building and loan association" will constitute assets described in    
Code Section 7701(a)(19)(C); 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 certificates held by a real estate investment     
trust will be considered "interest on obligations secured by mortgages on real  
property" within the meaning of Code Section 856(c)(3)(B). If less than 95% of  
the REMIC's assets are assets qualifying under any of these Code sections, the  
certificates will be qualifying assets only to the extent that the REMIC's      
assets are qualifying assets and interest on the certificates will be qualifying
income only to the extent the REMIC's income is qualifying income. In addition, 
payments on mortgage loans held pending distribution on the REMIC Certificates  
will be considered to be real estate assets for purposes of Code Section 856(c).

     In some instances the mortgage loans may not be treated entirely as
assets described in the foregoing sections. See, in this regard, the discussion 
of buydown loans contained in "- Non-REMIC Certificates - Single Class of       
Certificates." REMIC Certificates held by a real estate investment trust will   
not constitute "Government Securities" within the meaning of Code Section       
856(c)(4)(A), and REMIC Certificates held by a regulated investment company will
not constitute "Government Securities" within the meaning of Code Section       
851(b)(4)(A)(ii). REMIC Certificates held by certain financial institutions will
constitute "evidences of indebtedness" within the meaning of Code Section       
582(c)(1).                                                                      

        Among other requirements, to qualify as a REMIC, substantially all the
assets of a trust must consist of qualified mortgages and permitted investments.
A "qualified mortgage" for REMIC purposes is any obligation (including          
certificates of participation in an obligation) that is principally secured by  
an interest in real property and that is transferred to the REMIC within a      
prescribed time period in exchange for regular or residual interests in the     
REMIC. In addition to ordinary buildings, real property includes manufactured   
housing or mobile homes (not including recreational vehicles, campers or similar
vehicles) that are "single family residences" under Code Section 25(e)(10)      
regardless of state law classifications.                                        

     Starting in 2005, the American Jobs Creation Act of 2004 (the "Jobs
Act") allows REMICs to hold reverse mortgages, home equity loans and the assets 
needed to fund additional draws on these loans. The legislative history         
accompanying the Jobs Act defines a "reverse mortgage" as loan secured by real  
property that (1) provides for advances secured by the same property, (2)       
requires the payment of an amount due at maturity that is no greater than the   
value of the securing property, (3) provides that all payments are due only on  
maturity of the loan, and (4) matures after a fixed term or at the time the     
obligor ceases to use the securing property as a personal residence. If reverse 
mortgages or home equity loans are contributed to a REMIC, the accompanying tax 
consequences will be discussed separately in the prospectus supplement offering 
interests in that REMIC.                                                        

     Tiered REMIC Structures. For certain series of certificates, two or
more separate elections may be made to treat designated portions of the related 
trust fund as different and separate REMICs (respectively, the "Underlying      
REMIC" or "REMICs" and the "Master REMIC") for federal income tax purposes. Upon
the issuance of such a series of certificates, assuming compliance with all     
provisions of the related pooling and servicing agreement, the Master REMIC as  
well as each Underlying REMIC will each qualify as a REMIC, and the REMIC       
Certificates issued by the Master REMIC and each Underlying REMIC, respectively,
will be considered to evidence ownership of Regular Certificates or Residual    
Certificates in the related REMIC within the meaning of the REMIC provisions.   
With respect to each trust fund for which more than one REMIC election is to be 
made, Sidley Austin Brown &                                                     

72

424B5
195th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 195th
Wood LLP will issue an opinion confirming the conclusions expressed above       
concerning the status of the Master REMIC and each Underlying REMIC as a REMIC  
and the status of the certificates as regular or residual interests in a REMIC. 

      Except for the residual interest in any Underlying REMIC, only REMIC
Certificates issued by the Master REMIC will be offered under this prospectus.  
All Underlying REMICs and the Master REMIC will be treated as one REMIC solely  
for purposes of determining whether the REMIC Certificates will be "real estate 
assets" within the meaning of Section 856(c)(4)(A) of the Code, "loans secured  
by an interest in real property" under Section 7701(a)(19)(C) of the Code; and  
whether the income on the certificates will be interest described in Section    
856(c)(3)(B) of the Code.                                                       

A.       REGULAR CERTIFICATES                                                   

 General. Except as otherwise stated in this discussion, Regular
Certificates will be treated for federal income tax purposes as debt instruments
issued by the REMIC and not as ownership interests in the REMIC or its assets.  
Moreover, holders of Regular Certificates that otherwise report income under a  
cash method of accounting will be required to report income with respect to     
Regular Certificates under an accrual method. Under an accrual method of        
accounting, interest may have to be included in income before its receipt.      

      Original Issue Discount and Premium. The Regular Certificates may be
issued with OID. Generally, OID, if any, will equal the difference between the  
"stated redemption price at maturity" of a Regular Certificate and its "issue   
price." Holders of any class of certificates issued with OID will be required to
include OID in gross income for federal income tax purposes as it accrues, in   
accordance with a constant yield method based on the semi-annual (or more       
frequent) compounding of interest rather than in accordance with receipt of the 
interest payments. The following discussion is based in part on the OID         
Regulations and in part on the provisions of the 1986 Act. Holders of Regular   
Certificates (the "Regular Certificateholders") should be aware, however, that  
the OID Regulations do not adequately address certain issues relevant to        
prepayable securities, such as the Regular Certificates.                        

      Rules governing OID are set forth in Code Sections 1271 through 1273
and 1275. These rules require that the amount and rate of accrual of OID be     
calculated based on the Prepayment Assumption and the anticipated reinvestment  
rate, if any, relating to the Regular Certificates and prescribe a method for   
adjusting the amount and rate of accrual of the discount when the actual        
prepayment rate differs from the Prepayment Assumption. Under the Code, the     
Prepayment Assumption must be determined in the manner prescribed by            
regulations, which regulations have not yet been issued. The Legislative History
provides, however, that Congress intended the regulations to require that the   
Prepayment Assumption be the prepayment assumption that is used in determining  
the initial offering price of the Regular Certificates. The prospectus          
supplement for each series of Regular Certificates will specify the Prepayment  
Assumption to be used for the purpose of determining the amount and rate of     
accrual of OID. No representation is made that the Regular Certificates will    
prepay at the Prepayment Assumption or at any other rate.                       

         The IRS issued final regulations (the "Contingent Regulations") in June
1996 governing the calculation of OID on instruments having contingent interest 
payments. The Contingent Regulations specifically do not apply for purposes of  
calculating OID on debt instruments subject to Code Section 1272(a)(6), such as 
the Regular Certificates. Additionally, the OID Regulations do not contain      
provisions specifically interpreting Code Section 1272(a)(6). The trustee       
intends to base its computations on Code Section 1272(a)(6) and the OID         
Regulations as described in this prospectus. However, because no regulatory     
guidance currently exists under Code Section 1272(a)(6), there can be no        
assurance that this methodology represents the correct manner of calculating    
OID.                                                                            

  In general, each Regular Certificate will be treated as a single
installment obligation issued with an amount of OID equal to the excess of its  
"stated redemption price at maturity" over its issue price. The issue price of a
Regular Certificate is the first price at which a substantial amount of Regular 
Certificates of that class are first sold to the public (excluding bond houses, 
brokers, underwriters or wholesalers). The issue price of a Regular Certificate 
includes the amount, if any, paid by an initial certificateholder for interest  
accruing before the issue date of the Regular Certificate. The stated redemption
price at maturity of a Regular Certificate includes the original principal      
amount of the Regular Certificate, but generally will not include distributions 
of interest that constitute "qualified stated interest." Qualified stated       
interest generally means interest unconditionally payable at intervals of one   
year or                                                                         

73

424B5
196th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 196th
less at a single fixed rate or qualified variable rate (as described            
below) during the entire term of the Regular Certificate. Interest is payable at
a single fixed rate only if the rate appropriately takes into account the length
of the interval between payments. Distributions of interest on Regular          
Certificates with respect to which deferred interest will accrue (interest added
to principal) will not constitute qualified stated interest payments, and the   
stated redemption price at maturity of these Regular Certificates will include  
all distributions of interest as well as principal.                             

        If the interval between the issue date and the first distribution date
on a Regular Certificate is longer than the interval between subsequent         
distribution dates, but the amount of the distribution is not adjusted to       
reflect the longer interval, then for purposes of determining whether the       
Regular Certificate has de minimis OID, the stated redemption price of the      
Regular Certificate is treated as the issue price (determined as described      
above) plus the greater of (i) the amount of the distribution foregone or (ii)  
the excess (if any) of the Regular Certificates stated principal over its issue 
price. If the interval between the issue date and the first distribution date on
a Regular Certificate is shorter than the interval between subsequent           
distribution dates, but the amount of the distribution is not adjusted to       
reflect the shorter interval, then for the purposes of determining the OID, if  
any, on the Regular Certificate, the excess amount of the distribution would be 
added to the Regular Certificate's stated redemption price. Regular             
Certificateholders should consult their tax advisors to determine the issue     
price and stated redemption price at maturity of a Regular Certificate.         
Additionally, it is possible that the IRS could assert that the stated          
pass-through rate of interest on the Regular Certificates is not unconditionally
payable because late payments or nonpayments on the Regular Certificates are not
penalized nor are there reasonable remedies in place to compel payment on the   
Regular Certificates. That position, if successful, would require all holders of
Regular Certificates to accrue income on the certificates under the OID         
Regulations.                                                                    

 Under the de minimis rule, OID on a Regular Certificate will be
considered to be zero if it is less than 0.25% of the stated redemption price at
maturity of the Regular Certificate multiplied by the weighted average maturity 
of the Regular Certificate. The weighted average maturity of a Regular          
Certificate is the sum of the weighted maturity of each payment of the Regular  
Certificate's stated redemption price. The weighted maturity of each stated     
redemption price payment is (i) the number of complete years from the issue date
until the payment is made, multiplied by (ii) a fraction, the numerator of which
is the amount of the payment and the denominator of which is the Regular        
Certificate's total stated redemption price. Although currently unclear, it     
appears that the schedule of these distributions should be determined in        
accordance with the Prepayment Assumption. The Prepayment Assumption with       
respect to a series of Regular Certificates will be set forth in the related    
prospectus supplement. Holders generally must report de minimis OID pro rata as 
principal payments are received, and income will be capital gain if the Regular 
Certificate is held as a capital asset. However, holders may elect to accrue all
interest (including de minimis OID) under a constant yield method.              

         Super-Premium Certificates. The prospectus supplement with respect to a
trust fund may provide for certain Regular Certificates to be issued at prices  
significantly exceeding their principal amounts or based on notional principal  
balances (the "Super-Premium Certificates"). The income tax treatment of        
Super-Premium Certificates is not entirely certain. For information reporting   
purposes, the trust fund intends to take the position that the stated redemption
price at maturity of Super-Premium Certificates is the sum of all payments to be
made on these Regular Certificates determined under the Prepayment Assumption,  
with the result that these Regular Certificates will be issued with OID. The    
calculation of income in this manner could result in negative original issue    
discount (which delays future accruals of OID rather than being immediately     
deductible) if prepayments on the mortgage loans exceed those estimated under   
the Prepayment Assumption. As discussed above, the Contingent Regulations       
specifically do not apply to prepayable debt instruments subject to Code Section
1272(a)(6), such as the Regular Certificates. However, if the Super-Premium     
Certificates were treated as contingent payment obligations, it is unclear how  
holders of those certificates would report income or recover their basis. In the
alternative, the IRS could assert that the stated redemption price at maturity  
of Super-Premium Certificates should be limited to their principal amount       
(subject to the discussion under "- Accrued Interest Certificates"), so that the
Regular Certificates would be considered for federal income tax purposes to be  
issued at a premium. If this position were to prevail, the rules described under
"- Regular Certificates - Premium" would apply. It is unclear when a loss may be
claimed for any unrecovered basis for a Super-Premium Certificate. It is        
possible that a holder of a Super-Premium Certificate may only claim a loss     
either (i) when its remaining basis exceeds the maximum amount of future        
payments (assuming no further prepayments) or (ii) when the final payment is    
received with respect to the Super-                                             

74

424B5
197th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 197th
Premium Certificate. Absent further guidance, the trustee intends to treat the  
Super-Premium Certificates as described in this prospectus.                     

Under the REMIC Regulations, if the issue price of a Regular  
Certificate (other than those based on a notional amount) exceeds 125% of its   
actual principal amount, then the interest rate is considered disproportionately
high. Such a Regular Certificate generally should be treated as a Super-Premium 
Certificate and the rules described under "- Regular Certificates - Premium"    
should apply. However, it is possible that the holder of a certificate issued at
a premium, even if the premium is less than 25% of the certificate's actual     
principal balance, will be required to amortize the premium under an original   
issue discount method or contingent interest method even though no election     
under Code section 171 is made to amortize the premium.                         

         In an advanced notice of proposed rulemaking issued on August 24, 2004,
the IRS and Treasury requested comments on whether to adopt special rules for   
certain types of REMIC regular interests, specifically, REMIC regular interests 
that are entitled only to a specified portion of the interest in respect of one 
or more mortgage loans held by the REMIC ("REMIC IOs"), high-yield REMIC regular
interests, and "negative-yield" instruments. The same notice requested comments 
on different methods for taxing these instruments, including, for example,      
allowing a holder to recognize negative OID or applying the "bad debt" rules of 
Code Section 166. It is uncertain whether the IRS will propose any new          
regulations as a consequence of the notice, whether the regulations would       
address the treatment of Super-Premium Certificates or when any new regulations 
would be effective.                                                             

         Calculation of OID. Generally, a Regular Certificateholder must include
in gross income the "daily portions," as determined below, of the OID that      
accrues on the Regular Certificate for each day the certificateholder holds the 
Regular Certificate, including the purchase date but excluding the disposition  
date. The daily portions of OID are determined by allocating to each day in an  
accrual period the ratable portion of OID allocable to the accrual period.      
Accrual periods may be of any length and may vary in length over the term of the
Regular Certificates, provided that each accrual period (i) is no longer than   
one year, (ii) begins or ends on a distribution date (except for the first      
accrual period which begins on the issue date) and (iii) begins on the day after
the preceding accrual period ends. In the case of a full accrual period, the OID
accrued during the accrual period will be determined by                         

o     adding                                                  

     o    The present value at the end of the accrual period
                    (determined by using as a discount factor the original yield
                   to maturity of the Regular Certificates as calculated under
                  the Prepayment Assumption) of all remaining payments to be
                 received on the Regular Certificates under the Prepayment
Assumption and                          

          o    any payments included in the stated redemption price at
             maturity received during the same accrual period, and

   o     subtracting from that total the adjusted issue price of the
               Regular Certificates at the beginning of the same accrual period.

The adjusted issue price of a Regular Certificate at the beginning of the first 
accrual period is its issue price. The adjusted issue price of a Regular        
Certificate at the beginning of a subsequent accrual period is the adjusted     
issue price at the beginning of the immediately preceding accrual period        
increased by the amount of OID allocable to that accrual period and reduced by  
the amount of any payment other than a payment of qualified stated interest made
at the end of or during that accrual period. The OID accrued during an accrual  
period will then be divided by the number of days in the period to determine the
daily portion of OID for each day in the accrual period. The calculation of OID 
under the method described above will cause the accrual of OID to either        
increase or decrease (but never below zero) in a given accrual period to reflect
the fact that prepayments are occurring faster or slower than under the         
Prepayment Assumption. With respect to an initial accrual period shorter than a 
full accrual period, the daily portions of OID may be determined according to an
appropriate allocation under any reasonable method.                             

      The Internal Revenue Service proposed regulations on August 24, 2004
concerning the accrual of interest income on REMIC regular interests that       
provide for delays of 31 days or less between their record dates and payment    
dates. Under the proposed regulations, the amount of interest accruing on a     
regular interest would be                                                       

75

424B5
198th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 198th
determined from one record date to another rather than from one distribution    
date to another. In addition, if the proposed regulations are adopted as        
written, regular interest holders would have to accrue interest from the issue  
date of a regular interest to its first record date, but would not have to      
accrue interest from the last record date for a regular interest to the last    
distribution date. These new rules would apply to REMIC regular interests issued
after the date they are published as final regulations in the Federal Register. 
Under the proposed regulations, holders of regular interests issued after the   
regulations are finalized would be allowed to account for the interest accruing 
on those regular interest under the new rules without having to seek consent    
from the Internal Revenue Service to change their methods of accounting.        

      Acquisition Premium. A subsequent purchaser of a Regular Certificate
issued with OID who purchases the Regular Certificate at a cost less than the   
remaining stated redemption price at maturity will also be required to include  
in gross income the sum of the daily portions of OID on that Regular            
Certificate. In computing the daily portions of OID for a subsequent purchaser  
of a Regular Certificate (as well as for an initial purchaser that purchases at 
a price above the adjusted issue price but below the stated redemption price at 
maturity), however, the daily portion for any day is reduced by the amount that 
would be the daily portion for the day (computed in accordance with the rules   
set forth above) multiplied by a fraction, the numerator of which is:           

o     the excess of the cost of the Regular Certificate to the
purchaser over                                    

         o     the adjusted issue price of the Regular Certificate (which is the
              issue price of the Regular Certificate plus the aggregate amount
              of OID that would have been includible in the gross income of an
           original Regular Certificateholder (who purchased the Regular
               Certificate at its issue price), less any prior payments included
in the stated redemption price at maturity),      

And the denominator of which is:                                                

         o     the sum of the daily portions for the Regular Certificate for all
               days beginning after the purchase date and ending on the maturity
date computed under the Prepayment Assumption.    

A holder who pays an acquisition premium instead may elect to accrue OID by     
treating the purchase as a purchase at original issue.                          

      Variable Rate Regular Certificates. Regular Certificates may provide
for interest based on a variable rate. Interest is treated as payable at a      
variable rate and not as contingent interest if, generally, the issue price does
not exceed the original principal balance by more than a specified amount and   
the interest compounds or is payable at least annually based on current values  
of certain objective rates or based on lending rates for newly borrowed funds.  
An objective rate is a rate (other than a qualified floating rate) that is      
determined using a single fixed formula and that is based on objective financial
or economic information. Interest paid based on a variable rate generally will  
be qualified stated interest to the extent such interest is unconditionally     
payable at least annually and, if successive variable rates are used, such      
interest is not significantly accelerated or deferred.                          

   The amount of OID with respect to a Regular Certificate bearing a
variable rate of interest will accrue in the manner described under "- Original 
Issue Discount and Premium" by assuming generally that the index used for the   
variable rate will remain fixed throughout the term of the certificate.         
Appropriate adjustments are made for the actual variable rate. No representation
is made that an index or variable rate will actually equal or remain at such    
fixed amount.                                                                   

     Election to Treat All Interest as OID. The OID Regulations permit a
certificateholder to elect to accrue all interest (including stated interest),  
discount (including de minimis market discount and de minimis original issue    
discount) and premium in income using a constant yield method. If this election 
is made with respect to a certificate having market discount, the               
certificateholder is deemed to have made an election to include market discount 
in income currently with respect to all market discount debt instruments that   
the certificateholder acquires on the first day of the taxable year of the      
election and market discount debt instruments acquired thereafter. 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 with      
respect to all premium debt instruments that the certificateholder owns on the  
first day of the taxable year of the election and all premium debt instruments  
acquired thereafter. See "- Regular Certificates                                

76

424B5
199th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 199th
-- Premium." The election to accrue interest, discount and premium using a      
constant yield method with respect to a certificate cannot be revoked without   
the consent of the IRS. Prospective investors should consult their tax advisors 
regarding the election.                                                         

   Market Discount. A purchaser of a Regular Certificate may also be
subject to the market discount provisions of Code Sections 1276 through 1278.   
Under these provisions and the OID Regulations, "market discount" equals the    
excess, if any, of a Regular Certificate's stated principal amount or, in the   
case of a Regular Certificate with OID, the adjusted issue price (determined for
this purpose as if the purchaser had purchased the Regular Certificate from an  
original holder) over the price for the Regular Certificate paid by the         
purchaser. A certificateholder that purchases a Regular Certificate at a market 
discount will recognize income upon receipt of each distribution representing   
stated redemption price. In particular, under Section 1276 of the Code a holder 
generally will be required to allocate each principal distribution first to     
accrued market discount not previously included in income, and to recognize     
ordinary income to that extent. 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, the election will     
apply to all market discount bonds acquired by the electing certificateholder on
or after the first day of the first taxable year to which the election applies. 

Market discount with respect to a Regular Certificate will be 
considered to be zero if it is less than 0.25% of the Regular Certificate's     
stated redemption price at maturity multiplied by the Regular Certificate's     
weighted average maturity remaining after the date of purchase. If market       
discount on a Regular Certificate is considered to be zero under this rule, the 
actual amount of market discount must be allocated to the remaining principal   
payments on the Regular Certificate, and gain equal to the allocated amount will
be recognized when the corresponding principal payment is made. Treasury        
regulations implementing the market discount rules have not yet been issued.    
Investors should consult their tax advisors regarding the application of these  
rules and the advisability of making any of the elections allowed under Code    
Sections 1276 through 1278.                                                     

   The Code provides that any principal payment (whether a scheduled
payment or a prepayment) or any gain on disposition of a market discount bond   
shall be treated as ordinary income to the extent that it does not exceed the   
accrued market discount at the time of the payment or disposition. The amount of
accrued market discount for purposes of determining the tax treatment of        
subsequent principal payments or dispositions of the market discount bond is to 
be reduced by the amount so treated as ordinary income.                         

    The Code also grants authority to the Treasury Department to issue
regulations providing for the computation of accrued market discount on debt    
instruments, the principal of which is payable in more than one installment.    
Until regulations are issued by the Treasury, rules described in the Legislative
History will apply. Under those rules, the holder of a market discount bond may 
elect to accrue market discount either on the basis of a constant yield or      
according to one of the following methods:                                      

      o     For Regular Certificates issued with OID, the amount of market
              discount that accrues during a period is equal to the product of
               the total remaining market discount and a fraction, the numerator
    of which is the OID accruing during the period and the
              denominator of which is the total remaining OID at the beginning
of the period.                                    

         o     For Regular Certificates issued without OID, the amount of market
              discount that accrues during a period is equal to the product of
               the total remaining market discount and 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.

For purposes of calculating market discount under any of the above methods in   
the case of instruments (such as the Regular Certificates) that provide for     
payments that may be accelerated due to prepayments of other obligations        
securing the instruments, the same Prepayment Assumption applicable to          
calculating the accrual of OID will apply.                                      

         A holder of a Regular Certificate that acquires the Regular Certificate
at a market discount also may be required to defer, until the maturity date of  
the Regular Certificate or its earlier disposition in a taxable transaction, the
deduction of a portion of the amount of interest that the holder paid or accrued
during the taxable year on indebtedness incurred or maintained to purchase or   
carry the Regular Certificate in excess of the aggregate amount                 

77

424B5
200th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 200th
of interest (including OID) includible in the holder's gross income for the     
taxable year with respect to the Regular Certificate. The amount of the net     
interest expense deferred in a taxable year may not exceed the amount of market 
discount accrued on the Regular Certificate for the days during the taxable year
on which the holder held the Regular Certificate and, in general, would be      
deductible when the market discount is includible in income. If the holder of   
the Regular Certificate elects, the amount deferred from an earlier year may be 
deducted in a later year to the extent that the income from the Regular         
Certificate in the later year exceeds the interest paid or accrued on such      
indebtedness for the later year. The amount of any remaining deferred deduction 
is to be taken into account in the taxable year in which the Regular Certificate
matures or is disposed of in a taxable transaction. In the case of a disposition
in a "nonrecognition transaction" (that is, a transaction in which gain or loss 
is not recognized in whole or in part), any remaining deferred deduction will be
allowed to the extent of gain recognized on the disposition. This deferral rule 
does not apply if the Regular Certificateholder elects to include the market    
discount in income currently as it accrues on all market discount obligations   
acquired by the Regular Certificateholder in that taxable year or thereafter.   

         Premium. The holder of a Regular Certificate that purchases the Regular
Certificate at a cost (not including accrued qualified stated interest) greater 
than its remaining stated redemption price at maturity will be considered to    
have purchased the Regular Certificate at a premium and may elect to amortize   
the premium under a constant yield method. It is not clear whether the          
Prepayment Assumption would be taken into account in determining the life of the
Regular Certificate for this purpose. The Amortizable Bond Premium Regulations  
mentioned above specifically do not apply to prepayable debt instruments subject
to Code Section 1272(a)(6) such as the Regular Certificates. Absent further     
guidance from the IRS, the trustee intends to rely on the Legislative History   
and account for amortizable bond premium in the manner described in this        
prospectus. The Legislative History states that the same rules that apply to    
accrual of market discount (which rules require use of a Prepayment Assumption  
in accruing market discount with respect to Regular Certificates without regard 
to whether the certificates have OID) will also apply in amortizing bond premium
under Code Section 171. The Code provides that amortizable bond premium will be 
allocated among the interest payments on the Regular Certificate and will be    
applied as an offset against the interest payments. Prospective purchasers of   
the Regular Certificates should consult their tax advisors regarding the        
possible application of the Amortizable Bond Premium Regulations.               

         Deferred Interest. Certain classes of Regular Certificates will provide
for the deferred payment of interest. Any deferred interest that accrues with   
respect to a class of Regular Certificates will be accounted for as OID and     
includible in the income of the certificateholders before its receipt.          

       Effects of Defaults and Delinquencies. Certain series of certificates
may contain one or more classes of subordinated certificates, and in the event  
there are defaults or delinquencies on the mortgage loans, amounts that would   
otherwise be distributed to the subordinated certificates may instead be        
distributed to one or more classes of the senior certificates. Subordinated     
certificateholders, however, will be required to report income under an accrual 
method without giving effect to delays and reductions in distributions on the   
subordinated certificates attributable to defaults and delinquencies on the     
mortgage loans, except to the extent that it can be established that the amounts
are uncollectible. As a result, the amount of income reported by a subordinated 
certificateholder in any period could significantly exceed the amount of cash   
distributed to the holder in that period. The holder will eventually be allowed 
a loss (or will be allowed to report a lesser amount of income) to the extent   
that the aggregate amount of distributions on the subordinated certificate is   
reduced as a result of defaults and delinquencies on the mortgage loans.        
However, the timing and characterization of any losses or reductions in income  
are uncertain. Subordinated certificateholders are urged to consult their own   
tax advisors on these issues.                                                   

 Sale, Exchange or Redemption. If a Regular Certificate is sold,
exchanged, redeemed or retired, the seller will recognize gain or loss equal to 
the difference between the amount realized on the sale, exchange, redemption, or
retirement and the seller's adjusted basis in the Regular Certificate. The      
adjusted basis generally will equal the original cost of the Regular Certificate
to the seller, (1) increased by any OID and market discount included in the     
seller's gross income with respect to the Regular Certificate, and (2) reduced  
(but not below zero) by (a) payments included in the stated redemption price at 
maturity previously received by the seller and (b) any amortized premium.       
Similarly, upon retirement of a Regular Certificate, a holder will realize gain 
(or loss) to the extent that any amount received exceeds (or falls short of) the
holder's adjusted basis in the Regular Certificate. Except as provided in the   
following paragraph and as provided under "Market Discount," any gain or loss   
will be capital gain or loss, provided                                          

78

424B5
201st Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 201st
that the Regular Certificate is held as a "capital asset" (generally, property  
held for investment) within the meaning of Code Section 1221.                   

       Gain from the sale or other disposition of a Regular Certificate that
might otherwise be capital gain will be treated as ordinary income to the extent
that the gain does not exceed the excess, if any, of the amount that would have 
been includible in the holder's income with respect to the Regular Certificate  
had income accrued on it at a rate equal to 110% of the AFR as defined in Code  
Section 1274(d) determined as of the date of purchase of the Regular            
Certificate, over the amount actually includible in the holder's income.        

         The Regular Certificates will be "evidences of indebtedness" within the
meaning of Code Section 582(c)(1), so that gain or loss recognized from the sale
of a Regular Certificate by a bank or a thrift institution to which this section
applies will be ordinary income or loss.                                        

         The Regular Certificate information reports will include a statement of
the adjusted issue price of the Regular Certificate at the beginning of each    
accrual period. In addition, the reports will include information necessary to  
compute the accrual of any market discount that may arise upon secondary trading
of Regular Certificates. Because exact computation of the accrual of market     
discount on a constant yield method would require information relating to each  
holder's purchase price, the information reports will only contain information  
regarding the method of accruing (rather than the amount of) market discount.   

      Certain of the Regular Certificates ("Payment Lag Certificates") may
provide for payments of interest based on accrual periods that have the same    
number of days as the accrual periods between distribution dates (the "Ordinary 
Accrual Period") but that end and begin on other dates. In addition, in some    
cases, even though the period between the Closing Date for a Payment Lag        
Certificate and its first distribution date is shorter than an Ordinary Accrual 
Period, the Payment Lag Certificate will pay on the first distribution date an  
amount of interest for a full Ordinary Accrual Period (the extra interest being 
"pre-issuance interest"). In the case of such a Payment Lag Certificate, the    
trust fund intends to (i) treat the pre-issuance interest as part of the issue  
price of the Payment Lag Certificate and (ii) the remaining amount of such      
interest as interest.                                                           

      Investors should consult their tax advisors concerning the treatment
for federal income tax purposes of Payment Lag Certificates.                    

  Non-Interest Expenses of the REMIC. Under the temporary Treasury
regulations, if a REMIC is considered to be a "single-class REMIC," a portion of
the REMIC's servicing, administrative and other non-interest expenses (that is, 
expenses that may be classified as miscellaneous itemized deductions) will be   
allocated as a separate item to those Regular Certificateholders that are       
"pass-through interest holders." The portion of the non-interest expenses       
allocated to a pass-through interest holder may not be deductible except to the 
extent that, when added to the pass-through interest holder's other             
miscellaneous itemized deductions, they exceed two percent of the pass-through  
interest holder's adjusted gross income. Miscellaneous itemized deductions are  
not deductible for purposes of computing the alternative minimum tax.           
Certificateholders that are pass-through interest holders should consult their  
tax advisors about the impact of these rules on an investment in the Regular    
Certificates. See "- Residual Certificates - Pass-Through of Non-Interest       
Expenses of the REMIC."                                                         

       Treatment of Realized Losses. Although not entirely clear, it appears
that holders of Regular Certificates that are corporations should in general be 
allowed to deduct as an ordinary loss any loss sustained during the taxable year
on account of the certificates becoming wholly or partially worthless, and that,
in general, holders of certificates that are not corporations should be allowed 
to deduct as a short-term capital loss any loss sustained during the taxable    
year on account of the certificates becoming wholly worthless. Although the     
matter is unclear, non-corporate holders of certificates may be allowed a bad   
debt deduction at the time that the principal balance of a certificate is       
reduced to reflect realized losses resulting from any liquidated mortgage loans.
The IRS, however, could take the position that non-corporate holders will be    
allowed a bad debt deduction to reflect realized losses only after all mortgage 
loans remaining in the related trust fund have been liquidated or the           
certificates of the related series have been otherwise retired. Potential       
investors and Holders of the certificates are urged to consult their tax        
advisors regarding the appropriate timing, amount and character of any loss     
sustained with respect to their certificates, including any loss resulting from 
the failure to recover previously accrued interest or discount income.          

79

424B5
202nd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 202nd
  Subsequent Recoveries. Class Certificate Balances that have been
reduced because of allocations of Realized Losses may also be increased as a    
result of Subsequent Recoveries. See the discussion under the caption "The      
Pooling and Servicing Agreement - Realization Upon Defaulted Mortgage Loans -   
Application of Liquidation Proceeds." An increase in a Certificate Balance      
caused by a Subsequent Recovery should be treated by the certificateholder as   
ordinary (or capital) income to the extent that the certificateholder claimed an
ordinary (or capital) deduction for any decrease in the Certificate Balance     
caused by Realized Losses. Potential investors and Holders of the certificates  
are urged to consult their tax advisors regarding the appropriate timing, amount
and character of any income realized with respect to their certificates as a    
result of Subsequent Recoveries. "Subsequent Recoveries" are unexpected         
recoveries, net of reimbursable expenses, with respect to a Liquidated Mortgage 
Loan that resulted in a Realized Loss prior to the receipt of such recoveries.  

  Non-U.S. Persons. Generally, payments of interest (including any
payment with respect to accrued OID) on the Regular Certificates to a Regular   
Certificateholder who is not a U.S. Person and is not engaged in a trade or     
business within the United States will not be subject to federal withholding tax
if the non-U.S. Person provides the REMIC or other person who is otherwise      
required to withhold U.S. tax with respect to the Regular Certificate with an   
appropriate statement (on IRS Form W-8BEN or other similar form), signed under  
penalties of perjury, certifying that the beneficial owner of the Regular       
Certificate is a foreign person and providing that non-U.S. person's name and   
address. If a Regular Certificateholder is not exempt from withholding,         
distributions of interest, including distributions in respect of accrued OID,   
the holder may be subject to a 30% withholding tax, subject to reduction under  
any applicable income tax treaty.                                               

         Further, it appears that a Regular Certificate would not be included in
the estate of a non-resident alien individual and would not be subject to United
States estate taxes. However, Certificateholders who are non-resident alien     
individuals should consult their tax advisors concerning this question.         

    It is recommended that Regular Certificateholders who are not U.S.
Persons and persons related to them not acquire any Residual Certificates, and  
holders of Residual Certificates (the "Residual Certificateholder") and persons 
related to Residual Certificateholders not acquire any Regular Certificates     
without consulting their tax advisors as to the possible adverse tax            
consequences of doing so.                                                       

        Information Reporting and Backup Withholding. The master servicer will
furnish or make available, within a reasonable time after the end of each       
calendar year, to each person who was a Regular Certificateholder at any time   
during the year, any information deemed appropriate to assist Regular           
Certificateholders in preparing their federal income tax returns, or to enable  
holders to make the information available to beneficial owners or financial     
intermediaries that hold the Regular Certificates on behalf of beneficial       
owners. If a holder, beneficial owner, financial intermediary or other recipient
of a payment on behalf of a beneficial owner fails to supply a certified        
taxpayer identification number or if the Secretary of the Treasury determines   
that the person has not reported all interest and dividend income required to be
shown on its federal income tax return, backup withholding may be required with 
respect to any payments. Any amounts deducted and withheld from a distribution  
to a recipient would be allowed as a credit against a recipient's federal income
tax liability provided the requisite information is supplied to the IRS.        

B.       RESIDUAL CERTIFICATES                                                  

         Allocation of the Income of the REMIC to the Residual Certificates. The
REMIC will not be subject to federal income tax except with respect to income   
from prohibited transactions and certain other transactions. See "- Prohibited  
Transactions and Other Taxes." Instead, each original holder of a Residual      
Certificate will report on its federal income tax return, as ordinary income,   
its share of the taxable income of the REMIC for each day during the taxable    
year on which it owns any Residual Certificates. The taxable income of the REMIC
for each day will be determined by allocating the taxable income of the REMIC   
for each calendar quarter ratably to each day in the quarter. An original       
holder's share of the taxable income of the REMIC for each day will be based on 
the portion of the outstanding Residual Certificates that the holder owns on    
that day. The taxable income of the REMIC will be determined under an accrual   
method and will be taxable to the holders of Residual Certificates without      
regard to the timing or amounts of cash distributions by the REMIC. Ordinary    
income derived from Residual Certificates will be "portfolio income" for        
purposes of the taxation of taxpayers subject to the limitations on the         
deductibility of "passive losses." As residual interests, the Residual          
Certificates will be subject to tax rules, described below, that                

80

424B5
203rd Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 203rd
differ from those that would apply if the Residual Certificates were treated for
federal income tax purposes as direct ownership interests in the certificates or
as debt instruments issued or held by the REMIC.                                

         In most cases, a Residual Certificateholder will be required to include
taxable income from the Residual Certificate in excess of the cash received     
("phantom income"). This mismatch may be caused, for example, by a structure in 
which interest from the mortgage loans in excess of what is needed to pay       
interest on the Regular Certificates is used to pay the principal on the Regular
Certificates. This mismatching may be caused by the use of certain required tax 
accounting methods by the REMIC, variations in the prepayment rate of the       
underlying mortgage loans and certain other factors. Depending upon the         
structure of a particular transaction, the aforementioned factors may           
significantly reduce the after-tax yield of a Residual Certificate to a Residual
Certificateholder. Investors should consult their tax advisors concerning the   
federal income tax treatment of a Residual Certificate and the impact of the tax
treatment on the after-tax yield of a Residual Certificate.                     

         A subsequent Residual Certificateholder also will report on its federal
income tax return amounts representing a daily share of the taxable income of   
the REMIC for each day that the Residual Certificateholder owns the Residual    
Certificate. Those daily amounts generally would equal the amounts that would   
have been reported for the same days by an original Residual Certificateholder, 
as described above. The Legislative History indicates that certain adjustments  
may be appropriate to reduce (or increase) the income of a subsequent holder of 
a Residual Certificate that purchased the Residual Certificate at a price       
greater than (or less than) the adjusted basis the Residual Certificate would   
have in the hands of an original Residual Certificateholder. See "- Sale or     
Exchange of Residual Certificates." It is not clear, however, whether these     
adjustments will in fact be permitted or required and, if so, how they would be 
made. The REMIC Regulations do not provide for these adjustments.               

     Taxable Income of the REMIC Attributable to Residual Interests. The
taxable income of the REMIC will reflect a netting of the income from the       
mortgage loans and the REMIC's other assets and the deductions allowed to the   
REMIC for interest and OID accruing on the Regular Certificates and, except as  
described under "- Regular Certificates - Non-Interest Expenses of the REMIC,"  
other expenses. REMIC taxable income is generally determined in the same manner 
as the taxable income of an individual using the accrual method of accounting,  
except that the limitations on deductibility of investment interest expense and 
expenses for the production of income do not apply, all bad loans will be       
deductible as business bad debts, and the limitation on the deductibility of    
interest and expenses related to tax-exempt income is more restrictive than with
respect to individuals. The REMIC's gross income includes interest, original    
issue discount income, and market discount income, if any, on the mortgage      
loans, as well as, income earned from temporary investments or reserve assets,  
reduced by the amortization of any premium on the mortgage loans. In addition, a
Residual Certificateholder will recognize additional income due to the          
allocation of realized losses to the Regular Certificates due to defaults,      
delinquencies and realized losses on the mortgage loans. The timing of the      
inclusion of the income by Residual Certificateholders may differ from the time 
the actual loss is allocated to the Regular Certificates. The REMIC's deductions
include interest and original issue discount expense on the Regular             
Certificates, servicing fees on the mortgage loans, other administrative        
expenses of the REMIC and realized losses on the mortgage loans. The requirement
that Residual Certificateholders report their pro rata share of taxable income  
or net loss of the REMIC will continue as long as any class of the related      
Regular Certificates is outstanding.                                            

        For purposes of determining its taxable income, the REMIC will have an
initial aggregate tax basis in its assets equal to the sum of the issue prices  
of the Regular Certificates and the Residual Certificates (or, if a class of    
certificates is not sold initially, its fair market value). The aggregate basis 
will be allocated among the mortgage loans and other assets of the REMIC in     
proportion to their respective fair market values. A mortgage loan will be      
deemed to have been acquired with discount or premium to the extent that the    
REMIC's basis therein is less than or greater than its principal balance,       
respectively. Any discount (whether market discount or OID) will be includible  
in the income of the REMIC as it accrues, in advance of receipt of the cash     
attributable to this income, under a method similar to the method described     
above for accruing OID on the Regular Certificates. The REMIC expects to elect  
under Code Section 171 to amortize any premium on the mortgage loans. Premium on
any mortgage loan to which the election applies would be amortized under a      
constant yield method. It is not clear whether the yield of a mortgage loan     
would be calculated for this purpose based on scheduled payments or taking      
account of the Prepayment Assumption.                                           

81

424B5
204th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 204th
   The REMIC will be allowed a deduction for interest and OID on the
Regular Certificates. The amount and method of accrual of OID will be calculated
for this purpose in the same manner as described above with respect to Regular  
Certificates except that the 0.25% per annum de minimis rule and adjustments for
subsequent holders described therein will not apply.                            

         A Residual Certificateholder will not be permitted to amortize the cost
of the Residual Certificate as an offset to its share of the REMIC's taxable    
income. However, that taxable income will not include cash received by the REMIC
that represents a recovery of the REMIC's basis in its assets, and, as described
above, the issue price of the Residual Certificates will be added to the issue  
price of the Regular Certificates in determining the REMIC's initial basis in   
its assets. See "- Sale or Exchange of Residual Certificates." For a discussion 
of possible adjustments to income of a subsequent holder of a Residual          
Certificate to reflect any difference between the actual cost of the Residual   
Certificate to the holder and the adjusted basis the Residual Certificate would 
have in the hands of an original Residual Certificateholder, see "- Allocation  
of the Income of the REMIC to the Residual Certificates."                       

 Net Losses of the REMIC. The REMIC will have a net loss for any
calendar quarter in which its deductions exceed its gross income. The net loss  
would be allocated among the Residual Certificateholders in the same manner as  
the REMIC's taxable income. The net loss allocable to any Residual Certificate  
will not be deductible by the holder to the extent that the net loss exceeds the
holder's adjusted basis in the Residual Certificate. Any net loss that is not   
currently deductible due to this limitation may only be used by the Residual    
Certificateholder to offset its share of the REMIC's taxable income in future   
periods (but not otherwise). The ability of Residual Certificateholders that are
individuals or closely held corporations to deduct net losses may be subject to 
additional limitations under the Code.                                          

       For purposes of determining REMIC taxable income or loss, the trustee
intends to treat Subsequent Recoveries in the way described under the caption   
"Subsequent Recoveries."                                                        

Mark to Market Rules. A Residual Certificate cannot be        
marked-to-market.                                                               

        Pass-Through of Non-Interest Expenses of the REMIC. As a general rule,
all of the fees and expenses of a REMIC will be taken into account by holders of
the Residual Certificates. In the case of a single class REMIC, however, the    
expenses and a matching amount of additional income will be allocated among the 
Regular Certificateholders and the Residual Certificateholders on a daily basis 
in proportion to the relative amounts of income accruing to each                
certificateholder on that day. In general terms, a single class REMIC is one    
that either would qualify as a grantor trust if it were not a REMIC (treating   
all interests as ownership interests, even if they would be classified as debt  
for federal income tax purposes) or is similar to a grantor trust and is        
structured with the principal purpose of avoiding the single class REMIC rules. 
The applicable prospectus supplement may apportion expenses to the Regular      
Certificates, but if it does not, then the expenses of the REMIC will be        
allocated to holders of the related Residual Certificates in their entirety and 
not to holders of the related Regular Certificates.                             

      In the case of individuals (or trusts, estates or other persons that
compute their income in the same manner as individuals) who own an interest in a
Regular Certificate or a Residual Certificate directly or through a pass-through
interest holder that is required to pass miscellaneous itemized deductions      
through to its owners or beneficiaries (for example a partnership, an S         
corporation or a grantor trust), the trust expenses will be deductible under    
Code Section 67 only to the extent that those expenses, plus other              
"miscellaneous itemized deductions" of the individual, exceed 2% of the         
individual's adjusted gross income. In addition, Code Section 68 provides that  
the amount of itemized deductions otherwise allowable for an individual whose   
adjusted gross income exceeds a certain amount (the "Applicable Amount") will be
reduced by the lesser of 3% of the excess of the individual's adjusted gross    
income over the Applicable Amount or 80% of the amount of itemized deductions   
otherwise allowable for the taxable year. This reduction is scheduled to be     
phased out from 2006 through 2009, and reinstated after 2010. The amount of     
additional taxable income recognized by Residual Certificateholders who are     
subject to the limitations of Code Section 67, Code Section 68 or both may be   
substantial. Further, holders (other than corporations) subject to the          
alternative minimum tax may not deduct miscellaneous itemized deductions in     
determining their alternative minimum taxable income.                           

82

424B5
205th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 205th
      The REMIC is required to report to each pass-through interest holder
and to the IRS the holder's allocable share, if any, of the REMIC's non-interest
expenses. The term "pass-through interest holder" generally refers to           
individuals, entities taxed as individuals and certain pass-through entities,   
but does not include real estate investment trusts. Residual Certificateholders 
that are pass-through interest holders should consult their tax advisors about  
the impact of these rules on an investment in the Residual Certificates.        

 Excess Inclusions. All or a portion of the income on a Residual
Certificate (referred to in the Code as an "excess inclusion") for any calendar 
quarter generally will be subject to federal income tax in all events. Thus, for
example, an excess inclusion (1) may not be offset by any unrelated losses,     
deductions or loss carryovers of a Residual Certificateholder, (2) will be      
treated as "unrelated business taxable income" within the meaning of Code       
Section 512 if the Residual Certificateholder is a pension fund or any other    
organization that is subject to tax only on its unrelated business taxable      
income (see "- Tax-Exempt Investors"), and (3) is not eligible for any reduction
in the rate of withholding tax in the case of a Residual Certificateholder that 
is a foreign investor. See "- Non-U.S. Persons."                                

      Except in the case of a Residual Certificate that has no significant
value, and except as discussed in the following paragraph, the excess inclusions
for any calendar quarter is the excess, if any, of the income of the Residual   
Certificateholder for that calendar quarter from its Residual Certificate over  
the sum of the "daily accruals" for all days during the calendar quarter on     
which the Residual Certificateholder holds the Residual Certificate. For this   
purpose, the daily accruals with respect to a Residual Certificate are          
determined by allocating to each day in the calendar quarter its ratable portion
of the product of the "adjusted issue price" of the Residual Certificate at the 
beginning of the calendar quarter and 120 percent of the "Federal long-term     
rate" in effect at the time the Residual Certificate is issued. For this        
purpose, the "adjusted issue price" of a Residual Certificate at the beginning  
of any calendar quarter equals the issue price of the Residual Certificate,     
increased by the amount of daily accruals for all prior quarters, and decreased 
(but not below zero) by the aggregate amount of payments made on the Residual   
Certificate before the beginning of the same quarter. The "federal long-term    
rate" is an average of current yields on Treasury securities with a remaining   
term of greater than nine years, computed and published monthly by the IRS. In  
the case of a Residual Certificate that has no significant value, the excess    
inclusions for any calendar quarter is all of the Residual Certificateholder's  
income from the Residual Certificate for that quarter.                          

In the case of any Residual Certificates held by a real estate
investment trust, the aggregate excess inclusions with respect to the 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 the trust in         
proportion to the dividends received by the shareholders from the trust, and any
amount so allocated will be treated as an excess inclusion with respect to a    
Residual Certificate as if held directly by the shareholder. Regulated          
investment companies, common trust funds and certain cooperatives are subject to
similar rules.                                                                  

         Payments. Any distribution made on a Residual Certificate to a Residual
Certificateholder will be treated as a non-taxable return of capital to the     
extent it does not exceed the Residual Certificateholder's adjusted basis in the
Residual Certificate. To the extent a distribution exceeds the adjusted basis,  
it will be treated as gain from the sale of the Residual Certificate.           

         Sale or Exchange of Residual Certificates. If a Residual Certificate is
sold or exchanged, the seller will generally recognize gain or loss equal to the
difference between the amount realized on the sale or exchange and its adjusted 
basis in the Residual Certificate (except that the recognition of loss may be   
limited under the "wash sale" rules). A holder's adjusted basis in a Residual   
Certificate generally equals the cost of the Residual Certificate to the        
Residual Certificateholder, increased by the taxable income of the REMIC that   
was included in the income of the Residual Certificateholder with respect to the
Residual Certificate, and decreased (but not below zero) by the net losses that 
have been allowed as deductions to the Residual Certificateholder with respect  
to the Residual Certificate and by the distributions received by the Residual   
Certificateholder. In general, the gain or loss will be capital gain or loss    
provided the Residual Certificate is held as a capital asset. However, Residual 
Certificates will be "evidences of indebtedness" within the meaning of Code     
Section 582(c)(1), so that gain or loss recognized from sale of a Residual      
Certificate by a bank or thrift institution to which that section applies would 
be ordinary income or loss.                                                     

83

424B5
206th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 206th
         Any loss from the sale of a Residual Certificate will be subject to the
"wash sale" rules of Code Section 1091 if, during the period beginning six      
months before and ending six months after the sale of the Residual Certificate, 
the seller reacquires the Residual Certificate, or acquires (i) a Residual      
Certificate in any other REMIC (ii) a similar interest in a "taxable mortgage   
pool" (as defined in Code Section 7701(i)). In general, under the wash sale     
rules, loss from the Residual Certificate will be disallowed and the Residual   
Certificateholder's basis in the replacement interest will be the basis in the  
Residual Certificate that was sold, decreased or increased, as the case may be, 
by the difference between the selling price of the Residual Certificate and the 
purchase price of the replacement interest.                                     

PROHIBITED TRANSACTIONS AND OTHER TAXES                                         

         The Code imposes a tax on REMICs equal to 100 percent of the net income
(if any) derived from "prohibited transactions" (the "Prohibited Transactions   
Tax") and prohibits deducting any loss with respect to prohibited transactions. 
In general, subject to certain specified exceptions, a prohibited transaction   
means the disposition of a mortgage loan, 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 (as opposed to       
holding to maturity) of an asset purchased with the payments on the mortgage    
loans for temporary investment pending distribution on the certificates. It is  
not anticipated that the trust fund for any series of certificates will engage  
in any prohibited transactions in which it would recognize a material amount of 
net income.                                                                     

        In addition, certain contributions to a trust fund that has elected to
be treated as a REMIC, if made after the day on which the trust fund issues all 
of its interest could result in the imposition of a tax on the trust fund equal 
to 100% of the value of the contributed property (the "Contributions Tax"). No  
trust fund for any series of certificates will accept contributions that would  
subject it to a Contributions Tax.                                              

         In addition, a trust fund that has elected to be treated as a REMIC may
also be subject to federal income tax at the highest corporate rate on "net     
income from foreclosure property," determined by reference to the rules         
applicable to real estate investment trusts. "Net income from foreclosure       
property" generally means income from foreclosure property other than qualifying
income for a real estate investment trust.                                      

      Where any Prohibited Transactions Tax, Contributions Tax, tax on net
income from foreclosure property or state or local income or franchise tax that 
may be imposed on a REMIC relating to any series of certificates results from   

        o     a breach of the related master servicer's, trustee's or seller's
               obligations under the related pooling and servicing agreement for
               the series, the tax will be borne by the master servicer, trustee
    or seller, as the case may be, out of its own funds or

      o     the seller's obligation to repurchase a mortgage loan, the tax
will be borne by the seller.                      

If the master servicer, trustee or seller, as the case may be, fails to pay or  
is not required to pay the tax as provided above, the tax will be payable out of
the trust fund for the series and will result in a reduction in amounts         
available to be distributed to the certificateholders of the series.            

LIQUIDATION AND TERMINATION                                                     

        If the REMIC adopts a plan of complete liquidation, within the meaning
of Code Section 860F(a)(4)(A)(i), which may be accomplished by designating in   
the REMIC's final tax return a date on which the adoption is deemed to occur,   
and sells all of its assets (other than cash) within a 90-day period beginning  
on that date, the REMIC will not be subject to any Prohibited Transactions Tax, 
provided that the REMIC credits or distributes in liquidation all of the sale   
proceeds plus its cash (other than the amounts retained to meet claims) to      
holders of Regular and Residual Certificates within the 90-day period.          

  The REMIC will terminate shortly following the retirement of the
Regular Certificates. If a Residual Certificateholder's adjusted basis in the   
Residual Certificate exceeds the amount of cash distributed to the Residual     
Certificateholder in final liquidation of its interest, then it would appear    
that the Residual Certificateholder would be                                    

84

424B5
207th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 207th
entitled to a loss equal to the amount of the excess. It is unclear whether the 
loss, if allowed, will be a capital loss or an ordinary loss.                   

ADMINISTRATIVE MATTERS                                                          

      Solely for the purpose of the administrative provisions of the Code,
the REMIC generally will be treated as a partnership and the Residual           
Certificateholders will be treated as the partners if there is more than one    
holder of the Residual Certificate. The identity of a residual interest holder, 
however, is not a partnership item for purposes of applying the unified         
partnership audit procedures. Certain information is required to be furnished   
quarterly to each Residual Certificateholder who held a Residual Certificate on 
any day in the previous calendar quarter.                                       

   Each Residual Certificateholder is required to treat items on its
return consistently with the treatment of those on the REMIC's return unless the
Residual Certificateholder either files a statement identifying the             
inconsistency or establishes that the inconsistency resulted from incorrect     
information received from the REMIC. The IRS may assert a deficiency resulting  
from a failure to comply with the consistency requirement without instituting an
administrative proceeding at the REMIC level. The REMIC does not intend to      
register as a tax shelter pursuant to Code Section 6111 because it is not       
anticipated that the REMIC will have a net loss for any of the first five       
taxable years of its existence. Any person that holds a Residual Certificate as 
a nominee for another person may be required to furnish the REMIC, in a manner  
to be provided in Treasury regulations, with the name and address of the person 
and other information.                                                          

TAX-EXEMPT INVESTORS                                                            

       Any Residual Certificateholder that is a pension fund or other entity
that is subject to federal income taxation only on its "unrelated business      
taxable income" within the meaning of Code Section 512 will be subject to the   
tax on that portion of the distributions received on a Residual Certificate that
is considered an excess inclusion. See "- Residual Certificates - Excess        
Inclusions."                                                                    

NON-U.S. PERSONS                                                                

      Amounts paid to Residual Certificateholders who are not U.S. persons
(see "-- Regular Certificates -- Non-U.S. Persons") are treated as interest for 
purposes of the 30% (or lower treaty rate) United States withholding tax.       
Amounts distributed to holders of Residual Certificates should qualify as       
"portfolio interest," subject to the conditions described in "-- Regular        
Certificates." Furthermore, the rate of withholding on any income on a Residual 
Certificate that is excess inclusion income will not be subject to reduction    
under any applicable income tax treaties. See "-- Residual Certificates --      
Excess Inclusions." If the portfolio interest exemption is unavailable, the     
amount will be subject to United States withholding tax when paid or otherwise  
distributed (or when the Residual Certificate is disposed of) under rules       
similar to those for withholding upon disposition of debt instruments that have 
OID. The Code, however, grants the Treasury Department authority to issue       
regulations requiring that those amounts be taken into account earlier than     
otherwise provided where necessary to prevent avoidance of tax (for example,    
where the Residual Certificates do not have significant value). See "-- Residual
Certificates -- Excess Inclusions." If the amounts paid to Residual             
Certificateholders that are not U.S. persons are effectively connected with     
their conduct of a trade or business within the United States, the 30% (or lower
treaty rate) withholding will not apply. Instead, the amounts paid to the       
non-U.S. Person will be subject to U.S. federal income taxation at regular      
graduated rates. For special restrictions on the transfer of Residual           
Certificates, see "-- Tax-Related Restrictions on Transfers of Residual         
Certificates."                                                                  

TAX-RELATED RESTRICTIONS ON TRANSFERS OF RESIDUAL CERTIFICATES                  

         Disqualified Organizations. An entity may not qualify as a REMIC unless
there are reasonable arrangements designed to ensure that residual interests in 
the entity are not held by "disqualified organizations." Further, a tax is      
imposed on the transfer of a residual interest in a REMIC to a "disqualified    
organization." The amount of the tax equals the product of an amount (as        
determined under the REMIC Regulations) equal to the present value of the total 
anticipated "excess inclusions" with respect to the interest for periods after  
the transfer and the highest marginal federal income tax rate applicable to     
corporations. The tax is imposed on the transferor unless the transfer is       
through an agent (including a broker or other middleman) for a disqualified     
organization, in which                                                          

85

424B5
208th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 208th
event the tax is imposed on the agent. The person otherwise liable for the tax  
shall be relieved of liability for the tax if the transferee furnished to it an 
affidavit that the transferee is not a disqualified organization and, at the    
time of the transfer, the person does not have actual knowledge that the        
affidavit is false. A "disqualified organization" means the United States, any  
State, possession or political subdivision of the United States, any foreign    
government, any international organization or any agency or instrumentality of  
any of the foregoing entities (provided that the term does not include an       
instrumentality if all its activities are subject to tax and, except for Freddie
Mac, a majority of its board of directors is not selected by a governmental     
agency), any organization (other than certain farmers cooperatives) generally   
exempt from federal income taxes unless the organization is subject to the tax  
on "unrelated business taxable income" and a rural electric or telephone        
cooperative.                                                                    

         A tax is imposed on a "pass-through entity" holding a residual interest
in a REMIC if at any time during the taxable year of the pass-through entity a  
disqualified organization is the record holder of an interest in the entity. The
amount of the tax is equal to the product of the amount of excess inclusions for
the taxable year allocable to the interest held by the disqualified organization
and the highest marginal federal income tax rate applicable to corporations. The
pass-through entity otherwise liable for the tax, for any period during which   
the disqualified organization is the record holder of an interest in the entity,
will be relieved of liability for the tax if the record holder furnishes to the 
entity an affidavit that the record holder is not a disqualified organization   
and, for the applicable period, the pass-through entity does not have actual    
knowledge that the affidavit is false. For this purpose, a "pass-through entity"
means a regulated investment company, real estate investment trust, or common   
trust fund; a partnership, trust, or estate; and certain cooperatives. Any      
person holding an interest in a pass-through entity as a nominee for another    
will, with respect to the interest, be treated as a pass-through entity. Large  
partnerships (generally with 100 or more partners) will be taxable on excess    
inclusion income as if all partners were disqualified organizations.            

      To comply with these rules, the pooling and servicing agreement will
provide that no record or beneficial ownership interest in a Residual           
Certificate may be purchased, transferred or sold, directly or indirectly,      
without the express written consent of the master servicer. The master servicer 
will grant consent to a proposed transfer only if it receives an affidavit from 
the proposed transferee to the effect that it is not a disqualified organization
and is not acquiring the Residual Certificate as a nominee or agent for a       
disqualified organization and a covenant by the proposed transferee to the      
effect that the proposed transferee agrees to be bound by and to abide by the   
transfer restrictions applicable to the Residual Certificate.                   

         Noneconomic Residual Certificates. The REMIC Regulations disregard, for
federal income tax purposes, any transfer of a Noneconomic Residual Certificate 
to a "U.S. Transferee" unless no significant purpose of the transfer is to      
enable the transferor to impede the assessment or collection of tax. For this   
purpose, a U.S. Transferee means a U.S. Person as defined under "Certain Federal
Income Tax Consequences - Non-REMIC Certificates - Non-U.S. Persons." A U.S.    
Transferee also includes foreign entities and individuals (Non-U.S. Persons) but
only if their income from the residual interest is subject to tax under Code    
Section 871(b) or Code Section 882 (income effectively connected with a U.S.    
trade or business). If the transfer of a Noneconomic Residual Certificate is    
disregarded, the transferor continues to be treated as the owner of the Residual
Certificate and continues to be subject to tax on its allocable portion of the  
net income of the REMIC.                                                        

 A Residual Certificate (including a Residual Certificate with a
positive value at issuance) is a "Noneconomic Residual Certificate" at the time 
of transfer unless, (i) taking into account the Prepayment Assumption and any   
required or permitted clean up calls or required liquidation provided for in the
REMIC's organizational documents, the present value of the expected future      
distributions on the Residual Certificate at least equals the product of (A) the
present value of the anticipated excess inclusions and (B) the highest corporate
income tax rate in effect for the year in which the transfer occurs, and (ii)   
the transferor reasonably expects that the transferee will receive distributions
from the REMIC at or after the time at which taxes accrue on the anticipated    
excess inclusions in an amount sufficient to satisfy the accrued taxes. A       
transfer of a Noneconomic Residual Certificate has a "significant purpose to    
impede the assessment or collection of tax" if, at the time of transfer, the    
transferor either knew or should have known (had "Improper Knowledge") that the 
transferee would be unwilling or unable to pay taxes due on its share of the    
taxable income of the REMIC.                                                    

  The REMIC Regulations also provide a safe harbor under which the
transferor of a Noneconomic Residual Certificate is presumed not to have        
Improper knowledge at the time of transfer if the following conditions are met: 

86

424B5
209th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 209th
(i) the transferor conducts a reasonable investigation of the financial         
condition of the transferee, finds that the transferee has historically paid its
debts as they came due, and finds no significant evidence to indicate that the  
transferee will not continue to pay its debts as they come due; (ii) the        
transferee represents that it understands that as a result of holding the       
Noneconomic Residual Certificate, it may incur tax liabilities in excess of any 
cash flows generated by the Noneconomic Residual Certificate and intends to pay 
taxes associated with holding the Noneconomic Residual Certificate as they      
become due; (iii) the transferee represents that it will not cause income from  
the noneconomic residual interest to be attributable to a foreign permanent     
establishment or fixed base (within the meaning of an applicable income tax     
treaty) ("Offshore Location") of the transferee or another U.S. taxpayer; (iv)  
the transferee is not located in an Offshore Location; and (v) the transferee   
meets either the Formula Test or the Asset Test.                                

         A transfer of a Noneconomic Residual Certificate meets the Formula Test
if the present value of the anticipated tax liabilities associated with holding 
the residual interest does not exceed the sum of, (i) the present value of any  
consideration given to the transferee to acquire the interest; (ii) the present 
value of the expected future distributions on the interest; and (3) the present 
value of the anticipated tax savings associated with holding the interest as the
REMIC generates losses. For purposes of the Formula Test the transferee is      
assumed to pay tax at a rate equal to the highest corporate rate of tax         
specified in Code Section 11(b)(1). If, however, the transferee has been subject
to the alternative minimum tax ("AMT") under Code Section 55 in the preceding   
two years and will compute its taxable income in the current taxable year using 
the AMT rate, then the transferee can assume that it pays tax at the AMT rate   
specified in Code Section 55(b)(1)(B). Present values are computed using a      
discount rate equal to the Federal short-term rate prescribed by Code Section   
1274(d) for the month of the transfer and the compounding period used by the    
transferee.                                                                     

 The Asset Test only applies in cases where the transferee is an
Eligible Corporation. To be an Eligible Corporation, the transferee must be a   
taxable domestic C corporation, but an Eligible Corporation does not include a  
regulated investment company, a real estate investment trust, a REMIC or a      
cooperative. In addition, regardless of who the transferee may be, the transfer 
of a residual interest to an Offshore Location does not qualify as a transfer to
an Eligible Corporation even if the Offshore Location is only a branch of an    
Eligible Corporation and not a separate legal entity. A transfer of a           
Noneconomic Residual Certificate meets the Asset Test if at the time of the     
transfer, and at the close of each of the transferee's two fiscal years         
preceding the year of transfer, the transferee's gross assets for financial     
reporting purposes exceed $100 million and its net assets for financial         
reporting purposes exceed $10 million. The gross assets and net assets of a     
transferee do not include any obligation of any person related to the transferee
(such as a shareholder, partner affiliate or sister corporation) or any asset   
acquired for a principal purpose of satisfying the Asset Test. In addition, the 
transferee must make a written agreement that any subsequent transfer of the    
interest will be to another Eligible Corporation in a transaction that satisfies
the Asset Test. A transfer fails to meet this requirement if the transferor     
knows, or has reason to know, that the transferee will not honor the            
restrictions on subsequent transfers. Finally, the facts and circumstances known
to the transferor on or before the date of the transfer must not reasonably     
indicate that the taxes associated with the residual interest will not be paid. 
The consideration given to the transferee to acquire the noneconomic residual   
interest in the REMIC is only one factor to be considered. However, if the      
amount of consideration is so low that under any set of reasonable assumptions a
reasonable person would conclude that the taxes associated with holding the     
residual interest will not be paid, then the transferor is deemed to know that  
the transferee cannot or will not pay. In determining whether the amount is too 
low, the specific terms of the Formula Test need not be used.                   

        Treatment of Inducement Fees. The Treasury Department has issued final
regulations, effective May 11, 2004, which address the federal income tax       
treatment of "inducement fees" received by transferees of noneconomic REMIC     
residual interests. The final regulations require inducement fees to be included
in income over a period reasonably related to the period in which the related   
REMIC residual interest is expected to generate taxable income or net loss      
allocable to the holder. The final regulations provide two safe harbor methods  
which permit transferees to include inducement fees in income either (i) in the 
same amounts and over the same period that the taxpayer uses for financial      
reporting purposes, provided that such period is not shorter than the period the
REMIC is expected to generate taxable income or (ii) ratably over the remaining 
anticipated weighted average life of all the regular and residual interests     
issued by the REMIC, determined based on actual distributions projected as      
remaining to be made on such interests under the prepayment assumption. If the  
holder of a REMIC residual interest sells or otherwise disposes of the Residual 
Certificate, any unrecognized portion of the inducement fee must be taken into  
account at the time of the sale or disposition. The final regulations also      
provide that an inducement fee shall be treated as                              

87

424B5
210th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 210th
income from sources within the United States. In addition, the IRS has issued   
administrative guidance addressing the procedures by which transferees of       
noneconomic REMIC residual interests may obtain automatic consent from the IRS  
to change the method of accounting for REMIC inducement fee income to one of the
safe harbor methods provided in these final regulations (including a change from
one safe harbor method to the other safe harbor method). Prospective purchasers 
of the REMIC residual certificates should consult with their tax advisors       
regarding the effect of these final regulations and the related guidance        
regarding the procedures for obtaining automatic consent to change the method of
accounting.                                                                     

         Foreign Investors. The REMIC Regulations provide that the transfer of a
Residual Certificate that has a "tax avoidance potential" to a "foreign person" 
will be disregarded for federal income tax purposes. This rule appears to apply 
to a transferee who is not a U.S. Person unless the transferee's income in      
respect of the Residual Certificate is effectively connected with the conduct of
a United States trade or business. A Residual Certificate is deemed to have a   
tax avoidance potential unless, at the time of 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 the amounts   
will be distributed at or after the time the excess inclusion accrues and not   
later than the end of the calendar year following the year of accrual. If the   
non-U.S. Person transfers the Residual Certificate to a U.S. Person, the        
transfer will be disregarded, and the foreign transferor will continue to be    
treated as the owner, if the transfer has the effect of allowing the transferor 
to avoid tax on accrued excess inclusions. The pooling and servicing agreement  
will provide that no record or beneficial ownership interest in a Residual      
Certificate may be transferred, directly or indirectly, to a non-U.S. Person    
unless the person provides the trustee with a duly completed IRS Form W-8ECI and
the trustee consents to the transfer in writing.                                

Any attempted transfer or pledge in violation of the transfer 
restrictions shall be absolutely null and void and shall vest no rights in any  
purported transferee. Investors in Residual Certificates should consult their   
tax advisors with respect to transfers of the Residual Certificates and         
pass-through entities are encouraged to consult their own tax advisors with     
respect to any tax which may be imposed on a pass-through entity.               

OTHER TAX CONSIDERATIONS

 In addition to the federal income tax consequences described in
"Certain Federal Income Tax Considerations," potential investors should consider
the state, local and foreign tax consequences of the acquisition, ownership, and
disposition of the certificates. State, local and foreign tax law may differ    
substantially from the corresponding federal law, and this discussion does not  
purport to describe any aspect of the tax laws of any state or locality.        
Therefore, potential investors should consult their own tax advisors with       
respect to the various tax consequences of investments in the certificates.     

ERISA CONSIDERATIONS

   The following describes certain considerations under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") and the Code, which
apply to certificates issued by the trust. The related prospectus supplement    
will contain more specific information concerning the considerations relating to
ERISA and the Code applicable to each series of certificates.                   

       ERISA imposes requirements on employee benefit plans subject to ERISA
(and Section 4975 of the Code imposes requirements on certain other retirement  
plans and arrangements, including individual retirement accounts and annuities, 
Keogh plans and collective investment funds and separate accounts in which the  
plans, accounts or arrangements are invested) (collectively "Plans") and on     
persons who bear specified relationships to Plans ("Parties in Interest") or are
fiduciaries with respect to Plans. Generally, ERISA applies to investments made 
by Plans. Among other things, ERISA requires that the assets of a Plan be held  
in trust and that the trustee, or other duly authorized fiduciary, have         
exclusive authority and discretion to manage and control the assets of the Plan.
ERISA also imposes certain duties on persons who are fiduciaries of Plans. Under
ERISA, any person who exercises any authority or control respecting the         
management or disposition of the assets of a Plan is considered to be a         
fiduciary of the Plan (subject to certain exceptions not here relevant). Certain
employee benefit plans, such as governmental plans (as defined in ERISA Section 
3(32)) and, if no election has been made under Section 410(d) of the Code,      
church plans (as defined in ERISA Section 3(33)), are not subject to ERISA.     
Accordingly, assets of those plans may be invested in certificates without      
regard to ERISA's requirements, but subject to the provisions of any other      

88

424B5
211th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 211th
applicable federal or state law. Any of those plans that are qualified and      
exempt from taxation under Code Sections 401(a) and 501(a) are subject to the   
prohibited transaction rules set forth in Code Section 503.                     

     On November 13, 1986, the United States Department of Labor ("DOL")
issued final regulations concerning the definition of what constitutes the      
assets of a Plan. (DOL Reg. Section 2510.3-101.) Under this "Plan Assets        
Regulation," the underlying assets and properties of corporations, partnerships 
and certain other entities in which a Plan acquires an "equity interest" could  
be deemed for purposes of ERISA to be assets of the investing Plan in certain   
circumstances. Under the Plan Assets Regulation, the term "equity interest" is  
defined as any interest in an entity other than an instrument that is treated as
indebtedness under applicable local law and has no "substantial equity          
features." If securities are not treated as equity interests in the issuer for  
purposes of the Plan Assets Regulation, a Plan's investment in the certificates 
would not cause the assets of the issuer to be deemed plan assets. If the       
securities are deemed to be equity interests in the issuer, the issuer could be 
considered to hold plan assets because of a Plan's investment in those          
securities. In that event, the master servicer and other persons exercising     
management or discretionary control over the assets of the issuer or providing  
services with respect to the issuer could be deemed to be fiduciaries or other  
parties in interest with respect to investing Plans and thus subject to the     
prohibited transaction provisions of Section 406 of ERISA and Section 4975 of   
the Code and, in the case of fiduciaries, to the fiduciary responsibility       
provisions of Title I of ERISA, with respect to transactions involving the      
issuer's assets. Trust certificates are "equity interests" for purposes of the  
Plan Asset Regulation.                                                          

 In addition to the imposition of general fiduciary standards of
investment prudence and diversification, ERISA and the Code prohibit a broad    
range of transactions involving plan assets of a Plan and Parties in Interest   
with respect to the Plan and impose additional prohibitions where Parties in    
Interest are fiduciaries with respect to the Plan. Because the mortgage loans   
may be deemed plan assets of each Plan that purchases certificates, an          
investment in the certificates by a Plan might be a prohibited transaction under
ERISA Sections 406 and 407 and subject to an excise tax under Code Section 4975 
unless a statutory, regulatory or administrative exemption applies.             

  Without regard to whether securities are considered to be equity
interest in the issuer, certain affiliates of the issuer might be considered or 
might become Parties in Interest with respect to a Plan. In this case, the      
acquisition or holding of the securities by or on behalf of the Plan could      
constitute or give rise to a prohibited transaction, within the meaning of ERISA
and Section 4975 of the Code, unless they were subject to one or more           
exemptions. Depending on the relevant facts and circumstances, certain          
prohibited when transaction exemptions may apply to the purchase or holding of  
securities: for example, Prohibited Transaction Class Exemption ("PTCE") 96-23, 
which exempts certain transactions effected on behalf of a Plan by an "in-house 
asset manager"; PTCE 95-60, which exempts certain transactions by insurance     
company general accounts; PTCE 91-38, which exempts certain transactions by bank
collective investment funds; PTCE 90-1, which exempts certain transactions by   
insurance company pooled separate accounts; or PTCE 84-14, which exempts certain
transactions effected on behalf of a Plan by a "qualified professional asset    
manager". There can be no assurance that any of these exemptions will apply with
respect to any Plan's investment in securities, or that such an exemption, if it
did apply, would apply to all prohibited transactions that may occur in         
connection with the investment. Furthermore, these exemptions would not apply to
transactions involved in operation of the trust if, as described above, the     
assets of the trust were considered to include Plan assets.                     

       The DOL has granted to certain underwriters individual administrative
exemptions (the "Underwriter Exemptions") from certain of the prohibited        
transaction rules of ERISA and the related excise tax provisions of Section 4975
of the Code with respect to the initial purchase, the holding and the subsequent
resale by Plans of securities, including certificates, underwritten or privately
placed by that underwriter or its affiliate or by a syndicate managed by that   
underwriter or its affiliate and issued by entities, including trusts, that hold
investment pools consisting of certain secured receivables, loans and other     
obligations ("issuer") and the servicing, operation and management of such      
entities, provided that the conditions and requirements of the Underwriter      
Exemptions are met.                                                             

        While each Underwriter Exemption is an individual exemption separately
granted to a specific underwriter, the terms and conditions which generally     
apply to the Underwriter Exemptions are substantially the following:            

o     the acquisition of the securities by a Plan is on terms 
           (including the price for the securities) that are at least as
       favorable to the Plan as they would be in an arm's length
transaction with an unrelated party;              

89

424B5
212th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 212th
        o     the rights and interests evidenced by the securities acquired by
       the Plan are not subordinated to the rights and interests
     evidenced by other securities of the issuer, unless the
           investment pool contains certain types of collateral, such as
        fully-secured mortgages on real property in (a "Designated
Transaction");                                    

         o     the securities acquired by the Plan have received a rating at the
          time of acquisition that is one of the three highest generic
        rating categories (four, in a Designated Transaction) from
             Standard & Poor's, a division of The McGraw-Hill Company, Inc.,
           Moody's Investors Service, Inc. or Fitch Ratings (the "rating
agencies");                                       

  o     the trustee is not an affiliate of any other member of the
            Restricted Group, as defined below, other than an underwriter;

        o     the sum of all payments made to and retained by the underwriters
              in connection with the distribution of the securities represents
        not more than reasonable compensation for underwriting the
             securities; the sum of all payments made to and retained by the
          seller pursuant to the assignment of the loans to the issuer
              represents not more than the fair market value of the loans; the
             sum of all payments made to and retained by the master servicer
        and any other servicer represents not more than reasonable
           compensation for its services under the agreement pursuant to
             which the loans are pooled and reimbursements of its reasonable
expenses in connection therewith; and             

        o     the Plan investing in the securities is an "accredited investor"
               as defined in Rule 501(a)(1) of Regulation D of the SEC under the
Securities Act of 1933, as amended.               

         If an issuer holds obligations that have high loan-to-value ratios, the
Underwriter Exemption may apply to the issuer's non-subordinated securities     
rated in one of the two highest generic rating categories by at least one of the
rating agencies if the obligations are residential or home equity loans, and the
fair market value of the collateral for each loan on the closing date is at     
least 80% of the sum of the outstanding principal balance of the related        
obligation held in the investment pool and the outstanding principal balance of 
any obligation of higher priority secured by the same collateral.               

The   issuer must also meet the following requirements:       

     o     the investment pool must consist solely of assets of the type
that have been included in other investment pools;

       o     securities in those other investment pools must have been rated
          in one of the three highest rating categories (or four, in a
            Designated Transaction) of at least one of the rating agencies
      for at least one year prior to the Plan's acquisition of
securities; and                                   

     o     securities evidencing interests in the other investment pools
           must have been purchased by investors other than Plans for at
           least one year prior to any Plan's acquisition of securities.

    Moreover, the Underwriter Exemptions generally provide relief from
certain self-dealing and conflict of interest prohibited transactions that may  
occur when the Plan fiduciary causes a Plan to acquire securities in an issuer  
holding receivables as to which the fiduciary (or its affiliate) is an obligor  
provided that, among other requirements:                                        

    o     in the case of an acquisition in connection with the initial
             issuance of securities, at least fifty percent of each class of
        securities in which Plans have invested and at least fifty
             percent of the aggregate interest in the issuer are acquired by
persons independent of the Restricted Group;      

      o     the fiduciary (or its affiliate) is an obligor with respect to
              five percent or less of the fair market value of the obligations
contained in the investment pool;                 

        o     the Plan's investment in securities of any class does not exceed
        twenty-five percent of all of the securities of that class
outstanding at the time of the acquisition; and   

90

424B5
213th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 213th
   o     immediately after the acquisition, no more than twenty-five
         percent of the assets of any Plan with respect to which the
             person is a fiduciary is invested in securities representing an
       interest in one or more issuers containing assets sold or
serviced by the same entity.                      

This relief is not available to Plans sponsored by the seller, any underwriter, 
the trustee, the master servicer, any servicer, any insurer with respect to the 
trust, any obligor with respect to mortgage loans included in the investment    
pool constituting more than five percent of the aggregate unamortized principal 
balance of the assets in the investment pool, any counterparty to a permissible 
notional principal contract included in the trust, or any affiliate of those    
parties (the "Restricted Group").                                               

        The Underwriter Exemptions provide exemptive relief to mortgage-backed
and asset-backed securities transactions that use pre-funding accounts and that 
otherwise meet the requirements of the Underwriter Exemptions. Mortgage loans or
other secured receivables supporting payments to securityholders, and having a  
value equal to no more than twenty-five percent of the total principal amount of
the securities being offered by the issuer, may be transferred to the issuer    
within a 90-day or three-month period following the closing date, instead of    
being required to be either identified or transferred on or before the closing  
date. The relief is available when the pre-funding accounts meet certain        
conditions.                                                                     

         The rating of a security may change. If a class of securities no longer
has a permitted rating from at least one rating agency, securities of that class
will no longer be eligible for relief under the Underwriter Exemptions (although
a Plan that had purchased the security when it had a permitted rating would not 
be required by the Underwriter Exemptions to dispose of it). A certificate that 
satisfies the requirements of the Underwriter Exemptions other than the rating  
requirement may be eligible for purchase by an insurance company investing      
assets of its general account that include plan assets when the requirements of 
Sections I and III of Prohibited Transaction Class Exemption 95-60 are met.     

         The prospectus supplement for each series of certificates will indicate
the classes of certificates offered thereby, if any, as to which it is expected 
that an Underwriter Exemption will apply.                                       

Any Plan fiduciary that proposes to cause a Plan to purchase  
certificates is encouraged to consult with its counsel concerning the impact of 
ERISA and the Code, the effect of the Plan Assets Regulation, the availability  
and applicability of any Underwriter Exemption or any other exemptions from the 
prohibited transaction provisions of ERISA and the Code and the potential       
consequences in their specific circumstances, before making the investment.     
Moreover, each Plan fiduciary should determine whether under the general        
fiduciary standards of investment prudence and diversification an investment in 
the certificates is appropriate for the Plan, taking into account the overall   
investment policy of the Plan and the composition of the Plan's investment      
portfolio.                                                                      

         The sale of certificates to a Plan is in no respect a representation by
the issuer or any underwriter of the Certificates that this investment meets all
relevant legal requirements with respect to investments by Plans generally or   
any particular Plan, or that this investment is appropriate for Plans generally 
or any particular Plan.                                                         

LEGAL INVESTMENT

The prospectus supplement for each series of certificates will specify
which, if any, of the classes of certificates offered by it will constitute     
"mortgage related securities" for purposes of the Secondary Mortgage Market     
Enhancement Act of 1984 ("SMMEA"). Classes of certificates that qualify as      
"mortgage related securities" will be legal investments for those investors     
whose authorized investments are subject to state regulation, to the same extent
as, under applicable law, obligations issued by or guaranteed as to principal   
and interest by the United States constitute legal investments for them. Those  
investors are 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 (including the District of Columbia   
and Puerto Rico). Under SMMEA, if a state enacts legislation before October 4,  
1991 specifically limiting the legal investment authority of those entities with
respect to "mortgage related securities," the certificates will constitute legal
investments for entities subject to the legislation only to the extent provided 
in it. Approximately twenty-one states adopted limiting legislation before the  
October 4, 1991 deadline.                                                       

91

424B5
214th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 214th
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 in 
certificates without limitations as to the percentage of their assets           
represented by them, federal credit unions may invest in mortgage related       
securities, and national banks may purchase certificates for their own account  
without regard to the limitations generally applicable to investment securities 
set forth in 12 U.S.C. 24 (Seventh), subject in each case to regulations that   
the applicable federal authority may prescribe. In this connection, federal     
credit unions should review the National Credit Union Administration Letter to  
Credit Unions No. 96, as modified by Letter to Credit Unions No. 108, which     
includes guidelines to assist federal credit unions in making investment        
decisions for mortgage related securities, and the its regulation "Investment   
and Deposit Activities" (12 C.F.R. Part 703), (whether or not the class of      
certificates under consideration for purchase constitutes a "mortgage related   
security").                                                                     

All depository institutions considering an investment in the  
certificates (whether or not the class of certificates under consideration for  
purchase constitutes a "mortgage related security" should review the Federal    
Financial Institutions Examination Council's Supervisory Policy Statement on    
Securities Activities (to the extent adopted by their respective regulators),   
setting forth, in relevant part, certain securities trading and sales practices 
deemed unsuitable for an institution's investment portfolio, and guidelines for 
(and restrictions on) investing in mortgage derivative products, including      
"mortgage related securities" that are "high-risk mortgage securities" as       
defined in the policy statement. According to the policy statement, "high-risk  
mortgage securities" include securities such as certificates not entitled to    
distributions allocated to principal or interest, or subordinated certificates. 
Under the policy statement, each depository institution must determine, before  
purchase (and at stated intervals thereafter), whether a particular mortgage    
derivative product is a "high-risk mortgage security," and whether the purchase 
(or retention) of such a product would be consistent with the policy statement. 

     The foregoing does not take into consideration the applicability of
statutes, rules, regulations, orders, guidelines, or agreements generally       
governing investments made by a particular investor, including "prudent         
investor" provisions, percentage-of-assets limits and provisions that may       
restrict or prohibit investment in securities that are not "interest bearing" or
"income paying."                                                                

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

METHOD OF DISTRIBUTION

         Certificates are being offered hereby in series from time to time (each
series evidencing a separate trust fund) through any of the following methods:  

      o     by negotiated firm commitment or best efforts underwriting and
public reoffering by underwriters;                

 o     by agency placements through one or more placement agents
     primarily with institutional investors and dealers; and

 o     by placement directly by the depositor 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 of its underwriters and either the price at which the series
is being offered, the nature and amount of any underwriting discounts or        
additional compensation to the underwriters and the proceeds of the offering to 
the depositor, 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 depositor 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 the series if any 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.                                                            

92

424B5
215th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 215th
       This prospectus, together with the related prospectus supplement, may
be used by Countrywide Securities Corporation, an affiliate of CWALT, Inc., in  
connection with offers and sales related to market making transactions in the   
certificates in which Countrywide Securities Corporation acts as principal.     
Countrywide Securities Corporation may also act as agent in those transactions. 
Sales in those transactions will be made at prices related to prevailing prices 
at the time of sale.                                                            

       Underwriters and agents may be entitled under agreements entered into
with the depositor to indemnification by the depositor against certain civil    
liabilities, including liabilities under the Securities Act of 1933, as amended,
or to contribution with respect to payments which the underwriters or agents may
be required to make in respect thereof.                                         

      In relation to each Member State of the European Economic Area which
has implemented the Prospectus Directive (each, a "Relevant Member State"), each
underwriter will be required to represent and agree with the depositor that with
effect from and including the date on which the Prospectus Directive is         
implemented in that Relevant Member State (the "Relevant Implementation Date")  
and with respect to any class of securities with a minimum denomination of less 
than $100,000, it has not made and will not make an offer of certificates to the
public in that Relevant Member State prior to the publication of a prospectus in
relation to the certificates which has been approved by the competent authority 
in that Relevant Member State or, where appropriate, approved in another        
Relevant Member State and notified to the competent authority in that Relevant  
Member State, all in accordance with the Prospectus Directive, except that it   
may, with effect from and including the Relevant Implementation Date, make an   
offer of certificates to the public in that Relevant Member State at any time:  

       (a) to legal entities which are authorised or regulated to operate in
the financial markets or, if not so authorised or regulated, whose corporate    
purpose is solely to invest in securities;                                      

       (b) to any legal entity which has two or more of (1) an average of at
least 250 employees during the last financial year; (2) a total balance sheet of
more than (euro)43,000,000 and (3) an annual net turnover of more than          
(euro)50,000,000, as shown in its last annual or consolidated accounts; or      

        (c) in any other circumstances which do not require the publication by
the depositor of a prospectus pursuant to Article 3 of the Prospectus Directive.

 For the purposes of this provision, the expression an "offer of
certificates to the public" in relation to any class of certificates of a       
series, which class has a minimum denomination of less than $100,000, in any    
Relevant Member State means the communication in any form and by any means of   
sufficient information on the terms of the offer and the certificates to be     
offered so as to enable an investor to decide to purchase or subscribe the      
certificates, as the same may be varied in that Member State by any measure     
implementing the Prospectus Directive in that Member State, and the expression  
"Prospectus Directive" means Directive 2003/71/EC and includes any relevant     
implementing measure in each Relevant Member State.                             

        If a series is offered other than through underwriters, the prospectus
supplement relating to it will contain information regarding the nature of the  
offering and any agreements to be entered into between the depositor and        
purchasers of certificates of the series.                                       

 LEGAL MATTERS

        The validity of the certificates, including certain federal income tax
consequences with respect to the certificates, will be passed upon for the      
depositor by Sidley Austin Brown & Wood LLP, 787 Seventh Avenue, New York, New  
York 10019.                                                                     

 FINANCIAL INFORMATION

        A new trust fund will be formed for each series of certificates and no
trust fund will engage in any business activities or have any assets or         
obligations before the issuance of the related series of certificates.          
Accordingly, no financial statements for any trust fund will be included in this
prospectus or in the related prospectus supplement.                             

93

424B5
216th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 216th
RATING

It is a condition to the issuance of the certificates of each series  
offered by this prospectus and by the prospectus supplement that they shall have
been rated in one of the four highest rating categories by the nationally       
recognized statistical rating agency or agencies specified in the related       
prospectus supplement.                                                          

 Ratings on mortgage pass-through certificates address the likelihood of
receipt by certificateholders of all distributions on the underlying mortgage   
loans. These ratings address the structural, legal and issuer-related aspects   
associated with the certificates, the nature of the underlying mortgage loans   
and the credit quality of the credit enhancer or guarantor, if any. Ratings on  
mortgage pass-through certificates do not represent any assessment of the       
likelihood of principal prepayments by mortgagors or of the degree by which the 
prepayments might differ from those originally anticipated. As a result,        
certificateholders might suffer a lower than anticipated yield, and, in         
addition, holders of stripped pass-through certificates in extreme cases might  
fail to recoup their underlying investments.                                    

   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
organization. Each security rating should be evaluated independently of any     
other security rating.                                                          

94

424B5
217th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 217th
INDEX TO DEFINED TERMS                          

1986 Act...........................................66                           
Agency Securities..................................12                           
Amortizable Bond Premium Regulations...............66                           
Applicable Amount..................................82                           
ARM Loans..........................................67                           
Certificate Account................................45                           
Class Certificate Balance..........................28                           
Code...............................................25                           
Contingent Regulations.............................73                           
Contributions Tax..................................84                           
Deferred Interest..................................69                           
Eleventh District..................................35                           
ERISA..............................................88                           
excess inclusion...................................83                           
FHLBSF.............................................35                           
Garn-St Germain Act................................62                           
Insured Expenses...................................46                           
Legislative History................................68                           
Liquidated Mortgage................................53                           
Loan-to-Value Ratio................................14                           
Master REMIC.......................................72                           
Mortgage Assets....................................12                           
National Cost of Funds Index.......................35                           
Non-U.S. Person....................................71                           
OID................................................65                           
OID Regulations....................................67                           
OTS................................................35                           
Parties in Interest................................88                           
pass-through entity................................86                           
Payment Lag Certificates...........................79                           
Plans..............................................88                           
Prepayment Assumption..............................68                           
Private Mortgage-Backed Securities.................12                           
Prohibited Transactions Tax........................84                           
Regular Certificateholders.........................73                           
Regular Certificates...............................72                           
Relief Act.........................................63                           
REMIC Certificates.................................71                           
REMICs.............................................72                           
Residual Certificateholder.........................80                           
Residual Certificates..............................71                           
Restricted Group...................................91                           
single-class REMIC.................................79                           
SMMEA..............................................91                           
Stripped ARM Obligations...........................70                           
Stripped Bond Certificates.........................69                           
Stripped Coupon Certificates.......................69                           
Subsequent Recoveries..............................80                           
Super-Premium Certificates.........................74                           
Title V............................................63                           
U.S. Person........................................70                           
Underlying REMIC...................................72                           
Underwriter Exemptions.............................89                           

95

424B5
218th Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 218th
[THIS PAGE INTENTIONALLY LEFT BLANK]

424B5
Last Page of 219
TOC
1st
Previous
Next
↓Bottom
Just 219th
ALTERNATIVE LOAN TRUST 2005-J12 
ISSUER

CWALT, INC. 
DEPOSITOR 

 [Countrywide Home Loans LOGO]
Seller

Countrywide Home Loans Servicing LP 
Master Servicer 

$604,102,100
(Approximate) 

Mortgage Pass-Through Certificates, Series 2005-J12 

--------------------- 
Prospectus Supplement 
--------------------- 

Countrywide Securities Corporation

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 Series 2005-J12 Mortgage Pass-Through Certificates
in any state where the offer is not permitted.                                  

Dealers will deliver a prospectus supplement and prospectus when acting as
underwriters of the Series 2005-J12 Mortgage Pass-Through Certificates and      
with respect to their unsold allotments or subscriptions. In addition, all      
dealers selling the Series 2005-J12 Mortgage Pass-Through Certificates will be  
required to deliver a prospectus supplement and prospectus for 90 days after    
the date of this prospectus supplement.                                         

October 26, 2005