Asset Backed Funding Corp – ‘424B5’ on 3/29/04 re: Asset Backed Funding Corp Abfc Asset Backed Ser 2004-AHL1

On:  Monday, 3/29/04, at 1:03pm ET   ·   Accession #:  950136-4-897   ·   File #s:  333-108551, -04

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

 1: 424B5       Definitive Materials                                 215   1.23M 

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                                                Filed Pursuant to Rule 424(b)(5)
                                            Registration No.: 333-108551

PROSPECTUS SUPPLEMENT                                                           
(TO PROSPECTUS DATED MARCH 26, 2004)                                            

$166,147,000
 (APPROXIMATE)

ABFC ASSET-BACKED CERTIFICATES, SERIES 2004-AHL1
ASSET BACKED FUNDING CORPORATION
 DEPOSITOR

 BANK OF AMERICA, N.A.
SELLER

LITTON LOAN SERVICING LP
SERVICER

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

------------------------------------------------------------------------------- 
CAREFULLY CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE S-11 OF THIS PROSPECTUS 
SUPPLEMENT AND ON PAGE 10 IN THE ACCOMPANYING PROSPECTUS.                       

The offered certificates are not insured or guaranteed by any governmental      
agency or instrumentality.                                                      

The offered certificates represent interests in the trust only and will not be  
obligations of or represent interests in any other entity. This prospectus      
supplement may be used to offer and sell the offered certificates only if       
accompanied by the prospectus.                                                  

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

THE CERTIFICATES                                                                

o    The certificates represent ownership interests in a trust consisting       
    primarily of a pool of first lien residential mortgage loans. The mortgage
    loans will consist of conventional fixed-rate and adjustable-rate mortgage
loans.                                                                

o    The class A-1 and class A-2 certificates will be senior certificates.      

o    The class M-1 and class M-2 (and the class M-3, class M-4, class M-5, class
     M-6 and class M-7 certificates, which are not offered hereby) are mezzanine
     certificates, and as such are subordinate to and provide credit enhancement
     for the class A certificates. Each class of class M certificates is further
   subordinated to and provides credit enhancement for each class of class M
certificates with lower numerical class designations.                 

o    The classes of offered certificates are listed in the table on page S-5.   

CREDIT ENHANCEMENT                                                              

o    Excess Cashflow - Certain excess cashflow received from the mortgage loans 
will be used to cover losses.                                         

o    Overcollateralization - As of the cut-off date, the assets of the trust    
    will exceed the aggregate principal balance of the certificates, resulting
in overcollateralization. Certain excess cashflow received from the   
mortgage loans will also be applied as payments of principal on the   
certificates to maintain a required level of overcollateralization.   

o    Subordination - The mezzanine certificates are subordinate in right of     
certain payments to the senior certificates and to those classes of   
mezzanine certificates higher in order of payment priority.           

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

The underwriters will purchase and offer the offered certificates to investors  
at varying prices to be determined at the time of sale. The depositor expects   
that the offered certificates will be available for delivery to investors in    
book-entry form through The Depository Trust Company, Clearstream Banking or the
Euroclear System on or about March 30, 2004. Total proceeds to the depositor for
the offered certificates will be approximately 100.00% of the initial principal 
balance of the offered certificates, before deducting expenses estimated at     
$625,000 payable by the depositor.                                              

BANC OF AMERICA SECURITIES LLC                                                  
BEAR, STEARNS & CO. INC.    
                                          COUNTRYWIDE SECURITIES CORPORATION

THE DATE OF THIS PROSPECTUS SUPPLEMENT IS MARCH 26, 2004

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TABLE OF CONTENTS 

                      PAGE
                      ----
SUMMARY OF PROSPECTUS SUPPLEMENT..................S-5                           
RISK FACTORS.....................................S-10                           
THE MORTGAGE POOL................................S-18                           
General.....................................S-18                      
Mortgage Pool Statistics....................S-20                      
Mortgage Loan Statistical Tables............S-21                      
The Index-- Six-Month LIBOR.................S-34                      
Terms of the Mortgage Loans.................S-34                      
THE SELLER.......................................S-34                           
THE ORIGINATOR...................................S-34                           
UNDERWRITING STANDARDS...........................S-34                           
THE SERVICER.....................................S-39                           
Pledge and Assignment of Servicer's                                   
Rights...................................S-41                   
THE POOLING AND SERVICING AGREEMENT..............S-41                           
General.....................................S-41                      
Assignment of the Mortgage Loans............S-41                      
Payments on Mortgage Loans; Deposits to                               
Collection Account and Distribution                             
Account..................................S-43                   
Advances....................................S-43                      
The Trustee.................................S-45                      
Servicing and Other Compensation and                                  
Payment of Expenses......................S-45                   
Optional Termination........................S-46                      
Optional Purchase of Defaulted Loans........S-46                      
Due-on-Sale Clause..........................S-46                      
Events of Servicing Termination.............S-46                      
Rights upon Event of Servicing Termination..S-47                      
Voting Rights...............................S-47                      
Amendment...................................S-47                      
DESCRIPTION OF THE CERTIFICATES..................S-47                           
General.....................................S-47                      
Book-Entry Certificates.....................S-48                      
Allocation of Available Funds...............S-52                      
Interest Distributions......................S-52                      
Principal Distributions.....................S-54                      
Allocation of Losses........................S-59                      
Application of Monthly Excess Cashflow                                
Amounts..................................S-59                   
Pass-Through Rates..........................S-62                      
Calculation of One-Month LIBOR..............S-63                      
YIELD, PREPAYMENT AND MATURITY                                                  
CONSIDERATIONS...........................S-64                   
Additional Information......................S-65                      
Weighted Average Lives......................S-65                      
Final Scheduled Distribution Dates..........S-74                      
USE OF PROCEEDS..................................S-74                           
CERTAIN MATERIAL FEDERAL INCOME                                                 
TAX CONSEQUENCES.........................S-74                   
General.....................................S-74                      
Taxation of Regular Interests...............S-74                      
Taxation of the Notional Principal                                    
Arrangements.............................S-75                   
REMIC Taxes and Reporting...................S-76                      
STATE TAXES......................................S-76                           
ERISA CONSIDERATIONS.............................S-76                           
LEGAL INVESTMENT.................................S-78                           
METHOD OF DISTRIBUTION...........................S-79                           
LEGAL MATTERS....................................S-79                           
RATINGS..........................................S-79                           
INDEX OF DEFINED TERMS...........................S-81                           

ANNEX I-- GLOBAL CLEARANCE,                                                     
SETTLEMENT AND TAX                                              
DOCUMENTATION PROCEDURES..................I-1                   

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

         The depositor describes the certificates in two separate documents that
progressively provide more detail:                                              

       o    the accompanying prospectus, which provides general information,
 some of which may not apply to your certificates, and

        o    this prospectus supplement, which describes the specific terms of
your certificates.                                  

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

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

     You can find a listing of the pages where capitalized terms used in
this prospectus supplement and the accompanying prospectus are defined under the
caption "Index of Defined Terms" beginning on page S-83 in this document and    
under the caption "Index of Significant Definitions" beginning on page 122 in   
the accompanying prospectus. Any capitalized terms used but not defined in this 
prospectus supplement have the meanings assigned in the accompanying prospectus.

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

    This prospectus supplement and the accompanying prospectus contain
forward-looking statements relating to future economic performance or           
projections and other financial items. Such forward-looking statements, together
with related qualifying language and assumptions, are found in the material,    
including each of the tables, set forth under "Risk Factors" and "Yield,        
Prepayment and Maturity Considerations." Forward-looking statements are also    
found elsewhere in this prospectus supplement and the accompanying prospectus,  
and may be identified by, among other things, the use of forward-looking words  
such as "expects," "intends," "anticipates," "estimates," "believes," "may" or  
other comparable words. Such statements involve known and unknown risks,        
uncertainties and other important factors that could cause the actual results or
performance to differ materially from such forward-looking statements. Those    
risks, uncertainties and other factors include, among others, general economic  
and business conditions, competition, changes in political, social and economic 
conditions, regulatory initiatives and compliance with government regulations,  
customer preference and various other matters, many of which are beyond the     
depositor's control. These forward-looking statements speak only as of the date 
of this prospectus supplement. The depositor expressly disclaims any obligation 
or undertaking to update or revise forward-looking statements to reflect any    
change in the depositor's expectations or any change in events, conditions or   
circumstances on which any forward-looking statement is based.                  

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THE ABFC 2004-AHL1 ASSET-BACKED CERTIFICATES

                                                        [Enlarge/Download Table]


                INITIAL CERTIFICATE                                                                                  
   CLASS            BALANCE(1)           PASS-THROUGH RATE(2)        PRINCIPAL TYPES            INTEREST TYPES       
-------------  ----------------------  -------------------------  -----------------------  --------------------------
                                                                                                                     
A-1                $119,292,000             LIBOR + 0.160%          Senior Sequential            Floating Rate       
A-2                $ 26,365,000             LIBOR + 0.420%          Senior Sequential            Floating Rate       
M-1                $ 10,691,000             LIBOR + 0.520%              Mezzanine                Floating Rate       
M-2                $  9,799,000             LIBOR + 1.150%              Mezzanine                Floating Rate       

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

(1)   Plus or minus 5%.                                                         

(2)   These certificates will accrue interest at a variable per annum rate equal
  to one-month LIBOR as of the related LIBOR determination date plus the
  margin rate specified above for each class, in each case subject to an
     interest rate cap, as described in this Prospectus Supplement. The margin
rate for these certificates will increase following the optional    
termination date as described under "Description of the             
Certificates--Pass-Through Rates" in this Prospectus Supplement.    

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SUMMARY OF PROSPECTUS SUPPLEMENT

         Because this is a summary, it does not contain all the information that
may be important to you. You should read the entire accompanying prospectus (the
"PROSPECTUS") and this prospectus supplement (the "PROSPECTUS SUPPLEMENT")      
carefully before you decide to purchase a certificate. If capitalized terms are 
not defined in this Prospectus Supplement, they are defined in the Prospectus.  

ISSUER                                                                          

ABFC 2004-AHL1 Trust, referred to in this Prospectus Supplement as the trust.   

TITLE OF SERIES                                                                 

ABFC Asset-Backed Certificates, Series 2004-AHL1.                               

THE CERTIFICATES                                                                

The class A-1, class A-2, class M-1, class M-2, class M-3, class M-4, class M-5,
class M-6, class M-7, class CE, class P, class R and class RX certificates are  
the entire ownership interest in a trust fund which is composed of first lien   
mortgage loans. The trust will issue the certificates pursuant to a pooling and 
servicing agreement among Asset Backed Funding Corporation, as depositor, Litton
Loan Servicing LP, as servicer, and JPMorgan Chase Bank, as trustee. The trust  
is offering the class A-1, class A-2, class M-1 and class M-2 certificates as   
book-entry securities clearing through The Depository Trust Company ("DTC") (in 
the United States) or Clearstream Banking ("CLEARSTREAM") or the Euroclear      
System ("EUROCLEAR") (in Europe). See "Description of the                       
Certificates--Book-Entry Certificates" in this Prospectus Supplement.           

THE OFFERED CERTIFICATES                                                        

The underwriters are offering to sell the class A-1, class A-2, class M-1 and   
class M-2 certificates. The class M-3, class M-4, class M-5, class M-6, class   
M-7, class CE, class P, class R and class RX certificates are not being offered 
pursuant to this prospectus supplement.                                         

DEPOSITOR OF MORTGAGE LOANS                                                     

Asset Backed Funding Corporation will deposit the mortgage loans in the trust.  
The depositor is a Delaware corporation and a wholly-owned, indirect subsidiary 
of Bank of America Corporation. The depositor is an affiliate of Bank of        
America, N.A., the seller, and Banc of America Securities LLC, one of the       
underwriters.                                                                   

MORTGAGE LOAN ORIGINATOR                                                        

Accredited Home Lenders, Inc., a California corporation, originated or acquired 
all of the mortgage loans in the trust. Substantially all of the mortgage loans 
were originated or acquired generally in accordance with the underwriting       
standards described in "Underwriting Standards" in this Prospectus Supplement.  

MORTGAGE LOAN SELLER                                                            

On the closing date, the mortgage loans will be sold to the depositor by Bank of
America, N.A., an affiliate of the depositor and of one of the underwriters,    
which acquired the mortgage loans from Accredited Home Lenders, Inc.            

SERVICER                                                                        

Litton Loan Servicing LP will service the mortgage loans. Subject to certain    
limitations, the servicer must advance delinquent payments of principal and     
interest on the mortgage loans, other than with respect to REO Properties. See  
"The Pooling and Servicing Agreement--Advances" in this Prospectus Supplement   
and "Description of the Securities--Advances in Respect of Delinquencies" in the
Prospectus.                                                                     

TRUSTEE                                                                         

JPMorgan Chase Bank, a New York banking corporation.                            

CUT-OFF DATE                                                                    

March 1, 2004.                                                                  

CLOSING DATE                                                                    

On or about March 30, 2004.                                                     

FINAL SCHEDULED DISTRIBUTION DATES                                              

The final scheduled distribution date for each class of offered certificates is 
set forth below:                                                                

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FINAL SCHEDULED   
CLASS                 DISTRIBUTION DATE                         
----------------------    ---------------------------                           
A-1                  September 25, 2030                       
A-2                  November 25, 2033                        
M-1                  September 25, 2033                       
M-2                   August 25, 2033                         

Each such final scheduled distribution date has been calculated as described    
under "Yield, Prepayment and Maturity Considerations--Final Scheduled           
Distribution Dates" in this Prospectus Supplement.                              

THE MORTGAGE POOL                                                               

On the closing date, the trust will contain approximately 1,080 one- to         
four-family, fixed and adjustable-rate mortgage loans secured by first liens on 
residential properties.                                                         

The mortgage loans have original terms to maturity of not greater than 30 years 
from the first due date and the following aggregate characteristics as of the   
cut-off date (percentages are based on the aggregate principal balance of the   
mortgage loans):                                                                

Aggregate Current Principal Balance                            $178,174,543.01  
Average Outstanding Principal Balance                              $164,976.43  
Range of Outstanding Principal Balances              $22,483.28 to $646,551.64  
Average Original Principal Balance                                 $165,567.50  
Range of Original Principal Balances                 $22,500.00 to $648,400.00  
Loans with Prepayment Penalties                                         75.06%  
Adjustable-Rate Mortgage Loans                                          83.15%  
Fixed-Rate Mortgage Loans                                               16.85%  
Weighted Average Mortgage Interest Rate                                 7.457%  
Range of Mortgage Interest Rates                             5.375% to 13.990%  
Weighted Average Credit Score                                              637  
Range of Credit Scores                                              483 to 802  
Weighted Average Original Loan-to-Value Ratio                           79.95%  
Range of Original Loan-to-Value Ratio                         9.09% to 100.00%  
Weighted Average Original Term to Maturity                          357 months  
Weighted Average Remaining Term to Maturity                         353 months  
Percentage of Balloon Mortgage Loans                                     0.04%  
Max ZIP Code Concentration (%)                                           0.96%  
Max ZIP Code Concentration (ZIP)                                         95020  

Top 5 Geographic Concentrations:

California                                                              33.88%  
New York                                                                 8.24%  
Florida                                                                  7.69%  
Illinois                                                                 6.53%  
New Jersey                                                               4.43%  

For the Adjustable-Rate Mortgage Loans Only:                                    

Weighted Average Gross Margin                                           6.061%  
Range of Gross Margins                                       3.875% to 10.990%  
Weighted Average Maximum Mortgage Interest Rate1                        4.414%  
Range of Maximum Mortgage Interest Rates                    12.375% to 18.990%  
Weighted Average Minimum Mortgage Interest Rate                         7.414%  
Range of Minimum Mortgage Interest Rates5                     .375% to 11.990%  
Weighted Average Initial Rate Adjustment Cap                            1.498%  
Range of Initial Rate Adjustment Caps                         1.000% to 1.500%  
Weighted Average Periodic Rate Adjustment Cap                           1.499%  
Range of Periodic Rate Adjustment Caps                        1.000% to 1.500%  
Weighted Average Months to Next Adjustment Date                      27 months  
Range of Months to Next Adjustment Date                        15 to 32 months  

See "The Mortgage Pool" in this Prospectus Supplement for more information about
the mortgage loans.                                                             

DISTRIBUTIONS--GENERAL                                                          

The distribution date will be the 25th day of each month or, if such day is not 
a business day, the next business day, beginning on April 26, 2004.             
Distributions will generally include payments made on the mortgage loans during 
the related collection period and any advances by the servicer. The collection  
period for any distribution date is the period from the second day of the       
calendar month preceding the month in which the distribution date occurs through
the first day of the calendar month in which the distribution date occurs.      

RECORD DATE                                                                     

The record date for each distribution date will be, the business day before such
distribution date. If,                                                          

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however,  definitive  certificates are issued,  the record date will be the last
business day of the month  preceding  the month in which the  distribution  date
occurs (or the closing date, in the case of the first distribution date).       

INTEREST DISTRIBUTIONS                                                          

On each distribution date, you will be entitled to receive interest accrued on  
your certificate during the related interest accrual period and any interest    
which you earned previously but which you did not receive. The interest accrual 
period for any distribution date for all offered certificates is the period from
the distribution date in the prior month (or the closing date, in the case of   
the first distribution date) through the day prior to the current distribution  
date. Interest will be calculated for all offered certificates on the basis of  
the actual number of days in the interest accrual period, based on a 360-day    
year.                                                                           

There are certain circumstances which could reduce the amount of interest paid  
to you. See "Description of the Certificates--Interest Distributions" in this   
Prospectus Supplement.                                                          

PASS-THROUGH RATES                                                              

Interest will accrue on the offered certificates during each interest accrual   
period at a per annum rate equal to the least of (i) the sum of one-month LIBOR 
as described below plus the margin set forth in the table below, (ii) the       
maximum cap rate and (iii) the net WAC rate as described under "Description of  
the Certificates--Pass-Through Rates" in this Prospectus Supplement.            

The pass-through rates on the certificates are based on LIBOR. LIBOR is the rate
for deposits in U.S. dollars for a one-month period which appears on the Dow    
Jones Telerate page 3750, or similar replacement page, as of 11:00 a.m. London  
time, on the related LIBOR determination date. The LIBOR determination date for 
each interest accrual period is the second London business day prior to the     
first day of the related interest accrual period.                               

During each interest accrual period relating to the distribution dates after the
optional termination date, the margins will increase to the "stepped-up" margins
set forth in the table below if the optional termination right is not exercised.

          STEPPED-UP
CLASS             MARGIN            MARGIN                          
------------------    ------------    ---------------                           
A-1              0.160%            0.320%                         
A-2              0.420%            0.840%                         
M-1              0.520%            0.780%                         
M-2              1.150%            1.725%                         

PRINCIPAL DISTRIBUTIONS                                                         

On each distribution date, you will receive a distribution of principal if there
are funds available on that date for your class of certificates. You should     
review the priority of payments described under "Description of the             
Certificates--Principal Distributions" in this Prospectus Supplement.           

CREDIT ENHANCEMENT                                                              

Credit enhancement reduces the risk of harm caused to holders of certificates by
shortfalls in payments received on the mortgage loans. Credit enhancement can   
reduce the effect of shortfalls on all classes, or it can allocate shortfalls so
they affect some classes before others. This transaction employs the following  
forms of credit enhancement. See "Description of the Certificates" in this      
Prospectus Supplement.                                                          

MONTHLY EXCESS CASHFLOW. Because more interest is expected to be paid by the    
mortgagors than is necessary to pay the interest earned on the offered          
certificates and the class M-3, class M-4, class M-5, class M-6 and class M-7   
certificates, we expect there to be excess interest each month. The excess      
interest, together with any other monthly excess cashflow, will be used to      
maintain overcollateralization, to pay interest that was previously earned but  
not paid to such certificates, and to reimburse such certificates for losses and
certain shortfalls that they experienced previously.                            

OVERCOLLATERALIZATION. If the total assets in the trust exceed the total        
principal amount of the offered certificates and the class M-3, class M-4, class
M-5, class M-6 and class M-7 certificates, there is overcollateralization       
available to absorb losses on the mortgage loans before such losses affect such 
certificates. On the closing date, the total initial principal balance of the   
mortgage loans will exceed the total initial principal amount of the offered    
certificates and the class M-3, class M-4, class M-5 class M-6 and Class M-7    
certificates by approximately $891,543. This results in overcollateralization   
equal to approximately 0.50% of the total initial principal balance of the      
mortgage loans. If the level of overcollateralization falls below               

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what is required under the pooling and servicing  agreement,  any monthly excess
cashflow will be paid to the offered  certificates and the class M-3, class M-4,
class M-5, class M-6 and class M-7 certificates as principal. This will have the
effect of reducing the  principal  balance of the  certificates  faster than the
principal   balance  of  the  mortgage   loans  until  the  required   level  of
overcollateralization is reached.                                               

SUBORDINATION. On each distribution date, classes that are lower in order of    
payment priority will not receive payments until the classes that are higher in 
order of payment priority have been paid. If there are insufficient funds on a  
distribution date to pay all classes, the subordinate classes are the first to  
forego payment.                                                                 

APPLICATION OF REALIZED LOSSES. If, on any distribution date after the balances 
of the offered certificates and the class M-3, class M-4, class M-5, class M-6  
and class M-7 certificates have been reduced by the amount of collections paid  
as principal on that date, the total principal balance of such certificates is  
greater than the total principal balance of the mortgage loans, the principal   
balance of the class M certificates that are lowest in order of payment priority
will be reduced by the amount of such excess. Once realized losses are allocated
to the class M certificates, such realized losses will not be reinstated        
thereafter (except in the case of subsequent recoveries). The principal balances
of the class A-1 and class A-2 certificates will not be reduced by realized     
losses, although these certificates may experience losses if the credit         
enhancements described herein are exhausted.                                    

OPTIONAL TERMINATION                                                            

The majority holder of the class CE certificates or, if such holder is the      
mortgage loan seller or is affiliated with the mortgage loan seller or if there 
is no majority holder, the Servicer, will have the option to purchase all the   
mortgage loans and any properties that the trust acquired in satisfaction of any
of the mortgage loans, subject to certain conditions described herein under "The
Pooling and Servicing Agreement - Optional Termination." This option can be     
exercised when the total principal balance of the mortgage loans, including the 
mortgage loans related to REO Properties, is 10% or less of the total principal 
balance of the mortgage loans as of the cut-off date. If the option is          
exercised, your certificate will be retired earlier than it would be otherwise  
and you will be entitled to the following amounts to the extent available       
therefor:                                                                       

o    the outstanding principal balance of your certificate;                     

o    one month's interest on such balance at the related pass-through rate;     

o    any interest previously earned but not paid; and                           

o    any net WAC rate carryover amount, as described in this Prospectus         
Supplement, from all previous distribution dates.                     

You will receive the last two items only to the extent that there is enough cash
to make such payments. See "The Pooling and Servicing Agreement--Optional       
Termination" in this Prospectus Supplement.                                     

CERTAIN MATERIAL FEDERAL INCOME TAX CONSEQUENCES                                

The trustee will elect to treat certain of the assets of the trust (exclusive of
the arrangement intended to protect against basis risk for the certificates and 
any other assets excluded by the pooling and servicing agreement), as comprised 
of two or more real estate mortgage investment conduits (each, a "REMIC") for   
federal income tax purposes. Each of the offered certificates, exclusive of its 
right to receive net WAC rate carryover amounts, will be a "regular interest" in
a REMIC for federal income tax purposes.                                        

For further information regarding the federal income tax consequences of        
investing in the offered certificates, see "Certain Material Federal Income Tax 
Consequences" in this Prospectus Supplement and "Federal Income Tax             
Consequences" in the Prospectus.                                                

RATINGS                                                                         

The trust  will not issue  the  certificates  unless  the  offered  certificates
receive  the  respective  ratings  set forth  below from  Standard  & Poor's,  a
division of The  McGraw-Hill  Companies,  Inc.  ("S&P")  and  Moody's  Investors
Service, Inc. ("MOODY'S"):                                                      

CLASS          MOODY'S           S&P                            
------------     ----------    --------------                         
A-1             Aaa             AAA                           
A-2             Aaa             AAA                           
M-1             Aa2             AA                            
M-2             A2               A                            

The ratings on the certificates indicate the likelihood that you will receive   
all funds to which you are entitled by the terms of your certificate. The rating

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agency that issues the rating reviews the nature and credit quality of the      
mortgage loans and the soundness of the structure which the depositor has       
created to allow the payments on the mortgage loans to flow to the holders of   
the certificates. A rating is not a recommendation to buy, sell or hold         
securities and the rating agency can revise or withdraw it at any time. A rating
does not address the likelihood of the payment of net WAC rate carryover        
amounts, the frequency of prepayments on the mortgage loans or the effect of    
such prepayments on your yield. See "Yield, Prepayment and Maturity             
Considerations" and "Ratings" in this Prospectus Supplement and "Yield          
Considerations" in the Prospectus.                                              

LEGAL INVESTMENT                                                                

You should consult with counsel to see if you are permitted to buy the offered  
certificates, since legal investment rules will vary depending on the type of   
entity purchasing the offered certificates, whether that entity is subject to   
regulatory authority, and if so, by whom. The class A-1, class A-2 and class M-1
certificates will constitute "mortgage related securities" for purposes of the  
Secondary Mortgage Market Enhancement Act of 1984, as amended, so long as they  
are rated in one of the two highest rating categories by at least one nationally
recognized rating agency. The class M-2 certificates will not be "mortgage      
related securities" for purposes of the Secondary Mortgage Market Enhancement   
Act of 1984, as amended. See "Legal Investment" in this Prospectus Supplement   
and in the Prospectus.                                                          

ERISA CONSIDERATIONS                                                            

If you are a fiduciary of any employee benefit plan or other retirement         
arrangement subject to the Employee Retirement Income Security Act of 1974, as  
amended, or Section 4975 of the Internal Revenue Code of 1986 or any materially 
similar provisions of applicable federal, state or local law, you should consult
with counsel as to whether you can buy or hold an offered certificate. See      
"ERISA Considerations" in this Prospectus Supplement and in the Prospectus.     

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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 SET FORTH  
UNDER "RISK FACTORS" IN THE PROSPECTUS.                                         

THE NATURE OF SUB-PRIME MORTGAGE LOANS MAY INCREASE RISK OF LOSS.               

 Substantially all of the mortgage loans are of sub-prime credit
quality; i.e., they do not meet the customary credit standards of Freddie Mac   
and Fannie Mae. Accredited Home Lenders, Inc. makes mortgage loans to borrowers 
who do not meet conforming underwriting guidelines because of higher            
loan-to-value ratios, the nature or absence of income documentation, limited    
credit histories, high levels of consumer debt, or past credit difficulties. As 
a result of these factors, delinquencies and liquidation proceedings are more   
likely for these mortgage loans than for mortgage loans that satisfy customary  
credit standards. In the event these mortgage loans do become delinquent or     
subject to liquidation, you may experience losses and/or delays in receiving    
payment if the credit enhancements are insufficient to cover the losses and     
delays.                                                                         

   Furthermore, changes in values of mortgaged properties may have a
greater effect on the delinquency, foreclosure, bankruptcy and loss experience  
of the mortgage loans in the mortgage pool than on mortgage loans originated in 
a more traditional manner. 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. See           
"Underwriting Standards" in this Prospectus Supplement.                         

THERE ARE RISKS INVOLVING UNPREDICTABILITY OF PREPAYMENTS AND THE EFFECT OF     
PREPAYMENTS ON YIELDS.                                                          

       Mortgagors may prepay their mortgage loans in whole or in part at any
time. We cannot predict the rate at which mortgagors will repay their mortgage  
loans. A prepayment of a mortgage loan generally will result in a prepayment of 
the certificates.                                                               

      The yield to maturity on the offered certificates will depend upon a
variety of factors, including the following:                                    

       o    If you purchase your certificates at a discount and principal is
          repaid more slowly 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    The rate of prepayments on the mortgage loans will be sensitive to
              prevailing interest rates. Generally, if prevailing interest rates
        decline significantly below the interest rates on any of the
          mortgage loans, those mortgage loans are more likely to prepay
            than if prevailing rates remain above the interest rates on such
         mortgage loans. Conversely, if prevailing interest rates rise
          significantly, the prepayments on mortgage loans are likely to
             decrease. The prepayment behavior of the adjustable-rate mortgage
      loans and of the fixed-rate mortgage loans, may respond to
              different factors, or may respond differently to the same factors.
           If at the time of their first adjustment, the interest rates on
         any of the adjustable-rate mortgage loans would be subject to
         adjustment to a rate higher than the then prevailing mortgage
             interest rates available to the related borrowers, such borrowers
            may prepay their adjustable rate mortgage loans. Adjustable-rate
      mortgage loans may also suffer an increase in defaults and
              liquidations following upward adjustments of their interest rates,
especially following their initial adjustments.     

         o    Approximately 75.06% of the mortgage loans (by aggregate principal
           balance as of the cut-off date), require the mortgagor to pay a
             penalty if the mortgagor prepays the mortgage loan during periods
             ranging from six months to five years after the mortgage loan was
originated. A prepayment penalty                    

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       may discourage a mortgagor from prepaying the mortgage loan
           during the applicable period. Such prepayment penalties will be
         distributed to holders of the class P certificates and not to
            holders of the offered certificates. The servicer is entitled to
     waive prepayment penalties, subject to certain conditions
specified in the pooling and servicing agreement.   

        o    The originator or the seller may be required to purchase mortgage
 loans from the trust in the event certain breaches of
            representations and warranties occur and have not been cured. In
          addition, the servicer or an affiliate of the servicer has the
       option to purchase mortgage loans that are at least 90 days
           delinquent under the circumstances described in the pooling and
             servicing agreement. These purchases will have the same effect on
          the holders of the offered certificates as a prepayment of the
mortgage loans.                                     

      o    If the rate of default and the amount of losses on the mortgage
              loans is higher than you expect, then your yield may be lower than
you expect.                                         

         o    If the level of overcollateralization falls below what is required
              under the pooling and servicing agreement, excess cashflow will be
            paid to the certificates as principal. This will have the effect
             of reducing the principal balance of the certificates faster than
          the principal balance of the mortgage loans until the required
level of overcollateralization is reached.          

       o    As a result of the absorption of realized losses on the mortgage
              loans by excess cashflow and overcollateralization as described in
          this prospectus supplement, liquidations of defaulted mortgage
          loans, regardless of whether realized losses are incurred upon
             these liquidations, will result in an earlier return of principal
           to the offered certificates and will influence the yield on the
           offered certificates in a manner similar to the manner in which
          principal prepayments on the mortgage loans will influence the
yield on the offered certificates.                  

       See "Yield, Prepayment and Maturity Considerations" for a description
of factors that may influence the rate and timing of prepayments on the mortgage
loans.                                                                          

THE YIELD TO MATURITY ON THE SUBORDINATED CERTIFICATES WILL BE PARTICULARLY     
SENSITIVE TO THE RATE OF PREPAYMENTS ON THE MORTGAGE LOANS.                     

  The multiple class structure and structural subordination of the
mezzanine certificates causes the yield of these classes to be particularly     
sensitive to changes in the rates of prepayment of the mortgage loans. Because  
distributions of principal will be made to the holders of such certificates     
according to the priorities described in this Prospectus Supplement, the yield  
to maturity on such classes of certificates will be sensitive to the rates of   
prepayment on the mortgage loans experienced both before and after the          
commencement of principal distributions on such classes. The yield to maturity  
on such classes of certificates will also be extremely sensitive to losses due  
to defaults on the mortgage loans (and timing thereof), to the extent these     
losses are not covered by excess cashflow otherwise payable to the class CE     
certificates or to a class of mezzanine certificates with a lower payment       
priority. Furthermore, as described in this Prospectus Supplement, the timing of
receipt of principal and interest by the mezzanine certificates may be adversely
affected by losses even if these classes of certificates do not ultimately bear 
such loss.                                                                      

THERE ARE RISKS RELATING TO ALTERNATIVES TO FORECLOSURE.                        

       Certain of the mortgage loans may become delinquent after the closing
date. The servicer may either foreclose on any such mortgage loan or work out an
agreement with the mortgagor, which may involve waiving or modifying certain    
terms of the mortgage loan. If the servicer extends the payment period or       
accepts a lesser amount than stated in the mortgage note in satisfaction of the 
mortgage note, your yield may be reduced.                                       

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THERE IS A RISK THAT INTEREST PAYMENTS ON THE MORTGAGE LOANS MAY BE INSUFFICIENT
TO MAINTAIN OR RESTORE OVERCOLLATERALIZATION.                                   

    Because the weighted average of the interest rates on the mortgage
loans is expected to be higher than the weighted average of the pass-through    
rates on the offered certificates and the class M-3, class M-4, class M-5, class
M-6 and class M-7 certificates, the mortgage loans are expected to generate more
interest than is needed to pay interest owed on such certificates as well as    
certain fees and expenses of the trust. After these financial obligations of the
trust are covered, the available excess cashflow will be used to maintain or    
restore overcollateralization. Any remaining excess cashflow will then be used  
to compensate for any unpaid interest shortfall amounts and net WAC rate        
carryover amounts, and for losses incurred on the mortgage loans. We cannot     
assure you, however, that enough excess cashflow will be generated to maintain  
the overcollateralization level required by the pooling and servicing agreement.
The factors described below, as well as the factors described in the next Risk  
Factor, will affect the amount of excess cashflow that the mortgage loans will  
generate:                                                                       

     o    When a mortgage loan is prepaid in full or repurchased, excess
             cashflow will generally be reduced because the mortgage loan will
            no longer be outstanding and generating interest or, in the case
      of a partial prepayment, will be generating less interest.

      o    Every time a mortgage loan is liquidated or written off, excess
              cashflow will be reduced because such mortgage loan will no longer
be outstanding and generating interest.             

        o    If the rates of delinquencies, defaults or losses on the mortgage
              loans are higher than expected, excess cashflow will be reduced by
         the amount necessary to compensate for any shortfalls in cash
available on such date to pay certificateholders.   

      o    The pass-through rates of the offered certificates are based on
         one-month LIBOR while the adjustable-rate mortgage loans have
      rates that are adjustable based on six-month LIBOR and the
         fixed-rate mortgage loans have rates that do not adjust. As a
          result, the pass-through rates on the offered certificates may
           increase relative to interest rates on the mortgage loans, thus
         requiring that more of the interest generated by the mortgage
           loans be applied to cover interest on the offered certificates.

EFFECTS OF MORTGAGE INTEREST RATES AND OTHER FACTORS ON THE PASS-THROUGH RATES  
OF THE OFFERED CERTIFICATES.                                                    

      The net WAC cap, which is applicable to the offered certificates, is
equal to the weighted average of the mortgage interest rates on the mortgage    
loans, net of the servicing fee rate and the trustee fee rate. If, for any      
distribution date, the net WAC cap is lower than the applicable formula rate for
any class of the offered certificates, then the pass-through rate on that class 
will be the net WAC cap, rather than the related formula rate. In this event,   
that class of offered certificates will suffer a basis risk shortfall in the    
amount of the difference between interest that would have accrued on that class 
at its formula rate and interest that accrued on that class at the net WAC cap. 

       The yields to maturity on the offered certificates may be affected by
the inclusion of fixed-rate mortgage loans and the resetting of the mortgage    
interest rates on the adjustable-rate mortgage loans on their related adjustment
dates. The mortgage interest rates on the fixed-rate mortgage loans are fixed   
and will not vary with any index and the mortgage interest rates on the         
adjustable-rate mortgage loans are generally based on the six-month LIBOR index 
(and will not have their mortgage interest rates adjusted for two to three years
after the dates of their origination), while the pass-through rates on the      
certificates are based on one-month LIBOR, are subject to the maximum rate cap  
and to the net WAC rate cap, and are adjusted monthly. This mismatch of indices 
and adjustment frequency may cause the one-month LIBOR-based pass-through rates 
on the offered certificates to increase relative to the mortgage interest rates 
on the mortgage loans, which would require a greater portion of the interest    
generated by the mortgage loans to be applied to cover interest accrued on the  
offered certificates, and could result in the limitation of the pass-through    
rate on some or all of the offered certificates to the net WAC rate, and could  
therefore adversely affect the yield to maturity on such certificates.          

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        In addition, investors should note that any net WAC rate will decrease
if mortgage loans with relatively high mortgage interest rates prepay at a      
faster rate than mortgage loans with relatively low mortgage interest rates,    
which will increase the likelihood that the net WAC rate will apply to limit the
pass-through rate on one or more classes of the offered certificates.           

      If the pass-through rate on any class of the offered certificates is
limited by the net WAC rate cap for any distribution date, the resulting basis  
risk shortfalls may be recovered by the holders of such classes of certificates 
on that same distribution date or on future distribution dates, to the extent   
that on that distribution date or future distribution dates there are any       
available funds remaining after certain other distributions on the offered      
certificates and the payment of certain fees and expenses of the trust. You     
should note, however, that if the pass-through rate on any class of offered     
certificates is based on the maximum rate cap, any net WAC rate carryover amount
will be less during such period on those certificates than if the pass-through  
rate were based on one-month LIBOR plus the applicable margin. See "Description 
of the Certificates--Application of Monthly Excess Cashflow Amounts" in this    
Prospectus Supplement. The ratings on the offered certificates will not address 
the likelihood of any such recovery of net WAC rate carryover amounts by holders
of such certificates.                                                           

THE CREDIT ENHANCEMENT MAY NOT BE ADEQUATE TO COVER ALL LOSSES ON THE OFFERED   
CERTIFICATES.                                                                   

         The credit enhancement features described in this prospectus supplement
are intended to enhance the likelihood that holders of the class A-1 and class  
A-2 certificates, and to a limited extent the holders of the class M-1 and class
M-2 certificates, will receive regular payments of interest and principal. If   
delinquencies or defaults occur on the mortgage loans, neither the servicer nor 
any other entity will advance scheduled monthly payments of interest on         
delinquent or defaulted mortgage loans if the servicer determines that the      
advances are not likely to be recovered out of proceeds of the related mortgage 
loan or mortgaged property. We cannot assure you that the applicable credit     
enhancement will adequately cover any shortfalls in cash available to pay your  
certificates as a result of delinquencies or defaults on the mortgage loans. If 
substantial losses occur as a result of defaults and delinquent payments on the 
mortgage loans, you may suffer losses on your certificates.                     

THERE ARE RISKS IN HOLDING MEZZANINE CERTIFICATES.                              

      The protections afforded the senior certificates in this transaction
create risks for the mezzanine certificates. Prior to any purchase of any       
mezzanine certificates, consider the following factors that may adversely impact
your yield:                                                                     

        o    Because the mezzanine certificates receive interest and principal
    distributions after the senior certificates receive such
           distributions, there is a greater likelihood that the mezzanine
             certificates will not receive the distributions to which they are
entitled on any distribution date.                  

         o    If the servicer is not required to advance a delinquent payment on
       a mortgage loan or is only required to advance the interest
            portion of such delinquent payments, there may be a shortfall in
             distributions on the certificates which will impact the mezzanine
certificates.                                       

       o    The mezzanine certificates are not expected to receive principal
distributions until, at the earliest, April 2007.   

o    The portion of the shortfalls in the amount of interest  
              collections on mortgage loans that are attributable to prepayments
         in full and are not covered by the servicer and shortfalls in
             interest collections arising from the timing of partial principal
         prepayments may result in a shortfall in distributions on the
            certificates, which will disproportionately impact the mezzanine
certificates.                                       

        o    Losses resulting from the liquidation of defaulted mortgage loans
          will first reduce monthly excess cashflow, and then reduce the
   level of overcollateralization, if any, for the offered
           certificates and the class M-3, class M-4, class M-5, class M-6
            and class M-7 certificates in reverse order of payment priority.
             If there is no overcollateralization, losses will be allocated to
              the mezzanine certificates. Once a realized loss is allocated to a
   mezzanine certificate, no principal or interest will be

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             distributable with respect to such written down amount (except in
              the case of subsequent recoveries). A loss allocation results in a
  reduction in a certificate principal balance without a
     corresponding distribution of cash to the holder. A lower
      certificate principal balance will result in less interest
accruing on the certificate.                        

  o    The earlier in the life of the transaction that a loss on a
  mortgage loan occurs, the greater the impact on yield.

  See "Description of the Certificates" and "Yield, Prepayment and
Maturity Considerations" in this Prospectus Supplement for more detail.         

THERE IS A RISK THAT INTEREST PAYMENTS ON THE MORTGAGE LOANS MAY BE INSUFFICIENT
TO PAY INTEREST ON YOUR CERTIFICATES.                                           

   When a mortgage loan is prepaid in full, the mortgagor is charged
interest only up to the date on which payment is made, rather than for an entire
month. This may result in a shortfall in interest collections available for     
payment on the next distribution date. The servicer is required to cover a      
portion of the shortfall in interest collections that are attributable to       
prepayments in full on the mortgage loans as a compensating interest payment,   
but only up to 50% of the servicing fee for the related interest accrual period.
If the credit enhancement is insufficient to cover this shortfall in excess of  
the amount covered by the servicer, this may result in an interest shortfall.   

 In addition, the servicer will not cover shortfalls in interest
collections arising from the application of the Servicemembers Civil Relief Act 
or similar state or local laws.                                                 

HIGH LOAN-TO-VALUE RATIOS INCREASE RISK OF LOSS.                                

       Mortgage loans with higher loan-to-value ratios may present a greater
risk of loss than mortgage loans with lower loan-to-value ratios because the    
mortgagor has less equity in the related mortgaged property. Approximately      
27.35% and 0.92% of the mortgage loans (in each case, by aggregate principal    
balance of the mortgage loans as of the cut-off date) had original loan-to-value
ratios at origination in excess of 80.00% and 90.00%, respectively. An overall  
decline in the residential real estate market, a rise in mortgage interest rates
over a period of time and the general condition of a mortgaged property, as well
as other factors, may have the effect of reducing the value of such mortgaged   
property from the appraised value at the time the mortgage loan was originated. 
If there is a reduction in value of the mortgaged property, the loan-to-value   
ratio may increase over what it was at the time of origination. Such an increase
may reduce the likelihood that liquidation proceeds or other proceeds will be   
sufficient to pay off the mortgage loan fully. There can be no assurance that   
the loan-to-value ratio of any mortgage loan determined at any time after       
origination is less than or equal to its original loan-to-value ratio.          
Additionally, the originator's determination of the value of a mortgaged        
property used in the calculation of the loan-to-value ratios of the mortgage    
loans may differ from the appraised value of such mortgaged property or the     
actual value of such mortgaged property.                                        

THERE IS A RISK BECAUSE THE CERTIFICATES ARE NOT OBLIGATIONS OF ANY ENTITY.     

        The offered certificates represent an interest in the trust fund only.
No other person will insure or guarantee the offered certificates or will have  
any obligation with respect to the certificates except for the obligations of   
the originator and the seller pursuant to certain limited representations and   
warranties made with respect to the mortgage loans and of the servicer with     
respect to its servicing obligations under the pooling and servicing agreement. 
No government agency or instrumentality will guarantee or insure the            
certificates or the underlying mortgage loans. Proceeds of the assets included  
in the trust fund (including the mortgage loans) will be the sole source of     
payments on the offered certificates. You will not be able to receive money from
any entity in the event that such proceeds are not sufficient to make all       
payments provided for under the offered certificates.                           

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THERE IS A RISK THAT THERE MAY BE A DELAY IN RECEIPT OF LIQUIDATION PROCEEDS,   
AND THAT LIQUIDATION PROCEEDS MAY BE LESS THAN THE OUTSTANDING BALANCE OF THE   
RELATED MORTGAGE LOANS.                                                         

Substantial delays could be encountered in connection with the
liquidation of delinquent mortgage loans. Further, liquidation expenses such as 
legal fees, real estate taxes and maintenance and preservation expenses will    
reduce the portion of liquidation proceeds payable to you. If a mortgaged       
property fails to provide adequate security for the mortgage loan, you will     
incur a loss on your investment if the credit enhancements are insufficient to  
cover the loss.                                                                 

THERE ARE RISKS RELATING TO GEOGRAPHIC CONCENTRATION OF THE MORTGAGE LOANS.     

         The following chart lists the states with the highest concentrations of
mortgage loans, based on the aggregate principal balance of the mortgage loans  
as of the cut-off date.                                                         

 California                       33.88%
 New York                          8.24%
 Florida                           7.69%
 Illinois                          6.53%
 New Jersey                        4.43%

       California, Florida and several other states have experienced natural
disasters, such as earthquakes, fires, floods and hurricanes, which may not be  
fully insured against and which may result in property damage and losses on the 
mortgage loans.                                                                 

       In addition, the conditions below will have a disproportionate impact
on the mortgage loans in general:                                               

      o    Economic conditions in states listed above which may or may not
            affect real property values may affect the ability of mortgagors
to repay their loans on time.                       

    o    Declines in the residential real estate markets in the states
             listed above may reduce the values of properties located in those
          states, which would result in an increase in the loan-to-value
ratios.                                             

    o    Any increase in the market value of properties located in the
        states listed above would reduce the loan-to-value ratios of
            mortgage loans secured by properties located in those states and
             could, therefore, make alternative sources of financing available
            to the mortgagors at lower interest rates, which could result in
  an increased rate of prepayment of the mortgage loans.

THE LACK OF A SECONDARY MARKET MAY LIMIT YOUR ABILITY TO SELL YOUR CERTIFICATES.

        The underwriters intend to make a secondary market in the certificates
they purchase, but they have no obligation to do so. There is no assurance that 
such 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.                                                                      

VIOLATIONS OF CONSUMER PROTECTION LAWS AND PREDATORY LENDING LAWS MAY CAUSE     
LOSSES ON YOUR CERTIFICATES.                                                    

       Federal, state and local laws regulate the underwriting, origination,
servicing and collection of the mortgage loans. These laws have changed over    
time and have become more restrictive or stringent with respect to specific     

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activities of the servicer and the originator. Actual or alleged violations of  
these federal and state laws may, among other things:                           

         o    limit the ability of the servicer to collect principal or interest
on the mortgage loans,                              

         o    provide the mortgagors with a right to rescind the mortgage loans,

         o    entitle the mortgagors to refunds of amounts previously paid or to
          set-off those amounts against their mortgage loan obligations,

         o    result in a litigation proceeding being brought against the trust,
and                                                 

       o    subject the trust (and other assignees of the mortgage loans) to
            liability for expenses, penalties and damages resulting from the
violations.                                         

     As a result, these violations or alleged violations could result in
shortfalls in the distributions due on your certificates. See "Risk             
Factors--Violations of Federal Laws May Adversely Affect Ability to Collect on  
Loans" and "Certain Legal Aspects of Mortgage Loans--Anti-Deficiency            
Legislation, the Bankruptcy Code and Other Limitations on Lenders" in the       
Prospectus. The originator has made, and the seller will make, representations  
and warranties with respect to each mortgage loan relating to compliance with   
federal, state and local laws at the time of origination and will be required to
repurchase or replace any mortgage loan that was not originated in compliance   
with such laws. In addition, the originator (or the seller, if the originator   
fails to do so) will be required to reimburse the trust for any damages or costs
incurred by the trust as a result of a breach by any mortgage loan of any       
applicable abusive or predatory lending law. However, if the originator and the 
seller are unable to fulfill this reimbursement obligation for financial or     
other reasons, shortfalls in the distributions due on your certificates could   
occur.                                                                          

THE TRANSFER OF SERVICING MAY CAUSE DISRUPTIONS IN CASHFLOWS TO CERTIFICATE-    
HOLDERS.                                                                        

        On or about February 27, 2004, the servicing of the Mortgage Loans was
transferred from Accredited Home Lenders, Inc. to Litton Loan Servicing LP.     
Mortgage loans subject to servicing transfers may experience increased delays in
payments until all of the mortgagors are informed of the transfer and the       
related servicing mortgage files and records and all other relevant data had    
been obtained by the new servicer.                                              

THERE MAY EXIST CONFLICTS OF INTEREST BETWEEN THE SERVICER AND THE TRUST.       

     It is anticipated that the servicer or an affiliate of the servicer
will acquire, directly or indirectly, a significant portion of the non-offered  
certificates. The timing of mortgage loan foreclosures and sales of the related 
mortgaged properties, which will be under the control of the servicer, may      
affect the weighted average lives and yields of the offered certificates. You   
should consider that the timing of such foreclosures or sales may not be in the 
best interests of all certificateholders and that no formal policies or         
guidelines have been established to resolve or minimize such a conflict of      
interest.                                                                       

UNITED STATED MILITARY OPERATIONS MAY INCREASE RISK OF SHORTFALLS IN INTEREST.  

        In response to previously executed and threatened terrorist attacks in
the United States and foreign countries, the United States has initiated        
military operations and has placed a substantial number of armed forces         
reservists and members of the National Guard on active duty status. It is       
possible that the number of reservists and members of the National Guard placed 
on active duty status in the near future may increase. To the extent that a     
member of the military, or a member of the armed forces reserves or National    
Guard who is called to active duty, is a mortgagor of a mortgage loan in the    
trust, the interest rate limitation of the Servicemembers Civil Relief Act and  
any comparable state or local law, will apply. Substantially all of the mortgage
loans have mortgage interest rates, which, in turn will be allocated ratably in 
reduction of accrued interest on all classes of interest-bearing certificates,  
irrespective of the availability of excess cash flow or other credit            
enhancement. None of the originator, the depositor, any underwriter, the seller,
the servicer or any other party has taken any action to determine whether any   

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of the mortgage loans would be affected by such interest rate limitation. See   
"Description of the Certificates--Interest Distributions" in this Prospectus    
Supplement and "Certain Legal Aspects of the Mortgage Loans--Servicemembers     
Civil Relief Act" in the Prospectus.                                            

IN THE EVENT THE ORIGINATOR IS NOT ABLE TO REPURCHASE OR REPLACE DEFECTIVE      
MORTGAGE LOANS YOU MAY SUFFER LOSSES ON YOUR CERTIFICATES.                      

Accredited Home Lenders, Inc, as originator, made certain     
representations and warranties regarding the mortgage loans as of December 29,  
2003 and January 2, 2004, in the Flow Sale and Interim Servicing Agreement,     
dated as of December 1, 2003, referred to herein as the transfer agreement,     
under which the originator sold the mortgage loans to the seller, which         
representations and warranties will be assigned by the seller to the depositor  
and by the depositor to the trustee, for the benefit of the certificateholders. 
Within the period of time specified in the transfer agreement following its     
discovery of a breach of any representation or warranty that materially or      
adversely affects the interests of certificateholders in a mortgage loan, or    
receipt of notice of such breach, the originator will be obligated to cure such 
breach or purchase the affected Mortgage Loan from the trust for a price equal  
to the unpaid principal balance thereof plus accrued interest thereon (or, in   
certain circumstances, to substitute another mortgage loan).                    

       Pursuant to the terms of the mortgage loan purchase agreement whereby
the mortgage loans will be purchased by the depositor, the seller will make to  
the depositor (and the depositor will assign to the trustee for the benefit of  
holders of the offered certificates) only certain limited representations and   
warranties as of the closing date, generally intended to address the accuracy of
the mortgage loan schedule and the payment and delinquency status of each       
mortgage loan. In the event of a breach of any such representation or warranty  
that does not constitute a breach of any representation or warranty made by the 
originator as described above, the seller will be obligated in the same matter  
as the originator to cure such breach or purchase the affected mortgage loans,  
as described above.                                                             

   To the extent that any fact, condition or event with respect to a
mortgage loan constitutes a breach of both a representation and warranty of the 
originator under its transfer agreement with the seller, and a breach of a      
representation and warranty of the seller under the mortgage loan purchase      
agreement between the seller and the depositor, then the only right or remedy of
the trustee or any certificateholder shall be the trustee's right to enforce the
obligations of the originator under the transfer agreement, and there shall be  
no remedy against the seller for such breach (other than the seller's obligation
to reimburse the trust, if the originator fails to do so, for any damages or    
costs incurred by the trust as a result of a breach of the representation as to 
compliance with federal, state or local laws with respect to the origination of 
the mortgage loans).                                                            

      If the originator or the seller, as the case may be, fails to cure a
material breach of its representations and warranties with respect to any       
mortgage loan in a timely manner, such entity will be required to repurchase or 
replace the defective loan. See "The Pooling and Servicing Agreement--Assignment
of the Mortgage Loans" in this Prospectus Supplement. In the event that the     
seller or the originator is not able to repurchase or replace any defective     
mortgage loans at the date such action is required, for financial or other      
reasons, you may suffer losses on your certificates. The inability of the seller
or the originator to repurchase or replace defective mortgage loans would likely
cause the mortgage loans to experience higher rates of delinquencies, defaults  
and losses. As a result, shortfalls in the distributions due on your            
certificates could occur.                                                       

THE ORIGINATOR MAY BE SUBJECT TO LEGAL ACTIONS.                                 

         Because the nature of the originator's business involves the collection
of numerous accounts and compliance with federal, state and local lending laws, 
the originator is subject to claims and legal actions in the ordinary course of 
its business. Like a number of other consumer finance companies, the originator 
is subject to certain class-action lawsuits alleging violations of various      
federal and state consumer protection laws and other laws. The originator       
intends to defend or seek other resolution of these lawsuits and the originator 
either does not believe that their resolution will have a material adverse      
effect on its financial position or results of operations or has not been able  
to make a determination regarding the ultimate outcome of the matter or the     
amount of potential liability . In the event of an adverse outcome in one or    
more of the class action lawsuits, the originator's ability to repurchase       
defective mortgage loans could be materially adversely affected.                

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RATINGS ON THE OFFERED CERTIFICATES DO NOT ADDRESS ALL OF THE FACTORS YOU SHOULD
CONSIDER WHEN PURCHASING SUCH CERTIFICATES                                      

        The rating of each class of offered certificates will depend primarily
on an assessment by the rating agencies of the mortgage loans as well as the    
structure of the transaction. The rating assigned by the rating agencies of any 
class of offered certificates is not a recommendation to purchase, hold or sell 
any rated offered certificates, inasmuch as the rating does not comment as to   
the market price or suitability for a particular investor. There is no assurance
that the ratings will remain in place for any given period of time or that the  
ratings will not be qualified, lowered or withdrawn by the rating agencies. In  
general, the ratings address credit risk and do no address the likelihood of    
prepayments or the likelihood that any net WAC rate carryover amounts will be   
paid.                                                                           

See "Ratings" in this Prospectus Supplement for more detail.  

SUITABILITY OF THE OFFERED CERTIFICATES AS INVESTMENTS.                         

        The offered certificates are not suitable investments for any investor
that requires a regular or predictable schedule of monthly payments or payment  
on any specific date. The offered certificates are complex investments that     
should be considered only by investors who, either alone or with their          
financial, tax and legal advisors, have the expertise to analyze the prepayment,
reinvestment, default and market risk, the tax consequences of an investment and
the interaction of these factors.                                               

 THE MORTGAGE POOL

       Certain information with respect to the Mortgage Loans to be included
in the Mortgage Pool is set forth herein. Prior to the Closing Date, Mortgage   
Loans may be removed from the Mortgage Pool and other Mortgage Loans may be     
substituted therefor. The Depositor believes that the information set forth     
herein with respect to the Mortgage Pool as presently constituted is            
representative of the characteristics of the Mortgage Pool as it will be        
constituted at the Closing Date, although certain characteristics of the        
Mortgage Loans may vary.                                                        

GENERAL.                                                                        

       The issuer of the Certificates is ABFC 2004-AHL1 Trust (the "TRUST").
The assets included in the Trust (the "TRUST FUND") will consist primarily of a 
pool (the "MORTGAGE POOL") of approximately 1,080 fixed-rate and adjustable-rate
mortgage loans (the "MORTGAGE LOANS") having original terms to maturity ranging 
from 180 months to 360 months and an aggregate principal balance as of March 1, 
2004 (the "CUT-OFF DATE") of approximately $178,174,543.01. All Mortgage Loan   
statistics set forth herein are based on principal balances, interest rates,    
terms to maturity, mortgage loan counts and similar statistics as of the Cut-off
Date. All weighted averages specified herein are based on the principal balances
of the Mortgage Loans as of the Cut-off Date, as adjusted for the principal     
payments received or advanced on or before such date (each, a "CUT-OFF DATE     
PRINCIPAL BALANCE"). The "PRINCIPAL BALANCE" of a Mortgage Loan, as of any date,
is equal to the principal balance of such Mortgage Loan at its origination, less
the sum of (i) all collections and other amounts credited against the principal 
balance of any such Mortgage Loan, (ii) the principal portion of Advances, (iii)
any Deficient Valuation and (iv) any principal reduction resulting from a       
Servicer Modification. References to percentages of the Mortgage Loans mean     
percentages based on the aggregate of the Cut-off Date Principal Balances of the
Mortgage Loans, unless otherwise specified. References to percentages of the    
Mortgage Loans mean percentages based on the aggregate of the Cut-off Date      
Principal Balances of the Mortgage Loans, unless otherwise specified. The "POOL 
BALANCE" is equal to the aggregate of the Principal Balances of the Mortgage    
Loans.                                                                          

         The Depositor will purchase the Mortgage Loans from the Seller pursuant
to the Mortgage Loan Purchase Agreement (the "MORTGAGE LOAN PURCHASE            
AGREEMENT"), dated as of the Cut-off Date, between the Seller and the Depositor.
Pursuant to the Pooling and Servicing Agreement, the Depositor will cause the   
Mortgage Loans to be assigned to the Trustee for the benefit of the             
Certificateholders. See "The Pooling and Servicing Agreement" in this Prospectus
Supplement.                                                                     

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    Based on the representations made by the Originator, the Depositor
believes that each of the Mortgage Loans in the Mortgage Pool was originated or 
acquired by the Originator generally in accordance with the underwriting        
standards described under "Underwriting Standards."                             

Accredited Home Lenders, Inc. (the "ORIGINATOR") made certain 
representations and warranties regarding the mortgage loans as of December 29,  
2003 and January 2, 2004, in the Flow Sale and Interim Servicing Agreement,     
dated as of December 1, 2003, referred to herein as the "TRANSFER AGREEMENT",   
pursuant to which the Originator sold the Mortgage Loans to the Seller. These   
representations and warranties will be assigned by the Seller to the Depositor  
and by the Depositor to the Trustee, for the benefit of the Certificateholders. 
The Originator, subject to certain limitations, will be obligated under the     
Transfer Agreement to repurchase or substitute, subject to restrictions in the  
Pooling and Servicing Agreement, a similar mortgage loan for any Mortgage Loan  
as to which there exists deficient documentation or an uncured breach of any    
such representation or warranty, if such breach of any such representation or   
warranty materially and adversely affects the Certificateholders' interests in  
such Mortgage Loan.                                                             

    Pursuant to the terms of the Mortgage Loan Purchase Agreement, the
Seller will make to the Depositor (and the Depositor will assign to the Trustee 
for the benefit of holders of the Certificateholders) only certain limited      
representations and warranties as of the Closing Date, generally intended to    
address the accuracy of the Mortgage Loan Schedule and the payment and          
delinquency status of each Mortgage Loan. In the event of a breach of any such  
representation or warranty that does not constitute a breach of any             
representation or warranty made by the Originator as described above, the Seller
will be obligated in the same manner as the Originator to cure such breach or   
purchase the affected Mortgage Loans, as described above.                       

   To the extent that any fact, condition or event with respect to a
Mortgage Loan constitutes a breach of both a representation and warranty of the 
Originator under its Transfer Agreement with the Seller and a breach of a       
representation and warranty of the Seller under the Mortgage Loan Purchase      
Agreement between the Seller and the Depositor, then the only right or remedy of
the Trustee or any Certificateholder shall be the Trustee's right to enforce the
obligations of the Originator under the Transfer Agreement, and there shall be  
no remedy against the Seller for such breaches (other than the Seller's         
obligation to reimburse the Trust, if the Originator fails to do so, for any    
damages or costs incurred by the Trust as a result of a breach of the           
representation as to compliance with federal, state or local predatory and      
abusive lending laws with respect to the origination of the Mortgage Loans).    

         The Seller is selling the Mortgage Loans without recourse and will have
no obligation with respect to the Certificates in its capacity as Seller other  
than the repurchase or substitution obligations described above and its         
reimbursement obligation described under "The Pooling and Servicing             
Agreement--Assignment of the Mortgage Loans" in this Prospectus Supplement.     

  The Mortgage Pool will consist of fixed-rate Mortgage Loans (the
"FIXED-RATE MORTGAGE LOANS") and adjustable-rate Mortgage Loans (the            
"ADJUSTABLE-RATE MORTGAGE LOANS"). All of the Adjustable-Rate Mortgage Loans    
have an initial fixed mortgage interest rate for two years or three years. The  
Fixed-Rate Mortgage Loans consist of 241 Mortgage Loans with an aggregate       
principal balance of approximately $30,026,622.33 as of the Cut-off Date. The   
Adjustable-Rate Mortgage Loans consist of 839 Mortgage Loans with an aggregate  
principal balance of approximately $148,147,920.68 as of the Cut-off Date.      

     A Mortgage Loan is "DELINQUENT" if the scheduled monthly payment of
principal and/or interest on such Mortgage Loan which is payable by the related 
mortgagor under the related Mortgage Note (the "MONTHLY PAYMENT") due on a due  
date is not paid by the close of business on the next scheduled due date for    
such Mortgage Loan. Thus, a Mortgage Loan for which the mortgagor failed to make
the Monthly Payment due on February 1, 2004 will be reported as Delinquent on   
March 2, 2004 if the payment is not made by the close of business on March 1,   
2004. As of the Cut-off Date, none of the Mortgage Loans was Delinquent.        

        The Servicer will be required to make servicing advances on Delinquent
Mortgage Loans and make advances of delinquent payments of principal and        
interest on Delinquent Mortgage Loans (other than with respect to the Balloon   
Payment due on a Balloon Mortgage Loan), each to the extent such advances are   
deemed recoverable, until such Mortgage Loans become current or liquidated. The 
Servicer shall not be required to make principal advances with respect to REO   
Properties.                                                                     

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MORTGAGE POOL STATISTICS                                                        

       The following statistical information, unless otherwise specified, is
based upon the aggregate Principal Balance of the Mortgage Loans as of the      
Cut-off Date.                                                                   

      The Mortgage Loans are secured by mortgages, deeds of trust or other
similar security instruments (each, a "MORTGAGE") which the Seller has          
represented create a first lien on residential properties consisting of one- to 
four-family dwelling units, individual condominium units, planned unit          
developments and manufactured housing (each, a "MORTGAGED PROPERTY").           
Approximately 27.35% of the Mortgage Loans had an Original Loan-to-Value Ratio  
as of the Cut-off Date in excess of 80% and do not have primary mortgage        
insurance. There can be no assurance that the Loan-to-Value Ratio of any        
Mortgage Loan determined at any time after origination is less than or equal to 
its Original Loan-to-Value Ratio. All of the Mortgage Loans have scheduled      
Monthly Payments due on the first day of the month (the day such Monthly        
Payments are due with respect to each Mortgage Loan, a "DUE DATE").             

       Approximately 75.06% of the Mortgage Loans provide for payment by the
mortgagor of a prepayment charge in limited circumstances on certain            
prepayments. No such prepayment charge will be distributed to the holders of the
Offered Certificates.                                                           

      Approximately 0.04% of the Mortgage Loans will not fully amortize by
their respective maturity dates (each, a "BALLOON MORTGAGE LOAN"). The Monthly  
Payment for all of the Balloon Mortgage Loans is based on an amortization       
schedule of 360 months, except for the final payment (the "BALLOON PAYMENT")    
which is due and payable in the 180th month following origination of such       
Mortgage Loan, depending on the terms of the related mortgage note. The amount  
of the Balloon Payment on each Balloon Mortgage Loan is substantially in excess 
of the amount of the scheduled Monthly Payment for such Mortgage Loan.          

     Approximately 0.29% of the Mortgage Loans will provide for interest
only Monthly Payments for the first 60 months of the term of the Mortgage Loan  
(each, an "INTEREST ONLY MORTGAGE LOAN"). The Monthly Payment with respect to an
Interest Only Mortgage Loan will include accrued interest and principal on such 
Mortgage Loan beginning in the 61st month of the term of such Mortgage Loan. As 
a result of this payment structure, Monthly Payments beginning in the 61st month
of the term of such Mortgage Loans may be significantly larger than first 60    
Monthly Payments required under the mortgage note.                              

        Each Mortgage Loan accrues interest at a per annum rate (the "MORTGAGE
INTEREST RATE") of not less than 5.375% per annum and not more than 13.990% per 
annum and as of the Cut-off Date the weighted average Mortgage Interest Rate of 
the Mortgage Loans was approximately 7.457% per annum.                          

       The weighted average remaining term to maturity of the Mortgage Loans
will be approximately 353 months as of the Cut-off Date. None of the Mortgage   
Loans had a first Due Date prior to March 1, 2003 or after December 1, 2003 or  
will have a remaining term to maturity of less than 169 months or greater than  
356 months as of the Cut-off Date. The latest maturity date of any Mortgage Loan
is November 1, 2033.                                                            

        The average Principal Balance of the Mortgage Loans at origination was
approximately $165,567.50. No Mortgage Loan had a Cut-off Date Principal Balance
of greater than $646,551.64 or less than $22,483.28. The average Cut-off Date   
Principal Balance of the Mortgage Loans was approximately $164,976.43.          

   All of the Adjustable-Rate Mortgage Loans provide for semi-annual
adjustment to the Mortgage Interest Rate thereon and for corresponding          
adjustments to the Monthly Payment amount due thereon, in each case on each     
adjustment date applicable thereto (each such date, an "ADJUSTMENT DATE"). On   
each Adjustment Date for each Adjustable-Rate Mortgage Loan, the Mortgage       
Interest Rate thereon will be adjusted to equal the sum of Six-Month LIBOR (the 
"INDEX") and a fixed percentage amount (the "GROSS MARGIN" ). As of the Cut-off 
Date, the Adjustable-Rate Mortgage Loans had Gross Margins ranging from 3.875%  
to 10.990%, with a weighted average Gross Margin of approximately 6.061%. The   
Mortgage Interest Rate on each such Adjustable-Rate Mortgage Loan will increase 
or decrease by a percentage ranging from 1.000% to 1.500% per annum on the first
related Adjustment Date (the "INITIAL PERIODIC RATE CAP") and by 1.000% to      
1.500% per annum on any Adjustment Date thereafter (the "PERIODIC RATE CAP").   
The Adjustable-Rate Mortgage Loans have a weighted average Initial Periodic Rate

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Cap of approximately 1.498% per annum and a weighted average Periodic Rate Cap  
of approximately 1.499% per annum thereafter. Each Mortgage Interest Rate on    
each such Adjustable-Rate Mortgage Loan will not exceed a specified maximum     
Mortgage Interest Rate over the life of such Mortgage Loan (the "MAXIMUM        
MORTGAGE INTEREST RATE") or be less than a specified minimum Mortgage Interest  
Rate over the life of such Mortgage Loan (the "MINIMUM MORTGAGE INTEREST RATE").
As of the Cut-off Date, the Adjustable-Rate Mortgage Loans had Maximum Mortgage 
Interest Rates ranging from 12.375% per annum to 18.990% per annum and Minimum  
Mortgage Interest Rates ranging from 5.375% per annum to 11.990% per annum. As  
of the Cut-off Date, for the Adjustable-Rate Mortgage Loans, the weighted       
average Minimum Mortgage Interest Rate was approximately 7.414% per annum and   
the weighted average Maximum Mortgage Interest Rate was approximately 14.414%   
per annum.                                                                      

     Except with respect to certain of the Interest Only Mortgage Loans,
effective with the first Monthly Payment due on each Adjustable-Rate Mortgage   
Loan after each related Adjustment Date, the Monthly Payment amount will be     
adjusted to an amount that will amortize fully the outstanding Principal Balance
of the related Mortgage Loan over its remaining term, and pay interest at the   
Mortgage Interest Rate as so adjusted. The latest next Adjustment Date following
the Cut-off Date on any Adjustable-Rate Mortgage Loan occurs in November 2006   
and the weighted average number of months to the next Adjustment Date following 
the Cut-off Date for all of the Adjustable-Rate Mortgage Loans is approximately 
27 months. Due to the application of the Periodic Rate Caps and the Maximum     
Mortgage Interest Rates, the Mortgage Interest Rate on each such Mortgage Loan, 
as adjusted on any related Adjustment Date, may be less than the sum of the     
Index and the related Gross Margin. See "--The Index Six-Month LIBOR" in this   
Prospectus Supplement. None of the Adjustable-Rate Mortgage Loans had Mortgage  
Interest Rates that may be converted to fixed Mortgage Interest Rates at the    
option of the related mortgagor.                                                

MORTGAGE LOAN STATISTICAL TABLES                                                

       The Mortgage Loans are expected to have the characteristics as of the
Cut-off Date set forth in the tables below. (The sum in any column may not equal
the total indicated due to rounding). Statistics in an "ARMs" column relate     
solely to the Adjustable-Rate Mortgage Loans included in the Mortgage Pool, and 
statistics in an "FRMs" column relate solely to the Fixed-Rate Mortgage Loans   
included in the Mortgage Pool.                                                  

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                                  CUT-OFF DATE PRINCIPAL BALANCES OF THE MORTGAGE LOANS(1)                       

                                         NUMBER OF                              PRINCIPAL BALANCE                
                                       MORTGAGE LOANS                   OUTSTANDING AS OF THE CUT-OFF DATE       
           RANGE OF             -----------------------------     -----------------------------------------------
      PRINCIPAL BALANCE             ARMS      FRMS     TOTAL           ARMS            FRMS           TOTAL      
      -----------------             ----      ----     -----           ----            ----           -----      
                                                                                                                 
$      0.01 - $ 50,000.00             15        23       38     $    623,177.74   $ 1,003,807.61  $  1,626,985.35
$ 50,000.01 - $ 75,000.00             62        50      112        3,928,865.57     3,090,902.25     7,019,767.82
$ 75,000.01 - $100,000.00            114        41      155       10,166,688.40     3,571,519.10    13,738,207.50
$100,000.01 - $125,000.00            105        39      144       11,670,121.34     4,308,443.53    15,978,564.87
$125,000.01 - $150,000.00            114        27      141       15,701,122.81     3,679,305.69    19,380,428.50
$150,000.01 - $175,000.00             72        18       90       11,594,995.11     2,903,511.93    14,498,507.04
$175,000.01 - $200,000.00             72        11       83       13,608,030.58     2,045,121.32    15,653,151.90
$200,000.01 - $225,000.00             62         7       69       13,201,297.54     1,521,600.03    14,722,897.57
$225,000.01 - $250,000.00             48         3       51       11,416,228.47       703,573.58    12,119,802.05
$250,000.01 - $275,000.00             47         3       50       12,212,930.32       803,387.22    13,016,317.54
$275,000.01 - $300,000.00             43         5       48       12,354,062.96     1,424,508.40    13,778,571.36
$300,000.01 - $325,000.00             21         4       25        6,545,572.50     1,246,807.33     7,792,379.83
$325,000.01 - $350,000.00             21         6       27        7,054,423.66     2,021,204.03     9,075,627.69
$350,000.01 - $375,000.00             15         1       16        5,381,971.35       358,713.04     5,740,684.39
$375,000.01 - $400,000.00              9         1       10        3,508,817.98       398,676.97     3,907,494.95
$400,000.01 - $425,000.00              2         0        2          803,751.79             0.00       803,751.79
$425,000.01 - $450,000.00              5         1        6        2,200,760.94       447,363.12     2,648,124.06
$450,000.01 - $475,000.00              5         0        5        2,308,445.70             0.00     2,308,445.70
$475,000.01 - $500,000.00              2         1        3          996,593.00       498,177.18     1,494,770.18
$500,000.01 - $525,000.00              2         0        2        1,021,277.01             0.00     1,021,277.01
$575,000.01 - $600,000.00              1         0        1          596,862.02             0.00       596,862.02
$600,000.01 - $625,000.00              1         0        1          605,372.25             0.00       605,372.25
$625,000.01 - $650,000.00              1         0        1          646,551.64             0.00       646,551.64
                                -----------------------------   -------------------------------------------------
                         Total       839       241    1,080     $148,147,920.68   $30,026,622.33  $178,174,543.01
                                =============================   =================================================



                                          % OF AGGREGATE                                                         
                                   PRINCIPAL BALANCE OUTSTANDING                                                 
                                       AS OF THE CUT-OFF DATE                                                    
           RANGE OF              ----------------------------------                                              
      PRINCIPAL BALANCE             ARMS         FRMS      TOTAL                                                 
      -----------------             ----         ----      -----                                                 
                                                                                                                 
$      0.01 - $ 50,000.00            0.42%        3.34%      0.91%                                               
$ 50,000.01 - $ 75,000.00            2.65        10.29       3.94                                                
$ 75,000.01 - $100,000.00            6.86        11.89       7.71                                                
$100,000.01 - $125,000.00            7.88        14.35       8.97                                                
$125,000.01 - $150,000.00           10.60        12.25      10.88                                                
$150,000.01 - $175,000.00            7.83         9.67       8.14                                                
$175,000.01 - $200,000.00            9.19         6.81       8.79                                                
$200,000.01 - $225,000.00            8.91         5.07       8.26                                                
$225,000.01 - $250,000.00            7.71         2.34       6.80                                                
$250,000.01 - $275,000.00            8.24         2.68       7.31                                                
$275,000.01 - $300,000.00            8.34         4.74       7.73                                                
$300,000.01 - $325,000.00            4.42         4.15       4.37                                                
$325,000.01 - $350,000.00            4.76         6.73       5.09                                                
$350,000.01 - $375,000.00            3.63         1.19       3.22                                                
$375,000.01 - $400,000.00            2.37         1.33       2.19                                                
$400,000.01 - $425,000.00            0.54         0.00       0.45                                                
$425,000.01 - $450,000.00            1.49         1.49       1.49                                                
$450,000.01 - $475,000.00            1.56         0.00       1.30                                                
$475,000.01 - $500,000.00            0.67         1.66       0.84                                                
$500,000.01 - $525,000.00            0.69         0.00       0.57                                                
$575,000.01 - $600,000.00            0.40         0.00       0.33                                                
$600,000.01 - $625,000.00            0.41         0.00       0.34                                                
$625,000.01 - $650,000.00            0.44         0.00       0.36                                                
                                 ----------------------------------                                              
                                   100.00%      100.00%    100.00%                                               
                                 ==================================                                              

----------------------                                                          
(1)   The average Cut-off Date Principal Balance of Mortgage Loans was          
approximately $164,976.43.                                          

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                             MORTGAGE INTEREST RATES OF THE MORTGAGE LOANS AS OF THE CUT-OFF DATE(1)               

                                          NUMBER OF                             PRINCIPAL BALANCE                  
                                        MORTGAGE LOANS                   OUTSTANDING AS OF THE CUT-OFF DATE        
           RANGE OF              ----------------------------   ---------------------------------------------------
    MORTGAGE INTEREST RATES        ARMS      FRMS      TOTAL          ARMS             FRMS             TOTAL      
    -----------------------        ----      ----      -----          ----             ----             -----      
                                                                                                                   
5.001%      -  5.500%                 1         0        1       $    239,556.11   $         0.00  $    239,556.11 
5.501%      -  6.000%                15         6       21          3,503,204.25     1,159,356.98     4,662,561.23 
6.001%      -  6.500%                80         9       89         17,579,526.37     2,577,810.63    20,157,337.00 
6.501%      -  7.000%               197        27      224         38,811,387.43     4,022,917.85    42,834,305.28 
7.001%      -  7.500%               186        46      232         31,411,258.76     5,799,945.97    37,211,204.73 
7.501%      -  8.000%               192        73      265         31,576,576.23     8,014,191.32    39,590,767.55 
8.001%      -  8.500%                82        41      123         12,613,252.59     4,493,725.55    17,106,978.14 
8.501%      -  9.000%                63        26       89          9,805,728.01     2,908,600.91    12,714,328.92 
9.001%      -  9.500%                 9         6       15          1,161,722.58       594,554.12     1,756,276.70 
9.501%      - 10.000%                 8         5       13            997,998.37       338,884.39     1,336,882.76 
10.001%     - 10.500%                 3         0        3            191,276.41             0.00       191,276.41 
10.501%     - 11.000%                 2         1        3            210,095.13        94,151.33       304,246.46 
11.001%     - 11.500%                 0         0        0                  0.00             0.00             0.00 
11.501%     - 12.000%                 1         0        1             46,338.44             0.00        46,338.44 
12.001%     - 14.000%                 0         1        1                  0.00        22,483.28        22,483.28 
                                 ----------------------------   ---------------------------------------------------
            Total                   839       241    1,080       $148,147,920.68   $30,026,622.33  $178,174,543.01 
                                 ============================   ===================================================



                                      % OF AGGREGATE                                                               
                               PRINCIPAL BALANCE OUTSTANDING                                                       
                                   AS OF THE CUT-OFF DATE                                                          
           RANGE OF            ------------------------------                                                      
    MORTGAGE INTEREST RATES      ARMS        FRMS      TOTAL                                                       
    -----------------------      ----        ----      -----                                                       
                                                                                                                   
5.001%      -  5.500%             0.16%      0.00%       0.13%                                                     
5.501%      -  6.000%             2.36       3.86        2.62                                                      
6.001%      -  6.500%            11.87       8.59       11.31                                                      
6.501%      -  7.000%            26.20      13.40       24.04                                                      
7.001%      -  7.500%            21.20      19.32       20.88                                                      
7.501%      -  8.000%            21.31      26.69       22.22                                                      
8.001%      -  8.500%             8.51      14.97        9.60                                                      
8.501%      -  9.000%             6.62       9.69        7.14                                                      
9.001%      -  9.500%             0.78       1.98        0.99                                                      
9.501%      - 10.000%             0.67       1.13        0.75                                                      
10.001%     - 10.500%             0.13       0.00        0.11                                                      
10.501%     - 11.000%             0.14       0.31        0.17                                                      
11.001%     - 11.500%             0.00       0.00        0.00                                                      
11.501%     - 12.000%             0.03       0.00        0.03                                                      
12.001%     - 14.000%             0.00       0.07        0.01                                                      
                               --------------------------------                                                    
            Total               100.00%    100.00%     100.00%                                                     
                               ================================                                                    


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

(1)    As of the Cut-off Date, the weighted average Mortgage Interest Rate of   
the Mortgage Loans was approximately 7.457% per annum.            

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                                        ORIGINAL LOAN-TO-VALUE RATIOS OF THE MORTGAGE LOANS(1)                           

                                             NUMBER OF                                  PRINCIPAL BALANCE                
                                           MORTGAGE LOANS                        OUTSTANDING AS OF THE CUT-OFF DATE      
  RANGE OF ORIGINAL             ------------------------------------      -----------------------------------------------
 LOAN-TO-VALUE RATIOS              ARMS        FRMS           TOTAL            ARMS           FRMS            TOTAL      
 --------------------              ----        ----           -----            ----           ----            -----      
                                                                                                                         
 5.01%   -   15.00%                      0            1           1       $          0.00 $    49,834.28  $     49,834.28
15.01%   -   20.00%                      1            0           1             64,814.70           0.00        64,814.70
20.01%   -   25.00%                      0            1           1                  0.00      69,784.94        69,784.94
25.01%   -   30.00%                      0            2           2                  0.00     136,067.52       136,067.52
35.01%   -   40.00%                      1            2           3            468,723.30     209,037.49       677,760.79
40.01%   -   45.00%                      1            2           3             72,801.70     185,275.10       258,076.80
45.01%   -   50.00%                      5            5          10            754,581.93     475,426.53     1,230,008.46
50.01%   -   55.00%                      2            7           9            367,604.84   1,212,841.38     1,580,446.22
55.01%   -   60.00%                      5           10          15            831,513.92     988,555.22     1,820,069.14
60.01%   -   65.00%                     12            8          20          1,821,167.64   1,341,847.74     3,163,015.38
65.01%   -   70.00%                     21           13          34          2,758,077.85   1,960,234.08     4,718,311.93
70.01%   -   75.00%                     44           26          70          7,172,908.32   3,627,453.70    10,800,362.02
75.01%   -   80.00%                    520           81         601         94,601,732.92  10,279,639.30   104,881,372.22
80.01%   -   85.00%                    124           47         171         20,977,744.54   5,409,476.80    26,387,221.34
85.01%   -   90.00%                     95           30         125         17,187,119.07   3,506,295.13    20,693,414.20
90.01%   -   95.00%                      2            2           4            181,724.19     134,067.55       315,791.74
95.01%   -  100.00%                      6            4          10            887,405.76     440,785.57     1,328,191.33
                                ------------------------------------      -----------------------------------------------
                   Total               839          241       1,080       $148,147,920.68 $30,026,622.33  $178,174,543.01
                                ====================================      ===============================================



                                   % OF AGGREGATE                                                                        
                           PRINCIPAL BALANCE OUTSTANDING                                                                 
                                AS OF THE CUT-OFF DATE                                                                   
  RANGE OF ORIGINAL       ---------- ----------- ----------                                                              
 LOAN-TO-VALUE RATIOS       ARMS        FRMS       TOTAL                                                                 
 --------------------       ----        ----       -----                                                                 
                                                                                                                         
 5.01%   -   15.00%          0.00%      0.17%       0.03%                                                                
15.01%   -   20.00%          0.04       0.00        0.04                                                                 
20.01%   -   25.00%          0.00       0.23        0.04                                                                 
25.01%   -   30.00%          0.00       0.45        0.08                                                                 
35.01%   -   40.00%          0.32       0.70        0.38                                                                 
40.01%   -   45.00%          0.05       0.62        0.14                                                                 
45.01%   -   50.00%          0.51       1.58        0.69                                                                 
50.01%   -   55.00%          0.25       4.04        0.89                                                                 
55.01%   -   60.00%          0.56       3.29        1.02                                                                 
60.01%   -   65.00%          1.23       4.47        1.78                                                                 
65.01%   -   70.00%          1.86       6.53        2.65                                                                 
70.01%   -   75.00%          4.84      12.08        6.06                                                                 
75.01%   -   80.00%         63.86      34.24       58.86                                                                 
80.01%   -   85.00%         14.16      18.02       14.81                                                                 
85.01%   -   90.00%         11.60      11.68       11.61                                                                 
90.01%   -   95.00%          0.12       0.45        0.18                                                                 
95.01%   -  100.00%          0.60       1.47        0.75                                                                 
                          ---------------------------------                                                              
                   Total   100.00%    100.00%     100.00%                                                                
                          =================================                                                              


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

(1)     As of the Cut-off Date, the weighted average Loan-to-Value Ratio of     
the Mortgage Loans was approximately 79.95%.                    

The original "ORIGINAL LOAN-TO-VALUE RATIO" of a Mortgage Loan shall generally  
mean the ratio, expressed as a percentage of (i) the principal amount of the    
Mortgage Loan at origination over (ii) the lesser of (a) the appraised value of 
the related Mortgaged Property determined in accordance with an appraisal       
obtained in connection with origination of the Mortgage Loans, or (b) the sale  
price of the related Mortgaged Property. Sale price shall only be considered if 
the Mortgage Loan is made in connection with a purchase of the related Mortgaged
Property.                                                                       

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                                    ORIGINAL TERMS TO MATURITY OF THE MORTGAGE LOANS(1)                           

                                             NUMBER OF                           PRINCIPAL BALANCE                
                                           MORTGAGE LOANS                OUTSTANDING AS OF THE CUT-OFF DATE       
                                      -------------------------    -----------------------------------------------
ORIGINAL TERM TO MATURITY (MONTHS)      ARMS     FRMS    TOTAL          ARMS           FRMS            TOTAL      
----------------------------------      ----     ----    -----          ----           ----            -----      
                                                                                                                  
180                                        0       18       18     $          0.00 $ 1,941,370.43  $  1,941,370.43
240                                        0       10       10                0.00   1,303,969.52     1,303,969.52
360                                      839      213    1,052      148,147,920.68  26,781,282.38   174,929,203.06
                                      -------------------------    -----------------------------------------------
                    Total                839      241    1,080     $148,147,920.68 $30,026,622.33  $178,174,543.01
                                      =========================    ===============================================



                                              % OF AGGREGATE                                                      
                                      PRINCIPAL BALANCE OUTSTANDING                                               
                                          AS OF THE CUT-OFF DATE                                                  
                                     ---------------------------------                                            
ORIGINAL TERM TO MATURITY (MONTHS)     ARMS       FRMS       TOTAL                                                
----------------------------------     ----       ----       -----                                                
                                                                                                                  
180                                     0.00%      6.47%      1.09%                                               
240                                     0.00       4.34       0.73                                                
360                                   100.00      89.19      98.18                                                
                                     ---------------------------------                                            
                    Total             100.00%    100.00%    100.00%                                               
                                     =================================                                            


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

(1)    As of the Cut-off Date, the weighted average original term to maturity   
of the Mortgage Loans was approximately 357 months.               

                                                        [Enlarge/Download Table]


                                  REMAINING TERMS TO MATURITY OF THE MORTGAGE LOANS(1)                        

RANGE OF  REMAINING TERM                 NUMBER OF                           PRINCIPAL BALANCE                
TO MATURITY (MONTHS)                  MORTGAGE LOANS                OUTSTANDING AS OF THE CUT-OFF DATE        
--------------------              ------------------------    ------------------------------------------------
                                     ARMS     FRMS  TOTAL          ARMS             FRMS           TOTAL      
                                     ----     ----  -----          ----             ----           -----      
                                                                                                              
Less than 175                           0        5      5     $          0.00  $   587,202.09  $    587,202.09
176 - 235                               0       15     15                0.00    1,627,359.04     1,627,359.04
236 - 350                               2       10     12          200,127.12    1,170,057.40     1,370,184.52
351 - 355                             166       53    219       30,692,273.11    6,697,849.87    37,390,122.98
356 - 360                             671      158    829      117,255,520.45   19,944,153.93   137,199,674.38
                                  ------------------------    ------------------------------------------------
                          Total       839      241  1,080     $148,147,920.68  $30,026,622.33  $178,174,543.01
                                  ========================    ================================================



                                            % OF AGGREGATE                                                    
RANGE OF  REMAINING TERM           PRINCIPAL BALANCE OUTSTANDING                                              
TO MATURITY (MONTHS)                     AS OF THE CUT-OFF DATE                                               
--------------------             ---------------------------------                                            
                                     ARMS       FRMS       TOTAL                                              
                                     ----       ----       -----                                              
                                                                                                              
Less than 175                         0.00%      1.96%      0.33%                                             
176 - 235                             0.00       5.42       0.91                                              
236 - 350                             0.14       3.90       0.77                                              
351 - 355                            20.72      22.31      20.99                                              
356 - 360                            79.15      66.42      77.00                                              
                                   ---------------------------------                                          
                          Total     100.00%    100.00%    100.00%                                             
                                   =================================                                          

-----------                                                                     

(1)   As of the Cut-off Date, the weighted average remaining term of the        
Mortgage Loans was approximately 353 months.                        

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                                                  PROPERTY TYPES OF THE MORTGAGE LOANS                               

                                           NUMBER OF                              PRINCIPAL BALANCE                  
                                         MORTGAGE LOANS                   OUTSTANDING AS OF THE CUT-OFF DATE         
                                  -----------------------------     -----------------------------------------------  
PROPERTY TYPE                         ARMS      FRMS     TOTAL           ARMS              FRMS            TOTAL     
-------------                         ----      ----     -----           ----              ----            -----     
                                                                                                                     
Single Family                          599       201       800      $104,997,179.35   $23,800,663.05  $128,797,842.40
Planned Unit Development                95        13       108        17,964,194.89     2,131,915.18    20,096,110.07
Two to Four Family                      56        15        71        12,051,583.96     2,858,045.86    14,909,629.82
Condominium                             75         9        84        11,190,320.96       738,941.02    11,929,261.98
Townhouse                               13         1        14         1,745,590.77       103,691.43     1,849,282.20
Manufactured Housing                     1         2         3           199,050.75       393,365.79       592,416.54
                                  -----------------------------     ----------------  -------------------------------
                          Total        839       241     1,080      $148,147,920.68   $30,026,622.33  $178,174,543.01
                                  =============================     ================  ===============================



                                          % OF AGGREGATE                                                             
                                   PRINCIPAL BALANCE OUTSTANDING                                                     
                                      AS OF THE CUT-OFF DATE                                                         
                                 ----------------------------------                                                  
PROPERTY TYPE                       ARMS        FRMS       TOTAL                                                     
-------------                       ----        ----       -----                                                     
                                                                                                                     
Single Family                      70.87%      79.27%       72.29%                                                   
Planned Unit Development           12.13        7.10        11.28                                                    
Two to Four Family                  8.13        9.52         8.37                                                    
Condominium                         7.55        2.46         6.70                                                    
Townhouse                           1.18        0.35         1.04                                                    
Manufactured Housing                0.13        1.31         0.33                                                    
                                 ----------------------------------                                                  
                          Total   100.00%     100.00%      100.00%                                                   
                                 ==================================                                                  

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                                           DOCUMENTATION LEVELS OF THE MORTGAGE LOANS(1)                                

                                            NUMBER OF                               PRINCIPAL BALANCE                   
                                         MORTGAGE LOANS                    OUTSTANDING AS OF THE CUT-OFF DATE           
                                 --------------------------------     ----------------------------------------------    
DOCUMENTATION LEVEL                   ARMS        FRMS   TOTAL              ARMS              FRMS           TOTAL      
-------------------                   ----        ----   -----              ----              ----           -----      
                                                                                                                        
Full Documentation                     285         131       416        $ 49,000,416.81  $14,434,606.34   $63,435,023.15
Stated Documentation                   545         106       651          96,893,700.53   14,650,146.25   111,543,846.78
Limited Documentation                    9           4        13           2,253,803.34      941,869.74     3,195,673.08
                                 --------------------------------     --------------------------------------------------
                       Total           839         241     1,080        $148,147,920.68  $30,026,622.33  $178,174,543.01
                                 ================================     ==================================================



                                      % OF AGGREGATE                                                                    
                               PRINCIPAL BALANCE OUTSTANDING                                                            
                                  AS OF THE CUT-OFF DATE                                                                
                              --------------------------------                                                          
DOCUMENTATION LEVEL             ARMS        FRMS       TOTAL                                                            
-------------------             ----        ----       -----                                                            
                                                                                                                        
Full Documentation               33.08%     48.07%      35.60%                                                          
Stated Documentation             65.40      48.79       62.60                                                           
Limited Documentation             1.52       3.14        1.79                                                           
                              ---------------------------------                                                         
                       Total    100.00%    100.00%     100.00%                                                          
                              =================================                                                         

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

(1)    For a description of each documentation level, see "Underwriting         
Standards" in this Prospectus Supplement.                         

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                                                         CREDIT SCORE(1)                                        

                                     NUMBER OF                               PRINCIPAL BALANCE                  
                                  MORTGAGE LOANS                     OUTSTANDING AS OF THE CUT-OFF DATE         
                          --------------------------------     -----------------------------------------------  
                                                                                                                
RANGE OF CREDIT SCORES       ARMS          FRMS     TOTAL           ARMS           FRMS            TOTAL        
----------------------       ----          ----     -----           ----           ----            -----        
     801 - 850                   1           0         1       $    130,776.57  $         0.00  $    130,776.57 
     751 - 800                  33           4        37          6,323,353.04      811,462.24     7,134,815.28 
     701 - 750                 111          22       133         21,645,308.53    3,022,265.29    24,667,573.82 
     651 - 700                 255          51       306         46,362,172.16    7,053,349.65    53,415,521.81 
     601 - 650                 159          58       217         29,074,446.86    8,123,973.00    37,198,419.86 
     551 - 600                 112          51       163         19,111,411.54    5,310,722.91    24,422,134.45 
     501 - 550                 165          54       219         24,980,796.50    5,602,713.15    30,583,509.65 
     451 - 500                   3           1         4            519,655.48      102,136.09       621,791.57 
                          --------------------------------     -------------------------------------------------
               Total           839         241     1,080       $148,147,920.68  $30,026,622.33  $178,174,543.01 
                          ================================     =================================================



                                  % OF AGGREGATE                                                                
                          PRINCIPAL BALANCE OUTSTANDING                                                         
                              AS OF THE CUT-OFF DATE                                                            
                        -----------------------------------                                                     
                                                                                                                
RANGE OF CREDIT SCORES     ARMS        FRMS       TOTAL                                                         
----------------------     ----        ----       -----                                                         
     801 - 850               0.09%       0.00%        0.07%                                                     
     751 - 800               4.27        2.70         4.00                                                      
     701 - 750              14.61       10.07        13.84                                                      
     651 - 700              31.29       23.49        29.98                                                      
     601 - 650              19.63       27.06        20.88                                                      
     551 - 600              12.90       17.69        13.71                                                      
     501 - 550              16.86       18.66        17.16                                                      
     451 - 500               0.35        0.34         0.35                                                      
                        ------------------------------------                                                    
               Total       100.00%     100.00%      100.00%                                                     
                        ====================================                                                    

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

   (1)  As of the Cut-off Date, the weighted average Credit Scores of Mortgage
     Loans was approximately 637. "CREDIT SCORES" are statistical credit
      scores obtained by many mortgage lenders in connection with the loan
   application to help assess a borrower's credit-worthiness. Credit
        Scores are generated by models developed by a third party and are made
        available to lenders through three national credit bureaus. The models
   were derived by analyzing data on consumers in order to establish
patterns which are believed to be indicative of the borrower's
   probability of default. The Credit Score is based on a borrower's
         historical credit data, including, among other things, payment history,
       delinquencies on accounts, levels of outstanding indebtedness, length
    of credit history, types of credit, and bankruptcy experience. The
     Credit Scores of the Mortgage Loans range from approximately 300 to
       approximately 850, with higher scores indicating an individual with a
      more favorable credit history compared to an individual with a lower
         score. However, a Credit Score purports only to be a measurement of the
         relative degree of risk a borrower represents to a lender, i.e., that a
   borrower with a higher score is statistically expected to be less
     likely to default in payment than a borrower with a lower score. In
   addition, it should be noted that Credit Scores were developed to
      indicate a level of default probability over a two-year period which
         does not correspond to the life of a mortgage loan. Furthermore, Credit
   Scores were not developed specifically for use in connection with
        mortgage loans, but for consumer loans in general. Therefore, a Credit
    Score does not take into consideration the effect of mortgage loan
      characteristics on the probability of repayment by the borrower. The
        Credit Scores set forth in the table above were obtained at either the
time of origination of the Mortgage Loan or more recently. The
   Depositor makes no representations or warranties as to the actual
    performance of any Mortgage Loan or that a particular Credit Score
       should be relied upon as a basis for an expectation that the borrower
will repay the Mortgage Loan according to its terms.          

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                                                         CREDIT GRADES(1)                                 

                                 NUMBER OF                              PRINCIPAL BALANCE                 
                              MORTGAGE LOANS                    OUTSTANDING AS OF THE CUT-OFF DATE        
                     ----------------------------------   ----------------------------------------------- 
CREDIT GRADE            ARMS         FRMS      TOTAL           ARMS           FRMS             TOTAL      
------------            ----         ----      -----           ----           ----             -----      
                                                                                                          
    A+                    99          28         127      $ 18,881,947.01 $ 4,160,186.45   $ 23,042,133.46
    A                    462         102         564        84,985,373.06  14,596,447.10     99,581,820.16
    A-                    84          39         123        14,854,615.39   4,570,629.33     19,425,244.72
    B                    180          69         249        27,511,026.77   6,465,798.50     33,976,825.27
    C                     14           2          16         1,914,958.45     163,936.27      2,078,894.72
    C-                     0           1           1                 0.00      69,624.68         69,624.68
                     ----------------------------------   ------------------------------------------------
         Total           839         241       1,080      $148,147,920.68 $30,026,622.33   $178,174,543.01
                     ==================================   ================================================



                           % OF AGGREGATE                                                                 
                   PRINCIPAL BALANCE OUTSTANDING                                                          
                       AS OF THE CUT-OFF DATE                                                             
                -------------------------------------                                                     
CREDIT GRADE       ARMS        FRMS        TOTAL                                                          
------------       ----        ----        -----                                                          
                                                                                                          
    A+             12.75%      13.85%       12.93%                                                        
    A              57.37       48.61        55.89                                                         
    A-             10.03       15.22        10.90                                                         
    B              18.57       21.53        19.07                                                         
    C               1.29        0.55         1.17                                                         
    C-              0.00        0.23         0.04                                                         
                -------------------------------------                                                     
         Total    100.00%     100.00%      100.00%                                                        
                =====================================                                                     

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

(1)     See "Underwriting Standards" in this Prospectus Supplement for an       
explanation of the credit grades presented in this table.       

                                                        [Enlarge/Download Table]


                                                      PREPAYMENT PENALTY TERM(1)                                     

                                            NUMBER OF                             PRINCIPAL BALANCE                  
                                         MORTGAGE LOANS                   OUTSTANDING AS OF THE CUT-OFF DATE         
                                  ------------------------------    -------------------------------------------------
PREPAYMENT PENALTY TERM (MONTHS)    ARMS       FRMS       TOTAL          ARMS            FRMS           TOTAL        
--------------------------------    ----       ----       -----          ----            ----           -----        
                                                                                                                     
     No Prepayment Penalty                                                                                           
                                       231         54       285     $ 38,075,597.68   $ 6,353,375.04  $ 44,428,972.72
               6                         2          1         3          144,058.51        59,346.63       203,405.14
               12                       29         26        55        8,116,848.45     4,229,962.25    12,346,810.70
               18                        2          0         2          422,463.41             0.00       422,463.41
               24                       55          1        56       12,694,412.83       333,947.02    13,028,359.85
               30                        2          0         2          488,291.37             0.00       488,291.37
               36                      496         64       560       85,360,096.14     8,762,957.39    94,123,053.53
               48                        4          1         5          625,441.60       188,486.60       813,928.20
               60                       18         94       112        2,220,710.69    10,098,547.40    12,319,258.09
                                  ------------------------------    -------------------------------------------------
                   Total               839        241     1,080     $148,147,920.68  $ 30,026,622.33  $178,174,543.01
                                  ==============================    =================================================



                                             % OF AGGREGATE                                                          
                                      PRINCIPAL BALANCE OUTSTANDING                                                  
                                         AS OF THE CUT-OFF DATE                                                      
                                  --------------------------------------                                             
PREPAYMENT PENALTY TERM (MONTHS)     ARMS         FRMS        TOTAL                                                  
--------------------------------     ----         ----        -----                                                  
                                                                                                                     
     No Prepayment Penalty                                                                                           
                                     25.70%       21.16%      24.94%                                                 
               6                      0.10         0.20        0.11                                                  
               12                     5.48        14.09        6.93                                                  
               18                     0.29         0.00        0.24                                                  
               24                     8.57         1.11        7.31                                                  
               30                     0.33         0.00        0.27                                                  
               36                    57.62        29.18       52.83                                                  
               48                     0.42         0.63        0.46                                                  
               60                     1.50        33.63        6.91                                                  
                                  ------------ ----------- -------------                                             
                   Total            100.00%      100.00%     100.00%                                                 
                                  ============ =========== =============                                             

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

(1)    As of the Cut-off Date, the non-zero weighted average Prepayment         
Penalty term of the Mortgage Loans with Prepayment Penalties was  
approximately 35 months. The calculation of the amount of the     
Prepayment Penalty varies on the Mortgage Loans.                  

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                                      OCCUPANCY STATUS OF THE MORTGAGE LOANS(1)                             

                                 NUMBER OF                                 PRINCIPAL BALANCE                
                              MORTGAGE LOANS                      OUTSTANDING AS OF THE CUT-OFF DATE        
                      --------------------------------      ------------------------------------------------
OCCUPANCY STATUS        ARMS        FRMS      TOTAL              ARMS            FRMS            TOTAL      
----------------        ----        ----      -----              ----            ----            -----      
                                                                                                            
Owner-Occupied            801         224     1,025         $143,087,986.84  $27,943,114.29  $171,031,101.13
Non Owner-Occupied         37          16        53            4,996,384.58    1,788,494.64     6,784,879.22
Second Home                 1           1         2               63,549.26      295,013.40       358,562.66
                      --------------------------------      ------------------------------------------------
               Total      839         241     1,080         $148,147,920.68  $30,026,622.33  $178,174,543.01
                      ================================      ================================================



                              % OF AGGREGATE                                                                
                       PRINCIPAL BALANCE OUTSTANDING                                                        
                          AS OF THE CUT-OFF DATE                                                            
                      --------------------------------                                                      
OCCUPANCY STATUS        ARMS        FRMS      TOTAL                                                         
----------------        ----        ----      -----                                                         
                                                                                                            
Owner-Occupied           96.58%     93.06%     95.99%                                                       
Non Owner-Occupied        3.37       5.96       3.81                                                        
Second Home               0.04       0.98       0.20                                                        
                      --------------------------------                                                      
               Total    100.00%    100.00%    100.00%                                                       
                      ================================                                                      


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

(1)   Based on a representation made by the borrower at the time of origination.

                                                        [Enlarge/Download Table]


                                                   PURPOSE OF THE MORTGAGE LOANS                                      

                                        NUMBER OF                                 PRINCIPAL BALANCE                   
                                     MORTGAGE LOANS                       OUTSTANDING AS OF THE CUT-OFF DATE          
                           ------------------------------------    -------------------------------------------------  
PURPOSE                          ARMS         FRMS     TOTAL            ARMS             FRMS            TOTAL        
-------                          ----         ----     -----            ----             ----            -----        
                                                                                                                      
Purchase                          408           40       448       $ 77,698,388.43   $ 5,179,984.71  $82,878,373.14   
Cash-out Refinance                343          152       495         56,999,920.87    19,177,814.50   76,177,735.37   
Rate/Term Refinance                87           49       136         13,368,233.06     5,668,823.12   19,037,056.18   
Construction-Permit                 1            0         1             81,378.32             0.00       81,378.32   
                           ------------------------------------    ---------------------------------------------------
              Total               839          241     1,080       $148,147,920.68   $30,026,622.33  $178,174,543.01  
                           ====================================    =================================================  



                             % OF AGGREGATE                                                                           
                      PRINCIPAL BALANCE OUTSTANDING                                                                   
                         AS OF THE CUT-OFF DATE                                                                       
                     --------------------------------                                                                 
PURPOSE                ARMS        FRMS      TOTAL                                                                    
-------                ----        ----      -----                                                                    
                                                                                                                      
Purchase                52.45%     17.25%     46.52%                                                                  
Cash-out Refinance      38.48      63.87      42.75                                                                   
Rate/Term Refinance      9.02      18.88      10.68                                                                   
Construction-Permit      0.05       0.00       0.05                                                                   
                     --------------------------------                                                                 
              Total    100.00%    100.00%    100.00%                                                                  
                     ================================                                                                 

                                                        [Enlarge/Download Table]


                                                                    PRODUCT TYPE OF THE MORTGAGE LOANS                    

                                               NUMBER OF                                PRINCIPAL BALANCE                 
                                            MORTGAGE LOANS                      OUTSTANDING AS OF THE CUT-OFF DATE        
                                   ----------------------------------    -------------------------------------------------
PRODUCT TYPE                          ARMS        FRMS       TOTAL            ARMS             FRMS            TOTAL      
------------                          ----        ----       -----            ----             ----            -----      
                                                                                                                          
15 Year Fixed Loans                         0          17         17     $          0.00  $ 1,870,637.41  $  1,870,637.41 
15 Year Balloon Loans                       0           1          1                0.00       70,733.02        70,733.02 
20 Year Fixed Loans                         0          10         10                0.00    1,303,969.52     1,303,969.52 
2/28 ARM Loans w/5 Year IO Period           2           0          2          515,455.19            0.00       515,455.19 
2/28 ARM Loans                            288           0        288       54,507,547.02            0.00    54,507,547.02 
30 Year Fixed Loans                         0         213        213                0.00   26,781,282.38    26,781,282.38 
3/27 ARM Loans                            549           0        549       93,124,918.47            0.00    93,124,918.47 
                                   ----------- ----------- ----------    ---------------- --------------- ----------------
                      Total               839         241      1,080     $148,147,920.68  $30,026,622.33  $178,174,543.01 
                                   =========== =========== ==========    ================ =============== ================



                                               % OF AGGREGATE                                                             
                                        PRINCIPAL BALANCE OUTSTANDING                                                     
                                           AS OF THE CUT-OFF DATE                                                         
                                       -------------------------------                                                    
PRODUCT TYPE                             ARMS        FRMS      TOTAL                                                      
------------                             ----        ----      -----                                                      
                                                                                                                          
15 Year Fixed Loans                      0.00%      6.23%      1.05%                                                      
15 Year Balloon Loans                    0.00       0.24       0.04                                                       
20 Year Fixed Loans                      0.00       4.34       0.73                                                       
2/28 ARM Loans w/5 Year IO Period        0.35       0.00       0.29                                                       
2/28 ARM Loans                          36.79       0.00      30.59                                                       
30 Year Fixed Loans                      0.00      89.19      15.03                                                       
3/27 ARM Loans                          62.86       0.00      52.27                                                       
                                       ---------- ---------- ---------                                                    
                      Total            100.00%    100.00%    100.00%                                                      
                                       ========== ========== =========                                                    

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                                             GEOGRAPHIC DISTRIBUTION OF THE MORTGAGE LOANS(1)                             

                                             NUMBER OF                                  PRINCIPAL BALANCE                 
                                          MORTGAGE LOANS                        OUTSTANDING AS OF THE CUT-OFF DATE        
                                ------------------------------------     -------------------------------------------------
            LOCATION                   ARMS        FRMS       TOTAL                ARMS       FRMS            TOTAL       
            --------                   ----        ----       -----                ----       ----            -----       
                                                                                                                          
Alabama                                   1           3           4      $    135,426.18  $   277,868.88   $    413,295.06
Alaska                                    2           0           2           335,293.95            0.00        335,293.95
Arizona                                  29           8          37         3,406,811.06      722,583.22      4,129,394.28
Arkansas                                  8           1           9           854,296.02      120,550.99        974,847.01
California                              237          27         264        55,957,147.96    4,406,350.91     60,363,498.87
Colorado                                 13           1          14         2,266,700.43      163,155.59      2,429,856.02
Connecticut                              10           5          15         1,917,420.81      922,753.13      2,840,173.94
Delaware                                  3           2           5           317,470.30      281,373.69        598,843.99
Florida                                  77          46         123         9,283,922.14    4,415,840.56     13,699,762.70
Georgia                                  19           6          25         2,848,415.74      603,992.64      3,452,408.38
Hawaii                                   19           2          21         4,610,452.03      373,894.59      4,984,346.62
Idaho                                     7           1           8         1,029,858.54       62,274.84      1,092,133.38
Illinois                                 63           9          72        10,675,857.23      954,907.05     11,630,764.28
Indiana                                  19           4          23         1,738,985.07      255,884.55      1,994,869.62
Iowa                                      4           2           6           462,939.57       66,351.41        529,290.98
Kansas                                    2           1           3           144,058.51       59,346.63        203,405.14
Kentucky                                  7           5          12           790,355.02      471,407.65      1,261,762.67
Louisiana                                 0           1           1                 0.00       81,216.94         81,216.94
Maine                                     5           1           6           582,312.44      182,694.85        765,007.29
Maryland                                 19           8          27         3,567,642.16    1,816,585.80      5,384,227.96
Massachusetts                             9           1          10         2,358,856.33      219,637.76      2,578,494.09
Michigan                                 19           5          24         2,490,052.89      364,784.30      2,854,837.19
Minnesota                                 4           0           4           755,409.98            0.00        755,409.98
Mississippi                               2           1           3           243,638.71       62,223.40        305,862.11
Missouri                                 13           1          14         1,741,286.81       70,733.02      1,812,019.83
Montana                                   0           1           1                 0.00      307,206.22        307,206.22
Nevada                                   14           2          16         2,552,458.18      222,929.95      2,775,388.13
New Hampshire                             2           0           2           419,816.29            0.00        419,816.29
New Jersey                               37           3          40         7,452,186.81      437,594.98      7,889,781.79
New Mexico                                4           2           6           382,711.40      235,170.47        617,881.87
New York                                 47          29          76         9,354,200.26    5,329,139.47     14,683,339.73
North Carolina                           21           7          28         2,183,318.16      520,375.42      2,703,693.58
Ohio                                     18           4          22         2,295,253.78      389,811.52      2,685,065.30
Oklahoma                                  5           5          10           378,529.06      270,479.96        649,009.02
Oregon                                    9           4          13         1,677,102.11      480,983.75      2,158,085.86
Pennsylvania                             13           8          21         1,896,622.90      918,395.75      2,815,018.65
Rhode Island                              3           0           3           449,933.49            0.00        449,933.49
South Carolina                            4           2           6           329,392.29       82,264.49        411,656.78
Tennessee                                 5           6          11           692,133.67      369,646.77      1,061,780.44
Texas                                    31          21          52         3,622,638.79    2,235,262.03      5,857,900.82
Utah                                      6           1           7           733,819.70      147,580.21        881,399.91
Virginia                                 10           1          11         2,095,114.97      114,709.24      2,209,824.21
Washington                               12           4          16         2,098,087.81    1,008,659.70      3,106,747.51
Wisconsin                                 7           0           7         1,019,991.13            0.00      1,019,991.13
                                ------------------------------------     -------------------------------------------------
                      Total             839         241       1,080      $148,147,920.68  $30,026,622.33   $178,174,543.01
                                ====================================     =================================================



                                        % AGGREGATE                                                                       
                               PRINCIPAL BALANCE OUTSTANDING                                                              
                                  AS OF THE CUT-OFF DATE                                                                  
                             ----------------------------------                                                           
            LOCATION           ARMS        FRMS       TOTAL                                                               
            --------           ----        ----       -----                                                               
                                                                                                                          
Alabama                        0.09%       0.93%       0.23%                                                              
Alaska                         0.23        0.00        0.19                                                               
Arizona                        2.30        2.41        2.32                                                               
Arkansas                       0.58        0.40        0.55                                                               
California                     37.77      14.67       33.88                                                               
Colorado                       1.53        0.54        1.36                                                               
Connecticut                    1.29        3.07        1.59                                                               
Delaware                       0.21        0.94        0.34                                                               
Florida                        6.27       14.71        7.69                                                               
Georgia                        1.92        2.01        1.94                                                               
Hawaii                         3.11        1.25        2.80                                                               
Idaho                          0.70        0.21        0.61                                                               
Illinois                       7.21        3.18        6.53                                                               
Indiana                        1.17        0.85        1.12                                                               
Iowa                           0.31        0.22        0.30                                                               
Kansas                         0.10        0.20        0.11                                                               
Kentucky                       0.53        1.57        0.71                                                               
Louisiana                      0.00        0.27        0.05                                                               
Maine                          0.39        0.61        0.43                                                               
Maryland                       2.41        6.05        3.02                                                               
Massachusetts                  1.59        0.73        1.45                                                               
Michigan                       1.68        1.21        1.60                                                               
Minnesota                      0.51        0.00        0.42                                                               
Mississippi                    0.16        0.21        0.17                                                               
Missouri                       1.18        0.24        1.02                                                               
Montana                        0.00        1.02        0.17                                                               
Nevada                         1.72        0.74        1.56                                                               
New Hampshire                  0.28        0.00        0.24                                                               
New Jersey                     5.03        1.46        4.43                                                               
New Mexico                     0.26        0.78        0.35                                                               
New York                       6.31       17.75        8.24                                                               
North Carolina                 1.47        1.73        1.52                                                               
Ohio                           1.55        1.30        1.51                                                               
Oklahoma                       0.26        0.90        0.36                                                               
Oregon                         1.13        1.60        1.21                                                               
Pennsylvania                   1.28        3.06        1.58                                                               
Rhode Island                   0.30        0.00        0.25                                                               
South Carolina                 0.22        0.27        0.23                                                               
Tennessee                      0.47        1.23        0.60                                                               
Texas                          2.45        7.44        3.29                                                               
Utah                           0.50        0.49        0.49                                                               
Virginia                       1.41        0.38        1.24                                                               
Washington                     1.42        3.36        1.74                                                               
Wisconsin                      0.69        0.00        0.57                                                               
                             --------------------------------                                                             
                      Total  100.00%    100.00%      100.00%                                                              
                             ================================                                                             


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

(1)  The greatest ZIP Code geographic concentration of the Mortgage Loans, by   
  Principal Balance as of the Cut-off Date, was approximately 0.96% in the
95020 ZIP Code, located in California, for all of the Mortgage Loans. 

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The following tables present certain statistics relevant only to the            
Adjustable-Rate Loans:                                                          

                                                        [Enlarge/Download Table]


                                       MAXIMUM MORTGAGE INTEREST RATE(1)                                   

                                                                                       % OF AGGREGATE      
            RANGE OF                  NUMBER OF             PRINCIPAL BALANCE         PRINCIPAL BALANCE    
        MAXIMUM MORTGAGE              MORTGAGE              OUTSTANDING AS OF       OUTSTANDING AS OF THE  
         INTEREST RATES                 LOANS                THE CUT-OFF DATE           CUT-OFF DATE       
----------------------------------  --------------        -----------------------  ------------------------
                                                                                                           
    12.000%  -  12.500%                      1              $    239,556.11                  0.16%         
    12.501%  -  13.000%                     15                 3,503,204.25                  2.36          
    13.001%  -  13.500%                     80                17,579,526.37                 11.87          
    13.501%  -  14.000%                    197                38,811,387.43                 26.20          
    14.001%  -  14.500%                    186                31,411,258.76                 21.20          
    14.501%  -  15.000%                    192                31,576,576.23                 21.31          
    15.001%  -  15.500%                     82                12,613,252.59                  8.51          
    15.501%  -  16.000%                     63                 9,805,728.01                  6.62          
    16.001%  -  16.500%                      9                 1,161,722.58                  0.78          
    16.501%  -  17.000%                      8                   997,998.37                  0.67          
    17.001%  -  17.500%                      3                   191,276.41                  0.13          
    17.501%  -  18.000%                      2                   210,095.13                  0.14          
    18.501%  -  19.000%                      1                    46,338.44                  0.03          
                                    --------------        -----------------------  ------------------------
                            Total          839              $148,147,920.68                100.00%         
                                    ==============        =======================  ========================

(1)  As of the Cut-off Date, the weighted average Maximum Mortgage Interest Rate
of the Adjustable-Rate Mortgage Loans was approximately 14.414%.      

                                                        [Enlarge/Download Table]


                                     MINIMUM MORTGAGE INTEREST RATE(1)                                      

                                                                                        % OF AGGREGATE      
                                       NUMBER OF             PRINCIPAL BALANCE         PRINCIPAL BALANCE    
    RANGE OF MINIMUM MORTGAGE           MORTGAGE             OUTSTANDING AS OF       OUTSTANDING AS OF THE  
          INTEREST RATES                 LOANS               THE CUT-OFF DATE            CUT-OFF DATE       
-----------------------------------   -------------       ------------------------  ------------------------
                                                                                                            
     5.001%  -   5.500%                         1             $    239,556.11                  0.16%        
     5.501%  -   6.000%                        15                3,503,204.25                  2.36         
     6.001%  -   6.500%                        80               17,579,526.37                 11.87         
     6.501%  -   7.000%                       197               38,811,387.43                 26.20         
     7.001%  -   7.500%                       186               31,411,258.76                 21.20         
     7.501%  -   8.000%                       192               31,576,576.23                 21.31         
     8.001%  -   8.500%                        82               12,613,252.59                  8.51         
     8.501%  -   9.000%                        63                9,805,728.01                  6.62         
     9.001%  -   9.500%                         9                1,161,722.58                  0.78         
     9.501%  -  10.000%                         8                  997,998.37                  0.67         
    10.001%  -  10.500%                         3                  191,276.41                  0.13         
    10.501%  -  11.000%                         2                  210,095.13                  0.14         
    11.501%  -  12.000%                         1                   46,338.44                  0.03         
                                      -------------       ------------------------  ------------------------
                             Total            839             $148,147,920.68                100.00%        
                                      =============       ========================  ========================

(1)  As of the Cut-off Date, the weighted average Minimum Mortgage Interest Rate
of the Adjustable-Rate Mortgage Loans was approximately 7.414%.       

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                                            INITIAL PERIODIC CAP(1)                                        

                                                                                       % OF AGGREGATE      
                                      NUMBER OF             PRINCIPAL BALANCE         PRINCIPAL BALANCE    
                                       MORTGAGE             OUTSTANDING AS OF       OUTSTANDING AS OF THE  
       INITIAL PERIODIC CAP             LOANS               THE CUT-OFF DATE            CUT-OFF DATE       
-----------------------------------  -------------       ------------------------  ------------------------
                                                                                                           
      1.000%                                 5               $    582,312.44                  0.39%        
      1.500%                               834                147,565,608.24                 99.61         
                                     -------------       ------------------------  ------------------------
                             Total         839               $148,147,920.68                100.00%        
                                     =============       ========================  ========================

(1)   As of the Cut-off Date, the weighted average Initial Periodic Cap of the  
Adjustable-Rate Mortgage Loans was approximately 1.498%.            

                                                        [Enlarge/Download Table]


                                                  PERIODIC CAP(1)                                          

                                                                                       % OF AGGREGATE      
                                      NUMBER OF             PRINCIPAL BALANCE         PRINCIPAL BALANCE    
                                       MORTGAGE             OUTSTANDING AS OF       OUTSTANDING AS OF THE  
           PERIODIC CAP                 LOANS               THE CUT-OFF DATE            CUT-OFF DATE       
-----------------------------------  -------------       ------------------------  ------------------------
                                                                                                           
      1.000%                                 4               $    389,641.46                  0.26%        
      1.500%                               835                147,758,279.22                 99.74         
                                     -------------       ------------------------  ------------------------
                             Total         839               $148,147,920.68                100.00%        
                                     =============       ========================  ========================

(1)   As of the Cut-off Date, the weighted average Periodic Cap of the          
Adjustable-Rate Mortgage Loans was approximately 1.499%.            

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                                                   GROSS MARGINS(1)                                        
                                                                                        % OF AGGREGATE     
                                                                                       PRINCIPAL BALANCE   
                                                          PRINCIPAL BALANCE               OUTSTANDING      
 RANGE OF GROSS                   NUMBER OF          OUTSTANDING AS OF THE CUT-OFF      AS OF THE CUT-OFF  
    MARGINS                    MORTGAGE LOANS                  DATE                           DATE         
--------------------------  ---------------------  --------------------------------  ----------------------
                                                                                                           
   3.501% - 4.000%                     1                $    239,556.11                        0.16%       
   4.001% - 4.500%                    11                   2,879,753.98                        1.94        
   4.501% - 5.000%                    63                  14,154,795.51                        9.55        
   5.001% - 5.500%                   160                  32,693,643.93                       22.07        
   5.501% - 6.000%                   178                  32,246,502.42                       21.77        
   6.001% - 6.500%                   199                  32,063,075.40                       21.64        
   6.501% - 7.000%                   108                  16,326,227.42                       11.02        
   7.001% - 7.500%                    71                  11,162,535.81                        7.53        
   7.501% - 8.000%                    32                   4,773,835.38                        3.22        
   8.001% - 8.500%                     8                     897,533.87                        0.61        
   8.501% - 9.000%                     4                     403,608.64                        0.27        
   9.001% - 9.500%                     1                      50,418.64                        0.03        
   9.501% - 10.000%                    2                     210,095.13                        0.14        
   over 10.001%                        1                      46,338.44                        0.03        
                            ---------------------  --------------------------------  ----------------------
                    Total            839                $148,147,920.68                      100.00%       
                            =====================  ================================  ======================

(1)   As of the Cut-off Date, the weighted average Gross Margin of the          
Adjustable-Rate Mortgage Loans was approximately 6.061%.            

                                                        [Enlarge/Download Table]


                                      MONTH OF NEXT MORTGAGE INTEREST RATE CHANGE(1)                              

                                                                                               % OF AGGREGATE     
                                                               PRINCIPAL BALANCE             PRINCIPAL BALANCE    
     NEXT ADJUSTMENT              NUMBER OF              OUTSTANDING AS OF THE CUT-OFF          OUTSTANDING       
           DATE                 MORTGAGE LOANS                        DATE                 AS OF THE CUT-OFF DATE 
---------------------------  ---------------------      ---------------------------------  -----------------------
                                                                                                                  
June 1, 2005                             1                      $     82,028.54                     0.06%         
July 1, 2005                             1                           167,789.50                     0.11          
August 1, 2005                           2                           361,318.09                     0.24          
September 1, 2005                        4                           919,319.49                     0.62          
October 1, 2005                         41                         7,520,898.99                     5.08          
November 1, 2005                       241                        45,971,647.60                    31.03          
February 1, 2006                         1                            92,988.57                     0.06          
May 1, 2006                              1                           107,138.55                     0.07          
July 1, 2006                             3                           263,299.57                     0.18          
August 1, 2006                           3                           665,865.26                     0.45          
September 1, 2006                       13                         2,022,043.24                     1.36          
October 1, 2006                         98                        18,689,710.43                    12.62          
November 1, 2006                       430                        71,283,872.85                    48.12          
                             ---------------------      ---------------------------------  -----------------------
         Total                         839                      $148,147,920.68                   100.00%         
                             =====================      =================================  =======================

(1)   The weighted average months to next Adjustment Date for the Adjustable-   
   Rate Mortgage Loans as of the Cut-off Date was approximately 27 months.

     The months shown in the preceding table are the months in which the
Mortgage Interest Rates on the related Mortgage Loans were scheduled to be      
adjusted. In the case of a Mortgage Loan which was Delinquent in the month in   
which such adjustment was scheduled to occur, the adjustment will not occur     
until the Mortgage Loan has become current.                                     

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THE INDEX -- SIX-MONTH LIBOR                                                    

        The Index for all of the Adjustable-Rate Mortgage Loans is the average
of interbank offered rates for six-month U.S. dollar deposits in the London     
market based on quotations of major banks, and most recently available as of a  
day specified in the related note as published in The Wall Street Journal       
("SIX-MONTH LIBOR"). If Six-Month LIBOR becomes unpublished or is otherwise     
unavailable, the Servicer will select an alternative index which is based upon  
comparable information.                                                         

TERMS OF THE MORTGAGE LOANS                                                     

   The Mortgage Loans accrue interest on an actuarial basis over the
original terms thereof (or in the case of the Balloon Mortgage Loans, over a    
term of 30 years), calculated based on a 360-day year of twelve 30-day months.  
When a full prepayment of principal is made on a Mortgage Loan during a month,  
the mortgagor is charged interest only on the days of the month actually elapsed
up to the date of such prepayment, at a daily interest rate that is applied to  
the principal amount of the loan so prepaid. When a partial prepayment of       
principal is made on a Mortgage Loan during a month, the mortgagor generally is 
not charged interest on the amount of the partial prepayment during the month in
which such prepayment is made.                                                  

THE SELLER

      The Depositor will purchase the Mortgage Loans from Bank of America,
N.A. (the "SELLER"), a national banking association. The Seller is an affiliate 
of the Depositor and one of the Underwriters. The Seller has its principal place
of business in Charlotte, North Carolina. The Seller acquired the Mortgage Loans
from Accredited Home Lenders, Inc. (the "ORIGINATOR"). The Seller is engaged in 
a general commercial banking business, offering a full range of commercial,     
corporate, international, financial and retail banking services to corporations,
governments and individuals.                                                    

THE ORIGINATOR

         The information set forth in the following paragraphs has been provided
by Accredited Home Lenders, Inc. ("Accredited"), and none of the depositor, the 
underwriters, the servicer, the trustee, or any other person makes any          
representation as to the accuracy or completeness of such information.          

      Accredited is a nationwide mortgage banking company that originates,
finances, sells, securitizes and services first and subordinate lien mortgage   
loans secured by single-family residences, two- to four-family residences,      
condominium units, units in planned unit developments, manufactured housing     
units, townhomes and modular housing units. Accredited focuses on originating   
mortgage loans which do not conform to credit and other criteria established by 
Fannie Mae and Freddie Mac, commonly referred to as "nonconforming" and         
"subprime" mortgage loans.                                                      

        Accredited's mortgage loan originations are primarily wholesale, i.e.,
conducted through mortgage brokers. On a smaller scale, Accredited makes retail 
originations directly to borrowers.                                             

  Accredited's total annual mortgage loan production has increased
steadily from $1.5 billion in 2000, $2.3 billion in 2001, $4.3 billion in 2002  
and $8.0 billion in 2003. As of December 31, 2003, Accredited had 2,056         
employees.                                                                      

UNDERWRITING STANDARDS

The information set forth in this section with regard to the  
Originator's underwriting standards has been provided to the Depositor or       
compiled from information provided to the Depositor by the Originator. None of  
the Depositor, the Seller, the Trustee, the Servicer, the Underwriters or any of
their respective affiliates has made any independent investigation of this      
information or has made or will make any representation as to the accuracy or   
completeness of this information. All of the Mortgage Loans were originated or  
acquired in accordance with the Originator's guidelines (the "ACCREDITED        
STANDARDS") described in this section, subject to exceptions that may have      

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been made on a case-by-case basis where compensating factors existed. Therefore,
there can be no assurance that each such Mortgage Loan was originated exactly in
accordance with the following standards or that each specific criterion was     
satisfied individually.                                                         

      Underwriting Standards. Each mortgage loan originated or acquired by
Accredited is underwritten prior to loan closing, or re-underwritten after loan 
closing but prior to purchase by Accredited, in accordance with Accredited's    
underwriting guidelines. Accredited's underwriting process is intended to assess
a loan applicant's credit standing and repayment ability and the value and      
adequacy of the real property security as collateral for the proposed loan. All 
underwriting and re-underwriting is performed by Accredited's underwriting      
personnel, and Accredited does not delegate underwriting authority to any       
broker, correspondent or other mortgage loan provider. Accredited's underwriting
standards are applied in a standardized manner which complies with applicable   
federal and state laws and regulations.                                         

         All of Accredited's prospective mortgage brokers and correspondents are
subjected to a pre-approval process, including verification that all required   
licenses are current, and are required to sign agreements pursuant to which they
represent and warrant compliance with Accredited's underwriting guidelines and  
all applicable laws and regulations. Accredited periodically reviews each of its
mortgage broker's and correspondent's performance relative to issues disclosed  
by Accredited's quality control review, and discontinues relationships with     
unacceptable performers.                                                        

       Each prospective mortgagor completes a mortgage loan application that
includes information with respect to the applicant's liabilities, income, credit
history, employment history and personal information. At least one credit report
on each applicant from an independent, nationally recognized credit reporting   
company is required. 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, bankruptcies,             
repossessions, or judgments. All derogatory credit items occurring within the   
preceding two years and all credit inquiries within the preceding 90 days must  
be addressed by the applicant to the satisfaction of Accredited.                

       A full appraisal of the property proposed to be pledged as collateral
is required in connection with the origination of each first priority loan and  
each second priority loan greater than $50,000. Appraisals are performed by     
licensed, third-party, fee-based appraisers and include, among other things, an 
inspection of the exterior and interior of the subject property. Appraisals are 
also required to address neighborhood conditions, site and zoning status and the
condition and value of improvements. Following each appraisal, the appraiser    
prepares a report which includes a reproduction costs analysis (when            
appropriate) based on the current cost of constructing a similar home and market
value analysis based on recent sales of comparable homes in the area. Appraisals
generally conform to the Uniform Standards of Professional Appraisal Practice   
and must be on forms acceptable to Freddie Mac and Fannie Mae. Every appraisal  
is reviewed by a non-affiliated appraisal review firm or by Accredited's        
Appraisal Review Department or a qualified underwriter before the mortgage loan 
is closed. The appraisal may not be more than 180 days old on the day the loan  
is funded. In addition to the full appraisal, a Fannie Mae desk review or       
"drive-by" appraisal may be required for loan sizes between $400,000 to $500,000
and is required for loan sizes above $500,000 or for any property with a value  
greater than $650,000. For second priority loans of $50,000 or less, "drive-by" 
appraisals alone are acceptable.                                                

         Accredited's underwriting guidelines require verification or evaluation
of the income of each applicant pursuant to Accredited's "Full Documentation,"  
"Lite Documentation" or "Stated Income" programs. Under each of these programs, 
Accredited reviews the loan applicant's source of income, calculates the amount 
of income from sources indicated on the loan application or similar             
documentation, and calculates debt service-to-income ratios to determine the    
applicant's ability to repay the loan. Under the Full Documentation program,    
applicants are generally required to submit the last two pay stubs and written  
verification of income signed by the employer, Forms W-2 or 1040 and, in the    
case of self-employed applicants, Forms 1120 and profit and loss statements, in 
each case covering the preceding two years. Personal bank statements are        
acceptable as Full Documentation, with bank statements for the preceding 24     
months acceptable for "Alt2" documentation type or bank statements for the      
preceding 12 months acceptable for "Alt1." Under the Lite Documentation program,
applicants are generally required to submit a year-to-date pay stub or personal 
bank statements and, in the case of self-employed applicants, profit and loss   
statements, in each case covering at least the preceding six months. Under the  
Stated Income program, applicants are evaluated based upon income as stated in  
the mortgage loan application. Under all programs, Accredited may verify by     

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telephone employment, business and income, and self-employed applicants may be  
required to submit a business license.                                          

         Verification of the source of funds (if any) required to be paid by the
applicant at closing is generally required under all documentation programs in  
the form of a standard verification of deposit, two months' consecutive bank    
statements or other acceptable documentation. Twelve months' mortgage payment or
rental history must be verified by the related lender or landlord.              

         A critical function of Accredited's underwriting process is to identify
the level of credit risk associated with each applicant for a mortgage loan.    
Accredited has established five principal classifications, "A+" to "C," with    
respect to the credit profile of potential borrowers, and a rating is assigned  
to each loan based upon these classifications. Accredited has a sixth, generally
inactive credit classification, called "C-" which may be assigned to a borrower 
with a foreclosure or bankruptcy and can still be used on an exception basis    
with approval from executive management. Accredited assigns credit grades by    
analyzing mortgage payment history, consumer credit history, credit score,      
bankruptcy history, and debt-to-income ratio.                                   

       Each month, Accredited's quality control department generally reviews
and re-underwrites less than 5% of all of the loans that Accredited originates. 
The initial sample focuses on any loan with a first payment default or early    
payoff, or where fraud is suspected. Also, loans are randomly sampled from pools
designated for securitization or other programs in which Accredited retains the 
risk of loss on the loans. The quality control department re-underwrites these  
loans, re-verifies the sources of income, re-verifies employment, and reviews   
the appraisals to ensure that collateral values for the loans are supported.    
When fraud is suspected, the quality control department undertakes a            
comprehensive re-underwriting of not only that loan, but any related loans      
connected to the brokers, appraisers, or other parties to the transaction in    
question. All findings of the quality control department are reported on a      
regular basis to members of senior management. The Chief Executive Officer and  
the Chief Operating Officer, along with the Director of Operations and others   
analyze the results of the monthly quality control department audits as well as 
performance trends and servicing issues. Based upon this analysis, corrective   
actions are taken.                                                              

       With respect to the mortgage loans in the mortgage loan pool acquired
from Accredited, the following tables set forth Accredited's loan-to-value ratio
("LTV") and debt service-to-income ratio maximums based upon documentation type,
property type, and credit profile ("SFR" means single-family residence; "PUD"   
means planned unit development; and "N/O/O" means nonowner-occupied):           

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------------------------------------------------------------------------------------------------------------------------------------
                                                        FULL DOCUMENTATION                                                          
------------------------------------------------------------------------------------------------------------------------------------
                                                                                      MAXIMUM-LOAN-TO-VALUE RATIOS                  
                                                                              ----------------------------------------------        
                                                    TIME                          OWNER OCCUPIED         NON-OWNER OCCUPIED         
                 MAXIMUM                           ELAPSED                    ----------------------------------------------        
                MORTGAGE                            SINCE                                                                    MAX    
              DELINQUENCIES                      BANKRUPTCY                           RATE/   CASH          RATE/  CASH-   DEBT TO  
CREDIT         DURING LAST       CONSUMER             OR         PROPERTY              TERM   -OUT           TERM   OUT     INCOME  
LEVEL             YEAR            CREDIT         FORECLOSURE       TYPE       PURCH    REFI   REFI   PURCH   REFI   REFI    RATIOS  
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
          0x30                2x30; min 640      4 years since   SFR/PUD       100%     100%   100%    N/A     N/A    N/A     50% - 
A+                            credit score.      Bankruptcy      Condo         100%     100%   100%    N/A     N/A    N/A     55%   
------------------------------------------------ discharge or    -------------------------------------------------------------------
          0x30                0x30; > 90%        Foreclosure.    SFR/PUD       100%     100%   100%    90%     90%    90%     50% - 
                              min 580 credit                     Condo         100%     100%   100%    85%     85%    85%     55%   
                              score.                             -------------------------------------------------------------------
          --------------------------------------                 SFR, 2 unit    90%      90%    90%     80%    80%    80%     50% - 
          1x30 not            2x30. Past due     3 years since   PUD            85%      85%    85%     80%    80%    80%     55%   
A         rolling;            accounts must      Bankruptcy      Condo          85%      85%    85%     80%    80%    80%           
          0x30 for            be brought         discharge or    3-4 unit       85%      85%    85%     80%    80%    80%           
          N/O/O               current or paid.   Foreclosure                                                                        
          > 70% LTV.                                                                                                                
------------------------------------------------------------------------------------------------------------------------------------
          1x30 not            > 90% LTV          2 years since   SFR/PUD       100%     100%   100%    N/A     N/A    N/A     50% - 
          rolling             minimum 580        Bankruptcy      Condo         100%     100%   100%    N/A     N/A    N/A     55%   
                              credit score;      discharge.                                                                         
                              2x30               3 years since   -------------------------------------------------------------------
          -------------------------------------- Foreclosure.    SFR, 2 unit    90%      90%    90%     80%     80%    80%     50% -
A-        2x30; rolling       =< 90% LTV                         PUD            85%      85%    85%     75%     75%    75%     55%  
          30's OK             max 4x30. Past                     Condo          85%      85%    85%     75%     75%    75%          
                              due accounts                       3-4 unit       80%      80%    80%     75%     75%    75%          
                              must be brought                                                                                       
                              current or paid.                                                                                      
------------------------------------------------------------------------------------------------------------------------------------
          4x30 or             Average credit     18 months       SFR            85%      85%    85%     70%     70%    70%     50% -
          2x30  + 1x60        with 60-day late   since           PUD            80%      80%    75%     70%     70%    70%     55%  
          rolling             and isolated 90-   Bankruptcy      Condo          80%      80%    75%     70%     70%    70%          
          30's OK             day late.          discharge.      2-4 unit       80%      80%    75%     70%     70%    70%          
          (No 60's for        Majority of        May                                                                                
          >80%                trades must be     consider                                                                           
          LTV)                current.  Past     performing                                                                         
                              due accounts       Chapter 13                                                                         
B                             must be brought    on a case by                                                                       
                              current or paid.   case basis.                                                                        
                              85% LTV: min       2 years since                                                                      
                              550 credit         Foreclosure                                                                        
                              score.                                                                                                
------------------------------------------------------------------------------------------------------------------------------------
          Any number          Fair credit w/     1 year since    SFR            80%       80%    80%     65%     65%    65%     50% 
          of                  90-day late and    Bankruptcy      PUD            75%       75%    75%     65%     65%    65%         
          30's or             isolated 120-      discharge or    Condo          75%       75%    75%     65%     65%    65%         
          3x30 +              day late,          Foreclosure.    2-4 unit       70%       70%    70%     65%     65%    65%         
          1x60                charge-offs &      May consider                                                                       
          or 2x60 +           collections.       performing                                                                         
          1x90                Must be some       Chapter 13                                                                         
          (No 90's            major recent       on a case by                                                                       
C         for > 75% LTV)      positive trades.   case basis.                                                                        
                              Past due           80% LTV: 2                                                                         
                              accounts must      years.                                                                             
                              be brought                                                                                            
                              current or paid.                                                                                      
                              80% LTV: min                                                                                          
                              525 score.                                                                                            
------------------------------------------------------------------------------------------------------------------------------------
          Mortgage currently delinquent 90 days or greater, or greater than 1x90 in the last 12 months, may be considered on an     
C-        exception basis. Approval is required from executive management with the following restrictions: owner occupied           
          properties, full income documentation, maximum $1,000 cash out, no foreclosure bailouts, maximum 65% LTV, letter of       
          explanation required.                                                                                                     
------------------------------------------------------------------------------------------------------------------------------------

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------------------------------------------------------------------------------------------------------------------------------------
                                               LITE DOCUMENTATION AND STATED INCOME                                                 
------------------------------------------------------------------------------------------------------------------------------------
                                                                                  MAXIMUM-LOAN-TO-VALUE RATIOS                      
                                                                        ----------------------------------------------              
                                               TIME                        OWNER OCCUPIED         NON-OWNER OCCUPIED                
           MAXIMUM                           ELAPSED                    ----------------------------------------------              
          MORTGAGE                            SINCE                                                                         MAX     
        DELINQUENCIES                      BANKRUPTCY                             RATE/  CASH             RATE/  CASH-    DEBT TO   
CREDIT   DURING LAST       CONSUMER             OR           PROPERTY             TERM   -OUT             TERM   OUT       INCOME   
LEVEL       YEAR            CREDIT         FORECLOSURE         TYPE       PURCH   REFI   REFI    PURCH    REFI   REFI      RATIOS   
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
A+      0x30            2x30; min          4 years since      SFR/PUD      90%/     90%/  90%/    75%/     75%/   75%/     45%      
                        640 credit         Bankruptcy          Condo       90%      90%   90%     75%      75%    75%               
                        score.             discharge or                                                                             
                                           Foreclosure.                                                                             
------------------------------------------------------------------------------------------------------------------------------------
        0x30            2x30; min          3 years since      SFR/PUD      90%      90%   90%     75%      75%    75%      45% - 50%
                        640 credit score.  Bankruptcy          Condo       90%      90%   90%     75%      75%    75%               
        ---------------------------------- discharge or       2 unit       80%      90%   90%     N/A      N/A    N/A               
        0x30            Min 625 credit     Foreclosure.    -------------------------------------------------------------------------
                        score. 2x30 or                        SFR/PUD      85%      85%   85%     70%      70%    70%      45% - 50%
                        650 score.                             Condo       85%      85%   85%     70%      70%    70%               
A       ----------------------------------                    2 unit       80%      85%   85%     N/A      N/A    N/A               
        1x30 not        4x30; min                          -------------------------------------------------------------------------
        rolling         600 credit score.                       SFR        80%      80%   80%     70%      70%    70%      45% - 50%
                        Past due                                PUD        80%      80%   80%     70%      70%    70%               
                        accounts must                         2 unit       80%      80%   80%     70%      70%    70%               
                        be brought                             Condo       75%      75%   75%     65%      65%    65%               
                        current or paid.                     3-4 unit      70%      70%   70%     60%      60%    60%               
------------------------------------------------------------------------------------------------------------------------------------
A-      2x30; rolling   4x30; min          2 years since        SFR        80%      80%   80%     70%      70%    70%      50%      
        30's OK         575 credit score.  Bankruptcy           PUD        80%      80%   80%     70%      70%    70%               
                        80% LTV: min       discharge.         2 unit       80%      80%   80%     70%      70%    70%               
                        625 credit score.  3 years since       Condo       75%      75%   75%     65%      65%    65%               
                        Past due           Foreclosure.      3-4 unit      65%      65%   65%     55%      55%    55%               
                        accounts must                                                                                               
                        be brought                                                                                                  
                        current or paid.                                                                                            
------------------------------------------------------------------------------------------------------------------------------------
B       4x30 or 2x30    Min 575 credit     18 months since      SFR        75%      75%   75%     65%      65%    65%      50%      
        + 1x60;         score. Average     Bankruptcy           PUD        75%      75%   75%     65%      65%    65%               
        rolling 30's    with 60-day        discharge. May     2 unit       75%      75%   75%     65%      65%    65%               
        OK              lates and          consider            Condo       70%      70%   70%     60%      60%    60%               
                        isolated 90-day    performing        3-4 unit      60%      60%   60%     50%      50%    50%               
                        lates. Majority    Chapter 13 on a                                                                          
                        of trades must     case by case                                                                             
                        be current. Past   basis. 2 years                                                                           
                        due accounts       since                                                                                    
                        must be brought    Foreclosure.                                                                             
                        current or paid.                                                                                            
------------------------------------------------------------------------------------------------------------------------------------


         In addition to the core programs described above, Accredited offers the
following higher LTV/CLTV programs:                                             

         90% LTV Full Doc 1st Mortgage Program. This program offers higher LTVs,
greater than 90% and up to 104% LTV, for owner-occupied first mortgages. This   
program is restricted to full income documentation for both salaried and        
self-employed borrowers, with 24 months, personal bank statement income for     
self-employed borrowers allowed under certain circumstances. The borrower's     
mortgage and consumer history is carefully reviewed, with a minimum credit score
of 580 for up to 100% LTV and a minimum credit score of 620 for greater than    
100% LTV.                                                                       

       High CLTV 2nd Mortgage Programs. Up to 115% CLTV is available on this
full income documentation, owner-occupied, second mortgage program. Loan        
amounts, debt ratios, credit requirements and qualifying properties are based   
upon CLTVs up to 100% and CLTVs greater than 100% up to 115%, based upon a      
matrix with higher credit scores than Accredited's core programs. The combined  
loan amount maximum is $650,000. Additional criteria apply to loan amount       
minimums of $5,000 (our standard minimum is $10,000) as well as Stated Income   
documentation.                                                                  

     Non-Owner Occupied 1st Mortgages Greater Than 80% LTV. This program
offers a maximum 90% LTV first mortgage for nonowner-occupied properties.       
Standard full income documentation is required, with a minimum                  

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credit score of 640 for up to 85% LTV and a minimum credit score of 680 for LTVs
between 85% and 90%. Mortgages on all properties must have no late payments in  
the last 12 months, with a consumer credit maximum of two 30-day late payments  
in the last 12 months. No bankruptcy or foreclosure during the preceding five   
years is allowed. This program allows single-family and detached PUD properties 
up to 90% LTV, with condominiums and townhomes allowed up to 85% LTV. Two-unit  
properties may be considered up to 85% LTV on a case-by-case basis.             

 Exceptions. Accredited may allow exceptions to its underwriting
guidelines in accordance with Accredited's established exception policy.        
Exceptions may be allowed based upon the presence of compensating factors such  
as a low LTV, demonstrated pride of ownership and stability of employment.      

THE SERVICER

       The information contained herein with regard to Litton Loan Servicing
LP (in its capacity as Servicer, the "SERVICER"), has been provided by the      
Servicer. None of the Depositor, the Seller, the Trustee, any Underwriter or any
of their respective affiliates have made or will make any representation as to  
the accuracy or completeness of such information.                               

Litton Loan Servicing LP (the "SERVICER"), a Delaware limited 
partnership and a wholly-owned subsidiary of Credit-Based Asset Servicing and   
Securitization LLC ("C-BASS"), or C-BASS, will act as the servicer of the       
Mortgage Loans pursuant to the Pooling and Servicing Agreement. Litton Loan     
Servicing LP was formed in December 1996. As of December 31, 2003, the Servicer 
employed approximately 522 individuals. The main office of the Servicer is      
located at 4828 Loop Central Drive, Houston, Texas 77081. The Servicer is       
currently a Fannie Mae and Freddie Mac approved servicer and an approved FHA and
VA lender with a servicing portfolio of approximately $17.6 billion as of       
December 31, 2003. The Servicer specializes in servicing sub-performing mortgage
loans and entering into workouts with the related mortgagors. The Servicer is   
servicing in excess of 100 securitizations for C-BASS and various third parties.

    The Servicer may make available certain loan level and certificate
level information, such as delinquency and credit support data, projected and   
actual loss data, roll rates, and trend analyses, through its proprietary       
investor interface and asset analysis tool, RADARViewer(sm). The RADARViewer(sm)
internet website is currently located at http://www.radarviewer.com. The        
Servicer has no obligation to continue to provide any type of information       
available on RADARViewer(sm) as of the date hereof or to maintain its           
RADARViewer(sm) website in the entirety, and may, in its sole discretion,       
discontinue such service at any time.                                           

    Fitch Ratings ("Fitch") assigned the Servicer its RSS1 residential
special servicer rating on November 16, 1999 and reaffirmed that rating in      
November 2003. The rating is based on the Servicer's ability to manage and      
liquidate nonperforming residential mortgage loans and real estate owned assets.
This RSS1 rating is the highest special servicer rating attainable from Fitch,  
which reflects the Servicer's sophisticated proprietary default management      
technology, the financial strength of its well-capitalized parent and its highly
experienced management and staff.                                               

        In January 2001, Fitch assigned the Servicer its RPS1 primary servicer
rating for sub-prime and high loan-to-value ratio product and reaffirmed that   
rating in November 2003. The RPS1 rating is currently the highest subprime      
primary servicer ratin0000000g attainable from Fitch for any subprime servicer, 
which is based on the strength of the Servicer's loan administration process    
including new loan set-up procedures and related technology, loan               
accounting/cash management and loan reporting. The RPS1 rating for high         
loan-to-value ration product is based, in part, on the Servicer's intensive     
focus on early collection and loss mitigation.                                  

       In March 2001, Moody's assigned the Servicer its top servicer quality
rating (SQ1) as a primary servicer of prime and subprime mortgage loans, second 
liens and as a special servicer and reaffirmed that rating in June 2003. The    
rating is based on the Servicer's outstanding ability as a Servicer and the     
stability of its servicing operations.                                          

       In April 2001, S&P raised the Servicer's ranking from "Above Average"
to "Strong" for both its residential special and sub-prime servicing categories 
and reaffirmed that rating in September 2003. The "Strong" ranking is           

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S&P's highest possible ranking for these categories. The rankings are based on  
the Servicer's established history of servicing distressed assets for a diverse 
investor base, technological improvements that have increased operational       
efficiencies, superior management depth, and very good internal controls.       

        Delinquency and Foreclosure Experience. The following table sets forth
the delinquency and foreclosure experience of the mortgage loans serviced by the
Servicer as of the dates indicated. The Servicer's portfolio of mortgage loans  
may differ significantly from the Mortgage Loans in terms of interest rates,    
principal balances, geographic distribution, types of properties and other      
possibly relevant characteristics. There can be no assurance, and no            
representation is made, that the delinquency and foreclosure experience with    
respect to the Mortgage Loans will be similar to that reflected in the table    
below, nor is any representation made as to the rate at which losses may be     
experienced on liquidation of defaulted Mortgage Loans. The actual delinquency  
experience on the Mortgage Loans will depend, among other things, upon the value
of the real estate securing such Mortgage Loans and the ability of the related  
mortgagor to make required payments. It should be noted that the Servicer's     
business emphasizes to a certain degree the acquisition of servicing rights with
respect to non-performing and subperforming mortgage loans and the Servicer has 
been an active participant in the market for such servicing rights since 1997.  
The acquisition of such servicing rights may have affected the delinquency and  
foreclosure experience of the Servicer.                                         

DELINQUENCY AND FORECLOSURE EXPERIENCE
 (DOLLARS IN THOUSANDS)(1)

                                                        [Enlarge/Download Table]


                                   AT DECEMBER 31, 2001              AT DECEMBER 31, 2002               AT DECEMBER 31, 2003       
                            ---------------------------------  --------------------------------- --------------------------------- 
                                                      PERCENT                            PERCENT                           PERCENT 
                             NO. OF     PRINCIPAL       BY      NO. OF     PRINCIPAL       BY     NO. OF      PRINCIPAL       BY   
                              LOANS    BALANCE (2)    AMOUNT    LOANS      BALANCE (2)    AMOUNT   LOANS      BALANCE (2)   AMOUNT 
                            -------- ---------------- -------  -------- --------------- -------- --------  --------------- --------
                                                                                                                                   
Current Loans                 72,453   $5,117,899,302  62.30%    80,838  $ 6,690,592,530  64.66%  117,507  $12,259,524,842  69.54% 
Period of Delinquency: (3)                                                                                                         
30-59 Days                    12,261   $  918,166,282  11.18%    12,780  $ 1,040,126,117  10.05%   19,576  $ 1,846,650,352  10.47% 
60-89 Days                     5,266   $  379,058,310   4.61%     4,881  $   410,962,733   3.97%    8,097  $   759,456,004   4.31% 
90 Days or more                5,229   $  318,992,310   3.88%     4,407  $   299,691,214   2.90%    6,576  $   544,508,354   3.09% 
                            -------- ---------------- -------  -------- --------------- -------- --------  --------------- --------
Total Delinquent Loans        22,756   $1,616,216,902  19.67%    22,068  $ 1,750,780,064  16.92%   34,249  $ 3,150,614,710  17.87% 
Foreclosures/Bankruptcies(4)  13,865   $1,178,073,970  14.34%    18,294  $ 1,550,037,579  14.98%   19,954  $ 1,807,441,681  10.25% 
Real Estate Owned              4,117   $  302,723,096   3.69%     4,503  $   356,417,746   3.44%    4,611  $   411,683,483    2.34%
                            -------- ---------------- -------  -------- ---------------- ------- --------  --------------- --------
Total Portfolio              113,191   $8,214,913,270 100.00%   125,703  $10,347,827,919 100.00%  176,321  $17,629,264,716  100.00%
                            ======== ================ =======  ======== ================ ======= ========  =============== ========

-----------------------                               
        (1)  The table shows mortgage loans which were delinquent or for which
      foreclosure proceedings had been instituted as of the date
indicated.                                          

        (2)  For the Real Estate Owned Properties, the principal balance is at
the time of foreclosure.                            

    (3)  No mortgage loan is included in this section of the tables as
delinquent until it is 30 days past due.            

      (4)  Exclusive of the number of loans and principal balance shown in
Period of Delinquency.                              

       It is unlikely that the delinquency and foreclosure experience of the
Mortgage Loans will correspond to the delinquency and foreclosure experience of 
the Servicer's mortgage portfolio set forth in the foregoing table. The         
statistics shown above represent the delinquency and foreclosure experience for 
the Servicer's mortgage servicing portfolio only for the periods presented,     
whereas the aggregate delinquency and foreclosure experience on the Mortgage    
Loans will depend on the results obtained over the life of the mortgage pool.   
There can be no assurance that the Mortgage Loans will perform consistent with  
the delinquency and foreclosure experience than that indicated in the table     
above. It should be noted that if the residential real estate market should     
experience an overall decline in property values, the actual rates of           
delinquencies and foreclosures could be higher than those previously experienced
by the Servicer. In addition, adverse economic conditions 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 and          
foreclosures with respect to the Mortgage Loans.                                

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PLEDGE AND ASSIGNMENT OF SERVICER'S RIGHTS                                      

    On the Closing Date, the Servicer may pledge and assign all of its
right, title and interest in, to and under the Pooling and Servicing Agreement  
to one or more lenders (each, a "SERVICING RIGHTS PLEDGEE") selected by the     
Servicer, including Wachovia Bank, National Association, as the representative  
of certain lenders. In the event that an Event of Servicing Termination (as     
defined below) occurs, the Trustee and the Depositor have agreed to the         
appointment of a Servicing Rights Pledgee or its designee as the successor      
servicer, provided that at the time of such appointment the Servicing Rights    
Pledgee or such designee meets the requirements of a successor servicer         
described in the Pooling and Servicing Agreement (including being acceptable to 
the Rating Agencies) and that the Servicing Rights Pledgee or such designee     
agrees to be subject to the terms of the Pooling and Servicing Agreement. The   
Servicer may also pledge and assign its rights to be reimbursed for Advances and
Servicing Advances on terms described in the Pooling and Servicing Agreement.   
Under no circumstances will Wachovia Bank, National Association be required to  
act as a backup servicer.                                                       

 THE POOLING AND SERVICING AGREEMENT

GENERAL                                                                         

       The Certificates will be issued pursuant to the Pooling and Servicing
Agreement, dated as of March 1, 2004 (the "POOLING AND SERVICING AGREEMENT"),   
among the Depositor, the Servicer and the Trustee. The Trust Fund created under 
the Pooling and Servicing Agreement will consist of (i) all of the Depositor's  
right, title and interest in the Mortgage Loans, the related mortgage notes,    
mortgages and other related documents, (ii) all payments on or collections in   
respect of the Mortgage Loans due after the Cut-off Date, together with any     
proceeds thereof, (iii) any Mortgaged Properties acquired on behalf of          
Certificateholders by foreclosure or by deed in lieu of foreclosure, and any    
revenues received thereon, (iv) the rights of the Trustee under all insurance   
policies required to be maintained pursuant to the Pooling and Servicing        
Agreement, (v) the rights of the Depositor under the Mortgage Loan Purchase     
Agreement and the Transfer Agreement and (vi) certain other assets described in 
the Pooling and Servicing Agreement. The Offered Certificates will be           
transferable and exchangeable at the corporate trust offices of the Trustee.    

ASSIGNMENT OF THE MORTGAGE LOANS                                                

     On or about March 30, 2004 (the "CLOSING DATE"), the Depositor will
transfer to the Trust Fund all of its right, title and interest in and to each  
Mortgage Loan, the related mortgage notes, mortgages and other related documents
(collectively, the "RELATED DOCUMENTS"), including all scheduled payments with  
respect to each such Mortgage Loan due after the Cut-off Date. The Trustee,     
concurrently with such transfer, will deliver the Certificates to the Depositor.
Each Mortgage Loan transferred to the Trust Fund will be identified on a        
schedule (the "MORTGAGE LOAN SCHEDULE") delivered to the Trustee pursuant to the
Pooling and Servicing Agreement. Such Mortgage Loan Schedule will include       
information such as the Principal Balance of each Mortgage Loan as of the       
Cut-off Date, its Mortgage Interest Rate as well as other information.          

        The Pooling and Servicing Agreement will require that, within the time
period specified therein, the Seller will deliver or cause to be delivered to   
the Trustee (or a custodian, as the Trustee's agent for such purpose) the       
mortgage notes endorsed to the Trustee on behalf of the Certificateholders and  
the Related Documents. In lieu of delivery of original mortgages or mortgage    
notes, if such original is not available or lost, the Seller may deliver or     
cause to be delivered true and correct copies thereof, or, with respect to a    
lost mortgage note, a lost note affidavit executed by the Seller or the         
originator of such Mortgage Loan.                                               

   It is expected that the Mortgages or assignments of Mortgage with
respect to each Mortgage Loan will have been recorded in the name of an agent on
behalf of the holder of the related Mortgage Note. Accordingly, no Mortgage     
assignment in favor of the Trustee will be required to be prepared, delivered or
recorded. Instead, the Servicer will be required to take all actions as are     
necessary to cause the Trustee to be shown as the owner of the related Mortgage 
Loan on the records of the agent for purposes of the system of recording        
transfers of beneficial ownership of mortgages maintained by the agent.         

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        Within 60 days following the Closing Date, the Trustee will review (or
cause a custodian to review) the Mortgage Loans and the Related Documents       
pursuant to the Pooling and Servicing Agreement and if any Mortgage Loan or     
Related Document is found to be defective in any material respect and such      
defect has a material and adverse effect on the Certificateholders and is not   
cured within 120 days following notification thereof to the Seller (or within 90
days of the earlier of the Seller's discovery or receipt of notification if such
defect would cause the Mortgage Loan not to be a "qualified mortgage" for REMIC 
purposes as discussed below), the Seller will, or will cause the Originator, to 
either (i) substitute for such Mortgage Loan an Eligible Substitute Mortgage    
Loan; however, such 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
effect that such substitution will not disqualify the Trust Fund as a REMIC or  
result in a prohibited transaction tax under the Code, or (ii) purchase such    
Mortgage Loan at a price (the "PURCHASE PRICE") equal to the outstanding        
Principal Balance of such Mortgage Loan as of the date of purchase, plus all    
accrued and unpaid interest thereon, computed at the Mortgage Interest Rate     
through the end of the calendar month in which the purchase is effected, plus   
the amount of any unreimbursed Advances and Servicing Advances made by the      
Servicer plus any costs and damages incurred by the Trust in connection with any
violation by such Mortgage Loan of any predatory or abusive lending law. If,    
however, a Mortgage Loan is discovered to be defective in a manner that would   
cause it to be a "defective obligation" that is not a "qualified mortgage"      
within the meaning of Treasury regulations relating to REMICs, the Seller will  
be obligated to cure the defect or make the required purchase or substitution no
later than 90 days after the earlier of its discovery or receipt of notification
of the defect. The Purchase Price will be deposited in the Collection Account on
or prior to the next succeeding Determination Date after such obligation arises.
The obligation of the Originator or the Seller to repurchase or substitute for a
Defective Mortgage Loan is the sole remedy regarding any defects in the Mortgage
Loans and Related Documents available to the Trustee or the Certificateholders. 

        In connection with the substitution of an Eligible Substitute Mortgage
Loan, the Seller will be required to deposit in the Collection Account on or    
prior to the next succeeding Determination Date after such obligation arises an 
amount (the "SUBSTITUTION ADJUSTMENT") equal to the excess of the Purchase Price
of the related Defective Mortgage Loan over the Principal Balance (plus one     
month's interest on such balance) of such Eligible Substitute Mortgage Loan.    

       An "ELIGIBLE SUBSTITUTE MORTGAGE LOAN" is a mortgage loan substituted
by the Seller for a Defective Mortgage Loan which must, on the date of such     
substitution, (i) have an outstanding Principal Balance (or in the case of a    
substitution of more than one Mortgage Loan for a Defective Mortgage Loan, an   
aggregate Principal Balance), not in excess of, and not more than 5% less than, 
the Principal Balance of the Defective Mortgage Loan; (ii) have a Mortgage      
Interest Rate, with respect to a Fixed-Rate Mortgage Loan, not less than the    
Mortgage Interest Rate of the Defective Mortgage Loan and not more than 1% in   
excess of the Mortgage Interest Rate of such Defective Mortgage Loan or, with   
respect to an Adjustable-Rate Mortgage Loan, have a Maximum Mortgage Interest   
Rate and Minimum Mortgage Interest Rate not less than the respective rate for   
the Defective Mortgage Loan, have the same Index as the Defective Mortgage Loan 
and have a Gross Margin equal to or greater than the Defective Mortgage Loan;   
(iii) have the same Due Date as the Defective Mortgage Loan; (iv) have a        
remaining term to maturity not more than one year earlier and not later than the
remaining term to maturity of the Defective Mortgage Loan; (v) comply with each 
representation and warranty as to the Mortgage Loans set forth in the Mortgage  
Loan Purchase Agreement and the Transfer Agreement (deemed to be made as of the 
date of substitution); (vi) have been underwritten or re-underwritten in        
accordance with the same underwriting criteria and guidelines as the Mortgage   
Loans being replaced; (vii) must be of the same or better credit quality as the 
Mortgage Loan being replaced; and (viii) satisfy certain other conditions       
specified in the Pooling and Servicing Agreement.                               

        The Seller acquired the Mortgage Loans from the Originator pursuant to
a Flow Sale and Interim Servicing Agreement, dated as of December 1, 2003 (the  
"TRANSFER AGREEMENT"), between the Seller, as purchaser, and the Originator, as 
seller. Under the Transfer Agreement, the Originator made certain               
representations and warranties with respect to the Mortgage Loans as of December
29, 2003 and January 2, 2004, which will be assigned by the Seller to the       
Depositor, and by the Depositor to the Trustee for the benefit of the           
Certificateholders. Within 90 days following its discovery of a breach of any   
representation or warranty that materially or adversely affects the interests of
Certificateholders in a Mortgage Loan, or receipt of notice of such breach, the 
Originator will be obligated to cure such breach or purchase the affected       
Mortgage Loan from the Trust for a price equal to the unpaid principal balance  
thereof plus accrued interest thereon (or, in certain circumstances, to         
substitute another mortgage loan). In addition to the foregoing, if the breach  
involves the Originator's representation that the Mortgage Loan complies with   
the                                                                             

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requirements of all applicable federal, state or local abusive or predatory     
lending laws, the Originator will be obligated to reimburse the Trust for all   
costs or damages incurred by the Trust as a result of the violation of such     
representation (such amount, the "REIMBURSEMENT AMOUNT").                       

       Pursuant to the terms of the Mortgage Loan Purchase Agreement whereby
the Mortgage Loans will be purchased by the Depositor, the Seller will make to  
the Depositor (and the Depositor will assign to the Trustee for the benefit of  
holders of the Offered Certificates) only certain limited representations and   
warranties as of the Closing Date such as: (i) the accuracy of the Mortgage Loan
Schedule, (ii) the payment and delinquency status of each Mortgage Loan, (iii)  
at the time of transfer to the Depositor, the Seller has transferred or assigned
all of its right, title and interest in each Mortgage Loan and the Related      
Documents, free of any lien, and (iv) each Mortgage Loan complies with any and  
all requirements of any federal, state or local law with respect to the         
origination of such Mortgage Loans including, without limitation, usury, truth  
in lending, real estate settlement procedures, consumer credit protection, equal
credit opportunity, predatory and abusive lending laws or disclosure laws       
applicable to the Mortgage Loans. In the event of a breach of any such          
representation or warranty that does not constitute a breach of any             
representation or warranty made by the Originator as described above, the Seller
will be obligated in the same matter as the Originator to cure such breach or   
purchase the affected Mortgage Loans, as described above.                       

   To the extent that any fact, condition or event with respect to a
Mortgage Loan constitutes a breach of both a representation and warranty of the 
Originator under the Transfer Agreement, and a breach of a representation and   
warranty of the Seller under the Mortgage Loan Purchase Agreement, then the only
right or remedy of the Trustee or any Certificateholder shall be the Trustee's  
right to enforce the obligations of the Originator under the Transfer Agreement,
and there shall be no remedy against the Seller for such breaches (other than   
the Seller's obligation to remit to the Trust any Reimbursement Amount which the
Originator fails to pay).                                                       

         Mortgage Loans required to be transferred to the Seller as described in
the preceding paragraphs are referred to as "DEFECTIVE MORTGAGE LOANS."         

    Pursuant to the Pooling and Servicing Agreement, the Servicer will
service and administer the Mortgage Loans as more fully set forth therein.      

PAYMENTS ON MORTGAGE LOANS; DEPOSITS TO COLLECTION ACCOUNT AND DISTRIBUTION     
ACCOUNT                                                                         

      The Servicer will establish and maintain or cause to be maintained a
separate trust account (the "COLLECTION ACCOUNT") for the benefit of the holders
of the Certificates. The Collection Account will be an Eligible Account (as     
defined herein). Upon receipt by the Servicer of amounts in respect of the      
Mortgage Loans (excluding amounts representing the Servicing Fee, reimbursement 
for Advances and Servicing Advances, insurance proceeds to be applied to the    
restoration or repair of a Mortgaged Property or similar items), the Servicer   
will be required to deposit such amounts in the Collection Account. Amounts so  
deposited may be invested in Eligible Investments (as described in the Pooling  
and Servicing Agreement) maturing no later than one Business Day prior to the   
date on which the amount on deposit therein is required to be deposited in the  
Distribution Account. A "BUSINESS DAY" is any day other than a Saturday, a      
Sunday or a day on which banking institutions in the State of New York, the     
State of Texas, or in the city in which the corporate trust office of the       
Trustee is located are authorized or obligated by law or executive order to be  
closed. The Trustee will establish an account (the "DISTRIBUTION ACCOUNT") into 
which the Servicer will deposit, on the Business Day preceding each Distribution
Date, amounts withdrawn from the Collection Account for distribution to         
Certificateholders on such Distribution Date. The Distribution Account will be  
an Eligible Account. Amounts on deposit therein may be invested in Eligible     
Investments maturing on or before the Business Day prior to the related         
Distribution Date unless such Eligible Investments are invested in investments  
managed or advised by the Trustee or an affiliate thereof, in which case such   
Eligible Investments may mature on the related Distribution Date.               

         An "ELIGIBLE ACCOUNT" is a segregated account that is (i) an account or
accounts maintained with a federal or state chartered depository institution or 
trust company the short-term unsecured debt obligations of which (or, in the    
case of a depository institution or trust company that is the principal         
subsidiary of a holding company, the short-term unsecured debt obligations of   
such holding company) are rated by each of S&P and Moody's (collectively, the   
"RATING AGENCIES") at the levels specified in the Pooling and Servicing         
Agreement at the time any amounts are held on deposit therein, (ii) an account  
or accounts the deposits in which are fully insured by the Federal Deposit      

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Insurance Corporation (to the limits established by such corporation), (iii) a  
trust account or accounts maintained with the trust department of a federal or  
state chartered depository institution, national banking association or trust   
company acting in its fiduciary capacity or (iv) otherwise acceptable to each   
Rating Agency without reduction or withdrawal of their then current ratings of  
the Certificates as evidenced by a letter from each Rating Agency to the Trustee
or the Servicer, as applicable. Eligible Investments are specified in the       
Pooling and Servicing Agreement and are limited to investments which meet the   
criteria of the Rating Agencies.                                                

ADVANCES                                                                        

         Subject to the following limitations, the Servicer will be obligated to
advance or cause to be advanced at least one Business Day prior to each         
Distribution Date from its own funds, or funds in the Collection Account that   
are not included in the Available Funds for such Distribution Date, or a        
combination of both, in an amount equal to the aggregate of all payments of     
principal and interest, net of the Servicing Fee, that were due during the      
related Collection Period on the Mortgage Loans and that were not received by   
the related Determination Date (any such advance, an "ADVANCE").                

  The Servicer will be obligated to make any Advances of scheduled
interest with respect to REO Properties, but will not make any principal        
Advances with respect to REO Properties. With respect to Balloon Mortgage Loans,
the Servicer will not make an Advance of a delinquent Balloon Payment but will  
instead advance an assumed monthly payment that would have been due on the      
related Due Date based on the original principal amortization schedule for such 
Balloon Mortgage Loan. With respect to Interest Only Mortgage Loans, the        
Servicer will be obligated to make Advances of scheduled interest during the    
first 60 months of the term of such Mortgage Loan and Advances of scheduled     
principal and interest thereafter.                                              

         Advances with respect to Mortgage Loans are required to be made only to
the extent the Servicer deems them to be recoverable from related late          
collections, insurance proceeds, condemnation proceeds or liquidation proceeds. 
The purpose of making such Advances is to maintain a regular cash flow to the   
Certificateholders, rather than to guarantee or insure against losses. The      
Servicer will not make any Advances with respect to reductions in the amount of 
the Monthly Payments on the Mortgage Loans due to bankruptcy proceedings or the 
application of the Servicemembers Civil Relief Act (the "RELIEF ACT"), or       
similar state or local laws. Subject to the recoverability standard above, the  
Servicer's obligation to make Advances as to any Mortgage Loan will continue    
until the earlier of such time as the Trust acquires title to the related       
Mortgaged Property or such Mortgage Loan is paid in full by the mortgagor or    
disposed of by the Trust.                                                       

All Advances will be reimbursable to the Servicer from late   
collections, insurance proceeds, condemnation proceeds and liquidation proceeds 
from the Mortgage Loan as to which such unreimbursed Advance was made. In       
addition, any Advances previously made in respect of any Mortgage Loan that the 
Servicer deems to be nonrecoverable from related late collections, insurance    
proceeds, condemnation proceeds or liquidation proceeds may be reimbursed to the
Servicer out of general funds in the Collection Account prior to the            
distributions on the Certificates. In addition, the Servicer may withdraw from  
the Collection Account funds that were not included in Available Funds for the  
preceding Distribution Date to reimburse itself for Advances previously made. In
the event the Servicer fails in its obligation to make any such Advance, the    
Trustee, in its capacity as successor servicer, will be obligated to make any   
such Advance, to the extent required in the Pooling and Servicing Agreement.    

     In the course of performing its servicing obligations, the Servicer
will pay all reasonable and customary "out-of-pocket" costs and expenses        
incurred in the performance of its servicing obligations, including, but not    
limited to, the cost of (i) the preservation, restoration, inspection and       
protection of the Mortgaged Properties, (ii) any enforcement or judicial        
proceedings, including foreclosures, (iii) the management and liquidation of    
Mortgaged Properties acquired in satisfaction of the related mortgage and (iv)  
real estate taxes to the extent they must be paid to avoid a tax sale of a      
Mortgaged Property. Each such expenditure will constitute a "SERVICING ADVANCE."

         The Servicer's right to reimbursement for Servicing Advances is limited
to late collections on the related Mortgage Loan, including liquidation         
proceeds, released mortgaged property proceeds, insurance proceeds, condemnation
proceeds and such other amounts the Servicer may collect from the related       
mortgagor or otherwise relating to the Mortgage Loan in respect of which such   
unreimbursed amounts are owed, unless such amounts are                          

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deemed to be nonrecoverable by the Servicer, in which event reimbursement will  
be made to the Servicer from any funds in the Collection Account prior to the   
distributions on the Certificates.                                              

        The Pooling and Servicing Agreement will provide that (i) the Servicer
or the Trustee on behalf of the Trust Fund may enter into a facility with any   
person which provides that such person (an "ADVANCING PERSON") may fund Advances
and/or Servicing Advances, although no such facility shall reduce or otherwise  
affect the Servicer's obligation to fund such Advances and/or Servicing Advances
and (ii) the Pooling and Servicing Agreement may be amended without the consent 
of the Certificateholders to provide for such a facility.                       

THE TRUSTEE                                                                     

  JPMorgan Chase Bank, a New York banking corporation, will act as
trustee (the "TRUSTEE") for the Certificates pursuant to the Pooling and        
Servicing Agreement. The Trustee has its corporate trust office at 4 New York   
Plaza, 6th Floor, New York, New York 10004-2477, Attention: Institutional Trust 
Services/Global Debt: ABFC 2004-AHL1. The Trustee will perform administrative   
functions on behalf of the Trust Fund and for the benefit of the                
Certificateholders pursuant to the terms of the Pooling and Servicing Agreement.
The principal compensation to be paid to the Trustee in respect of its          
obligations under the Pooling and Servicing Agreement will be the "TRUSTEE FEE."
This fee will be paid monthly by the Trust Fund and will be calculated as 0.009%
annually (the "TRUSTEE FEE RATE") of the Principal Balance of each Mortgage     
Loan. The Pooling and Servicing Agreement will provide that the Trustee and any 
director, officer, employee or agent of the Trustee will be indemnified by the  
Trust Fund and will be held harmless against any loss, liability or expense (not
including expenses, disbursements and advances incurred or made by the Trustee  
in the ordinary course of the Trustee's performance in accordance with the      
provisions of the Pooling and Servicing Agreement) the Trustee incurs arising   
out of or in connection with the acceptance or administration of its obligations
and duties under the Pooling and Servicing Agreement, other than any loss,      
liability or expense (i) that is specifically allocated to the Trustee under the
Pooling and Servicing Agreement or (ii) incurred by reason of willful           
misfeasance, bad faith or negligence in the performance of the Trustee's duties 
under the Pooling and Servicing Agreement or by reason of reckless disregard of 
the Trustee's obligations and duties under the Pooling and Servicing Agreement. 

SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES                        

    The principal compensation (the "SERVICING FEE") to be paid to the
Servicer in respect of its servicing activities for the Certificates will be at 
the "SERVICING FEE RATE" of 0.50% per annum on the Principal Balance of each    
Mortgage Loan. As additional servicing compensation, the Servicer is entitled to
retain all service-related fees, including assumption fees, modification fees,  
extension fees, bad check fees and late payment charges, to the extent collected
from mortgagors, together with any interest or other income earned on funds held
in the Collection Account and any escrow accounts. The Servicer is obligated to 
offset any Prepayment Interest Shortfall on the Mortgage Loans on any           
Distribution Date (payments made by the Servicer in satisfaction of such        
obligation, "COMPENSATING INTEREST") by an amount not in excess of 50% of the   
aggregate Servicing Fee for such Distribution Date. The Servicer is obligated to
pay certain insurance premiums and certain ongoing expenses associated with the 
Mortgage Pool and incurred by the Servicer in connection with its               
responsibilities under the Pooling and Servicing Agreement and is entitled to   
reimbursement therefor as provided in the Pooling and Servicing Agreement.      

        The "DETERMINATION DATE" with respect to any Distribution Date will be
the 18th day of the calendar month in which such Distribution Date occurs or, if
such day is not a Business Day, the Business Day immediately preceding such 18th
day. With respect to any Determination Date and each Mortgage Loan as to which a
principal prepayment in full was applied during the prior calendar month, the   
"PREPAYMENT INTEREST SHORTFALL" is an amount equal to the interest at the       
Mortgage Interest Rate for such Mortgage Loan (net of the Servicing Fee Rate) on
the amount of such principal prepayment for the number of days commencing on the
date on which the principal prepayment is applied and ending on the last day of 
the prior calendar month.                                                       

OPTIONAL TERMINATION                                                            

         The majority holder of the Class CE Certificates or, if (i) such holder
is the Seller or is affiliated with the Seller or (ii) there is no majority     
holder of the Class CE Certificates, the Servicer, will have the right to       
purchase all of the Mortgage Loans and REO Properties in the Trust Fund and     
thereby effect the early retirement of the                                      

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Certificates, on any Distribution Date on which the aggregate Principal Balance 
of such Mortgage Loans and REO Properties is less than 10% of the aggregate     
Principal Balance of the Mortgage Loans as of the Cut-Off Date. If such holder  
does not exercise this option, then the Servicer or an affiliate of the Servicer
may do so. The first Distribution Date on which such option could be exercised  
is referred to herein as the "OPTIONAL TERMINATION DATE." In the event that the 
option is exercised, the purchase will be made at a price (the "TERMINATION     
PRICE") generally equal to par plus accrued interest for each Mortgage Loan at  
the related Mortgage Interest Rate to but not including the first day of the    
month in which such purchase price is distributed plus the amount of any        
unreimbursed Advances and Servicing Advances made by the Servicer. If the       
majority holder of the Class CE Certificates is subject to regulation by the    
OCC, the FDIC, the Federal Reserve or the Office of Thrift Supervision, however,
the option may not be exercised unless the aggregate fair market value of the   
Mortgage Loans and REO Properties is greater than or equal to the Termination   
Price. In addition, no option may be exercised until any due and unpaid         
Reimbursement Amounts have been paid to the Trust. Proceeds from such purchase  
will be included in Available Funds and will be distributed to the holders of   
the Certificates in accordance with the Pooling and Servicing Agreement. Any    
such purchase of Mortgage Loans and REO Properties will result in the early     
retirement of the Certificates.                                                 

       In connection with the issuance of any net interest margin securities
secured by all or a portion of the Class CE and Class P Certificates, a party   
may agree to refrain from exercising this option while those securities are     
outstanding.                                                                    

OPTIONAL PURCHASE OF DEFAULTED LOANS                                            

      As to any Mortgage Loan which is Delinquent in payment by 90 days or
more, the Servicer or an affiliate of the Servicer may, at its option, purchase 
such Mortgage Loan from the Trust at the Purchase Price for such Mortgage Loan, 
under the circumstances described in the Pooling and Servicing Agreement        

DUE-ON-SALE CLAUSE                                                              

      When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, except as set forth below, to the extent it has  
knowledge of such conveyance or prospective conveyance, exercise its rights to  
accelerate the maturity of the related Mortgage Loan under any "due-on-sale"    
clause contained in the related Mortgage or Mortgage Note; provided, however,   
that the Servicer shall not exercise any such right if the "due-on-sale" clause,
in the reasonable belief of the Servicer, is not enforceable under applicable   
law, or if in the reasonable judgment of the Servicer, entering into an         
assumption and modification agreement with a Person to whom such property shall 
be conveyed and releasing the original Mortgagor from liability would be in the 
best interests of the Certificateholders.                                       

EVENTS OF SERVICING TERMINATION                                                 

       Events of Servicing Termination will consist, among other things, of:
(i) any failure by the Servicer to deposit in the Collection Account or         
Distribution Account the required amounts or remit to the Trustee any payment   
which continues unremedied for one Business Day; (ii) any failure of the        
Servicer to make any Advance with respect to a Mortgage Loan or to pay any      
required Compensating Interest to cover Prepayment Interest Shortfalls on       
Mortgage Loans, as described herein, which failure continues unremedied for one 
Business Day; (iii) any failure by the Servicer to observe or perform in any    
material respect any other of its covenants or agreements in the Pooling and    
Servicing Agreement, which continues unremedied for 30 days after the first date
on which (x) the Servicer has knowledge of such failure or (y) written notice of
such failure is given to the Servicer; (iv) insolvency, readjustment of debt,   
marshalling of assets and liabilities or similar proceedings, and certain       
actions by or on behalf of the Servicer indicating its insolvency or inability  
to pay its obligations; or (v) the violation of a cumulative loss test specified
in the Pooling and Servicing Agreement measuring the cumulative amount of       
Realized Losses incurred from and after the Cut-off Date on the pool of Mortgage
Loans.                                                                          

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RIGHTS UPON EVENT OF SERVICING TERMINATION                                      

         So long as an Event of Servicing Termination (as defined in the Pooling
and Servicing Agreement) remains unremedied, the Trustee may, and at the        
direction of the holders of the Certificates evidencing not less than 51% of the
Voting Rights is required to, terminate all of the rights and obligations of the
Servicer in its capacity as servicer with respect to the Mortgage Loans, as     
provided in the Pooling and Servicing Agreement, whereupon the Trustee will     
succeed to (or appoint a successor servicer to assume) all of the               
responsibilities and duties of the Servicer pursuant to the Pooling and         
Servicing Agreement, including the obligation to make any required Advances and 
Servicing Advances. No assurance can be given that termination of the rights and
obligations of the Servicer under the Pooling and Servicing Agreement would not 
adversely affect the servicing of the related Mortgage Loans, including the     
delinquency experience of such Mortgage Loans.                                  

        No holder of an Offered Certificate, solely by virtue of such holder's
status as a holder of an Offered Certificate, will have any right under the     
Pooling and Servicing Agreement to institute any proceeding with respect        
thereto, unless such holder previously has given to the Trustee written notice  
of default and unless the holders of Certificates having not less than 51% of   
the Voting Rights evidenced by the Certificates so agree and have offered       
indemnity satisfactory to the Trustee.                                          

VOTING RIGHTS                                                                   

      With respect to any date of determination, the percentage of all the
Voting Rights allocated among holders of the Certificates (other than the Class 
CE, Class P and Class R Certificates) will be 98% and will be allocated among   
the classes of such Certificates in the proportion that the aggregate           
Certificate Principal Balance of all the Certificates of such class then        
outstanding bear to the aggregate Certificate Principal Balance of all          
Certificates then outstanding. With respect to any date of determination, 1% of 
all the Voting Rights will be allocated to the holders of each of the Class CE  
and Class P Certificates. The Voting Rights allocated to a class of Certificates
will be allocated among all holders of each such class in proportion to the     
outstanding certificate balances (or percentage interest) of such Certificates. 
The Class R Certificate will not have any Voting Rights.                        

AMENDMENT                                                                       

      The Pooling and Servicing Agreement may be amended by the Depositor,
the Servicer and the Trustee, without the consent of the holders of the         
Certificates, for any of the purposes set forth under "Description of the       
Agreements--Material Terms of the Pooling and Servicing Agreements and          
Underlying Servicing Agreements--Amendment" in the Prospectus. In addition, the 
Pooling and Servicing Agreement may be amended by the Depositor, the Servicer   
and the Trustee and the holders of a majority in interest of any class of       
Certificates 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  
any class of Certificates; provided, however, that no such amendment may (i)    
reduce in any manner the amount of, or delay the timing of, distributions       
required to be made on any class of Certificates without the consent of the     
holders of such Certificates; (ii) adversely affect in any material respect the 
interests of the holders of any class of Certificates in a manner other than as 
described in clause (i) above, without the consent of the holders of such class 
evidencing percentage interests aggregating at least 66%; (iii) reduce the      
aforesaid percentage of aggregate outstanding principal amounts of Certificates,
the holders of which are required to consent to any such amendment, without the 
consent of the holders of all such Certificates; or (iv) result in the          
imposition of any tax on any REMIC constituting part of the Trust Fund or cause 
any such REMIC to fail to qualify as a REMIC at any time that any Certificates  
are outstanding.                                                                

 DESCRIPTION OF THE CERTIFICATES

GENERAL                                                                         

       The Certificates will be issued pursuant to the Pooling and Servicing
Agreement. Set forth below are summaries of the specific terms and provisions   
pursuant to which the Offered Certificates will be issued. The following        
summaries do not purport to be complete and are subject to, and are qualified in
their entirety by reference                                                     

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to, the provisions of the Pooling and Servicing Agreement. When particular      
provisions or terms used in the Pooling and Servicing Agreement are referenced, 
the actual provisions (including definitions of terms) are incorporated by      
reference.                                                                      

    The Trust will issue the Class A-1 and Class A-2 Certificates (the
"CLASS A CERTIFICATES" or the "SENIOR CERTIFICATES"), the Class M-1, Class M-2, 
Class M-3, Class M-4, Class M-5, Class M-6 and Class M-7 Certificates           
(collectively, the "MEZZANINE CERTIFICATES" or the "CLASS M CERTIFICATES"), the 
Class CE Certificates (the "CLASS CE CERTIFICATES," and together with the Class 
M Certificates, the "SUBORDINATED CERTIFICATES"), the Class P Certificates (the 
"CLASS P CERTIFICATES") and the Class R and Class RX Certificates (the "RESIDUAL
CERTIFICATES"). The Senior Certificates, the Subordinated Certificates, the     
Class P Certificates and the Residual Certificates are collectively referred to 
herein as the "CERTIFICATES." Only the Class A and Class M-1 and Class M-2      
Certificates are offered hereby (the "OFFERED CERTIFICATES").                   

        The Offered Certificates will have the respective original Certificate
Principal Balances specified on page S-5 hereof, subject to a permitted variance
of plus or minus five percent. The Certificate Principal Balance of the Class   
M-3, Class M-4, Class M-5, Class M-6 and Class M-7 Certificates shall equal     
(subject to a permitted variance of plus or minus five percent): $2,227,000,    
$2,673,000, $2,227,000, $2,227,000 and $1,782,000, respectively.                

         The Offered Certificates will be issued in book-entry form as described
below. The Offered Certificates will be issued in minimum dollar denominations  
of $25,000 and integral multiples of $1 in excess thereof.                      

       Distributions on the Offered Certificates will be made by the Trustee
on the 25th day of each month, or if such day is not a Business Day, on the     
first Business Day thereafter, commencing in April 2004 (each, a "DISTRIBUTION  
DATE"), to the persons in whose names such Certificates are registered at the   
close of business on the Record Date. With respect to the Offered Certificates, 
the "RECORD DATE" for any Distribution Date is the Business Day immediately     
preceding such Distribution Date; provided, however, that if any such Offered   
Certificates become Definitive Certificates (as defined herein), the Record Date
for such Certificates will be the last Business Day of the month immediately    
preceding the month in which the related Distribution Date occurs.              

BOOK-ENTRY CERTIFICATES                                                         

The Offered Certificates will be book-entry Certificates (the 
"BOOK-ENTRY CERTIFICATES"). Persons acquiring beneficial ownership interests in 
the Offered Certificates ("CERTIFICATE OWNERS") will hold such Certificates     
through DTC in the United States, or Clearstream or Euroclear (in Europe) if    
they are participants of such systems (the "PARTICIPANTS"), or indirectly       
through organizations which are participants in such systems (the "INDIRECT     
PARTICIPANTS"). The Book-Entry Certificates will be issued in one or more       
certificates which equal the aggregate Certificate Principal Balance of such    
Certificates and will initially be registered in the name of Cede & Co., the    
nominee of DTC. Clearstream and Euroclear will hold omnibus positions on behalf 
of their Participants through customers' securities accounts in Clearstream'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, N.A. will act as depositary  
for Clearstream and JPMorgan Chase Bank 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 of $25,000. Except as described
below, no person acquiring a Book-Entry Certificate (each, a "BENEFICIAL OWNER")
will be entitled to receive a physical certificate representing such Certificate
(a "DEFINITIVE CERTIFICATE"). Unless and until Definitive Certificates are      
issued, it is anticipated that the only "CERTIFICATEHOLDER" of the Offered      
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 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 or Euroclear, as appropriate).                       

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       Certificate Owners will receive all distributions of principal of and
interest on the Book-Entry Certificates from the Trustee through DTC and DTC    
Participants. While the Book-Entry 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 Book-Entry Certificates and is required to receive and transmit  
distributions of principal of, and interest on, the Book-Entry Certificates.    
Participants and Indirect Participants with whom Certificate Owners have        
accounts with respect to Book-Entry 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 representing their respective interests in the    
Book-Entry Certificates, the Rules provide a mechanism by which Certificate     
Owners will receive distributions and will be able to transfer their interest.  
It is expected that payments by DTC Participants to Certificate Owners will be  
governed by such standing instructions and customary practices. However,        
payments of principal and interest in respect of such Book-Entry Certificates   
will be the responsibility of the applicable DTC Participants and will not be   
the responsibility of the applicable DTC Participants and will not be the       
responsibility of DTC, the Depositor or the Trustee.                            

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

    The laws of some states require that certain persons take physical
delivery of securities in definitive, certificated form. Consequently, this may 
limit a beneficial owner's ability to transfer its interests in a Book-Entry    
Certificate to such persons. Because DTC can only act on behalf of DTC          
Participants, the ability of an owner of a beneficial interest in a Book-Entry  
Certificate to pledge such interest to persons or entities that are not DTC     
Participants, or otherwise take actions in respect of such interest, may be     
limited by the lack of definitive certificate for such interest. See "Global    
Clearance, Settlement and Tax Documentation Procedures" in Annex I to this      
Prospectus Supplement.                                                          

     Because of time zone differences, credits of securities received in
Clearstream or Euroclear as a result of a transaction with a Participant will be
made during subsequent securities settlement processing and dated as of the next
Business Day for Euroclear and Clearstream 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            
Participants on such Business Day. Cash received in Clearstream or Euroclear as 
a result of sales of securities by or through a Clearstream 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 or        
Euroclear cash account only as of the next Business Day for Euroclear and       
Clearstream following settlement in DTC. For information with respect to tax    
documentation procedures relating to the Certificates, see "Federal Income Tax  
Consequences--REMICs--Taxation of Certain Foreign Investors" and "--Backup      
Withholding" in the Prospectus and "Global Clearance, Settlement and Tax        
Documentation Procedures--Certain U.S. Federal Income Tax Documentation         
Requirements" in Annex I to this Prospectus Supplement.                         

         Transfers between Participants will occur in accordance with DTC rules.
Transfers between Clearstream 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    
Participants or Euroclear Participants, on the other, will be effected in       
accordance with DTC rules on behalf of the relevant European international      
clearing system by the Relevant Depositary; however, such cross-market transfers
will require delivery of instructions to the relevant European international    
clearing system by the counterparty 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                    

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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 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, as in effect from time to time.                           

      Clearstream, 67 Bd Grande-Duchesse Charlotte, L-1331 Luxembourg, was
incorporated in 1970 as a limited company under Luxembourg law. Clearstream is  
owned by banks, securities dealers and financial institutions, and currently has
about 100 shareholders, including U.S. financial institutions or their          
subsidiaries. No single entity may own more than five percent of Clearstream's  
stock.                                                                          

   Clearstream is registered as a bank in Luxembourg, and as such is
subject to regulation by the Luxembourg Monetary Authority, which supervises    
Luxembourg banks.                                                               

Clearstream holds securities for its customers ("CLEARSTREAM  
PARTICIPANTS") and facilitates the clearance and settlement of securities       
transactions by electronic book-entry transfers between their accounts.         
Clearstream provides various services, including safekeeping, administration,   
clearance and settlement of internationally traded securities and securities    
lending and borrowing. Clearstream also deals with domestic securities markets  
in several countries through established depository and custodial relationships.
Clearstream has established an electronic bridge with Euroclear Bank S.A./N.V.  
as the Euroclear Operator in Brussels to facilitate settlement of trades between
systems. Clearstream currently accepts over 70,000 securities issues on its     
books.                                                                          

         Clearstream's customers are world-wide financial institutions including
underwriters, securities brokers and dealers, banks, trust companies and        
clearing corporations. Clearstream's United States customers are limited to     
securities brokers and dealers and banks. Currently, Clearstream has            
approximately 3,000 customers located in over 60 countries, including all major 
European countries, Canada, and the United States. Indirect access to           
Clearstream is available to other institutions which clear through or maintain a
custodial relationship with an account holder of Clearstream.                   

The Euroclear System ("EUROCLEAR") was created in 1968 to hold
securities for its participants ("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 be settled in a variety of   
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       
Euroclear Bank S.A./N.V. (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.       

    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                                 

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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 Cede & Co., as nominee of DTC. DTC will be  
responsible for crediting the amount of such payments to the accounts of the    
applicable DTC 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 Certificates held through Clearstream or Euroclear will be credited  
to the cash accounts of Clearstream 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 "Federal Income Tax Consequences--REMICs--Taxation of Certain Foreign       
Investors" and "--Backup Withholding" in the Prospectus. Because DTC can only   
act on behalf of DTC Participants, the ability of a beneficial owner to pledge  
Book-Entry Certificates to persons or entities that do not participate in the   
book-entry 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 will be provided to Cede &
Co., as nominee of DTC, and may be made available by Cede & Co. to beneficial   
owners upon request, in accordance with the rules, regulations and procedures   
creating and affecting the DTC Participants to whose DTC accounts the Book-Entry
Certificates of such beneficial owners are credited.                            

DTC has advised the Trustee that, unless and until Definitive 
Certificates are issued, DTC will take any action the holders of the Book-Entry 
Certificates are permitted to take 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 or the Euroclear Operator, as the case
may be, will take any other action permitted to be taken by a Certificateholder 
under the Pooling and Servicing Agreement on behalf of a Clearstream 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 DTC     
advises the Trustee in writing that DTC 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 successor.                                         

         Upon the occurrence of the event 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 Certificateholders     
under the Pooling and Servicing Agreement.                                      

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

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  None of the Depositor, the Servicer or the Trustee will have any
responsibility for any aspect of the records relating to or payments made on    
account of beneficial ownership interests of the Book-Entry Certificates held by
Cede & Co., as nominee for DTC, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests. In the event of the    
insolvency of DTC, a DTC Participant or an Indirect DTC Participant in whose    
name Book-Entry Certificates are registered, the ability of Certificate Owners  
to obtain timely payment and, if the limits of applicable insurance coverage by 
the Securities Investor Protection Corporation are exceeded or if such coverage 
is otherwise unavailable, ultimate payment of amounts distributable with respect
to such Book-Entry Certificates may be impaired.                                

ALLOCATION OF AVAILABLE FUNDS                                                   

        Distributions to holders of each class of Offered Certificates will be
made on each Distribution Date from Available Funds. "AVAILABLE FUNDS" will be  
equal to the sum of the following amounts with respect to the Mortgage Loans,   
net of amounts reimbursable or payable to the Servicer and the Trustee,         
including amounts in respect of indemnification of the Servicer, the Servicing  
Fee and any accrued and unpaid Servicing Fee and amounts payable to the Trustee 
in respect of certain expenses and indemnification: (i) the aggregate amount of 
Monthly Payments on the Mortgage Loans due during the related Collection Period 
and remitted by the Servicer to the Trustee one Business Day prior to the       
related Distribution Date (including Advances), (ii) certain unscheduled        
payments in respect of the Mortgage Loans, including prepayments (but excluding 
any prepayment penalties and any payments made by the Servicer or the Originator
in respect thereof), insurance proceeds, liquidation proceeds net of certain    
expenses, Subsequent Recoveries and any collections on REO properties received  
during the related Prepayment Period, (iii) payments from the Servicer of       
Compensating Interest to cover Prepayment Interest Shortfalls for such          
Distribution Date, (iv) the Purchase Price for any repurchased Mortgage Loan    
deposited to the Collection Account during the related Prepayment Period, (v)   
any Substitution Adjustments deposited in the Collection Account during the     
related Prepayment Period, (vi) any Reimbursement Amount deposited to the       
Collection Account during the related Prepayment Period and (vii) on the        
Distribution Date on which the Trust is to be terminated in accordance with the 
Pooling and Servicing Agreement, the Termination Price.                         

         The "COLLECTION PERIOD" with respect to any Distribution Date means the
period from the second day of the calendar month preceding the month in which   
such Distribution Date occurs through the first day of the month in which such  
Distribution Date occurs.                                                       

         The "PREPAYMENT PERIOD" with respect to any Distribution Date means the
calendar month preceding the month in which such Distribution Date occurs.      

INTEREST DISTRIBUTIONS                                                          

         On each Distribution Date, based upon the information provided to it in
a remittance report prepared by the Servicer, the Trustee will distribute the   
Interest Remittance Amount in the following order of priority to the extent     
available:                                                                      

        first, to the Trustee, the Trustee Fee in respect of that Distribution
Date;                                                                         

        second, concurrently, to the Class A-1 and Class A-2 Certificates, pro
rata, the applicable Accrued Certificate Interest thereon for such Distribution 
Date;                                                                           

       third, concurrently, to the Class A-1 and Class A-2 Certificates, pro
rata, the applicable Unpaid Interest Shortfall Amount thereon for such          
Distribution Date;                                                              

         fourth, to the Class M-1 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;                                             

        fifth, to the Class M-2 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;                                             

        sixth, to the Class M-3 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;                                             

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 seventh, to the Class M-4 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;                                    

         eighth, to the Class M-5 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;                                             

        ninth, to the Class M-6 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date;                                             

        tenth, to the Class M-7 Certificates, the Accrued Certificate Interest
thereon for such Distribution Date; and                                         

 eleventh, the amount, if any, of the Interest Remittance Amount
remaining after application with respect to the priorities set forth above      
(which is defined below as the "Monthly Excess Interest Amount" for such        
Distribution Date) will be included in the Monthly Excess Cashflow Amount and   
will be applied as described below under "--Application of Monthly Excess       
Cashflow Amounts."                                                              

      "ACCRUED CERTIFICATE INTEREST" for each class of Class A and Class M
Certificates and each Distribution Date means an amount equal to the interest   
accrued during the related Interest Accrual Period on the Certificate Principal 
Balance of such class of Certificates, minus that class's Interest Percentage of
shortfalls caused by the Relief Act or similar state or local laws for such     
Distribution Date.                                                              

        The "INTEREST ACCRUAL PERIOD" for any Distribution Date and each class
of Class A and Class M Certificates will be the period from and including the   
previous Distribution Date, or in the case of the first Distribution Date, from 
the Closing Date, through and including the day prior to the current            
Distribution Date and calculations of interest will be made on the basis of the 
actual number of days in the Interest Accrual Period and on a 360-day year.     

         The "INTEREST PERCENTAGE" is, with respect to any class of Certificates
and any Distribution Date, the ratio (expressed as a decimal carried to six     
places) of the Accrued Certificate Interest for such class to the Accrued       
Certificate Interest for all classes of Certificates, in each case with respect 
to such Distribution Date and without regard to shortfalls caused by the Relief 
Act or similar state or local laws.                                             

      "INTEREST REMITTANCE AMOUNT" means, as of any Distribution Date, the
sum, without duplication, of (i) that portion of the Available Funds for such   
Distribution Date attributable to all interest collected or advanced with       
respect to the related Collection Period on the Mortgage Loans, (ii) all        
Compensating Interest paid by the Servicer on such Distribution Date with       
respect to the Mortgage Loans, (iii) the portion of any payment in connection   
with any principal prepayment, Substitution Amount, Purchase Price, Termination 
Price, liquidation proceeds (net of certain expenses) or insurance proceeds     
relating to interest with respect to the Mortgage Loans received during the     
related Prepayment Period and (iv) the portion of any Reimbursement Amount      
relating to the Mortgage Loans received during the related Prepayment Period.   

       The "NET WAC RATE CARRYOVER AMOUNT" for any Distribution Date for any
class of Class A or Class M Certificates equals the sum of (a) the amount, if   
any, by which (i) the amount of Accrued Certificate Interest that would have    
been payable on that class for that Distribution Date had its Pass-Through Rate 
been equal to the related Formula Rate, exceeds (ii) the actual amount of the   
Accrued Certificate Interest for that class and Distribution Date, because the  
related Pass-Through Rate was limited to the Net WAC Rate, plus (b) any such    
amount from a previous Distribution Date that remains unpaid, with interest     
thereon at the applicable Formula Rate since that Distribution Date, to the     
extent such interest remains unpaid.                                            

        "UNPAID INTEREST SHORTFALL AMOUNT" means (i) for each class of Class A
and Class M Certificates and the first Distribution Date, zero, and (ii) with   
respect to each class of Class A and Class M Certificates and any Distribution  
Date after the first Distribution Date, the amount, if any, by which (a) the sum
of (1) current interest for such class for the immediately preceding            
Distribution Date and (2) the outstanding Unpaid Interest Shortfall Amount, if  
any, for such class for such preceding Distribution Date exceeds (b) the        
aggregate amount distributed on such class in respect of interest on such       
preceding Distribution Date, plus interest on the amount of interest due but not
paid on the Certificates of such class on such preceding Distribution Date, to  
the extent permitted by law, at the Pass-Through Rate for such class for the    
related Interest Accrual Period.                                                

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       If the Interest Remittance Amount is insufficient on any Distribution
Date to distribute the aggregate Accrued Certificate Interest on the Class A    
Certificates, any shortfall in available amounts will be allocated to the Class 
A Certificates pro rata in accordance with their Interest Percentages. Amounts  
paid in respect of any Unpaid Interest Shortfall Amount or Net WAC Rate         
Carryover Amount shall be applied first to pay unpaid accrued interest on       
shortfall amounts and thereafter to pay the shortfall amounts, beginning with   
those that were incurred earliest.                                              

PRINCIPAL DISTRIBUTIONS                                                         

      Distributions before the Stepdown Date or when a Trigger Event is in
Effect. With respect to each Distribution Date (a) before the Stepdown Date or  
(b) as to which a Trigger Event is in effect, the Principal Distribution Amount 
will be allocated among and distributed in reduction of the Certificate         
Principal Balances of the Certificates in the following order of priority:      

       first, to the Class A-1 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;                                       

        second, to the Class A-2 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;                                       

       third, to the Class M-1 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;                                       

        fourth, to the Class M-2 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;                                       

       fifth, to the Class M-3 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;                                       

       sixth, to the Class M-4 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;                                       

         seventh, to the Class M-5 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;                                       

        eighth, to the Class M-6 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;                                       

       ninth, to the Class M-7 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; and                                   

        tenth, any remaining Principal Distribution Amount will be distributed
as part of the Monthly Excess Cashflow Amount as described below under          
"--Application of Monthly Excess Cashflow Amounts."                             

         Distributions on or after the Stepdown Date when no Trigger Event is in
Effect. With respect to each Distribution Date (a) on or after the Stepdown Date
and (b) as long as a Trigger Event is not in effect, the Principal Distribution 
Amount will be allocated among and distributed in reduction of the Certificate  
Principal Balances of the Certificates in the following order of priority:      

   first, to the Class A-1 Certificates, up to the Class A Principal
Distribution Amount, until the Certificate Principal Balance thereof has been   
reduced to zero;                                                                

    second, to the Class A-2 Certificates, up to the Class A Principal
Distribution Amount remaining after priority first above, until the Certificate 
Principal Balance thereof has been reduced to zero;                             

     third, to the Class M-1 Certificates, up to the Class M-1 Principal
Distribution Amount, until the Certificate Principal Balance thereof has been   
reduced to zero;                                                                

      fourth, to the Class M-2 Certificates, up to the Class M-2 Principal
Distribution Amount, until the Certificate Principal Balance thereof has been   
reduced to zero;                                                                

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     fifth, to the Class M-3 Certificates, up to the Class M-3 Principal
Distribution Amount, until the Certificate Principal Balance thereof has been   
reduced to zero;                                                                

     sixth, to the Class M-4 Certificates, up to the Class M-4 Principal
Distribution Amount, until the Certificate Principal Balance thereof has been   
reduced to zero;                                                                

       seventh, to the Class M-5 Certificates, up to the Class M-5 Principal
Distribution Amount, until the Certificate Principal Balance thereof has been   
reduced to zero;                                                                

      eighth, to the Class M-6 Certificates, up to the Class M-6 Principal
Distribution Amount, until the Certificate Principal Balance thereof has been   
reduced to zero;                                                                

     ninth, to the Class M-7 Certificates, up to the Class M-7 Principal
Distribution Amount, until the Certificate Principal Balance thereof has been   
reduced to zero; and                                                            

        tenth, any remaining Principal Distribution Amount will be distributed
as part of the Monthly Excess Cashflow Amount as described below under          
"--Application of Monthly Excess Cashflow Amounts."                             

  For purposes of the foregoing, the following terms will have the
respective meanings set forth below.                                            

 "BASIC PRINCIPAL DISTRIBUTION AMOUNT" means with respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such   
Distribution Date over (ii) the Overcollateralization Release Amount, if any,   
for such Distribution Date.                                                     

"CERTIFICATE PRINCIPAL BALANCE" with respect to any class of  
Certificates and any Distribution Date, will equal the principal balance of such
class on the date of the initial issuance of the Certificates as reduced, but   
not below zero, by:                                                             

     o    all amounts distributed on previous Distribution Dates on such
class on account of principal; and                  

        o    except for the Class A-1 and Class A-2 Certificates, such class's
           pro rata share of any Applied Realized Loss Amount for previous
        Distribution Dates (taking into account any increases in the
              Certificate Principal Balance thereof by any Subsequent Recoveries
allocated to that class).                           

         "CLASS A PRINCIPAL DISTRIBUTION AMOUNT" for any Distribution Date is an
amount equal to the excess of (x) the Certificate Principal Balance of the Class
A Certificates immediately prior to such Distribution Date over (y) the lesser  
of (A) the product of (i) approximately 63.50% and (ii) the aggregate principal 
balance of the Mortgage Loans as of the last day of the related Collection      
Period after giving effect to prepayments in the related Prepayment Period and  
(B) the aggregate principal balance of the Mortgage Loans as of the last day of 
the related Collection Period after giving effect to prepayments in the related 
Prepayment Period, minus the product of (x) 0.50% and (y) the principal balance 
of the Mortgage Loans as of the Cut-off Date.                                   

        "CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT" for any Distribution Date is
an amount equal to the excess of (x) the sum of the Certificate Principal       
Balance of the Class A Certificates (after taking into account the payment of   
the Class A Principal Distribution Amount) and the Class M-1 Certificates       
immediately prior to such Distribution Date over (y) the lesser of (A) the      
product of (i) approximately 75.50% and (ii) the aggregate principal balance of 
the Mortgage Loans as of the last day of the related Collection Period after    
giving effect to prepayments in the related Prepayment Period and (B) the       
aggregate principal balance of the Mortgage Loans as of the last day of the     
related Collection Period after giving effect to prepayments in the related     
Prepayment Period, minus the product of (x) 0.50% and (y) the principal balance 
of the Mortgage Loans as of the Cut-off Date.                                   

        "CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT" for any Distribution Date is
an amount equal to the excess of (x) the sum of the Certificate Principal       
Balance of the Class A Certificates (after taking into account the payment of   
the Class A Principal Distribution Amount), the Class M-1 Certificates (after   
taking into account the payment of the Class M-1 Principal Distribution Amount) 
and the Class M-2 Certificates immediately prior to such Distribution           

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Date over (y) the lesser of (A) the product of (i) approximately 86.50% and (ii)
the aggregate principal balance of the Mortgage Loans as of the last day of the 
related Collection Period after giving effect to prepayments in the related     
Prepayment Period and (B) the aggregate principal balance of the Mortgage Loans 
as of the last day of the related Collection Period after giving effect to      
prepayments in the related Prepayment Period, minus the product of (x) 0.50% and
(y) the principal balance of the Mortgage Loans as of the Cut-off Date.         

        "CLASS M-3 PRINCIPAL DISTRIBUTION AMOUNT" for any Distribution Date is
an amount equal to the excess of (x) the sum of the Certificate Principal       
Balance of the Class A Certificates (after taking into account the payment of   
the Class A Principal Distribution Amount on that Distribution Date), the Class 
M-1 Certificates (after taking into account the payment of the Class M-1        
Principal Distribution Amount on that Distribution Date), the Class M-2         
Certificates (after taking into account the payment of the Class M-2 Principal  
Distribution Amount on that Distribution Date) and the Class M-3 Certificates   
immediately prior to such Distribution Date over (y) the lesser of (A) the      
product of (i) approximately 89.00% and (ii) the aggregate principal balance of 
the Mortgage Loans as of the last day of the related Collection Period after    
giving effect to prepayments in the related Prepayment Period and (B) the       
aggregate principal balance of the Mortgage Loans as of the last day of the     
related Collection Period after giving effect to prepayments in the related     
Prepayment Period, minus the product of (x) 0.50% and (y) the principal balance 
of the Mortgage Loans as of the Cut-off Date.                                   

        "CLASS M-4 PRINCIPAL DISTRIBUTION AMOUNT" for any Distribution Date is
an amount equal to the excess of (x) the sum of the Certificate Principal       
Balance of the Class A Certificates (after taking into account the payment of   
the Class A Principal Distribution Amount on that Distribution Date), the Class 
M-1 Certificates (after taking into account the payment of the Class M-1        
Principal Distribution Amount on that Distribution Date), the Class M-2         
Certificates (after taking into account the payment of the Class M-2 Principal  
Distribution Amount on that Distribution Date), the Class M-3 Certificates      
(after taking into account the payment of the Class M-3 Principal Distribution  
Amount on that Distribution Date) and the Class M-4 Certificates immediately    
prior to such Distribution Date over (y) the lesser of (A) the product of (i)   
approximately 92.00% and (ii) the aggregate principal balance of the Mortgage   
Loans as of the last day of the related Collection Period after giving effect to
prepayments in the related Prepayment Period and (B) the aggregate principal    
balance of the Mortgage Loans as of the last day of the related Collection      
Period after giving effect to prepayments in the related Prepayment Period,     
minus the product of (x) 0.50% and (y) the principal balance of the Mortgage    
Loans as of the Cut-off Date.                                                   

        "CLASS M-5 PRINCIPAL DISTRIBUTION AMOUNT" for any Distribution Date is
an amount equal to the excess of (x) the sum of the Certificate Principal       
Balance of the Class A Certificates (after taking into account the payment of   
the Class A Principal Distribution Amount on that Distribution Date), the Class 
M-1 Certificates (after taking into account the payment of the Class M-1        
Principal Distribution Amount on that Distribution Date), the Class M-2         
Certificates (after taking into account the payment of the Class M-2 Principal  
Distribution Amount on that Distribution Date), the Class M-3 Certificates      
(after taking into account the payment of the Class M-3 Principal Distribution  
Amount on that Distribution Date), the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on that      
Distribution Date) and the Class M-5 Certificates immediately prior to such     
Distribution Date over (y) the lesser of (A) the product of (i) approximately   
94.50% and (ii) the aggregate principal balance of the Mortgage Loans as of the 
last day of the related Collection Period after giving effect to prepayments in 
the related Prepayment Period and (B) the aggregate principal balance of the    
Mortgage Loans as of the last day of the related Collection Period after giving 
effect to prepayments in the related Prepayment Period, minus the product of (x)
0.50% and (y) the principal balance of the Mortgage Loans as of the Cut-off     
Date.                                                                           

        "CLASS M-6 PRINCIPAL DISTRIBUTION AMOUNT" for any Distribution Date is
an amount equal to the excess of (x) the sum of the Certificate Principal       
Balance of the Class A Certificates (after taking into account the payment of   
the Class A Principal Distribution Amount on that Distribution Date), the Class 
M-1 Certificates (after taking into account the payment of the Class M-1        
Principal Distribution Amount on that Distribution Date), the Class M-2         
Certificates (after taking into account the payment of the Class M-2 Principal  
Distribution Amount on that Distribution Date), the Class M-3 Certificates      
(after taking into account the payment of the Class M-3 Principal Distribution  
Amount on that Distribution Date), the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on that      
Distribution Date), the Class M-5 Certificates (after taking into account the   
payment on the Class M-5 Principal Distribution Amount on that Distribution     
Date) and the Class M-6 Certificates immediately prior to such Distribution Date
over (y) the lesser of (A) the product of (i) approximately 97.00% and (ii) the 
aggregate principal balance of the Mortgage Loans as of the last day of the     
related Collection                                                              

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Period after giving effect to prepayments in the related Prepayment Period and  
(B) the aggregate principal balance of the Mortgage Loans as of the last day of 
the related Collection Period after giving effect to prepayments in the related 
Prepayment Period, minus the product of (x) 0.50% and (y) the principal balance 
of the Mortgage Loans as of the Cut-off Date.                                   

        "CLASS M-7 PRINCIPAL DISTRIBUTION AMOUNT" for any Distribution Date is
an amount equal to the excess of (x) the sum of the Certificate Principal       
Balance of the Class A Certificates (after taking into account the payment of   
the Class A Principal Distribution Amount on that Distribution Date), the Class 
M-1 Certificates (after taking into account the payment of the Class M-1        
Principal Distribution Amount on that Distribution Date), the Class M-2         
Certificates (after taking into account the payment of the Class M-2 Principal  
Distribution Amount on that Distribution Date), the Class M-3 Certificates      
(after taking into account the payment of the Class M-3 Principal Distribution  
Amount on that Distribution Date), the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on that      
Distribution Date), the Class M-5 Certificates (after taking into account the   
payment on the Class M-5 Principal Distribution Amount on that Distribution     
Date), the Class M-6 Certificates (after taking into account the payment on the 
Class M-6 Principal Distribution Amount on that Distribution Date) and the Class
M-7 Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) approximately 99.00% and (ii) the aggregate principal 
balance of the Mortgage Loans as of the last day of the related Collection      
Period after giving effect to prepayments in the related Prepayment Period and  
(B) the aggregate principal balance of the Mortgage Loans as of the last day of 
the related Collection Period after giving effect to prepayments in the related 
Prepayment Period, minus the product of (x) 0.50% and (y) the principal balance 
of the Mortgage Loans as of the Cut-off Date.                                   

  "CREDIT ENHANCEMENT PERCENTAGE" for any Distribution Date is the
percentage obtained by dividing (x) the sum of (i) the aggregate Certificate    
Principal Balance of the Mezzanine Certificates and (ii) the                    
Overcollateralization Amount, in each case before taking into account the       
distribution of the Principal Distribution Amount on such Distribution Date, by 
(y) the Pool Balance as of the last day of the related Collection Period.       

     "EXTRA PRINCIPAL DISTRIBUTION AMOUNT" means, as of any Distribution
Date, the lesser of (x) the Monthly Excess Cashflow Amount for such Distribution
Date and (y) the Overcollateralization Deficiency for such Distribution Date.   

       "OVERCOLLATERALIZATION AMOUNT" means, as of any Distribution Date the
excess, if any, of (x) the Pool Balance as of the last day of the related       
Collection Period over (y) the aggregate Certificate Principal Balance of all   
classes of Class A and Class M Certificates (after taking into account all      
distributions of principal on such Distribution Date).                          

         "OVERCOLLATERALIZATION DEFICIENCY " means, as of any Distribution Date,
the excess, if any, of (x) the Targeted Overcollateralization Amount for such   
Distribution Date over (y) the Overcollateralization Amount for such            
Distribution Date, calculated for this purpose after taking into account the    
reduction on such Distribution Date of the Certificate Principal Balances of all
classes of Class A and Class M Certificates resulting from the distribution of  
the Basic Principal Distribution Amount on such Distribution Date, but prior to 
taking into account any Applied Realized Loss Amounts on such Distribution Date.

   "OVERCOLLATERALIZATION RELEASE AMOUNT" means, with respect to any
Distribution Date on or after the Stepdown Date on which a Trigger Event is not 
in effect, the excess, if any, of (i) the Overcollateralization Amount          
(calculated as described in the definition of Overcollateralization Deficiency) 
for such Distribution Date, assuming that 100% of the Principal Remittance      
Amount is applied as a principal payment on the Certificates on such            
Distribution Date, over (ii) the Targeted Overcollateralization Amount for such 
Distribution Date. With respect to any Distribution Date on which a Trigger     
Event is in effect, the Overcollateralization Release Amount will be zero.      

        "PRINCIPAL DISTRIBUTION AMOUNT" means with respect to any Distribution
Date, the sum of (i) the Basic Principal Distribution Amount for such           
Distribution Date and (ii) the Extra Principal Distribution Amount for such     
Distribution Date.                                                              

      "PRINCIPAL REMITTANCE AMOUNT" means with respect to any Distribution
Date, the sum of (i) all scheduled payments of principal collected or advanced  
on the Mortgage Loans by the Servicer that were due during the related          

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Collection Period, (ii) the principal portion of all partial and full principal 
prepayments of the Mortgage Loans applied by the Servicer during the related    
Prepayment Period, (iii) the principal portion of all related net liquidation   
proceeds, Subsequent Recoveries and insurance proceeds received during such     
Prepayment Period with respect to the Mortgage Loans, (iv) that portion of the  
purchase price, representing principal of any repurchased Mortgage Loans,       
deposited to the Collection Account during such Prepayment Period, (v) the      
principal portion of any related Substitution Adjustments deposited in the      
Collection Account during such Prepayment Period with respect to the Mortgage   
Loans, and (vi) on the Distribution Date on which the Trust is to be terminated 
in accordance with the Pooling and Servicing Agreement, that portion of the     
Termination Price, representing principal with respect to the Mortgage Loans.   

        "60+ DAY DELINQUENT LOAN" means each Mortgage Loan (including each REO
property and each Mortgage Loan in foreclosure and each Mortgage Loan for which 
the mortgagor has filed for bankruptcy after the Closing Date) with respect to  
which any portion of a Monthly Payment is, as of the last day of the prior      
Collection Period, two months or more past due and each Mortgage Loan relating  
to an REO Property.                                                             

         "STEPDOWN DATE" means the earlier to occur of (i) the Distribution Date
on which the aggregate Certificate Principal Balance of the Class A Certificates
is reduced to zero and (ii) the later to occur of (x) the Distribution Date in  
April 2007 and (y) the Distribution Date on which the Credit Enhancement        
Percentage is greater than or equal to 36.50%.                                  

   "SUBSEQUENT RECOVERIES" means unanticipated amounts received on a
liquidated Mortgage Loan that resulted in a Realized Loss in a prior month. If  
Subsequent Recoveries are received, they will be included as part of the        
Principal Remittance Amount for the following Distribution Date and distributed 
in accordance with the priorities described herein. In addition, after giving   
effect to all distributions on a Distribution Date, if any Applied Realized Loss
Amounts are outstanding, the Applied Realized Loss Amount for the class of      
Mezzanine Certificates then outstanding with the highest distribution priority  
will be decreased by the amount of such Subsequent Recoveries until reduced to  
zero (with any remaining Subsequent Recoveries applied to reduce the Applied    
Realized Loss Amount of the class with the next highest distribution priority), 
and the Certificate Principal Balance of such class or classes of Mezzanine     
Certificates will be increased by the same amount. Thereafter, such class or    
classes of Mezzanine Certificates will accrue interest on the increased         
Certificate Principal Balance.                                                  

      "TARGETED OVERCOLLATERALIZATION AMOUNT" means as of any Distribution
Date, (x) prior to the Stepdown Date, approximately 0.50% of the Pool Balance on
the Cut-off Date and (y) on and after the Stepdown Date, (i) if a Trigger Event 
is not in effect, the greater of (a) approximately 1.00% of the Pool Balance as 
of the last day of the related Collection Period and (b) 0.50% of the Pool      
Balance on the Cut-off Date, and (ii) if a Trigger Event is in effect, the      
Targeted Overcollateralization Amount for the immediately preceding Distribution
Date.                                                                           

  A "TRIGGER EVENT" has occurred on a Distribution Date if (i) the
three-month rolling average of 60+ Day Delinquent Loans equals or exceeds 42.00%
of the Credit Enhancement Percentage or (ii) the aggregate amount of Realized   
Losses incurred since the Cut-off Date through the last day of the related      
Collection Period (reduced by the aggregate amount of Subsequent Recoveries     
received since the Cut-off Date through the last day of the related Collection  
Period) divided by the Pool Balance on the Cut-off Date exceeds the applicable  
percentage for that Distribution Date (the "TRIGGER LOSS PERCENTAGE"). The      
Trigger Loss Percentage for certain Distribution Dates is set forth below. The  
Trigger Loss Percentage will increase each month and is calculated using        
straight line interpolation methodology between the Trigger Loss Percentages for
the particular Distribution Dates specified in the table below:                 

                                              TRIGGER LOSS
DISTRIBUTION DATE OCCURRING IN                 PERCENTAGE 
-----------------------------------------------     ------------------      
April 2007 - March 2008                       2.75%   
April 2008 - March 2009                       4.25%   
April 2009 - March 2010                       5.25%   
April 2010 and thereafter                      5.50%    

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ALLOCATION OF LOSSES                                                            

A "REALIZED LOSS" is:                                         

       o    as to any Liquidated Mortgage Loan, the unpaid Principal Balance
          thereof less the net proceeds from the liquidation of, and any
       insurance proceeds from, such Mortgage Loan and the related
        Mortgaged Property which are applied to reduce the Principal
Balance of such Mortgage Loan.                      

o    as to any Mortgage Loan, a Deficient Valuation.          

    o    as to any Mortgage Loan, a reduction in the Principal Balance
thereof resulting from a Servicer Modification.     

         A "LIQUIDATED MORTGAGE LOAN" is any defaulted Mortgage Loan as to which
the Servicer has determined that all amounts which it expects to recover from or
on account of such Mortgage Loan have been recovered.                           

        A Realized Loss may result from the personal bankruptcy of a mortgagor
if the bankruptcy court establishes the value of the Mortgaged Property at an   
amount less than the then outstanding Principal Balance of the Mortgage Loan    
secured by such Mortgaged Property and reduces the secured debt to such value.  
In such case, the Trust, as the holder of such Mortgage Loan, would become an   
unsecured creditor to the extent of the difference between the outstanding      
Principal Balance of such mortgage loan and such reduced secured debt (such     
difference, a "DEFICIENT VALUATION").                                           

If a Mortgage Loan is in default, or if default is reasonably 
foreseeable, the Servicer may permit a modification of such Mortgage Loan to    
reduce its Principal Balance and/or extend its term to a term not longer than   
the latest maturity date of any other Mortgage Loan (any such modification, a   
"SERVICER MODIFICATION") as described in the Pooling and Servicing Agreement.   
Any such principal reduction will constitute a Realized Loss at the time of such
reduction. An extension of the term will not result in a Realized Loss unless   
coupled with a principal reduction.                                             

    Realized Losses will, in effect, be absorbed first by the Class CE
Certificates, through the application of the Monthly Excess Interest Amount to  
fund such deficiency, as well as through a reduction in the                     
Overcollateralization Amount.                                                   

If, after giving effect to the distribution of the Principal  
Distribution Amount on any Distribution Date the aggregate Certificate Principal
Balance of the Certificates exceeds the Pool Balance as of the end of the       
related Collection Period, such excess will be allocated to the Class M-7, Class
M-6, Class M-5, Class M-4, Class M-3, Class M-2 and Class M-1 Certificates, in  
that order, until their respective Certificate Principal Balances are reduced to
zero. Any allocation of such excess in reduction of a Certificate Principal     
Balance is referred to as an "APPLIED REALIZED LOSS AMOUNT." Any such reduction 
of a Certificate Principal Balance will not be reversed or reinstated (except in
the case of Subsequent Recoveries). However, on future Distribution Dates,      
Certificateholders of the related class may receive amounts in respect of prior 
reductions in the related Certificate Principal Balances as described below.    
Such subsequent payments will be applied in the reverse of the order set forth  
above. The Certificate Principal Balances of the Class A Certificates will not  
be reduced by any Applied Realized Loss Amounts; however, under certain loss    
scenarios, there will not be enough interest and principal on the Mortgage Loans
to distribute to the Class A Certificates all interest and principal amounts to 
which they are entitled.                                                        

APPLICATION OF MONTHLY EXCESS CASHFLOW AMOUNTS                                  

        The weighted average Net Mortgage Interest Rate for the Mortgage Loans
is generally expected to be higher than the weighted average of the interest    
rates on the Certificates, thus generating certain excess interest collections  
which, in the absence of losses, will not be necessary to fund interest         
distributions on the Certificates. This excess interest for a Collection Period,
together with interest on the Overcollateralization Amount itself, is the       
"MONTHLY EXCESS INTEREST AMOUNT."                                               

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The "NET MORTGAGE INTEREST RATE" for each Mortgage Loan is the
applicable Mortgage Interest Rate less the sum of the Servicing Fee Rate and the
Trustee Fee Rate.                                                               

       The required level of overcollateralization for any Distribution Date
is the Targeted Overcollateralization Amount. The Targeted Overcollateralization
Amount is initially approximately $891,543.                                     

    If Realized Losses are incurred on the Mortgage Loans that are not
covered by the Monthly Excess Cashflow Amount, such Realized Losses will result 
in an Overcollateralization Deficiency (since they will reduce the Pool Balance 
without giving rise to a corresponding reduction of the aggregate Certificate   
Principal Balance of the Certificates). The cashflow priorities of the Trust    
Fund in this situation increase the Extra Principal Distribution Amount (subject
to the availability of any Monthly Excess Cashflow Amount in subsequent months) 
for the purpose of re-establishing the Overcollateralization Amount at the      
then-required Targeted Overcollateralization Amount.                            

         On and after the Stepdown Date and assuming that a Trigger Event is not
in effect, the Targeted Overcollateralization Amount may be permitted to        
decrease or "step down." If the Targeted Overcollateralization Amount is        
permitted to step down on a Distribution Date, the Pooling and Servicing        
Agreement permits a portion of the Principal Remittance Amount for such         
Distribution Date not to be passed through as a distribution of principal on the
Certificates on such Distribution Date. This has the effect of decelerating the 
amortization of the Certificates relative to the Pool Balance, thereby reducing 
the actual level of the Overcollateralization Amount to the new, lower Targeted 
Overcollateralization Amount. This portion of the Principal Remittance Amount   
not distributed as principal on the Certificates therefore releases             
overcollateralization from the Trust Fund.                                      

  On any Distribution Date, the sum of the Monthly Excess Interest
Amount, the Overcollateralization Release Amount and any portion of the         
Principal Distribution Amount (without duplication) remaining after principal   
distributions on the Certificates is the "MONTHLY EXCESS CASHFLOW AMOUNT," which
is required to be applied in the following order of priority (the "MONTHLY      
EXCESS CASHFLOW ALLOCATION") on such Distribution Date:                         

          (i)     to the Class M-1 Certificates, any Accrued Certificate
 Interest for such class and Distribution Date remaining unpaid;

      (ii)    to the Class M-1 Certificates, any Unpaid Interest
Shortfall Amount for such class for such Distribution Date;   

              (iii)   to the Class M-1 Certificates, any Class M-1 Realized Loss
Amortization Amount for such class for such Distribution Date;

          (iv)    to the Class M-2 Certificates, any Accrued Certificate
 Interest for such class and Distribution Date remaining unpaid;

      (v)     to the Class M-2 Certificates, any Unpaid Interest
Shortfall Amount for such class for such Distribution Date;   

              (vi)    to the Class M-2 Certificates, any Class M-2 Realized Loss
Amortization Amount for such class for such Distribution Date;

          (vii)   to the Class M-3 Certificates, any Accrued Certificate
 Interest for such class and Distribution Date remaining unpaid;

      (viii)  to the Class M-3 Certificates, any Unpaid Interest
Shortfall Amount for such class for such Distribution Date;   

              (ix)    to the Class M-3 Certificates, any Class M-3 Realized Loss
Amortization Amount for such class for such Distribution Date;

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          (x)     to the Class M-4 Certificates, any Accrued Certificate
 Interest for such class and Distribution Date remaining unpaid;

      (xi)    to the Class M-4 Certificates, any Unpaid Interest
Shortfall Amount for such class for such Distribution Date;   

              (xii)   to the Class M-4 Certificates, any Class M-4 Realized Loss
Amortization Amount for such class for such Distribution Date;

          (xiii)  to the Class M-5 Certificates, any Accrued Certificate
 Interest for such class and Distribution Date remaining unpaid;

      (xiv)   to the Class M-5 Certificates, any Unpaid Interest
Shortfall Amount for such class for such Distribution Date;   

              (xv)    to the Class M-5 Certificates, any Class M-5 Realized Loss
Amortization Amount for such class for such Distribution Date;

          (xvi)   to the Class M-6 Certificates, any Accrued Certificate
 Interest for such class and Distribution Date remaining unpaid;

      (xvii)  to the Class M-6 Certificates, any Unpaid Interest
Shortfall Amount for such class for such Distribution Date;   

              (xviii) to the Class M-6 Certificates, any Class M-6 Realized Loss
Amortization Amount for such class for such Distribution Date;

          (xix)   to the Class M-7 Certificates, any Accrued Certificate
 Interest for such class and Distribution Date remaining unpaid;

      (xx)    to the Class M-7 Certificates, any Unpaid Interest
Shortfall Amount for such class for such Distribution Date;   

              (xxi)   to the Class M-7 Certificates, any Class M-7 Realized Loss
Amortization Amount for such class for such Distribution Date;

          (xxii)  first to the Class A-1 and Class A-2 Certificates, pro
     rata, and then sequentially to the Class M-1, Class M-2, Class M-3,
        Class M-4, Class M-5, Class M-6 and Class M-7 Certificates, to pay the
     Net WAC Rate Carryover Amount, if any, for such class, in each case
until such amount for such class is paid in full; and         

             (xxiii) to the Class CE Certificates, in the amounts specified in
the Pooling and Servicing Agreement.                          

  For purposes of the foregoing, the following terms will have the
respective meanings set forth below.                                            

      "CLASS M-1 REALIZED LOSS AMORTIZATION AMOUNT" means, as to the Class
M-1 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid  
Realized Loss Amount for the Class M-1 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum  
of the amounts described in clauses (i) through (ii) of the Monthly Excess      
Cashflow Allocation for such Distribution Date.                                 

      "CLASS M-2 REALIZED LOSS AMORTIZATION AMOUNT" means, as to the Class
M-2 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid  
Realized Loss Amount for the Class M-2 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum  
of the amounts described in clauses (i) through (v) of the Monthly Excess       
Cashflow Allocation for such Distribution Date.                                 

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      "CLASS M-3 REALIZED LOSS AMORTIZATION AMOUNT" means, as to the Class
M-3 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid  
Realized Loss Amount for the Class M-3 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum  
of the amounts described in clauses (i) through (viii) of the Monthly Excess    
Cashflow Allocation for such Distribution Date.                                 

      "CLASS M-4 REALIZED LOSS AMORTIZATION AMOUNT" means, as to the Class
M-4 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid  
Realized Loss Amount for the Class M-4 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum  
of the amounts described in clauses (i) through (xi) of the Monthly Excess      
Cashflow Allocation for such Distribution Date.                                 

      "CLASS M-5 REALIZED LOSS AMORTIZATION AMOUNT" means, as to the Class
M-5 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid  
Realized Loss Amount for the Class M-5 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum  
of the amounts described in clauses (i) through (xiv) of the Monthly Excess     
Cashflow Allocation for such Distribution Date.                                 

      "CLASS M-6 REALIZED LOSS AMORTIZATION AMOUNT" means, as to the Class
M-6 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid  
Realized Loss Amount for the Class M-6 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum  
of the amounts described in clauses (i) through (xvii) of the Monthly Excess    
Cashflow Allocation for such Distribution Date.                                 

      "CLASS M-7 REALIZED LOSS AMORTIZATION AMOUNT" means, as to the Class
M-7 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid  
Realized Loss Amount for the Class M-7 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum  
of the amounts described in clauses (i) through (xx) of the Monthly Excess      
Cashflow Allocation for such Distribution Date.                                 

 "REALIZED LOSS AMORTIZATION AMOUNT" means each of the Class M-1
Realized Loss Amortization Amount, the Class M-2 Realized Loss Amortization     
Amount, the Class M-3 Realized Loss Amortization Amount, the Class M-4 Realized 
Loss Amortization Amount, the Class M-5 Realized Loss Amortization Amount, the  
Class M-6 Realized Loss Amortization Amount and the Class M-7 Realized Loss     
Amortization Amount.                                                            

"UNPAID REALIZED LOSS AMOUNT" means for any class of Class M  
Certificates and as to any Distribution Date, the excess of (x) the cumulative  
amount of related Applied Realized Loss Amounts with respect to such class for  
all prior Distribution Dates over (y) the cumulative amount of related Realized 
Loss Amortization Amounts with respect to such class for all prior Distribution 
Dates.                                                                          

PASS-THROUGH RATES                                                              

   The "PASS-THROUGH RATE" for each class of the Class A and Class M
Certificates for any Interest Accrual Period will be the per annum rate equal to
the lesser of (x) the related Formula Rate for such Distribution Date and (y)   
the Net WAC Rate for such Distribution Date.                                    

   With respect to the Class A and Class M Certificates, interest in
respect of any Distribution Date will accrue during the related Interest Accrual
Period on the basis of the actual number of days in such Interest Accrual Period
over a 360-day year.                                                            

         The "ADJUSTED NET MAXIMUM MORTGAGE INTEREST RATE" for any Mortgage Loan
for any Distribution Date shall be a per annum rate equal to the rate specified 
in the related Mortgage Note as the maximum Mortgage Interest Rate for such     
Mortgage Loan (if it is an Adjustable-Rate Mortgage Loan) or the fixed Mortgage 
Interest Rate for such Mortgage Loan, if it is a Fixed-Rate Mortgage Loan, as of
the beginning of the related Collection Period, minus the sum of the Servicing  
Fee Rate and the Trustee Fee Rate.                                              

       The "FORMULA RATE" for any Distribution Date and any class of Class A
or Class M Certificates is the lesser of (i) the sum of (A) one-month LIBOR     
("LIBOR") as of the related LIBOR Determination Date and (B) the margin for such
Class specified in the table below (the applicable "CERTIFICATE MARGIN") and    
(ii) the applicable Maximum Cap Rate for such Distribution Date.                

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        During each Interest Accrual Period relating to the Distribution Dates
after the Optional Termination Date, each of the Certificate Margins in the     
table below will "step-up" to the level indicated in the table below if the     
optional termination right is not exercised.                                    

                                      STEPPED UP
          CERTIFICATE MARGIN          CERTIFICATE MARGIN
           ------------------------    -----------------------

Class A-1              0.160%                   0.320%              
Class A-2              0.420%                   0.840%              
Class M-1              0.520%                   0.780%              
Class M-2              1.150%                   1.725%              
Class M-3              1.400%                   2.100%              
Class M-4              1.650%                   2.475%              
Class M-5              1.800%                   2.700%              
Class M-6              3.000%                   4.500%              
Class M-7              3.500%                   5.250%              

      The "MAXIMUM CAP RATE" for any Distribution Date is a per annum rate
(not less than zero and subject to adjustment based on the actual number of days
in the related Interest Accrual Period) equal to the weighted average of the    
Adjusted Net Maximum Mortgage Interest Rates of the Mortgage Loans as of the    
beginning of the related Collection Period.                                     

       The "NET WAC RATE" for any Distribution Date is a per annum rate (not
less than zero and subject to adjustment based on the actual number of days in  
the related Interest Accrual Period) equal to the weighted average of the Net   
Mortgage Interest Rates of the Mortgage Loans as of the beginning of the related
Collection Period.                                                              

        The "NET WAC CAP" for any Distribution Date will equal the related Net
WAC Rate.                                                                       

CALCULATION OF ONE-MONTH LIBOR                                                  

       One-Month LIBOR for the first Distribution Date will be determined on
the second business day preceding the Closing Date and for each subsequent      
Distribution Date will be determined on the second business day prior to the    
immediately preceding Distribution Date (each such date, a "LIBOR DETERMINATION 
DATE"). With respect to each Distribution Date, "ONE-MONTH LIBOR" will equal the
interbank offered rate for one-month United States dollar deposits in the London
market as quoted on Telerate Page 3750 as of 11:00 A.M., London time, on the    
related LIBOR Determination Date. "TELERATE PAGE 3750" means the display        
designated as page 3750 on the Moneyline Telerate (or such other page as may    
replace page 3750 on that service for the purpose of displaying London interbank
offered rates of major banks). 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 One-Month LIBOR or         
comparable rates as may be selected by the Trustee), the rate will be the       
Reference Bank Rate. The "REFERENCE BANK RATE" will be determined on the basis  
of the rates at which deposits in U.S. Dollars are offered by the reference     
banks (which shall be three major banks that are engaged in transactions in the 
London interbank market, selected by the Trustee) as of 11:00 A.M., London time,
on the related LIBOR Determination Date, to prime banks in the London interbank 
market for a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Class A and Class M Certificates. The      
Trustee will request the principal London office of each of the reference banks 
to provide a quotation of its rate. If at least two such quotations are         
provided, the rate will be the arithmetic mean of the quotations. If on such    
date fewer than two quotations are provided as requested, the rate will be the  
arithmetic mean 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 Certificate Principal Balance of   
the Offered Certificates. If no such quotations can be obtained, the rate will  
be One-Month LIBOR for the prior Distribution Date.                             

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

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 YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS

  The yields to maturity and weighted average lives of the Offered
Certificates will depend upon, among other things, the price at which such      
Offered Certificates are purchased, the amount and timing of principal payments 
on the Mortgage Loans, the allocation of Available Funds to various classes of  
Offered Certificates, the amount and timing of mortgagor delinquencies and      
defaults on the Mortgage Loans, the rate of liquidations and Realized Losses and
the allocation of Realized Losses to various classes of Offered Certificates.   

         The rate of payment of principal, the aggregate amount of distributions
and the yield to maturity of the Offered Certificates will be affected by the   
rate of defaults resulting in Realized Losses, by the severity of these losses  
and by the timing thereof. If a purchaser of an Offered Certificate calculates  
its anticipated yield based on an assumed rate of default and amount of Realized
Losses that is lower than the default rate and amount of losses actually        
incurred, its actual yield to maturity will be lower than that so calculated.   
The timing of Realized Losses will also affect an investor's actual yield to    
maturity, even if the average rate of defaults and severity of losses are       
consistent with an investor's expectations. In general, the earlier a loss      
occurs, the greater is the effect on an investor's yield to maturity. There can 
be no assurance as to the delinquency, foreclosure or loss experience with      
respect to the Mortgage Loans. The Mortgage Loans may have a greater than normal
risk of future defaults and delinquencies, as compared to newly originated, high
quality one- to four-family residential mortgage loans of comparable size and   
geographic concentration because the Mortgage Loans are of sub-prime credit     
quality. See "Risk Factors--The nature of sub-prime mortgage loans may increase 
risk of loss" in this Prospectus Supplement.                                    

       The rate of principal payments, the aggregate amount of distributions
and the yields to maturity of the Offered Certificates will be related to the   
rate and timing of payments of principal on the 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 or condemnations 
and repurchases by the Originator, the Seller or the Servicer). Because certain 
of the Mortgage Loans contain prepayment penalties, the rate of principal       
payments may be less than the rate of principal payments for mortgage loans     
which did not have prepayment penalties. The Mortgage Loans are subject to the  
"due-on-sale" provisions included therein. See "The Mortgage Pool" in this      
Prospectus Supplement.                                                          

        Unscheduled payments of principal (whether resulting from prepayments,
repurchases, liquidations, casualties or condemnations) will result in          
distributions on the related Offered Certificates of principal amounts which    
would otherwise be distributed over the remaining terms of the Mortgage Loans.  
Since the rate of payment of principal on the Mortgage Loans will depend on     
future events and a variety of other factors, no assurance can be given as to   
such rate 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 such class of Offered Certificates 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 
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 Mortgage Loans could  
result in an actual yield to such 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 on the Mortgage Loans could  
result in an actual yield to such investor that is lower than the anticipated   
yield.                                                                          

    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 and servicing decisions. In general, if prevailing  
interest rates were to fall significantly below the Mortgage Interest Rates on  
the Mortgage Loans, such Mortgage Loans could be subject to higher prepayment   
rates than if prevailing interest rates were to remain at or above the Mortgage 
Interest Rates on such Mortgage Loans. Conversely, if prevailing interest rates 
were to rise significantly, the rate of prepayments on such Mortgage Loans would
generally be expected to decrease.                                              

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        As is the case with the Fixed-Rate Mortgage Loans, the Adjustable-Rate
Mortgage Loans may be subject to a greater rate of principal prepayments in a   
low interest rate environment. For example, if prevailing interest rates were to
fall, mortgagors with adjustable-rate mortgage loans may be inclined to         
refinance their adjustable-rate mortgage loans with a fixed-rate loan to "lock  
in" a lower interest rate. The existence of the applicable Periodic Rate Cap and
Maximum Mortgage Interest Rate also may affect the likelihood of prepayments    
resulting from refinancings. No assurances can be given as to the rate of       
prepayments on the Mortgage Loans in stable or changing interest rate           
environments. In addition, the delinquency and loss experience of the           
Adjustable-Rate Mortgage Loans may differ from that on the Fixed-Rate Mortgage  
Loans because the amount of the Monthly Payments on the Adjustable-Rate Mortgage
Loans are subject to adjustment on each Adjustment Date. Further, a majority of 
the Adjustable-Rate Mortgage Loans will not have their initial Adjustment Date  
for two to three years after the origination thereof. The Adjustable-Rate       
Mortgage Loans may be subject to greater rates of prepayments as they approach  
their initial Adjustment Dates even if market interest rates are only slightly  
higher or lower than the Mortgage Interest Rates on such Adjustable-Rate        
Mortgage Loans as borrowers seek to avoid changes in their Monthly Payments     

  The weighted average life and yield to maturity of each class of
Certificates will also be influenced by the amount of Monthly Excess Cashflow   
Amounts generated by the Mortgage Loans and applied in reduction of the         
Certificate Principal Balances of such Certificates. The level of Monthly Excess
Cashflow Amounts available on any Distribution Date to be applied in reduction  
of the Certificate Principal Balance of the Certificates will be influenced by, 
among other factors, (i) the overcollateralization level of the Mortgage Loans  
at such time (i.e., the extent to which interest on the Mortgage Loans is       
accruing on a higher Principal Balance than the aggregate Certificate Principal 
Balance of the Certificates), (ii) the delinquency and default experience of the
Mortgage Loans and (iii) the level of the index for the Adjustable-Rate Mortgage
Loans. To the extent that greater amounts of Monthly Excess Cashflow Amounts are
distributed in reduction of the Certificate Principal Balance of a class of     
Certificates, the weighted average life thereof can be expected to shorten. No  
assurance can be given as to the amount of Monthly Excess Cashflow Amounts      
distributed at any time or in the aggregate.                                    

      The Class M-1 and Class M-2 Certificates are not expected to receive
any principal distributions until at least the Distribution Date in April 2007  
(unless the aggregate Certificate Principal Balance of the Class A Certificates 
is reduced to zero prior thereto). As a result, the weighted average lives of   
the Class M-1 and Class M-2 Certificates will be longer than would have been the
case if principal distributions were to be made on a pro rata basis. The longer 
weighted average lives may increase the risk that an Applied Realized Loss      
Amount will be allocated to the Class M-1 and Class M-2 Certificates.           

ADDITIONAL INFORMATION                                                          

      The Depositor has filed certain yield tables and other computational
materials with respect to certain classes of the Offered Certificates with the  
Commission in a report on Form 8-K and may file certain additional yield tables 
and other computational materials with respect to one or more classes of Offered
Certificates with the Commission in a report on Form 8-K. Such tables and       
materials were prepared by one or more of the Underwriters at the request of    
certain prospective investors, based on assumptions provided by, and satisfying 
the special requirements of, such prospective investors. Such tables and        
assumptions may be based on assumptions that differ from the Structuring        
Assumptions. Accordingly, such tables and other materials may not be relevant to
or appropriate for investors other than those specifically requesting them.     

WEIGHTED AVERAGE LIVES                                                          

   The timing of changes in the rate of principal prepayments on the
Mortgage Loans may significantly affect an investor's actual yield to maturity, 
even if the average rate of principal prepayments is consistent with such       
investor's expectation. In general, the earlier a principal prepayment on the   
Mortgage Loans occurs, the greater the effect of such principal prepayment on an
investor's yield to maturity. The effect on an investor's yield of principal    
prepayments 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 prepayments.                                              

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The projected weighted average life of any class of Offered   
Certificates is the average amount of time that will elapse from the Closing    
Date, until each dollar of principal is scheduled to be repaid to the investors 
in such class of Offered Certificates. Because it is expected that there will be
prepayments and defaults on the Mortgage Loans, the actual weighted average     
lives of the classes of Offered Certificates are expected to vary substantially 
from the weighted average remaining terms to stated maturity of the Mortgage    
Loans as set forth in this Prospectus Supplement under "The Mortgage Pool."     

   Prepayments on mortgage loans are commonly measured relative to a
prepayment model or standard. The prepayment models used in this Prospectus     
Supplement (the "PREPAYMENT ASSUMPTIONS") are based on an assumed rate of       
prepayment each month of the then unpaid principal balance of two hypothetical  
pools of mortgage loans similar to the Mortgage Loans.                          

      For the Adjustable-Rate Mortgage Loans, the Prepayment Assumption is
the "ADJUSTABLE-RATE MORTGAGE PREPAYMENT CURVE" or "ARM PPC," which assumes a   
constant prepayment rate of 28% CPR per annum each month. For the Fixed-Rate    
Mortgage Loans, the Prepayment Assumption is the "FIXED-RATE MORTGAGE PREPAYMENT
CURVE" or "FRM PPC," which assumes a prepayment rate of 2.3% CPR per annum of   
the then outstanding principal balance of a hypothetical pool of fixed-rate     
mortgage loans in the first month of the life of such mortgage loans and an     
additional 2.3% per annum in each month thereafter until 23% CPR is reached in  
the tenth month. Beginning in the tenth month and in each month thereafter      
during the life of such mortgage loans, FRM PPC assumes a constant prepayment   
rate of 23% CPR per annum each month.                                           

       "CPR" represents a constant assumed rate of principal prepayment each
year relative to the then-outstanding principal balance of a pool of mortgage   
loans for the life of such mortgage loans.                                      

     No Prepayment Assumption purports to be a historical description of
prepayment experience or a prediction of the anticipated rate of prepayment of  
any pool of mortgage loans, including the Mortgage Loans.                       

        The tables on pages S-70 through S-73 (the "DEC TABLES") were prepared
on the basis of the assumptions in the following paragraph and the tables set   
forth below. There may be certain differences between the loan characteristics  
included in such assumptions and the characteristics of the actual Mortgage     
Loans. Any such discrepancy may have an effect upon the percentages of original 
Certificate Principal Balances outstanding and weighted average lives of the    
Offered Certificates set forth in the DEC Tables. In addition, since the actual 
Mortgage Loans in the Trust Fund will have characteristics that differ from     
those assumed in preparing the tables set forth below, the distributions of     
principal of the Offered Certificates may be made earlier or later than         
indicated in the tables.                                                        

   The percentages and weighted average lives in the DEC Tables were
determined using the following assumptions collectively (the "STRUCTURING       
ASSUMPTIONS"): (i) the Mortgage Loans have the characteristics set forth in the 
table below, (ii) the closing date for the Offered Certificates occurs on March 
30, 2004 and the Offered Certificates are sold to investors on such date, (iii) 
distributions on the Certificates are made on the 25th day of each month        
regardless of the day on which the Distribution Date actually occurs, commencing
in April 2004, in accordance with the allocation of Available Funds set forth   
above under "Description of the Certificates," (iv) the Mortgage Loans prepay in
accordance with the Prepayment Assumptions indicated, (v) prepayments include   
thirty days' interest thereon, (vi) the Seller is not required to substitute for
or repurchase any of the Mortgage Loans pursuant to the Pooling and Servicing   
Agreement, (vii) no optional termination is exercised (except with respect to   
the entry identified by the row captioned "Weighted Avg. Life to Call" for each 
Class of Offered Certificates in the DEC Tables), (viii) the Targeted           
Overcollateralization Amount is set initially as specified herein and thereafter
decreases as described in the definition thereof, (ix) scheduled payments for   
all Mortgage Loans are received on the related Due Date commencing in April     
2004, the principal portion of such payments is computed prior to giving effect 
to prepayments received in such month and there are no losses or delinquencies  
with respect to such Mortgage Loans, (x) such prepayments are received on the   
last day of each month commencing in April 2004, (xi) the aggregate of the      
annualized rates at which the Servicing Fee and the Trustee Fee are calculated  
is 0.509%, (xii) One-Month LIBOR is at all times equal to 1.09%, (xiii) the     
Pass-Through Rates for the Offered Certificates are as set forth or described   
above under "Description of the Certificates--Pass-Through Rates," (xiv) the    
Mortgage Interest Rate for each Adjustable-Rate Mortgage Loan adjusts           
semi-annually on its next Adjustment Date (and on subsequent Adjustment Dates,  
if necessary) to equal the sum of (a) the assumed level of Six-Month LIBOR and  

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(b) the respective Gross Margin (such sum being subject to the applicable       
Periodic Rate Caps, Minimum Mortgage Interest Rates and Maximum Mortgage        
Interest Rates), (xv) with respect to the Adjustable-Rate Mortgage Loans,       
Six-Month LIBOR is at all times equal to 1.18% and (xvi) no interest is earned  
on the Overcollateralization Amount. Nothing contained in the foregoing         
assumptions should be construed as a representation that the Mortgage Loans will
not experience delinquencies or losses.                                         

Based on the foregoing assumptions and assumed mortgage loan  
characteristics, the tables indicate the projected weighted average lives of    
each class of Offered Certificates and set forth the percentages of the original
Certificate Principal Balance of each such class that would be outstanding after
each of the dates shown at the indicated percentages of the applicable          
Prepayment Assumption.                                                          

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                                                        [Enlarge/Download Table]


                                                   ASSUMED MORTGAGE LOAN CHARACTERISTICS              
                                                      (ADJUSTABLE-RATE MORTGAGE LOANS)                

                                                           ORIGINAL              ORIGINAL             
                                      INITIAL   ORIGINAL AMORTIZATION            INTEREST             
                                      MORTGAGE  TERM TO    TERM TO                 ONLY               
                       PRINCIPAL      INTEREST  MATURITY  MATURITY    SEASONING   PERIOD      GROSS   
    DESCRIPTION       BALANCE ($)      RATE (%) (MONTHS)  (MONTHS)     (MONTHS)  (MONTHS)   MARGIN (%)
    -----------       -----------     --------  --------  ----------  ---------  --------  -----------
                                                                                                      
2/28 ARM w/IO Period     275,899.08     6.2500   360        360(1)        4        60        4.7500   
2/28 ARM w/IO Period     239,556.11     5.3750   360        360(1)        5        60        3.8750   
2/28 ARM              29,126,830.02     7.6486   360        360           4        0         6.2057   
2/28 ARM                 102,592.37     8.3900   360        360           4        0         6.8900   
2/28 ARM               6,552,933.73     7.2216   360        360           4        0         5.8076   
2/28 ARM                 422,463.41     6.5378   360        360           4        0         5.3396   
2/28 ARM              11,822,207.11     7.1723   360        360           4        0         5.7907   
2/28 ARM                 153,280.34     7.6250   360        360           4        0         6.1250   
2/28 ARM               5,482,765.49     7.5176   360        360           4        0         6.1326   
2/28 ARM                 844,474.55     7.5330   360        360           4        0         6.2697   
3/27 ARM               8,672,868.58     8.0669   360        360           4        0         6.7247   
3/27 ARM                  41,466.14     7.5000   360        360           4        0         6.2500   
3/27 ARM               1,563,914.72     7.4438   360        360           4        0         6.0742   
3/27 ARM                 632,649.61     7.5166   360        360           4        0         6.0205   
3/27 ARM                 335,011.03     7.5900   360        360           4        0         6.0900   
3/27 ARM              79,877,330.65     7.2976   360        360           4        0         5.9858   
3/27 ARM                 625,441.60     7.0645   360        360           4        0         5.7238   
3/27 ARM               1,376,236.14     8.3687   360        360           5        0         7.1837   



                          MONTHS                                  MAXIMUM    MINIMUM                  
                         TO NEXT          INITIAL                 MORTGAGE   MORTGAGE                 
                        ADJUSTMENT       PERIODIC      PERIODIC   INTEREST   INTEREST                 
    DESCRIPTION         DATE (MONTHS)   RATE CAP (%)   RATE CAP   RATE (%)   RATE (%)                 
    -----------         -------------   -----------     -------   --------   --------                 
                                                                                                      
2/28 ARM w/IO Period        20             1.5000      1.5000      13.2500     6.2500                 
2/28 ARM w/IO Period        19             1.5000      1.5000      12.3750     5.3750                 
2/28 ARM                    20             1.4900      1.4933      14.6486     7.6486                 
2/28 ARM                    20             1.5000      1.5000      15.3900     8.3900                 
2/28 ARM                    20             1.5000      1.5000      14.2216     7.2216                 
2/28 ARM                    20             1.5000      1.5000      13.5378     6.5378                 
2/28 ARM                    20             1.5000      1.5000      14.1723     7.1723                 
2/28 ARM                    20             1.5000      1.5000      14.6250     7.6250                 
2/28 ARM                    20             1.5000      1.5000      14.5176     7.5176                 
2/28 ARM                    20             1.5000      1.5000      14.5330     7.5330                 
3/27 ARM                    32             1.5000      1.5000      15.0669     8.0669                 
3/27 ARM                    32             1.5000      1.5000      14.5000     7.5000                 
3/27 ARM                    32             1.5000      1.5000      14.4438     7.4438                 
3/27 ARM                    32             1.5000      1.5000      14.5166     7.5166                 
3/27 ARM                    32             1.5000      1.5000      14.5900     7.5900                 
3/27 ARM                    32             1.5000      1.5000      14.2976     7.2976                 
3/27 ARM                    32             1.5000      1.5000      14.0645     7.0645                 
3/27 ARM                    31             1.5000      1.5000      15.3687     8.3687                 

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

(1)  Principal payments on the Interest Only Mortgage Loans will commence on the
   61st month of the term of such Mortgage Loans and the principal amortizes
over the remaining 300 months.                                        

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                   ASSUMED MORTGAGE LOAN CHARACTERISTICS                               
                        (FIXED-RATE MORTGAGE LOANS)                                    

                                                                 ORIGINAL              
                                                                AMORTIZATION           
                                    MORTGAGE       ORIGINAL       TERM TO              
                      PRINCIPAL     INTEREST    TERM TO MATURITY  MATURITY    SEASONING
     DESCRIPTION     BALANCE ($)    RATE (%)       (MONTHS)       (MONTHS)    (MONTHS) 
     -----------     -----------    --------       --------      --------     -------- 
                                                                                       
15 Year Fixed       535,608.35      8.1866           180           180           4     
15 Year Fixed       703,073.22      7.5222           180           180           5     
15 Year Fixed       236,614.75      8.4826           180           180           4     
15 Year Fixed       395,341.09      8.5212           180           180           5     
15/30 Balloon        70,733.02      8.2590           180           360           11    
20 Year Fixed       628,440.53      7.5766           240           240           4     
20 Year Fixed       223,724.64      5.9900           240           240           5     
20 Year Fixed       266,947.40      7.1250           240           240           4     
20 Year Fixed       184,856.95      7.6153           240           240           4     
30 Year Fixed     5,189,326.16      7.9643           360           360           4     
30 Year Fixed        59,346.63      8.2500           360           360           4     
30 Year Fixed     3,303,164.39      7.3206           360           360           5     
30 Year Fixed       333,947.02      7.2590           360           360           4     
30 Year Fixed     8,259,395.24      7.6202           360           360           4     
30 Year Fixed       188,486.60      7.9900           360           360           4     
30 Year Fixed     9,447,616.34      7.6600           360           360           4     

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                          PERCENTAGE OF ORIGINAL PRINCIPAL BALANCE OUTSTANDING(1) AT THE                                   
                          SPECIFIED PERCENTAGES OF THE APPLICABLE PREPAYMENT ASSUMPTION                                    

                                                          CLASS A-1                                                        

ARM PPC                             0%           50%          75%           100%         125%         150%          175%   
-----------------------------    ----------    ---------    ---------     ---------    ---------    ----------    ---------
FRM PPC                             0%           50%          75%           100%         125%         150%          175%   
-----------------------------    ----------    ---------    ---------     ---------    ---------    ----------    ---------
                                                                                                                           
Distribution Date                                                                                                          
-----------------                                                                                                          

Initial Percentage                 100          100          100           100          100           100           100    
March 25, 2005                      99           79           69            59           49            39            29    
March 25, 2006                      97           60           44            29           15             3            0     
March 25, 2007                      95           44           24             7            0             0            0     
March 25, 2008                      93           31           15             4            0             0            0     
March 25, 2009                      91           21            7             0            0             0            0     
March 25, 2010                      89           15            1             0            0             0            0     
March 25, 2011                      87            9            0             0            0             0            0     
March 25, 2012                      84            4            0             0            0             0            0     
March 25, 2013                      82            0            0             0            0             0            0     
March 25, 2014                      79            0            0             0            0             0            0     
March 25, 2015                      76            0            0             0            0             0            0     
March 25, 2016                      72            0            0             0            0             0            0     
March 25, 2017                      69            0            0             0            0             0            0     
March 25, 2018                      65            0            0             0            0             0            0     
March 25, 2019                      60            0            0             0            0             0            0     
March 25, 2020                      56            0            0             0            0             0            0     
March 25, 2021                      51            0            0             0            0             0            0     
March 25, 2022                      46            0            0             0            0             0            0     
March 25, 2023                      41            0            0             0            0             0            0     
March 25, 2024                      35            0            0             0            0             0            0     
March 25, 2025                      29            0            0             0            0             0            0     
March 25, 2026                      23            0            0             0            0             0            0     
March 25, 2027                      19            0            0             0            0             0            0     
March 25, 2028                      14            0            0             0            0             0            0     
March 25, 2029                       9            0            0             0            0             0            0     
March 25, 2030                       3            0            0             0            0             0            0     
March 25, 2031                       0            0            0             0            0             0            0     
March 25, 2032                       0            0            0             0            0             0            0     
March 25, 2033                       0            0            0             0            0             0            0     
March 25, 2034                       0            0            0             0            0             0            0     

Weighted Avg. Life to              16.16         3.15         2.10          1.49         1.11         0.90          0.74   
    Maturity (in years)(2)                                                                                                 
Weighted Avg. Life to                                                                                                      
    Call (in years)(2) (3)         16.16         3.15         2.10          1.49         1.11         0.90          0.74   

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


(1)   Rounded to the nearest whole percentage.                                  

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

(3)   Assumes optional termination right is exercised on the Optional Terminal  
Date.                                                               

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                              PERCENTAGE OF ORIGINAL PRINCIPAL BALANCE OUTSTANDING(1) AT THE                               
                              SPECIFIED PERCENTAGES OF THE APPLICABLE PREPAYMENT ASSUMPTION                                

                                                             CLASS A-2                                                     

ARM PPC                             0%           50%          75%          100%         125%          150%          175%   
-----------------------------     --------     ---------    ---------    ---------    ---------     ---------     ---------
FRM PPC                             0%           50%          75%          100%         125%          150%          175%   
-----------------------------     --------     ---------    ---------    ---------    ---------     ---------     ---------
                                                                                                                           
Distribution Date                                                                                                          
-----------------                                                                                                          

Initial Percentage                  100          100          100          100          100           100           100    
March 25, 2005                      100          100          100          100          100           100           100    
March 25, 2006                      100          100          100          100          100           100            63    
March 25, 2007                      100          100          100          100           68            16             0    
March 25, 2008                      100          100          100          100           68            16             0    
March 25, 2009                      100          100          100           84           52            16             0    
March 25, 2010                      100          100          100           60           34            16             0    
March 25, 2011                      100          100           80           44           22            11             0    
March 25, 2012                      100          100           63           31           15             6             0    
March 25, 2013                      100          100           49           22           10             3             0    
March 25, 2014                      100           86           38           16            6             0             0    
March 25, 2015                      100           73           30           12            3             0             0    
March 25, 2016                      100           61           23            8            1             0             0    
March 25, 2017                      100           51           18            6            0             0             0    
March 25, 2018                      100           43           14            3            0             0             0    
March 25, 2019                      100           36           11            1            0             0             0    
March 25, 2020                      100           30            8            0            0             0             0    
March 25, 2021                      100           25            6            0            0             0             0    
March 25, 2022                      100           20            4            0            0             0             0    
March 25, 2023                      100           16            2            0            0             0             0    
March 25, 2024                      100           13            1            0            0             0             0    
March 25, 2025                      100           11            0            0            0             0             0    
March 25, 2026                      100            8            0            0            0             0             0    
March 25, 2027                      100            7            0            0            0             0             0    
March 25, 2028                      100            5            0            0            0             0             0    
March 25, 2029                      100            2            0            0            0             0             0    
March 25, 2030                      100            1            0            0            0             0             0    
March 25, 2031                       85            0            0            0            0             0             0    
March 25, 2032                       55            0            0            0            0             0             0    
March 25, 2033                       23            0            0            0            0             0             0    
March 25, 2034                        0            0            0            0            0             0             0    

Weighted Avg. Life to              28.16        14.40        10.00         7.42         5.42          3.36          2.16   
    Maturity (in years)(2)                                                                                                 
Weighted Avg. Life to                                                                                                      
    Call (in years)(2)(3)          27.88        12.44         8.46         6.23         4.48          2.83          2.16   

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

(1)   Rounded to the nearest whole percentage.                                  

(2)   The weighted average life of any Class of Certificates is determined by   
 (i) multiplying the assumed net reduction, if any, in the Certificate
     Principal Balance on each Distribution Date of such class of Certificates
   by the number of years from the date of issuance of the Certificates to
the related Distribution Date, (ii) summing the results, and (iii)  
    dividing the sum by the aggregate amount of the assumed net reduction in
the Certificate Principal Balance of such class of Certificates.    

(3)   Assumes optional termination right is exercised on the Optional Terminal  
Date.                                                               

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                               PERCENTAGE OF ORIGINAL PRINCIPAL BALANCE OUTSTANDING(1) AT THE                              
                               SPECIFIED PERCENTAGES OF THE APPLICABLE PREPAYMENT ASSUMPTION                               

                                                           CLASS M-1                                                       

ARM PPC                            0%           50%           75%          100%         125%          150%         175%    
----------------------------    ---------    ----------    ----------    ---------    ----------    ---------    ----------
FRM PPC                            0%           50%           75%          100%         125%          150%         175%    
----------------------------    ---------    ----------    ----------    ---------    ----------    ---------    ----------
                                                                                                                           

Distribution Date                                                                                                          
-----------------                                                                                                          

Initial Percentage                100           100           100          100           100          100           100    
March 25, 2005                    100           100           100          100           100          100           100    
March 25, 2006                    100           100           100          100           100          100           100    
March 25, 2007                    100           100           100          100           100          100            94    
March 25, 2008                    100           100            77           54            66          100            94    
March 25, 2009                    100            91            61           39            24           52            50    
March 25, 2010                    100            78            48           28            16           15            27    
March 25, 2011                    100            66            37           20            10            5            10    
March 25, 2012                    100            56            29           15             7            1             2    
March 25, 2013                    100            47            23           10             4            0             0    
March 25, 2014                    100            40            18            7             1            0             0    
March 25, 2015                    100            34            14            5             0            0             0    
March 25, 2016                    100            29            11            3             0            0             0    
March 25, 2017                    100            24             8            0             0            0             0    
March 25, 2018                    100            20             6            0             0            0             0    
March 25, 2019                    100            17             5            0             0            0             0    
March 25, 2020                    100            14             3            0             0            0             0    
March 25, 2021                    100            11             1            0             0            0             0    
March 25, 2022                    100             9             0            0             0            0             0    
March 25, 2023                    100             8             0            0             0            0             0    
March 25, 2024                    100             6             0            0             0            0             0    
March 25, 2025                    100             5             0            0             0            0             0    
March 25, 2026                     96             4             0            0             0            0             0    
March 25, 2027                     86             1             0            0             0            0             0    
March 25, 2028                     76             0             0            0             0            0             0    
March 25, 2029                     65             0             0            0             0            0             0    
March 25, 2030                     53             0             0            0             0            0             0    
March 25, 2031                     40             0             0            0             0            0             0    
March 25, 2032                     26             0             0            0             0            0             0    
March 25, 2033                     11             0             0            0             0            0             0    
March 25, 2034                      0             0             0            0             0            0             0    

Weighted Avg. Life to            26.03          10.13         6.92          5.36          4.82         5.24          5.25  
    Maturity (in years)(2)                                                                                                 
Weighted Avg. Life to                                                                                                      
    Call (in years)(2) (3)       25.91           9.28          6.26         4.86          4.43         4.39          3.51  

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

(1)   Rounded to the nearest whole percentage.                                  

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

(3)   Assumes optional termination right is exercised on the Optional Terminal  
Date.                                                               

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                                  PERCENTAGE OF ORIGINAL PRINCIPAL BALANCE OUTSTANDING(1) AT THE                           
                                  SPECIFIED PERCENTAGES OF THE APPLICABLE PREPAYMENT ASSUMPTION                            

                                                               CLASS M-2                                                   

ARM PPC                            0%           50%           75%          100%         125%          150%         175%    
----------------------------    ---------    ----------    ----------    ---------    ----------    ---------    ----------
FRM PPC                            0%           50%           75%          100%         125%          150%         175%    
----------------------------    ---------    ----------    ----------    ---------    ----------    ---------    ----------
                                                                                                                           

Distribution Date                                                                                                          
-----------------                                                                                                          

Initial Percentage                100           100           100          100           100          100           100    
March 25, 2005                    100           100           100          100           100          100           100    
March 25, 2006                    100           100           100          100           100          100           100    
March 25, 2007                    100           100           100          100           100          100           100    
March 25, 2008                    100           100            77           54            37           40            17    
March 25, 2009                    100            91            61           39            24           14             8    
March 25, 2010                    100            78            48           28            16            8             0    
March 25, 2011                    100            66            37           20            10            2             0    
March 25, 2012                    100            56            29           15             6            0             0    
March 25, 2013                    100            47            23           10             1            0             0    
March 25, 2014                    100            40            18            7             0            0             0    
March 25, 2015                    100            34            14            3             0            0             0    
March 25, 2016                    100            29            11            0             0            0             0    
March 25, 2017                    100            24             8            0             0            0             0    
March 25, 2018                    100            20             5            0             0            0             0    
March 25, 2019                    100            17             2            0             0            0             0    
March 25, 2020                    100            14             0            0             0            0             0    
March 25, 2021                    100            11             0            0             0            0             0    
March 25, 2022                    100             9             0            0             0            0             0    
March 25, 2023                    100             8             0            0             0            0             0    
March 25, 2024                    100             5             0            0             0            0             0    
March 25, 2025                    100             2             0            0             0            0             0    
March 25, 2026                     96             0             0            0             0            0             0    
March 25, 2027                     86             0             0            0             0            0             0    
March 25, 2028                     76             0             0            0             0            0             0    
March 25, 2029                     65             0             0            0             0            0             0    
March 25, 2030                     53             0             0            0             0            0             0    
March 25, 2031                     40             0             0            0             0            0             0    
March 25, 2032                     26             0             0            0             0            0             0    
March 25, 2033                     11             0             0            0             0            0             0    
March 25, 2034                      0             0             0            0             0            0             0    

Weighted Avg. Life to            26.03         10.04           6.84         5.22          4.47         4.24          3.81  
    Maturity (in years)(2)                                                                                                 
Weighted Avg. Life to                                                                                                      
    Call (in years)(2) (3)       25.91         9.28            6.26         4.79          4.12         3.96          3.49  

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

(1)   Rounded to the nearest whole percentage.                                  

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

(3)   Assumes optional termination right is exercised on the Optional Terminal  
Date.                                                               

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FINAL SCHEDULED DISTRIBUTION DATES                                              

The Final Scheduled Distribution Date of each class of Offered
Certificates is set forth under "Summary of Prospectus Supplement" in this      
Prospectus Supplement. The Final Scheduled Distribution Date for such           
Certificates has been calculated on the basis of the Structuring Assumptions and
the assumption that there are no prepayments. Since the rate of distributions in
reduction of the Certificate Principal Balance of each class of Offered         
Certificates will depend on the rate of payment (including prepayments) of the  
Mortgage Loans, the Certificate Principal Balance of any such class could be    
reduced to zero significantly earlier or later than the Final Scheduled         
Distribution Date. The rate of payments on the Mortgage Loans will depend on    
their particular characteristics, as well as on prevailing interest rates from  
time to time and other economic factors, and no assurance can be given as to the
actual payment experience of the Mortgage Loans.                                

 USE OF PROCEEDS

      The Depositor will apply the net proceeds of the sale of the Offered
Certificates to the purchase price of the Mortgage Loans transferred to the     
Trust Fund. See "Method of Distribution" in this Prospectus Supplement.         

CERTAIN MATERIAL FEDERAL INCOME TAX CONSEQUENCES

GENERAL                                                                         

      The Pooling and Servicing Agreement provides that certain segregated
portions of the Trust Fund, exclusive of the Notional Principal Arrangement (as 
defined below) and certain other assets excluded by the Pooling and Servicing   
Agreement, will comprise two or more REMICs consisting of one or more Lower Tier
REMICs and one or more Issuing REMICs. Each Lower Tier REMIC will issue         
uncertificated regular interests and those interests will be held entirely by a 
REMIC above it in the tiered structure. Each of the Lower Tier REMICs and the   
Issuing REMICs will designate a single class of interests as the residual       
interest in that REMIC. Elections will be made to treat each Lower Tier REMIC   
and each Issuing REMIC as a REMIC for federal income tax purposes. Except to the
extent described in the next paragraph, each class of Offered Certificates, will
represent beneficial ownership of the corresponding class of regular interests  
issued by an Issuing REMIC. The Trust Fund will also include a grantor trust    
which will hold the portion of the Trust Fund for which a REMIC election will   
not be made, including the Notional Principal Arrangements (as defined below).  

     The Offered Certificates will represent beneficial ownership of the
corresponding class of regular interests issued by an Issuing REMIC and of the  
right to receive Net WAC Rate Carryover Amounts from amounts otherwise          
distributable to the Class CE Certificates as part of the Monthly Excess        
Cashflow Amount. Holders of such Offered Certificates must allocate their basis 
between their regular interest and their right to receive such Net WAC Rate     
Carryover Amounts.                                                              

      Upon the issuance of the Offered Certificates, Hunton & Williams LLP
will deliver its opinion to the effect that, assuming compliance with the       
Pooling and Servicing Agreement and the other transaction documents, for federal
income tax purposes, each Lower Tier REMIC and each Issuing REMIC will qualify  
as a REMIC within the meaning of Section 860D of the Internal Revenue Code of   
1986, as amended (the "CODE") and the portion of the Trust Fund exclusive of the
REMICs will qualify as a grantor trust under Subpart E, Part 1 of Subchapter J  
of the Code.                                                                    

TAXATION OF REGULAR INTERESTS                                                   

         For federal income tax reporting purposes, the regular interest portion
of the classes of Offered Certificates may be treated as having been issued with
original issue discount ("OID"). The Prepayment Assumption that will be used in 
determining the rate of accrual of original issue discount, premium and market  
discount, if any, for federal income tax purposes will be based on the          
assumption that subsequent to the date of any determination the Mortgage Loans  
will prepay at a constant rate of 100% ARM PPC with respect to the              
Adjustable-Rate Mortgage Loans and 100% FRM PPC with respect to Fixed-Rate      
Mortgage Loans. No representation is made that any                              

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Mortgage Loans will prepay at such rate or at any other rate. See "Federal      
Income Tax Consequences--REMICs--Taxation of Owners of Regular                  
Securities--Original Issue Discount" in the Prospectus.                         

       The IRS has issued regulations (the "OID REGULATIONS") under Sections
1271 to 1275 of the Code generally addressing the treatment of debt instruments 
issued with original issue discount. Purchasers of the Offered Certificates     
should be aware that the OID Regulations do not adequately address certain      
issues relevant to, or are not applicable to, securities such as the Offered    
Certificates. Because of the uncertainty concerning the application of Section  
1272(a)(6) of the Code to such Certificates, and because the rules of the OID   
Regulations are limited in their application in ways that could preclude their  
application to such Certificates even in the absence of Section 1272(a)(6) of   
the Code, the IRS could assert that the Offered Certificates should be treated  
as issued with original issue discount or should be governed by the rules       
applicable to debt instruments having contingent payments or by some other      
manner not yet set forth in regulations. Prospective purchasers of the Offered  
Certificates are advised to consult their tax advisors concerning the tax       
treatment of such Certificates.                                                 

  The REMIC regular interest portion of the Classes of the Offered
Certificates generally will be treated as assets described in Section           
7701(a)(19)(c) of the Code and "real estate assets" under Section 856(c)(4)(a)  
of the Code, in the same proportion that the assets in the Trust Fund would be  
so treated. In addition, interest on the Offered Certificates generally will be 
treated as "interest on obligations secured by mortgages on real property" under
Section 856(c)(3)(b) of the Code, to the extent that the Offered Certificates   
are treated as "real estate assets" under Section 856(c)(4)(a) of the Code. See 
"Federal Income Tax Consequences--REMICs--Characterization of Investments in    
REMIC Securities" in the Prospectus. If more than 95% of the regular interests  
and income qualify for these treatments, the regular interests generally will   
qualify for such treatments in their entirety. However, no portion of an Offered
Certificateholder's basis or income allocable to a Notional Principal           
Arrangement will qualify for any of the above treatments. In addition, because  
the Offered Certificates have each entered into a Notional Principal Arrangement
(as defined below), those Certificates are not suitable investments for         
inclusion in another REMIC.                                                     

TAXATION OF THE NOTIONAL PRINCIPAL ARRANGEMENTS                                 

    General. Each holder of an Offered Certificate will be treated for
federal income tax purposes as having entered into a notional principal contract
pursuant to its rights to receive payment with respect to Net WAC Rate Carryover
Amounts on the date it purchases its Certificates. The rights to receive such   
payments (referred to as the "NOTIONAL PRINCIPAL ARRANGEMENT") are beneficially 
owned by holders of Offered Certificates in the portion of the Trust Fund,      
exclusive of the REMICs, which is treated as a grantor trust for federal income 
tax purposes. The Internal Revenue Service (the "IRS") has issued final         
regulations under Section 446 of the Code relating to notional principal        
contracts (the "SWAP REGULATIONS").                                             

       In general, the holders of the Offered Certificates must allocate the
price they pay for the Offered Certificates between their REMIC regular interest
and the applicable Notional Principal Arrangement or Arrangements based on their
relative fair market values. To the extent rights to receive payments are       
determined to have a value on the Closing Date that is greater than zero, a     
portion of such purchase price will be allocable to such rights, and such       
portion will be treated as a notional principal contract premium (the "NPC      
PREMIUM") paid by the holders of the Offered Certificates. A holder of an       
Offered Certificate will be required to amortize the NPC Premium under a level  
payment method as if the NPC Premium represented the present value of a series  
of equal payments made over the life of the applicable Notional Principal       
Arrangement (adjusted to take into account decreases in notional principal      
amount), discounted at a rate equal to the rate used to determine the amount of 
the NPC Premium (or some other reasonable rate). Prospective purchasers of      
Offered Certificates should consult their own tax advisors regarding the        
appropriate method of amortizing any NPC Premium. The Swap Regulations treat a  
nonperiodic payment made under a cap contract as a loan for federal income tax  
purposes if the payment is "significant." It is not known whether any NPC       
Premium would be treated in part as a loan under the Swap Regulations.          

      Under the Swap Regulations (i) all taxpayers must recognize periodic
payments with respect to a notional principal contract under the accrual method 
of accounting, and (ii) any periodic payments received under the applicable     
Notional Principal Arrangement must be netted against payments, if any, deemed  
made as a result of the NPC Premiums over the recipient's taxable year, rather  
than accounted for on a gross basis. Net income or                              

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deduction with respect to net payments under a notional principal contract for a
taxable year should constitute ordinary income or ordinary deduction. The IRS   
could contend the amount is capital gain or loss, but such treatment is         
unlikely, at least in the absence of further regulations. Any regulations       
requiring capital gain or loss treatment presumably would apply only            
prospectively. Individuals may be limited in their ability to deduct any such   
net deduction and should consult their tax advisors prior to investing in the   
Offered Certificates.                                                           

      Any amount of proceeds from the sale, redemption or retirement of an
Offered Certificate that is considered to be allocated to rights under a        
Notional Principal Arrangement would be considered a "termination payment" under
the Swap Regulations. It is anticipated that the Trustee will account for any   
termination payments for reporting purposes in accordance with the Swap         
Regulations, as described below.                                                

       Termination Payments. Any amount of sales proceeds that is considered
to be allocated to the selling beneficial owner's rights under the applicable   
Notional Principal Arrangement in connection with the sale or exchange of an    
Offered Certificate would be considered a "termination payment" under the Swap  
Regulations allocable to that Offered Certificate. A holder of an Offered       
Certificate will have gain or loss from such a termination of a Notional        
Principal Arrangement equal to (i) any termination payment it received or is    
deemed to have received minus (ii) the unamortized portion of any NPC Premium   
paid (or deemed paid) by the beneficial owner upon entering into or acquiring   
its interest in a Notional Principal Arrangement.                               

    Gain or loss realized upon the termination of a Notional Principal
Arrangement will generally be treated as capital gain or loss. Moreover, in the 
case of a bank or thrift institution, Code Section 582(c) would likely not apply
to treat such gain or loss as ordinary.                                         

REMIC TAXES AND REPORTING                                                       

      It is not anticipated that the Trust will engage in any transactions
that would subject it to the prohibited transactions tax as defined in Section  
860F(a)(2) of the Code, the contributions tax as defined in Section 860G(d) of  
the Code or the tax on net income from foreclosure property as defined in       
Section 860G(c) of the Code. However, in the event that any such tax is imposed 
on the Trust, such tax will be borne (i) by the Trustee, if the Trustee has     
breached its obligations with respect to REMIC compliance under the Agreement,  
(ii) by the Servicer, if the Servicer has breached its obligations with respect 
to REMIC compliance under the Agreement, and (iii) otherwise by the Trust Fund, 
with a resulting reduction in amounts otherwise distributable to Holders of the 
Offered Certificates. See "Description of the Securities--General" and "Federal 
Income Tax Consequences--REMICs--Taxes That May Be Imposed on the REMIC         
Pool--Prohibited Transactions" in the Prospectus.                               

      The responsibility for filing annual federal information returns and
other reports will be borne by the Trustee. See "Federal Income Tax             
Consequences--REMICs--Taxes That May Be Imposed on the REMIC                    
Pool--Administrative Matters" in the Prospectus.                                

       For further information regarding the federal income tax consequences
of investing in the Offered Certificates, see "Federal Income Tax               
Consequences--REMICs" in the Prospectus.                                        

 STATE TAXES

       The Depositor makes no representations regarding the tax consequences
of purchase, ownership or disposition of the Offered Certificates under the tax 
laws of any state. Investors considering an investment in the Offered           
Certificates should consult their own tax advisors regarding such tax           
consequences.                                                                   

   All investors should consult their own tax advisors regarding the
federal, state, local or foreign income tax consequences of the purchase,       
ownership and disposition of the Offered Certificates.                          

ERISA CONSIDERATIONS

        Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), prohibits "parties in interest" with respect to an employee  
benefit plan subject to ERISA and/or a plan or other arrangement                

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subject to the excise tax provisions set forth under Section 4975 of the Code   
(each of the foregoing, an "ERISA PLAN") from engaging in certain transactions  
involving such ERISA Plan and its assets unless a statutory, regulatory or      
administrative exemption applies to the transaction. Section 4975 of the Code   
imposes certain excise taxes on prohibited transactions involving plans         
described under that Section; ERISA authorizes the imposition of civil penalties
for prohibited transactions involving plans not covered under Section 4975 of   
the Code. ANY ERISA PLAN FIDUCIARY WHICH PROPOSES TO CAUSE AN ERISA PLAN TO     
ACQUIRE ANY OF THE CLASS A CERTIFICATES SHOULD CONSULT WITH ITS COUNSEL WITH    
RESPECT TO THE POTENTIAL CONSEQUENCES UNDER ERISA AND THE CODE OF THE ERISA     
PLAN'S ACQUISITION AND OWNERSHIP OF SUCH CERTIFICATES AND WHETHER SUCH ERISA    
PLAN MEETS THE CONDITIONS FOR OWNERSHIP OF THE OFFERED CERTIFICATES THAT ARE    
DESCRIBED IN THE PROSPECTUS. SEE "ERISA CONSIDERATIONS" IN THE PROSPECTUS.      

  Certain employee benefit plans, including governmental plans and
certain church plans (collectively with ERISA Plans, "PLANS"), are not subject  
to ERISA's requirements. However, such plans may be subject to the provisions of
other applicable federal, state or local law ("SIMILAR LAW") materially similar 
to the foregoing provisions of ERISA and the Code. Any such plan which is       
qualified and exempt from taxation under Sections 401(a) and 501(a) of the Code 
may nonetheless be subject to the prohibited transaction rules set forth in     
Section 503 of the Code.                                                        

    Except as noted above, investments by Plans are subject to 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 which decides to  
invest the assets of a Plan in the Offered Certificates should consider, among  
other factors, the extreme sensitivity of the investments to the rate of        
principal payments (including prepayments) on the Mortgage Loans.               

       The U.S. Department of Labor has extended to each of the Underwriters
an administrative exemption (collectively, the "EXEMPTIONS" and each, an        
"EXEMPTION") 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 certificates
in pass-through trusts that consist of certain receivables, loans and other     
obligations that meet the conditions and requirements of the Exemptions. The    
Exemptions can apply to certificates in a pass-through trust holding mortgage   
loans, and the Exemptions may apply to the Offered Certificates if they meet its
conditions.                                                                     

         Among the conditions that must be satisfied for the Exemptions to apply
are the following:                                                              

(1) the acquisition of the certificates by a Plan is on terms 
(including the price for the certificates) that are at least as favorable to the
Plan as they would be in an arm's length transaction with an unrelated party;   

      (2) generally, the certificates acquired by the Plan have received a
rating at the time of such acquisition that is one of the four highest generic  
rating categories from S&P, Moody's or Fitch (collectively, the "EXEMPTION      
RATING AGENCIES");                                                              

     (3) the trustee must not be an affiliate of any other member of the
Restricted Group (as defined below), other than an Underwriter;                 

         (4) the sum of all payments made to and retained by the underwriters in
connection with the distribution of the certificates represents not more than   
reasonable compensation for underwriting the certificates; the sum of all       
payments made to and retained by the seller pursuant to the assignment of the   
loans to the trust represents not more than the fair market value of such loans;
the sum of all payments made to and retained by the servicer represents not more
than reasonable compensation for such person's services under the agreement     
pursuant to which the loans are pooled and reimbursements of such person's      
reasonable expenses in connection therewith; and                                

        (5) the Plan investing in the certificates is an "accredited investor"
as defined in Rule 501(a)(1) of Regulation D of the Securities and Exchange     
Commission under the Securities Act of 1933, as amended (the "ACT").            

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The trust must also meet the following requirements:          

           (i)    the corpus of the trust must consist solely of assets of
the type that have been included in other investment pools;   

             (ii)   certificates in such other investment pools must have been
  rated in one of the four highest generic rating categories by an
   Exemption Rating Agency for at least one year prior to the Plan's
acquisition of certificates; and                              

             (iii)  certificates evidencing interests in such other investment
     pools must have been purchased by investors other than Plans for at
     least one year prior to any Plan's acquisition of the certificates.

Moreover, the Exemptions provide relief from certain          
self-dealing/conflict of interest prohibited transactions that may occur when   
the Plan fiduciary causes a Plan to acquire certificates in a trust holding     
receivables as to which the fiduciary (or its affiliate) is an obligor provided 
that, among other requirements, (i) in the case of an acquisition in connection 
with the initial issuance of certificates, at least fifty percent (50%) of each 
class of certificates in which Plans have invested is acquired by persons       
independent of the Restricted Group; (ii) such fiduciary (or its affiliate) is  
an obligor with respect to five percent (5%) or less of the fair market value of
the obligations contained in the trust; (iii) a Plan's investment in            
certificates of any class does not exceed twenty-five percent (25%) of all of   
the certificates of that class outstanding at the time of the acquisition; and  
(iv) immediately after the acquisition, no more than twenty-five percent (25%)  
of the assets of any Plan with respect to which such person is a fiduciary are  
invested in certificates representing an interest in one or more trusts         
containing assets sold or serviced by the same entity. The Exemptions do not    
apply to Plans sponsored by any Underwriter, the Trustee, the Servicer, any     
obligor with respect to Mortgage Loans included in the Trust constituting more  
than five percent of the aggregate unamortized principal balance of the assets  
in the Trust, or any affiliate of such parties (the "RESTRICTED GROUP").        

      The Exemptions will apply to the acquisition and holding by Plans of
the Offered Certificates if all conditions of the Exemptions are met.           

     Prospective Plan investors should consult with their legal advisors
concerning the impact of ERISA, the Code and Similar Law, the applicability of  
PTCE 83-1 described in the Prospectus and the Exemptions, and the potential     
consequences in their specific circumstances, prior to making an investment in  
the Offered Certificates. Moreover, each Plan fiduciary should determine whether
under the general fiduciary standards of investment prudence and                
diversification, an investment in 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.                                 

         It should be noted that in promulgating the Exemptions (and PTCE 83-1),
the DOL may not have had under its consideration pools with features of the     
exact nature of those of the Mortgage Pool.                                     

      Any purported acquisition or holding of the Offered Certificates, or
interests therein, in violation of the provisions of the conditions of the      
Exemptions shall be void ab initio and any purchaser or transferee of such      
Certificate shall indemnify and hold harmless the Depositor, the Trustee, the   
Seller, the Servicer and the Trust from and against any and all liabilities,    
claims, costs or expenses incurred by such parties as a result of such          
acquisition or holding.                                                         

LEGAL INVESTMENT

     The Class A-1, Class A-2 and Class M-1 Certificates will constitute
"mortgage related securities" for purposes of the Secondary Mortgage Market     
Enhancement Act of 1984, as amended ("SMMEA"), so long as they are rated in one 
of the two highest rating categories by at least one nationally recognized      
rating agency. The Class M-2 Certificates will not be "mortgage related         
securities" for purposes of SMMEA.                                              

There may be restrictions on the ability of certain investors,
including depository institutions, either to purchase the Offered Certificates  
or to purchase Offered Certificates representing more than a specified          
percentage                                                                      

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of the investor's assets. Investors should consult their own legal advisors in  
determining whether and to what extent the Offered Certificates constitute legal
investments for such investors. See "Legal Investment" in the Prospectus.       

METHOD OF DISTRIBUTION

   Subject to the terms and conditions set forth in the Underwriting
Agreement, between the Depositor and Banc of America Securities LLC ("BANC OF   
AMERICA"), an affiliate of the Depositor, as representative (in such capacity,  
the "REPRESENTATIVE") of Banc of America, Bear, Stearns & Co. Inc. and          
Countrywide Securities Corporation (together with Banc of America, the          
"UNDERWRITERS"), the Underwriters have severally agreed to purchase and the     
Depositor has agreed to sell to the Underwriters the Offered Certificates as    
follows: Banc of America will acquire approximately 90% of each class of Offered
Certificates and Bear, Stearns & Co. Inc. and Countrywide Securities Corporation
will each acquire approximately 5% of each class of Offered Certificates.       

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

        The Depositor has been advised by the Underwriters that they intend to
make a market in the Offered Certificates but have no obligation to do so. There
can be no assurance that a secondary market for the Offered Certificates will   
develop or, if it does develop, that it will continue.                          

         The Depositor has agreed to indemnify the Underwriters against, or make
contributions to the Underwriters with respect to, certain liabilities,         
including liabilities under the Act.                                            

 LEGAL MATTERS

      Certain matters relating to the validity of the Offered Certificates
and certain tax matters will be passed upon for the Depositor and the           
Underwriters by Hunton & Williams LLP, Charlotte, North Carolina.               

 RATINGS

        It is a condition to the issuance of the Offered Certificates that the
Certificates receive the following ratings from Moody's and S&P:                

CLASS              MOODY'S             S&P  
------------------     -------------    --------------  
A-1                 Aaa               AAA 
A-2                 Aaa               AAA 
M-1                 Aa2               AA  
M-2                  A2                A  

  A securities rating addresses the likelihood of the receipt by a
certificateholder of distributions on the Mortgage Loans. The rating takes into 
consideration the characteristics of the Mortgage Loans and the structural,     
legal and tax aspects associated with the certificates. The ratings on the      
Offered Certificates do not, however, constitute statements regarding the       
likelihood of the payment of any Net WAC Rate Carryover Amount, the frequency of
prepayments on the Mortgage Loans, or the possibility that a holder of an       
Offered Certificate might realize a lower than anticipated yield.               

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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. In the event that the ratings       
initially assigned to any of the Offered Certificates by the Rating Agencies are
subsequently lowered for any reason, no person or entity is obligated to provide
any additional support or credit enhancement with respect to such Offered       
Certificates.                                                                   

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INDEX OF DEFINED TERMS

60+ Day Delinquent Loan.................................................S-58    
Accredited Standards....................................................S-34    
Accrued Certificate Interest............................................S-53    
Act.....................................................................S-77    
Adjustable-Rate Mortgage Loans..........................................S-19    
Adjustable-Rate Mortgage Prepayment Curve...............................S-66    
Adjusted Net Maximum Mortgage Interest Rate.............................S-62    
Adjustment Date.........................................................S-20    
Advance.................................................................S-44    
Advancing Person........................................................S-45    
Applied Realized Loss Amount............................................S-59    
ARM PPC.................................................................S-66    
Available Funds.........................................................S-52    
Balloon Mortgage Loan...................................................S-20    
Balloon Payment.........................................................S-20    
Banc of America.........................................................S-79    
Basic Principal Distribution Amount.....................................S-55    
beneficial owner........................................................S-48    
Book-Entry Certificates.................................................S-48    
Business Day............................................................S-43    
C-BASS..................................................................S-39    
Certificate Margin......................................................S-62    
Certificate Owners......................................................S-48    
Certificate Principal Balance...........................................S-55    
Certificateholder.......................................................S-48    
Certificates............................................................S-48    
Class A Certificates....................................................S-48    
Class A Principal Distribution Amount...................................S-55    
Class CE Certificates...................................................S-48    
Class M Certificates....................................................S-48    
Class M-1 Principal Distribution Amount.................................S-55    
Class M-1 Realized Loss Amortization Amount.............................S-61    
Class M-2 Principal Distribution Amount.................................S-55    
Class M-2 Realized Loss Amortization Amount.............................S-61    
Class M-3 Principal Distribution Amount.................................S-56    
Class M-3 Realized Loss Amortization Amount.............................S-62    
Class M-4 Principal Distribution Amount.................................S-56    
Class M-4 Realized Loss Amortization Amount.............................S-62    
Class M-5 Principal Distribution Amount.................................S-56    
Class M-5 Realized Loss Amortization Amount.............................S-62    
Class M-6 Principal Distribution Amount.................................S-56    
Class M-6 Realized Loss Amortization Amount.............................S-62    
Class M-7 Principal Distribution Amount.................................S-57    
Class M-7 Realized Loss Amortization Amount.............................S-62    
Class P Certificates....................................................S-48    
Clearstream..............................................................S-5    
Clearstream Participants................................................S-50    
Closing Date............................................................S-41    
Code....................................................................S-74    
Collection Account......................................................S-43    
Collection Period.......................................................S-52    
Compensating Interest...................................................S-45    

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Cooperative.............................................................S-50    
CPR.....................................................................S-66    
Credit Enhancement Percentage...........................................S-57    
Credit Scores...........................................................S-27    
Cut-off Date............................................................S-18    
Cut-off Date Principal Balance..........................................S-18    
DEC Tables..............................................................S-66    
Defective Mortgage Loans................................................S-43    
Deficient Valuation.....................................................S-59    
Definitive Certificate..................................................S-48    
Delinquent..............................................................S-19    
Determination Date......................................................S-45    
Distribution Account....................................................S-43    
Distribution Date.......................................................S-48    
DTC......................................................................S-5    
Due Date................................................................S-20    
Eligible Account........................................................S-43    
Eligible Substitute Mortgage Loan.......................................S-42    
ERISA...................................................................S-76    
ERISA Plan..............................................................S-77    
Euroclear..........................................................S-5, S-50    
Euroclear Operator......................................................S-50    
Euroclear Participants..................................................S-50    
European Depositaries...................................................S-48    
Exemption...............................................................S-77    
Exemption Rating Agencies...............................................S-77    
Exemptions..............................................................S-77    
Extra Principal Distribution Amount.....................................S-57    
Financial Intermediary..................................................S-48    
Fixed-Rate Mortgage Loans...............................................S-19    
Fixed-Rate Mortgage Prepayment Curve....................................S-66    
Formula Rate............................................................S-62    
FRM PPC.................................................................S-66    
Global Securities........................................................I-1    
Gross Margin............................................................S-20    
Index...................................................................S-20    
Indirect Participants...................................................S-48    
Initial Periodic Rate Cap...............................................S-20    
Interest Accrual Period.................................................S-53    
Interest Only Mortgage Loan.............................................S-20    
Interest Percentage.....................................................S-53    
Interest Remittance Amount..............................................S-53    
IRS.....................................................................S-75    
LIBOR...................................................................S-62    
LIBOR Determination Date................................................S-63    
Liquidated Mortgage Loan................................................S-59    
LTV.....................................................................S-36    
Maximum Cap Rate........................................................S-63    
Maximum Mortgage Interest Rate..........................................S-21    
Mezzanine Certificates..................................................S-48    
Minimum Mortgage Interest Rate..........................................S-21    
Monthly Excess Cashflow Allocation......................................S-60    
Monthly Excess Cashflow Amount..........................................S-60    
Monthly Excess Interest Amount..........................................S-59    
Monthly Payment.........................................................S-19    
Moody's..................................................................S-8    

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Mortgage................................................................S-20    
Mortgage Interest Rate..................................................S-20    
Mortgage Loan Purchase Agreement........................................S-18    
Mortgage Loan Schedule..................................................S-41    
Mortgage Loans..........................................................S-18    
Mortgage Pool...........................................................S-18    
Mortgaged Property......................................................S-20    
N/O/O...................................................................S-36    
Net Mortgage Interest Rate..............................................S-60    
Net WAC Cap.............................................................S-63    
Net WAC Rate............................................................S-63    
Net WAC Rate Carryover Amount...........................................S-53    
New Regulations..........................................................I-4    
Notional Principal Arrangement..........................................S-75    
NPC Premium.............................................................S-75    
Offered Certificates....................................................S-48    
OID.....................................................................S-74    
OID Regulations.........................................................S-75    
One-Month LIBOR.........................................................S-63    
Optional Termination Date...............................................S-46    
Original Loan-to-Value Ratio............................................S-24    
Originator........................................................S-19, S-34    
Overcollateralization Amount............................................S-57    
Overcollateralization Deficiency........................................S-57    
Overcollateralization Release Amount....................................S-57    
Participants............................................................S-48    
Pass-Through Rate.......................................................S-62    
Periodic Rate Cap.......................................................S-20    
Plans...................................................................S-77    
Pool Balance............................................................S-18    
Pooling and Servicing Agreement.........................................S-41    
Prepayment Assumptions..................................................S-66    
Prepayment Interest Shortfall...........................................S-45    
Prepayment Period.......................................................S-52    
Principal Balance.......................................................S-18    
Principal Distribution Amount...........................................S-57    
Principal Remittance Amount.............................................S-57    
Prospectus...............................................................S-5    
Prospectus Supplement....................................................S-5    
PUD.....................................................................S-36    
Purchase Price..........................................................S-42    
Rating Agencies.........................................................S-43    
Realized Loss...........................................................S-59    
Realized Loss Amortization Amount.......................................S-62    
Record Date.............................................................S-48    
Reference Bank Rate.....................................................S-63    
Reimbursement Amount....................................................S-43    
Related Documents.......................................................S-41    
Relevant Depositary.....................................................S-48    
Relief Act..............................................................S-44    
REMIC....................................................................S-8    
Representative..........................................................S-79    
Residual Certificates...................................................S-48    
Restricted Group........................................................S-78    
Rules...................................................................S-49    
S&P......................................................................S-8    

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Seller..................................................................S-34    
Senior Certificates.....................................................S-48    
Servicer................................................................S-39    
Servicer Modification...................................................S-59    
Servicing Advance.......................................................S-44    
Servicing Fee...........................................................S-45    
Servicing Fee Rate......................................................S-45    
Servicing Rights Pledgee................................................S-41    
SFR.....................................................................S-36    
Similar Law.............................................................S-77    
Six-Month LIBOR.........................................................S-34    
SMMEA...................................................................S-78    
Stepdown Date...........................................................S-58    
Structuring Assumptions.................................................S-66    
Subordinated Certificates...............................................S-48    
Subsequent Recoveries...................................................S-58    
Substitution Adjustment.................................................S-42    
Swap Regulations........................................................S-75    
Targeted Overcollateralization Amount...................................S-58    
Telerate Page 3750......................................................S-63    
Termination Price.......................................................S-46    
Terms and Conditions....................................................S-50    
Transfer Agreement................................................S-19, S-42    
Trigger Event...........................................................S-58    
Trigger Loss Percentage.................................................S-58    
Trust...................................................................S-18    
Trust Fund..............................................................S-18    
Trustee.................................................................S-45    
Trustee Fee.............................................................S-45    
Trustee Fee Rate........................................................S-45    
U.S. Person..............................................................I-4    
Underwriters............................................................S-79    
Unpaid Interest Shortfall Amount........................................S-53    
Unpaid Realized Loss Amount.............................................S-62    

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 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 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.                        

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      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 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  
either a 360-day year comprised of 30-day months or the actual number of days in
such interest accrual period and a year assumed to consist of 360 days, 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 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 a 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 either a 360-day year comprised of 30-day months or the actual  
number of days in such interest accrual period and a year assumed to consist of 
360 days, 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                                                                    

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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      
automatically fail on the sale side unless affirmative action were taken. At    
least three techniques should be readily available to eliminate this potential  
problem:                                                                        

        o    borrowing through Clearstream or Euroclear 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;                               

         o    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                                    

         o    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 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). 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 of Tax on Income Effectively Connected with the      
Conduct of a Trade or Business in the United States).                           

   Exemption or reduced rate for non-U.S. Persons resident in treaty
countries (Form W-8BEN). 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.                                                                         

    Exemption 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 or, in the case of a Form W-8ECI filer, his agent, 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 the form is signed.                      

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         Final withholding regulations (the "NEW REGULATIONS") effective January
1, 2001 affect the documentation required from non-U.S. Persons. The New        
Regulations replace a number of prior tax certification forms (including IRS    
Form W-8, 1001 and 4224) with a new series of IRS Form W-8 and generally        
standardize the period of time for which withholding agents can rely on such    
forms (although certain of the new forms may remain valid indefinitely if the   
beneficial owner provides a United States taxpayer identification number and the
information on the form does not change).                                       

      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.     

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PROSPECTUS                                                                      

ASSET BACKED FUNDING CORPORATION
 Depositor

 ASSET BACKED CERTIFICATES
ASSET BACKED NOTES
(ISSUABLE IN SERIES)

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

------------------------------------------------------------------------------- 
YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 10 OF THIS     
PROSPECTUS.                                                                     

The securities of any series will not be insured or guaranteed by any           
governmental agency or instrumentality other than as expressly described in the 
prospectus supplement for that series.                                          

The securities of each series will represent interests in, or will represent    
debt obligations of, the related trust only and will not represent interests in 
or obligations of any other entity.                                             

This prospectus may be used to offer and sell any series of securities only if  
accompanied by the prospectus supplement for that series. The securities of each
series are not deposits or other obligations of a bank and are not insured by   
the FDIC.                                                                       
------------------------------------------------------------------------------- 

EACH TRUST                                                                      

o    will issue a series of asset-backed certificates or asset-backed notes that
will consist of one or more classes; and                              

o    may own--                                                                  

  o    a pool or pools of single family and/or multifamily mortgage loans,
         which may include sub-prime mortgage loans, and are secured by either
          first or junior liens on one- to four-family residential properties or
primarily residential properties consisting of five or more 
    residential dwelling units and which may include limited retail,
office or other commercial space;                           

 o    a pool or pools of home improvement installment sales contracts or
installment loans that are unsecured;                       

  o    a pool or pools of manufactured housing installment sales contracts
       and installment loan agreements secured by a security interest in a
       new or used manufactured home, and if indicated in the accompanying
prospectus supplement, by real property; and                

o    other assets described in this prospectus and the accompanying   
prospectus supplement.                                      

EACH SERIES OF SECURITIES--                                                     

o    will represent ownership interest in the related trust or will represent   
debt obligations of the related trust;                                

o    may be entitled to one or more of the other types of credit support        
described in this prospectus; and                                     

o    will be paid only from the assets of the related trust.                    

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

The date of this prospectus is March 26, 2004.

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 TABLE OF CONTENTS

IMPORTANT NOTICE ABOUT                                                          
INFORMATION PRESENTED IN THIS                                         
PROSPECTUS AND THE                                                    
ACCOMPANYING PROSPECTUS SUPPLEMENT.............4                      
SUMMARY OF PROSPECTUS...............................5                           
RISK FACTORS.......................................10                           
Risks Associated with the Securities...........10                       
Risks Associated with the Assets...............12                       
Violations of Federal, State and Local Laws                             
May Adversely Affect Ability to                               
Collect on Loans..........................15                  
Market Values of Manufactured Homes May                                 
Increase the Risk of Loss.................16                  
Risk of Loss May Be Greater on Unsecured                                
Home Improvement Loans....................17                  
Risks of Loss May Increase Due to Defective                             
Security Interest and Effects of                              
Certain Other Legal Aspects of                                
the Contracts.............................17                  
DESCRIPTION OF THE TRUST FUNDS.....................17                           
Assets.........................................17                       
Mortgage Loans.................................18                       
General...................................18                  
Loan-to-Value Ratio.......................19                  
Mortgage Loan Information in Prospectus                       
Supplements............................19               
Payment Provisions of the Mortgage                            
Loans..................................20               
Revolving Credit Line Loans...............20                  
Unsecured Home Improvement Loans...............21                       
Unsecured Home Improvement Loan                               
Information in Prospectus                               
Supplements............................21               
Contracts......................................21                       
General...................................21                  
Contract Information in Prospectus                            
Supplements............................21               
Payment Provisions of the Contracts.......22                  
Pre-Funding Account............................22                       
Accounts.......................................22                       
Credit Support.................................23                       
Cash Flow Agreements...........................23                       
USE OF PROCEEDS....................................23                           
YIELD CONSIDERATIONS...............................23                           
General........................................23                       
Pass-Through Rate and Interest Rate............24                       
Timing of Payment of Interest..................24                       
Payments of Principal; Prepayments.............24                       
Prepayments--Maturity and Weighted Average                              
Life......................................25                  
Other Factors Affecting Weighted Average Life..26                       
Type of Asset.............................26                  
Termination...............................27                  
Defaults..................................27                  
Foreclosures..............................28                  
Refinancing...............................28                  
Due-on-Sale Clauses.......................28                  
THE DEPOSITOR......................................28                           
DESCRIPTION OF THE SECURITIES......................30                           
General........................................30                       
Distributions..................................30                       
Available Distribution Amount..................31                       
Distributions of Interest on the Securities....32                       
Distributions of Principal of the Securities...32                       
Categories of Classes of Securities............33                       
Components.....................................36                       
Distributions on the Securities of Prepayment                           
Premiums..................................36                  
Allocation of Losses and Shortfalls............36                       
Advances in Respect of Delinquencies...........36                       
Reports to Securityholders.....................37                       
Termination....................................39                       
Optional Purchases.............................39                       
Definitive Form................................40                       
Book-Entry Registration and Definitive                                  
Securities................................40                  
DESCRIPTION OF THE AGREEMENTS......................43                           
Agreements Applicable to a Series..............43                       
REMIC Securities, FASIT Securities,                           
Grantor Trust Securities...............43               
Securities That Are Partnership                               
Interests for Tax Purposes and Notes...43               
Material Terms of the Pooling and Servicing                             
Agreements and Underlying Servicing                           
Agreements................................43                  
General...................................43                  
Assignment of Assets; Repurchases.........44                  
Representations and Warranties;                               
Repurchases............................45               
Collection Account and Related Accounts...46                  
Deposits..................................47                  
Withdrawals...............................48                  
Realization Upon Defaulted Assets.........50                  
Hazard Insurance Policies.................52                  
Contracts.................................53                  
Fidelity Bonds and Errors and Omissions                       
Insurance..............................53               
Due-on-Sale Provisions....................53                  
Retained Interest; Servicing                                  
Compensation and Payment of                             
Expenses...............................54               
Evidence as to Compliance.................54                  
Certain Matters Regarding Servicers,                          
the Master Servicer and the                             
Depositor..............................55               
Special Servicers.........................55                  
Events of Default under the Agreements....56                  
Rights Upon Event of Default under                            
the Agreements.........................56               
Amendment.................................57                  
The Trustee...............................57                  
Duties of the Trustee.....................57                  
Certain Matters Regarding the Trustee.....58                  
Resignation and Removal of the Trustee....58                  
Material Terms of the Indenture................58                       
General...................................58                  
Events of Default.........................58                  

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Discharge of Indenture....................60                  
Indenture Trustee's Annual Report.........60                  
The Indenture Trustee.....................60                  
DESCRIPTION OF CREDIT SUPPORT......................61                           
General........................................61                       
Subordinate Securities.........................61                       
Overcollateralization..........................61                       
Excess Interest................................62                       
Cross-Support Provisions.......................62                       
Limited Guarantee..............................62                       
Financial Guaranty Insurance Policy or                                  
Surety Bond...............................62                  
Letter of Credit...............................62                       
Pool Insurance Policies........................62                       
Special Hazard Insurance Policies..............62                       
Mortgagor Bankruptcy Bond......................63                       
Reserve Funds..................................63                       
CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS............63                           
General........................................63                       
Types of Mortgage Instruments..................64                       
Interest in Real Property......................64                       
Cooperative Loans..............................64                       
Land Sale Contracts............................65                       
Foreclosure....................................66                       
General...................................66                  
Judicial Foreclosure......................66                  
Equitable Limitations on Enforceability                       
of Certain Provisions..................66               
Non-Judicial Foreclosure/Power of Sale....67                  
Public Sale...............................67                  
Rights of Redemption......................68                  
Cooperative Loans.........................68                  
Junior Mortgages...............................69                       
Rights of Redemption...........................70                       
Anti-Deficiency Legislation, the Bankruptcy                             
Code and Other Limitations on Lenders.....70                  
Enforceability of Certain Provisions...........72                       
Environmental Considerations...................72                       
Due-on-Sale Clauses............................74                       
Prepayment Premiums............................75                       
Subordinate Financing..........................75                       
Applicability of Usury Laws....................75                       
Alternative Mortgage Instruments...............76                       
Homeowners Protection Act of 1998..............76                       
Texas Home Equity Loans........................77                       
Servicemembers Civil Relief Act................77                       
Forfeiture for Drug, RICO and Money                                     
Laundering Violations.....................77                  
CERTAIN LEGAL ASPECTS OF THE CONTRACTS.............78                           
General........................................78                       
Security Interests in the Manufactured Homes...78                       
Enforcement of Security Interests in                                    
Manufactured Homes........................80                  
Servicemembers Civil Relief Act................80                       
Consumer Protection Laws.......................80                       
Transfers of Manufactured Homes;                                        
Enforceability of Due-on-Sale Clauses.....80                  
Applicability of Usury Laws....................81                       
FEDERAL INCOME TAX CONSEQUENCES....................82                           
General........................................82                       
Taxable Mortgage Pools....................82                  
REMICS.........................................83                       
Classification of REMICs..................83                  
Characterization of Investments in                            
REMIC Securities.......................84               
Tiered REMIC Structures...................85                  
Taxation of Owners of Regular Securities..85                  
Taxation of Owners of Residual Securities.92                  
Tax-Related Restrictions on Transfer                          
of Residual Securities.................95               
Sale or Exchange of a Residual Security...98                  
Mark to Market Regulations................98                  
Taxes That May Be Imposed on the REMIC                        
Pool...................................99               
Taxation of Certain Foreign Investors....100                  
Reporting Requirements...................102                  
Grantor Trust Funds...........................102                       
Standard Securities...........................103                       
Stripped Securities...........................106                       
General..................................106                  
Status of Stripped Securities............107                  
Taxation of Stripped Securities..........107                  
Reporting Requirements and Backup                             
Withholding...........................108               
Taxation of Certain Foreign Investors....109                  
Partnership Trust Funds.......................109                       
Classification of Partnership Trust                           
Funds.................................109               
Characterization of Investments in                            
Partnership Securities and                              
Debt Securities.......................109               
Taxation of Debt Securityholders.........109                  
Taxation of Owners of Partnership                             
Securities............................110               
STATE AND OTHER TAX CONSEQUENCES..................114                           
ERISA CONSIDERATIONS..............................114                           
LEGAL INVESTMENT..................................118                           
METHODS OF DISTRIBUTION...........................119                           
LEGAL MATTERS.....................................120                           
FINANCIAL INFORMATION.............................120                           
RATING............................................121                           
WHERE YOU CAN FIND MORE INFORMATION...............121                           
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE.121                           
INDEX OF SIGNIFICANT DEFINITIONS..................122                           

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

     Information is provided to you about the securities in two separate
documents that progressively provide more detail: (a) this prospectus, which    
provides general information, some of which may not apply to a particular series
of securities, including your series, and (b) the accompanying prospectus       
supplement, which will describe the specific terms of your series of securities,
including:                                                                      

  o    the principal balances and/or interest rates of each class;

  o    the timing and priority of interest and principal payments;

  o    statistical and other information about the mortgage loans;

    o    information about credit enhancement, if any, for each class;

o    the ratings for each class; and                          

o    the method for selling the securities.                   

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

         You should rely only on the information provided in this prospectus and
the accompanying prospectus supplement including the information incorporated by
reference. No one has been authorized to provide you with different information.
The securities are not being offered in any state where the offer is not        
permitted. The depositor does not claim the accuracy of the information in this 
prospectus or the accompanying prospectus supplement as of any date other than  
the dates stated on their respective covers.                                    

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

     You can find a listing of the pages where capitalized terms used in
this prospectus are defined under the caption "Index of Significant Definitions"
beginning on page 122 in this prospectus.                                       

    The depositor's principal executive office is located at 214 North
Tryon Street, Charlotte, North Carolina 28255 and the depositor's telephone     
number is (704) 386-2400.                                                       

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 SUMMARY OF PROSPECTUS

     THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS DOCUMENT AND
DOES NOT CONTAIN ALL OF THE INFORMATION THAT YOU NEED TO CONSIDER IN MAKING AN  
INVESTMENT DECISION. PLEASE READ THIS ENTIRE PROSPECTUS AND THE ACCOMPANYING    
PROSPECTUS SUPPLEMENT CAREFULLY TO UNDERSTAND ALL OF THE TERMS OF A SERIES OF   
SECURITIES.                                                                     

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

RELEVANT PARTIES FOR EACH SERIES OF SECURITIES                                  

TITLE OF SECURITIES                                                             

Asset backed certificates and asset backed notes issuable in series.            

DEPOSITOR                                                                       

Asset Backed Funding Corporation, a wholly-owned indirect subsidiary of Bank of 
America Corporation. The depositor is an affiliate of Banc of America Securities
LLC.                                                                            

ISSUER                                                                          

With respect to each series of certificates and/or notes, the trust fund to be  
formed pursuant to either a pooling and servicing agreement or a deposit trust  
agreement.                                                                      

SERVICER                                                                        

The entity or entities named as servicer in the related prospectus supplement. A
servicer may be an affiliate of the depositor.                                  

MASTER SERVICER                                                                 

The entity, if any, named as master servicer in the related prospectus          
supplement that will perform certain administration, calculation and reporting  
functions with respect to the trust fund and will supervise the servicers. The  
master servicer may be an affiliate of the depositor.                           

TRUSTEE / INDENTURE TRUSTEE                                                     

The entity named as trustee or indenture trustee in the related prospectus      
supplement.                                                                     

RELEVANT DATES                                                                  

CUT-OFF DATE                                                                    

The date specified in the related prospectus supplement.                        

CLOSING DATE                                                                    

The date when the certificates and/or notes of any series are initially issued  
as specified in the related prospectus supplement.                              

DISTRIBUTION DATE                                                               

The monthly, quarterly or other periodic date specified in the related          
prospectus supplement on which distributions will be made to holders of the     
certificates and/or notes.                                                      

STATISTICAL CALCULATION DATE                                                    

The calendar day, if applicable, specified in the related prospectus supplement.

DESCRIPTION OF SECURITIES                                                       

      Each series of certificates will be issued pursuant to a pooling and
servicing agreement and will include one or more classes representing an        
ownership interest in a segregated pool of mortgage loans, unsecured home       
improvement loans and/or manufactured housing installment sales contracts and   
other assets of the trust fund. If a series of securities includes notes, such  
notes will represent debt obligations of the related trust fund formed pursuant 
to a deposit trust agreement and will be secured by the assets of the trust fund
pursuant to an indenture. A class of securities will be entitled, to the extent 
of funds available, to one of the following:                                    

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o    principal and interest distributions;                    

o    principal distributions, with no interest distributions; 

  o    interest distributions, with no principal distributions; or

  o    such other distributions as are described in the applicable
prospectus supplement.                              

See "Description of the Securities" in this prospectus.       

INTEREST DISTRIBUTIONS                                                          

      With respect to each series of securities, interest on each class of
securities (other than a class of securities entitled to receive only principal)
will accrue during each period specified in the prospectus supplement and will  
be distributed to the holders of the related classes of securities on each      
distribution date in accordance with the particular terms of each such class of 
securities. The terms of each such class of securities will be described in the 
related prospectus supplement.                                                  

      See "Description of the Securities--Distributions of Interest on the
Securities" in this prospectus.                                                 

PRINCIPAL DISTRIBUTIONS                                                         

With respect to each series of securities, principal payments 
(including prepayments) on the related mortgage loans, unsecured home           
improvement loans and/or manufactured housing installment sales contracts will  
be distributed to holders of the related securities or otherwise applied as     
described in the related prospectus supplement on each distribution date.       
Distributions in reduction of principal balance will be allocated among the     
classes of securities of a series in the manner specified in the applicable     
prospectus supplement.                                                          

      See "Description of the Securities--Distribution of Principal of the
Securities" in this prospectus.                                                 

DENOMINATIONS                                                                   

    Each class of securities of a series will be issued in the minimum
denominations set forth in the related prospectus supplement.                   

REGISTRATION OF THE SECURITIES                                                  

The securities will be issued either:                         

     o    in book-entry form initially held through The Depository Trust
       Company in the United States, or Clearstream Banking or the
Euroclear System in Europe; or                      

o    in fully registered, certificated form.                  

See "Description of the Securities--General" and "--Book-Entry
Registration and Definitive Securities" in this prospectus.                     

ASSETS OF THE TRUST                                                             

       The trust related to each series will consist primarily of any of the
following assets:                                                               

     o    a segregated pool of single family and/or multifamily mortgage
loans which may include sub-prime mortgage loans;   

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        o    home improvement installment sales contracts or installment loans
that are unsecured;                                 

       o    manufactured housing installment sales contracts and installment
loan agreements; and                                

o    certain other property.                                  

       o    You should refer to the applicable prospectus supplement for the
             precise characteristics or expected characteristics of the assets
          and a description of the other property, if any, included in a
particular trust.                                   

See "Description of the Trust Funds" in this prospectus.      

OPTIONAL TERMINATION OF THE TRUST                                               

        The related prospectus supplement may provide that the party specified
in the related prospectus supplement may                                        

       o    repurchase all of the assets in the trust fund and thereby cause
             early retirement of the securities under the circumstances and in
         the manner specified in the related prospectus supplement and

       o    repurchase a portion of such assets to retire specified class or
           classes of securities under the circumstances and in the manner
specified in the related prospectus supplement.     

      See "Description of the Securities--Termination" in this prospectus.

        The yield on each class of securities of a series will be affected by,
among other things, the rate of payment of principal (including prepayments) on 
the assets in the related trust and the timing of receipt of such payments.     

See "Yield Considerations" in this prospectus.                

PREFUNDING ACCOUNT                                                              

  The related prospectus supplement may provide that the depositor
deposit a specified amount in a pre-funding account on the date the securities  
are issued. In this case, the deposited funds may only be used to acquire the   
additional assets for the trust during a set period after the initial issuance  
of the securities. Any amounts remaining in the account at the end of the period
will be distributed as a prepayment of principal to the holders of the related  
securities.                                                                     

  See "Description of the Trust Funds--Prefunding Account" in this
prospectus.                                                                     

CREDIT ENHANCEMENT                                                              

         If so specified in the applicable prospectus supplement, the securities
of any series, or any one or more classes of a series, may be entitled to the   
benefits of other types of credit enhancement, including but not limited to:    

                                                                [Download Table]

                                                                          
o  overcollateralization                o  excess interest                

o  subordination                        o  cross-support                  

o  financial guaranty insurance policy  o  reserve fund                   

o  spread account                       o  mortgage pool insurance policy 

o  letter of credit                     o  special hazard insurance policy

o  cash collateral account                                                

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  Any credit support will be described in detail in the applicable
prospectus supplement.                                                          

See "Description of Credit Support" in this prospectus.       

RATING OF SECURITIES                                                            

   The securities of any series will not be offered pursuant to this
prospectus and a prospectus supplement unless each offered security is rated in 
one of the four highest rating categories by at least one nationally recognized 
statistical rating agency.                                                      

         o    A security rating is not a recommendation to buy, sell or hold the
             securities on any series and is subject to revision or withdrawal
at any time by the assigning rating agency.         

  o    Ratings do not address credit risk and do not represent any
          assessment of the likelihood or rate of principal prepayments.

  See "Risk Factors--Risks Associated with the Securities--Ratings
Assigned to the Securities Will Have Limitations" and "Ratings" in this         
prospectus.                                                                     

TAX STATUS OF THE SECURITIES                                                    

The securities of each series offered will be either:         

       o    regular interests and residual interests in a trust fund treated
as a REMIC;                                         

o    interests in a trust fund treated as a grantor trust;    

o    interests in a trust fund treated as a partnership;      

o    debt obligations secured by assets of a trust fund; or   

       o    regular interests or ownership interests in a trust fund treated
as a FASIT.                                         

     For additional information see "Federal Income Tax Consequences" in
this prospectus and "Certain Material Federal Income Tax Consequences" in the   
prospectus supplement.                                                          

ERISA CONSIDERATIONS                                                            

     If you are a fiduciary of any employee benefit plan or arrangement,
including an individual retirement account, subject to the Employee Retirement  
Income Security Act of 1974, as amended, the Internal Revenue Code of 1986, as  
amended, or any federal, state or local law which is similar to ERISA or the    
Code, you should carefully review with your legal advisors whether the purchase 
or holding of securities could give rise to a transaction that is prohibited or 
not otherwise permissible under ERISA, the Code or similar law.                 

For additional information see "ERISA Considerations" in this 
prospectus and in the prospectus supplement.                                    

LEGAL INVESTMENT                                                                

        The applicable prospectus supplement will specify whether the class or
classes of securities offered will constitute "mortgage related securities" for 
purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended.  
If your investment activities are subject to legal investment laws and          
regulations, regulatory capital requirements or review by regulatory            
authorities, then you may be subject to restrictions on investment in the       

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securities. You should consult your own legal advisors for assistance in        
determining the suitability of the securities for you and the consequences of   
the purchase, ownership and sale of the securities.                             

      For additional information see "Legal Investment" in this prospectus
and in the prospectus supplement.                                               

MATERIAL RISKS                                                                  

    You are urged to read "Risk Factors" in this prospectus and in the
prospectus supplement for a discussion of the material risks associated with an 
investment in the securities.                                                   

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RISK FACTORS

   You should consider, among other things, the following factors in
connection with the purchase of securities.                                     

RISKS ASSOCIATED WITH THE SECURITIES                                            

       Securities May Not be Liquid. The liquidity of your securities may be
limited. You should consider that:                                              

  o    a secondary market for the securities of any series may not
            develop, or if it does, it may not provide you with liquidity of
             investment, or it may not continue for the life of the securities
of any series;                                      

         o    issuance of any of the securities of any series in book-entry form
        may reduce the liquidity of such securities in the secondary
           trading market because investors may not be willing to purchase
            securities for which they cannot obtain physical certificates or
notes; and                                          

    o    unless specified in the applicable prospectus supplement, the
     securities will not be listed on any securities exchange.

       The Depositor, the Master Servicer, the Servicer, the Trustee and, if
applicable, the Certificate Administrator Will Have Limited Obligations. No     
class of securities of any series will be an interest in or obligation of the   
depositor, the master servicer, the servicer, the trustee, the certificate      
administrator (if applicable) or any of their affiliates. Unless otherwise      
provided in the related prospectus supplement, the only obligations with respect
to any of the securities or the related assets will be:                         

       o    the servicer's and master servicer's servicing obligations under
the applicable agreement; and                       

        o    the obligation of the party making representations and warranties
          regarding the assets of a trust, the seller of the assets of a
           trust, either directly or indirectly, to the depositor or other
              entity specified in the related prospectus supplement to purchase,
           or substitute a substantially similar asset for any asset as to
         which there is defective documentation or a breach of certain
           representations and warranties made with respect to such asset.

        Unless otherwise provided in the prospectus supplement, the securities
and the underlying assets will not be guaranteed or insured by any governmental 
agency or instrumentality, or by the depositor, the master servicer, the        
servicer, the trustee or any of their affiliates.                               

       Credit Enhancement is Limited in Amount and Coverage. With respect to
each series of securities, credit enhancement may be provided in limited amounts
to cover certain types of losses on the underlying assets. Credit enhancement   
will be provided in one or more of the forms referred to in this prospectus,    
including, but not limited to: subordination of other classes of securities of  
the same series; excess interest; overcollateralization; cross-support; a       
financial guaranty insurance policy; a reserve fund; a spread account; a        
mortgage pool insurance policy; a special hazard insurance policy; a cash       
collateral account; a letter of credit; or other type of credit enhancement. See
"Description of Credit Support" in this prospectus.                             

Regardless of the form of credit enhancement provided:        

         o    the amount of coverage will be limited in amount and in most cases
      will be subject to periodic reduction in accordance with a
schedule or formula;                                

       o    the credit enhancement may provide only very limited coverage as
         to certain types of losses, and may provide no coverage as to
certain types of losses; and                        

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   o    all or a portion of the credit enhancement for any series of
    securities may be permitted to be reduced, terminated or
            substituted for, if each applicable rating agency indicates that
    the then-current ratings will not be adversely affected.

     Rate of Prepayment on Assets May Adversely Affect Average Lives and
Yields on the Securities. The yield on the securities of each series will depend
in part on the rate of principal payment on the assets (including prepayments,  
liquidations due to defaults and asset repurchases). Such yield may be adversely
affected, depending upon whether a particular security is purchased at a premium
or a discount, by a higher or lower than anticipated rate of prepayments on the 
related assets. In particular:                                                  

      o    the yield on principal-only or interest-only securities will be
         extremely sensitive to the rate of prepayments on the related
assets; and                                         

        o    the yield on certain classes of securities may be relatively more
         sensitive to the rate of prepayments of specified assets than
other classes of securities.                        

         The rate of prepayments on assets is influenced by a number of factors,
including:                                                                      

o    the prevailing mortgage market interest rates;           

o    local and national economic conditions;                  

o    homeowner mobility; and                                  

o    the ability of the borrower to obtain financing.         

In addition, your yield may be adversely affected by interest 
shortfalls which may result from the timing of the receipt of prepayments or    
liquidations to the extent that such interest shortfalls are not covered by     
aggregate servicing fees or other mechanisms specified in the applicable        
prospectus supplement. Your yield also will be adversely affected if losses on  
the assets in the related trust are allocated to your securities and may be     
adversely affected to the extent of unadvanced delinquencies on the assets in   
the related trust. Classes of securities identified in the applicable prospectus
supplement as subordinated certificates or notes are more likely to be affected 
by delinquencies and losses than other classes of securities.                   

See "Yield Considerations" in this prospectus.                

       Ratings Assigned to the Securities Will Have Limitations. The ratings
assigned to your securities will not:                                           

        o    assess the likelihood that principal prepayments (including those
              caused by defaults) on the related assets will be made, the degree
        to which the rate of such prepayments might differ from that
      originally anticipated or the likelihood of early optional
      termination or redemption of the series of securities; and

        o    address the possibility that prepayments at higher or lower rates
      than anticipated by an investor may cause such investor to
         experience a lower than anticipated yield or that an investor
        purchasing a security at a significant premium might fail to
             recoup its initial investment under certain prepayment scenarios.

        In addition, the ratings of any series of securities by any applicable
rating agency may be lowered following the initial issuance of the securities.  
The lowering of a rating on a series or class of securities may adversely affect
the market value of such securities and the liquidity of such securities.       
Neither the depositor nor any of its affiliates will have any obligation to     
maintain any rating of any series of securities.                                

Book-Entry Securities May Experience Certain Problems. Since  
transactions in the classes of securities of a Series issued in book-entry form 
can be effected only through The Depository Trust Company, Clearstream Banking, 
the Euroclear System, participating organizations, indirect participants and    
certain banks:                                                                  

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         o    you may experience delays in your receipts of payments of interest
and principal; and                                  

         o    your ability to pledge such securities to persons or entities that
           do not participate in The Depository Trust Company, Clearstream
             Banking or the Euroclear System may be limited due to the lack of
a physical certificate.                             

 See "Description of the Securities--Book-Entry Registration and
Definitive Securities" in this prospectus.                                      

       Risk of Loss May Be Greater on Subordinated Securities. The rights of
holders of subordinated securities will be subordinate:                         

    o    to the rights of the servicer and any master servicer (to the
          extent of their servicing fees, including any unpaid servicing
       fees with respect to one or more prior due periods, and its
            reimbursement for certain unreimbursed advances and unreimbursed
liquidation expenses); and                          

      o    the holders of senior securities to the extent described in the
related prospectus supplement.                      

      As a result of the foregoing, investors must be prepared to bear the
risk that they may be subject to delays in payment and may not recover their    
initial investments in the subordinated securities. See "Description of Credit  
Support" in this prospectus.                                                    

         The yields on the subordinated securities may be extremely sensitive to
the loss experience of the related assets and the timing of any such losses. If 
the actual rate and amount of losses experienced by the assets exceed the rate  
and amount of such losses assumed by an investor, the yield to maturity on the  
subordinated securities may be lower than anticipated.                          

RISKS ASSOCIATED WITH THE ASSETS                                                

      Sub-Prime Mortgage Loans May Experience Greater Rates of Delinquency
and Foreclosure. All or a portion of the mortgage loans may consist of mortgage 
loans underwritten in accordance with the underwriting for sub-prime mortgage   
loans. A sub-prime mortgage loan is a mortgage loan that is ineligible for      
purchase by Fannie Mae or the Freddie Mac due to borrower credit                
characteristics, property characteristics, loan documentation guidelines or     
other credit characteristics that do not meet Fannie Mae or Freddie Mac         
underwriting guidelines. As a consequence:                                      

       o    delinquencies and foreclosures may be expected to be more likely
         with respect to sub-prime mortgage loans than with respect to
              mortgage loans originated in accordance with Fannie Mae or Freddie
Mac underwriting guidelines; and                    

   o    changes in the values of the mortgaged properties may have a
             greater effect on the loss experience of sub-prime mortgage loans
              than on mortgage loans originated in accordance with Fannie Mae or
Freddie Mac underwriting guidelines.                

         Mortgage Loans Secured by Multifamily Properties May Experience Greater
Rates of Delinquency and Foreclosure. The ability of a borrower to repay a loan 
secured by an income-producing property typically is dependent primarily upon   
the successful operation of such property rather than upon the existence of     
independent income or assets of the borrower; thus, the value of an             
income-producing property typically is directly related to the net operating    
income derived from such property. If the net operating income of the property  
is reduced (for example, if rental or occupancy rates decline or real estate tax
rates or other operating expenses increase), the borrower's ability to repay the
loan may be impaired. In addition, the concentration of default, foreclosure and
loss risk for a pool of mortgage loans secured by multifamily properties may be 
greater than for a pool of mortgage loans secured by single family properties of
comparable aggregate unpaid principal balance because the pool of mortgage loans
secured by multifamily properties is likely to consist of a smaller number of   
higher balance loans.                                                           

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       General Economic Conditions Affect Mortgage Loan Performance. General
economic conditions have an impact on the ability of borrowers to repay mortgage
loans. Loss of earnings, illness and other similar factors may lead to an       
increase in delinquencies and bankruptcy filings by borrowers. In the event of  
personal bankruptcy of a borrower under a mortgage loan, it is possible that the
holders of the related securities could experience a loss with respect to such  
mortgagor's mortgage loan. In conjunction with a mortgagor's bankruptcy, a      
bankruptcy court may suspend or reduce the payments of principal and interest to
be paid with respect to such mortgage loan, thus delaying the amount received by
the holders of the related securities with respect to such mortgage loan.       
Moreover, if a bankruptcy court prevents the transfer of the related mortgaged  
property to the related trust, any remaining balance on such mortgage loan may  
not be recoverable.                                                             

    Real Estate Market Conditions Affect Mortgage Loan Performance. An
investment in the securities which are secured by or represent interests in     
mortgage loans may be affected by, among other things, a decline in real estate 
values. There is no assurance that the values of the mortgaged properties will  
remain at the levels existing 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 balances of the mortgage   
loans contained in a particular trust and any secondary financing on the        
mortgaged properties, become equal to or greater than the value of the mortgaged
properties, delinquencies, foreclosures and losses could be higher than those   
now generally experienced in the mortgage lending industry.                     

      Geographic Concentration May Increase Rates of Loss and Delinquency.
Certain geographic regions of the United States from time to time will          
experience weaker regional economic conditions and housing markets, and,        
consequently, will experience higher rates of loss and delinquency on assets    
generally. Any concentration of the assets relating to any series of securities 
in such a region may present risk considerations in addition to those generally 
present for similar asset-backed securities without such concentration.         

  See "The Mortgage Pool" in the related prospectus supplement for
further information regarding the geographic concentration of the assets        
underlying the securities of any series.                                        

      Risk of Loss May Be Greater on Junior Mortgage Loans. Certain of the
mortgage loans underlying the securities of a series may be secured by mortgages
junior or subordinate to one or more other mortgages, and the related more      
senior mortgages may not be included in the trust fund. Although little data is 
available, the rate of default of second or more junior mortgage loans may be   
greater than that of mortgage loans secured by senior liens on comparable       
properties. A primary risk to holders of mortgage loans secured by junior       
mortgages is the possibility that adequate funds will not be received in        
connection with a foreclosure of the related senior mortgage to satisfy fully   
both the senior mortgage and the mortgage that is junior or subordinate. In such
case, holders of the securities would bear:                                     

     o    the risk of delay in distributions while a deficiency judgment
against the borrower is obtained; and               

        o    the risk of loss if the deficiency judgment is not realized upon.

Moreover, deficiency judgments may not be available in certain
jurisdictions. In addition, a junior mortgagee may not foreclose on the property
securing a junior mortgage unless it forecloses subject to the more senior      
mortgage.                                                                       

   In servicing junior mortgages, it is generally the servicer's and
master servicer's practice to advance funds to keep the senior mortgage current 
if the mortgagor is in default thereunder. The servicer and master servicer     
intend to advance such amounts in accordance with their normal servicing        
procedures, but only to the extent that it determines such advances will be     
recoverable from future payments and collections on that mortgage loan or       
otherwise. Such practice may not be followed in servicing loans more junior than
second mortgages or may be modified at any time. The related trust will have no 
source of funds to satisfy any senior mortgage or make payments due to any      
senior mortgagee. The junior mortgages securing the mortgage loans are subject  
and subordinate to any senior mortgage affecting the related mortgaged property,
including limitations and prohibitions which may be contained in such senior    
mortgage upon subordinate financing.                                            

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         Special Risks of Certain Assets. Certain assets that may be included in
the Trust may involve additional uncertainties not present in other types of    
assets. Certain of the assets may provide for escalating or variable payments   
that may be larger than the initial payment amount; however, the borrowers under
such assets are generally approved on the basis of the initial payment amount   
and the borrower's income may not be sufficient to enable them to pay the       
increased payment amounts. Therefore, in such cases the likelihood of default   
may increase.                                                                   

Certain of the assets underlying a series of securities may be
delinquent in respect of the payment of principal and interest. In addition,    
certain of the mortgagors under the mortgage loans underlying a series of       
securities may be subject to personal bankruptcy proceedings. Credit enhancement
provided with respect to a particular series of securities may not cover all    
losses related to such mortgage loans. Prospective investors should consider the
risk that the inclusion in a trust of delinquent assets and mortgage loans with 
respect to which the mortgagor is the subject of bankruptcy proceedings may     
cause the rate of the defaults and prepayments on such assets to increase and,  
in turn, may cause losses to exceed the available credit enhancement for such   
series and affect the yield on the securities of such series. See "The Mortgage 
Pool" in the related prospectus supplement.                                     

     Defaulted Mortgage Loans May Experience Delays in Liquidation. Even
assuming the mortgaged properties provide adequate security for the mortgage    
loans underlying a series of securities, substantial delays could result in     
connection with the liquidation of defaulted mortgage loans. This could result  
in corresponding delays in the receipt of the related proceeds by the related   
trust. See "Certain Legal Aspects of the Mortgage Loans--Foreclosure," "--Rights
of Redemption" and "--Anti-Deficiency Legislation, the Bankruptcy Code and Other
Limitations on Lenders" in this prospectus.                                     

         Liquidation Expenses May be Disproportionate. Liquidation expenses with
respect to defaulted assets do not vary directly with the outstanding principal 
balance of the assets at the time of default. Therefore, assuming that the      
servicer and master servicer took the same steps in realizing upon a defaulted  
asset having a small remaining principal balance as they would in the case of a 
defaulted asset having a large remaining principal balance, the amount realized 
after expenses of liquidation would be smaller as a percentage of the           
outstanding principal balance of the small asset than would be the case with the
defaulted asset having a large remaining principal balance. Because the average 
outstanding principal balance of the assets is small relative to the size of the
average outstanding principal balance of the loans in a typical pool consisting 
only of conventional purchase-money mortgage loans, net liquidation proceeds on 
liquidated assets may also be smaller as a percentage of the principal balance  
of the assets than would be the case in a typical pool consisting only of       
conventional purchase-money mortgage loans.                                     

    Defaults May Be More Likely on Newer Assets. Certain of the assets
underlying a series of securities may be recently originated as of the date of  
the inclusion in the related trust fund. Although little data is available,     
defaults on assets are generally expected to occur with greater frequency in    
their early years.                                                              

     Balloon Payment Assets May Have a Greater Default Risk at Maturity.
Certain of the underlying a series of securities may provide for a lump-sum     
payment of the unamortized principal balance of the mortgage loan at the        
maturity of the asset. See "The Mortgage Pool" in the related prospectus        
supplement.                                                                     

   Because borrowers under this type of asset are required to make a
relatively large single payment upon maturity, it is possible that the default  
risk associated with such assets is greater than that associated with           
fully-amortizing mortgage loans. The ability of a mortgagor on this type of     
asset to repay the mortgage loan upon maturity frequently depends upon the      
mortgagor's ability:                                                            

    o    to refinance the asset, which will be affected by a number of
         factors, including, without limitation, the level of mortgage
           rates available in the primary mortgage market at the time, the
     mortgagor's equity in the related mortgaged property, the
      financial condition of the mortgagor, the condition of the
            mortgaged property, tax law, general economic conditions and the
              general willingness of financial institutions and primary mortgage
bankers to extend credit; or                        

      o    to sell the related mortgaged property at a price sufficient to
permit the mortgagor to make the lump-sum payment.  

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      Texas Home Equity Loans Have Significant Limitations. Certain of the
mortgage loans may be home equity loans secured by mortgaged properties located 
in Texas. The Texas Constitution permits this type of loan, but significant     
limitations are imposed on permitted terms, conditions and practices incident to
their creation. For example, these loans must be made without recourse for      
personal liability against the homestead owner(s) or their spouse(s) (except in 
the case of actual fraud on their part in obtaining the loan) and may be        
foreclosed upon only by court order. Further, holders of these types of loans   
face unique legal risks and uncertainties that they do not customarily confront 
with equity take-out mortgages in other states. For example, if any of the      
requirements that are addressed in the Texas Constitution (such as limitations  
on fees charged to the borrower, disclosures to the borrower or matters to be   
provided for in the closing documents) are not met, the lien may be invalid.    
There are also similar risks involved in servicing these types of loans (such as
the failure to comply with an obligation to the borrower within a reasonable    
time after receiving notification from the borrower) that can result in the     
forfeiture of all principal and interest due on the mortgage loan.              

   Increased Risk of Loss if Assets are Delinquent. A portion of the
assets may be delinquent upon the issuance of the related securities. Credit    
enhancement provided with respect to a particular series of securities may not  
cover all losses related thereto. You should consider the risk that the         
inclusion of such assets in the trust fund for a series may cause the rate of   
defaults and prepayments on the assets to increase and, in turn, may cause      
losses to exceed the available credit enhancement for such series and affect the
yield on the securities of such series.                                         

        Cash Flow Agreements are Subject to Counterparty Risk. The assets of a
trust fund may, if specified in the related prospectus supplement, include      
agreements such as interest rate exchange agreements, interest rate cap or floor
agreements, currency exchange agreements or other similar agreements, which will
require the provider of such instrument or counterparty to make payments to the 
trust fund under the circumstances described in the prospectus supplement. To   
the extent that payments on the securities of the related series depend in part 
on payments to be received under this type of agreement, the ability of the     
trust fund to make payments on the securities will be subject to the credit risk
of the counterparty. The prospectus supplement for a series of securities will  
describe any mechanism, such as the payment of any "breakage fee," which may    
exist to facilitate the replacement of this type of agreement upon the default  
of credit impairment of the related counterparty. However, there can be no      
assurance that any such mechanism will result in the ability of the servicer to 
obtain a replacement.                                                           

VIOLATIONS OF FEDERAL, STATE AND LOCAL LAWS MAY ADVERSELY AFFECT ABILITY TO     
COLLECT ON LOANS                                                                

    The mortgage loans may also be subject to federal, state and local
laws, including:                                                                

    o    the Federal Truth in Lending Act and Regulation Z promulgated
              under that act, which require certain disclosures to the borrowers
regarding the terms of the residential loans;       

    o    the Equal Credit Opportunity Act and Regulation B promulgated
              under that act, which prohibit discrimination on the basis of age,
        race, color, sex, religion, marital status, national origin,
           receipt of public assistance or the exercise of any right under
           the Consumer Credit Protection Act, in the extension of credit;

 o    the Fair Credit Reporting Act, which regulates the use and
     reporting of information related to the borrower's credit
experience; and                                     

       o    for mortgage loans that were originated or closed after November
          7, 1989, the Home Equity Loan Consumer Protection Act of 1988,
             which requires additional disclosures, limits changes that may be
           made to the loan documents without the borrower's consent. This
            act also restricts a lender's ability to declare a default or to
             suspend or reduce a borrower's credit limit to certain enumerated
events.                                             

        Certain mortgage loans are subject to the Riegle Community Development
and Regulatory Improvement Act of 1994 which incorporates the Home Ownership and
Equity Protection Act of 1994. These provisions may:                            

       o    impose additional disclosure and other requirements on creditors
       with respect to non-purchase money mortgage loans with high
interest rates or high up-front fees and charges;   

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        o    apply on a mandatory basis to all mortgage loans originated on or
after October 1, 1995;                              

     o    impose specific statutory liabilities on creditors who fail to
comply with their provisions; and                   

o    affect the enforceability of the related loans.          

         In addition, any assignee of the creditor would generally be subject to
all claims and defenses that the consumer could assert against the creditor,    
including, without limitation, the right to rescind the mortgage loan.          
Violations of certain provisions of these laws may limit the ability of the     
servicer to collect all or part of the principal of or interest on the mortgage 
loans, may entitle the mortgagor to a refund of amounts previously paid and may 
subject the depositor, the servicer, the master servicer or the trust to damages
and administrative enforcement. As a result, these violations or alleged        
violations could result in shortfalls in the distributions due on your          
securities.                                                                     

    In the past few years, a number of legislative proposals have been
introduced at both the federal and state level that are designed to discourage  
predatory lending practices. Some states have enacted, or may enact, laws or    
regulations that prohibit inclusion of some provisions in mortgage loans that   
have mortgage rates or origination costs in excess of prescribed levels, and    
require that borrowers be given certain disclosures prior to the consummation of
such mortgage loans. In some cases, state law may impose requirements and       
restrictions greater than those in the Home Ownership and Equity Protection Act 
of 1994. Lawsuits have been brought in various states making claims against     
assignees of high cost loans for violations of state law. Named defendants in   
these cases include numerous participants within the secondary mortgage market, 
including some securitization trusts. The seller of the assets, either directly 
or indirectly, to the depositor will make representations and warranties with   
respect to each asset relating to compliance with federal, state and local laws 
at the time of origination, that none of the mortgage loans are subject to the  
Home Ownership and Equity Protection Act of 1994 and that none of the mortgage  
loans are "high cost" loans within the meaning of such federal, state and local 
laws. In the event of a breach of any such representations, the party specified 
in the related prospectus supplement will be required to cure such breach or    
repurchase or replace the affected mortgage loan. In addition, such party will  
be required to reimburse the related trust fund for any damages or costs        
incurred by such trust fund as a result of a breach of the representation as to 
compliance with federal, state and local laws. However, if such party is unable 
to fulfill this reimbursement obligation for financial or other reasons,        
shortfalls in the distributions due on your securities could occur. See         
"Description of the Agreements--Material Terms of the Pooling and Servicing     
Agreements and Underlying Servicing Agreements--Representations and Warranties; 
Repurchases" and see "Certain Legal Aspects of the Mortgage Loans" in this      
prospectus for other limitations on the enforceability of mortgage loans.       

        The home improvement contracts are also subject to the Preservation of
Consumers' Claims and Defenses regulations of the Federal Trade Commission and  
other similar federal and state statutes and regulations. These laws:           

       o    protect the homeowner from defective craftsmanship or incomplete
work by a contractor;                               

      o    permit the obligated party to withhold payment if the work does
          not meet the quality and durability standards agreed to by the
homeowner and the contractor; and                   

        o    subject any person to whom the seller assigns its consumer credit
            transaction to all claims and defenses which the obligated party
           in a credit sale transaction could assert against the seller of
the goods.                                          

     See "Certain Legal Aspects of the Contracts" in this prospectus for
other limitations on the enforceability of the home improvement contracts.      

MARKET VALUES OF MANUFACTURED HOMES MAY INCREASE THE RISK OF LOSS               

         Manufactured homes generally depreciate in value. Thus investors should
expect that, as a general matter, the market value of any manufactured home will
be lower than the outstanding principal balance of the related                  

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installment contract. As a result, investors must be prepared to bear the risk  
of loss resulting from any delinquency or liquidation loss on the contracts in a
trust fund. See "Description of Credit Support" in this prospectus.             

RISK OF LOSS MAY BE GREATER ON UNSECURED HOME IMPROVEMENT LOANS                 

      The obligations of the borrower under any unsecured home improvement
loan included in a trust fund will not be secured by an interest in the related 
real estate or any other property. In the event of a default, the trust fund    
will have recourse only against the borrower's assets generally, along with all 
other general unsecured creditors of the borrower. In a bankruptcy or insolvency
proceeding, the obligations of the borrower under an unsecured home improvement 
loan may be discharged in their entirety. As a result, the trust fund may suffer
losses. In addition, a borrower on an unsecured home improvement loan may not   
demonstrate the same degree of concern over performance of the borrower's       
obligations as if such obligations were secured by the real estate or other     
assets owned by such borrower.                                                  

RISKS OF LOSS MAY INCREASE DUE TO DEFECTIVE SECURITY INTEREST AND EFFECTS OF    
CERTAIN OTHER LEGAL ASPECTS OF THE CONTRACTS                                    

 The seller of the assets, either directly or indirectly, to the
depositor will represent that a contract is secured by a security interest in a 
manufactured home. Perfection of such security interests and the right to       
realize upon the value of the manufactured homes as collateral for the contracts
are subject to a number of federal and state laws, including the Uniform        
Commercial Code. The steps necessary to perfect the security interest in a      
manufactured home will vary from state to state. Because of the expense and     
administrative inconvenience involved, the servicer or the master servicer will 
not amend any certificates of title to change the lienholder specified therein  
from the seller of the assets to the trustee and will not deliver any           
certificate of title to the trustee or note thereon the trustee's interest.     
Consequently, in some states, in the absence of such an amendment, the          
assignment to the trustee of the security interest in the manufactured home may 
not be effective or such security interest may not be perfected and, may not be 
effective against creditors of the seller of the assets or a trustee in         
bankruptcy of such seller.                                                      

         In addition, numerous federal and state consumer protection laws impose
requirements on lending under installment sales contracts and installment loan  
agreements such as the contracts, and the failure by the lender or seller of    
goods to comply with such requirements could give rise to liabilities of        
assignees for amounts due under such agreements and claims by such assignees may
be subject to set-off as a result of such lender's or seller's noncompliance.   
These laws would apply to the trustee as assignee of the contracts. The seller  
of the assets of the contracts will warrant that each contract complies with all
requirements of law and will make certain warranties relating to the validity,  
subsistence, perfection and priority of the security interest in each           
manufactured home securing a contract. A breach of any such warranty that       
materially adversely affects any contract would create an obligation of the     
seller of the assets to repurchase, or if permitted by the applicable agreement,
substitute for, such contract unless such breach is cured. If the credit support
is exhausted and recovery of amounts due on the contracts is dependent on       
repossession and resale of manufactured homes securing contracts that are in    
default, certain other factors may limit the ability to realize upon the        
manufactured home or may limit the amount realized by securityholders to less   
than the amount due. See "Certain Legal Aspects of the Contracts."              

DESCRIPTION OF THE TRUST FUNDS

ASSETS                                                                          

       The primary assets of each Trust Fund (the "ASSETS") will include (i)
a segregated pool of single family and/or multifamily mortgage loans which may  
include sub-prime mortgage loans (the "MORTGAGE LOANS"), including without      
limitation, Home Equity Loans, Home Improvement Contracts and Land Sale         
Contracts, (ii) home improvement installment sales contracts or installment     
loans that are unsecured (the "UNSECURED HOME IMPROVEMENT LOANS"), (iii)        
manufactured housing installment sales contracts and installment loan agreements
(the "CONTRACTS") or (iv) a combination of Mortgage Loans, Unsecured Home       
Improvement Loans and/or Contracts. The Mortgage Loans will not be guaranteed or
insured by the Depositor or any of its affiliates. The Mortgage Loans will be   
guaranteed or insured by a governmental agency or instrumentality or other      
person only if and to the extent expressly provided in the related prospectus   
supplement. Each Asset will be selected by the Depositor for inclusion in a     
Trust Fund from among those purchased, either directly or indirectly, from a    
prior holder thereof (an "ASSET                                                 

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SELLER"), which may be an affiliate of the Depositor and which prior holder may 
or may not be the originator of such Mortgage Loan, Unsecured Home Improvement  
Loan or Contract.                                                               

      The Assets included in the Trust Fund for a Series may be subject to
various types of payment provisions. Such Assets may consist of (1) "LEVEL      
PAYMENT ASSETS," which may provide for the payment of interest and full         
repayment of principal in level monthly payments with a fixed rate of interest  
computed on their declining principal balances; (2) "ADJUSTABLE RATE ASSETS,"   
which may provide for periodic adjustments to their rates of interest to equal  
the sum (which may be rounded) of a fixed margin and an index; (3) "BUY DOWN    
ASSETS," which are Assets for which funds have been provided by someone other   
than the related obligors to reduce the obligors' monthly payments during the   
early period after origination of such Assets; (4) "INCREASING PAYMENT ASSETS," 
as described below; (5) "INTEREST REDUCTION ASSETS," which provide for the      
one-time reduction of the interest rate payable thereon; (6) "GEM ASSETS," which
provide for (a) monthly payments during the first year after origination that   
are at least sufficient to pay interest due thereon, and (b) an increase in such
monthly payments in subsequent years at a predetermined rate resulting in full  
repayment over a shorter term than the initial amortization terms of such       
Assets; (7) "GPM ASSETS," which allow for payments during a portion of their    
terms which are or may be less than the amount of interest due on the unpaid    
principal balances thereof, and which unpaid interest will be added to the      
principal balances of such Assets and will be paid, together with interest      
thereon, in later years; (8) "STEP-UP RATE ASSETS" which provide for interest   
rates that increase over time; (9) "BALLOON PAYMENT ASSETS" which are mortgage  
loans that are not fully amortizing over their terms and, thus, will require a  
lump-sum payment at their stated maturity; (10) "CONVERTIBLE ASSETS" which are  
Adjustable Rate Assets subject to provisions pursuant to which, subject to      
certain limitations, the related obligors may exercise an option to convert the 
adjustable interest rate to a fixed interest rate; and (11) "BI-WEEKLY ASSETS," 
which provide for obligor payments to be made on a bi-weekly basis.             

   An Increasing Payment Asset is an Asset that provides for monthly
payments that are fixed for an initial period to be specified in the related    
prospectus supplement and which increase thereafter (at a predetermined rate    
expressed as a percentage of the monthly payment during the preceding payment   
period, subject to any caps on the amount of any single monthly payment         
increase) for a period to be specified in the related prospectus supplement from
the date of origination, after which the monthly payment is fixed at a          
level-payment amount so as to fully amortize the Asset over its remaining term  
to maturity. The scheduled monthly payment with respect to an Increasing Payment
Asset is the total amount required to be paid each month in accordance with its 
terms and equals the sum of (1) the obligor's monthly payments referred to in   
the preceding sentence and (2) in the case of certain Increasing Payment Assets,
payments made by the respective Servicers pursuant to buy-down or subsidy       
agreements. The obligor's initial monthly payments for each Increasing Payment  
Asset are set at the level-payment amount that would apply to an otherwise      
identical Level Payment Asset having an interest rate a certain number of       
percentage points below the Asset Rate of such Increasing Payment Asset. The    
obligor's monthly payments on each Increasing Payment Asset, together with any  
payments made thereon by the related Servicers pursuant to buy-down or subsidy  
agreements, will in all cases be sufficient to allow payment of accrued interest
on such Increasing Payment Asset at the related interest rate, without negative 
amortization. An obligor's monthly payments on such an Asset may, however, not  
be sufficient to result in any reduction of the principal balance of such Asset 
until after the period when such payments may be increased.                     

        The Securities will be entitled to payment only from the assets of the
related Trust Fund and will not be entitled to payments in respect of the assets
of any other trust fund established by the Depositor. If specified in the       
related prospectus supplement, the assets of a Trust Fund will consist of       
certificates representing beneficial ownership interests in, or indebtedness of,
another trust fund that contains the Assets.                                    

MORTGAGE LOANS                                                                  

General                                                       

        Each Mortgage Loan will generally be secured by a lien on (i) a one-to
four-family residential property or a security interest in shares issued by a   
cooperative housing corporation (a "SINGLE FAMILY PROPERTY" and the related     
Mortgage Loan a "SINGLE FAMILY MORTGAGE LOAN") or (ii) a primarily residential  
property which consists of five or more residential dwelling units, and which   
may include limited retail, office or other commercial space (a "MULTIFAMILY    
PROPERTY" and the related Mortgage Loan a "MULTIFAMILY MORTGAGE LOAN"). Single  
Family                                                                          

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Properties and Multifamily Properties are sometimes referred to herein          
collectively as "MORTGAGED PROPERTIES." To the extent specified in the related  
prospectus supplement, the Mortgage Loans will be secured by first and/or junior
mortgages or deeds of trust or other similar security instruments creating a    
first or junior lien on Mortgaged Property. The Mortgaged Properties may include
apartments owned by cooperative housing corporations ("COOPERATIVES"). The      
Mortgaged Properties may include leasehold interests in properties, the title to
which is held by third party lessors. The term of any such leasehold shall      
exceed the term of the related mortgage note by at least five years or such     
other time period specified in the related prospectus supplement. The Mortgage  
Loans may include (i) closed-end and/or revolving home equity loans or certain  
balances thereof ("HOME EQUITY LOANS") and/or (ii) secured home improvement     
installment sales contracts and secured installment loan agreements ("HOME      
IMPROVEMENT CONTRACTS"). In addition, the Mortgage Loans may include certain    
Mortgage Loans evidenced by contracts ("LAND SALE CONTRACTS") for the sale of   
properties pursuant to which the mortgagor promises to pay the amount due       
thereon to the holder thereof with fee title to the related property held by    
such holder until the mortgagor has made all of the payments required pursuant  
to such Land Sale Contract, at which time fee title is conveyed to the          
mortgagor. The Originator of each Mortgage Loan will have been a person other   
than the Depositor. The related prospectus supplement will indicate if any      
person who originated the Mortgage Loans (each an "ORIGINATOR") is an affiliate 
of the Depositor. The Mortgage Loans will be evidenced by promissory notes (the 
"MORTGAGE NOTES") secured by mortgages, deeds of trust or other security        
instruments (the "MORTGAGES") creating a lien on the Mortgaged Properties.      

Loan-to-Value Ratio                                           

       The "LOAN-TO-VALUE RATIO" of a Mortgage Loan at any given time is the
ratio (expressed as a percentage) of the then outstanding principal balance of  
the Mortgage Loan to the Value of the related Mortgaged Property. The "VALUE" of
a Mortgaged Property, other than with respect to Refinance Loans, is generally  
the lesser of (a) the appraised value determined in an appraisal obtained by the
originator at origination of such loan and (b) the sales price for such         
property. "REFINANCE LOANS" are loans made to refinance existing loans. Unless  
otherwise set forth in the related prospectus supplement, the Value of the      
Mortgaged Property securing a Refinance Loan is the appraised value thereof     
determined in an appraisal obtained at the time of origination of the Refinance 
Loan. The value of a Mortgaged Property as of the date of initial issuance of   
the related Series of Securities may be less than the Value at origination and  
will fluctuate from time to time based upon changes in economic conditions and  
the real estate market.                                                         

Mortgage Loan Information in Prospectus Supplements           

      Each prospectus supplement will contain information, as of the dates
specified in such prospectus supplement and to the extent then applicable and   
specifically known to the Depositor, with respect to the Mortgage Loans,        
including (i) the aggregate outstanding principal balance and the largest,      
smallest and average outstanding principal balance of the Mortgage Loans as of  
the applicable cut-off date (the "CUT-OFF DATE") specified in the prospectus    
supplement, (ii) the type of property securing the Mortgage Loans, (iii) the    
weighted average (by principal balance) of the original and remaining terms to  
maturity of the Mortgage Loans, (iv) the earliest and latest origination date   
and maturity date of the Mortgage Loans, (v) the range of the Loan-to-Value     
Ratios at origination of the Mortgage Loans, (vi) the Mortgage Rates or range of
Mortgage Rates and the weighted average Mortgage Rate borne by the Mortgage     
Loans, (vii) the state or states in which most of the Mortgaged Properties are  
located, (viii) information with respect to the prepayment provisions, if any,  
of the Mortgage Loans, (ix) with respect to Mortgage Loans with adjustable      
Mortgage Rates ("ARM LOANS"), the index, the frequency of the adjustment dates, 
the range of margins added to the index, and the maximum Mortgage Rate or       
monthly payment variation at the time of any adjustment thereof and over the    
life of the ARM Loan, (x) information regarding the payment characteristics of  
the Mortgage Loans, including without limitation balloon payment and other      
amortization provisions, (xi) the number of Mortgage Loans that are delinquent  
and the number of days or ranges of the number of days such Mortgage Loans are  
delinquent and (xii) the material underwriting standards used for the Mortgage  
Loans. If specific information respecting the Mortgage Loans is not known to the
Depositor at the time Securities are initially offered, more general information
of the nature described above will be provided in the prospectus supplement, and
specific information will be set forth in a report which will be available to   
purchasers of the related Securities at or before the initial issuance thereof  
and will be filed as part of a Current Report on Form 8-K with the Securities   
and Exchange Commission (the "COMMISSION" ) after such initial issuance.        
Notwithstanding the foregoing, the characteristics of the Mortgage Loans        
included in a Trust Fund will not vary by more than five percent (by aggregate  

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principal balance as of the Cut-off Date) from the characteristics thereof that 
are described in the related prospectus supplement.                             

     The related prospectus supplement will specify whether the Mortgage
Loans include (i) Home Equity Loans, which may be secured by Mortgages that are 
junior to other liens on the related Mortgaged Property and/or (ii) Home        
Improvement Contracts originated by a home improvement contractor and secured by
a Mortgage on the related Mortgaged Property that is junior to other liens on   
the Mortgaged Property. The home improvements purchased with the Home           
Improvement Contracts typically include replacement windows, house siding,      
roofs, swimming pools, satellite dishes, kitchen and bathroom remodeling goods, 
solar heating panels, patios, decks, room additions and garages. The related    
prospectus supplement will specify whether the Home Improvement Contracts are   
partially insured under Title I of the National Housing Act of 1934 (the        
"NATIONAL HOUSING ACT") and, if so, the limitations on such insurance. In       
addition, the related prospectus supplement will specify whether the Mortgage   
Loans contain certain Mortgage Loans evidenced by Land Sale Contracts.          

Payment Provisions of the Mortgage Loans                      

   All of the Mortgage Loans will provide for payments of principal,
interest or both, on due dates that occur monthly, quarterly or semi-annually or
at such other interval as is specified in the related prospectus supplement or  
for payments in another manner described in the related prospectus supplement.  
Each Mortgage Loan may provide for no accrual of interest or for accrual of     
interest thereon at an interest rate (a "MORTGAGE RATE") that is fixed over its 
term or that adjusts from time to time, or that may be converted from an        
adjustable to a fixed Mortgage Rate or a different adjustable Mortgage Rate, or 
from a fixed to an adjustable Mortgage Rate, from time to time pursuant to an   
election or as otherwise specified on the related Mortgage Note, in each case as
described in the related prospectus supplement. Each Mortgage Loan may provide  
for scheduled payments to maturity or payments that adjust from time to time to 
accommodate changes in the Mortgage Rate or to reflect the occurrence of certain
events or that adjust on the basis of other methodologies, and may provide for  
negative amortization or accelerated amortization, in each case as described in 
the related prospectus supplement. Each Mortgage Loan may be fully amortizing or
require a balloon payment due on its stated maturity date, in each case as      
described in the related prospectus supplement. Each Mortgage Loan may contain  
prohibitions on prepayment (a "LOCK-OUT PERIOD" and, the date of expiration     
thereof, a "LOCK-OUT DATE") or require payment of a premium or a yield          
maintenance penalty (a "PREPAYMENT PREMIUM") in connection with a prepayment, in
each case as described in the related prospectus supplement. In the event that  
holders of any Class or Classes of Offered Securities will be entitled to all or
a portion of any Prepayment Premiums collected in respect of Mortgage Loans, the
related prospectus supplement will specify the method or methods by which any   
such amounts will be allocated. See "--Assets" above.                           

Revolving Credit Line Loans                                   

   As more fully described in the related prospectus supplement, the
Mortgage Loans may consist, in whole or in part, of revolving Home Equity Loans 
or certain balances thereof ("REVOLVING CREDIT LINE LOANS"). Interest on each   
Revolving Credit Line Loan, excluding introductory rates offered from time to   
time during promotional periods, may be computed and payable monthly on the     
average daily outstanding principal balance of such loan. From time to time     
prior to the expiration of the related draw period specified in a Revolving     
Credit Line Loan, principal amounts on such Revolving Credit Line Loan may be   
drawn down (up to a maximum amount as set forth in the related prospectus       
supplement) or repaid. If specified in the related prospectus supplement, new   
draws by borrowers under the Revolving Credit Line Loans will automatically     
become part of the Trust Fund described in such prospectus supplement. As a     
result, the aggregate balance of the Revolving Credit Line Loans will fluctuate 
from day to day as new draws by borrowers are added to the Trust Fund and       
principal payments are applied to such balances and such amounts will usually   
differ each day, as more specifically described in the related prospectus       
supplement. Under certain circumstances, under a Revolving Credit Line Loan, a  
borrower may, during the related draw period, choose an interest only payment   
option, during which the borrower is obligated to pay only the amount of        
interest which accrues on the loan during the billing cycle, and may also elect 
to pay all or a portion of the principal. An interest only payment option may   
terminate at the end of the related draw period, after which the borrower must  
begin paying at least a minimum monthly portion of the average outstanding      
principal balance of the loan.                                                  

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UNSECURED HOME IMPROVEMENT LOANS                                                

  The Unsecured Home Improvement Loans may consist of conventional
unsecured home improvement loans and FHA insured unsecured home improvement     
loans. Except as otherwise set forth in the related prospectus supplement, the  
Unsecured Home Improvement Loans will be fully amortizing and will bear interest
at a fixed or variable annual percentage rate.                                  

       Unsecured Home Improvement Loan Information in Prospectus Supplements

      Each prospectus supplement will contain information, as of the dates
specified in such prospectus supplement and to the extent then applicable and   
specifically known to the Depositor, with respect to the Unsecured Home         
Improvement Loans, including (i) the aggregate outstanding principal balance and
the largest, smallest and average outstanding principal balance of the Unsecured
Home Improvement Loans as of the applicable Cut-Off Date, (ii) the weighted     
average (by principal balance) of the original and remaining terms to maturity  
of the Unsecured Home Improvement Loans, (iii) the earliest and latest          
origination date and maturity date of the Unsecured Home Improvements Loans,    
(iv) the interest rates or range of interest rates and the weighted average     
interest rates borne by the Unsecured Home Improvement Loans, (v) the state or  
states in which most of the Unsecured Home Improvement Loans were originated,   
(vi) information with respect to the prepayment provisions, if any, of the      
Unsecured Home Improvement Loans, (vii) with respect to the Unsecured Home      
Improvement Loans with adjustable interest rates ("ARM UNSECURED HOME           
IMPROVEMENT LOANS"), the index, the frequency of the adjustment dates, the range
of margins added to the index, and the maximum interest rate or monthly payment 
variation at the time of any adjustment thereof and over the life of the ARM    
Unsecured Home Improvement Loan, (viii) information regarding the payment       
characteristics of the Unsecured Home Improvement Loan, (ix) the number of      
Unsecured Home Improvement Loans that are delinquent and the number of days or  
ranges of the number of days such Unsecured Home Improvement Loans are          
delinquent and (x) the material underwriting standards used for the Unsecured   
Home Improvement Loans. If specific information respecting the Unsecured Home   
Improvement Loans is not known to the Depositor at the time Securities are      
initially offered, more general information of the nature described above will  
be provided in the prospectus supplement, and specific information will be set  
forth in a report which will be available to purchasers of the related          
Securities at or before the initial issuance thereof and will be filed as part  
of a Current Report on Form 8-K with the Securities and Exchange Commission     
after such initial issuance. Notwithstanding the foregoing, the characteristics 
of the Unsecured Home Improvement Loans included in a Trust Fund will not vary  
by more than five percent (by aggregate principal balance as of the Cut-off     
Date) from the characteristics thereof that are described in the related        
prospectus supplement.                                                          

CONTRACTS                                                                       

General                                                       

   To the extent provided in the related prospectus supplement, each
Contract will be secured by a security interest in a new or used manufactured   
home (each, a "MANUFACTURED HOME"). Such prospectus supplement will specify the 
states or other jurisdictions in which the Manufactured Homes are located as of 
the related Cut-off Date. The method of computing the Loan-to-Value Ratio of a  
Contract will be described in the related prospectus supplement.                

Contract Information in Prospectus Supplements                

        Each prospectus supplement will contain certain information, as of the
dates specified in such prospectus supplement and to the extent then applicable 
and specifically known to the Depositor, with respect to the Contracts,         
including (i) the aggregate outstanding principal balance and the largest,      
smallest and average outstanding principal balance of the Contracts as of the   
applicable Cut-off Date, (ii) whether the Manufactured Homes were new or used as
of the origination of the related Contracts, (iii) the weighted average (by     
principal balance) of the original and remaining terms to maturity of the       
Contracts, (iv) the earliest and latest origination date and maturity date of   
the Contracts, (v) the range of the Loan-to-Value Ratios at origination of the  
Contracts, (vi) the Contract Rates or range of Contract Rates and the weighted  
average Contract Rate borne by the Contracts, (vii) the state or states in which
most of the Manufactured Homes are located at origination, (viii) information   
with respect to the prepayment provisions, if any, of the Contracts, (ix) with  
respect to Contracts with adjustable Contract Rates ("ARM                       

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CONTRACTS"), the index, the frequency of the adjustment dates, and the maximum  
Contract Rate or monthly payment variation at the time of any adjustment thereof
and over the life of the ARM Contract, (x) the number of Contracts that are     
delinquent and the number of days or ranges of the number of days such Contracts
are delinquent, (xi) information regarding the payment characteristics of the   
Contracts and (xii) the material underwriting standards used for the Contracts. 
If specific information respecting the Contracts is not known to the Depositor  
at the time Securities are initially offered, more general information of the   
nature described above will be provided in the prospectus supplement, and       
specific information will be set forth in a report which will be available to   
purchasers of the related Securities at or before the initial issuance thereof  
and will be filed as part of a Current Report on Form 8-K with the Securities   
and Exchange Commission after such initial issuance. Notwithstanding the        
foregoing, the characteristics of the Contracts included in a Trust Fund will   
not vary by more than five percent (by aggregate principal balance as of the    
Cut-off Date) from the characteristics thereof that are described in the related
prospectus supplement.                                                          

Payment Provisions of the Contracts                           

       All of the Contracts will provide for payments of principal, interest
or both, on due dates that occur monthly or at such other interval as is        
specified in the related prospectus supplement or for payments in another manner
described in the prospectus supplement. Each Contract may provide for no accrual
of interest or for accrual of interest thereon at an annual percentage rate (a  
"CONTRACT RATE") that is fixed over its term or that adjusts from time to time, 
or as otherwise specified in the related prospectus supplement. Each Contract   
may provide for scheduled payments to maturity or payments that adjust from time
to time to accommodate changes in the Contract Rate as otherwise described in   
the related prospectus supplement. See "--Assets" above.                        

PRE-FUNDING ACCOUNT                                                             

     To the extent provided in a prospectus supplement, a portion of the
proceeds of the issuance of Securities may be deposited into an account         
maintained with the Trustee (a "PRE-FUNDING ACCOUNT"). In such event, the       
Depositor will be obligated (subject only to the availability thereof) to sell  
at a predetermined price, and the Trust Fund for the related Series of          
Securities will be obligated to purchase (subject to the availability thereof), 
additional Assets (the "SUBSEQUENT ASSETS") from time to time (as frequently as 
daily) within the period (generally not to exceed three months) specified in the
related prospectus supplement (the "PRE-FUNDING PERIOD") after the issuance of  
such Series of Securities having an aggregate principal balance approximately   
equal to the amount on deposit in the Pre-Funding Account (the "PRE-FUNDED      
AMOUNT") for such Series on the date of such issuance. The Pre-Funded Amount    
with respect to a Series is not expected to exceed 25% of the aggregate initial 
Security Balance of the related Securities. Any Subsequent Assets will be       
required to satisfy certain eligibility criteria more fully set forth in the    
applicable Agreement, which eligibility criteria will be consistent with the    
eligibility criteria of the Assets initially included in the Trust Fund, subject
to such exceptions as are expressly stated in the prospectus supplement. For    
example, the Subsequent Assets will be subject to the same underwriting         
standards, representations and warranties as the Assets initially included in   
the Trust Fund. In addition, certain conditions must be satisfied before the    
Subsequent Assets are transferred into the Trust Fund such as the delivery to   
the Rating Agencies and the Trustee of certain opinions of counsel (including   
bankruptcy, corporate and tax opinions).                                        

   Any portion of the Pre-Funded Amount remaining in the Pre-Funding
Account at the end of the Pre-Funding Period will be used to prepay one or more 
Classes of Securities in the amounts and in the manner specified in the related 
prospectus supplement. In addition, if specified in the related prospectus      
supplement, the Depositor may be required to deposit cash into an account       
maintained by the Trustee (the "CAPITALIZED INTEREST ACCOUNT") for the purpose  
of assuring the availability of funds to pay interest with respect to the       
Securities during the Pre-Funding Period. Any amount remaining in the           
Capitalized Interest Account at the end of the Pre-Funding Period will be       
remitted as specified in the related prospectus supplement.                     

ACCOUNTS                                                                        

    Each Trust Fund will include one or more accounts, established and
maintained on behalf of the Securityholders into which the person or persons    
designated in the related prospectus supplement will, to the extent described   
herein and in such prospectus supplement deposit all payments and collections   
received or advanced with respect to the Assets and other assets in the Trust   
Fund. Such an account may be maintained as an interest bearing                  

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or a non-interest bearing account, and funds held therein may be held as cash or
invested in certain short-term, investment grade obligations, in each case as   
described in the related prospectus supplement. See "Description of the         
Agreements--Material Terms of the Pooling and Servicing Agreements and          
Underlying Servicing Agreements--Collection Account and Related Accounts."      

CREDIT SUPPORT                                                                  

      If so provided in the related prospectus supplement, partial or full
protection against certain defaults and losses on the Assets in the related     
Trust Fund may be provided to one or more Classes of Securities in the related  
Series in the form of subordination of one or more other Classes of Securities  
in such Series or by one or more other types of credit support, such as         
overcollateralization, excess interest, cross-support, a reserve fund, a        
guarantee, a letter of credit, an insurance policy, a spread account or another 
type of credit support, or a combination thereof (any such coverage with respect
to the Securities of any Series, "CREDIT SUPPORT"). The amount and types of     
coverage, the identification of the entity providing the coverage (if           
applicable) and related information with respect to each type of Credit Support,
if any, will be described in the prospectus supplement for a Series of          
Securities. See "Risk Factors--Risks Associated with the Securities--Credit     
Enhancement is Limited in Amount and Coverage" and "Description of Credit       
Support."                                                                       

CASH FLOW AGREEMENTS                                                            

         If so provided in the related prospectus supplement, the Trust Fund may
include guaranteed investment contracts pursuant to which moneys held in the    
funds and accounts established for the related Series will be invested at a     
specified rate. The Trust Fund may also include certain other agreements, such  
as interest rate exchange agreements, interest rate cap or floor agreements,    
currency exchange agreements or similar agreements provided to reduce the       
effects of interest rate or currency exchange rate fluctuations on the Assets or
on one or more Classes of Securities. (Currency exchange agreements might be    
included in the Trust Fund if some or all of the Mortgage Loans were denominated
in a non-United States currency.) The principal terms of any such guaranteed    
investment contract or other agreement (any such agreement, a "CASH FLOW        
AGREEMENT"), including, without limitation, provisions relating to the timing,  
manner and amount of payments thereunder and provisions relating to the         
termination thereof, will be described in the prospectus supplement for the     
related Series. In addition, the related prospectus supplement will provide     
certain information with respect to the obligor under any such Cash Flow        
Agreement.                                                                      

 USE OF PROCEEDS

         The net proceeds to be received from the sale of the Securities will be
applied by the Depositor to the purchase of Assets, or the repayment of the     
financing incurred in such purchase, and to pay for certain expenses incurred in
connection with such purchase of Assets and sale of Securities. The Depositor   
expects to sell the Securities from time to time, but the timing and amount of  
offerings of Securities will depend on a number of factors, including the volume
of Assets acquired by the Depositor, prevailing interest rates, availability of 
funds and general market conditions.                                            

YIELD CONSIDERATIONS

GENERAL                                                                         

        The yield on any Offered Security will depend on the price paid by the
holder of the Security (the "SECURITYHOLDER"), the Pass-Through Rate of the     
Security, the receipt and timing of receipt of distributions on the Security and
the weighted average life of the Assets in the related Trust Fund (which may be 
affected by prepayments, defaults, liquidations or repurchases). See "Risk      
Factors--Risks Associated with the Securities--Rate of Prepayment on Mortgage   
Loans May Adversely Affect Average Lives and Yields on the Securities."         

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PASS-THROUGH RATE AND INTEREST RATE                                             

     Securities of any Class within a Series may have fixed, variable or
adjustable Pass-Through Rates or interest rates, which may or may not be based  
upon the interest rates borne by the Assets in the related Trust Fund. The      
prospectus supplement with respect to any Series of Securities will specify the 
Pass-Through Rate or interest rate for each Class of such Securities or, in the 
case of a variable or adjustable Pass-Through Rate or interest rate, the method 
of determining the Pass-Through Rate or interest rate; the effect, if any, of   
the prepayment of any Asset on the Pass-Through Rate or interest rate of one or 
more Classes of Securities; and whether the distributions of interest on the    
Securities of any Class will be dependent, in whole or in part, on the          
performance of any obligor under a Cash Flow Agreement.                         

     If so specified in the related prospectus supplement, the effective
yield to maturity to each holder of Securities entitled to payments of interest 
will be below that otherwise produced by the applicable Pass-Through Rate or    
interest rate and purchase price of such Security because, while interest may   
accrue on each Asset during a certain period (each, an "ACCRUAL PERIOD"), the   
distribution of such interest will be made on a day which may be several days,  
weeks or months following the period of accrual.                                

TIMING OF PAYMENT OF INTEREST                                                   

         Each payment of interest on the Securities (or addition to the Security
Balance of a Class of Accrual Securities) on the monthly, quarterly or other    
periodic date specified in the related prospectus supplement on which           
distributions will be made to holders of Securities (a "DISTRIBUTION DATE") will
include interest accrued during the Accrual Period for such Distribution Date.  
As indicated above under "--Pass-Through Rate and Interest Rate," if the Accrual
Period ends on a date other than the day before a Distribution Date for the     
related Series, the yield realized by the holders of such Securities may be     
lower than the yield that would result if the Accrual Period ended on such day  
before the Distribution Date.                                                   

PAYMENTS OF PRINCIPAL; PREPAYMENTS                                              

         The yield to maturity on the Securities will be affected by the rate of
principal payments on the Assets (including principal prepayments on Mortgage   
Loans and Contracts resulting from both voluntary prepayments by the borrowers  
and involuntary liquidations). The rate at which principal prepayments occur on 
the Mortgage Loans and Contracts will be affected by a variety of factors,      
including, without limitation, the terms of the Mortgage Loans and Contracts,   
the level of prevailing interest rates, the availability of mortgage credit and 
economic, demographic, geographic, tax, legal and other factors. In general,    
however, if prevailing interest rates fall significantly below the Mortgage     
Rates on the Mortgage Loans comprising or underlying the Assets in a particular 
Trust Fund, such Mortgage Loans are likely to be the subject of higher principal
prepayments than if prevailing rates remain at or above the rates borne by such 
Mortgage Loans. In this regard, it should be noted that certain Assets may      
consist of Mortgage Loans with different Mortgage Rates. The rate of principal  
payments on some or all of the Classes of Securities of a Series will correspond
to the rate of principal payments on the Assets in the related Trust Fund and is
likely to be affected by the existence of Lock-out Periods and Prepayment       
Premium provisions of the Mortgage Loans underlying or comprising such Assets,  
and by the extent to which the servicer of any such Mortgage Loan is able to    
enforce such provisions. Mortgage Loans with a Lock-out Period or a Prepayment  
Premium provision, to the extent enforceable, generally would be expected to    
experience a lower rate of principal prepayments than otherwise identical       
Mortgage Loans without such provisions, with shorter Lock-out Periods or with   
lower Prepayment Premiums. Because of the depreciating nature of manufactured   
housing, which limits the possibilities for refinancing, and because the terms  
and principal amounts of manufactured housing contracts are generally shorter   
and smaller than the terms and principal amounts of mortgage loans secured by   
site-built homes, changes in interest rates have a correspondingly smaller      
effect on the amount of the monthly payments on manufactured housing contracts  
than on the amount of the monthly payments on mortgage loans secured by         
site-built homes. Consequently, changes in interest rates may play a smaller    
role in prepayment behavior of manufactured housing contracts than they do in   
the prepayment behavior of loans secured by mortgage on site-built homes.       
Conversely, local economic conditions and certain of the other factors mentioned
above may play a larger role in the prepayment behavior of manufactured housing 
contracts than they do in the prepayment behavior of loans secured by mortgages 
on site-built homes.                                                            

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     If the purchaser of a Security offered at a discount calculates its
anticipated yield to maturity based on an assumed rate of distributions of      
principal that is faster than that actually experienced on the Assets, the      
actual yield to maturity will be lower than that so calculated. Conversely, if  
the purchaser of a Security offered at a premium calculates its anticipated     
yield to maturity based on an assumed rate of distributions of principal that is
slower than that actually experienced on the Assets, the actual yield to        
maturity will be lower than that so calculated. In either case, if so provided  
in the prospectus supplement for a Series of Securities, the effect on yield on 
one or more Classes of the Securities of such Series of prepayments of the      
Assets in the related Trust Fund may be mitigated or exacerbated by any         
provisions for sequential or selective distribution of principal to such        
Classes.                                                                        

      When a full prepayment is made on a Mortgage Loan or a Contract, the
obligor is charged interest on the principal amount of the Mortgage Loan or     
Contract so prepaid for the number of days in the month actually elapsed up to  
the date of the prepayment or such other period specified in the related        
prospectus supplement. Generally, the effect of prepayments in full will be to  
reduce the amount of interest paid in the following month to holders of         
Securities entitled to payments of interest because interest on the principal   
amount of any Mortgage Loan or Contract so prepaid will be paid only to the date
of prepayment rather than for a full month. A partial prepayment of principal is
applied so as to reduce the outstanding principal balance of the related        
Mortgage Loan or Contract as of the Due Date in the month in which such partial 
prepayment is received or such other date as is specified in the related        
prospectus supplement.                                                          

       The timing of changes in the rate of principal payments on the Assets
may significantly affect an investor's actual yield to maturity, even if the    
average rate of distributions of principal is consistent with an investor's     
expectation. In general, the earlier a principal payment is received on the     
Mortgage Loans and distributed on a Security, the greater the effect on such    
investor's yield to maturity. The effect on an investor's yield of principal    
payments occurring at a rate higher (or lower) than the rate anticipated by the 
investor during a given period may not be offset by a subsequent like decrease  
(or increase) in the rate of principal payments.                                

 The Securityholder will bear the risk of being able to reinvest
principal received in respect of a Security at a yield at least equal to the    
yield on such Security.                                                         

PREPAYMENTS--MATURITY AND WEIGHTED AVERAGE LIFE                                 

  The rates at which principal payments are received on the Assets
included in or comprising a Trust Fund and the rate at which payments are made  
from any Credit Support or Cash Flow Agreement for the related Series of        
Securities may affect the ultimate maturity and the weighted average life of    
each Class of such Series. Prepayments on the Mortgage Loans or Contracts       
comprising or underlying the Assets in a particular Trust Fund will generally   
accelerate the rate at which principal is paid on some or all of the Classes of 
the Securities of the related Series.                                           

         If so provided in the prospectus supplement for a Series of Securities,
one or more Classes of Securities may have a final scheduled Distribution Date, 
which is the date on or prior to which the stated principal amount (the         
"SECURITY BALANCE") thereof is scheduled to be reduced to zero, calculated on   
the basis of the assumptions applicable to such Series set forth therein.       
Weighted average life refers to the average amount of time that will elapse from
the date of issue of a security until each dollar of principal of such security 
will be repaid to the investor. The weighted average life of a Class of         
Securities of a Series will be influenced by the rate at which principal on the 
Assets is paid to such Class, which may be in the form of scheduled amortization
or prepayments (for this purpose, the term "prepayment" includes prepayments, in
whole or in part, and liquidations due to default).                             

 In addition, the weighted average life of the Securities may be
affected by the varying maturities of the Assets in a Trust Fund. If any Assets 
in a particular Trust Fund have actual terms to maturity less than those assumed
in calculating final scheduled Distribution Dates for the Classes of Securities 
of the related Series, one or more Classes of such Securities may be fully paid 
prior to their respective final scheduled Distribution Dates, even in the       
absence of prepayments. Accordingly, the prepayment experience of the Assets    
will, to some extent, be a function of the mix of Mortgage Rates or Contract    
Rates and maturities of the Mortgage Loans or Contracts comprising or underlying
such Assets. See "Description of the Trust Funds."                              

Prepayments on loans are also commonly measured relative to a 
prepayment standard or model, such as the Constant Prepayment Rate ("CPR")      
prepayment model or the Standard Prepayment Assumption ("SPA")                  

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prepayment model, each as described below. CPR represents a constant assumed    
rate of prepayment each month relative to the then outstanding principal balance
of a pool of loans for the life of such loans. SPA represents an assumed rate of
prepayment each month relative to the then outstanding principal balance of a   
pool of loans. A prepayment assumption of 100% of SPA assumes prepayment rates  
of 0.2% per annum of the then outstanding principal balance of such loans in the
first month of the life of the loans and an additional 0.2% per annum in each   
month thereafter until the thirtieth month. Beginning in the thirtieth month and
in each month thereafter during the life of the loans, 100% of SPA assumes a    
constant prepayment rate of 6% per annum each month.                            

  Neither CPR nor SPA nor any other prepayment model or assumption
purports to be a historical description of prepayment experience or a prediction
of the anticipated rate of prepayment of any pool of loans, including the       
Mortgage Loans or Contracts underlying or comprising the Assets.                

         The prospectus supplement with respect to each Series of Securities may
contain tables, if applicable, setting forth the projected weighted average life
of each Class of Offered Securities of such Series and the percentage of the    
initial Security Balance of each such Class that would be outstanding on        
specified Distribution Dates based on the assumptions stated in such prospectus 
supplement, including assumptions that prepayments on the Mortgage Loans        
comprising or underlying the related Assets are made at rates corresponding to  
various percentages of CPR, SPA or such other standard specified in such        
prospectus supplement. Such tables and assumptions are intended to illustrate   
the sensitivity of the weighted average life of the Securities to various       
prepayment rates and will not be intended to predict or to provide information  
that will enable investors to predict the actual weighted average life of the   
Securities. It is unlikely that prepayment of any Mortgage Loans or Contracts   
comprising or underlying the Assets for any Series will conform to any          
particular level of CPR, SPA or any other rate specified in the related         
prospectus supplement.                                                          

OTHER FACTORS AFFECTING WEIGHTED AVERAGE LIFE                                   

Type of Asset                                                 

   If so specified in the related prospectus supplement, a number of
Mortgage Loans may have balloon payments due at maturity (which, based on the   
amortization schedule of such Mortgage Loans, may be a substantial amount), and 
because the ability of a mortgagor to make a balloon payment typically will     
depend upon its ability either to refinance the loan or to sell the related     
Mortgaged Property, there is a risk that a number of Balloon Payment Assets may 
default at maturity. The ability to obtain refinancing will depend on a number  
of factors prevailing at the time refinancing or sale is required, including,   
without limitation, real estate values, the mortgagor's financial situation,    
prevailing mortgage loan interest rates, the mortgagor's equity in the related  
Mortgaged Property, tax laws and prevailing general economic conditions. Neither
the Depositor, the Servicer, the Master Servicer, nor any of their affiliates   
will be obligated to refinance or repurchase any Mortgage Loan or to sell the   
Mortgaged Property except to the extent provided in the related prospectus      
supplement. In the case of defaults, recovery of proceeds may be delayed by,    
among other things, bankruptcy of the mortgagor or adverse conditions in the    
market where the property is located. In order to minimize losses on defaulted  
Mortgage Loans, the Servicer may, to the extent and under the circumstances set 
forth in the related prospectus supplement, be permitted to modify Mortgage     
Loans that are in default or as to which a payment default is reasonably        
foreseeable. Any defaulted balloon payment or modification that extends the     
maturity of a Mortgage Loan will tend to extend the weighted average life of the
Securities and may thereby lengthen the period of time elapsed from the date of 
issuance of a Security until it is retired.                                     

  With respect to certain Mortgage Loans, including ARM Loans, the
Mortgage Rate at origination may be below the rate that would result if the     
index and margin relating thereto were applied at origination. With respect to  
certain Contracts, the Contract Rate may be "stepped up" during its term or may 
otherwise vary or be adjusted. Under the applicable underwriting standards, the 
mortgagor or obligor under each Mortgage Loan or Contract generally will be     
qualified on the basis of the Mortgage Rate or Contract Rate in effect at       
origination. The repayment of any such Mortgage Loan or Contract may thus be    
dependent on the ability of the mortgagor or obligor to make larger level       
monthly payments following the adjustment of the Mortgage Rate or Contract Rate.
In addition, certain Mortgage Loans may be subject to temporary buydown plans   
("BUYDOWN MORTGAGE LOANS") pursuant to which the monthly payments made by the   
mortgagor during the early years of the Mortgage Loan will be less than the     
scheduled monthly payments thereon (the "BUYDOWN PERIOD"). The periodic increase
in the amount                                                                   

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paid by the mortgagor of a Buydown Mortgage Loan during or at the end of the    
applicable Buydown Period may create a greater financial burden for the         
mortgagor, who might not have otherwise qualified for a mortgage, and may       
accordingly increase the risk of default with respect to the related Mortgage   
Loan.                                                                           

The Mortgage Rates on certain ARM Loans subject to negative   
amortization generally adjust monthly and their amortization schedules adjust   
less frequently. During a period of rising interest rates as well as immediately
after origination (initial Mortgage Rates are generally lower than the sum of   
the applicable index at origination and the related margin over such index at   
which interest accrues), the amount of interest accruing on the principal       
balance of such Mortgage Loans may exceed the amount of the minimum scheduled   
monthly payment thereon. As a result, a portion of the accrued interest on      
negatively amortizing Mortgage Loans may be added to the principal balance      
thereof and will bear interest at the applicable Mortgage Rate. The addition of 
any such deferred interest to the principal balance of any related Class or     
Classes of Securities will lengthen the weighted average life thereof and may   
adversely affect yield to holders thereof, depending upon the price at which    
such Securities were purchased. In addition, with respect to certain ARM Loans  
subject to negative amortization, during a period of declining interest rates,  
it might be expected that each minimum scheduled monthly payment on such a      
Mortgage Loan would exceed the amount of scheduled principal and accrued        
interest on the principal balance thereof, and since such excess will be applied
to reduce the principal balance of the related Class or Classes of Securities,  
the weighted average life of such Securities will be reduced and may adversely  
affect yield to holders thereof, depending upon the price at which such         
Securities were purchased.                                                      

As may be described in the related prospectus supplement, the 
applicable Agreement may provide that all or a portion of the principal         
collected on or with respect to the related Mortgage Loans may be applied by the
related Trustee to the acquisition of additional Mortgage Loans during a        
specified period (rather than used to fund payments of principal to             
Securityholders during such period) with the result that the related securities 
possess an interest-only period, also commonly referred to as a revolving       
period, which will be followed by an amortization period. Any such interest-only
or revolving period may, upon the occurrence of certain events to be described  
in the related prospectus supplement, terminate prior to the end of the         
specified period and result in the earlier than expected amortization of the    
related Securities.                                                             

In addition, and as may be described in the related prospectus
supplement, the related Agreement may provide that all or a portion of such     
collected principal may be retained by the Trustee (and held in certain         
temporary investments, including Mortgage Loans) for a specified period prior to
being used to fund payments of principal to Securityholders.                    

         The result of such retention and temporary investment by the Trustee of
such principal would be to slow the amortization rate of the related Securities 
relative to the amortization rate of the related Mortgage Loans, or to attempt  
to match the amortization rate of the related Securities to an amortization     
schedule established at the time such Securities are issued. Any such feature   
applicable to any Securities may terminate upon the occurrence of events to be  
described in the related prospectus supplement, resulting in the current funding
of principal payments to the related Securityholders and an acceleration of the 
amortization of such Securities.                                                

Termination                                                   

   If so specified in the related prospectus supplement, a Series of
Securities may be subject to optional early termination through the repurchase  
of the Assets in the related Trust Fund by the party specified therein, on any  
date on which the aggregate principal balance of the Assets or the aggregate    
Security Balance of the Securities of such Series declines to a percentage      
specified in the related prospectus supplement (not to exceed 10%) of the       
aggregate initial principal balance of such Assets or initial Security Balance  
of such Securities, as the case may be, under the circumstances and in the      
manner set forth therein. In addition, if so provided in the related prospectus 
supplement, certain Classes of Securities may be purchased or redeemed in the   
manner set forth therein. See "Description of the Securities--Termination."     

Defaults                                                      

      The rate of defaults on the Assets will also affect the rate, timing
and amount of principal payments on the Assets and thus the yield on the        
Securities. In general, defaults on mortgage loans or contracts are expected to 
occur                                                                           

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with greater frequency in their early years. The rate of default on Mortgage    
Loans which are refinance or limited documentation mortgage loans, and on       
Mortgage Loans with high Loan-to-Value Ratios, may be higher than for other     
types of Mortgage Loans. Furthermore, the rate and timing of prepayments,       
defaults and liquidations on the Mortgage Loans and Contracts will be affected  
by the general economic condition of the region of the country in which the     
related Mortgage Properties or Manufactured Homes are located. The risk of      
delinquencies and loss is greater and prepayments are less likely in regions    
where a weak or deteriorating economy exists, as may be evidenced by, among     
other factors, increasing unemployment or falling property values.              

Foreclosures                                                  

         The number of foreclosures or repossessions and the principal amount of
the Mortgage Loans or Contracts comprising or underlying the Assets that are    
foreclosed or repossessed in relation to the number and principal amount of     
Mortgage Loans or Contracts that are repaid in accordance with their terms will 
affect the weighted average life of the Mortgage Loans or Contracts comprising  
or underlying the Assets and that of the related Series of Securities.          

Refinancing                                                   

       At the request of a mortgagor, the Servicer may allow the refinancing
of a Mortgage Loan or Contract in any Trust Fund by accepting prepayments       
thereon and permitting a new loan secured by a mortgage on the same property. In
the event of such a refinancing, the new loan would not be included in the      
related Trust Fund and, therefore, such refinancing would have the same effect  
as a prepayment in full of the related Mortgage Loan or Contract. A Servicer    
may, from time to time, implement programs designed to encourage refinancing.   
Such programs may include, without limitation, modifications of existing loans, 
general or targeted solicitations, the offering of pre-approved applications,   
reduced origination fees or closing costs, or other financial incentives. In    
addition, Servicers may encourage the refinancing of Mortgage Loans or          
Contracts, including defaulted Mortgage Loans or Contracts, that would permit   
creditworthy borrowers to assume the outstanding indebtedness of such Mortgage  
Loans or Contracts.                                                             

Due-on-Sale Clauses                                           

       Acceleration of mortgage payments as a result of certain transfers of
underlying Mortgaged Property is another factor affecting prepayment rates that 
may not be reflected in the prepayment standards or models used in the relevant 
prospectus supplement. A number of the Mortgage Loans comprising or underlying  
the Assets may include "due-on-sale clauses" that allow the holder of the       
Mortgage Loans to demand payment in full of the remaining principal balance of  
the Mortgage Loans upon sale, transfer or conveyance of the related Mortgaged   
Property. With respect to any Mortgage Loans, except as set forth in the related
prospectus supplement, the Servicer will generally enforce any due-on-sale      
clause to the extent it has knowledge of the conveyance or proposed conveyance  
of the underlying Mortgaged Property and it is entitled to do so under          
applicable law; provided, however, that the Servicer will not take any action in
relation to the enforcement of any due-on-sale provision which would adversely  
affect or jeopardize coverage under any applicable insurance policy. See        
"Certain Legal Aspects of Mortgage Loans--Due-on-Sale Clauses" and "Description 
of the Agreements--Material Terms of the Pooling and Servicing Agreements and   
Underlying Servicing Agreements--Due-on-Sale Provisions." The Contracts, in     
general, prohibit the sale or transfer of the related Manufactured Homes without
the consent of the Servicer and permit the acceleration of the maturity of the  
Contracts by the Servicer upon any such sale or transfer that is not consented  
to. It is expected that the Servicer will permit most transfers of Manufactured 
Homes and not accelerate the maturity of the related Contracts. In certain      
cases, the transfer may be made by a delinquent obligor in order to avoid a     
repossession of the Manufactured Home. In the case of a transfer of a           
Manufactured Home after which the Servicer desires to accelerate the maturity of
the related Contract, the Servicer's ability to do so will depend on the        
enforceability under state law of the "due-on-sale clause". See "Certain Legal  
Aspects of the Contracts--Transfers of Manufactured Homes; Enforceability of    
Due-on-Sale Clauses."                                                           

 THE DEPOSITOR

Asset Backed Funding Corporation (the "DEPOSITOR") is a direct
wholly-owned subsidiary of Banc of America Mortgage Capital Corporation and was 
incorporated in the State of Delaware on July 23, 1997. The                     

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principal executive offices of the Depositor are located at 214 North Tryon     
Street, Charlotte, North Carolina 28255. Its telephone number is (704) 386-2400.

   The Depositor formerly was an indirect wholly-owned subsidiary of
NationsBank Corporation. On September 30, 1998, BankAmerica Corporation was     
merged with and into NationsBank Corporation with the latter entity surviving.  
Upon completion of the merger, NationsBank Corporation changed its name first to
BankAmerica Corporation and then to Bank of America Corporation. As a result,   
the Depositor is now an indirect wholly-owned subsidiary of Bank of America     
Corporation.                                                                    

        The Depositor does not have, nor is it expected in the future to have,
any significant assets.                                                         

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 DESCRIPTION OF THE SECURITIES

GENERAL                                                                         

         The asset-backed certificates (the "CERTIFICATES") of a series (each, a
"SERIES") (including any Class of Certificates not offered hereby) will         
represent the entire beneficial ownership interest in the trust fund (the       
"TRUST" or the "TRUST FUND") created pursuant to the applicable Agreement. If a 
Series of Securities includes asset-backed notes (the "NOTES" and, together with
the Certificates, the "SECURITIES"), such Notes will represent indebtedness of  
the related Trust Fund and will be issued and secured pursuant to an Indenture. 
Each Series of Securities will consist of one or more classes (each, a "CLASS") 
of Securities that may (i) provide for the accrual of interest thereon based on 
fixed, variable or adjustable rates; (ii) be senior (the "SENIOR CERTIFICATES"  
or the "SENIOR NOTES" and, collectively, "SENIOR SECURITIES") or subordinate    
(the "SUBORDINATE CERTIFICATES" or the "SENIOR NOTES" and, collectively,        
"SUBORDINATE SECURITIES") to one or more other Classes of Securities in respect 
of certain distributions on the Securities; (iii) be entitled either to (A)     
principal distributions, with disproportionately low, nominal or no interest    
distributions or (B) interest distributions, with disproportionately low,       
nominal or no principal distributions (collectively, "STRIP SECURITIES"); (iv)  
provide for distributions of accrued interest thereon commencing only following 
the occurrence of certain events, such as the retirement of one or more other   
Classes of Securities of such Series (collectively, "ACCRUAL SECURITIES"); (v)  
provide for payments of principal as described in the related prospectus        
supplement, from all or only a portion of the Assets in such Trust Fund, to the 
extent of available funds, in each case as described in the related prospectus  
supplement; and/or (vi) provide for distributions based on a combination of two 
or more components thereof with one or more of the characteristics described in 
this paragraph including a Strip Security component. If so specified in the     
related prospectus supplement, distributions on one or more Classes of a Series 
of Securities may be limited to collections from a designated portion of the    
Assets in the related Trust Fund (each such portion of Assets, an "ASSET        
GROUP"). Any such Classes may include Classes of Securities of a Series offered 
pursuant to this prospectus and a related prospectus supplement (the "OFFERED   
SECURITIES" ).                                                                  

        Each Class of Offered Securities of a Series will be issued in minimum
denominations corresponding to the Security Balances or, in the case of certain 
Classes of Strip Securities, notional amounts or percentage interests specified 
in the related prospectus supplement. The transfer of any Offered Securities may
be registered and such Securities may be exchanged without the payment of any   
service charge payable in connection with such registration of transfer or      
exchange, but the Depositor or the Trustee or any agent thereof may require     
payment of a sum sufficient to cover any tax or other governmental charge. One  
or more Classes of Securities of a Series may be issued in fully registered,    
certificated form ("DEFINITIVE SECURITIES") or in book-entry form ("BOOK-ENTRY  
SECURITIES"), as provided in the related prospectus supplement. See "Risk       
Factors--Risks Associated with the Securities--Book-Entry Securities May        
Experience Certain Problems and "Description of the Securities--Book-Entry      
Registration and Definitive Securities." Definitive Securities will be          
exchangeable for other Securities of the same Class and Series of a like        
aggregate Security Balance, notional amount or percentage interest but of       
different authorized denominations. See "Risk Factors--Risks Associated with the
Securities--Securities May Not be Liquid."                                      

DISTRIBUTIONS                                                                   

      Distributions on the Securities of each Series will be made by or on
behalf of the Trustee on each Distribution Date as specified in the related     
prospectus supplement from the Available Distribution Amount for such Series and
such Distribution Date. Distributions (other than the final distribution) will  
be made to the persons in whose names the Securities are registered at the close
of business on, unless a different date is specified in the related prospectus  
supplement, the last business day of the month preceding the month in which the 
Distribution Date occurs (the "RECORD DATE"), and the amount of each            
distribution will be determined as of the close of business on the date         
specified in the related prospectus supplement (the "DETERMINATION DATE"). All  
distributions with respect to each Class of Securities on each Distribution Date
will be allocated pro rata among the outstanding Securityholders in such Class  
or by random selection or as described in the related prospectus supplement.    
Payments will be made either by wire transfer in immediately available funds to 
the account of a Securityholder at a bank or other entity having appropriate    
facilities therefor, if such Securityholder has so notified the Trustee or other
person required to make such payments no later than the date specified in the   
related prospectus supplement (and, if so provided in the related prospectus    
supplement, holds Securities in the requisite amount specified therein), or by  

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check mailed to the address of the person entitled thereto as it appears on the 
security register; provided, however, that the final distribution in retirement 
of the Securities will be made only upon presentation and surrender of the      
Securities at the location specified in the notice to Securityholders of such   
final distribution.                                                             

AVAILABLE DISTRIBUTION AMOUNT                                                   

         All distributions on the Securities of each Series on each Distribution
Date will be made from the Available Distribution Amount described below, in    
accordance with the terms described in the related prospectus supplement.       
Generally, the "AVAILABLE DISTRIBUTION AMOUNT" for each Distribution Date equals
the sum of the following amounts:                                               

         (i)    the total amount of all cash on deposit in the related
Collection Account as of the corresponding Determination Date,
exclusive of:                                                 

                 (a)    all scheduled payments of principal and interest
            collected but due on a date subsequent to the related Due Period
             (unless a different period is specified in the related prospectus
            supplement, a "DUE PERIOD" with respect to any Distribution Date
     will commence on the second day of the month in which the
            immediately preceding Distribution Date occurs, or the day after
              the Cut-off Date in the case of the first Due Period, and will end
            on the first day of the month of the related Distribution Date),

                   (b)    all prepayments, together with related payments of
     the interest thereon and related Prepayment Premiums, all
             proceeds of any insurance policies to be maintained in respect of
          each Asset (to the extent such proceeds are not applied to the
       restoration of the Asset or released in accordance with the
           normal servicing procedures of a Servicer, subject to the terms
          and conditions applicable to the related Asset) (collectively,
             "INSURANCE PROCEEDS"), all other amounts received and retained in
             connection with the liquidation of Assets in default in the Trust
           Fund ("LIQUIDATION PROCEEDS"), and other unscheduled recoveries
received subsequent to the related Due Period,      

                   (c)    all amounts in the Collection Account that are due
             or reimbursable to the Depositor, the Trustee, an Asset Seller, a
             Servicer, the Master Servicer or any other entity as specified in
            the related prospectus supplement or that are payable in respect
      of certain expenses of the related Trust Fund, and (d) all
             amounts received for a repurchase of an Asset from the Trust Fund
        for defective documentation or a breach of representation or
   warranty received subsequent to the related Due Period;

              (ii)    if the related prospectus supplement so provides, interest
       or investment income on amounts on deposit in the Collection Account,
including any net amounts paid under any Cash Flow Agreements;

             (iii)   all advances made by a Servicer or the Master Servicer or
         any other entity as specified in the related prospectus supplement with
respect to such Distribution Date;                            

             (iv)    if and to the extent the related prospectus supplement so
       provides, amounts paid by a Servicer or any other entity as specified
in the related prospectus supplement with respect to interest 
     shortfalls resulting from prepayments during the related Prepayment
Period; and                                                   

          (v)     to the extent not on deposit in the related Collection
 Account as of the corresponding Determination Date, any amounts
        collected under, from or in respect of any Credit Support with respect
to such Distribution Date.                                    

      As described below, the entire Available Distribution Amount will be
distributed among the related Securities (including any Securities not offered  
hereby) on each Distribution Date, and accordingly will be released from the    
Trust Fund and will not be available for any future distributions.              

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   The related prospectus supplement for a Series of Securities will
describe any variation in the calculation of the Available Distribution Amount  
for such Series.                                                                

DISTRIBUTIONS OF INTEREST ON THE SECURITIES                                     

       Each Class of Securities (other than Classes of Strip Securities that
have no Pass-Through Rate or interest rate) may have a different Pass-Through   
Rate or interest rate, which will be a fixed, variable or adjustable rate at    
which interest will accrue on such Class or a Component thereof (the            
"PASS-THROUGH RATE" in the case of Certificates). The related prospectus        
supplement will specify the Pass-Through Rate or interest rate for each Class or
component or, in the case of a variable or adjustable Pass-Through Rate or      
interest rate, the method for determining the Pass-Through Rate or interest     
rate. Interest on the Securities will be calculated on the basis of a 360-day   
year consisting of twelve 30-day months unless the related prospectus supplement
specifies a different basis.                                                    

     Distributions of interest in respect of the Securities of any Class
will be made on each Distribution Date (other than any Class of Accrual         
Securities, which will be entitled to distributions of accrued interest         
commencing only on the Distribution Date, or under the circumstances, specified 
in the related prospectus supplement, and any Class of Strip Securities that are
not entitled to any distributions of interest) based on the Accrued Security    
Interest for such Class and such Distribution Date, subject to the sufficiency  
of the portion of the Available Distribution Amount allocable to such Class on  
such Distribution Date. Prior to the time interest is distributable on any Class
of Accrual Securities, the amount of Accrued Security Interest otherwise        
distributable on such Class will be added to the Security Balance thereof on    
each Distribution Date. With respect to each Class of Securities and each       
Distribution Date (other than certain Classes of Strip Securities), "ACCRUED    
SECURITY INTEREST" will be equal to interest accrued during the related Accrual 
Period on the outstanding Security Balance thereof immediately prior to the     
Distribution Date, at the applicable Pass-Through Rate or interest rate, reduced
as described below. Accrued Security Interest on certain Classes of Strip       
Securities will be equal to interest accrued during the related Accrual Period  
on the outstanding notional amount thereof immediately prior to each            
Distribution Date, at the applicable Pass-Through Rate or interest rate, reduced
as described below, or interest accrual in the manner described in the related  
prospectus supplement. The method of determining the notional amount for a      
certain Class of Strip Securities will be described in the related prospectus   
supplement. Reference to notional amount is solely for convenience in certain   
calculations and does not represent the right to receive any distributions of   
principal. Unless otherwise provided in the related prospectus supplement, the  
Accrued Security Interest on a Series of Securities will be reduced in the event
of prepayment interest shortfalls, which are shortfalls in collections of       
interest for a full accrual period resulting from prepayments prior to the due  
date in such accrual period on the Mortgage Loans or Contracts comprising or    
underlying the Assets in the Trust Fund for such Series. The particular manner  
in which such shortfalls are to be allocated among some or all of the Classes of
Securities of that Series will be specified in the related prospectus           
supplement. The related prospectus supplement will also describe the extent to  
which the amount of Accrued Security Interest that is otherwise distributable on
(or, in the case of Accrual Securities, that may otherwise be added to the      
Security Balance of) a Class of Offered Securities may be reduced as a result of
any other contingencies, including delinquencies, losses and deferred interest  
on or in respect of the Mortgage Loans or Contracts comprising or underlying the
Assets in the related Trust Fund. Unless otherwise provided in the related      
prospectus supplement, any reduction in the amount of Accrued Security Interest 
otherwise distributable on a Class of Securities by reason of the allocation to 
such Class of a portion of any deferred interest on the Mortgage Loans or       
Contracts comprising or underlying the Assets in the related Trust Fund will    
result in a corresponding increase in the Security Balance of such Class. See   
"Risk Factors--Risk Associated with the Securities--Rate of Prepayment on       
Mortgage Loans May Adversely Affect Average Lives and Yields on the Securities" 
and "Yield Considerations."                                                     

DISTRIBUTIONS OF PRINCIPAL OF THE SECURITIES                                    

    The Securities of each series, other than certain Classes of Strip
Securities, will have a Security Balance which, at any time, will equal the then
maximum amount that the holder will be entitled to receive in respect of        
principal out of the future cash flow on the Assets and other assets included in
the related Trust Fund. The outstanding Security Balance of a Security will be  
reduced to the extent of distributions of principal thereon from time to time   
and, if and to the extent so provided in the related prospectus supplement, by  
the amount of losses incurred in respect of the related Assets, may be increased
in respect of deferred interest on the related Mortgage Loans to the extent     
provided in the related prospectus supplement and, in the case of Accrual       
Securities prior to the                                                         

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Distribution Date on which distributions of interest are required to commence,  
will be increased by any related Accrued Security Interest. If so specified in  
the related prospectus supplement, the initial aggregate Security Balance of all
Classes of Securities of a Series will be greater than the outstanding aggregate
principal balance of the related Assets as of the applicable Cut-off Date. The  
initial aggregate Security Balance of a series and each Class thereof will be   
specified in the related prospectus supplement. Distributions of principal will 
be made on each Distribution Date to the Class or Classes of Securities in the  
amounts and in accordance with the priorities specified in the related          
prospectus supplement. Certain Classes of Strip Securities with no Security     
Balance are not entitled to any distributions of principal.                     

CATEGORIES OF CLASSES OF SECURITIES                                             

       The Securities of any Series may be comprised of one or more Classes.
Such Classes, in general, fall into different categories. The following chart   
identifies and generally defines certain of the more typical categories. The    
prospectus supplement for a Series of Securities may identify the Classes which 
comprise such Series by reference to the following categories or another        
category specified in the applicable prospectus supplement.                     

                                                        [Enlarge/Download Table]


CATEGORIES OF CLASSES                         DEFINITION                                                                  
---------------------                         ----------                                                                  
                                                                                                                          
                                                                       PRINCIPAL TYPES                                    

Accretion Directed Class..................... 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 Assets for the related Series.                                          

Component Class.............................. A Class consisting of two or more specified components (each, a             
                                              "COMPONENT") as described in the applicable prospectus                      
                                              supplement.  The Components of a Class may have different                   
                                              principal and/or interest payment characteristics but together              
                                              constitute a single Class and do not represent severable                    
                                              interests.  Each Component may be identified as falling into one            
                                              or more of the categories in this chart.                                    

Lockout Class................................ A senior Class that is designed not to participate in or to participate to a
                                              limited extent in (i.e., to be "locked out" of), for a specified period,    
                                              the receipt of (1) principal prepayments on the Assets that are allocated   
                                              disproportionately to the senior Classes of such Series as a group          
                                              pursuant to a "shifting interest" structure and/or (2) scheduled            
                                              principal payments on the Assets that are allocated to the senior Classes   
                                              as a group. A Lockout Class will typically not be entitled to receive, or   
                                              will be entitled to receive only a restricted portion of, distributions     
                                              or principal prepayments and/or scheduled principal payments, as            
                                              applicable, for a period of several years, during which time all or a       
                                              portion of such principal payments that it would otherwise be entitled to   
                                              receive in the absence of a "lockout" structure will be distributed in      
                                              reduction of the principal balances of other senior Classes. Lockout        
                                              Classes are designed to minimize weighted average life volatility during    
                                              the lockout period.                                                         

Notional Amount Class........................ 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.                    

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Pass-Through Class........................... A Class of Senior Securities that is entitled to receive all or             
                                              a specified percentage of the principal payments that are                   
                                              distributable to the Senior Certificates or applicable group of             
                                              Senior Certificates (other than any Ratio Strip Class) in the               
                                              aggregate on a Distribution Date and that is not designated as a            
                                              Sequential Pay Class.                                                       

Planned Amortization Class                    A Class that is designed to receive principal payments using a              
     (also sometimes referred to as a "PAC"). predetermined principal balance schedule derived by assuming two            
                                              constant prepayment rates for the underlying Assets. These two rates are    
                                              the endpoints for the "structuring range" for the Planned Amortization      
                                              Class. The Planned Amortization Classes in any Series of Securities may     
                                              be subdivided into different categories (e.g., Planned Amortization Class   
                                              I ("PAC I"), Planned Amortization Class II ("PAC II") and so forth)         
                                              derived using different structuring ranges and/or payment priorities. A     
                                              PAC is designed to provide protection against volatility of weighted        
                                              average life if prepayments occur at a constant rate within the             
                                              structuring range.                                                          

Ratio Strip Class............................ A Class that is entitled to receive a constant proportion, or "ratio strip,"
                                              of the principal payments on the underlying Assets.                         

Scheduled Amortization Class................. A Class that is designed to receive principal payments using a              
                                              predetermined principal balance schedule but is not designated              
                                              as a Planned Amortization Class or Targeted Amortization Class.             
                                              The schedule is derived by assuming either two constant                     
                                              prepayment rates or a single constant prepayment rate for the               
                                              underlying Assets.  In the former case, the two rates are the               
                                              endpoints for the "structuring range" for the Scheduled                     
                                              Amortization Class and such range generally is narrower than                
                                              that for a Planned Amortization Class.  Typically, the Support              
                                              Class(es) for the applicable Series of Securities generally will            
                                              represent a smaller percentage of the Scheduled Amortization                
                                              Class than a Support Class generally would represent in relation            
                                              to a Planned Amortization Class or a Targeted Amortization                  
                                              Class.  A Scheduled Amortization Class is generally less                    
                                              sensitive to weighted average life volatility as a result of                
                                              prepayments than a Support Class but more sensitive than a                  
                                              Planned Amortization Class or a Targeted Amortization Class.                

Senior Securities............................ Classes that are entitled to receive payments of principal and              
                                              interest on each Distribution Date prior to the Classes of                  
                                              Subordinated Securities.                                                    

Sequential Pay Class......................... A Class that is entitled to receive principal payments in a                 
                                              prescribed sequence, that does not have a predetermined                     
                                              principal balance schedule and that, in most cases, is entitled             
                                              to receive payments of principal continuously from the first                
                                              Distribution Date on which it receives principal until it is                
                                              retired.  A single Class is entitled to receive principal                   
                                              payments before or after other Classes in the same Series of                
                                              Securities may be identified as a Sequential Pay Class.                     

Subordinated Securities...................... Classes that are entitled to receive payments of principal and              
                                              interest on each Distribution Date only after the Senior                    
                                              Securities                                                                  

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                                              and certain Classes of Subordinated Securities with                         
                                              higher priority of distributions have received their full                   
                                              principal and interest entitlements.                                        

Super Senior Class........................... A Class of Senior Securities that will not bear its share of                
                                              certain losses or is not allocated certain losses after the Classes of      
                                              Subordinated Securities are no longer outstanding and one or more           
                                              specified Classes of Senior Securities bear such losses.                    

Super Senior Support Class................... A Class of Senior Securities that bears certain losses allocated to         
                                              one or more Classes of Senior Securities or is allocated certain losses     
                                              while one or more Classes of Senior Securities are not allocated losses.    

Support Class                                 A Class that is entitled to receive principal payments on any               
     (also sometimes referred to as a         Distribution Date only if scheduled payments have been made on              
     "COMPANION CLASS")...................... specified Planned Amortization Classes, Targeted Amortization               
                                              Classes and/or Scheduled Amortization Classes.                              

Targeted Amortization Class                   A Class that is designed to receive principal payments using a              
     (also sometimes referred to as a "TAC"). predetermined principal balance schedule derived by assuming a              
                                              single constant prepayment rate for the underlying Assets. A TAC is         
                                              designed to provide some protection against shortening of weighted          
                                              average life if prepayments occur at a rate exceeding the assumed           
                                              constant prepayment rate used to derive the principal balances schedule     
                                              of such Class.                                                              

                                                               INTEREST TYPES                                             

Accrual Class................................ A Class that accretes the amount of accrued interest otherwise              
                                              distributable on such Class, which amount will be added as                  
                                              principal to the principal balance of such Class on each                    
                                              applicable Distribution Date.  Such accretion may continue until            
                                              some specified event has occurred or until such Accrual Class is            
                                              retired.                                                                    

Fixed Rate Class............................. A Class with an interest rate that is fixed throughout the life             
                                              of the Class.                                                               

Floating Rate Class.......................... A Class with an interest rate that resets periodically based                
                                              upon a designated index and that varies directly with changes in            
                                              such index.                                                                 

Interest Only Class.......................... A Class that is entitled to receive some or all of the interest             
                                              payments made on the Assets and little or no principal.                     
                                              Interest Only Classes have either no principal balance, 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 in respect of principal.                                  

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Inverse Floating Rate Class.................. A Class with an interest rate that resets periodically based                
                                              upon a designated index and that varies inversely with changes              
                                              in such index and with changes in the interest rate payable on              
                                              the related Floating Rate Class.                                            

Prepayment Premium Class..................... A Class that is only entitled to penalties or premiums, if any,             
                                              due in connection with a full or partial prepayment of an Asset.            

Principal Only Class......................... A Class that does not bear interest and is entitled to receive              
                                              only distributions in respect of principal.                                 

Step Coupon Class............................ A Class with a fixed interest rate that is reduced to a lower               
                                              fixed rate after a specific period of time. The difference between the      
                                              initial interest rate and the lower interest rate will be supported by a    
                                              reserve fund established on the Closing Date.                               

Variable Rate Class.......................... A Class with an interest rate that resets periodically and is               
                                              calculated by reference to the rate or rates of interest                    
                                              applicable to the Assets.                                                   


COMPONENTS                                                                      

To the extent specified in the related prospectus supplement, 
distribution on a Class of Securities may be based on a combination of two or   
more different Components as described under "--General" above. To such extent, 
the descriptions set forth under "--Distributions of Interest on the Securities"
and "--Distributions of Principal of the Securities" above also relate to       
Components of such a Class of Securities. In such case, reference in such       
sections to Security Balance and Pass-Through Rate or interest rate refer to the
principal balance, if any, of any such Component and the Pass-Through Rate or   
interest rate, if any, on any such Component, respectively.                     

DISTRIBUTIONS ON THE SECURITIES OF PREPAYMENT PREMIUMS                          

 If so provided in the related prospectus supplement, Prepayment
Premiums that are collected on the Mortgage Loans in the related Trust Fund will
be distributed on each Distribution Date to the Class or Classes of Securities  
entitled thereto in accordance with the provisions described in such prospectus 
supplement.                                                                     

ALLOCATION OF LOSSES AND SHORTFALLS                                             

        If so provided in the prospectus supplement for a Series of Securities
consisting of one or more Classes of Subordinate Securities, on any Distribution
Date in respect of which losses or shortfalls in collections on the Assets have 
been incurred, the amount of such losses or shortfalls will be borne first by a 
Class of Subordinate Securities in the priority and manner and subject to the   
limitations specified in such prospectus supplement. See "Description of Credit 
Support" for a description of the types of protection that may be included in a 
Trust Fund against losses and shortfalls on Assets comprising such Trust Fund.  

ADVANCES IN RESPECT OF DELINQUENCIES                                            

      With respect to any Series of Securities evidencing an interest in a
Trust Fund, if so provided in the related prospectus supplement, the Servicer or
another entity described therein will be required as part of its servicing      
responsibilities to advance on or before each Distribution Date its own funds or
funds held in the Collection Account that are not included in the Available     
Distribution Amount for such Distribution Date, in an amount equal to the       
aggregate of payments of principal (other than any balloon payments) and        
interest (net of related servicing fees and Retained Interest) that were due on 
the Assets in such Trust Fund during the related Due Period and were delinquent 
on the related Determination Date, subject to the Servicer's (or another        
entity's) good faith determination that such advances will be reimbursable from 
Related Proceeds (as defined below). In the case of a Series of Securities that 

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includes one or more Classes of Subordinate Securities and if so provided in the
related prospectus supplement, the Servicer's (or another entity's) advance     
obligation may be limited only to the portion of such delinquencies necessary to
make the required distributions on one or more Classes of Senior Securities     
and/or may be subject to the Servicer's (or another entity's) good faith        
determination that such advances will be reimbursable not only from Related     
Proceeds but also from collections on other Assets otherwise distributable on   
one or more Classes of such Subordinate Securities. See "Description of Credit  
Support."                                                                       

        Advances are intended to maintain a regular flow of scheduled interest
and principal payments to holders of the Class or Classes of Securities entitled
thereto, rather than to guarantee or insure against losses. Advances of the     
Servicer's (or another entity's) funds will be reimbursable only out of related 
recoveries on the Assets (including amounts received under any form of Credit   
Support) respecting which such advances were made (as to any Assets, "RELATED   
PROCEEDS") and from any other amounts specified in the related prospectus       
supplement, including out of any amounts otherwise distributable on one or more 
Classes of Subordinate Securities of such Series; provided, however, that any   
such advance will be reimbursable from any amounts in the Collection Account    
prior to any distributions being made on the Securities to the extent that the  
Servicer (or such other entity) shall determine in good faith that such advance 
(a "NONRECOVERABLE ADVANCE") is not ultimately recoverable from Related Proceeds
or, if applicable, from collections on other Assets otherwise distributable on  
such Subordinate Securities. If advances have been made by the Servicer from    
excess funds in the Collection Account, the Servicer is required to replace such
funds in the Collection Account on any future Distribution Date to the extent   
that funds in the Collection Account on such Distribution Date are less than    
payments required to be made to Securityholders on such date. If so specified in
the related prospectus supplement, the obligations of the Servicer (or another  
entity) to make advances may be secured by a cash advance reserve fund, a surety
bond, a letter of credit or another form of limited guaranty. If applicable,    
information regarding the characteristics of, and the identity of any obligor   
on, any such surety bond, will be set forth in the related prospectus           
supplement.                                                                     

        If and to the extent so provided in the related prospectus supplement,
the Servicer (or another entity) will be entitled to receive interest at the    
rate specified therein on its outstanding advances and will be entitled to pay  
itself such interest periodically from general collections on the Assets prior  
to any payment to Securityholders or as otherwise provided in the applicable    
Agreement and described in such prospectus supplement.                          

        If specified in the related prospectus supplement, the Master Servicer
or the Trustee will be required to make advances, subject to certain conditions 
described in the prospectus supplement, in the event of a Servicer default.     

REPORTS TO SECURITYHOLDERS                                                      

   With each distribution to holders of any Class of Securities of a
Series, the Servicer, the Master Servicer or the Trustee, as provided in the    
related prospectus supplement, will forward or cause to be forwarded to each    
such holder, to the Depositor and to such other parties as may be specified in  
the applicable Agreement, a statement generally setting forth, in each case to  
the extent applicable and available:                                            

              (i)    the amount of such distribution to holders of Securities of
such Class applied to reduce the Security Balance thereof;    

              (ii)   the amount of such distribution to holders of Securities of
such Class allocable to Accrued Security Interest;            

          (iii)  the amount of such distribution allocable to Prepayment
Premiums;                                                     

              (iv)   the amount of related servicing compensation and such other
   customary information as is required to enable Securityholders to
prepare their tax returns;                                    

    (v)    the aggregate amount of advances included in such
        distribution, and the aggregate amount of unreimbursed advances at the
close of business on such Distribution Date;                  

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         (vi)     the aggregate principal balance of the Assets at the
close of business on such Distribution Date;                  

           (vii)    the number and aggregate principal balance of Mortgage
     Loans or Contracts in respect of which (a) one scheduled payment is
     delinquent, (b) two scheduled payments are delinquent, (c) three or
        more scheduled payments are delinquent and (d) foreclosure proceedings
have been commenced;                                          

             (viii)   with respect to any Mortgage Loan or Contract liquidated
    during the related Due Period, (a) the portion of such liquidation
         proceeds payable or reimbursable to a Servicer (or any other entity) in
 respect of such Mortgage Loan and (b) the amount of any loss to
Securityholders;                                              

          (ix)     with respect to collateral acquired by the Trust Fund
   through foreclosure or otherwise (a "REO PROPERTY") relating to a
        Mortgage Loan or Contract and included in the Trust Fund as of the end
of the related Due Period, the date of acquisition;           

             (x)      with respect to each REO Property relating to a Mortgage
      Loan or Contract and included in the Trust Fund as of the end of the
      related Due Period, (a) the book value, (b) the principal balance of
  the related Mortgage Loan or Contract immediately following such
    Distribution Date (calculated as if such Mortgage Loan or Contract
were still outstanding taking into account certain limited    
modifications to the terms thereof specified in the applicable
Agreement), (c) the aggregate amount of unreimbursed servicing
  expenses and unreimbursed advances in respect thereof and (d) if
     applicable, the aggregate amount of interest accrued and payable on
related servicing expenses and related advances;              

          (xi)     with respect to any such REO Property sold during the
       related Due Period (a) the aggregate amount of sale proceeds, (b) the
      portion of such sales proceeds payable or reimbursable to the Master
       Servicer in respect of such REO Property or the related Mortgage Loan
  or Contract and (c) the amount of any loss to Securityholders in
respect of the related Mortgage Loan;                         

              (xii)    the aggregate Security Balance or notional amount, as the
  case may be, of each Class of Securities (including any Class of
 Securities not offered hereby) at the close of business on such
 Distribution Date, separately identifying any reduction in such
        Security Balance due to the allocation of any loss and increase in the
     Security Balance of a Class of Accrual Securities in the event that
Accrued Security Interest has been added to such balance;     

              (xiii)   the aggregate amount of principal prepayments made during
the related Due Period;                                       

              (xiv)    the amount deposited in the reserve fund, if any, on such
Distribution Date;                                            

            (xv)     the amount remaining in the reserve fund, if any, as of
the close of business on such Distribution Date;              

            (xvi)    the aggregate unpaid Accrued Security Interest, if any,
on each Class of Securities at the close of business on such  
Distribution Date;                                            

           (xvii)   in the case of Securities with a variable Pass-Through
Rate or interest rate, the Pass-Through Rate or interest rate 
applicable to such Distribution Date, and, if available, the  
       immediately succeeding Distribution Date, as calculated in accordance
 with the method specified in the related prospectus supplement;

              (xviii)  in the case of Securities with an adjustable Pass-Through
         Rate or interest rate, for statements to be distributed in any month in
      which an adjustment date occurs, the adjustable Pass-Through Rate or
       interest rate applicable to such Distribution Date, if available, and
the immediately succeeding Distribution Date as calculated in 
accordance with the method specified in the related prospectus
supplement;                                                   

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        (xix)    as to any Series which includes Credit Support, the
  amount of coverage of each instrument of Credit Support included
therein as of the close of business on such Distribution Date;

            (xx)     during the Pre-Funding Period, the remaining Pre-Funded
  Amount and the portion of the Pre-Funding Amount used to acquire
  Subsequent Mortgage Loans since the preceding Distribution Date;

           (xxi)    during the Pre-Funding Period, the amount remaining in
the Capitalized Interest Account; and                         

            (xxii)   the aggregate amount of payments by the obligors of (a)
        default interest, (b) late charges and (c) assumption and modification
fees collected during the related Due Period.                 

         Within a reasonable period of time after the end of each calendar year,
the Servicer, the Master Servicer or the Trustee, as provided in the related    
prospectus supplement, shall furnish to each Securityholder of record at any    
time during the calendar year such information required by the Code and         
applicable regulations thereunder to enable Securityholders to prepare their tax
returns. See "Description of the Securities--Book-Entry Registration and        
Definitive Securities."                                                         

TERMINATION                                                                     

        The obligations created by the applicable Agreement for each Series of
Securities will terminate upon the payment to Securityholders of that Series of 
all amounts held in the Collection Account or by a Servicer, the Master         
Servicer, if any, or the Trustee and required to be paid to them pursuant to    
such Agreement following the earlier of (i) the final payment or other          
liquidation of the last Asset subject thereto or the disposition of all property
acquired upon foreclosure of any Mortgage Loan or Contract subject thereto and  
(ii) the purchase of all of the assets of the Trust Fund by the party entitled  
to effect such termination, under the circumstances and in the manner set forth 
in the related prospectus supplement. In no event, however, will the Trust Fund 
continue beyond the date specified in the related prospectus supplement. Written
notice of termination of the applicable Agreement will be given to each         
Securityholder, and the final distribution will be made only upon presentation  
and surrender of the Securities at the location to be specified in the notice of
termination.                                                                    

   If so specified in the related prospectus supplement, a Series of
Securities may be subject to optional early termination through the repurchase  
of the Assets in the related Trust Fund by the party specified therein, under   
the circumstances and in the manner set forth therein. If so provided in the    
related prospectus supplement, upon the reduction of the Security Balance of a  
specified Class or Classes of Securities by a specified percentage, the party   
specified therein will solicit bids for the purchase of all assets of the Trust 
Fund, or of a sufficient portion of such assets to retire such Class or Classes 
or purchase such Class or Classes at a price set forth in the related prospectus
supplement, in each case, under the circumstances and in the manner set forth   
therein. Such price will at least equal the outstanding Security Balances and   
any accrued and unpaid interest thereon (including any unpaid interest          
shortfalls for prior Distribution Dates). Any sale of the Assets of the Trust   
Fund will be without recourse to the Trust Fund or the Securityholders. Any such
purchase or solicitation of bids may be made only when the aggregate Security   
Balance of such class or classes declines to a percentage of the Initial        
Security Balance of such Securities (not to exceed 10%) specified in the related
prospectus supplement. In addition, if so provided in the related prospectus    
supplement, certain Classes of Securities may be purchased or redeemed in the   
manner set forth therein.                                                       

OPTIONAL PURCHASES                                                              

       Subject to the provisions of the applicable Agreement, the Depositor,
the Servicer or such other party specified in the related prospectus supplement 
may, at such party's option, repurchase (i) any Asset which is in default or as 
to which default is reasonably foreseeable if, in the Depositor's, the          
Servicer's or such other party's judgment, the related default is not likely to 
be cured by the borrower or default is not likely to be averted and (ii) any    
Asset as to which the origination of such Asset breached a representation or    
warranty made with respect of such Mortgage Loan to the Depositor, the Servicer 
or such other party at a price equal to the unpaid principal balance thereof    
plus accrued interest thereon and under the conditions set forth in the         
applicable prospectus supplement.                                               

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DEFINITIVE FORM                                                                 

       If so specified in the related prospectus supplement, Securities of a
Series may be issued as Definitive Securities. Distributions of principal of,   
and interest on, Definitive Securities will be made directly to holders of      
Definitive Securities in accordance with the procedures set forth in the        
Agreement. The Definitive Securities of a Series offered hereby and by means of 
the applicable prospectus supplement will be transferable and exchangeable at   
the office or agency maintained by the Trustee or such other entity for such    
purpose set forth in the applicable prospectus supplement. No service charge    
will be made for any transfer or exchange of Definitive Securities, but the     
Trustee or such other entity may require payment of a sum sufficient to cover   
any tax or other governmental charge in connection with such transfer or        
exchange.                                                                       

       In the event that an election is made to treat the Trust Fund (or one
or more pools of segregated assets therein) as a REMIC, the Residual Securities 
thereof will be issued as Definitive Securities. No legal or beneficial interest
in all or a portion of any Residual Security may be transferred without the     
receipt by the transferor and the Trustee of an affidavit described under       
"--Taxation of Owners of Residual Securities--Tax-Related Restrictions on       
Transfer of Residual Securities."                                               

BOOK-ENTRY REGISTRATION AND DEFINITIVE SECURITIES                               

   If so specified in the related prospectus supplement, one or more
Classes of Securities of a Series will be issued as Securities and will be      
transferable and exchangeable at the office of the registrar identified in the  
related prospectus supplement. Unless otherwise specified in the related        
prospectus supplement, no service charge will be made for any such registration 
or transfer of such Securities, but the owner may be required to pay a sum      
sufficient to cover any tax or other governmental charge.                       

  If so specified in the related prospectus supplement, Book-Entry
Securities may be initially represented by one or more Securities registered in 
the name of DTC and be available only in the form of book-entries. If specified 
in the related prospectus supplement, holders of Securities may hold beneficial 
interests in Book-Entry Securities through DTC (in the United States) or        
Clearstream or Euroclear (in Europe) directly if they are participants of such  
systems, or indirectly through organizations which are participants in such     
systems.                                                                        

    Clearstream and Euroclear will hold omnibus positions on behalf of
their participants through customers' securities accounts in their respective   
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.                                                                   

         Transfers between Participants will occur in accordance with DTC rules.
Transfers between Clearstream Participants and Euroclear Participants will occur
in accordance with their applicable 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 or 
Euroclear, on the other, will be effected in DTC in accordance with DTC rules on
behalf of the relevant European international clearing system by its Depositary.
However, each such cross-market transaction will require delivery of            
instructions to the relevant European international clearing system by the      
counterparty in such system in accordance with its rules and procedures and     
within its established deadlines. The relevant European international clearing  
system will, if the transaction meets its settlement requirements, deliver      
instructions to its Depositary to take action to effect final settlement on its 
behalf by delivering or receiving securities through DTC, and making or         
receiving payment in accordance with normal procedures for same-day funds       
settlement applicable to DTC. Clearstream Participants and Euroclear            
Participants may not deliver instructions directly to the Depositaries.         

     Because of time-zone differences, credits of securities received in
Clearstream 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 Clearstream   
Participant or Euroclear Participant on such business day. Cash received in     
Clearstream or Euroclear as a result of sales of Securities by or through a     
Clearstream Participant or a                                                    

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Euroclear Participant to a Participant will be received with value on the DTC   
settlement date but will be available in the relevant Clearstream or Euroclear  
cash account only as of the business day following settlement in DTC.           

        DTC is a limited purpose trust company organized under the laws of the
State of New York, a "banking organization" within the meaning of the New York  
Banking Law, a member of the Federal Reserve System, a "clearing corporation"   
within the meaning of the New York Uniform Commercial Code ("UCC") and a        
"clearing agency" registered pursuant to Section 17A of the Securities Exchange 
Act of 1934, as amended ("EXCHANGE ACT"). DTC was created to hold securities for
its participating members ("DTC PARTICIPANTS") and to facilitate the clearance  
and settlement of securities transactions between Participants through          
electronic book-entries, thereby eliminating the need for physical movement of  
securities. Participants include securities brokers and dealers, banks, trust   
companies and clearing corporations which may include underwriters, agents or   
dealers with respect to the Securities of any Class or Series. Indirect access  
to the DTC system also is available to others 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"). The     
rules applicable to DTC and Participants are on file with the Commission.       

    Beneficial owners ("SECURITY OWNERS") that are not Participants or
Indirect Participants but desire to purchase, sell or otherwise transfer        
ownership of, or other interests in, Book-Entry Securities may do so only       
through Participants and Indirect Participants. Participants who are Security   
Owners of Book-Entry Securities will receive a credit for such Securities on    
DTC's records. The ownership interest of such holder will in turn be recorded on
respective records of the Participants and Indirect Participants. Such holders  
will not receive written confirmation from DTC of their purchase, but are       
expected to receive written confirmations providing details of the transaction, 
as well as periodic statements of their holdings, from the Participant or       
Indirect Participant through which the Securityholders entered into the         
transaction. Unless and until Definitive Securities (as defined below) are      
issued, it is anticipated that the only "holder" of Book-Entry Securities of any
Series will be Cede & Co. ("CEDE"), as nominee of DTC. Security Owners will     
only permitted to exercise the rights of holders indirectly through Participants
and DTC.                                                                        

        Under the rules, regulations and procedures creating and affecting DTC
and its operations, DTC is required to make book-entry transfers among          
Participants on whose behalf it acts with respect to the Book-Entry Securities  
and is required to receive and transmit distributions of principal of and       
interest on the Book-Entry Securities. Participants and Indirect Participants   
with which Security Owners have accounts with respect to the Book-Entry         
Securities similarly are required to make book-entry transfers and receive and  
transmit such payments on behalf of their respective Securityholders.           

        DTC has advised the Servicer and the Depositors that, unless and until
Definitive Securities are issued, DTC will take any action permitted to be taken
by a holder only at the direction of one or more Participants to whose DTC      
accounts the Securities are credited. DTC has advised the Servicer and the      
Depositors that DTC will take such action with respect to any Percentage        
Interests of the Book-Entry Securities of a Series only at the direction of and 
on behalf of such Participants with respect to such Percentage Interests of the 
Book-Entry Securities. DTC may take actions, at the direction of the related    
Participants, with respect to some Book-Entry Securities which conflict with    
actions taken with respect to other Book-Entry Securities.                      

 Clearstream International, L-2967 Luxembourg ("CLEARSTREAM"), a
Luxembourg limited liability company, was formed in January 2000 through the    
merger of Cedel International and Deutsche Boerse Clearing, the shareholders of 
which comprise 93 of the of the world's major financial institutions.           

   Clearstream is registered as a bank in Luxembourg, and as such is
subject to regulation by the Luxembourg Monetary Authority, which supervises    
Luxembourg banks.                                                               

Clearstream holds securities for its customers ("CLEARSTREAM  
PARTICIPANTS") and facilitates the clearance and settlement of securities       
transactions by electronic book-entry transfers between their accounts.         
Clearstream provides various services, including safekeeping, administration,   
clearance and settlement of internationally traded securities and securities    
lending and borrowing. Clearstream also deals with domestic securities markets  
in several countries through established depository and custodial relationships.
Clearstream has established an electronic                                       

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bridge with the Euroclear Operator in Brussels to facilitate settlement of      
trades between systems. Clearstream currently accepts over 200,000 securities   
issues on its books.                                                            

         Clearstream's customers are world-wide financial institutions including
underwriters, securities brokers and dealers, banks, trust companies and        
clearing corporations. Clearstream's United States customers are limited to     
securities brokers and dealers and banks. Currently, Clearstream has            
approximately 3,000 customers located in over 60 countries, including all major 
European countries, Canada, and the United States. Indirect access to           
Clearstream is available to other institutions which clear through or maintain a
custodial relationship with an account holder of Clearstream.                   

The Euroclear System ("EUROCLEAR") was created in 1968 to hold
securities for its participants ("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 be settled in a variety of   
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       
Euroclear Bank S.A./N.V. (the "EUROCLEAR OPERATOR"). All operations are         
conducted by the Euroclear Operator, and all Euroclear securities clearance     
accounts and Euroclear cash accounts are accounts with the Euroclear Operator.  
Euroclear plc 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.                                                         

    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 and applicable Belgian law    
(collectively, the "TERMS AND CONDITIONS"). The Terms and Conditions govern     
transfers of securities and cash within the Euroclear, withdrawals of securities
and cash from the Euroclear and receipts of payments with respect to securities 
in the Euroclear. All securities in the Euroclear are held on a fungible basis  
without attribution of specific Securities 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.                                 

       Payments and distributions with respect to Book-Entry Securities held
through Clearstream or Euroclear will be credited to the cash accounts of       
Clearstream Participants or Euroclear Participants in accordance with the       
relevant system's rules and procedures, to the extent received by Citibank, N.A.
or JPMorgan Chase Bank, the relevant depositary of Clearstream and Euroclear    
(the "DEPOSITORIES" ), respectively. Such payments and distributions will be    
subject to tax withholding in accordance with relevant United States tax laws   
and regulations. See "Federal Income Tax Considerations". Clearstream or the    
Euroclear Operator, as the case may be, will take any other action permitted to 
be taken by a Securityholder on behalf of a Clearstream Participant or Euroclear
Participant only in accordance with its relevant rules and procedures and       
subject to its Depositary's ability to effect such actions on its behalf through
DTC.                                                                            

      Although DTC, Clearstream and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of Securities among participants of 
DTC, Clearstream and Euroclear, they are under no obligation to perform or      
continue to perform such procedures and such procedures may be discontinued at  
any time.                                                                       

   Book-Entry Securities of a Series will be converted to Definitive
Securities and reissued to beneficial owners or their nominees, rather than to  
DTC or its nominee only if DTC advises the Trustee in writing that DTC is no    
longer willing or able to discharge properly its responsibilities as nominee and
depository with respect to the Book-Entry Securities of such Series and the     
Servicer is unable to locate a qualified successor or under the circumstances   
specified in the related prospectus supplement or as provided in the related    
Pooling and Servicing Agreement. Upon issuance of Definitive Securities of a    
Series to Security Owners, such Book-Entry Securities will be transferable      
directly (and not exclusively on a book-entry basis) and registered holders will
deal directly with the Trustee with respect to transfers, notices and           
distributions.                                                                  

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 DESCRIPTION OF THE AGREEMENTS

AGREEMENTS APPLICABLE TO A SERIES                                               

REMIC Securities, FASIT Securities, Grantor Trust Securities  

 Securities representing interests in a Trust Fund, or a portion
thereof, that the Trustee will elect to have treated as REMIC Securities, FASIT 
Securities or Grantor Trust Securities will be issued, and the related Trust    
Fund will be created, pursuant to a pooling and servicing agreement (a "POOLING 
AND SERVICING AGREEMENT") among the Depositor, the Trustee and the sole Servicer
or Master Servicer, as applicable. The Assets of such Trust Fund will be        
transferred to the Trust Fund and thereafter serviced in accordance with the    
terms of the Pooling and Servicing Agreement. In the event there are multiple   
Servicers of the Assets of such Trust Fund, each Servicer will perform its      
servicing functions pursuant to a servicing agreement (each, an "UNDERLYING     
SERVICING AGREEMENT").                                                          

      Securities That Are Partnership Interests for Tax Purposes and Notes

        Partnership Securities that are partnership interests for tax purposes
will be issued, and the related Trust Fund will be created, pursuant to a       
Pooling and Servicing Agreement.                                                

        A Series of Notes issued by a Trust Fund will be issued pursuant to an
indenture (the "INDENTURE") between the related Trust Fund and the Indenture    
Trustee named in the related prospectus supplement. The Trust Fund will be      
established pursuant to a deposit trust agreement (each, a "DEPOSIT TRUST       
AGREEMENT") between the Depositor and an owner trustee specified in the         
prospectus supplement relating to such Series of Notes. The Assets securing     
payment on the Notes will be serviced in accordance with a servicing agreement  
(each, an "INDENTURE SERVICING AGREEMENT") between the related Trust Fund as    
issuer of the Notes, the Servicer and the Indenture Trustee. The Pooling and    
Servicing Agreements, the Indenture Servicing Agreements, the Underlying        
Servicing Agreements and the Indenture are referred to each as an "AGREEMENT."  

MATERIAL TERMS OF THE POOLING AND SERVICING AGREEMENTS AND UNDERLYING SERVICING 
AGREEMENTS                                                                      

General                                                       

   The following summaries describe the material provisions that may
appear in each Pooling and Servicing Agreement and Underlying Servicing         
Agreement. The prospectus supplement for a Series of Securities will describe   
any provision of the applicable Agreement relating to such Series that          
materially differs from the description thereof 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       
applicable Agreement for each Trust Fund and the description of such provisions 
in the related prospectus supplement. The provisions of each Agreement will vary
depending upon the nature of the Securities to be issued thereunder and the     
nature of the related Trust Fund. As used herein with respect to any Series, the
term "SECURITY" refers to all of the Securities of that Series, whether or not  
offered hereby and by the related prospectus supplement, unless the context     
otherwise requires. A form of a Pooling and Servicing Agreement has been filed  
as an exhibit to the Registration Statement of which this prospectus is a part. 
The Depositor will provide a copy of the Pooling and Servicing Agreement        
(without exhibits) relating to any Series of Securities without charge upon     
written request of a Securityholder of such Series addressed to Asset Backed    
Funding Corporation, 214 North Tryon Street, Charlotte, North Carolina 28255,   
Attention: Vice President.                                                      

   The servicers (the "SERVICERS"), any master servicer (the "MASTER
SERVICER") and the trustee (the "TRUSTEE") or indenture trustee (the "INDENTURE 
TRUSTEE"), as applicable, with respect to any Series of Securities will be named
in the related prospectus supplement. In the event there are multiple Servicers 
for the Assets in a Trust Fund, a Master Servicer will perform certain          
administration, calculation and reporting functions with respect to such Trust  
Fund and will supervise the related Servicers pursuant to a Pooling and         
Servicing Agreement. With respect to Series involving a Master Servicer,        
references in this prospectus to the Servicer will apply to the Master Servicer 
where non-servicing obligations are described. If so specified in the related   
prospectus supplement, a manager or administrator may be appointed pursuant to  
the Pooling and Servicing Agreement for any Trust Fund to                       

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administer such Trust Fund or certain administrative functions which would      
otherwise be performed by the Servicer or the Master Servicer may be performed  
by the Trustee.                                                                 

Assignment of Assets; Repurchases                             

         At the time of issuance of any Series of Securities, the Depositor will
assign (or cause to be assigned) to the designated Trustee the Assets to be     
included in the related Trust Fund, together with all principal and interest to 
be received on or with respect to such Assets after the Cut-off Date, other than
principal and interest due on or before the Cut-off Date and other than any     
Retained Interest. The Trustee will, concurrently with such assignment, deliver 
the Securities to the Depositor in exchange for the Assets and the other assets 
comprising the Trust Fund for such Series. Each Asset will be identified in a   
schedule appearing as an exhibit to the applicable Agreement. Such schedule will
include detailed information to the extent available and relevant (i) in respect
of each Mortgage Loan included in the related Trust Fund, including without     
limitation, the city and state of the related Mortgaged Property and type of    
such property, the Mortgage Rate and, if applicable, the applicable index,      
margin, adjustment date and any rate cap information, the original and remaining
term to maturity, the original and outstanding principal balance and balloon    
payment, if any, the Loan-to-Value Ratio as of the date indicated and payment   
and prepayment provisions, if applicable; and (ii) in respect of each Contract  
included in the related Trust Fund, including without limitation the outstanding
principal amount and the Contract Rate.                                         

      With respect to each Mortgage Loan, except as otherwise specified in
the related prospectus supplement, the Depositor will deliver or cause to be    
delivered to the Trustee (or to the custodian hereinafter referred to) certain  
loan documents, which will generally include the original Mortgage Note         
endorsed, without recourse, in blank or to the order of the Trustee, the        
original Mortgage (or a certified copy thereof) with evidence of recording      
indicated thereon and an assignment of the Mortgage to the Trustee in recordable
form. Notwithstanding the foregoing, a Trust Fund may include Mortgage Loans    
where the original Mortgage Note is not delivered to the Trustee if the         
Depositor delivers to the Trustee or the custodian a copy or a duplicate        
original of the Mortgage Note, together with an affidavit certifying that the   
original thereof has been lost or destroyed. With respect to such Mortgage      
Loans, the Trustee (or its nominee) may not be able to enforce the Mortgage Note
against the related borrower. The Asset Seller or other entity specified in the 
related prospectus supplement will be required to agree to repurchase, or       
substitute for, each such Mortgage Loan that is subsequently in default if the  
enforcement thereof or of the related Mortgage is materially adversely affected 
by the absence of the original Mortgage Note. The applicable Agreement will     
generally require the Depositor or another party specified in the related       
prospectus supplement to promptly cause each such assignment of Mortgage to be  
recorded in the appropriate public office for real property records, unless (i) 
with respect to a particular state, the Trustee has received an opinion of      
counsel acceptable to it that such recording is not required to make the        
assignment effective against the parties to the Mortgage or subsequent          
purchasers or encumbrancers of the Mortgaged Property or (ii) recordation in a  
state is not required by the Rating Agencies rating the Series in order to      
obtain the initial ratings on the Securities described in the related prospectus
supplement.                                                                     

       Notwithstanding the preceding paragraph, with respect to any Mortgage
Loan which has been recorded in the name of Mortgage Electronic Registration    
Systems, Inc. ("MERS") or its designee, no mortgage assignment in favor of the  
Trustee will be required to be prepared or delivered. Instead, the Master       
Servicer and the applicable Servicer will be required to take all actions as are
necessary to cause the applicable Trust Fund to be shown as the owner of the    
related Mortgage Loan on the records of MERS for purposes of the system of      
recording transfers of beneficial ownership of mortgages maintained by MERS.    

       The Trustee (or a custodian) will review such Mortgage Loan documents
within a specified period of days after receipt thereof, and the Trustee (or a  
custodian) will hold such documents in trust for the benefit of the             
Securityholders. If any such document is found to be missing or defective in any
material respect, the Trustee (or such custodian) shall immediately notify the  
Servicer and the Depositor, and the Servicer shall immediately notify the       
relevant Asset Seller or other entity specified in the related prospectus       
supplement. If the Asset Seller cannot cure the omission or defect within a     
specified number of days after receipt of such notice, then unless otherwise    
specified in the related prospectus supplement, the Asset Seller or other entity
specified in the related prospectus supplement will be obligated, within a      
specified number of days of receipt of such notice, to repurchase the related   
Mortgage Loan from the Trustee at a price equal to the sum of the unpaid        
principal balance thereof, plus unpaid accrued interest at the interest rate for
such Asset from the date as to which interest was last paid to the due date in  

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the Due Period in which the relevant purchase is to occur, plus certain         
servicing expenses that are payable to the Servicer or such other price as      
specified in the related prospectus supplement (the "PURCHASE PRICE") or        
substitute for such Mortgage Loan. There can be no assurance that an Asset      
Seller or other named entity will fulfill this repurchase or substitution       
obligation, and neither the Servicer nor the Depositor will be obligated to     
repurchase or substitute for such Mortgage Loan if the Asset Seller or other    
named entity defaults on its obligation. This repurchase or substitution        
obligation constitutes the sole remedy available to the Securityholders or the  
Trustee for omission of, or a material defect in, a constituent document. To the
extent specified in the related prospectus supplement, in lieu of curing any    
omission or defect in the Asset or repurchasing or substituting for such Asset, 
the Asset Seller or other named entity may agree to cover any losses suffered by
the Trust Fund as a result of such breach or defect.                            

  Notwithstanding the preceding two paragraphs, the documents with
respect to Home Equity Loans, Home Improvement Contracts and Unsecured Home     
Improvement Loans will be delivered to the Trustee (or a custodian) only to the 
extent specified in the related prospectus supplement. Generally such documents 
will be retained by the Servicer, which may also be the Asset Seller. In        
addition, assignments of the related Mortgages to the Trustee will be recorded  
only to the extent specified in the related prospectus supplement.              

    With respect to each Contract, the Servicer (which may also be the
Asset Seller) generally will maintain custody of the original Contract and      
copies of documents and instruments related to each Contract and the security   
interest in the Manufactured Home securing each Contract. In order to give      
notice of the right, title and interest of the Trustee in the Contracts, the    
Depositor will cause UCC-1 financing statements to be authorized by the related 
Asset Seller identifying the Depositor as secured party and by the Depositor    
identifying the Trustee as the secured party and, in each case, identifying all 
Contracts as collateral. The Contracts will be stamped or otherwise marked to   
reflect their assignment from the Company to the Trust Fund only to the extent  
specified in the related prospectus supplement. Therefore, if, through          
negligence, fraud or otherwise, a subsequent purchaser were able to take        
physical possession of the Contracts without notice of such assignment, the     
interest of the Trustee in the Contracts could be defeated. See "Certain Legal  
Aspects of the Contracts."                                                      

         While the Contract documents will not be reviewed by the Trustee or the
Servicer, if the Servicer finds that any such document is missing or defective  
in any material respect, the Servicer will be required to immediately notify the
Depositor and the relevant Asset Seller or other entity specified in the related
prospectus supplement. If the Asset Seller or such other entity cannot cure the 
omission or defect within a specified number of days after receipt of such      
notice, then the Asset Seller or such other entity will be obligated, within a  
specified number of days of receipt of such notice, to repurchase the related   
Contract from the Trustee at the Purchase Price or substitute for such Contract.
There can be no assurance that an Asset Seller or such other entity will fulfill
this repurchase or substitution obligation, and neither the Servicer nor the    
Depositor will be obligated to repurchase or substitute for such Contract if the
Asset Seller or such other entity defaults on its obligation. This repurchase or
substitution obligation constitutes the sole remedy available to the            
Securityholders or the Trustee for omission of, or a material defect in, a      
constituent document. To the extent specified in the related prospectus         
supplement, in lieu of curing any omission or defect in the Asset or            
repurchasing or substituting for such Asset, the Asset Seller may agree to cover
any losses suffered by the Trust Fund as a result of such breach or defect.     

Representations and Warranties; Repurchases                   

 To the extent provided in the related prospectus supplement the
Depositor will, with respect to each Asset, make or assign certain              
representations and warranties, as of a specified date (the person making such  
representations and warranties including the Depositor, the "WARRANTING PARTY") 
covering, by way of example, the following types of matters: (i) the accuracy of
the information set forth for such Asset on the schedule of Assets appearing as 
an exhibit to the applicable Agreement; (ii) in the case of a Mortgage Loan, the
existence of title insurance insuring the lien priority of the Mortgage Loan    
and, in the case of a Contract, that the Contract creates a valid first security
interest in or lien on the related Manufactured Home; (iii) the authority of the
Warranting Party to sell the Asset; (iv) the payment status of the Asset; (v) in
the case of a Mortgage Loan, the existence of customary provisions in the       
related Mortgage Note and Mortgage to permit realization against the Mortgaged  
Property of the benefit of the security of the Mortgage; and (vi) the existence 
of hazard and extended perils insurance coverage on the Mortgaged Property or   
Manufactured Home.                                                              

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       Any Warranting Party shall be an Asset Seller or an affiliate thereof
or such other person acceptable to the Depositor and shall be identified in the 
related prospectus supplement.                                                  

     Representations and warranties made in respect of an Asset may have
been made as of a date prior to the applicable Cut-off Date. A substantial      
period of time may have elapsed between such date and the date of initial       
issuance of the related Series of Securities evidencing an interest in such     
Asset. In the event of a breach of any such representation or warranty, the     
Warranting Party will be obligated to reimburse the Trust Fund for losses caused
by any such breach or either cure such breach or repurchase or replace the      
affected Asset as described below. Since the representations and warranties may 
not address events that may occur following the date as of which they were made,
the Warranting Party will have a reimbursement, cure, repurchase or substitution
obligation in connection with a breach of such a representation and warranty    
only if the relevant event that causes such breach occurs prior to such date.   
Such party would have no such obligations if the relevant event that causes such
breach occurs after such date.                                                  

      Each Agreement will provide that the Servicer and/or Trustee or such
other entity identified in the related prospectus supplement will be required to
notify promptly the relevant Warranting Party of any breach of any              
representation or warranty made by it in respect of an Asset that materially and
adversely affects the value of such Asset or the interests therein of the       
Securityholders. If such Warranting Party cannot cure such breach within a      
specified period following the date on which such party was notified of such    
breach, then such Warranting Party will be obligated to repurchase such Asset   
from the Trustee within a specified period from the date on which the Warranting
Party was notified of such breach, at the Purchase Price therefor. If so        
provided in the prospectus supplement for a Series, a Warranting Party, rather  
than repurchase an Asset as to which a breach has occurred, will have the       
option, within a specified period after initial issuance of such Series of      
Securities, to cause the removal of such Asset from the Trust Fund and          
substitute in its place one or more other Assets, as applicable, in accordance  
with the standards described in the related prospectus supplement. If so        
provided in the prospectus supplement for a Series, a Warranting Party, rather  
than repurchase or substitute an Asset as to which a breach has occurred, will  
have the option to reimburse the Trust Fund or the Securityholders for any      
losses caused by such breach. This reimbursement, repurchase or substitution    
obligation will constitute the sole remedy available to Securityholders or the  
Trustee for a breach of representation by a Warranting Party.                   

       Neither the Depositor (except to the extent that it is the Warranting
Party) nor the Servicer will be obligated to purchase or substitute for an Asset
if a Warranting Party defaults on its obligation to do so, and no assurance can 
be given that Warranting Parties will carry out such obligations with respect to
the Assets.                                                                     

       A Servicer will make certain representations and warranties regarding
its authority to enter into, and its ability to perform its obligations under,  
the applicable Agreement. A breach of any such representation of the Servicer   
which materially and adversely affects the interests of the Securityholders and 
which continues unremedied for the number of days specified in the applicable   
Agreement after the giving of written notice of such breach to the Servicer by  
the Trustee or the Depositor, or to the Servicer, the Depositor and the Trustee 
by the holders of Securities evidencing not less than 25% of the Voting Rights  
or such other percentage specified in the related prospectus supplement, will   
constitute an Event of Default under such Agreement. See "--Events of Default   
under the Agreements" and "--Rights Upon Event of Default under the Agreements."

Collection Account and Related Accounts                       

       General. The Servicer and/or the Trustee will, as to each Trust Fund,
establish and maintain or cause to be established and maintained one or more    
separate accounts for the collection of payments on the related Assets          
(collectively, the "COLLECTION ACCOUNT"), which must be either (i) an account or
accounts the deposits in which are insured by the Bank Insurance Fund or the    
Savings Association Insurance Fund of the Federal Deposit Insurance Corporation 
("FDIC") (to the limits established by the FDIC) and the uninsured deposits in  
which are otherwise secured such that the Securityholders have a claim with     
respect to the funds in the Collection Account or a perfected first priority    
security interest against any collateral securing such funds that is superior to
the claims of any other depositors or general creditors of the institution with 
which the Collection Account is maintained or (ii) otherwise maintained with a  
bank or trust company, and in a manner, satisfactory to the Rating Agency or    
Agencies rating any Class of Securities of such Series. The collateral eligible 
to secure amounts in the Collection Account is limited to United States         
government securities and other investment grade obligations specified in the   
applicable Agreement                                                            

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("PERMITTED INVESTMENTS"). A Collection Account may be maintained as an interest
bearing or a non-interest bearing account and the funds held therein may be     
invested pending each succeeding Distribution Date in certain short-term        
Permitted Investments. Unless otherwise specified in the applicable prospectus  
supplement, any interest or other income earned on funds in the Collection      
Account will be paid to the Servicer or its designee as additional servicing    
compensation. The Collection Account may be maintained with an institution that 
is an affiliate of the Servicer, if applicable, provided that such institution  
meets the standards imposed by the Rating Agency or Agencies. If permitted by   
the Rating Agency or Agencies, a Collection Account may contain funds relating  
to more than one Series of mortgage pass-through certificates and may contain   
other funds respecting payments on mortgage loans belonging to the Servicer or  
serviced or master serviced by it on behalf of others.                          

Deposits.                                                     

        A Servicer or the Trustee will deposit or cause to be deposited in the
Collection Account for one or more Trust Funds on a daily basis, or such other  
period provided in the applicable Agreement, the following payments and         
collections received, or advances made, by the Servicer or the Trustee or on its
behalf subsequent to the Cut-off Date (other than payments due on or before the 
Cut-off Date, and exclusive of any amounts representing a Retained Interest):   

              (i)      all payments on account of principal, including principal
prepayments, on the Assets;                                   

       (ii)     all payments on account of interest on the Assets,
   including any default interest collected, in each case net of any
      portion thereof retained by a Servicer as its servicing compensation
and net of any Retained Interest;                             

          (iii)    Liquidation Proceeds and Insurance Proceeds, together
     with the net proceeds on a monthly basis with respect to any Assets
acquired for the benefit of Securityholders;                  

            (iv)     any amounts paid under any instrument or drawn from any
fund that constitutes Credit Support for the related Series of
Securities as described under "Description of Credit Support";

             (v)      any advances made as described under "Description of the
Securities--Advances in Respect of Delinquencies";            

       (vi)     any amounts paid under any Cash Flow Agreement, as
described under "Description of the Trust Funds--Cash Flow    
Agreements";                                                  

             (vii)    all proceeds of any Asset or, with respect to a Mortgage
        Loan, property acquired in respect thereof purchased by the Depositor,
   any Asset Seller or any other specified person as described under
  "--Assignment of Assets; Repurchases" and "--Representations and
       Warranties; Repurchases," all proceeds of any defaulted Mortgage Loan
         purchased as described under "--Realization Upon Defaulted Assets," and
        all proceeds of any Asset purchased as described under "Description of
the Securities--Termination";                                 

             (viii)   any amounts paid by a Servicer to cover certain interest
         shortfalls arising out of the prepayment of Assets in the Trust Fund as
    described under "Description of the Agreements--Retained Interest;
Servicing Compensation and Payment of Expenses";              

         (ix)     to the extent that any such item does not constitute
  additional servicing compensation to a Servicer, any payments on
     account of modification or assumption fees, late payment charges or
Prepayment Premiums on the Assets;                            

            (x)      all payments required to be deposited in the Collection
        Account with respect to any deductible clause in any blanket insurance
policy described under "--Hazard Insurance Policies";         

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             (xi)     any amount required to be deposited by a Servicer or the
   Trustee in connection with losses realized on investments for the
      benefit of the Servicer or the Trustee, as the case may be, of funds
held in the Collection Account; and                           

      (xii)    any other amounts required to be deposited in the
Collection Account as provided in the applicable Agreement and
described in the related prospectus supplement.               

Withdrawals.                                                  

    A Servicer or the Trustee may, from time to time, make withdrawals
from the Collection Account for each Trust Fund for any of the following        
purposes:                                                                       

         (i)      to make distributions to the Securityholders on each
Distribution Date;                                            

              (ii)     to reimburse a Servicer for unreimbursed amounts advanced
        described under "Description of the Securities--Advances in Respect of
       Delinquencies," such reimbursement to be made out of amounts received
       which were identified and applied by the Servicer as late collections
      of interest (net of related servicing fees and Retained Interest) on
  and principal of the particular Assets with respect to which the
     advances were made or out of amounts drawn under any form of Credit
Support with respect to such Assets;                          

             (iii)    to reimburse a Servicer for unpaid servicing fees earned
      and certain unreimbursed servicing expenses incurred with respect to
       Assets and properties acquired in respect thereof, such reimbursement
   to be made out of amounts that represent Liquidation Proceeds and
       Insurance Proceeds collected on the particular Assets and properties,
        and net income collected on the particular properties, with respect to
      which such fees were earned or such expenses were incurred or out of
     amounts drawn under any form of Credit Support with respect to such
Assets and properties;                                        

          (iv)     to reimburse a Servicer for any advances described in
        clause (ii) above and any servicing expenses described in clause (iii)
 above which, in the Servicer's good faith judgment, will not be
   recoverable from the amounts described in clauses (ii) and (iii),
       respectively, such reimbursement to be made from amounts collected on
     other Assets or, if and to the extent so provided by the applicable
    Agreement and described in the related prospectus supplement, just
from that portion of amounts collected on other Assets that is
otherwise distributable on one or more Classes of Subordinate 
       Securities, if any, remain outstanding, and otherwise any outstanding
Class of Securities, of the related Series;                   

             (v)      if and to the extent described in the related prospectus
supplement, to pay a Servicer interest accrued on the advances
        described in clause (ii) above and the servicing expenses described in
      clause (iii) above while such advances and servicing expenses remain
outstanding and unreimbursed;                                 

            (vi)     to reimburse a Servicer, the Depositor, or any of their
       respective directors, officers, employees and agents, as the case may
      be, for certain expenses, costs and liabilities incurred thereby, as
and to the extent described under "--Certain Matters Regarding
Servicers, the Master Servicer and the Depositor";            

             (vii)    if and to the extent described in the related prospectus
       supplement, to pay (or to transfer to a separate account for purposes
of escrowing for the payment of) the Trustee's fees;          

      (viii)   to reimburse the Trustee or any of its directors,
 officers, employees and agents, as the case may be, for certain
        expenses, costs and liabilities incurred thereby, as and to the extent
described under "--Certain Matters Regarding the Trustee";    

             (ix)     to pay a Servicer, as additional servicing compensation,
         interest and investment income earned in respect of amounts held in the
Collection Account;                                           

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             (x)      to pay the person entitled thereto any amounts deposited
   in the Collection Account that were identified and applied by the
Servicer as recoveries of Retained Interest;                  

            (xi)     to pay for costs reasonably incurred in connection with
 the proper management and maintenance of any Mortgaged Property
       acquired for the benefit of Securityholders by foreclosure or by deed
      in lieu of foreclosure or otherwise, such payments to be made out of
income received on such property;                             

         (xii)    if one or more elections have been made to treat the

     Trust Fund or designated portions thereof as a REMIC or a FASIT, to
        pay any federal, state or local taxes imposed on the Trust Fund or its
       assets or transactions, as and to the extent described under "Federal
   Income Tax Consequences--REMICs--Taxes That May Be Imposed on the
       REMIC Pool" or in the applicable prospectus supplement, respectively;

             (xiii)   to pay for the cost of an independent appraiser or other
       expert in real estate matters retained to determine a fair sale price
         for a defaulted Mortgage Loan or a property acquired in respect thereof
       in connection with the liquidation of such Mortgage Loan or property;

       (xiv)    to pay for the cost of various opinions of counsel
  obtained pursuant to the applicable Agreement for the benefit of
Securityholders;                                              

     (xv)     to pay for the costs of recording the applicable
       Agreement if such recordation materially and beneficially affects the
    interests of Securityholders, provided that such payment shall not
      constitute a waiver with respect to the obligation of the Warranting
    Party to remedy any breach of representation or warranty under the
applicable Agreement;                                         

             (xvi)    to pay the person entitled thereto any amounts deposited
       in the Collection Account in error, including amounts received on any
  Asset after its removal from the Trust Fund whether by reason of
      purchase or substitution as contemplated by "--Assignment of Assets;
    Repurchase" and "--Representations and Warranties; Repurchases" or
otherwise;                                                    

              (xvii)   to make any other withdrawals permitted by the applicable
Agreement; and                                                

         (xviii)  to clear and terminate the Collection Account at the
termination of the Trust Fund.                                

 Other Collection Accounts. Notwithstanding the foregoing, if so
specified in the related prospectus supplement, the applicable Agreement for any
Series of Securities may provide for the establishment and maintenance of a     
separate collection account into which the Servicer will deposit on a daily     
basis the amounts described under "--Deposits" above for one or more Series of  
Securities. Any amounts on deposit in any such collection account will be       
withdrawn therefrom and deposited into the appropriate Collection Account by a  
time specified in the related prospectus supplement. To the extent specified in 
the related prospectus supplement, any amounts which could be withdrawn from the
Collection Account as described under "--Withdrawals" above, may also be        
withdrawn from any such collection account. The prospectus supplement will set  
forth any restrictions with respect to any such collection account, including   
investment restrictions and any restrictions with respect to financial          
institutions with which any such collection account may be maintained.          

        Collection and Other Servicing Procedures. The Servicer is required to
make reasonable efforts to collect all scheduled payments under the Assets and  
will follow or cause to be followed such collection procedures as it would      
follow with respect to assets that are comparable to the Assets and held for its
own account, provided such procedures are consistent with (i) the terms of the  
applicable Agreement and any related hazard insurance policy or instrument of   
Credit Support, if any, included in the related Trust Fund described herein or  
under "Description of Credit Support," (ii) applicable law and (iii) the general
servicing standard specified in the related prospectus supplement or, if no such
standard is so specified, its normal servicing practices (in either case, the   
"SERVICING STANDARD"). In connection therewith, the Servicer will be permitted  
in its discretion to waive any late payment                                     

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charge or penalty interest in respect of a late payment on an Asset, subject to 
the terms and conditions of the applicable agreement.                           

Each Servicer will also be required to perform other customary
functions of a servicer of comparable assets, including maintaining hazard      
insurance policies as described herein and in any related prospectus supplement,
and filing and settling claims thereunder; maintaining, to the extent required  
by the applicable Agreement, escrow or impoundment accounts of obligors for     
payment of taxes, insurance and other items required to be paid by any obligor  
pursuant to the terms of the Assets; processing assumptions or substitutions in 
those cases where the Servicer has determined not to enforce any applicable     
due-on-sale clause; attempting to cure delinquencies; supervising foreclosures  
or repossessions; inspecting and managing Mortgaged Properties or Manufactured  
Homes under certain circumstances; and maintaining accounting records relating  
to the Assets. The Servicer or such other entity specified in the related       
prospectus supplement will be responsible for filing and settling claims in     
respect of particular Assets under any applicable instrument of Credit Support. 
See "Description of Credit Support."                                            

        The Servicer may agree to modify, waive or amend any term of any Asset
in a manner consistent with the Servicing Standard so long as the modification, 
waiver or amendment will not (i) affect the amount or timing of any scheduled   
payments of principal or interest on the Asset or (ii) in its judgment,         
materially impair the security for the Asset or reduce the likelihood of timely 
payment of amounts due thereon. The Servicer also may agree to any modification,
waiver or amendment that would so affect or impair the payments on, or the      
security for, an Asset if, unless otherwise provided in the related prospectus  
supplement, (i) in its judgment, a material default on the Asset has occurred or
a payment default is reasonably foreseeable and (ii) in its judgment, such      
modification, waiver or amendment is reasonably likely to produce a greater     
recovery with respect to the Asset on a present value basis than would          
liquidation. The Servicer is required to notify the Trustee in the event of any 
modification, waiver or amendment of any Asset.                                 

     In the case of Multifamily Mortgage Loans, a mortgagor's failure to
make required Mortgage Loan payments may mean that operating income is          
insufficient to service the Mortgage Loan debt, or may reflect the diversion of 
that income from the servicing of the Mortgage Loan debt. In addition, a        
mortgagor under a Multifamily Mortgage Loan that is unable to make Mortgage Loan
payments may also be unable to make timely payment of all required taxes and    
otherwise to maintain and insure the related Mortgaged Property. In general, the
Servicer will be required to monitor any Multifamily Mortgage Loan that is in   
default, evaluate whether the causes of the default can be corrected over a     
reasonable period without significant impairment of the value of the related    
Mortgaged Property, initiate corrective action in cooperation with the mortgagor
if cure is likely, inspect the related Multifamily Property and take such other 
actions as are consistent with the applicable Agreement. A significant period of
time may elapse before the Servicer is able to assess the success of any such   
corrective action or the need for additional initiatives. The time within which 
the Servicer can make the initial determination of appropriate action, evaluate 
the success of corrective action, develop additional initiatives, institute     
foreclosure proceedings and actually foreclose may vary considerably depending  
on the particular Multifamily Mortgage Loan, the Multifamily Property, the      
mortgagor, the presence of an acceptable party to assume the Multifamily        
Mortgage Loan and the laws of the jurisdiction in which the Multifamily Property
is located.                                                                     

Realization Upon Defaulted Assets                             

       Generally, the Servicer is required to monitor any Assets which is in
default, initiate corrective action in cooperation with the mortgagor or obligor
if cure is likely, inspect the Asset and take such other actions as are         
consistent with the Servicing Standard. A significant period of time may elapse 
before the Servicer is able to assess the success of such corrective action or  
the need for additional initiatives.                                            

        Any Agreement relating to a Trust Fund that includes Mortgage Loans or
Contracts may grant to the Servicer and/or the holder or holders of certain     
Classes of Securities a right of first refusal to purchase from the Trust Fund  
at a predetermined purchase price any such Mortgage Loan or Contract as to which
a specified number of scheduled payments thereunder are delinquent. Any such    
right granted to the holder of an Offered Security will be described in the     
related prospectus supplement. The related prospectus supplement will also      
describe any such right granted to any person if the predetermined purchase     
price is less than the Purchase Price described under "--Representations and    
Warranties; Repurchases."                                                       

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        If so specified in the related prospectus supplement, the Servicer may
offer to sell any defaulted Mortgage Loan or Contract described in the preceding
paragraph and not otherwise purchased by any person having a right of first     
refusal with respect thereto, if and when the Servicer determines, consistent   
with the Servicing Standard, that such a sale would produce a greater recovery  
on a present value basis than would liquidation through foreclosure,            
repossession or similar proceedings. The applicable Agreement will provide that 
any such offering be made in a commercially reasonable manner for a specified   
period and that the Servicer accept the highest cash bid received from any      
person (including itself, an affiliate of the Servicer or any Securityholder)   
that constitutes a fair price for such defaulted Mortgage Loan or Contract. In  
the absence of any bid determined in accordance with the applicable Agreement to
be fair, the Servicer shall proceed with respect to such defaulted Mortgage Loan
or Contract as described below. Any bid in an amount at least equal to the      
Purchase Price described under "--Representations and Warranties; Repurchases"  
will in all cases be deemed fair.                                               

   The Servicer, on behalf of the Trustee, may at any time institute
foreclosure proceedings, exercise any power of sale contained in any mortgage,  
obtain a deed in lieu of foreclosure, or otherwise acquire title to a Mortgaged 
Property securing a Mortgage Loan by operation of law or otherwise and may at   
any time repossess and realize upon any Manufactured Home, if such action is    
consistent with the Servicing Standard and a default on such Mortgage Loan or   
Contract has occurred or, in the Servicer's judgment, is imminent.              

      If title to any Mortgaged Property is acquired by a Trust Fund as to
which a REMIC election has been made, the Servicer, on behalf of the Trust Fund,
will be required to sell the Mortgaged Property by the close of the third       
calendar year after the year of acquisition, unless (i) the Internal Revenue    
Service (the "IRS") grants an extension of time to sell such property or (ii)   
the Trustee receives an opinion of independent counsel to the effect that the   
holding of the property by the Trust Fund subsequent to the close of the third  
calendar year after the year of the acquisition of the property by the Trust    
Fund will not result in the imposition of a tax on the Trust Fund or cause the  
Trust Fund to fail to qualify as a REMIC under the Code at any time that any    
Securities are outstanding. Subject to the foregoing, the Servicer will be      
required to (i) solicit bids for any Mortgaged Property so acquired in such a   
manner as will be reasonably likely to realize a fair price for such property   
and (ii) accept the first (and, if multiple bids are contemporaneously received,
the highest) cash bid received from any person that constitutes a fair price.   
The applicability of these limitations if a FASIT election is made with respect 
to all or a part of the Trust Fund will be described in the applicable          
prospectus supplement.                                                          

   The limitations imposed by the applicable Agreement and the REMIC
provisions or the FASIT provisions of the Code (if a REMIC election or a FASIT  
election, respectively, has been made with respect to the related Trust Fund) on
the ownership and management of any Mortgaged Property acquired on behalf of the
Trust Fund may result in the recovery of an amount less than the amount that    
would otherwise be recovered. See "Certain Legal Aspects of Mortgage            
Loans--Foreclosure."                                                            

         If recovery on a defaulted Asset under any related instrument of Credit
Support is not available, the Servicer nevertheless will be obligated to follow 
or cause to be followed such normal practices and procedures as it deems        
necessary or advisable to realize upon the defaulted Asset. If the proceeds of  
any liquidation of the property securing the defaulted Asset are less than the  
outstanding principal balance of the defaulted Asset plus interest accrued      
thereon at the applicable interest rate, plus the aggregate amount of expenses  
incurred by the Servicer in connection with such proceedings and which are      
reimbursable under the applicable Agreement, the Trust Fund will realize a loss 
in the amount of such difference. The Servicer will be entitled to withdraw or  
cause to be withdrawn from the Collection Account out of the Liquidation        
Proceeds recovered on any defaulted Asset, prior to the distribution of such    
Liquidation Proceeds to Securityholders, amounts representing its normal        
servicing compensation on the Security, unreimbursed servicing expenses incurred
with respect to the Asset and any unreimbursed advances of delinquent payments  
made with respect to the Asset.                                                 

       If any property securing a defaulted Asset is damaged the Servicer is
not required to expend its own funds to restore the damaged property unless it  
determines (i) that such restoration will increase the proceeds to              
Securityholders on liquidation of the Asset after reimbursement of the Servicer 
for its expenses and (ii) that such expenses will be recoverable by it from     
related Insurance Proceeds or Liquidation Proceeds.                             

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         As servicer of the Assets, a Servicer, on behalf of itself, the Trustee
and the Securityholders, will present claims to the obligor under each          
instrument of Credit Support, and will take such reasonable steps as are        
necessary to receive payment or to permit recovery thereunder with respect to   
defaulted Assets.                                                               

         If a Servicer or its designee recovers payments under any instrument of
Credit Support with respect to any defaulted Assets, the Servicer will be       
entitled to withdraw or cause to be withdrawn from the Collection Account out of
such proceeds, prior to distribution thereof to Securityholders, amounts        
representing its normal servicing compensation on such Asset, unreimbursed      
servicing expenses incurred with respect to the Asset and any unreimbursed      
advances of delinquent payments made with respect to the Asset. See "--Hazard   
Insurance Policies" and "Description of Credit Support."                        

Hazard Insurance Policies                                     

         Mortgage Loans. Generally, each Agreement for a Trust Fund comprised of
Mortgage Loans will require the Servicer to cause the mortgagor on each Mortgage
Loan to maintain a hazard insurance policy providing for such coverage as is    
required under the related Mortgage or, if any Mortgage permits the holder      
thereof to dictate to the mortgagor the insurance coverage to be maintained on  
the related Mortgaged Property, then such coverage as is consistent with the    
Servicing Standard. Such coverage will be in general in an amount equal to the  
lesser of the principal balance owing on such Mortgage Loan (but not less than  
the amount necessary to avoid the application of any co-insurance clause        
contained in the hazard insurance policy) and the amount necessary to fully     
compensate for any damage or loss to the improvements on the Mortgaged Property 
on a replacement cost basis or such other amount specified in the related       
prospectus supplement. The ability of the Servicer to assure that hazard        
insurance proceeds are appropriately applied may be dependent upon its being    
named as an additional insured under any hazard insurance policy and under any  
other insurance policy referred to below, or upon the extent to which           
information in this regard is furnished by mortgagors. All amounts collected by 
the Servicer under any such 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 Servicer's normal servicing procedures, subject to the terms
and conditions of the related Mortgage and Mortgage Note) will be deposited in  
the Collection Account. The applicable Agreement may provide that the Servicer  
may satisfy its obligation to cause each mortgagor to maintain such a hazard    
insurance policy by the Servicer's maintaining a blanket policy insuring against
hazard losses on the Mortgage Loans. If such blanket policy contains a          
deductible clause, the Servicer will be required to deposit in the Collection   
Account all sums that would have been deposited therein but for such clause.    

    In general, the standard form of fire and extended coverage policy
covers physical damage to or destruction of the improvements of the property by 
fire, lightning, explosion, smoke, windstorm and hail, and riot, strike and     
civil commotion, subject to the conditions and exclusions specified in each     
policy. Although the policies relating to the Mortgage Loans will be            
underwritten by different insurers under different state laws in accordance with
different applicable state forms, and therefore will not contain identical terms
and conditions, the basic terms thereof are dictated by respective state laws,  
and most such policies typically do not cover any physical damage resulting from
war, revolution, governmental actions, floods and other water-related causes,   
earth movement (including earthquakes, landslides and mudflows), wet or dry rot,
vermin, domestic animals and certain other kinds of uninsured risks.            

 The hazard insurance policies covering the Mortgaged Properties
securing the Mortgage Loans will typically contain a coinsurance 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          
improvements on the property in order to recover the full amount of any partial 
loss. If the insured's coverage falls below this specified percentage, such     
clause generally provides that the insurer's liability in the event of partial  
loss does not exceed the lesser of (i) the replacement cost of the improvements 
less physical depreciation and (ii) such proportion of the loss as the amount of
insurance carried bears to the specified percentage of the full replacement cost
of such improvements.                                                           

  Each Agreement for a Trust Fund comprised of Mortgage Loans will
require the Servicer to cause the mortgagor on each Mortgage Loan to maintain   
all such other insurance coverage with respect to the related Mortgaged Property
as is consistent with the terms of the related Mortgage and the Servicing       
Standard, which insurance may typically include flood insurance (if the related 
Mortgaged Property was located at the time of origination in a federally        
designated flood area).                                                         

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     Any cost incurred by the Servicer in maintaining any such insurance
policy will be added to the amount owing under the Mortgage Loan where the terms
of the Mortgage Loan so permit; provided, however, that the addition of such    
cost will not be taken into account for purposes of calculating the distribution
to be made to Securityholders. Such costs may be recovered by the Servicer from 
the Collection Account, with interest thereon, as provided by the applicable    
Agreement.                                                                      

     Under the terms of the Mortgage Loans, mortgagors will generally be
required to present claims to insurers under hazard insurance policies          
maintained on the related Mortgaged Properties. The Servicer, on behalf of the  
Trustee and Securityholders, is obligated to present or cause to be presented   
claims under any blanket insurance policy insuring against hazard losses on     
Mortgaged Properties securing the Mortgage Loans. However, the ability of the   
Servicer to present or cause to be presented such claims is dependent upon the  
extent to which information in this regard is furnished to the Servicer by      
mortgagors.                                                                     

Contracts                                                     

   Generally, the terms of the applicable Agreement for a Trust Fund
comprised of Contracts will require the Servicer to cause to be maintained with 
respect to each Contract one or more hazard insurance policies which provide, at
a minimum, the same coverage as a standard form fire and extended coverage      
insurance policy that is customary for manufactured housing, issued by a company
authorized to issue such policies in the state in which the Manufactured Home is
located, and in an amount which is not less than the maximum insurable value of 
such Manufactured Home or the principal balance due from the obligor on the     
related Contract, whichever is less; provided, however, that the amount of      
coverage provided by each such hazard insurance policy shall be sufficient to   
avoid the application of any co-insurance clause contained therein. When a      
Manufactured Home's location was, at the time of origination of the related     
Contract, within a federally designated special flood hazard area, the Servicer 
shall cause such flood insurance to be maintained, which coverage shall be at   
least equal to the minimum amount specified in the preceding sentence or such   
lesser amount as may be available under the federal flood insurance program.    
Each hazard insurance policy caused to be maintained by the Servicer shall      
contain a standard loss payee clause in favor of the Servicer and its successors
and assigns. If any obligor is in default in the payment of premiums on its     
hazard insurance policy or policies, the Servicer shall pay such premiums out of
its own funds, and may add separately such premium to the obligor's obligation  
as provided by the Contract, but may not add such premium to the remaining      
principal balance of the Contract.                                              

 The Servicer may maintain, in lieu of causing individual hazard
insurance policies to be maintained with respect to each Manufactured Home, and 
shall maintain, to the extent that the related Contract does not require the    
obligor to maintain a hazard insurance policy with respect to the related       
Manufactured Home, one or more blanket insurance policies covering losses on the
obligor's interest in the Contracts resulting from the absence or insufficiency 
of individual hazard insurance policies. The Servicer shall pay the premium for 
such blanket policy on the basis described therein and shall pay any deductible 
amount with respect to claims under such policy relating to the Contracts.      

Fidelity Bonds and Errors and Omissions Insurance             

      Each Agreement will require that the Servicer obtain and maintain in
effect a fidelity bond or similar form of insurance coverage (which may provide 
blanket coverage) or any combination thereof insuring against loss occasioned by
fraud, theft or other intentional misconduct of the officers, employees and     
agents of the Servicer. The applicable Agreement will allow the Servicer to     
self-insure against loss occasioned by the errors and omissions of the officers,
employees and agents of the Servicer so long as certain criteria set forth in   
such Agreement are met.                                                         

Due-on-Sale Provisions                                        

     The Mortgage Loans may contain clauses requiring the consent of the
mortgagee to any sale or other transfer of the related Mortgaged Property, or   
due-on-sale clauses entitling the mortgagee to accelerate payment of the        
Mortgage Loan upon any sale, transfer or conveyance of the related Mortgaged    
Property. The Servicer will generally enforce any due-on-sale clause to the     
extent it has knowledge of the conveyance or proposed conveyance of the         
underlying Mortgaged Property and it is entitled to do so under applicable law; 
provided, however, that the Servicer will not take any action in relation to the
enforcement of any due-on-sale provision which would adversely                  

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affect or jeopardize coverage under any applicable insurance policy. Any fee    
collected by or on behalf of the Servicer for entering into an assumption       
agreement will be retained by or on behalf of the Servicer as additional        
servicing compensation. See "Certain Legal Aspects of Mortgage                  
Loans--Due-on-Sale Clauses." The Contracts may also contain such clauses. The   
Servicer will generally permit such transfer so long as the transferee satisfies
the Servicer's then applicable underwriting standards. The purpose of such      
transfers is often to avoid a default by the transferring obligor. See "Certain 
Legal Aspects of the Contracts--Transfers of Manufactured Homes; Enforceability 
of "Due-on-Sale" Clauses."                                                      

   Retained Interest; Servicing Compensation and Payment of Expenses

   The prospectus supplement for a Series of Securities will specify
whether there will be any Retained Interest in the Assets, and, if so, the      
initial owner thereof. If so, the Retained Interest will be established on a    
loan-by-loan basis and will be specified on an exhibit to the applicable        
Agreement. A "RETAINED INTEREST" in an Asset represents a specified portion of  
the interest payable thereon. The Retained Interest will be deducted from       
mortgagor payments as received and will not be part of the related Trust Fund.  

        The Servicer's primary servicing compensation with respect to a Series
of Securities will come from the periodic payment to it of a portion of the     
interest payment on each Asset or such other amount specified in the related    
prospectus supplement. Since any Retained Interest and a Servicer's primary     
compensation are percentages of the principal balance of each Asset, such       
amounts will decrease in accordance with the amortization of the Assets. The    
prospectus supplement with respect to a Series of Securities evidencing         
interests in a Trust Fund that includes Mortgage Loans or Contracts may provide 
that, as additional compensation, the Servicer may retain all or a portion of   
assumption fees, modification fees, late payment charges or Prepayment Premiums 
collected from mortgagors and any interest or other income which may be earned  
on funds held in the Collection Account or any account established by a Servicer
pursuant to the applicable Agreement.                                           

    The Servicer may, to the extent provided in the related prospectus
supplement, pay from its servicing compensation certain expenses incurred in    
connection with its servicing and managing of the Assets, including, without    
limitation, payment of the fees and disbursements of the Trustee and independent
accountants, payment of expenses incurred in connection with distributions and  
reports to Securityholders, and payment of any other expenses described in the  
related prospectus supplement. Certain other expenses, including certain        
expenses relating to defaults and liquidations on the Assets and, to the extent 
so provided in the related prospectus supplement, interest thereon at the rate  
specified therein may be borne by the Trust Fund.                               

         If and to the extent provided in the related prospectus supplement, the
Servicer may be required to apply a portion of the servicing compensation       
otherwise payable to it in respect of any Due Period to certain interest        
shortfalls resulting from the voluntary prepayment of any Assets in the related 
Trust Fund during such period prior to their respective due dates therein.      

Evidence as to Compliance                                     

   Each Agreement relating to Assets which include Mortgage Loans or
Contracts 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 such firm conducted             
substantially in compliance with either the Uniform Single Attestation Program  
for Mortgage Bankers, the Audit Program for Mortgages serviced for Freddie Mac  
or such other program used by the Servicer, the servicing by or on behalf of the
Servicer of mortgage loans under agreements substantially similar to each other 
(including the applicable Agreement) was conducted in compliance with the terms 
of such agreements or such program except for any significant exceptions or     
errors in records that, in the opinion of the firm, either the Audit Program for
Mortgages serviced for Freddie Mac, or paragraph 4 of the Uniform Single        
Attestation Program for Mortgage Bankers, or such other program, requires it to 
report.                                                                         

       Each such 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 Servicer to the effect that the Servicer has fulfilled its      
obligations under the applicable Agreement throughout the preceding calendar    
year or other specified twelve-month period.                                    

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     Copies of such annual accountants' statement and such statements of
officers will be obtainable by Securityholders without charge upon written      
request to the Servicer or other entity specified in the related prospectus     
supplement at the address set forth in the related prospectus supplement.       

  Certain Matters Regarding Servicers, the Master Servicer and the
Depositor                                                     

         The Servicers and Master Servicer under each Agreement will be named in
the related prospectus supplement. The entities serving as Servicer or Master   
Servicer may be affiliates of the Depositor and may have other normal business  
relationships with the Depositor or the Depositor's affiliates. Reference herein
to the Servicer shall be deemed to be to the Master Servicer, if applicable.    

         The applicable Agreement will provide that the Servicer may resign from
its obligations and duties thereunder only upon a determination that its duties 
under such Agreement are no longer permissible under applicable law or are in   
material conflict by reason of applicable law with any other activities carried 
on by it, the other activities of the Servicer so causing such a conflict being 
of a type and nature carried on by the Servicer at the date of such Agreement.  
No such resignation will become effective until the Trustee or a successor      
servicer has assumed the Servicer's obligations and duties under the applicable 
Agreement.                                                                      

    Each Agreement will further provide that none of any Servicer, the
Depositor or any director, officer, employee, or agent of a Servicer or the     
Depositor will be under any liability to the related Trust Fund or              
Securityholders for any action taken, or for refraining from the taking of any  
action, in good faith pursuant to the applicable Agreement; provided, however,  
that none of a Servicer, the Depositor or any such person will be protected     
against any breach of a representation, warranty or covenant made in such       
Agreement, or against any liability specifically imposed thereby, or against any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of obligations or duties thereunder
or by reason of reckless disregard of obligations and duties thereunder. Each   
Agreement will further provide that any Servicer, the Depositor and any         
director, officer, employee or agent of a 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 applicable Agreement or the Securities; provided,        
however, that such indemnification will not extend to any loss, liability or    
expense (i) specifically imposed by such Agreement or otherwise incidental to   
the performance of obligations and duties thereunder, including, in the case of 
a Servicer, the prosecution of an enforcement action in respect of any specific 
Mortgage Loan or Mortgage Loans or Contract or Contracts (except as any such    
loss, liability or expense shall be otherwise reimbursable pursuant to such     
Agreement); (ii) incurred in connection with any breach of a representation,    
warranty or covenant made in such Agreement; (iii) incurred by reason of        
misfeasance, bad faith or gross negligence in the performance of obligations or 
duties thereunder, or by reason of reckless disregard of such obligations or    
duties; (iv) incurred in connection with any violation of any state or federal  
securities law; or (v) imposed by any taxing authority if such loss, liability  
or expense is not specifically reimbursable pursuant to the terms of the        
applicable Agreement. In addition, each Agreement will provide that neither any 
Servicer nor the Depositor will be under any obligation to appear in, prosecute 
or defend any legal action which is not incidental to its respective            
responsibilities under the applicable Agreement and which in its opinion may    
involve it in any expense or liability. Any such Servicer or the Depositor may, 
however, in its discretion undertake any such action which it may deem necessary
or desirable with respect to the applicable Agreement and the rights and duties 
of the parties thereto and the interests of the Securityholders thereunder. In  
such event, the legal expenses and costs of such action and any liability       
resulting therefrom will be expenses, costs and liabilities of the              
Securityholders, and the Servicer or the Depositor, as the case may be, will be 
entitled to be reimbursed therefor and to charge the Collection Account.        

      Any person into which the Servicer or the Depositor may be merged or
consolidated, or any person resulting from any merger or consolidation to which 
the Servicer or the Depositor is a party, or any person succeeding to the       
business of the Servicer or the Depositor, will be the successor of the Servicer
or the Depositor, as the case may be, under the applicable Agreement.           

Special Servicers                                             

        If and to the extent specified in the related prospectus supplement, a
special servicer (a "SPECIAL SERVICER") may be a party to the applicable        
Agreement or may be appointed by the Servicer or another specified party to     

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perform certain specified duties in respect of servicing the related Mortgage   
Loans that would otherwise be performed by the Servicer (for example, the       
workout and/or foreclosure of defaulted Mortgage Loans). The rights and         
obligations of any Special Servicer will be specified in the related Agreement. 
The Servicer will be liable for the performance of a Special Servicer only if,  
and to the extent, set forth in such Agreement.                                 

Events of Default under the Agreements                        

         Events of default under the applicable Agreement will generally include
(i) any failure by the Servicer to distribute or cause to be distributed to     
Securityholders, or to remit to the Trustee for distribution to Securityholders,
any required payment that continues after a grace period, if any; (ii) any      
failure by the Servicer duly to observe or perform in any material respect any  
of its other covenants or obligations under the applicable Agreement which      
continues unremedied for 30 days after written notice of such failure has been  
given to the Servicer by the Trustee or the Depositor, or to the Servicer, the  
Depositor and the Trustee by Securityholders evidencing not less than 25% of the
Voting Rights; (iii) any breach of a representation or warranty made by the     
Servicer under the applicable Agreement which materially and adversely affects  
the interests of Securityholders and which continues unremedied for 30 days     
after written notice of such breach has been given to the Servicer by the       
Trustee or the Depositor, or to the Servicer, the Depositor and the Trustee by  
the holders of Securities evidencing not less than 25% of the Voting Rights; and
(iv) certain events of insolvency, readjustment of debt, marshaling of assets   
and liabilities or similar proceedings and certain actions by or on behalf of   
the Servicer indicating its insolvency or inability to pay its obligations.     
Material variations to the foregoing events of default (other than to shorten   
cure periods or eliminate notice requirements) will be specified in the related 
prospectus supplement. The Trustee will, not later than the later of 60 days or 
such other period specified in the related prospectus supplement after the      
occurrence of any event which constitutes or, with notice or lapse of time or   
both, would constitute an event of default and five days after certain officers 
of the Trustee become aware of the occurrence of such an event, transmit by mail
to the Depositor and all Securityholders of the applicable Series notice of such
occurrence, unless such default shall have been cured or waived.                

         The manner of determining the "VOTING RIGHTS" of a Security or Class or
Classes of Securities will be specified in the related prospectus supplement.   

Rights Upon Event of Default under the Agreements             

       So long as an event of default under an Agreement remains unremedied,
the Depositor or the Trustee may, and at the direction of holders of Securities 
evidencing not less than 51% (or such other percentage specified in the related 
prospectus supplement) of the Voting Rights, the Trustee shall terminate all of 
the rights and obligations of the Servicer under the applicable Agreement and in
and to the Mortgage Loans (other than as a Securityholder or as the owner of any
Retained Interest), whereupon the Trustee will succeed to all of the            
responsibilities, duties and liabilities of the Servicer under the applicable   
Agreement (except that if the Trustee is prohibited by law from obligating      
itself to make advances regarding delinquent Assets, or if the related          
prospectus supplement so specifies, then the Trustee will not be obligated to   
make such advances) and will be entitled to similar compensation arrangements.  
In the event that the Trustee is unwilling or unable so to act, it may or, at   
the written request of the holders of Securities entitled to at least 51% (or   
such other percentage specified in the related prospectus supplement) of the    
Voting Rights, it shall appoint, or petition a court of competent jurisdiction  
for the appointment of, a loan servicing institution acceptable to the Rating   
Agency with a net worth at the time of such appointment of at least $15,000,000 
(or such other amount specified in the related prospectus supplement) to act as 
successor to the Servicer under the applicable Agreement. Pending such          
appointment, the Trustee is obligated to act in such capacity. The Trustee and  
any such successor may agree upon the servicing compensation to be paid, which  
in no event may be greater than the compensation payable to the Servicer under  
the applicable Agreement.                                                       

        The holders of Securities representing at least 66 2/3% (or such other
percentage specified in the related prospectus supplement) of the Voting Rights 
allocated to the respective Classes of Securities affected by any event of      
default will be entitled to waive such event of default; provided, however, that
an Event of Default involving a failure to distribute a required payment to     
Securityholders described in clause (i) under "--Events of Default under the    
Agreements" may be waived only by all of the Securityholders. Upon any such     
waiver of an event of default, such event of default shall cease to exist and   
shall be deemed to have been remedied for every purpose under the applicable    
Agreement.                                                                      

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         No Securityholders will have the right under any Agreement to institute
any proceeding with respect thereto unless such holder previously has given to  
the Trustee written notice of default and unless the holders of Securities      
evidencing not less than 25% (or such other percentage specified in the related 
prospectus supplement) of the Voting Rights have made written request upon the  
Trustee to institute such proceeding in its own name as Trustee thereunder and  
have offered to the Trustee reasonable indemnity, and the Trustee for 60 days   
(or such other number of days specified in the related prospectus supplement)   
has neglected or refused to institute any such proceeding. The Trustee, however,
is under no obligation to exercise any of the trusts or powers vested in it by  
any Agreement or to make any investigation of matters arising thereunder or to  
institute, conduct or defend any litigation thereunder or in relation thereto at
the request, order or direction of any of the Securityholders covered by such   
Agreement, unless such Securityholders have offered to the Trustee reasonable   
security or indemnity against the costs, expenses and liabilities which may be  
incurred therein or thereby.                                                    

Amendment                                                     

   Each Agreement may be amended by the parties thereto, without the
consent of any Securityholders covered by the applicable Agreement, (i) to cure 
any ambiguity or mistake, (ii) to correct, modify or supplement any provision   
therein which may be inconsistent with any other provision therein or with the  
related prospectus supplement, (iii) to make any other provisions with respect  
to matters or questions arising under the applicable Agreement which are not    
materially inconsistent with the provisions thereof, or (iv) to comply with any 
requirements imposed by the Code; provided that, in the case of clause (iii),   
such amendment will not adversely affect in any material respect the interests  
of any Securityholders covered by the applicable Agreement as evidenced either  
by an opinion of counsel to such effect or the delivery to the Trustee of       
written notification from each Rating Agency that provides, at the request of   
the Depositor, a rating for the Offered Securities of the related Series to the 
effect that such amendment or supplement will not cause such Rating Agency to   
lower or withdraw the then current rating assigned to such Securities. Each     
Agreement may also be amended by the Depositor, the Servicer and the Trustee,   
with the consent of the Securityholders affected thereby evidencing not less    
than 51% (or such other percentage specified in the related prospectus          
supplement) of the Voting Rights, for any purpose; provided, however, no such   
amendment may (i) reduce in any manner the amount of, or delay the timing of,   
payments received or advanced on Assets which are required to be distributed on 
any Security without the consent of the Securityholder or (ii) reduce the       
consent percentages described in this paragraph without the consent of all the  
Securityholders covered by such Agreement then outstanding. However, with       
respect to any Series of Securities as to which a REMIC election or a FASIT     
election is to be made, the Trustee will not consent to any amendment of the    
applicable Agreement unless it shall first have received an opinion of counsel  
to the effect that such amendment will not result in the imposition of a tax on 
the related Trust Fund or cause the related Trust Fund to fail to qualify as a  
REMIC or a FASIT, as the case may be, at any time that the related Securities   
are outstanding.                                                                

The Trustee                                                   

The Trustee under each Agreement will be named in the related 
prospectus supplement. The commercial bank, national banking association,       
banking corporation or trust company serving as Trustee may have a banking      
relationship with the Depositor and its affiliates, with any Servicer and its   
affiliates and with any Master Servicer and its affiliates. With respect to     
certain Series of Securities, a certificate administrator will perform certain  
duties and functions normally performed by the Trustee. Any certificate         
administrator will be a party to the applicable Agreement and will be named in  
the applicable Prospectus Supplement. Any certificate administrator will have   
obligations and rights similar to the Trustee as described in this Prospectus.  

Duties of the Trustee                                         

The Trustee will make no representations as to the validity or
sufficiency of any Agreement, the Securities or any Asset or related document   
and is not accountable for the use or application by or on behalf of any        
Servicer of any funds paid to the Master Servicer or its designee in respect of 
the Securities or the Assets, or deposited into or withdrawn from the Collection
Account or any other account by or on behalf of the Servicer. If no Event of    
Default has occurred and is continuing, the Trustee is required to perform only 
those duties specifically required under the applicable Agreement, as           
applicable. However, upon receipt of the various certificates, reports or other 
instruments required to be furnished to it, the Trustee is required to examine  
such documents and to determine whether they conform to the requirements of the 
applicable Agreement.                                                           

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Certain Matters Regarding the Trustee                         

         The Trustee and any director, officer, employee or agent of the Trustee
shall be entitled to indemnification out of the Collection Account for any loss,
liability or expense (including costs and expenses of litigation, and of        
investigation, counsel fees, damages, judgments and amounts paid in settlement) 
incurred in connection with the Trustee's (i) enforcing its rights and remedies 
and protecting the interests, of the Securityholders during the continuance of  
an Event of Default, (ii) defending or prosecuting any legal action in respect  
of the applicable Agreement or Series of Securities (iii) being the mortgagee of
record with respect to the Mortgage Loans in a Trust Fund and the owner of      
record with respect to any Mortgaged Property acquired in respect thereof for   
the benefit of Securityholders, or (iv) acting or refraining from acting in good
faith at the direction of the holders of the related Series of Securities       
entitled to not less than 25% (or such other percentage as is specified in the  
applicable Agreement with respect to any particular matter) of the Voting Rights
for such Series; provided, however, that such indemnification will not extend to
any loss, liability or expense that constitutes a specific liability of the     
Trustee pursuant to the applicable Agreement, or to any loss, liability or      
expense incurred by reason of willful misfeasance, bad faith or negligence on   
the part of the Trustee in the performance of its obligations and duties        
thereunder, or by reason of its reckless disregard of such obligations or       
duties, or as may arise from a breach of any representation, warranty or        
covenant of the Trustee made therein.                                           

Resignation and Removal of the Trustee                        

    The Trustee may at any time resign from its obligations and duties
under an Agreement by giving written notice thereof to the Depositor, the       
Servicer and all Securityholders. Upon receiving such notice of resignation, the
Depositor is required promptly to appoint a successor trustee acceptable to the 
Servicer. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the  
resigning Trustee may petition any court of competent jurisdiction for the      
appointment of a successor trustee.                                             

      If at any time the Trustee shall cease to be eligible to continue as
such under the applicable Agreement, or if at any time the Trustee shall become 
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver  
of the Trustee or of its property shall be appointed, or any public officer     
shall take charge or control of the Trustee or of its property or affairs for   
the purpose of rehabilitation, conservation or liquidation, or if a change in   
the financial condition of the Trustee has adversely affected or will adversely 
affect the rating on any Class of the Securities, then the Depositor may remove 
the Trustee and appoint a successor trustee acceptable to the Servicer.         
Securityholders of any Series entitled to at least 51% (or such other percentage
specified in the related prospectus supplement) of the Voting Rights for such   
Series may at any time remove the Trustee without cause and appoint a successor 
trustee.                                                                        

Any resignation or removal of the Trustee and appointment of a
successor trustee shall not become effective until acceptance of appointment by 
the successor trustee.                                                          

MATERIAL TERMS OF THE INDENTURE                                                 

General                                                       

         The following summary describes the material provisions that may appear
in each Indenture. The prospectus supplement for a Series of Notes will describe
any provision of the Indenture relating to such Series that materially differs  
from the description thereof 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 Indenture for a Series of Notes. A
form of an Indenture has been filed as an exhibit to the Registration Statement 
of which this prospectus is a part. The Depositor will provide a copy of the    
Indenture (without exhibits) relating to any Series of Notes without charge upon
written request of a Securityholder of such Series addressed to Asset Backed    
Funding Corporation, 214 North Tryon Street, Charlotte, North Carolina 28255,   
Attention: Vice President.                                                      

Events of Default                                             

     Events of default under the Indenture for each Series of Notes will
generally include: (i) a default for thirty (30) days (or such other number of  
days specified in such prospectus supplement) or more in the payment of any     

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principal of or interest on any Note of such Series; (ii) failure to perform any
other covenant of the Depositor or the Trust Fund in the Indenture which        
continues for a period of sixty (60) days (or such other number of days         
specified in such prospectus supplement) after notice thereof is given in       
accordance with the procedures described in the related prospectus supplement;  
(iii) any representation or warranty made by the Depositor or the Trust Fund in 
the Indenture or in any certificate or other writing delivered pursuant thereto 
or in connection therewith with respect to or affecting such Series having been 
incorrect in a material respect as of the time made, and such breach is not     
cured within sixty (60) days (or such other number of days specified in such    
prospectus supplement) after notice thereof is given in accordance with the     
procedures described in the related prospectus supplement; (iv) certain events  
of bankruptcy, insolvency, receivership or liquidation of the Depositor or the  
Trust Fund; or (v) any other event of default provided with respect to Notes of 
that Series.                                                                    

       If an event of default with respect to the Notes of any Series at the
time outstanding occurs and is continuing, either the Indenture Trustee or the  
Securityholders of a majority of the then aggregate outstanding amount of the   
Notes of such Series may declare the principal amount (or, if the Notes of that 
Series are Accrual Securities, such portion of the principal amount as may be   
specified in the terms of that Series, as provided in the related prospectus    
supplement) of all the Notes of such Series to be due and payable immediately.  
Such declaration may, under certain circumstances, be rescinded and annulled by 
the Securityholders of a majority in aggregate outstanding amount of the Notes  
of such Series.                                                                 

        If, following an event of default with respect to any Series of Notes,
the Notes of such Series have been declared to be due and payable, the Indenture
Trustee may, in its discretion, notwithstanding such acceleration, elect to     
maintain possession of the collateral securing the Notes of such Series and to  
continue to apply distributions on such collateral as if there had been no      
declaration of acceleration if such collateral continues to provide sufficient  
funds for the payment of principal of and interest on the Notes of such Series  
as they would have become due if there had not been such a declaration. In      
addition, the Indenture Trustee may not sell or otherwise liquidate the         
collateral securing the Notes of a Series following an event of default, other  
than a default in the payment of any principal or interest on any Note of such  
Series for thirty (30) days or more, unless (a) the Securityholders of 100% (or 
such other percentage specified in the related prospectus supplement) of the    
then aggregate outstanding amount of the Notes of such Series consent to such   
sale, (b) the proceeds of such sale or liquidation are sufficient to pay in full
the principal of and accrued interest, due and unpaid, on the outstanding Notes 
of such Series at the date of such sale or (c) the Indenture Trustee determines 
that such collateral would not be sufficient on an ongoing basis to make all    
payments on such Notes as such payments would have become due if such Notes had 
not been declared due and payable, and the Indenture Trustee obtains the consent
of the Securityholders of 66 2/3% (or such other percentage specified in the    
related prospectus supplement) of the then aggregate outstanding amount of the  
Notes of such Series.                                                           

      In the event that the Indenture Trustee liquidates the collateral in
connection with an event of default involving a default for thirty (30) days (or
such other number of days specified in the related prospectus supplement) or    
more in the payment of principal of or interest on the Notes of a Series, the   
Indenture provides that the Indenture Trustee will have a prior lien on the     
proceeds of any such liquidation for unpaid fees and expenses. As a result, upon
the occurrence of such an event of default, the amount available for            
distribution to the Securityholders would be less than would otherwise be the   
case. However, the Indenture Trustee may not institute a proceeding for the     
enforcement of its lien except in connection with a proceeding for the          
enforcement of the lien of the Indenture for the benefit of the Securityholders 
after the occurrence of such an event of default.                               

     To the extent provided in the related prospectus supplement, in the
event the principal of the Notes of a Series is declared due and payable, as    
described above, the Securityholders of any such Notes issued at a discount from
par may be entitled to receive no more than an amount equal to the unpaid       
principal amount thereof less the amount of such discount which is unamortized. 

      Subject to the provisions of the Indenture relating to the duties of
the Indenture Trustee, in case an event of default shall occur and be continuing
with respect to a Series of Notes, the Indenture Trustee shall be under no      
obligation to exercise any of the rights or powers under the Indenture at the   
request or direction of any of the Securityholders of such Series, unless such  
holders offered to the Indenture Trustee security or indemnity satisfactory to  
it against the costs, expenses and liabilities which might be incurred by it in 
complying with such request or direction. Subject to such provisions for        
indemnification and certain limitations contained in the                        

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Indenture, the Securityholders of a majority of the then aggregate outstanding  
amount of the Notes of such Series shall have the right to direct the time,     
method and place of conducting any proceeding for any remedy available to the   
Indenture Trustee or exercising any trust or power conferred on the Indenture   
Trustee with respect to the Notes of such Series, and the Securityholders of a  
majority of the then aggregate outstanding amount of the Notes of such Series   
may, in certain cases, waive any default with respect thereto, except a default 
in the payment of principal or interest or a default in respect of a covenant or
provision of the Indenture that cannot be modified without the waiver or consent
of all the Securityholders of the outstanding Notes of such Series affected     
thereby.                                                                        

Discharge of Indenture                                        

    The Indenture will be discharged with respect to a Series of Notes
(except with respect to certain continuing rights specified in the Indenture)   
upon the delivery to the Indenture Trustee for cancellation of all the Notes of 
such Series or, with certain limitations, upon deposit with the Indenture       
Trustee of funds sufficient for the payment in full of all of the Notes of such 
Series.                                                                         

       In addition to such discharge with certain limitations, the Indenture
will provide that, if so specified with respect to the Notes of any Series, the 
related Trust Fund will be discharged from any and all obligations in respect of
the Notes of such Series (except for certain obligations relating to temporary  
Notes and exchange of Notes, to register the transfer of or exchange Notes of   
such Series, to replace stolen, lost or mutilated Notes of such Series, to      
maintain paying agencies and to hold monies for payment in trust) upon the      
deposit with the Indenture Trustee, in trust, of money and/or direct obligations
of or obligations guaranteed by the United States of America which through the  
payment of interest and principal in respect thereof in accordance with their   
terms will provide money in an amount sufficient to pay the principal of and    
each installment of interest on the Notes of such Series on the maturity date   
for such Notes and any installment of interest on such Notes in accordance with 
the terms of the Indenture and the Notes of such Series. In the event of any    
such defeasance and discharge of Notes of such Series, holders of Notes of such 
Series would be able to look only to such money and/or direct obligations for   
payment of principal and interest, if any, on their Notes until maturity.       

Indenture Trustee's Annual Report                             

         The Indenture Trustee for each Series of Notes will be required to mail
each year to all related Securityholders a brief report relating to its         
eligibility and qualification to continue as Indenture Trustee under the related
Indenture, any amounts advanced by it under the Indenture, the amount, interest 
rate and maturity date of certain indebtedness owing by such Trust to the       
applicable Indenture Trustee in its individual capacity, the property and funds 
physically held by such Indenture Trustee as such and any action taken by it    
that materially affects such Notes and that has not been previously reported.   

The Indenture Trustee                                         

      The Indenture Trustee for a Series of Notes will be specified in the
related prospectus supplement. The Indenture Trustee for any Series may resign  
at any time, in which event the Depositor will be obligated to appoint a        
successor trustee for such Series. The Depositor may also remove any such       
Indenture Trustee if such Indenture Trustee ceases to be eligible to continue as
such under the related Indenture or if such Indenture Trustee becomes insolvent.
In such circumstances the Depositor will be obligated to appoint a successor    
trustee for the applicable Series of Notes. Any resignation or removal of the   
Indenture Trustee and appointment of a successor trustee for any Series of Notes
does not become effective until acceptance of the appointment by the successor  
trustee for such Series.                                                        

   The bank or trust company serving as Indenture Trustee may have a
banking relationship with the Depositor or any of its affiliates, a Servicer or 
any of its affiliates or the Master Servicer or any of its affiliates.          

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 DESCRIPTION OF CREDIT SUPPORT

GENERAL                                                                         

   For any Series of Securities, Credit Support may be provided with
respect to one or more Classes thereof or the related Assets. Credit Support may
be in the form of the subordination of one or more Classes of Securities,       
overcollateralization, excess interest, cross-support, letters of credit,       
insurance policies, guarantees, the establishment of one or more reserve funds  
or another method of Credit Support described in the related prospectus         
supplement, or any combination of the foregoing. If so provided in the related  
prospectus supplement, any form of Credit Support may be structured so as to be 
drawn upon by more than one Series to the extent described therein.             

      The coverage provided by any Credit Support will be described in the
related prospectus supplement. Generally, such coverage will not provide        
protection against all risks of loss and will not guarantee repayment of the    
entire Security Balance of the Securities and interest thereon. If losses or    
shortfalls occur that exceed the amount covered by Credit Support or that are   
not covered by Credit Support, Securityholders will bear their allocable share  
of deficiencies. Moreover, if a form of Credit Support covers more than one     
Series of Securities (each, a "COVERED TRUST"), Securityholders evidencing      
interests in any of such Covered Trusts will be subject to the risk that such   
Credit Support will be exhausted by the claims of other Covered Trusts prior to 
such Covered Trust receiving any of its intended share of such coverage.        

      If Credit Support is provided with respect to one or more Classes of
Securities of a Series, or the related Assets, the related prospectus supplement
will include a description of (a) the nature and amount of coverage under such  
Credit Support, (b) any conditions to payment thereunder not otherwise described
herein, (c) the conditions (if any) under which the amount of coverage under    
such Credit Support may be reduced and under which such Credit Support may be   
terminated or replaced and (d) the material provisions relating to such Credit  
Support. Additionally, the related prospectus supplement will set forth certain 
information with respect to the obligor under any instrument of Credit Support, 
including (i) a brief description of its principal business activities, (ii) its
principal place of business, place of incorporation and the jurisdiction under  
which it is chartered or licensed to do business, (iii) if applicable, the      
identity of regulatory agencies that exercise primary jurisdiction over the     
conduct of its business and (iv) its total assets, and its stockholders' or     
policyholders' surplus, if applicable, as of the date specified in the          
prospectus supplement. See "Risk Factors--Risks Associated with the             
Securities--Credit Enhancement is Limited in Amount and Coverage."              

SUBORDINATE SECURITIES                                                          

   If so specified in the related prospectus supplement, one or more
Classes of Securities of a Series may be Subordinate Securities. To the extent  
specified in the related prospectus supplement, the rights of the holders of    
Subordinate Securities to receive distributions of principal and interest from  
the Collection Account on any Distribution Date will be subordinated to such    
rights of the holders of Senior Securities. If so provided in the related       
prospectus supplement, the subordination of a Class may apply only in the event 
of (or may be limited to) certain types of losses or shortfalls. The related    
prospectus supplement will set forth information concerning the amount of       
subordination of a Class or Classes of Subordinate Securities in a Series, the  
circumstances in which such subordination will be applicable and the manner, if 
any, in which the amount of subordination will be effected.                     

OVERCOLLATERALIZATION                                                           

  If specified in the related prospectus supplement, subordination
provisions of a Trust Fund may be used to accelerate to a limited extent the    
amortization of one or more Classes of Securities relative to the amortization  
of the related Assets. The accelerated amortization is achieved by the          
application of certain excess interest to the payment of principal of one or    
more Classes of Securities. This acceleration feature creates, with respect to  
the Assets or a group thereof, overcollateralization which results from the     
excess of the aggregate principal balance of the related Assets, or group       
thereof, over the principal balance of the related Class or Classes of          
Securities. Such acceleration may continue for the life of the related Security,
or may be limited. In the case of limited acceleration, once the required level 
of overcollateralization is reached, and subject to certain provisions specified
in the related prospectus supplement, such limited acceleration feature may     
cease, unless necessary to maintain the required level of overcollateralization.

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EXCESS INTEREST                                                                 

    If specified in the related prospectus supplement, the Assets in a
Trust Fund may generate more interest than is necessary to pay the interest     
earned on the Classes of Securities each month. The excess interest may be used 
to maintain overcollateralization, to pay interest that was previously earned   
but not paid to certain Classes of Securities and to reimburse certain Classes  
of Securities for losses and certain shortfalls that they experienced           
previously.                                                                     

CROSS-SUPPORT PROVISIONS                                                        

   If the Assets for a Series are divided into separate groups, each
supporting a separate Class or Classes of Securities of a Series, Credit Support
may be provided by cross-support provisions requiring that distributions be made
on Senior Securities evidencing interests in one group of Assets prior to       
distributions on Subordinate Securities evidencing interests in a different     
group of Assets within the Trust Fund. The prospectus supplement for a Series   
that includes a cross-support provision will describe the manner and conditions 
for applying such provisions.                                                   

LIMITED GUARANTEE                                                               

        If so specified in the related prospectus supplement with respect to a
Series of Securities, credit enhancement may be provided in the form of a       
limited guarantee issued by a guarantor named therein.                          

FINANCIAL GUARANTY INSURANCE POLICY OR SURETY BOND                              

        If so specified in the related prospectus supplement with respect to a
Series of Securities, credit enhancement may be provided in the form of a       
financial guaranty insurance policy or a surety bond issued by an insurer named 
therein.                                                                        

LETTER OF CREDIT                                                                

       Alternative credit support with respect to a Series of Securities may
be provided by the issuance of a letter of credit by the bank or financial      
institution specified in the related prospectus supplement. The coverage, amount
and frequency of any reduction in coverage provided by a letter of credit issued
with respect to a Series of Securities will be set forth in the prospectus      
supplement relating to such Series.                                             

POOL INSURANCE POLICIES                                                         

    If so specified in the related prospectus supplement relating to a
Series of Securities, a pool insurance policy for the Mortgage Loans in the     
related Trust Fund will be obtained. The pool insurance policy will cover any   
loss (subject to the limitations described in the related prospectus supplement)
by reason of default to the extent a related Mortgage Loan is not covered by any
primary mortgage insurance policy. The amount and principal terms of any such   
coverage will be set forth in the prospectus supplement.                        

SPECIAL HAZARD INSURANCE POLICIES                                               

        If so specified in the related prospectus supplement, a special hazard
insurance policy may also be obtained for the related Trust Fund in the amount  
set forth in such prospectus supplement. The special hazard insurance policy    
will, subject to the limitations described in the related prospectus supplement,
protect against loss by reason of damage to Mortgaged Properties caused by      
certain hazards not insured against under the standard form of hazard insurance 
policy for the respective states, in which the Mortgaged Properties are located.
The amount and principal terms of any such coverage will be set forth in the    
prospectus supplement.                                                          

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MORTGAGOR BANKRUPTCY BOND                                                       

        If so specified in the related prospectus supplement, losses resulting
from a bankruptcy proceeding relating to a mortgagor affecting the Mortgage     
Loans in a Trust Fund with respect to a Series of Securities will be covered    
under a mortgagor bankruptcy bond (or any other instrument that will not result 
in a downgrading of the rating of the Securities of a Series by the Rating      
Agency or Rating Agencies that rate such Series). Any mortgagor bankruptcy bond 
or such other instrument will provide for coverage in an amount meeting the     
criteria of the Rating Agency or Rating Agencies rating the Securities of the   
related Series, which amount will be set forth in the related prospectus        
supplement. The amount and principal terms of any such coverage will be set     
forth in the prospectus supplement.                                             

RESERVE FUNDS                                                                   

         If so provided in the prospectus supplement for a Series of Securities,
deficiencies in amounts otherwise payable on such Securities or certain Classes 
thereof will be covered by one or more reserve funds in which cash, a letter of 
credit, Permitted Investments, a demand note or a combination thereof will be   
deposited, in the amounts so specified in such prospectus supplement. The       
reserve funds for a Series may also be funded over time by depositing therein a 
specified amount of the distributions received on the related Assets as         
specified in the related prospectus supplement.                                 

        Amounts on deposit in any reserve fund for a Series, together with the
reinvestment income thereon, if any, will be applied for the purposes, in the   
manner, and to the extent specified in the related prospectus supplement. A     
reserve fund may be provided to increase the likelihood of timely distributions 
of principal of and interest on the Securities. If so specified in the related  
prospectus supplement, reserve funds may be established to provide limited      
protection against only certain types of losses and shortfalls. Following each  
Distribution Date amounts in a reserve fund in excess of any amount required to 
be maintained therein may be released from the reserve fund under the conditions
and to the extent specified in the related prospectus supplement and will not be
available for further application to the Securities.                            

     Moneys deposited in any reserve funds will be invested in Permitted
Investments, to the extent specified in the related prospectus supplement. To   
the extent specified in the related prospectus supplement, any reinvestment     
income or other gain from such investments will be credited to the related      
reserve fund for such Series, and any loss resulting from such investments will 
be charged to such reserve fund. However, such income may be payable to any     
related Servicer or another service provider as additional compensation. To the 
extent specified in the related prospectus supplement, the reserve fund, if any,
for a Series will not be a part of the Trust Fund.                              

         Additional information concerning any reserve fund will be set forth in
the related prospectus supplement, including the initial balance of such reserve
fund, the balance required to be maintained in the reserve fund, the manner in  
which such required balance will decrease over time, the manner of funding such 
reserve fund, the purposes for which funds in the reserve fund may be applied to
make distributions to Securityholders and use of investment earnings from the   
reserve fund, if any.                                                           

 CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS

   The following discussion contains summaries, which are general in
nature, of certain legal aspects of loans secured by single-family or           
multi-family residential properties. Because such legal aspects are governed    
primarily by applicable state law(which laws may differ substantially), the     
summaries do not purport to be complete nor to reflect the laws of any          
particular state, nor to encompass the laws of all states in which the security 
for the Mortgage Loans is situated. The summaries are qualified in their        
entirety by reference to the applicable federal and state laws governing the    
Mortgage Loans. See "Description of the Trust Funds--Assets."                   

GENERAL                                                                         

     All of the Mortgage Loans are loans evidenced by a note or bond and
secured by instruments granting a security interest in real property which may  
be mortgages, deeds of trust, security deeds or deeds to secure debt,           

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depending upon the prevailing practice and law in the state in which the        
Mortgaged Property is located. Mortgages, deeds of trust and deeds to secure    
debt are herein collectively referred to as "mortgages." Any of the foregoing   
types of mortgages will create a lien upon, or grant a title interest in, the   
subject property, the priority of which will depend on the terms of the         
particular security instrument, as well as separate, recorded, contractual      
arrangements with others holding interests in the mortgaged property, the       
knowledge of the parties to such instrument as well as the order of recordation 
of the instrument in the appropriate public recording office. However, recording
does not generally establish priority over governmental claims for real estate  
taxes and assessments and other charges imposed under governmental police       
powers.                                                                         

TYPES OF MORTGAGE INSTRUMENTS                                                   

         A mortgage either creates a lien against or constitutes a conveyance of
real property between two parties--a mortgagor (the borrower and usually the    
owner of the subject property) and a mortgagee (the lender). In contrast, a deed
of trust is a three-party instrument, among a trustor (the equivalent of a      
mortgagor), a trustee to whom the mortgaged property is conveyed, and a         
beneficiary (the lender) for whose benefit the conveyance is made. As used in   
this prospectus, unless the context otherwise requires, "mortgagor" includes the
trustor under a deed of trust and a grantor under a security deed or a deed to  
secure debt. Under a deed of trust, the mortgagor grants the property,          
irrevocably until the debt is paid, in trust, generally with a power of sale as 
security for the indebtedness evidenced by the related note. A deed to secure   
debt typically has two parties. By executing a deed to secure debt, the grantor 
conveys title to, as opposed to merely creating a lien upon, the subject        
property to the grantee until such time as the underlying debt is repaid,       
generally with a power of sale as security for the indebtedness evidenced by the
related mortgage note. In case the mortgagor under a mortgage is a land trust,  
there would be an additional party because legal title to the property is held  
by a land trustee under a land trust agreement for the benefit of the mortgagor.
At origination of a mortgage loan involving a land trust, the mortgagor executes
a separate undertaking to make payments on the mortgage note. The mortgagee's   
authority under a mortgage, the trustee's authority under a deed of trust and   
the grantee's authority under a deed to secure debt are governed by the express 
provisions of the mortgage, the law of the state in which the real property is  
located, certain federal laws (including, without limitation, the Relief Act)   
and, in some cases, in deed of trust transactions, the directions of the        
beneficiary.                                                                    

   The Mortgages that encumber Multifamily Properties may contain an
assignment of rents and leases, pursuant to which the mortgagor assigns to the  
lender the mortgagor's right, title and interest as landlord under each lease   
and the income derived therefrom, while retaining a revocable license to collect
the rents for so long as there is no default. If the mortgagor defaults, the    
license terminates and the lender is entitled to collect the rents. Local law   
may require that the lender take possession of the property and/or obtain a     
court-appointed receiver before becoming entitled to collect the rents.         

INTEREST IN REAL PROPERTY                                                       

       The real property covered by a mortgage, deed of trust, security deed
or deed to secure debt is most often the fee estate in land and improvements.   
However, such an instrument may encumber other interests in real property such  
as a tenant's interest in a lease of land or improvements, or both, and the     
leasehold estate created by such lease. An instrument covering an interest in   
real property other than the fee estate requires special provisions in the      
instrument creating such interest or in the mortgage, deed of trust, security   
deed or deed to secure debt, to protect the mortgagee against termination of    
such interest before the mortgage, deed of trust, security deed or deed to      
secure debt is paid. The Depositor, the Asset Seller or other entity specified  
in the related prospectus supplement will make certain representations and      
warranties in the applicable Agreement or certain representations and warranties
will be assigned to the Trustee with respect to any Mortgage Loans that are     
secured by an interest in a leasehold estate. Such representation and           
warranties, if applicable, will be set forth in the prospectus supplement.      

COOPERATIVE LOANS                                                               

   If specified in the prospectus supplement relating to a Series of
Offered Securities, the Mortgage Loans may also consist of cooperative apartment
loans ("COOPERATIVE LOANS") secured by security interests in shares issued by a 
cooperative housing corporation (a "COOPERATIVE") and in the related proprietary
leases or occupancy agreements granting exclusive rights to occupy specific     
dwelling units in the cooperatives' buildings. The security agreement will      
create a lien upon, or grant a title interest in, the property which it covers, 
the priority of which will                                                      

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depend on the terms of the particular security agreement as well as the order of
recordation of the agreement in the appropriate recording office. Such a lien or
title interest is not prior to the lien for real estate taxes and assessments   
and other charges imposed under governmental police powers.                     

     Each Cooperative owns in fee or has a leasehold interest in all the
real property and owns in fee or leases the building and all separate dwelling  
units therein. The Cooperative is directly responsible for property management  
and, in most cases, payment of real estate taxes, other governmental impositions
and hazard and liability insurance. If there is a blanket mortgage or mortgages 
on the cooperative apartment building or underlying land, as is generally the   
case, or an underlying lease of the land, as is the case in some instances, the 
Cooperative, as property mortgagor, or lessee, as the case may be, is also      
responsible for meeting these mortgage or rental obligations. A blanket mortgage
is ordinarily incurred by the cooperative in connection with either the         
construction or purchase of the Cooperative's apartment building or obtaining of
capital by the Cooperative. The interest of the occupant under proprietary      
leases or occupancy agreements as to which that Cooperative is the landlord are 
generally subordinate to the interest of the holder of a blanket mortgage and to
the interest of the holder of a land lease. If the Cooperative is unable to meet
the payment obligations (i) arising under a blanket mortgage, the mortgagee     
holding a blanket mortgage could foreclose on that mortgage and terminate all   
subordinate proprietary leases and occupancy agreements or (ii) arising under   
its land lease, the holder of the landlord's interest under the land lease could
terminate it and all subordinate proprietary leases and occupancy agreements.   
Also, a 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 final payment at maturity. The inability of the Cooperative to 
refinance a mortgage and its consequent inability to make such final payment    
could lead to foreclosure by the mortgagee. Similarly, a land lease has an      
expiration date and the inability of the Cooperative to extend its term or, in  
the alternative, to purchase the land could lead to termination of the          
Cooperative's interest in the property and termination of all proprietary leases
and occupancy agreement. In either event, a foreclosure by the holder of a      
blanket mortgage or the termination of the underlying lease could eliminate or  
significantly diminish the value of any collateral held by the lender that      
financed the purchase by an individual tenant stockholder of cooperative shares 
or, in the case of the Mortgage Loans, the collateral securing the Cooperative  
Loans.                                                                          

        The Cooperative is owned by tenant-stockholders who, through ownership
of stock or shares in the corporation, receive proprietary lease 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 such 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 occupancy rights are financed through
a Cooperative Loan evidenced by a promissory note and secured by an assignment  
of and a security interest in the occupancy agreement or proprietary lease and a
security interest in the related Cooperative shares. The lender generally takes 
possession of the share certificate and a counterpart of the proprietary lease  
or occupancy agreement and a financing statement covering the proprietary lease 
or occupancy agreement and the cooperative shares is filed in the appropriate   
state and local offices to perfect the lender's interest in its collateral.     
Subject to the limitations discussed below, upon default of the                 
tenant-stockholder, the lender may sue for judgment on the 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. See "Foreclosure--Cooperative   
Loans" below.                                                                   

LAND SALE CONTRACTS                                                             

        Under Land Sale Contracts the contract seller (hereinafter referred to
as the "CONTRACT LENDER") retains legal title to the property and enters into an
agreement with the contract purchaser (hereinafter referred to as the "CONTRACT 
BORROWER") for the payment of the purchase price, plus interest, over the term  
of the Land Sale Contract. Only after full performance by the borrower of the   
contract is the contract lender obligated to convey title to the real estate to 
the purchaser. As with mortgage or deed of trust financing, during the effective
period of the Land Sale Contract, the contract borrower is responsible for      
maintaining the property in good condition and for paying real estate taxes,    
assessments and hazard insurance premiums associated with the property.         

    The method of enforcing the rights of the contract lender under an
installment contract varies on a state-by-state basis depending upon the extent 
to which state courts are willing, or able pursuant to state statute, to enforce

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the contract strictly according to its terms. The terms of Land Sale Contracts  
generally provide that upon default by the contract borrower, the borrower loses
his or her right to occupy the property, the entire indebtedness is accelerated,
and the buyer's equitable interest in the property is forfeited. The contract   
lender in such a situation does not have to foreclose in order to obtain title  
to the property, although in some cases a quiet title action is in order if the 
contract borrower has filed the Land Sale Contract in local land records and an 
ejectment action may be necessary to recover possession. In a few states,       
particularly in cases of contract borrower default during the early years of a  
Land Sale Contract, the courts will permit ejectment of the buyer and a         
forfeiture of his or her interest in the property. However, most state          
legislatures have enacted provisions by analogy to mortgage law protecting      
borrowers under Land Sale Contracts from the harsh consequences of forfeiture.  
Under such statues, a judicial contract may be reinstated upon full payment of  
the default amount and the borrower may have a post-foreclosure statutory       
redemption right. In other states, courts in equity may permit a contract       
borrower with significant investment in the property under a Land Sale Contract 
for the sale of real estate to share the proceeds of sale of the property after 
the indebtedness is repaid or may otherwise refuse to enforce the forfeiture    
clause. Nevertheless, generally speaking, the contract lender's procedures for  
obtaining possession and clear title under a Land Sale Contract for the sale of 
real estate in a given state are simpler and less time consuming and costly than
are the procedures for foreclosing and obtaining clear title to a mortgaged     
property.                                                                       

FORECLOSURE                                                                     

General                                                       

       Foreclosure is a legal procedure that allows the mortgagee to recover
its mortgage debt by enforcing its rights and available legal remedies under the
mortgage. If the mortgagor defaults in payment or performance of its obligations
under the note or mortgage, the mortgagee has the right to institute foreclosure
proceedings to sell the mortgaged property at public auction to satisfy the     
indebtedness.                                                                   

      Foreclosure procedures with respect to the enforcement of a mortgage
vary from state to state. Two primary methods of foreclosing a mortgage are     
judicial foreclosure and non-judicial foreclosure pursuant to a power of sale   
granted in the mortgage instrument. There are several other foreclosure         
procedures available in some states that are either infrequently used or        
available only in certain limited circumstances, such as strict foreclosure.    

Judicial Foreclosure                                          

  A judicial foreclosure proceeding is conducted in a court having
jurisdiction over the mortgaged property. Generally, the action is initiated by 
the service of legal pleadings upon all parties having an interest of record in 
the real property. Delays in completion of the foreclosure may occasionally     
result from difficulties in locating defendants. When the lender's right to     
foreclose is contested, the legal proceedings can be time-consuming. Upon       
successful completion of a judicial foreclosure proceeding, the court generally 
issues a judgment of foreclosure and appoints a referee or other officer to     
conduct a public sale of the mortgaged property, the proceeds of which are used 
to satisfy the judgment. Such sales are made in accordance with procedures that 
vary from state to state.                                                       

Equitable Limitations on Enforceability of Certain Provisions 

   United States courts have traditionally imposed general equitable
principles to limit the remedies available to a mortgagee in connection with    
foreclosure. These equitable principles are generally designed to relieve the   
mortgagor from the legal effect of mortgage defaults, to the extent that such   
effect is perceived as harsh or unfair. Relying on such principles, a court may 
alter the specific terms of a loan to the extent it considers necessary to      
prevent or remedy an injustice, undue oppression or overreaching, or may require
the lender to undertake affirmative and expensive actions to determine the cause
of the mortgagor's default and the likelihood that the mortgagor will be able to
reinstate the loan. In some cases, courts have substituted their judgment for   
the lender's and have required that lenders reinstate loans or recast payment   
schedules in order to accommodate mortgagors who are suffering from a temporary 
financial disability. In other cases, courts have limited the right of the      
lender to foreclose if the default under the mortgage is not monetary, e.g., the
mortgagor failed to maintain the mortgaged property adequately or the mortgagor 
executed a junior mortgage on the mortgaged property. The exercise by the court 
of its equity powers will depend on the individual circumstances of each case   
presented to it. Finally, some courts have been faced with the issue of whether 
federal or state constitutional provisions reflecting due process               

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concerns for adequate notice require that a mortgagor receive notice in addition
to statutorily-prescribed minimum notice. For the most part, these cases have   
upheld the reasonableness of the notice provisions or have found that a public  
sale under a mortgage providing for a power of sale does not involve sufficient 
state action to afford constitutional protections to the mortgagor.             

Non-Judicial Foreclosure/Power of Sale                        

Foreclosure of a deed of trust is generally accomplished by a 
non-judicial trustee's sale pursuant to the power of sale granted in the deed of
trust. A power of sale is typically granted in a deed of trust. It may also be  
contained in any other type of mortgage instrument. A power of sale allows a    
non-judicial public sale to be conducted generally following a request from the 
beneficiary/lender to the trustee to sell the property upon any default by the  
mortgagor under the terms of the mortgage note or the mortgage instrument and   
after notice of sale is given in accordance with the terms of the mortgage      
instrument, as well as applicable state law. In some states, prior to such sale,
the trustee under a deed of trust must record a notice of default and notice of 
sale and send a copy to the mortgagor and to any other party who has recorded a 
request for a copy of a notice of default and notice of sale. In addition, in   
some states the trustee must provide notice to any other party having an        
interest of record in the real property, including junior lienholders. A notice 
of sale must be posted in a public place and, in most states, published for a   
specified period of time in one or more newspapers. The mortgagor or junior     
lienholder may then have the right, during a reinstatement period required in   
some states, to cure the default by paying the entire actual amount in arrears  
(without acceleration) plus the expenses incurred in enforcing the obligation.  
In other states, the mortgagor or the junior lienholder is not provided a period
to reinstate the loan, but has only the right to pay off the entire debt to     
prevent the foreclosure sale. Generally, the procedure for public sale, the     
parties entitled to notice, the method of giving notice and the applicable time 
periods are governed by state law and vary among the states. Foreclosure of a   
deed to secure debt is also generally accomplished by a non-judicial sale       
similar to that required by a deed of trust, except that the lender or its      
agent, rather than a trustee, is typically empowered to perform the sale in     
accordance with the terms of the deed to secure debt and applicable law.        

Public Sale                                                   

      A third party may be unwilling to purchase a mortgaged property at a
public sale because of the difficulty in determining the value of such property 
at the time of sale, due to, among other things, redemption rights which may    
exist and the possibility of physical deterioration of the property during the  
foreclosure proceedings. For these reasons, it is common for the lender to      
purchase the mortgaged property for an amount equal to or less than the         
underlying debt and accrued and unpaid interest plus the expenses of            
foreclosure. Generally, state law controls the amount of foreclosure costs and  
expenses which may be recovered by a lender. Thereafter, subject to the         
mortgagor's right in some states to remain in possession during a redemption    
period, if applicable, the lender will become the owner of the property and have
both the benefits and burdens of ownership of the mortgaged property. For       
example, the lender will become obligated to pay taxes, obtain casualty         
insurance and to make such repairs at its own expense as are necessary to render
the property suitable for sale. The lender will commonly obtain the services of 
a real estate broker and pay the broker's commission in connection with the sale
of the property. Depending upon market conditions, the ultimate proceeds of the 
sale of the property may not equal the lender's investment in the property.     
Moreover, a lender commonly incurs substantial legal fees and court costs in    
acquiring a mortgaged property through contested foreclosure and/or bankruptcy  
proceedings. Generally, state law controls the amount of foreclosure expenses   
and costs, including attorneys' fees, that may be recovered by a lender.        

   A junior mortgagee may not foreclose on the property securing the
junior mortgage unless it forecloses subject to senior mortgages and any other  
prior liens, in which case it may be obliged to make payments on the senior     
mortgages to avoid their foreclosure. In addition, in the event that the        
foreclosure of a junior mortgage triggers the enforcement of a "due-on-sale"    
clause contained in a senior mortgage, the junior mortgagee may be required to  
pay the full amount of the senior mortgage to avoid its foreclosure.            
Accordingly, with respect to those Mortgage Loans, if any, that are junior      
mortgage loans, if the lender purchases the property the lender's title will be 
subject to all senior mortgages, prior liens and certain governmental liens.    

   The proceeds received by the referee or trustee from the sale are
applied first to the costs, fees and expenses of sale and then in satisfaction  
of the indebtedness secured by the mortgage under which the sale was conducted. 
Any proceeds remaining after satisfaction of senior mortgage debt are generally 
payable to the holders of junior                                                

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mortgages and other liens and claims in order of their priority, whether or not 
the mortgagor is in default. Any additional proceeds are generally payable to   
the mortgagor. The payment of the proceeds to the holders of junior mortgages   
may occur in the foreclosure action of the senior mortgage or a subsequent      
ancillary proceeding or may require the institution of separate legal           
proceedings by such holders.                                                    

Rights of Redemption                                          

     The purposes of a foreclosure action are to enable the mortgagee to
realize upon its security and to bar the mortgagor, and all persons who have an 
interest in the property which is subordinate to the mortgage being foreclosed, 
from exercise of their "equity of redemption." The doctrine of equity of        
redemption provides that, until the property covered by a mortgage has been sold
in accordance with a properly conducted foreclosure and foreclosure sale, those 
having an interest which is subordinate to that of the foreclosing mortgagee    
have an equity of redemption and may redeem the property by paying the entire   
debt with interest. In addition, in some states, when a foreclosure action has  
been commenced, the redeeming party must pay certain costs of such action. Those
having an equity of redemption must generally be made parties and joined in the 
foreclosure proceeding in order for their equity of redemption to be cut off and
terminated.                                                                     

      The equity of redemption is a common-law (non-statutory) right which
exists prior to completion of the foreclosure, is not waivable by the mortgagor,
must be exercised prior to foreclosure sale and should be distinguished from the
post-sale statutory rights of redemption. In some states, after sale pursuant to
a deed of trust or foreclosure of a mortgage, the mortgagor and foreclosed      
junior lienors are given a statutory period in which to redeem the property from
the foreclosure sale. In some states, statutory redemption may occur only upon  
payment of the foreclosure sale price. In other states, redemption may be       
authorized if the former mortgagor pays only a portion of the sums due. The     
effect of a statutory 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 from a foreclosure sale or sale under a 
deed of trust. Consequently, the practical effect of the redemption right is to 
force the lender to maintain the property and pay the expenses of ownership     
until the redemption period has expired. In some states, a post-sale statutory  
right of redemption may exist following a judicial foreclosure, but not         
following a trustee's sale under a deed of trust.                               

      Under the REMIC Provisions currently in effect, property acquired by
foreclosure generally must not be held for more than three calendar years       
following the year the Trust Fund acquired the property. With respect to a      
Series of Securities for which an election is made to qualify the Trust Fund or 
a part thereof as a REMIC, the applicable Agreement will permit foreclosed      
property to be held for more than such period of time if the IRS grants an      
extension of time within which to sell such property or independent counsel     
renders an opinion to the effect that holding such property for such additional 
period is permissible under the REMIC Provisions. The applicability of these    
limitations if a FASIT election is made with respect to all or a part of the    
Trust Fund will be described in the applicable prospectus supplement.           

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 by-laws, as well as 
the proprietary lease or occupancy agreement, and may be canceled by the        
Cooperative for failure by the tenant-stockholder to pay rent or other          
obligations or charges owed by such tenant-stockholder, including mechanics'    
liens against the cooperative apartment building incurred by such               
tenant-stockholder. The proprietary lease or occupancy agreement generally      
permit the Cooperative to terminate such lease or agreement in the event an     
obligor fails to make payments or defaults in the performance of covenants      
required thereunder. Typically, the lender and the Cooperative enter into a     
recognition agreement which establishes the rights and obligations of both      
parties in the event of a default by the tenant-stockholder under the           
proprietary lease or occupancy agreement will usually constitute a default under
the security agreement between the lender and the tenant-stockholder.           

      The recognition agreement generally provides that, in the event that
the tenant-stockholder has defaulted under the proprietary lease or occupancy   
agreement, the Cooperative will take no action to terminate such lease or       
agreement until the lender has been provided with 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      

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the lender's lien against proceeds from the sale of the Cooperative apartment,  
subject, however, to the Cooperative's right to sums due under such 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       
thereon.                                                                        

        Recognition agreements also provide that in the event of a foreclosure
on 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.    

       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 Cooperatives 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.                                                 

     In the case of foreclosure on a building which was 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 which apply to certain      
tenants who elected to remain in a building so converted.                       

JUNIOR MORTGAGES                                                                

        Some of the Mortgage Loans may be secured by junior mortgages or deeds
of trust, which are subordinate to first or other senior mortgages or deeds of  
trust held by other lenders. The rights of the Trust Fund as the holder of a    
junior deed of trust or a junior mortgage are subordinate in lien and in payment
to those of the holder of the senior mortgage or deed of trust, including the   
prior rights of the senior mortgagee or beneficiary to receive and apply hazard 
insurance and condemnation proceeds and, upon default of the mortgagor, to cause
a foreclosure on the property. Upon completion of the foreclosure proceedings by
the holder of the senior mortgage or the sale pursuant to the deed of trust, the
junior mortgagee's or junior beneficiary's lien will be extinguished unless the 
junior lienholder satisfies the defaulted senior loan or asserts its subordinate
interest in a property in foreclosure proceedings. See "--Foreclosure" herein.  

        Furthermore, because the terms of the junior mortgage or deed of trust
are subordinate to the terms of the first mortgage or deed of trust, in the     
event of a conflict between the terms of the first mortgage or deed of trust and
the junior mortgage or deed of trust, the terms of the first mortgage or deed of
trust will generally govern. Upon a failure of the mortgagor or trustor to      
perform any of its obligations, the senior mortgagee or beneficiary, subject to 
the terms of the senior mortgage or deed of trust, may have the right to perform
the obligation itself. Generally, all sums so expended by the mortgagee or      
beneficiary become part of the indebtedness secured by the mortgage or deed of  
trust. To the extent a first mortgagee expends such sums, such sums will        
generally have priority over all sums due under the junior mortgage.            

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RIGHTS OF REDEMPTION                                                            

     The purposes of a foreclosure action are to enable the mortgagee to
realize upon its security and to bar the mortgagor, and all persons who have an 
interest in the property which is subordinate to the mortgage being foreclosed, 
from exercise of their "equity of redemption." The doctrine of equity of        
redemption provides that, until the property covered by a mortgage has been sold
in accordance with a properly conducted foreclosure and foreclosure sale, those 
having an interest which is subordinate to that of the foreclosing mortgagee    
have an equity of redemption and may redeem the property by paying the entire   
debt with interest. In addition, in some states, when a foreclosure action has  
been commenced, the redeeming party must pay certain costs of such action. Those
having an equity of redemption must generally be made parties and joined in the 
foreclosure proceeding in order for their equity of redemption to be cut off and
terminated.                                                                     

      The equity of redemption is a common-law (non-statutory) right which
exists prior to completion of the foreclosure, is not waivable by the mortgagor,
must be exercised prior to foreclosure sale and should be distinguished from the
post-sale statutory rights of redemption. In some states, after sale pursuant to
a deed of trust or foreclosure of a mortgage, the mortgagor and foreclosed      
junior lienors are given a statutory period in which to redeem the property from
the foreclosure sale. In some states, statutory redemption may occur only upon  
payment of the foreclosure sale price. In other states, redemption may be       
authorized if the former mortgagor pays only a portion of the sums due. The     
effect of a statutory 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 from a foreclosure sale or sale under a 
deed of trust. Consequently, the practical effect of the redemption right is to 
force the lender to maintain the property and pay the expenses of ownership     
until the redemption period has expired. In some states, a post-sale statutory  
right of redemption may exist following a judicial foreclosure, but not         
following a trustee's sale under a deed of trust.                               

ANTI-DEFICIENCY LEGISLATION, THE BANKRUPTCY CODE AND OTHER LIMITATIONS ON       
LENDERS                                                                         

    Certain states have imposed statutory prohibitions which limit the
remedies of a beneficiary under a deed of trust or a mortgagee under a mortgage.
In some states, statutes limit the right of the beneficiary or mortgagee to     
obtain a deficiency judgment against the borrower following foreclosure or sale 
under a deed of trust. A deficiency judgment would be a personal judgment       
against the former borrower equal in most cases to the difference between the   
net amount realized upon the public sale of the real property and the amount due
to the lender. Other statutes 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. Finally, other statutory provisions limit any deficiency judgment     
against the former borrower following a judicial sale to the excess of the      
outstanding debt over the fair market value of the property at the time of the  
public sale. The purpose of these statutes is generally to prevent a beneficiary
or a mortgagee from obtaining a large deficiency judgment against the former    
borrower as a result of low or no bids at the judicial sale.                    

        In addition to anti-deficiency and related legislation, numerous other
federal and state statutory provisions, including the United States Bankruptcy  
Code, 11 U.S.C. Sections 101 et seq. (the "BANKRUPTCY CODE"), and state laws    
affording relief to debtors may interfere with or affect the ability of a       
secured mortgage lender to obtain payment of a mortgage loan, to realize upon   
collateral and/or enforce a deficiency judgment. For example, under the         
Bankruptcy Code, virtually all actions (including foreclosure actions and       
deficiency judgment proceedings) are automatically stayed upon the filing of a  
bankruptcy petition, and, usually, no interest or principal payments are made   
during the course of the bankruptcy case. Foreclosure of an interest in real    
property of a debtor in a case under the Bankruptcy Code can typically occur    
only if the bankruptcy court vacates the stay; an action the court may be       
reluctant to take, particularly if the debtor has the prospect of restructuring 
his or her debts and the mortgage collateral is not deteriorating in value. The 
delay and the consequences thereof caused by such automatic stay can be         
significant. Also, under the Bankruptcy Code, the filing of a petition in       
bankruptcy by or on behalf of a junior lienor (a subordinate lender secured by a
mortgage on the property) may stay a senior lender from taking action to        
foreclose.                                                                      

        A homeowner may file for relief under the Bankruptcy Code under any of
three different chapters of the Bankruptcy Code. Under Chapter 7, the assets of 
the debtor are liquidated and a lender secured by a lien may "bid in" (i.e., bid
up to the amount of the debt) at the sale of the asset. See "--Foreclosure." A  
homeowner may also file                                                         

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for relief under Chapter 11 of the bankruptcy code and reorganize his or her    
debts through his or her reorganization plan. Alternatively, a homeowner may    
file for relief under Chapter 13 of the Bankruptcy Code and address his or her  
debts in a rehabilitation plan. (Chapter 13 is often referred to as the "wage   
earner chapter" or "consumer chapter" because most individuals seeking to       
restructure their debts file for relief under Chapter 13 rather than under      
Chapter 11.)                                                                    

         The Bankruptcy Code permits a mortgage loan that is secured by property
that does not consist solely of the debtor's principal residence to be modified 
without the consent of the lender provided certain substantive and procedural   
safeguards are met. Under the Bankruptcy Code, the lender's security interest   
may be reduced to the then-current value of the property as determined by the   
court if the value is less than the amount due on the loan, thereby leaving the 
lender as a general unsecured creditor for the difference between the value of  
the collateral and the outstanding balance of the mortgage loan. A borrower's   
unsecured indebtedness will typically be discharged in full upon payment of a   
substantially reduced amount. Other modifications to a mortgage loan may include
a reduction in the amount of each scheduled payment, which reduction may result 
from a reduction in the rate of interest, an alteration of the repayment        
schedule, an extension of the final maturity date, and/or a reduction in the    
outstanding balance of the secured portion of the loan. In certain              
circumstances, subject to the court's approval, a debtor in a case under Chapter
11 of the Bankruptcy Code may have the power to grant liens senior to the lien  
of a mortgage.                                                                  

        A reorganization plan under Chapter 11 and a rehabilitation plan under
Chapter 13 of the Bankruptcy Code may each allow a debtor to cure a default with
respect to a mortgage loan on such debtor's residence by paying arrearages over 
a period of time and to deaccelerate and reinstate the original mortgage loan   
payment schedule, even though the lender accelerated the loan and a final       
judgment of foreclosure had been entered in state court (provided no sale of the
property had yet occurred) prior to the filing of the debtor's petition under   
the Bankruptcy Code. Under a Chapter 13 plan, curing of defaults must be        
accomplished within the five year maximum term permitted for repayment plans,   
such term commencing when the repayment plan becomes effective, while defaults  
may be cured over a longer period of time under a Chapter 11 plan of            
reorganization.                                                                 

       Generally, a repayment plan in a case under Chapter 13 may not modify
the claim of a mortgage lender if the borrower elects to retain the property,   
the property is the borrower's principal residence and the property is the      
lender's only collateral. Certain courts have allowed modifications when the    
mortgage loan is secured both by the debtor's principal residence and by        
collateral that is not "inextricably bound" to the real property, such as       
appliances, machinery, or furniture. Certain courts have also allowed           
modifications when the Mortgage Loan is fully unsecured at the time of          
bankruptcy.                                                                     

   The general protection for mortgages secured only by the debtor's
principal residence is not applicable in a case under Chapter 13 if the last    
payment on the original payment schedule is due before the final date for       
payment under the debtor's Chapter 13 plan (which date could be up to five years
after the debtor emerges from bankruptcy). Under several recently decided cases,
the terms of such a loan can be modified in the manner described above. While   
these decisions are contrary to the holding in a prior case by a senior         
appellate court, it is possible that the later decisions will become the        
accepted interpretation in view of the language of the applicable statutory     
provision. If this interpretation is adopted by a court considering the         
treatment in a Chapter 13 repayment plan of a Mortgage Loan, it is possible that
the Mortgage Loan could be modified.                                            

    State statutes and general principles of equity may also provide a
mortgagor with means to halt a foreclosure proceeding or sale and to force a    
restructuring of a mortgage loan on terms a lender would not otherwise accept.  

     In a bankruptcy or similar proceeding of a mortgagor, action may be
taken seeking the recovery, as a preferential transfer or on other grounds, of  
any payments made by the mortgagor under the related mortgage loan prior to the 
bankruptcy or similar proceeding. Payments on long-term debt may be protected   
from recovery as preferences if they are payments in the ordinary course of     
business made on debts incurred in the ordinary course of business or if the    
value of the collateral exceeds the debt at the time of payment. Whether any    
particular payment would be protected depends upon the facts specific to a      
particular transaction.                                                         

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        A trustee in bankruptcy, in some cases, may be entitled to collect its
costs and expenses in preserving or selling the mortgaged property ahead of     
payment to the lender. Moreover, the laws of certain states also give priority  
to certain tax and mechanics liens over the lien of a mortgage. Under the       
Bankruptcy Code, if the court finds that actions of the mortgagee have been     
unreasonable and inequitable, the lien of the related mortgage may be           
subordinated to the claims of unsecured creditors.                              

    Bankruptcy reform legislation being considered by the Senate would
amend the Bankruptcy Code (such amendment, the "TILA AMENDMENT") to authorize   
bankruptcy court judges to disallow claims based on secured debt if the creditor
failed to comply with certain provisions of the federal Truth in Lending Act. As
most recently proposed, such provision would apply retroactively to secured debt
incurred by a debtor prior to the date of effectiveness of such legislation,    
including the Mortgage Loans. The House bill does not include a comparable      
provision as of the date hereof. If the TILA Amendment were to become law, a    
violation of the Truth in Lending act with respect to a Mortgage Loan could     
result in a total loss with respect to such loan in a bankruptcy proceeding. Any
such violation would be a breach of representation and warranty of the          
Depositor, and the Depositor would be obligated to repurchase such Mortgage Loan
as described herein.                                                            

   Various proposals to amend the Bankruptcy Code in ways that could
adversely affect the value of the Mortgage Loans in a trust have been considered
by Congress, and more such proposed legislation may be considered in the future.
No assurance can be given that any particular proposal will or will not be      
enacted into law, or that any provision so enacted will not differ materially   
from the proposals described above.                                             

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

ENFORCEABILITY OF CERTAIN PROVISIONS                                            

      Standard forms of note, mortgage and deed of trust generally contain
provisions obligating the borrower to pay a late charge if payments are not     
timely made and in some circumstances may provide for prepayment fees or        
penalties if the obligation is paid prior to maturity. In certain states, there 
are or may be specific limitations upon late charges which a lender may collect 
from a borrower for delinquent payments. Certain states also limit the amounts  
that a lender may collect from a borrower as an additional charge if the loan is
prepaid.                                                                        

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

ENVIRONMENTAL CONSIDERATIONS                                                    

         A lender may be subject to unforeseen environmental risks when taking a
security interest in real or personal property. Property subject to such a      
security interest may be subject to federal, state, and local laws and          

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regulations relating to environmental protection. Such laws may regulate, among 
other things: emissions of air pollutants; discharges of wastewater or storm    
water; generation, transport, storage or disposal of hazardous waste or         
hazardous substances; operation, closure and removal of underground storage     
tanks; removal and disposal of asbestos-containing materials; management of     
electrical or other equipment containing polychlorinated biphenyls ("PCBS").    
Failure to comply with such laws and regulations may result in significant      
penalties, including civil and criminal fines. Under the laws of certain states,
environmental contamination on a property may give rise to a lien on the        
property to ensure the availability and/or reimbursement of cleanup costs.      
Generally all subsequent liens on such property are subordinated to such a lien 
and, in some states, even prior recorded liens are subordinated to such liens   
("SUPERLIENS"). In the latter states, the security interest of the Trustee in a 
property that is subject to such Superlien could be adversely affected.         

      Under the federal Comprehensive Environmental Response, Compensation
and Liability Act, as amended ("CERCLA"), and under state law in certain states,
a secured party which takes a deed in lieu of foreclosure, purchases a mortgaged
property at a foreclosure sale, operates a mortgaged property or undertakes     
certain types of activities that may constitute management of the mortgaged     
property may become liable in certain circumstances for the costs of remedial   
action ("CLEANUP COSTS") if hazardous wastes or hazardous substances have been  
released or disposed of on the property. Such Cleanup Costs may be substantial. 
CERCLA imposes strict, as well as joint and several liability for environmental 
remediation and/or damage costs on several classes of "potentially responsible  
parties," including current "owners and/or operators" of property, irrespective 
of whether those owners or operators caused or contributed to the contamination 
on the property. In addition, owners and operators of properties that generate  
hazardous substances that are disposed of at other "off-site" locations may be  
held strictly, jointly and severally liable for environmental remediation and/or
damages at those off-site locations. Many states also have laws that are similar
to CERCLA. Liability under CERCLA or under similar state law could exceed the   
value of the property itself as well as the aggregate assets of the property    
owner.                                                                          

       The law is unclear as to whether and under what precise circumstances
cleanup costs, or the obligation to take remedial actions, could be imposed on a
secured lender such as the Trust Fund. Under the laws of some states and under  
CERCLA, a lender may be liable as an "owner or operator" for costs of addressing
releases or threatened releases of hazardous substances on a mortgaged property 
if such lender or its agents or employees have "participated in the management" 
of the operations of the borrower, even though the environmental damage or      
threat was caused by a prior owner or current owner or operator or other third  
party. Excluded from CERCLA's definition of "owner or operator" is a person "who
without participating in the management of . . . [the] facility, holds indicia  
of ownership primarily to protect his security interest" (the "SECURED-CREDITOR 
EXEMPTION"). This exemption for holders of a security interest such as a secured
lender applies only to the extent that a lender seeks to protect its security   
interest in the contaminated facility or property. Thus, if a lender's          
activities begin to encroach on the actual management of such facility or       
property, the lender faces potential liability as an "owner or operator" under  
CERCLA. Similarly, when a lender forecloses and takes title to a contaminated   
facility or property, the lender may incur potential CERCLA liability in various
circumstances, including among others, when it holds the facility or property as
an investment (including leasing the facility or property to a third party),    
fails to market the property in a timely fashion or fails to properly address   
environmental conditions at the property or facility.                           

  The Resource Conservation and Recovery Act, as amended ("RCRA"),
contains a similar secured-creditor exemption for those lenders who hold a      
security interest in a petroleum underground storage tank ("UST") or in real    
estate containing a UST, or that acquire title to a petroleum UST or facility or
property on which such a UST is located. As under CERCLA, a lender may lose its 
secured-creditor exemption and be held liable under RCRA as a UST owner or      
operator if such lender or its employees or agents participate in the management
of the UST. In addition, if the lender takes title to or possession of the UST  
or the real estate containing the UST, under certain circumstances the          
secured-creditor exemption may be deemed to be unavailable.                     

      A decision in May 1990 of the United States Court of Appeals for the
Eleventh Circuit in United States v. Fleet Factors Corp. very narrowly construed
CERCLA's secured-creditor exemption. The court's opinion suggested that a lender
need not have involved itself in the day-to-day operations of the facility or   
participated in decisions relating to hazardous waste to be liable under CERCLA;
rather, liability could attach to a lender if its involvement with the          
management of the facility were broad enough to support the inference that the  
lender had the capacity to influence the borrower's treatment of hazardous      
waste. The court added that a lender's capacity to influence such decisions     
could be inferred from the extent of its involvement in the facility's financial
management. A subsequent                                                        

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decision by the United States Court of Appeals for the Ninth Circuit in In re   
Bergsoe Metal Corp., apparently disagreeing with, but not expressly             
contradicting, the Fleet Factors court, held that a secured lender had no       
liability absent "some actual management of the facility" on the part of the    
lender.                                                                         

Court decisions have taken varying views of the scope of the  
secured-creditor exemption, leading to administrative and legislative efforts to
provide guidance to lenders on the scope of activities that would trigger CERCLA
and/or RCRA liability. Until recently, these efforts have failed to provide     
substantial guidance.                                                           

        On September 28, 1996, Congress enacted, and on September 30, 1996 the
President signed into law the Asset Conservation Lender Liability and Deposit   
Insurance Protection Act of 1996 (the "ASSET CONSERVATION ACT"). The Asset      
Conservation Act was intended to clarify the scope of the secured creditor      
exemption. This legislation more clearly defines the kinds of activities that   
would constitute "participation in management" and that therefore would trigger 
liability for secured parties under CERCLA. It also identified certain          
activities that ordinarily would not trigger liability, provided, however, that 
such activities did not otherwise rise to the level of "participation in        
management." The Asset Conservation Act specifically reverses the Fleet Factors 
"capacity to influence" standard. The Asset Conservation Act also provides      
additional protection against liability in the event of foreclosure. However,   
since the courts have not yet had the opportunity to interpret the new statutory
provisions, the scope of the additional protections offered by the Asset        
Conservation Act is not fully defined. It also is important to note that the    
Asset Conservation Act does not offer complete protection to lenders and that   
the risk of liability remains.                                                  

        If a secured lender does become liable, it may be entitled to bring an
action for contribution against the owner or operator who created the           
environmental contamination or against some other liable party, but that person 
or entity may be bankrupt or otherwise judgment-proof. It is therefore possible 
that cleanup or other environmental liability costs could become a liability of 
the Trust Fund and occasion a loss to the Trust Fund and to Securityholders in  
certain circumstances. The new secured creditor amendments to CERCLA, also,     
would not necessarily affect the potential for liability in actions by either a 
state or a private party under other federal or state laws which may impose     
liability on "owners or operators" but do not incorporate the secured-creditor  
exemption.                                                                      

     Traditionally, residential mortgage lenders have not taken steps to
evaluate whether hazardous wastes or hazardous substances are present with      
respect to any mortgaged property prior to the origination of the mortgage loan 
or prior to foreclosure or accepting a deed-in-lieu of foreclosure. Neither the 
Depositor nor any Servicer makes any representations or warranties or assumes   
any liability with respect to: environmental conditions of such Mortgaged       
Property; the absence, presence or effect of hazardous wastes or hazardous      
substances on, near or emanating from such Mortgaged Property; the impact on    
Securityholders of any environmental condition or presence of any substance on  
or near such Mortgaged Property; or the compliance of any Mortgaged Property    
with any environmental laws. In addition, no agent, person or entity otherwise  
affiliated with the Depositor is authorized or able to make any such            
representation, warranty or assumption of liability relative to any such        
Mortgaged Property.                                                             

DUE-ON-SALE CLAUSES                                                             

   Unless the related prospectus supplement indicates otherwise, the
Mortgage Loans will contain due-on-sale clauses. These clauses generally provide
that the lender may accelerate the maturity of the loan if the mortgagor sells, 
transfers or conveys the related Mortgaged Property. The enforceability of      
due-on-sale clauses has been the subject of legislation or litigation in many   
states and, in some cases, the enforceability of these clauses was limited or   
denied. However, with respect to certain loans the Garn-St. Germain Depository  
Institutions Act of 1982 preempts state constitutional, statutory and case law  
that prohibits the enforcement of due-on-sale clauses and permits lenders to    
enforce these clauses in accordance with their terms, subject to certain limited
exceptions. Due-on-sale clauses contained in mortgage loans originated by       
federal savings and loan associations of federal savings banks are fully        
enforceable pursuant to regulations of the United States Federal Home Loan Bank 
Board, as succeeded by the Office of Thrift Supervision, which preempt state law
restrictions on the enforcement of such clauses. Similarly, "due-on-sale"       
clauses in mortgage loans made by national banks and federal credit unions are  
now fully enforceable pursuant to preemptive regulations of the Comptroller of  
the Currency and the National Credit Union Administration, respectively.        

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     The Garn-St. Germain Act also sets forth nine specific instances in
which a mortgage lender covered by the act (including federal savings and loan  
associations and federal savings banks) may not exercise a "due-on-sale" clause,
notwithstanding the fact that a transfer of the property may have occurred.     
These include intra-family transfers, certain transfers by operation of law,    
leases of fewer than three years and the creation of a junior encumbrance.      
Regulations promulgated under the Garn-St. Germain Act also prohibit the        
imposition of a prepayment premium upon the acceleration of a loan pursuant to a
due-on-sale clause. The inability to enforce a "due-on-sale" clause may result  
in a mortgage that bears an interest rate below the current market rate being   
assumed by a new home buyer rather than being paid off, which may affect the    
average life of the Mortgage Loans and the number of Mortgage Loans which may   
extend to maturity.                                                             

PREPAYMENT PREMIUMS                                                             

         Some state laws restrict the imposition of Prepayment Premiums and late
fees even when the mortgage loans expressly provide for the collection of those 
charges. Although the Alternative Mortgage Transaction Parity Act of 1982 (the  
"PARITY ACT"), permits the collection of Prepayment Premiums and late fees in   
connection with some types of eligible mortgage loans preempting any contrary   
state law prohibitions, some states may not recognize the preemptive authority  
of the Parity Act or have formally opted out of the Parity Act. As a result, it 
is possible that Prepayment Premiums and late fees may not be collected even on 
loans that provide for the payment of those charges. The "OTS", the agency that 
administers the Parity Act for unregulated, non-federally chartered housing     
creditors, withdrew its favorable Parity Act regulations and Chief Counsel      
Opinions that previously authorized state-chartered housing creditors to charge 
Prepayment Premiums and late fees in certain circumstances notwithstanding      
contrary state law, effective with respect to mortgage loans originated on or   
after July 1, 2003. However, the OTS's ruling does not retroactively affect     
mortgage loans originated by such entities before July 1, 2003.                 

SUBORDINATE FINANCING                                                           

        Where a mortgagor encumbers mortgaged property with one or more junior
liens, the senior lender is subjected to additional risk. First, the mortgagor  
may have difficulty servicing and repaying multiple loans. In addition, if the  
junior loan permits recourse to the mortgagor (as junior loans often do) and the
senior loan does not, a mortgagor may be more likely to repay sums due on the   
junior loan than those on the senior loan. Second, acts of the senior lender    
that prejudice the junior lender or impair the junior lender's security may     
create a superior equity in favor of the junior lender. For example, if the     
mortgagor and the senior lender agree to an increase in the principal amount of 
or the interest rate payable on the senior loan, the senior lender may lose its 
priority to the extent any existing junior lender is harmed or the mortgagor is 
additionally burdened. Third, if the mortgagor defaults on the senior loan      
and/or any junior loan or loans, the existence of junior loans and actions taken
by junior lenders can impair the security available to the senior lender and can
interfere with or delay the taking of action by the senior lender. Moreover, the
bankruptcy of a junior lender may operate to stay foreclosure or similar        
proceedings by the senior lender.                                               

APPLICABILITY OF USURY LAWS                                                     

  Title V of the Depository Institutions Deregulation and Monetary
Control Act of 1980, enacted in March 1980 ("TITLE V"), provides that state     
usury limitations shall not apply to certain types of residential first mortgage
loans originated by certain lenders after March 31, 1980. A similar federal     
statute was in effect with respect to mortgage loans made during the first three
months of 1980. The Office of Thrift Supervision is authorized to issue rules   
and regulations and to publish interpretations governing implementation of Title
V. The statute authorized any state to reimpose interest rate limits by         
adopting, before April 1, 1983, a law or constitutional provision that expressly
rejects 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 and/or to limit       
discount points or other charges.                                               

     The Depositor believes that a court interpreting Title V would hold
that residential first mortgage loans that are originated on or after January 1,
1980 are subject to federal preemption. Therefore, in a state that has not taken
the requisite action to reject application of Title V or to adopt a provision   
limiting discount points or other charges                                       

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prior to origination of such mortgage loans, any such limitation under such     
state's usury law would not apply to such mortgage loans.                       

 In any state in which application of Title V has been expressly
rejected or a provision limiting discount points or other charges is adopted, no
mortgage loan originated after the date of such state action will be eligible   
for inclusion in a Trust Fund unless (i) such mortgage loan provides for such   
interest rate, discount points and charges as are permitted in such state or    
(ii) such mortgage loan provides that the terms thereof shall be construed in   
accordance with the laws of another state under which such interest rate,       
discount points and charges would not be usurious and the mortgagor's counsel   
has rendered an opinion that such choice of law provision would be given effect.

 Statutes differ in their provisions as to the consequences of a
usurious loan. One group of statutes requires the lender to forfeit the interest
due above the applicable limit or impose a specified penalty. Under this        
statutory scheme, the mortgagor may cancel the recorded mortgage or deed of     
trust upon paying its debt with lawful interest, and the lender may foreclose,  
but only for the debt plus lawful interest. A second group of statutes is more  
severe. A violation of this type of usury law results in the invalidation of the
transaction, thereby permitting the mortgagor to cancel the recorded mortgage or
deed of trust without any payment or prohibiting the lender from foreclosing.   

ALTERNATIVE MORTGAGE INSTRUMENTS                                                

      Alternative mortgage instruments, including adjustable rate mortgage
loans and early ownership mortgage loans, originated by non-federally chartered 
lenders have historically been subject to a variety of restrictions. Such       
restrictions differed from state to state, resulting in difficulties in         
determining whether a particular alternative mortgage instrument originated by a
state-chartered lender was in compliance with applicable law. These difficulties
were alleviated substantially as a result of the enactment of Title VIII of the 
Garn-St. Germain Act ("TITLE VIII"). Title VIII provides that, notwithstanding  
any state law to the contrary, state-chartered banks may originate alternative  
mortgage instruments in accordance with regulations promulgated by the          
Comptroller of the Currency with respect to origination of alternative mortgage 
instruments by national banks; state-chartered credit unions may originate      
alternative mortgage instruments in accordance with regulations promulgated by  
the National Credit Union Administration with respect to origination of         
alternative mortgage instruments by federal credit unions; and all other        
non-federally chartered housing creditors, including state-chartered savings and
loan associations, state-chartered savings banks and mutual savings banks and   
mortgage banking companies, may originate alternative mortgage instruments in   
accordance with the regulations promulgated by the Federal Home Loan Bank Board,
predecessor to the Office of Thrift Supervision, with respect to origination of 
alternative mortgage instruments by federal savings and loan associations. Title
VIII provides that any state may reject applicability of the provisions of Title
VIII by adopting, prior to October 15, 1985, a law or constitutional provision  
expressly rejecting the applicability of such provisions. Certain states have   
taken such action.                                                              

HOMEOWNERS PROTECTION ACT OF 1998                                               

     The Homeowners Protection Act of 1998 ("HOPA") provides for certain
disclosure and termination requirements for primary mortgage insurance ("PMI"). 
The termination provisions of HOPA apply only to mortgage loans relating to     
single-family primary residences originated on or after July 29, 1999. Such     
termination provisions govern when a mortgagor may cancel the requirement to    
maintain PMI and when the requirement to maintain PMI is automatically          
terminated. In general, voluntary termination is permitted and automatic        
termination occurs when the principal balance of the mortgage loan is reduced to
80% or 78%, respectively, of the original property value. The disclosure        
requirements of HOPA vary depending on whether the mortgage loan was originated 
before or after July 29, 1999. Such disclosure requirements include notification
of the circumstances whereby a mortgagor may cancel PMI, the date when PMI      
automatically terminates and servicer contact information. In addition, HOPA    
provides that no later than 30 days after cancellation or termination of PMI,   
the servicer shall provide written notification that such PMI is terminated and 
no further payments are due or payable. Any servicer, mortgagee or mortgage     
insurer that violates provisions of HOPA is subject to possible liability which 
includes, but is not limited to, actual damages, statutory damages and          
reasonable attorney's fees.                                                     

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TEXAS HOME EQUITY LOANS                                                         

 Generally, any "cash-out" refinance or other non-purchase money
transaction (except for rate/term refinance loans and certain other narrow      
exceptions) secured by a Texas resident's principal residence is subject to the 
provisions set forth in Section 50(a)(6) of Article XVI of the Constitution of  
Texas (the "TEXAS HOME EQUITY LAWS"). The Texas Home Equity Laws provide for    
certain disclosure requirements, caps on allowable fees, required loan closing  
procedures and other restrictions. Failure, inadvertent or otherwise, to comply 
with any requirement may render the Mortgage Loan unenforceable and/or the lien 
on the Mortgaged Property invalid. Because mortgage loans which are subject to  
the Texas Home Equity Laws can be foreclosed only pursuant to court order,      
rather than non-judicial foreclosure as is available for other types of mortgage
loans in Texas, delays and increased losses may result in connection with       
foreclosures of such loans. If a court were to find that any requirement of the 
Texas Home Equity Laws was not complied with, the court could refuse to allow   
foreclosure to proceed, declare the lien on the Mortgaged Property to be        
invalid, and/or require the originating lender or the holder of the note to     
forfeit some or all principal and interest of the related Mortgage Loan. Title  
insurance generally available on such Mortgage Loans may exclude coverage for   
some of the risks described in this paragraph.                                  

SERVICEMEMBERS CIVIL RELIEF ACT                                                 

        Generally, under the terms of the Servicemembers Civil Relief Act (the
"RELIEF ACT"), a mortgagor who enters military service after the origination of 
such mortgagor's Mortgage Loan, including a mortgagor who was in reserve status 
and is called to active duty after origination of the Mortgage Loan, may not be 
charged interest, including fees and charges, in excess of 6% per annum during  
the period of the mortgagor's active duty status. In addition to adjusting the  
interest, the lender must forgive any such interest in excess of 6%, unless a   
court or administrative agency orders otherwise upon application of the lender. 
Further, the Relief Act provides broad discretion for a court to modify a       
mortgage loan upon application by the mortgagor. The Relief Act applies to      
mortgagors who are members of the U.S. Armed Forces and officers of the U.S.    
Public Health Service or the National Oceanic and Atmospheric Administration    
assigned to duty with the military. The California Military and Veterans Code   
(the "CALIFORNIA MILITARY CODE") provides protection substantially similar to   
that provided by the Relief Act to California national guard members called up  
to active service by the Governor, California national guard members called up  
to active service by the President and reservists called to active duty. In     
addition, other states have enacted comparable legislation which may interfere  
with or affect the ability of the Servicer to timely collect payments of        
principal and interest on, or to foreclose on, Mortgage Loans of mortgagors in  
such states who are active or reserve members of the armed services. It is      
possible that the Relief Act, the California Military Code or similar state law 
could have an effect, for an indeterminate period of time, on the ability of the
Servicer to collect full amounts of interest on certain of the Mortgage Loans in
a Trust Fund. Any shortfall in interest collections resulting from the          
application of the Relief Act, the California Military Code or similar state law
could result in losses to the holders of the Securities of the related Series.  
Further, since the Relief Act, the California Military Code and similar state   
law impose limitations which would impair the ability of the Servicer to        
foreclose on an affected Mortgage Loan during the mortgagor's period of active  
duty status, in the event that such a Mortgage Loan goes into default, there may
be delays and losses occasioned by the inability to realize upon the Mortgaged  
Property in a timely fashion.                                                   

FORFEITURE FOR DRUG, RICO AND MONEY LAUNDERING VIOLATIONS                       

      Federal law provides that property purchased or improved with assets
derived from criminal activity or otherwise tainted, or used in the commission  
of certain offenses, can be seized and ordered forfeited to the United States of
America. The offenses which can trigger such a seizure and forfeiture include,  
among others, violations of the Racketeer Influenced and Corrupt Organizations  
Act, the Bank Secrecy Act, the anti-money laundering laws and regulations,      
including the USA Patriot Act of 2001 and the regulations issued thereunder, as 
well as the narcotic drug laws. In many instances, the United States may seize  
the property even before a conviction occurs.                                   

  In the event of a forfeiture proceeding, a lender may be able to
establish its interest in the property by proving that (i) its mortgage was     
executed and recorded before the commission of the illegal conduct from which   
the assets used to purchase or improve the property were derived or before any  
other crime upon which the forfeiture is based, or (ii) the lender, at the time 
of the execution of the mortgage, "did not know or was reasonably without cause 

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to believe that the property was subject to forfeiture." However, there can be  
no assurance that such a defense will be successful.                            

CERTAIN LEGAL ASPECTS OF THE CONTRACTS

   The following discussion contains summaries, which are general in
nature, of certain legal matters relating to the Contracts. Because such legal  
aspects are governed primarily by applicable state law (which laws may differ   
substantially), the summaries do not purport to be complete nor to reflect the  
laws of any particular state, nor to encompass the laws of all states in which  
the security for the Contracts is situated. The summaries are qualified in their
entirety by reference to the appropriate laws of the states in which Contracts  
may be originated.                                                              

GENERAL                                                                         

    As a result of the assignment of the Contracts to the Trustee, the
Trustee will succeed collectively to all of the rights (including the right to  
receive payment on the Contracts) of the obligee under the Contracts. Each      
Contract evidences both (a) the obligation of the obligor to repay the loan     
evidenced thereby, and (b) the grant of a security interest in the Manufactured 
Home to secure repayment of such loan. Certain aspects of both features of the  
Contracts are described more fully below.                                       

      The Contracts generally are "chattel paper" as defined in the UCC in
effect in the states in which the Manufactured Homes initially were registered. 
Pursuant to the UCC, the sale of chattel paper is treated in a manner similar to
perfection of a security interest in chattel paper. Under the applicable        
Agreement, the Servicer will transfer physical possession of the Contracts to   
the Trustee or its custodian or may retain possession of the Contracts as       
custodian for the Trustee. In addition, the Servicer will make an appropriate   
filing of a UCC-1 financing statement in the appropriate states to give notice  
of the Trustee's ownership of the Contracts. The Contracts will be stamped or   
marked otherwise to reflect their assignment from the Company to the Trustee    
only if provided in the related prospectus supplement. Therefore, if, through   
negligence, fraud or otherwise, a subsequent purchaser were able to take        
physical possession of the Contracts without notice of such assignment, the     
Trustee's interest in Contracts could be defeated.                              

SECURITY INTERESTS IN THE MANUFACTURED HOMES

        The Manufactured Homes securing the Contracts may be located in all 50
states. Security interests in manufactured homes may be perfected either by     
notation of the secured party's lien on the certificate of title or by delivery 
of the required documents and payment of a fee to the state motor vehicle       
authority, depending on state law. In some nontitle states, perfection pursuant 
to the provisions of the UCC is required. The Asset Seller may effect such      
notation or delivery of the required documents and fees, and obtain possession  
of the certificate of title, as appropriate under the laws of the state in which
any manufactured home securing a manufactured housing conditional sales contract
is registered. In the event the Asset Seller fails, due to clerical error, to   
effect such notation or delivery, or files the security interest under the wrong
law (for example, under a motor vehicle title statute rather than under the UCC,
in a few states), the Asset Seller may not have a first priority security       
interest in the Manufactured Home securing a Contract. As manufactured homes    
have become larger and often have been attached to their sites without any      
apparent intention to move them, courts in many states have held that           
manufactured homes, under certain circumstances, may become subject to real     
estate title and recording laws. As a result, a security interest in a          
manufactured home could be rendered subordinate to the interests of other       
parties claiming an interest in the home under applicable state real estate law.
In order to perfect a security interest in a manufactured home under real estate
laws, the holder of the security interest must file either a "fixture filing"   
under the provisions of the UCC or a real estate mortgage under the real estate 
laws of the state where the home is located. These filings must be made in the  
real estate records office of the county where the home is located.             
Substantially all of the Contracts contain provisions prohibiting the borrower  
from permanently attaching the Manufactured Home to its site. So long as the    
borrower does not violate this agreement, a security interest in the            
Manufactured Home will be governed by the certificate of title laws or the UCC, 
and the notation of the security interest on the certificate of title or the    
filing of a UCC financing statement will be effective to maintain the priority  
of the security interest in the Manufactured Home. If, however, a Manufactured  
Home is permanently attached to its site, other parties could obtain an interest
in the Manufactured Home which is prior to the security interest originally     
retained by the Asset Seller and transferred to the Depositor. With respect to a
Series of Securities and if so described in the related                         

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prospectus supplement, the Servicer may be required to perfect a security       
interest in the Manufactured Home under applicable real estate laws. The        
Warranting Party will represent that as of the date of the sale to the Depositor
it has obtained a perfected first priority security interest by proper notation 
or delivery of the required documents and fees with respect to substantially all
of the Manufactured Homes securing the Contracts.                               

     The Depositor will cause the security interests in the Manufactured
Homes to be assigned to the Trustee on behalf of the Securityholders. The       
Depositor or the Trustee will amend the certificates of title (or file UCC-3    
statements) to identify the Trustee as the new secured party, and will deliver  
the certificates of title to the Trustee or note thereon the interest of the    
Trustee only if specified in the related prospectus supplement. Accordingly, the
Asset Seller (or other originator of the Contracts) will continue to be named as
the secured party on the certificates of title relating to the Manufactured     
Homes. In some states, such assignment is an effective conveyance of such       
security interest without amendment of any lien noted on the related certificate
of title and the new secured party succeeds to Servicer's rights as the secured 
party. However, in some states, in the absence of an amendment to the           
certificate of title (or the filing of a UCC-3 statement), such assignment of   
the security interest in the Manufactured Home may not be held effective or such
security interests may not be perfected and in the absence of such notation or  
delivery to the Trustee, the assignment of the security interest in the         
Manufactured Home may not be effective against creditors of the Asset Seller (or
such other originator of the Contracts) or a trustee in bankruptcy of the Asset 
Seller (or such other originator).                                              

 In the absence of fraud, forgery or permanent affixation of the
Manufactured Home to its site by the Manufactured Home owner, or administrative 
error by state recording officials, the notation of the lien of the Asset Seller
(or other originator of the Contracts) on the certificate of title or delivery  
of the required documents and fees will be sufficient to protect the            
Securityholders against the rights of subsequent purchasers of a Manufactured   
Home or subsequent lenders who take a security interest in the Manufactured     
Home. If there are any Manufactured Homes as to which the security interest     
assigned to the Trustee is not perfected, such security interest would be       
subordinate to, among others, subsequent purchasers for value of Manufactured   
Homes and holders of perfected security interests. There also exists a risk in  
not identifying the Trustee as the new secured party on the certificate of title
that, through fraud or negligence, the security interest of the Trustee could be
released.                                                                       

        In the event that the owner of a Manufactured Home moves it to a state
other than the state in which such Manufactured Home initially is registered,   
under the laws of most states the perfected security interest in the            
Manufactured Home would continue for four months after such relocation and      
thereafter only if and after the owner re-registers the Manufactured Home in    
such state. If the owner were to relocate a Manufactured Home to another state  
and not re-register the Manufactured Home in such state, and if steps are not   
taken to re-perfect the Trustee's security interest in such state, the security 
interest in the Manufactured Home would cease to be perfected. A majority of    
states generally require surrender of a certificate of title to re-register a   
Manufactured Home; accordingly, the Servicer must surrender possession if it    
holds the certificate of title to such Manufactured Home or, in the case of     
Manufactured Homes registered in states which provide for notation of lien, the 
Asset Seller (or other originator) would receive notice of surrender if the     
security interest in the Manufactured Home is noted on the certificate of title.
Accordingly, the Trustee would have the opportunity to re-perfect its security  
interest in the Manufactured Home in the state of relocation. In states which do
not require a certificate of title for registration of a manufactured home,     
re-registration could defeat perfection. In the ordinary course of servicing the
manufactured housing contracts, the Servicer takes steps to effect such         
re-perfection upon receipt of notice of re-registration or information from the 
obligor as to relocation. Similarly, when an obligor under a manufactured       
housing contract sells a manufactured home, the Servicer must surrender         
possession of the certificate of title or, if it is noted as lienholder on the  
certificate of title, will receive notice as a result of its lien noted thereon 
and accordingly will have an opportunity to require satisfaction of the related 
manufactured housing conditional sales contract before release of the lien.     
Under the applicable Agreement, the Servicer is obligated to take such steps, at
the Servicer's expense, as are necessary to maintain perfection of security     
interests in the Manufactured Homes.                                            

 Under the laws of most states, liens for repairs performed on a
Manufactured Home and liens for personal property taxes take priority even over 
a perfected security interest. The Warranting Party will represent in the       
applicable Agreement that it has no knowledge of any such liens with respect to 
any Manufactured Home securing payment on any Contract. However, such liens     
could arise at any time during the term of a Contract. No notice will be given  
to the Trustee or Securityholders in the event such a lien arises.              

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ENFORCEMENT OF SECURITY INTERESTS IN MANUFACTURED HOMES                         

      The Servicer on behalf of the Trustee, to the extent required by the
applicable Agreement, may take action to enforce the Trustee's security interest
with respect to Contracts in default by repossession and resale of the          
Manufactured Homes securing such defaulted Contracts. So long as the            
Manufactured Home has not become subject to the real estate law, a creditor can 
repossess a Manufactured Home securing a Contract by voluntary surrender, by    
"self-help" repossession that is "peaceful" (i.e., without breach of the peace) 
or, in the absence of voluntary surrender and the ability to repossess without  
breach of the peace, by judicial process. The holder of a Contract must give the
debtor a number of days' notice, which varies from 10 to 30 days depending on   
the state, prior to commencement of any repossession. The UCC and consumer      
protection laws in most states place restrictions on repossession sales,        
including requiring prior notice to the debtor and commercial reasonableness in 
effecting such a sale. The law in most states also requires that the debtor be  
given notice of any sale prior to resale of the unit so that the debtor may     
redeem at or before such resale. In the event of such repossession and resale of
a Manufactured Home, the Trustee would be entitled to be paid out of the sale   
proceeds before such proceeds could be applied to the payment of the claims of  
unsecured creditors or the holders of subsequently perfected security interests 
or, thereafter, to the debtor.                                                  

     Under the laws applicable in most states, a creditor is entitled to
obtain a deficiency judgment from a debtor for any deficiency on repossession   
and resale of the manufactured home securing such debtor's loan. However, some  
states impose prohibitions or limitations on deficiency judgments, and in many  
cases the defaulting borrower would have no assets with which to pay a judgment.

 Certain other statutory provisions, including federal and state
bankruptcy and insolvency laws and general equitable principles, may limit or   
delay the ability of a lender to repossess and resell collateral or enforce a   
deficiency judgment.                                                            

SERVICEMEMBERS CIVIL RELIEF ACT                                                 

  The terms of the Relief Act apply to an obligor on a Contract as
described for a mortgagor on a Mortgage Loan under "Certain Legal Aspects of    
Mortgage Loans--Servicemembers Civil Relief Act."                               

CONSUMER PROTECTION LAWS                                                        

The so-called "Holder-in-Due-Course" rule of the Federal Trade
Commission is intended to defeat the ability of the transferor of a consumer    
credit contract which is the seller of goods which gave rise to the transaction 
(and certain related lenders and assignees) to transfer such contract free of   
notice of claims by the debtor thereunder. The effect of this rule is to subject
the assignee of such a contract to all claims and defenses which the debtor     
could assert against the seller of goods. Liability under this rule is limited  
to amounts paid under a Contract; however, the obligor also may be able to      
assert the rule to set off remaining amounts due as a defense against a claim   
brought by the Trustee against such obligor. Numerous other federal and state   
consumer protection laws impose requirements applicable to the origination and  
lending pursuant to the Contracts, including the Truth in Lending Act, the      
Federal Trade Commission Act, the Fair Credit Billing Act, the Fair Credit      
Reporting Act, the Equal Credit Opportunity Act, the Fair Debt Collection       
Practices Act and the Uniform Consumer Credit Code. In the case of some of these
laws, the failure to comply with their provisions may affect the enforceability 
of the related Contract.                                                        

TRANSFERS OF MANUFACTURED HOMES; ENFORCEABILITY OF DUE-ON-SALE CLAUSES          

         The Contracts, in general, prohibit the sale or transfer of the related
Manufactured Homes without the consent of the Servicer and permit the           
acceleration of the maturity of the Contracts by the Servicer upon any such sale
or transfer that is not consented to. Generally, it is expected that the        
Servicer will permit most transfers of Manufactured Homes and not accelerate the
maturity of the related Contracts. In certain cases, the transfer may be made by
a delinquent obligor in order to avoid a repossession proceeding with respect to
a Manufactured Home.                                                            

  In the case of a transfer of a Manufactured Home after which the
Servicer desires to accelerate the maturity of the related Contract, the        
Servicer's ability to do so will depend on the enforceability under state law of
the "due-                                                                       

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on-sale" clause. The Garn-St. Germain Depositary Institutions Act of 1982       
preempts, subject to certain exceptions and conditions, state laws prohibiting  
enforcement of "due-on-sale" clauses applicable to the Manufactured Homes.      
Consequently, in some states the Servicer may be prohibited from enforcing a    
"due-on-sale" clause in respect of certain Manufactured Homes.                  

APPLICABILITY OF USURY LAWS                                                     

         Title V provides that, subject to the following conditions, state usury
limitations shall not apply to any loan which is secured by a first lien on     
certain kinds of manufactured housing. The Contracts would be covered if they   
satisfy certain conditions, among other things, governing the terms of any      
prepayments, late charges and deferral fees and requiring a 30-day notice period
prior to instituting any action leading to repossession of or foreclosure with  
respect to the related unit.                                                    

        Title V authorized any state to reimpose limitations on interest rates
and finance charges by adopting before April 1, 1983 a law or constitutional    
provision which expressly rejects application of the federal law. Fifteen states
adopted such a law prior to the April 1, 1983 deadline. In addition, even where 
Title V was not so rejected, any state is authorized by the law to adopt a      
provision limiting discount points or other charges on loans covered by Title V.
The related Asset Seller will represent that all of the Contracts comply with   
applicable usury law.                                                           

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 FEDERAL INCOME TAX CONSEQUENCES

GENERAL                                                                         

The following discussion represents the opinion of Cadwalader,
Wickersham & Taft LLP or Hunton & Williams LLP, as to the anticipated material  
federal income tax consequences of the purchase, ownership and disposition of   
the Securities offered hereunder. This discussion is directed solely to         
Securityholders that hold the Securities as capital assets within the meaning of
Section 1221 of the Internal Revenue Code of 1986, as amended (the "CODE") and  
does not purport to discuss all federal income tax consequences that may be     
applicable to particular categories of investors, some of which (such as banks, 
insurance companies and foreign investors) may be subject to special rules.     
Further, the authorities on which this discussion, and the opinion referred to  
below, are based are subject to change or differing interpretations, which could
apply retroactively. In addition to the federal income tax consequences         
described herein, potential investors should consider the state and local tax   
consequences, if any, of the purchase, ownership and disposition of the         
Securities. See "State and Other Tax Consequences." Securityholders are advised 
to consult their own tax advisors concerning the federal, state, local or other 
tax consequences to them of the purchase, ownership and disposition of the      
Securities offered hereunder.                                                   

      The following discussion addresses securities of four general types:
(i) securities ("REMIC SECURITIES") representing interests in a Trust Fund, or a
portion thereof, that the Trustee will elect to have treated as a real estate   
mortgage investment conduit ("REMIC" ) under Sections 860A through 860G (the    
"REMIC PROVISIONS") of the Code, (ii) securities ("GRANTOR TRUST SECURITIES")   
representing interests in a Trust Fund ("GRANTOR TRUST FUND") as to which no    
such election will be made, (iii) securities ("PARTNERSHIP SECURITIES")         
representing interests in a Trust Fund ("PARTNERSHIP TRUST FUND") which is      
treated as a partnership for federal income tax purposes, and (iv) securities   
("DEBT SECURITIES") representing indebtedness of a Partnership Trust Fund for   
federal income tax purposes. The prospectus supplement for each Series of       
Securities will indicate which of the foregoing treatments will apply to such   
Series and, if a REMIC election (or elections) will be made for the related     
Trust Fund, will identify all "regular interests" and "residual interests" in   
the REMIC. For purposes of this tax discussion, (i) references to a             
"Securityholder" or a "holder" are to the beneficial owner of a Security, (ii)  
references to "REMIC POOL" are to an entity or portion thereof as to which a    
REMIC election will be made and (iii) unless indicated otherwise in the         
applicable prospectus supplement, references to "Mortgage Loans" include        
Contracts. Except as set forth in the applicable prospectus supplement, no REMIC
election will be made with respect to Unsecured Home Improvement Loans. The     
discussion below assumes that no election will be made to treat the Trust Fund, 
or any portion thereof, as a financial asset securitization investment trust (a 
"FASIT") under Sections 860H through 860L of the Code. If a FASIT election is   
made for a particular Series, the prospectus supplement for that Series will    
address the material federal income tax consequences of such election.          
Securities issued with respect to a Series for which a FASIT election has been  
made are referred to herein as "FASIT SECURITIES."                              

    The following discussion is based in part upon the rules governing
original issue discount that are set forth in Sections 1271-1273 and 1275 of the
Code and in the Treasury regulations issued thereunder (the "OID REGULATIONS"), 
and in part upon the REMIC Provisions and the Treasury regulations issued       
thereunder (the "REMIC REGULATIONS"). The OID Regulations do not adequately     
address certain issues relevant to, and in some instances provide that they are 
not applicable to, securities such as the Securities.                           

Taxable Mortgage Pools                                        

  Corporate income tax can be imposed on the net income of certain
entities issuing non-REMIC debt obligations secured by real estate mortgages    
("TAXABLE MORTGAGE POOLS"). Any entity other than a REMIC or a FASIT will be    
considered a Taxable Mortgage Pool if (i) substantially all of the assets of the
entity consist of debt obligations and more than 50% of such obligations consist
of "real estate mortgages," (ii) such entity is the obligor under debt          
obligations with two or more maturities, and (iii) under the terms of the debt  
obligations on which the entity is the obligor, payments on such obligations    
bear a relationship to payments on the obligations held by the entity.          
Furthermore, a group of assets held by an entity can be treated as a separate   
Taxable Mortgage Pool if the assets are expected to produce significant cash    
flow that will support one or more of the entity's issues of debt obligations.  
The Depositor generally will structure offerings of non-REMIC Securities to     
avoid the application of the Taxable Mortgage Pool rules.                       

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REMICS                                                                          

Classification of REMICs                                      

      With respect to each Series of REMIC Securities, assuming compliance
with all provisions of the related Pooling and Servicing Agreement, the related 
Trust Fund (or each applicable portion thereof) will qualify as a REMIC and the 
REMIC Securities offered with respect thereto will be considered to evidence    
ownership of "regular interests" ("REGULAR SECURITIES") or "residual interests" 
("RESIDUAL SECURITIES") in that REMIC within the meaning of the REMIC           
Provisions.                                                                     

  In order for the REMIC Pool to qualify as a REMIC, there must be
ongoing compliance on the part of the REMIC Pool with the requirements set forth
in the Code. The REMIC Pool must fulfill an asset test, which requires that no  
more than a de minimis portion of the assets of the REMIC Pool, as of the close 
of the third calendar month beginning after the "STARTUP DAY" (which for        
purposes of this discussion is the date of issuance of the REMIC Securities) and
at all times thereafter, may consist of assets other than "qualified mortgages" 
and "permitted investments." The REMIC Regulations provide a safe harbor        
pursuant to which the de minimis requirement will be met if at all times the    
aggregate adjusted basis of the nonqualified assets is less than 1% of the      
aggregate adjusted basis of all the REMIC Pool's assets. An entity that fails to
meet the safe harbor may nevertheless demonstrate that it holds no more than a  
de minimis amount of nonqualified assets. A REMIC Pool also must provide        
"reasonable arrangements" to prevent its residual interests from being held by  
"disqualified organizations" or agents thereof and must furnish applicable tax  
information to transferors or agents that violate this requirement. The Pooling 
and Servicing Agreement with respect to each Series of REMIC Securities will    
contain provisions meeting these requirements. See "--Taxation of Owners of     
Residual Securities--Tax-Related Restrictions on Transfer of Residual           
Securities--Disqualified Organizations."                                        

       A qualified mortgage is any obligation that is principally secured by
an interest in real property and that is either transferred to the REMIC Pool on
the Startup Day or is purchased by the REMIC Pool within a three-month period   
thereafter pursuant to a fixed price contract in effect on the Startup Day.     
Qualified mortgages include whole mortgage loans, such as the Mortgage Loans,   
and, generally, certificates of beneficial interest in a grantor trust that     
holds mortgage loans and regular interests in another REMIC, such as lower-tier 
regular interests in Tiered REMICs. The REMIC Regulations specify that loans    
secured by timeshare interests, shares held by a tenant stockholder in a        
cooperative housing corporation, and manufactured housing that qualifies as a   
"single family residence" under Code Section 25(e)(10) can be qualified         
mortgages. A qualified mortgage includes a qualified replacement mortgage, which
is any property that would have been treated as a qualified mortgage if it were 
transferred to the REMIC Pool on the Startup Day and that is received either (i)
in exchange for any qualified mortgage within a three-month period thereafter or
(ii) in exchange for a "defective obligation" within a two-year period          
thereafter. A "defective obligation" includes (i) a mortgage in default or as to
which default is reasonably foreseeable, (ii) a mortgage as to which a customary
representation or warranty made at the time of transfer to the REMIC Pool has   
been breached, (iii) a mortgage that was fraudulently procured by the mortgagor,
and (iv) a mortgage that was not in fact principally secured by real property   
(but only if such mortgage is disposed of within 90 days of discovery). A       
mortgage loan that is "defective" as described in clause (iv) that is not sold  
or, if within two years of the Startup Day, exchanged, within 90 days of        
discovery, ceases to be a qualified mortgage after such 90-day period.          

        Permitted investments include cash flow investments, qualified reserve
assets, and foreclosure property. A cash flow investment is an investment,      
earning a return in the nature of interest, of amounts received on or with      
respect to qualified mortgages for a temporary period, not exceeding 13 months, 
until the next scheduled distribution to holders of interests in the REMIC Pool.
A qualified reserve asset is any intangible property held for investment that is
part of any reasonably required reserve maintained by the REMIC Pool to provide 
for payments of expenses of the REMIC Pool or amounts due on the regular or     
residual interests in the event of defaults (including delinquencies) on the    
qualified mortgages, lower than expected reinvestment returns, prepayment       
interest shortfalls and certain other contingencies. The reserve fund will be   
disqualified if more than 30% of the gross income from the assets in such fund  
for the year is derived from the sale or other disposition of property held for 
less than three months, unless required to prevent a default on the regular     
interests caused by a default on one or more qualified mortgages. A reserve fund
must be reduced "promptly and appropriately" as payments on the Mortgage Loans  
are received. Foreclosure property is real property acquired by the REMIC Pool  
in connection with the default or                                               

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imminent default of a qualified mortgage and generally may not be held beyond   
the close of the third calendar year beginning after the taxable year of        
acquisition unless an extension is granted by the IRS.                          

       In addition to the foregoing requirements, the various interests in a
REMIC Pool also must meet certain requirements. All of the interests in a REMIC 
Pool must be either of the following: (i) one or more Classes of regular        
interests or (ii) a single class of residual interests on which distributions,  
if any, are made pro rata. A regular interest is an interest in a REMIC Pool    
that is issued on the Startup Day with fixed terms, is designated as a regular  
interest, and unconditionally entitles the holder to receive a specified        
principal amount (or other similar amount), and provides that interest payments 
(or other similar amounts), if any, at or before maturity either are payable    
based on a fixed rate or a qualified variable rate, or consist of a specified,  
nonvarying portion of the interest payments on qualified mortgages. Such a      
specified portion may consist of a fixed number of basis points, a fixed        
percentage of the total interest, or a qualified variable rate, inverse variable
rate or difference between two fixed or qualified variable rates on some or all 
of the qualified mortgages. The specified principal amount of a regular interest
that provides for interest payments consisting of a specified, nonvarying       
portion of interest payments on qualified mortgages may be zero. A residual     
interest is an interest in a REMIC Pool other than a regular interest that is   
issued on the Startup Day and that is designated as a residual interest. An     
interest in a REMIC Pool may be treated as a regular interest even if payments  
of principal with respect to such interest are subordinated to payments on other
regular interests or the residual interest in the REMIC Pool, and are dependent 
on the absence of defaults or delinquencies on qualified mortgages or permitted 
investments, lower than reasonably expected returns on permitted investments,   
unanticipated expenses incurred by the REMIC Pool or prepayment interest        
shortfalls. Accordingly, the Regular Securities of a Series will constitute one 
or more Classes of regular interests, and the Residual Securities with respect  
to that Series will constitute a single Class of residual interests with respect
to each REMIC Pool.                                                             

         If an entity electing to be treated as a REMIC fails to comply with one
or more of the ongoing requirements of the Code for such status during any      
taxable year, the Code provides that the entity will not be treated as a REMIC  
for such year and thereafter. In that event, such entity may be taxable as a    
corporation under Treasury regulations, and the related REMIC Securities may not
be accorded the status or given the tax treatment described below. Although the 
Code authorizes the Treasury Department to issue regulations providing relief in
the event of an inadvertent termination of REMIC status, no such regulations    
have been issued. Any such relief, moreover, may be accompanied by sanctions,   
such as the imposition of a corporate tax on all or a portion of the Trust      
Fund's income for the period in which the requirements for such status are not  
satisfied. The Pooling and Servicing Agreement with respect to each REMIC Pool  
will include provisions designed to maintain the Trust Fund's status as a REMIC 
under the REMIC Provisions. It is not anticipated that the status of any Trust  
Fund as a REMIC will be terminated.                                             

Characterization of Investments in REMIC Securities           

  In general, the REMIC Securities will be treated as "real estate
assets" within the meaning of Section 856(c)(4)(A) of the Code and assets       
described in Section 7701(a)(19)(C) of the Code in the same proportion that the 
assets of the REMIC Pool underlying such Securities would be so treated.        
Moreover, if 95% or more of the assets of the REMIC Pool qualify for either of  
the foregoing treatments at all times during a calendar year, the REMIC         
Securities will qualify for the corresponding status in their entirety for that 
calendar year. If the assets of the REMIC Pool include Buydown Mortgage Loans,  
it is possible that the percentage of such assets constituting "loans . . .     
secured by an interest in real property which is . . . residential real         
property" for purposes of Code Section 7701(a)(19)(C)(v) may be required to be  
reduced by the amount of the related funds paid thereon (the "BUYDOWN FUNDS").  
Interest (including original issue discount) on the Regular Securities and      
income allocated to the Class of Residual Securities will be interest described 
in Section 856(c)(3)(B) of the Code to the extent that such Securities are      
treated as "real estate assets" within the meaning of Section 856(c)(4)(A) of   
the Code. In addition, the Regular Securities generally will be "qualified      
mortgages" within the meaning of Section 860G(a)(3) of the Code if transferred  
to another REMIC on its Startup Day in exchange for regular or residual         
interests therein. Regular Securities held by a FASIT will qualify for treatment
as "permitted assets" within the meaning of Section 860L(c)(1)(G) of the Code.  
The determination as to the percentage of the REMIC Pool's assets that          
constitute assets described in the foregoing sections of the Code will be made  
with respect to each calendar quarter based on the average adjusted basis of    
each category of the assets held by the REMIC Pool during such calendar quarter.
The REMIC will report those determinations to Securityholders in the manner and 
at the times required by applicable Treasury regulations.                       

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    The assets of the REMIC Pool will include, in addition to Mortgage
Loans, payments on Mortgage Loans held pending distribution on the REMIC        
Securities and property acquired by foreclosure held pending sale, and may      
include amounts in reserve accounts. It is unclear whether property acquired by 
foreclosure held pending sale and amounts in reserve accounts would be          
considered to be part of the Mortgage Loans, or whether such assets (to the     
extent not invested in assets described in the foregoing sections) otherwise    
would receive the same treatment as the Mortgage Loans for purposes of all of   
the foregoing sections. The REMIC Regulations do provide, however, that payments
on Mortgage Loans held pending distribution are considered part of the Mortgage 
Loans for purposes of Section 856(c)(4)(A) of the Code. Furthermore, foreclosure
property generally will qualify as "real estate assets" under Section           
856(c)(4)(A) of the Code.                                                       

Tiered REMIC Structures                                       

        For certain Series of REMIC Securities, two or more separate elections
may be made to treat designated portions of the related Trust Fund as REMICs    
("TIERED REMICS") for federal income tax purposes. Upon the issuance of any such
Series of REMIC Securities, Cadwalader, Wickersham & Taft LLP or Hunton &       
Williams LLP will deliver its opinion generally to the effect that, assuming    
compliance with all provisions of the related Pooling and Servicing Agreement,  
the Tiered REMICs will each qualify as a REMIC and the REMIC Securities issued  
by the Tiered REMICs will be considered to evidence ownership of Regular        
Securities or Residual Securities in the related REMIC within the meaning of the
REMIC Provisions.                                                               

         Solely for purposes of determining whether the REMIC Securities will be
"real estate assets" within the meaning of Section 856(c)(4)(A) of the Code and 
"loans secured by an interest in real property" under Section 7701(a)(19)(C) of 
the Code, and whether the income on such Securities is interest described in    
Section 856(c)(3)(B) of the Code, the Tiered REMICs will be treated as one      
REMIC.                                                                          

Taxation of Owners of Regular Securities                      

General                                                       

         In general, interest, original issue discount, and market discount on a
Regular Security will be treated as ordinary income to a holder of the Regular  
Security (the "REGULAR SECURITYHOLDER"), and principal payments on a Regular    
Security will be treated as a return of capital to the extent of the Regular    
Securityholder's basis in the Regular Security allocable thereto. Regular       
Securityholders must use the accrual method of accounting with regard to Regular
Securities, regardless of the method of accounting otherwise used by such       
Regular Securityholder.                                                         

Original Issue Discount                                       

         Accrual Securities will be, and other Classes of Regular Securities may
be, issued with "original issue discount" within the meaning of Code Section    
1273(a). Holders of any Class or subclass of Regular Securities having original 
issue discount generally must include original issue discount in ordinary income
for federal income tax purposes as it accrues, in accordance with a constant    
yield method that takes into account the compounding of interest, in advance of 
the receipt of the cash attributable to such income. The following discussion is
based in part on OID Regulations issued under Code Sections 1271 through 1273   
and 1275 and in part on the provisions of the 1986 Act. Regular Securityholders 
should be aware, however, that the OID Regulations do not adequately address    
certain issues relevant to prepayable securities, such as the Regular           
Securities. To the extent such issues are not addressed in such regulations, the
Depositor intends to apply the methodology described in the Conference Committee
Report to the 1986 Act. No assurance can be provided that the IRS will not take 
a different position as to those matters not currently addressed by the OID     
Regulations. Moreover, the OID Regulations include an anti-abuse rule allowing  
the IRS to apply or depart from the OID Regulations where necessary or          
appropriate to ensure a reasonable tax result in light of the applicable        
statutory provisions. A tax result will not be considered unreasonable under the
anti-abuse rule in the absence of a substantial effect on the present value of a
taxpayer's tax liability. Investors are advised to consult their own tax        
advisors as to the discussion therein and the appropriate method for reporting  
interest and original issue discount with respect to the Regular Securities.    

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  Each Regular Security (except to the extent described below with
respect to a Regular Security on which principal is distributed in a single     
installment or by lots of specified principal amounts upon the request of a     
Securityholder or by random lot (a "NON-PRO RATA SECURITY")) will be treated as 
a single installment obligation for purposes of determining the original issue  
discount includable in a Regular Securityholder's income. The total amount of   
original issue discount on a Regular Security is the excess of the "stated      
redemption price at maturity" of the Regular Security over its "issue price."   
The issue price of a Class of Regular Securities offered pursuant to this       
prospectus generally is the first price at which a substantial amount of such   
Class is sold to the public (excluding bond houses, brokers and underwriters).  
Although unclear under the OID Regulations, it is anticipated that the Trustee  
will treat the issue price of a Class as to which there is no substantial sale  
as of the issue date or that is retained by the Depositor as the fair market    
value of the Class as of the issue date. The issue price of a Regular Security  
also includes any amount paid by an initial Regular Securityholder for accrued  
interest that relates to a period prior to the issue date of the Regular        
Security, unless the Regular Securityholder elects on its federal income tax    
return to exclude such amount from the issue price and to recover it on the     
first Distribution Date. The stated redemption price at maturity of a Regular   
Security always includes the original principal amount of the Regular Security, 
but generally will not include distributions of interest if such distributions  
constitute "qualified stated interest." Under the OID Regulations, qualified    
stated interest generally means interest payable at a single fixed rate or a    
qualified variable rate (as described below), provided that such interest       
payments are unconditionally payable at intervals of one year or less during the
entire term of the Regular Security. Because there is no penalty or default     
remedy in the case of nonpayment of interest with respect to a Regular Security,
it is possible that no interest on any Class of Regular Securities will be      
treated as qualified stated interest. However, except as provided in the        
following three sentences or in the applicable prospectus supplement, because   
the underlying Mortgage Loans provide for remedies in the event of default, it  
is anticipated that the Trustee will treat interest with respect to the Regular 
Securities as qualified stated interest. Distributions of interest on an Accrual
Security, or on other Regular Securities with respect to which deferred interest
will accrue, will not constitute qualified stated interest, in which case the   
stated redemption price at maturity of such Regular Securities includes all     
distributions of interest as well as principal thereon. Likewise, it is         
anticipated that the Trustee will treat an interest-only Class or a Class on    
which interest is substantially disproportionate to its principal amount (a     
so-called "SUPER-PREMIUM" Class) as having no qualified stated interest. Where  
the interval between the issue date and the first Distribution Date on a Regular
Security is shorter than the interval between subsequent Distribution Dates, the
interest attributable to the additional days will be included in the stated     
redemption price at maturity.                                                   

        Under a de minimis rule, original issue discount on a Regular Security
will be considered to be zero if such original issue discount is less than 0.25%
of the stated redemption price at maturity of the Regular Security multiplied by
the weighted average maturity of the Regular Security. For this purpose, the    
weighted average maturity of the Regular Security is computed as the sum of the 
amounts determined by multiplying the number of full years (i.e., rounding down 
partial years) from the issue date until each distribution in reduction of      
stated redemption price at maturity is scheduled to be made by a fraction, the  
numerator of which is the amount of each distribution included in the stated    
redemption price at maturity of the Regular Security and the denominator of     
which is the stated redemption price at maturity of the Regular Security. The   
Conference Committee Report to the 1986 Act provides that the schedule of such  
distributions should be determined in accordance with the assumed rate of       
prepayment of the Mortgage Loans (the "PREPAYMENT ASSUMPTION") and the          
anticipated reinvestment rate, if any, relating to the Regular Securities. The  
Prepayment Assumption with respect to a Series of Regular Securities will be set
forth in the applicable prospectus supplement. Holders generally must report de 
minimis original issue discount pro rata as principal payments are received, and
such income will be capital gain if the Regular Security is held as a capital   
asset. Under the OID Regulations, however, Regular Securityholders may elect to 
accrue all de minimis original issue discount as well as market discount and    
market premium, under the constant yield method. See "--Election to Treat All   
Interest Under the Constant Yield Method."                                      

         A Regular Securityholder generally must include in gross income for any
taxable year the sum of the "daily portions," as defined below, of the original 
issue discount on the Regular Security accrued during an accrual period for each
day on which it holds the Regular Security, including the date of purchase but  
excluding the date of disposition. The Trustee will treat the monthly period    
ending on the day before each Distribution Date as the accrual period. With     
respect to each Regular Security, a calculation will be made of the original    
issue discount that accrues during each successive full accrual period (or      
shorter period from the date of original issue) that ends on the day before the 
related Distribution Date on the Regular Security. The Conference Committee     
Report to the 1986 Act states that the rate of accrual of original issue        
discount is intended to be based on the Prepayment Assumption.                  

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The original issue discount accruing in a full accrual period would be the      
excess, if any, of (i) the sum of (a) the present value of all of the remaining 
distributions to be made on the Regular Security as of the end of that accrual  
period, and (b) the distributions made on the Regular Security during the       
accrual period that are included in the Regular Security's stated redemption    
price at maturity, over (ii) the adjusted issue price of the Regular Security at
the beginning of the accrual period. The present value of the remaining         
distributions referred to in the preceding sentence is calculated based on (i)  
the yield to maturity of the Regular Security at the issue date, (ii) events    
(including actual prepayments) that have occurred prior to the end of the       
accrual period, and (iii) the Prepayment Assumption. For these purposes, the    
adjusted issue price of a Regular Security at the beginning of any accrual      
period equals the issue price of the Regular Security, increased by the         
aggregate amount of original issue discount with respect to the Regular Security
that accrued in all prior accrual periods and reduced by the amount of          
distributions included in the Regular Security's stated redemption price at     
maturity that were made on the Regular Security in such prior periods. The      
original issue discount accruing during any accrual period (as determined in    
this paragraph) will then be divided by the number of days in the period to     
determine the daily portion of original issue discount for each day in the      
period. With respect to an initial accrual period shorter than a full accrual   
period, the daily portions of original issue discount must be determined        
according to an appropriate allocation under any reasonable method.             

        Under the method described above, the daily portions of original issue
discount required to be included in income by a Regular Securityholder generally
will increase to take into account prepayments on the Regular Securities as a   
result of prepayments on the Mortgage Loans that exceed the Prepayment          
Assumption, and generally will decrease (but not below zero for any period) if  
the prepayments are slower than the Prepayment Assumption. An increase in       
prepayments on the Mortgage Loans with respect to a Series of Regular Securities
can result in both a change in the priority of principal payments with respect  
to certain Classes of Regular Securities and either an increase or decrease in  
the daily portions of original issue discount with respect to such Regular      
Securities.                                                                     

    In the case of a Non-Pro Rata Security, it is anticipated that the
Trustee will determine the yield to maturity of such Security based upon the    
anticipated payment characteristics of the Class as a whole under the Prepayment
Assumption. In general, the original issue discount accruing on each Non-Pro    
Rata Security in a full accrual period would be its allocable share of the      
original issue discount with respect to the entire Class, as determined in      
accordance with the preceding paragraph. However, in the case of a distribution 
in retirement of the entire unpaid principal balance of any Non-Pro Rata        
Security (or portion of such unpaid principal balance), (a) the remaining       
unaccrued original issue discount allocable to such Security (or to such        
portion) will accrue at the time of such distribution, and (b) the accrual of   
original issue discount allocable to each remaining Security of such Class will 
be adjusted by reducing the present value of the remaining payments on such     
Class and the adjusted issue price of such Class to the extent attributable to  
the portion of the unpaid principal balance thereof that was distributed. The   
Depositor believes that the foregoing treatment is consistent with the "pro rata
prepayment" rules of the OID Regulations, but with the rate of accrual of       
original issue discount determined based on the Prepayment Assumption for the   
Class as a whole. Investors are advised to consult their tax advisors as to this
treatment.                                                                      

Acquisition Premium                                           

       A purchaser of a Regular Security having original issue discount at a
price greater than its adjusted issue price but less than its stated redemption 
price at maturity will be required to include in gross income the daily portions
of the original issue discount on the Regular Security reduced pro rata by a    
fraction, the numerator of which is the excess of its purchase price over such  
adjusted issue price and the denominator of which is the excess of the remaining
stated redemption price at maturity over the adjusted issue price.              
Alternatively, such a subsequent purchaser may elect to treat all such          
acquisition premium under the constant yield method, as described below under   
the heading "--Election to Treat All Interest Under the Constant Yield Method." 

Variable Rate Regular Securities                              

       Regular Securities may provide for interest based on a variable rate.
Under the OID Regulations, interest is treated as payable at a variable rate if,
generally, (i) the issue price does not exceed the original principal balance by
more than a specified amount and (ii) the interest compounds or is payable at   
least annually at current values of (a) one or more "qualified floating rates," 
(b) a single fixed rate and one or more qualified floating rates, (c) a single  
"objective rate," or (d) a single fixed rate and a single objective rate that is
a "qualified inverse floating rate." A                                          

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floating rate is a qualified floating rate if variations can reasonably be      
expected to measure contemporaneous variations in the cost of newly borrowed    
funds. A multiple of a qualified floating rate is considered a qualified        
floating rate only if the rate is equal to either (a) the product of a qualified
floating rate and a fixed multiple that is greater than 0.65 but not more than  
1.35 or (b) the product of a qualified floating rate and a fixed multiple that  
is greater that 0.65 but not more than 1.35, increased or decreased by a fixed  
rate. Such rate may also be subject to a fixed cap or floor, or a cap or floor  
that is not reasonably expected as of the issue date to affect the yield of the 
instrument significantly. An objective rate is any 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, provided that such information  
is not (i) within the control of the issuer or a related party or (ii) unique to
the circumstances of the issuer or a related party. A qualified inverse floating
rate is a rate equal to a fixed rate minus a qualified floating rate that       
inversely reflects contemporaneous variations in the cost of newly borrowed     
funds; an inverse floating rate that is not a qualified inverse floating rate   
may nevertheless be an objective rate. A Class of Regular Securities may be     
issued under this prospectus that does not have a variable rate under the       
foregoing rules, for example, a Class that bears different rates at different   
times during the period it is outstanding such that it is considered            
significantly "front-loaded" or "back-loaded" within the meaning of the OID     
Regulations. It is possible that such a Class may be considered to bear         
"contingent interest" within the meaning of the OID Regulations. The OID        
Regulations, as they relate to the treatment of contingent interest, are by     
their terms not applicable to Regular Securities. However, if final regulations 
dealing with contingent interest with respect to Regular Securities apply the   
same principles as the OID Regulations, such regulations may lead to different  
timing of income inclusion that would be the case under the OID Regulations.    
Furthermore, application of such principles could lead to the characterization  
of gain on the sale of contingent interest Regular Securities as ordinary       
income. Investors should consult their tax advisors regarding the appropriate   
treatment of any Regular Security that does not pay interest at a fixed rate or 
variable rate as described in this paragraph.                                   

         Under the REMIC Regulations, a Regular Security (i) bearing interest at
a rate that qualifies as a variable rate under the OID Regulations that is tied 
to current values of a variable rate (or the highest, lowest or average of two  
or more variable rates, including a rate based on the average cost of funds of  
one or more financial institutions), or a positive or negative multiple of such 
a rate (plus or minus a specified number of basis points), or that represents a 
weighted average of rates on some or all of the Mortgage Loans, including such a
rate that is subject to one or more caps or floors, or (ii) bearing one or more 
such variable rates for one or more periods, or one or more fixed rates for one 
or more periods, and a different variable rate or fixed rate for other periods, 
qualifies as a regular interest in a REMIC. Accordingly, unless otherwise       
indicated in the applicable prospectus supplement, it is anticipated that the   
Trustee will treat Regular Securities that qualify as regular interests under   
this rule in the same manner as obligations bearing a variable rate for original
issue discount reporting purposes.                                              

 The amount of original issue discount with respect to a Regular
Security bearing a variable rate of interest will accrue in the manner described
above under "Original Issue Discount," with the yield to maturity and future    
payments on such Regular Security generally to be determined by assuming that   
interest will be payable for the life of the Regular Security based on the      
initial rate (or, if different, the value of the applicable variable rate as of 
the pricing date) for the relevant Class. Unless required otherwise by          
applicable final regulations, it is anticipated that the Trustee will treat such
variable interest as qualified stated interest, other than variable interest on 
an interest-only or super-premium Class, which will be treated as non-qualified 
stated interest includable in the stated redemption price at maturity. Ordinary 
income reportable for any period will be adjusted based on subsequent changes in
the applicable interest rate index.                                             

       Although unclear under the OID Regulations, unless required otherwise
by applicable final regulations, the Seller intends to treat Regular Securities 
bearing an interest rate that is a weighted average of the net interest rates on
Mortgage Loans as having qualified stated interest, except to the extent that   
initial "teaser" rates cause sufficiently "back-loaded" interest to create more 
than de minimis original issue discount. The yield on such Regular Securities   
for purposes of accruing original issue discount will be a hypothetical fixed   
rate based on the fixed rates, in the case of fixed-rate Mortgage Loans, and    
initial "teaser rates" followed by fully indexed rates, in the case of          
adjustable-rate Mortgage Loans. In the case of adjustable-rate Mortgage Loans,  
the applicable index used to compute interest on the Mortgage Loans in effect on
the pricing date (or possibly the issue date) will be deemed to be in effect    
beginning with the period in which the first weighted average adjustment date   
occurring after the issue date occurs. Adjustments will be made in each accrual 
period either increasing or decreasing the amount of ordinary income reportable 
to reflect the actual Pass-Through Rate on the Regular Securities.              

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Market Discount                                               

         A subsequent purchaser of a Regular Security also may be subject to the
market discount rules of Code Sections 1276 through 1278. Under these sections  
and the principles applied by the OID Regulations in the context of original    
issue discount, "market discount" is the amount by which the purchaser's        
original basis in the Regular Security (i) is exceeded by the remaining         
outstanding principal payments and interest payments other than qualified stated
interest payments due on a Regular Security, or (ii) in the case of a Regular   
Security having original issue discount, is exceeded by the adjusted issue price
of such Regular Security at the time of purchase. Such purchaser generally will 
be required to recognize ordinary income to the extent of accrued market        
discount on such Regular Security as distributions includable in the stated     
redemption price at maturity thereof are received, in an amount not exceeding   
any such distribution. Such market discount would accrue in a manner to be      
provided in Treasury regulations and should take into account the Prepayment    
Assumption. The Conference Committee Report to the 1986 Act provides that until 
such regulations are issued, such market discount would accrue either (i) on the
basis of a constant interest rate, or (ii) in the ratio of stated interest      
allocable to the relevant period to the sum of the interest for such period plus
the remaining interest as of the end of such period, or in the case of a Regular
Security issued with original issue discount, in the ratio of original issue    
discount accrued for the relevant period to the sum of the original issue       
discount accrued for such period plus the remaining original issue discount as  
of the end of such period. Such purchaser also generally will be required to    
treat a portion of any gain on a sale or exchange of the Regular Security as    
ordinary income to the extent of the market discount accrued to the date of     
disposition under one of the foregoing methods, less any accrued market discount
previously reported as ordinary income as partial distributions in reduction of 
the stated redemption price at maturity were received. Such purchaser will be   
required to defer deduction of a portion of the excess of the interest paid or  
accrued on indebtedness incurred to purchase or carry a Regular Security over   
the interest distributable thereon. The deferred portion of such interest       
expense in any taxable year generally will not exceed the accrued market        
discount on the Regular Security for such year. Any such deferred interest      
expense is, in general, allowed as a deduction not later than the year in which 
the related market discount income is recognized or the Regular Security is     
disposed of. As an alternative to the inclusion of market discount in income on 
the foregoing basis, the Regular Securityholder may elect to include market     
discount in income currently as it accrues on all market discount instruments   
acquired by such Regular Securityholder in that taxable year or thereafter, in  
which case the interest deferral rule will not apply. See "--Election to Treat  
All Interest Under the Constant Yield Method" below regarding an alternative    
manner in which such election may be deemed to be made. A person who purchases a
Regular Security at a price lower than the remaining amounts includable in the  
stated redemption price at maturity of the security, but higher than its        
adjusted issue price, does not acquire the Regular Security with market         
discount, but will be required to report original issue discount, appropriately 
adjusted to reflect the excess of the price paid over the adjusted issue price. 

       Market discount with respect to a Regular Security will be considered
to be zero if such market discount is less than 0.25% of the remaining stated   
redemption price at maturity of such Regular Security (or, in the case of a     
Regular Security having original issue discount, the adjusted issue price of    
such Regular Security) multiplied by the weighted average maturity of the       
Regular Security (determined as described above in the third paragraph under    
"--Original Issue Discount") remaining after the date of purchase. It appears   
that de minimis market discount would be reported in a manner similar to de     
minimis original issue discount. See "--Original Issue Discount" above.         

        Under provisions of the OID Regulations relating to contingent payment
obligations, a secondary purchaser of a Regular Security that has "contingent   
interest" at a discount generally would continue to accrue interest and         
determine adjustments on the Regular Security based on the original projected   
payment schedule devised by the issuer of the Security. The holder of such a    
Regular Security would be required, however, to allocate the difference between 
the adjusted issue price of the Regular Security and its basis in the Regular   
Security as positive adjustments to the accruals or projected payments on the   
Regular Security over the remaining term of the Regular Security in a manner    
that is reasonable (e.g., based on a constant yield to maturity).               

      Treasury regulations implementing the market discount rules have not
yet been issued, and uncertainty exists with respect to many aspects of those   
rules. Due to the substantial lack of regulatory guidance with respect to the   
market discount rules, it is unclear how those rules will affect any secondary  
market that develops for a given Class of Regular Securities. Prospective       
investors in Regular Securities should consult their own tax advisors regarding 
the application of the market discount rules to the Regular Securities.         
Investors should also consult                                                   

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Revenue Procedure 92-67 concerning the elections to include market discount in  
income currently and to accrue market discount on the basis of the constant     
yield method.                                                                   

Amortizable Premium                                           

   A Regular Security purchased at a cost greater than its remaining
stated redemption price at maturity generally is considered to be purchased at a
premium. If the Regular Securityholder holds such Regular Security as a "capital
asset" within the meaning of Code Section 1221, the Regular Securityholder may  
elect under Code Section 171 to amortize such premium under a constant yield    
method that reflects compounding based on the interval between payments on the  
Regular Security. Such election will apply to all taxable debt obligations      
(including REMIC regular interests) acquired by the Regular Securityholder at a 
premium held in that taxable year or thereafter, unless revoked with the        
permission of the IRS. Final Treasury regulations have been issued with respect 
to amortizable bond premiums which do not by their terms apply to prepayable    
debt instruments such as the Regular Securities. However, the Conference        
Committee Report to the 1986 Act indicates a Congressional intent that the same 
rules that apply to the accrual of market discount on installment obligations   
will also apply to amortizing bond premium under Code Section 171 on installment
obligations such as the Regular Securities, although it is unclear whether the  
alternatives to the constant interest method described above under "--Market    
Discount" are available. Amortizable bond premium generally will be treated as  
an offset to interest income on a Regular Security, rather than as a separate   
deduction. See "--Election to Treat All Interest Under the Constant Yield       
Method" below regarding an alternative manner in which the Code Section 171     
election may be deemed to be made.                                              

         Amortizable premium on a Regular Security that is subject to redemption
at the option of the issuer generally must be amortized as if the optional      
redemption price and date were the Security's principal amount and maturity date
if doing so would result in a smaller amount of premium amortization during the 
period ending with the optional redemption date. Thus, a holder of a Regular    
Security would not be able to amortize any premium on a Regular Security that is
subject to optional redemption at a price equal to or greater than the          
Securityholder's acquisition price unless and until the redemption option       
expires. A Regular Security subject to redemption at the option of the issuer   
described in the preceding sentence will be treated as having matured on the    
redemption date for the redemption price and then as having been reissued on    
that date for that price. Any premium remaining on the Regular Security at the  
time of the deemed reissuance will be amortized on the basis of (i) the original
principal amount and maturity date or (ii) the price and date of any succeeding 
optional redemption, under the principles described above.                      

Election to Treat All Interest Under the Constant Yield Method

       A holder of a debt instrument such as a Regular Security may elect to
treat all interest that accrues on the instrument using the constant yield      
method, with none of the interest being treated as qualified stated interest.   
For purposes of applying the constant yield method to a debt instrument subject 
to such an election, (i) "interest" includes stated interest, original issue    
discount, de minimis original issue discount, market discount and de minimis    
market discount, as adjusted by any amortizable bond premium or acquisition     
premium and (ii) the debt instrument is treated as if the instrument were issued
on the holder's acquisition date in the amount of the holder's adjusted basis   
immediately after acquisition. It is unclear whether, for this purpose, the     
initial Prepayment Assumption would continue to apply or if a new prepayment    
assumption as of the date of the holder's acquisition would apply. A holder     
generally may make such an election on an instrument by instrument basis or for 
a Class or group of debt instruments. However, if the holder makes such an      
election with respect to a debt instrument with amortizable bond premium or with
market discount, the holder is deemed to have made elections to amortize bond   
premium or to report market discount income currently as it accrues under the   
constant yield method, respectively, for all premium bonds held or market       
discount bonds acquired by the holder in the same taxable year or thereafter.   
The election is made on the holder's federal income tax return for the year in  
which the debt instrument is acquired and is irrevocable except with the        
approval of the IRS. Investors should consult their own tax advisors regarding  
the advisability of making such an election                                     

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Treatment of Losses                                           

        Regular Securityholders will be required to report income with respect
to Regular Securities on the accrual method of accounting, without giving effect
to delays or reductions in distributions attributable to defaults or            
delinquencies on the Mortgage Loans, except to the extent it can be established 
that such losses are uncollectable. Accordingly, the holder of a Regular        
Security, particularly a Subordinate Security, may have income, or may incur a  
diminution in cash flow as a result of a default or delinquency, but may not be 
able to take a deduction (subject to the discussion below) for the corresponding
loss until a subsequent taxable year. In this regard, investors are cautioned   
that while they may generally cease to accrue interest income if it reasonably  
appears that the interest will be uncollectable, the IRS may take the position  
that original issue discount must continue to be accrued in spite of its        
uncollectibility until the debt instrument is disposed of in a taxable          
transaction or becomes worthless in accordance with the rules of Code Section   
166. Under Code Section 166, it appears that Regular Securityholders that are   
corporations or that otherwise hold the Regular Securities in connection with a 
trade or business should in general be allowed to deduct as an ordinary loss    
such loss with respect to principal sustained during the taxable year on account
of any such Regular Securities becoming wholly or partially worthless, and that,
in general, Regular Securityholders that are not corporations and do not hold   
the Regular Securities in connection with a trade or business should be allowed 
to deduct as a short-term capital loss any loss sustained during the taxable    
year on account of a portion of any such Regular Securities becoming wholly     
worthless. Although the matter is not free from doubt, such non-corporate       
Regular Securityholders should be allowed a bad debt deduction at such time as  
the principal balance of such Regular Securities is reduced to reflect 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 such losses only after all the Mortgage Loans remaining in the Trust    
Fund have been liquidated or the applicable Class of Regular Securities has been
otherwise retired. The IRS could also assert that losses on the Regular         
Securities are deductible based on some other method that may defer such        
deductions for all holders, such as reducing future cashflow for purposes of    
computing original issue discount. This may have the effect of creating         
"negative" original issue discount which would be deductible only against future
positive original issue discount or otherwise upon termination of the Class.    
Regular Securityholders are urged to consult their own tax advisors regarding   
the appropriate timing, amount and character of any loss sustained with respect 
to such Regular Securities. While losses attributable to interest previously    
reported as income should be deductible as ordinary losses by both corporate and
non-corporate holders, the IRS may take the position that losses attributable to
accrued original issue discount may only be deducted as capital losses in the   
case of non-corporate holders who do not hold the Regular Securities in         
connection with a trade or business. Special loss rules are applicable to banks 
and thrift institutions, including rules regarding reserves for bad debts. Such 
taxpayers are advised to consult their tax advisors regarding the treatment of  
losses on Regular Securities.                                                   

Sale or Exchange of Regular Securities                        

        If a Regular Securityholder sells or exchanges a Regular Security, the
Regular Securityholder will recognize gain or loss equal to the difference, if  
any, between the amount received and its adjusted basis in the Regular Security.
The adjusted basis of a Regular Security generally will equal the original cost 
of the Regular Security to the seller, increased by any original issue discount 
or market discount previously included in the seller's gross income with respect
to the Regular Security and reduced by amounts included in the stated redemption
price at maturity of the Regular Security that were previously received by the  
seller, by any amortized premium, and by any recognized losses.                 

       Except as described above with respect to market discount, and except
as provided in this paragraph, any gain or loss on the sale or exchange of a    
Regular Security realized by an investor who holds the Regular Security as a    
capital asset will be capital gain or loss and will be long-term or short-term  
depending on whether the Regular Security has been held for the long-term       
capital gain holding period (currently, more than one year). Such gain will be  
treated as ordinary income (i) if a Regular Security is held as part of a       
"conversion transaction" as defined in Code Section 1258(c), up to the amount of
interest that would have accrued on the Regular Securityholder's net investment 
in the conversion transaction at 120% of the appropriate applicable Federal rate
in effect at the time the taxpayer entered into the transaction minus any amount
previously treated as ordinary income with respect to any prior disposition of  
property that was held as part of such transaction, (ii) in the case of a       
non-corporate taxpayer, to the extent such taxpayer has made an election under  
Code Section 163(d)(4) to have net capital gains taxed as investment income at  
ordinary income rates, or (iii) to the extent that such gain does not exceed the
excess, if any, of                                                              

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(a) the amount that would have been includable in the gross income of the holder
if its yield on such Regular Security were 110% of the applicable Federal rate  
as of the date of purchase, over (b) the amount of income actually includable in
the gross income of such holder with respect to such Regular Security. In       
addition, gain or loss recognized from the sale of a Regular Security by certain
banks or thrift institutions will be treated as ordinary income or loss pursuant
to Code Section 582(c). Long-term capital gains of certain noncorporate         
taxpayers generally are subject to a lower maximum tax rate than ordinary income
or short-term capital gains of such taxpayers for property held for more than   
one year. Currently, the maximum tax rate for corporations is the same with     
respect to both ordinary income and capital gains.                              

        Regular Securityholders that recognize a loss on a sale or exchange of
a Regular Security for federal income tax purposes in excess of certain         
threshold amounts should consult their tax advisors as to the need to file IRS  
Form 8886 (disclosing certain potential tax shelters) on their federal income   
tax returns.                                                                    

Taxation of Owners of Residual Securities                     

Taxation of REMIC Income                                      

     Generally, the "daily portions" of REMIC taxable income or net loss
will be includable as ordinary income or loss in determining the federal taxable
income of holders of Residual Securities ("RESIDUAL HOLDERS"), and will not be  
taxed separately to the REMIC Pool. The daily portions of REMIC taxable income  
or net loss of a Residual Holder are determined by allocating the REMIC Pool's  
taxable income or net loss for each calendar quarter ratably to each day in such
quarter and by allocating such daily portion among the Residual Holders in      
proportion to their respective holdings of Residual Securities in the REMIC Pool
on such day. 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 (i) the limitations on deductibility of investment interest expense 
and expenses for the production of income do not apply, (ii) all bad loans will 
be deductible as business bad debts, and (iii) the limitation on the            
deductibility of interest and expenses related to tax-exempt income will apply. 
The REMIC Pool's gross income includes interest, original issue discount income 
and market discount income, if any, on the Mortgage Loans, reduced by           
amortization of any premium on the Mortgage Loans, plus income from amortization
of issue premium, if any, on the Regular Securities, plus income on reinvestment
of cash flows and reserve assets, plus any cancellation of indebtedness income  
upon allocation of realized losses to the Regular Securities. The REMIC Pool's  
deductions include interest and original issue discount expense on the Regular  
Securities, servicing fees on the Mortgage Loans, other administrative expenses 
of the REMIC Pool and realized losses on the Mortgage Loans. The requirement    
that Residual Holders report their pro rata share of taxable income or net loss 
of the REMIC Pool will continue until there are no Securities of any Class of   
the related Series outstanding.                                                 

        The taxable income recognized by a Residual Holder in any taxable year
will be affected by, among other factors, the relationship between the timing of
recognition of interest, original issue discount or market discount income or   
amortization of premium with respect to the Mortgage Loans, on the one hand, and
the timing of deductions for interest (including original issue discount) or    
income from amortization of issue premium on the Regular Securities, on the     
other hand. In the event that an interest in the Mortgage Loans is acquired by  
the REMIC Pool at a discount, and one or more of such Mortgage Loans is prepaid,
the prepayment may be used in whole or in part to make distributions in         
reduction of principal on the Regular Securities, and (ii) the discount on the  
Mortgage Loans which is includable in income may exceed the deduction allowed   
upon such distributions on those Regular Securities on account of any unaccrued 
original issue discount relating to those Regular Securities. When there is more
than one Class of Regular Securities that distribute principal sequentially,    
this mismatching of income and deductions is particularly likely to occur in the
early years following issuance of the Regular Securities when distributions in  
reduction of principal are being made in respect of earlier Classes of Regular  
Securities to the extent that such Classes are not issued with substantial      
discount or are issued at a premium. If taxable income attributable to such a   
mismatching is realized, in general, losses would be allowed in later years as  
distributions on the later maturing Classes of Regular Securities are made.     
Taxable income may also be greater in earlier years than in later years as a    
result of the fact that interest expense deductions, expressed as a percentage  
of the outstanding principal amount of such a Series of Regular Securities, may 
increase over time as distributions in reduction of principal are made on the   
lower yielding Classes of Regular Securities, whereas, to the extent the REMIC  
Pool consists of fixed rate Mortgage Loans, interest income with respect to any 
given Mortgage Loan will remain constant over time as a percentage of the       
outstanding principal amount of that loan. Consequently, Residual Holders must  
have sufficient                                                                 

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other sources of cash to pay any federal, state, or local income taxes due as a 
result of such mismatching or unrelated deductions against which to offset such 
income, subject to the discussion of "excess inclusions" below under            
"--Limitations on Offset or Exemption of REMIC Income." The timing of such      
mismatching of income and deductions described in this paragraph, if present    
with respect to a Series of Securities, may have a significant adverse effect   
upon a Residual Holder's after-tax rate of return.                              

     A portion of the income of a Residual Securityholder may be treated
unfavorably in three contexts: (i) it may not be offset by current or net       
operating loss deductions; (ii) it will be considered unrelated business taxable
income to tax-exempt entities; and (iii) it is ineligible for any statutory or  
treaty reduction in the 30% withholding tax otherwise available to a foreign    
Residual Securityholder. See "--Limitations on Offset or Exemption of REMIC     
Income" below. In addition, a Residual Holder's taxable income during certain   
periods may exceed the income reflected by such Residual Holders for such       
periods in accordance with generally accepted accounting principles. Investors  
should consult their own accountants concerning the accounting treatment of     
their investment in Residual Securities.                                        

Basis and Losses                                              

     The amount of any net loss of the REMIC Pool that may be taken into
account by the Residual Holder is limited to the adjusted basis of the Residual 
Security as of the close of the quarter (or time of disposition of the Residual 
Security if earlier), determined without taking into account the net loss for   
the quarter. The initial adjusted basis of a purchaser of a Residual Security is
the amount paid for such Residual Security. Such adjusted basis will be         
increased by the amount of taxable income of the REMIC Pool reportable by the   
Residual Holder and will be decreased (but not below zero), first, by a cash    
distribution from the REMIC Pool and, second, by the amount of loss of the REMIC
Pool reportable by the Residual Holder. Any loss that is disallowed on account  
of this limitation may be carried over indefinitely with respect to the Residual
Holder as to whom such loss was disallowed and may be used by such Residual     
Holder only to offset any income generated by the same REMIC Pool.              

       A Residual Holder will not be permitted to amortize directly the cost
of its Residual Security as an offset to its share of the taxable income of the 
related REMIC Pool. However, the taxable income will not include cash received  
by the REMIC Pool that represents a recovery of the REMIC Pool's basis in its   
assets. Although the law is unclear in certain respects, such recovery of basis 
by the REMIC Pool will have the effect of amortization of the issue price of the
Residual Securities over their life. However, in view of the possible           
acceleration of the income of Residual Holders described above under "--Taxation
of REMIC Income," the period of time over which such issue price is effectively 
amortized may be longer than the economic life of the Residual Securities.      

        A Residual Security may have a negative value if the net present value
of anticipated tax liabilities exceeds the present value of anticipated cash    
flows. The REMIC Regulations appear to treat the issue price of such a residual 
interest as zero rather than such negative amount for purposes of determining   
the REMIC Pool's basis in its assets. Regulations have been proposed addressing 
the federal income tax treatment of "inducement fees" received by transferees of
noneconomic residual interests. The proposed regulations would require          
inducement fees to be included in income over a period reasonably related to the
period in which a Residual Security is expected to generate taxable income or   
net loss to its holder. Under two proposed safe harbor methods, inducement fees 
would be permitted to be included in income: (i) in the same amounts and over   
the same period that the holder uses for financial reporting purposes, provided 
that such period is not shorter than the period the related 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 related    
REMIC, determined based on actual distributions projected as remaining to be    
made on such interests under the applicable prepayment assumption. If a Residual
Holder sells or otherwise disposes of the residual interest, any unrecognized   
portion of the inducement fee would be required to be taken into account at the 
time of the sale or disposition.                                                

      Further, to the extent that the initial adjusted basis of a Residual
Holder (other than an original holder) in the Residual Security is greater than 
the corresponding portion of the REMIC Pool's basis in the Mortgage Loans, the  
Residual Holder will not recover a portion of such basis until termination of   
the REMIC Pool unless future Treasury regulations provide for periodic          
adjustments to the REMIC income otherwise reportable by such holder. The REMIC  
Regulations currently in effect do not so provide. See "--Treatment of Certain  
Items of REMIC Income and Expense--Market Discount" below regarding the basis of
Mortgage Loans to the REMIC Pool and "--                                        

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Sale or Exchange of a Residual Security" below regarding possible treatment of a
loss upon termination of the REMIC Pool as a capital loss.                      

Treatment of Certain Items of REMIC Income and Expense        

       Although it is anticipated that the Trustee will compute REMIC income
and expense in accordance with the Code and applicable regulations, the         
authorities regarding the determination of specific items of income and expense 
are subject to differing interpretations. The Depositor makes no representation 
as to the specific method that will be used for reporting income with respect to
the Mortgage Loans and expenses with respect to the Regular Securities, and     
different methods could result in different timing or reporting of taxable      
income or net loss to Residual Holders or differences in capital gain versus    
ordinary income.                                                                

  Original Issue Discount and Premium. Generally, the REMIC Pool's
deductions for original issue discount and income from amortization of premium  
will be determined in the same manner as original issue discount income on      
Regular Securities as described above under "--Taxation of Owners of Regular    
Securities--Original Issue Discount" and "--Variable Rate Regular Securities,"  
without regard to the de minimis rule described therein, and "--Taxation of     
Owners of Regular Securities--Amortizable Premium."                             

     Market Discount. The REMIC Pool will have market discount income in
respect of Mortgage Loans if, in general, the basis of the REMIC Pool in such   
Mortgage Loans is exceeded by their unpaid principal balances. The REMIC Pool's 
basis in such Mortgage Loans is generally the fair market value of the Mortgage 
Loans immediately after the transfer thereof to the REMIC Pool. The REMIC       
Regulations provide that such basis is equal in the aggregate to the issue      
prices of all regular and residual interests in the REMIC Pool. The accrued     
portion of such market discount would be recognized currently as an item of     
ordinary income in a manner similar to original issue discount. Market discount 
income generally should accrue in the manner described above under "--Taxation  
of Owners of Regular Securities--Market Discount."                              

    Premium. Generally, if the basis of the REMIC Pool in the Mortgage
Loans exceeds the unpaid principal balances thereof, the REMIC Pool will be     
considered to have acquired such Mortgage Loans at a premium equal to the amount
of such excess. As stated above, the REMIC Pool's basis in Mortgage Loans is the
fair market value of the Mortgage Loans, based on the aggregate of the issue    
prices of the regular and residual interests in the REMIC Pool immediately after
the transfer thereof to the REMIC Pool. In a manner analogous to the discussion 
above under "--Taxation of Owners of Regular Securities--Amortizable Premium," a
person that holds a Mortgage Loan as a capital asset under Code Section 1221 may
elect under Code Section 171 to amortize premium on Mortgage Loans originated   
after September 27, 1985 under the constant yield method. Amortizable bond      
premium will be treated as an offset to interest income on the Mortgage Loans,  
rather than as a separate deduction item. Because substantially all of the      
mortgagors on the Mortgage Loans are expected to be individuals, Code Section   
171 will not be available for premium on Mortgage Loans originated on or prior  
to September 27, 1985. Premium with respect to such Mortgage Loans may be       
deductible in accordance with a reasonable method regularly employed by the     
holder thereof. The allocation of such premium pro rata among principal payments
should be considered a reasonable method; however, the IRS may argue that such  
premium should be allocated in a different manner, such as allocating such      
premium entirely to the final payment of principal.                             

Limitations on Offset or Exemption of REMIC Income            

A portion (or all) of the REMIC taxable income includable in  
determining the federal income tax liability of a Residual Holder will be       
subject to special treatment. That portion, referred to as the "excess          
inclusion," is equal to the excess of REMIC taxable income for the calendar     
quarter allocable to a Residual Security over the daily accruals for such       
quarterly period of (i) 120% of the long-term applicable Federal rate that would
have applied to the Residual Security (if it were a debt instrument) on the     
Startup Day under Code Section 1274(d), multiplied by (ii) the adjusted issue   
price of such Residual Security at the beginning of such quarterly period. For  
this purpose, the adjusted issue price of a Residual Security at the beginning  
of a quarter is the issue price of the Residual Security, plus the amount of    
such daily accruals of REMIC income described in this paragraph for all prior   
quarters, decreased by any distributions made with respect to such Residual     
Security prior to the beginning of such quarterly period. Accordingly, the      
portion of the REMIC Pool's taxable income that will be treated as excess       
inclusions will be a larger portion of such income as the adjusted issue price  
of the Residual Securities diminishes.                                          

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       The portion of a Residual Holder's REMIC taxable income consisting of
the excess inclusions generally may not be offset by other deductions, including
net operating loss carryforwards, on such Residual Holder's return. However, net
operating loss carryovers are determined without regard to excess inclusion     
income. Further, if the Residual Holder is an organization subject to the tax on
unrelated business income imposed by Code Section 511, the Residual Holder's    
excess inclusions will be treated as unrelated business taxable income of such  
Residual Holder for purposes of Code Section 511. In addition, REMIC taxable    
income is subject to 30% withholding tax with respect to certain persons who are
not U.S. Persons (as defined below under "--Tax-Related Restrictions on Transfer
of Residual Securities--Foreign Investors"), and the portion thereof            
attributable to excess inclusions is not eligible for any reduction in the rate 
of withholding tax (by treaty or otherwise). See "--Taxation of Certain Foreign 
Investors--Residual Securities" below. Finally, if a real estate investment     
trust or a regulated investment company owns a Residual Security, a portion     
(allocated under Treasury regulations yet to be issued) of dividends paid by the
real estate investment trust or regulated investment company could not be offset
by net operating losses of its shareholders, would constitute unrelated business
taxable income for tax-exempt shareholders, and would be ineligible for         
reduction of withholding to certain persons who are not U.S. Persons.           

       There are three rules for determining the effect of excess inclusions
on the alternative minimum taxable income of a Residual Holder. First,          
alternative minimum taxable income for a Residual Holder is determined without  
regard to the special rule, discussed above, that taxable income cannot be less 
than excess inclusions. Second, a Residual Holder's alternative minimum taxable 
income for a taxable year cannot be less than the excess inclusions for the     
year. Third, the amount of any alternative minimum tax net operating loss       
deduction must be computed without regard to any excess inclusions.             

Tax-Related Restrictions on Transfer of Residual Securities   

      Disqualified Organizations. If any legal or beneficial interest in a
Residual Security is transferred to a Disqualified Organization (as defined     
below), a tax would be imposed in an amount equal to the product of (i) the     
present value of the total anticipated excess inclusions with respect to such   
Residual Security for periods after the transfer and (ii) the highest marginal  
federal income tax rate applicable to corporations. The REMIC Regulations       
provide that the anticipated excess inclusions are based on actual prepayment   
experience to the date of the transfer and projected payments based on the      
Prepayment Assumption. The present value rate equals the applicable Federal rate
under Code Section 1274(d) as of the date of the transfer for a term ending with
the last calendar quarter in which excess inclusions are expected to accrue.    
Such rate is applied to the anticipated excess inclusions from the end of the   
remaining calendar quarters in which they arise to the date of the transfer.    
Such a tax generally would be imposed on the transferor of the Residual         
Security, except that where such transfer is through an agent (including a      
broker, nominee, or other middleman) for a Disqualified Organization, the tax   
would instead be imposed on such agent. However, a transferor of a Residual     
Security would in no event be liable for such tax with respect to a transfer if 
the transferee furnished to the transferor an affidavit stating that the        
transferee is not a Disqualified Organization and, as of the time of the        
transfer, the transferor does not have actual knowledge that such affidavit is  
false. The tax also may be waived by the IRS if the Disqualified Organization   
promptly disposes of the Residual Security and the transferor pays income tax at
the highest corporate rate on the excess inclusion for the period the Residual  
Security is actually held by the Disqualified Organization.                     

     In addition, if a Pass-Through Entity (as defined below) has excess
inclusion income with respect to a Residual Security during a taxable year and a
Disqualified Organization is the record holder of an equity interest in such    
entity, then a tax is imposed on such entity equal to the product of (i) the    
amount of excess inclusions that are allocable to the interest in the           
Pass-Through Entity during the period such interest is held by such Disqualified
Organization, and (ii) the highest marginal federal corporate income tax rate.  
Such tax would be deductible from the ordinary gross income of the Pass-Through 
Entity for the taxable year. The Pass-Through Entity would not be liable for    
such tax if it has received an affidavit from such record holder that it is not 
a Disqualified Organization or stating such holder's taxpayer identification    
number and, during the period such person is the record holder of the Residual  
Security, the Pass-Through Entity does not have actual knowledge that such      
affidavit is false.                                                             

   If an "electing large partnership" holds a Residual Security, all
interests in the electing large partnership are treated as held by Disqualified 
Organizations for purposes of the tax imposed upon a Pass-Through Entity by     
section 860E(c) of the Code. An exception to this tax, otherwise available to a 
Pass-Through Entity that is furnished certain                                   

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affidavits by record holders of interests in the entity and that does not know  
such affidavits are false, is not available to an electing large partnership.   

      For these purposes, (i) "DISQUALIFIED ORGANIZATION" means the United
States, any state or political subdivision thereof, any foreign government, any 
international organization, any agency or instrumentality of any of the         
foregoing (provided, that such term does not include an instrumentality if all  
of its activities are subject to tax and a majority of its board of directors in
not selected by any such governmental entity), any cooperative organization     
furnishing electric energy or providing telephone service or persons in rural   
areas as described in Code Section 1381(a)(2)(C), and any organization (other   
than a farmers' cooperative described in Code Section 531) that is exempt from  
taxation under the Code unless such organization is subject to the tax on       
unrelated business income imposed by Code Section 511, (ii) "PASS-THROUGH       
ENTITY" means any regulated investment company, real estate investment trust,   
common trust fund, partnership, trust or estate and certain corporations        
operating on a cooperative basis. Except as may be provided in Treasury         
regulations, any person holding an interest in a Pass-Through Entity as a       
nominee for another will, with respect to such interest, be treated as a        
Pass-Through Entity, and (iii) an "ELECTING LARGE PARTNERSHIP" means any        
partnership having more than 100 members during the preceding tax year (other   
than certain service partnerships and commodity pools), which elect to apply    
simplified reporting provisions under the Code.                                 

   The Pooling and Servicing Agreement with respect to a Series will
provide that no legal or beneficial interest in a Residual Security may be      
transferred or registered unless (i) the proposed transferee furnished to the   
transferor and the Trustee an affidavit providing its taxpayer identification   
number and stating that such transferee is the beneficial owner of the Residual 
Security and is not a Disqualified Organization and is not purchasing such      
Residual Security on behalf of a Disqualified Organization (i.e., as a broker,  
nominee or middleman thereof) and (ii) the transferor provides a statement in   
writing to the Trustee that it has no actual knowledge that such affidavit is   
false. Moreover, the Pooling and Servicing Agreement will provide that any      
attempted or purported transfer in violation of these transfer restrictions will
be null and void and will vest no rights in any purported transferee. Each      
Residual Security with respect to a Series will bear a legend referring to such 
restrictions on transfer, and each Residual Holder will be deemed to have       
agreed, as a condition of ownership thereof, to any amendments to the related   
Pooling and Servicing Agreement required under the Code or applicable Treasury  
regulations to effectuate the foregoing restrictions. Information necessary to  
compute an applicable excise tax must be furnished to the IRS and to the        
requesting party within 60 days of the request, and the Depositor or the Trustee
may charge a fee for computing and providing such information.                  

       Noneconomic Residual Interests. The REMIC Regulations would disregard
certain transfers of Residual Securities, in which case the transferor would    
continue to be treated as the owner of the Residual Securities and thus would   
continue to be subject to tax on its allocable portion of the net income of the 
REMIC Pool. Under the REMIC Regulations, a transfer of a "noneconomic residual  
interest" (as defined below) to a Residual Holder (other than a Residual Holder 
who is not a U.S. Person as defined below under "--Foreign Investors") is       
disregarded for all federal income tax purposes if a significant purpose of the 
transfer is to impede the assessment or collection of tax. A residual interest  
in a REMIC (including a residual interest with a positive value at issuance) is 
a "noneconomic residual interest" unless, at the time of the transfer, (i) the  
present value of the expected future distributions on the residual interest at  
least equals the product of the present value of the anticipated excess         
inclusions and 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 on each excess inclusion. The anticipated excess   
inclusions and the present value rate are determined in the same manner as set  
forth above under "--Disqualified Organizations." The REMIC Regulations explain 
that a significant purpose to impede the assessment or collection of tax exists 
if the transferor, at the time of the transfer, either knew or should have known
that the transferee would be unwilling or unable to pay taxes due on its share  
of the taxable income of the REMIC. Under the REMIC Regulations, as amended on  
July 19, 2002, a safe harbor is provided if (i) the transferor conducted, at the
time of the transfer, a reasonable investigation of the financial condition of  
the transferee and found that the transferee historically had paid its debts as 
they came due and found no significant evidence to indicate that the transferee 
would not continue to pay its debts as they came due in the future, (ii) the    
transferee represents to the transferor that it understands that, as the holder 
of the non-economic residual interest, the transferee may incur liabilities in  
excess of any cash flows generated by the interest and that the transferee      
intends to pay taxes associated with holding the residual interest as they      
become due and (iii) the transferee represents to the transferor                

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that it will not cause income from the Residual Security to be attributable to a
foreign permanent establishment or fixed base (within the meaning of an         
applicable income tax treaty) of the transferee or any other person. The Pooling
and Servicing Agreement with respect to each Series of Certificates will require
the transferee of a Residual Security to certify to the matters in the preceding
sentence as part of the affidavit described above under the heading             
"Disqualified Organizations."                                                   

        In addition to the three conditions set forth above for the transferor
of a noneconomic residual interest to be presumed not to have 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 contain a fourth condition   
for the transferor to be presumed to lack such knowledge. This fourth condition 
requires that one of the two following tests be satisfied: Either               

         (a)      the present value of the anticipated tax liabilities
      associated with holding the noneconomic residual interest 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                  

                      (iii)   the present value of the anticipated tax savings
       associated with holding the interest as the REMIC generates
losses.                                             

      For purposes of these computations, the transferee is assumed to pay
       tax at the highest corporate rate of tax specified in the Code or, in
   certain circumstances, the alternative minimum tax rate. Further,
      present values generally are computed using a discount rate equal to
      the short-term Federal rate set forth in Section 1274(d) of the Code
      for the month of the transfer and the compounding period used by the
transferee; or                                                

          (b)      (i) the transferee must be a domestic "C" corporation
(other than a corporation exempt from taxation or a regulated 
        investment company or real estate investment trust) that meets certain
 asset tests; (ii) the transferee must agree in writing that any
      subsequent transfer of the residual interest would be to an eligible
   "C" corporation and would meet the requirements for a safe harbor
transfer; and (iii) 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 ownership of the residual
interest will not be paid by the transferee.                  

         Unless otherwise indicated in the applicable Prospectus Supplement, the
Pooling and Servicing Agreement will not require that transfers of the Residual 
Securities meet the fourth requirement above, and thus meet the safe harbor.    
Persons considering the purchase of the Residual Securities should consult their
advisors regarding the advisability of meeting the safe harbor in any transfer  
of the Residual Securities.                                                     

         Foreign Investors. The REMIC Regulations provide that the transfer of a
Residual Security that has "tax avoidance potential" to a "foreign person" will 
be disregarded for all federal tax purposes. This rule appears intended to apply
to a transferee who is not a "U.S. Person" (as defined below), unless such      
transferee's income is effectively connected with the conduct of a trade or     
business within the United States. A Residual Security is deemed to have tax    
avoidance potential unless, at the time of the transfer, (i) the future value of
expected distributions equals at least 30% of the anticipated excess inclusions 
after the transfer, and (ii) the transferor reasonably expects that the         
transferee will receive sufficient distributions from the REMIC Pool at or after
the time at which the excess inclusions accrue and prior to the end of the next 
succeeding taxable year for the accumulated withholding tax liability to be     
paid. If the non-U.S. Person transfers the Residual Security back to a U.S.     
Person, the transfer will be disregarded and the foreign transferor will        
continue to be treated as the owner unless arrangements are made so that the    
transfer does not have the effect of allowing the transferor to avoid tax on    
accrued excess inclusions.                                                      

        The prospectus supplement relating to the Certificates of a Series may
provide that a Residual Security may not be purchased by or transferred to any  
person that is not a U.S. Person or may describe the circumstances and          
restrictions pursuant to which such a transfer may be made. The term "U.S.      
PERSON" means a citizens or resident of                                         

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the United States, a corporation or partnership (unless, in the case of a       
partnership, Treasury regulations are adopted that provide otherwise) created or
organized in or under the laws of the United States, any state thereof or the   
District of Columbia, including an entity treated as a corporation or           
partnership for federal income tax purposes, an estate that is subject to U.S.  
federal income tax regardless of the source of its income, or a trust if a court
within the United States is able to exercise primary supervision over the       
administration of such trust and one or more such U.S. Persons have the         
authority to control all substantial decisions of such trust (or, to the extent 
provided in applicable Treasury regulations, certain trusts in existence on     
August 20, 1996 which are eligible to elect to be treated as U.S. Persons).     

Sale or Exchange of a Residual Security                       

       Upon the sale or exchange of a Residual Security, the Residual Holder
will recognize gain or loss equal to the excess, if any, of the amount realized 
over the adjusted basis (as described above under "--Taxation of Owners of      
Residual Securities--Basis and Losses") of such Residual Holder in such Residual
Security at the time of the sale or exchange. In addition to reporting the      
taxable income of the REMIC Pool, a Residual Holder will have taxable income to 
the extent that any cash distribution to it from the REMIC Pool exceeds such    
adjusted basis on that Distribution Date. Such income will be treated as gain   
from the sale or exchange of the Residual Holder's Residual Security, in which  
case, if the Residual Holder has an adjusted basis in its Residual Security     
remaining when its interest in the REMIC Pool terminates, and if it holds such  
Residual Security as a capital asset under Code Section 1221, then it will      
recognize a capital loss at that time in the amount of such remaining adjusted  
basis.                                                                          

         Any gain on the sale of a Residual Security will be treated as ordinary
income (i) if a Residual Security is held as part of a "conversion transaction" 
as defined in Code Section 1258(c), up to the amount of interest that would have
accrued on the Residual Holder's net investment in the conversion transaction at
120% of the appropriate applicable Federal rate in effect at the time the       
taxpayer entered into the transaction minus any amount previously treated as    
ordinary income with respect to any prior disposition of property that was held 
as a part of such transaction or (ii) in the case of a non-corporate taxpayer,  
to the extent such taxpayer has made an election under Code Section 163(d)(4) to
have net capital gains taxed as investment income at ordinary income rates. In  
addition, gain or loss recognized from the sale of a Residual Security by       
certain banks or thrift institutions will be treated as ordinary income or loss 
pursuant to Code Section 582(c).                                                

       The Conference Committee Report to the 1986 Act provides that, except
as provided in Treasury regulations yet to be issued, the wash sale rules of    
Code Section 1091 will apply to dispositions of Residual Securities where the   
seller of the Residual Security, during the period beginning six months before  
the sale or disposition of the Residual Security and ending six months after    
such sale or disposition, acquires (or enters into any other transaction that   
results in the application of Code Section 1091) any residual interest in any   
REMIC or any interest in a "taxable mortgage pool" (such as a non-REMIC owner   
trust) that is economically comparable to a Residual Security.                  

      The Residual Holder that recognize a loss on a sale or exchange of a
Residual Security for federal income tax purposes in excess of certain threshold
amounts should consult their tax advisors as to the need to file IRS Form 8886  
(disclosing certain potential tax shelters) on their federal income tax returns.

Mark to Market Regulations                                    

         The IRS has issued final regulations (the "MARK TO MARKET REGULATIONS")
under Code Section 475 relating to the requirement that a securities dealer mark
to market securities held for sale to customers. This mark-to-market requirement
applies to all securities of a dealer, except to the extent that the dealer has 
specifically identified a security as held for investment. The Mark to Market   
Regulations provide that, for purposes of this mark to market requirement, a    
Residual Security is not treated as a security and thus may not be marked to    
market.                                                                         

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Taxes That May Be Imposed on the REMIC Pool                   

Prohibited Transactions                                       

      Income from certain transaction by the REMIC Pool, called prohibited
transactions, will not be part of the calculation of income or loss includable  
in the federal income tax returns of Residual Holders, but rather will be taxed 
directly to the REMIC Pool at a 100% rate. Prohibited transactions generally    
include (i) the disposition of a qualified mortgages other than for (a)         
substitution within two years of the Startup Day for a defective (including a   
defaulted) obligation (or repurchase in lieu of substitution of a defective     
(including a defaulted) obligation at any time) or for any qualified mortgage   
within three months of the Startup Day, (b) foreclosure, default, or imminent   
default of a qualified mortgage, (c) bankruptcy or insolvency of the REMIC Pool,
or (d) a qualified (complete) liquidation, (ii) the receipt of income from      
assets that are not the type of mortgages or investments that the REMIC Pool is 
permitted to hold, (iii) the receipt of compensation for services, or (iv) the  
receipt of gain from disposition of cash flow investments other than pursuant to
a qualified liquidation. Notwithstanding (i) and (iv), it is not a prohibited   
transaction to sell a qualified mortgage or cash flow investment held by a REMIC
Pool to prevent a default on Regular Securities as a result of a default on     
qualified mortgages or to facilitate a clean-up call (generally, an optional    
termination to save administrative costs when no more than a small percentage of
the Securities is outstanding). The REMIC Regulations indicate that the         
modification of a Mortgage Loan generally will not be treated as a disposition  
if it is occasioned by a default or reasonably foreseeable default, an          
assumption of the Mortgage Loan, the waiver of a due-on-sale or                 
due-on-encumbrance clause, or the conversion of an interest rate by a mortgagor 
pursuant to the terms of a convertible adjustable rate Mortgage Loan.           

Contributions to the REMIC Pool After the Startup Day         

       In general, the REMIC Pool will be subject to a tax at a 100% rate on
the value of any property contributed to the REMIC Pool after the Startup Day.  
Exceptions are provided for cash contributions to the REMIC Pool (i) during the 
three months following the Startup Day, (ii) made to a qualified reserve fund by
a Residual Holder, (iii) in the nature of a guarantee, (iv) made to facilitate a
qualified liquidation or clean-up call, and (v) as otherwise permitted in       
Treasury regulations yet to be issued. It is not anticipated that there will be 
any contributions to the REMIC Pool after the Startup Day.                      

Net Income from Foreclosure Property                          

     The REMIC Pool will be subject of 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. Generally,  
property acquired by deed in lieu of foreclosure would be treated as            
"foreclosure property" for a period ending with the close of the third calendar 
year beginning after the year in which the REMIC Pool acquires such property,   
with a possible extension. Net income from foreclosure property generally means 
gain from the sale of a foreclosure property that is inventory property and     
gross income from foreclosure property other than qualifying rents and other    
qualifying income for a real estate investment trust. It is not anticipated that
the REMIC Pool will have any taxable net income from foreclosure property.      

Liquidation of the REMIC Pool                                 

   If a REMIC Pool 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 Pool's final tax return a date on which such adoption  
is deemed to occur, and sells all of its assets (other than cash) within a      
90-day period beginning on such date, the REMIC Pool will not be subject to the 
prohibited transaction rules on the sale of its assets, provided that the REMIC 
Pool credits or distributes in liquidation all of the sale proceeds plus its    
cash (other than amounts retained to meet claims) to holders of Regular         
Securities and Residual Holders within the 90-day period.                       

Administrative Matters                                        

     The REMIC Pool will be required to maintain its books on a calendar
year basis and to file federal income tax returns for federal income tax        
purposes in a manner similar to a partnership. The form for such income tax     

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return is Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax    
Return. The Trustee will be required to sign the REMIC Pool's returns. Treasury 
regulations provide that, except where there is a single Residual Holder for an 
entire taxable year, the REMIC Pool will be subject to the procedural and       
administrative rules of the Code applicable to partnerships, including the      
determination by the IRS of any adjustments to, among other things, items of    
REMIC income, gain, loss, deduction, or credit in a unified administrative      
proceeding. The Master Servicer will be obligated to act as "tax matters        
person," as defined in applicable Treasury regulations, with respect to the     
REMIC Pool as agent of the Residual Holders holding the largest percentage      
interest in the Residual Securities. If the Code or applicable Treasury         
regulations do not permit the Master Servicer to act as tax matters person in   
its capacity as agent of such Residual Holder, such Residual Holder or such     
other person specified pursuant to Treasury regulations will be required to act 
as tax matters person. The tax matters person generally has responsibility for  
overseeing and providing notice to the other Residual Holders of certain        
administrative and judicial proceedings regarding the REMIC Pool's tax affairs, 
although other holders of the Residual Securities of the same Series would be   
able to participate in such proceedings in appropriate circumstances.           

Limitations on Deduction of Certain Expenses                  

       An investor who is an individual, estate, or trust will be subject to
limitation with respect to certain itemized deductions described in Code Section
67, to the extent that such itemized deductions, in the aggregate, do not exceed
2% of the investor's adjusted gross income. In addition, Code Section 68        
provides that itemized deductions otherwise allowable for a taxable year of an  
individual taxpayer will be reduced by the lesser of (i) 3% of the excess, if   
any, of adjusted gross income over a statutory threshold amount or (ii) 80% of  
the amount of itemized deductions otherwise allowable for such year. These      
limitations will be phased out and eliminated by 2010. In the case of a REMIC   
Pool, such deductions may include deductions under Code Section 212 for the     
Servicing Fee and all administrative and other expenses relating to the REMIC   
Pool, or any similar expenses allocated to the REMIC Pool with respect to a     
regular interest it holds in another REMIC. Such investors who hold REMIC       
Securities either directly or indirectly through certain pass-through entities  
may have their pro rata share of such expenses allocated to them as additional  
gross income, but may be subject to such limitation on deductions. In addition, 
such expenses are not deductible at all for purposes of computing the           
alternative minimum tax, and may cause such investors to be subject to          
significant additional tax liability. Temporary Treasury regulations provide    
that the additional gross income and corresponding amount of expenses generally 
are to be allocated entirely to the holders of Residual Securities in the case  
of a REMIC Pool that would not qualify as a fixed investment trust in the       
absence of a REMIC election. With respect to a REMIC Pool that would be         
classified as an investment trust in the absence of a REMIC election or that is 
substantially similar to an investment trust, any holder of a Regular Security  
that is an individual, trust, estate, or pass-through entity also will be       
allocated its pro rata share of such expenses and a corresponding amount of     
income and will be subject to the limitations or deductions imposed by Code     
Sections 67 and 68, as described above. Unless indicated otherwise in the       
applicable prospectus supplement, all such expenses will be allocable to the    
Residual Securities. In general, such allocable portion will be determined based
on the ratio that a REMIC Securityholder's income, determined on a daily basis, 
bears to the income of all holders of Regular Securities and Residual Securities
with respect to a REMIC Pool. As a result, individuals, estates or trusts       
holding REMIC Securities (either directly or indirectly through a grantor trust,
partnership, S corporation, REMIC, or certain other pass-through entities       
described in the foregoing temporary Treasury regulations) may have taxable     
income in excess of the interest income at the pass-through rate on Regular     
Securities that are issued in a single Class or otherwise consistently with     
fixed investment trust status or in excess of cash distributions for the related
period on Residual Securities.                                                  

Taxation of Certain Foreign Investors                         

Regular Securities                                            

       Interest, including original issue discount, distributable to Regular
Securityholders who are non-resident aliens, foreign corporations, or other     
Non-U.S. Persons (as defined below), generally will be considered "portfolio    
interest" and, therefore, generally will not be subject to 30% United States    
withholding tax, provided that (i) such interest is not effectively connected   
with the conduct of a trade or business in the United States of the             
Securityholder, (ii) such Non-U.S. Person is not a "10-percent shareholder"     
within the meaning of Code Section 871(h)(3)(B) or a controlled foreign         
corporation described in Code Section 881(c)(3)(C) and (iii) such Non-U.S.      
Person provides the Trustee, or the person who would otherwise be required to   
withhold tax from such distributions                                            

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under Code Section 1441 or 1442, with an appropriate statement, signed under    
penalties of perjury, identifying the beneficial owner and stating, among other 
things, that the beneficial owner of the Regular Security is a Non-U.S. Person. 
If such statement, or any other required statement, is not provided, 30%        
withholding will apply unless reduced or eliminated pursuant to an applicable   
tax treaty or unless the interest on the Regular Security is effectively        
connected with the conduct of a trade or business within the United States by   
such Non-U.S. Person. In the latter case, such Non-U.S. Person will be subject  
to United States federal income tax at regular rates. Investors who are Non-U.S.
Persons should consult their own tax advisors regarding the specific tax        
consequences to them of owning a Regular Security. The term "NON-U.S. PERSON"   
means any person who is not a U.S. Person.                                      

Final withholding regulations (the "WITHHOLDING REGULATIONS"),
effective January 2001, provide alternative methods of satisfying the beneficial
ownership certification requirement described above. The Withholding Regulations
provide for a new series of withholding certificates that must be used for all  
payments after December 31, 2000. The Withholding Regulations require, in the   
case of Regular Securities held by a foreign partnership, that (x) the          
certification described above be provided by the partners rather than by the    
foreign partnership and (y) the partnership provide certain information,        
including a United States taxpayer identification number in certain             
circumstances. A look-through rule applies in the case of tiered partnerships.  
Non-U.S. Persons should consult their own tax advisors concerning the           
application of the certification requirements in the Withholding Regulations.   

Residual Securities                                           

        The Conference Committee Report to the 1986 Act indicates that amounts
paid to Residual Holders who are Non-U.S. Persons generally should be treated as
interest for purposes of the 30% (or lower treaty rate) United States           
withholding tax. Treasury regulations provide that amount distributed to        
Residual Holders may qualify as "portfolio interest," subject to the conditions 
described in "--Regular Securities" above, but only to the extent that (i) the  
Mortgage Loans were issued after July 18, 1984 and (ii) the Trust Fund or       
segregated pool of assets therein (as to which a separate REMIC election will be
made), to which the Residual Security relates, consists of obligations issued in
"registered form" within the meaning of Code Section 163(f)(1). Generally,      
Mortgage Loans will not be, but regular interests in another REMIC Pool will be,
considered obligations issued in registered form. Furthermore, Residual Holders 
will not be entitled to any exemption from the 30% withholding tax (or lower    
treaty rate) to the extent of that portion of REMIC taxable income that         
constitutes an "excess inclusion." See "--Taxation of Owners of Residual        
Securities--Limitations on Offset or Exemption of REMIC Income." If the amounts 
paid to Residual Holders who are Non-U.S. Persons are effectively connected with
the conduct of a trade or business within the United States by such Non-U.S.    
Persons, 30% (or lower treaty rate) withholding will not apply. Instead, the    
amounts paid to such Non-U.S. Persons will be subject to United States federal  
income tax at regular rates. If 30% (or lower treaty rate) withholding is       
applicable, such amounts generally will be taken into account for purposes of   
withholding only when paid or otherwise distributed (or when the Residual       
Security is disposed of) under rules similar to withholding upon disposition of 
debt instruments that have original issue discount. See "--Taxation of Owners of
Residual Securities--Tax-Related Restrictions on Transfer of Residual           
Securities--Foreign Investors" above concerning the disregard of certain        
transfers having "tax avoidance potential." Investors who are Non-U.S. Persons  
should consult their own tax advisors regarding the specific tax consequences to
them of owning Residual Securities.                                             

Backup Withholding                                            

     Distributions made on the Regular Securities, and proceeds from the
sale of the Regular Securities to or through certain brokers, may be subject to 
a "backup" withholding tax under Code Section 3406 of 28% (increasing to 31%    
after 2010) on "reportable payments" (including interest distributions, original
issue discount, and, under certain circumstances, principal distributions)      
unless the Regular Holder complies with certain reporting and/or certification  
procedures, including the provision of its taxpayer identification number to the
Trustee, its agent or the broker who effected the sale of the Regular Security, 
or such Holder is otherwise an exempt recipient under applicable provisions of  
the Code. Any amounts to be withheld from distribution on the Regular Securities
would be refunded by the IRS or allowed as a credit against the Regular Holder's
federal income tax liability. The Withholding Regulations change certain of the 
rules relating to certain presumptions relating to information reporting and    
backup withholding. Non-U.S. Persons are urged to contact their own tax advisors
regarding the application to them of backup withholding and information         
reporting.                                                                      

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Reporting Requirements                                        

      Reports of accrued interest, original issue discount and information
necessary to compute the accrual of market discount will be made annually to the
IRS and to individuals, estates, non-exempt and non-charitable trusts, and      
partnerships who are either holders of record of Regular Securities or          
beneficial owners who own Regular Securities through a broker or middleman as   
nominee. All brokers, nominees and all other non-exempt holders of record of    
Regular Securities (including corporations, non-calendar year taxpayers,        
securities or commodities dealers, real estate investment trusts, investment    
companies, common trust funds, thrift institutions and charitable trusts) may   
request such information for any calendar quarter by telephone or in writing by 
contacting the person designated in Internal Revenue Service Publication 938    
with respect to a particular Series of Regular Securities. Holders through      
nominees must request such information from the nominee.                        

         The IRS's Form 1066 has an accompanying Schedule Q, Quarterly Notice to
Residual Interest Holders of REMIC Taxable Income or Net Loss Allocation.       
Treasury regulations require that Schedule Q be furnished by the REMIC Pool to  
each Residual Holder by the end of the month following the close of each        
calendar quarter (41 days after the end of a quarter under proposed Treasury    
regulations) in which the REMIC Pool is in existence). Treasury regulations     
require that, in addition to the foregoing requirements, information must be    
furnished quarterly to Residual Holders, furnished annually, if applicable, to  
holders of Regular Securities, and filed annually with the IRS concerning Code  
Section 67 expenses (see "--Taxes That May Be Imposed on the REMIC              
Pool--Limitations on Deduction of Certain Expenses" above) allocable to such    
holders. Furthermore, under such regulations, information must be furnished     
quarterly to Residual Holders, furnished annually to holders of Regular         
Securities, and filed annually with the IRS concerning the percentage of the    
REMIC Pool's assets meeting the qualified asset tests described above under     
"Characterization of Investments in REMIC Securities."                          

         Residual Holders should be aware that their responsibilities as holders
of the residual interest in a REMIC Pool, including the duty to account for     
their shares of the REMIC Pool's income or loss on their returns, continue for  
the life of the REMIC Pool, even after the principal and interest on their      
Residual Securities have been paid in full.                                     

        Treasury regulations provide that a Residual Holder is not required to
treat items on its return consistently with their treatment on the REMIC Pool's 
return if the Holder owns 100% of the Residual Securities for the entire        
calendar year. Otherwise, each Residual Holder is required to treat items on its
returns consistently with their treatment on the REMIC Pool's return, unless the
Holder either files a statement identifying the inconsistency or establishes    
that the inconsistency resulted from incorrect information received from the    
REMIC Pool. The IRS may assess a deficiency resulting from a failure to comply  
with the consistency requirement without instituting an administrative          
proceeding at the REMIC Pool level. Any person that holds a Residual Security as
a nominee for another person may be required to furnish the related REMIC Pool, 
in a manner to be provided in Treasury regulations, with the name and address of
such person and other specified information.                                    

GRANTOR TRUST FUNDS                                                             

Classification of Grantor Trust Funds                         

   With respect to each Series of Grantor Trust Securities, assuming
compliance with all provisions of the applicable Agreement, the related Grantor 
Trust Fund will be classified as a grantor trust under subpart E, part I of     
subchapter J of the Code and not as a partnership, an association taxable as a  
corporation, or a "taxable mortgage pool" within the meaning of Code Section    
7701(i). Accordingly, each holder of a Grantor Trust Security generally will be 
treated as the beneficial owner of an undivided interest in the Mortgage Loans  
included in the Grantor Trust Fund.                                             

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STANDARD SECURITIES                                                             

General                                                       

        Where there is no Retained Interest or "excess" servicing with respect
to the Mortgage Loans underlying the Securities of a Series, and where such     
Securities are not designated as "Stripped Securities," the holder of each such 
Security in such Series (referred to herein as "STANDARD SECURITIES") will be   
treated as the owner of a pro rata undivided interest in the ordinary income and
corpus portions of the Grantor Trust Fund represented by its Standard Security  
and will be considered the beneficial owner of a pro rata undivided interest in 
each of the Mortgage Loans, subject to the discussion below under               
"--Recharacterization of Servicing Fees." Accordingly, the holder of a Standard 
Security of a particular Series will be required to report on its federal income
tax return its pro rata share of the entire income from the Mortgage Loans      
represented by its Standard Security, including interest at the coupon rate on  
such Mortgage Loans, original issue discount (if any), prepayment fees,         
assumption fees, and late payment charges received by the Servicer, in          
accordance with such Securityholder's method of accounting. A Securityholder    
generally will be able to deduct its share of the Servicing Fee and all         
administrative and other expenses of the Trust Fund in accordance with its      
method of accounting, provided that such amounts are reasonable compensation for
services rendered to that Grantor Trust Fund. However, investors who are        
individuals, estates or trusts who own Securities, either directly or indirectly
through certain pass-through entities, will be subject to limitations with      
respect to certain itemized deductions described in Code Section 67, including  
deductions under Code Section 212 for the Servicing Fee and all such            
administrative and other expenses of the Grantor Trust Fund, to the extent that 
such deductions, in the aggregate, do not exceed two percent of an investor's   
adjusted gross income. In addition, Code Section 68 provides that itemized      
deductions otherwise allowable for a taxable year of an individual taxpayer will
be reduced by the lesser of (i) 3% of the excess, if any, of adjusted gross     
income over a statutory threshold amount or (ii) 80% of the amount of itemized  
deductions otherwise allowable for such year. These limitations will be phased  
out and eliminated by 2010. As a result, such investors holding Standard        
Securities, directly or indirectly through a pass-through entity, may have      
aggregate taxable income in excess of the aggregate amount of cash received on  
such Standard Securities with respect to interest at the pass-through rate or as
discount income on such Standard Securities. In addition, such expenses are not 
deductible at all for purposes of computing the alternative minimum tax, and may
cause such investors to be subject to significant additional tax liability.     
Moreover, where there is Retained Interest with respect to the Mortgage Loans   
underlying a Series of Securities or where the servicing fees are in excess of  
reasonable servicing compensation, the transaction will be subject to the       
application of the "stripped bond" and "stripped coupon" rules of the Code, as  
described below under "--Stripped Securities" and "--Recharacterization of      
Servicing Fees," respectively.                                                  

    Holders of Standard Securities, particularly any Class of a Series
which is a Subordinate Security, may incur losses of interest or principal with 
respect to the Mortgage Loans. Such losses would be deductible generally only as
described above under "--REMICs--Taxation of Owners of Regular                  
Securities--Treatment of Losses," except that Securityholders on the cash method
of accounting would not be required to report qualified stated interest as      
income until actual receipt.                                                    

Tax Status                                                    

         With respect to a Series, Cadwalader, Wickersham & Taft LLP or Hunton &
Williams LLP has advised the Depositor that, except with respect to a Trust Fund
consisting of Unsecured Home Improvement Loans:                                 

 o    A Standard Security owned by a "domestic building and loan
            association" within the meaning of Code Section 7701(a)(19) will
             be considered to represent "loans . . . secured by an interest in
              real property which is . . . residential real property" within the
             meaning of Code Section 7701(a)(19)(C)(v), provided that the real
             property securing the Mortgage Loans represented by that Standard
          Security is of the type described in such section of the Code.

       o    A Standard Security owned by a real estate investment trust will
              be considered to represent "real estate assets" within the meaning
             of Code Section 856(c)(4)(A) to the extent that the assets of the
       related Grantor Trust Fund consist of qualified assets, and
interest income on such assets will be              

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            considered "interest on obligations secured by mortgages on real
       property" to such extent within the meaning of Code Section
856(c)(3)(B).                                       

 o    A Standard Security owned by a REMIC will be considered to
    represent an "obligation (including any participation or
             certificate of beneficial ownership therein) which is principally
          secured by an interest in real property" within the meaning of
           Code Section 860G(a)(3)(A) to the extent that the assets of the
              related Grantor Trust Fund consist of "qualified mortgages" within
the meaning of Code Section 860G(a)(3).             

An issue arises as to whether Buydown Mortgage Loans may be   
characterized in their entirety under the Code provisions cited in the first two
bullet points above or whether the amount qualifying for such treatment must be 
reduced by the amount of the Buydown Funds. There is indirect authority         
supporting treatment of an investment in a Buydown Mortgage Loan as entirely    
secured by real property if the fair market value of the real property securing 
the loan exceeds the principal amount of the loan at the time of issuance or    
acquisition, as the case may be. There is no assurance that the treatment       
described above is proper. Accordingly, Securityholders are urged to consult    
their own tax advisors concerning the effects of such arrangements on the       
characterization of such Securityholder's investment for federal income tax     
purposes.                                                                       

Premium and Discount                                          

      Securityholders are advised to consult with their tax advisors as to
the federal income tax treatment of premium and discount arising either upon    
initial acquisition of Standard Securities or thereafter.                       

   Premium. The treatment of premium incurred upon the purchase of a
Standard Security will be determined generally as described above under         
"--REMICs--Taxation of Owners of Residual Securities--Premium." The rules       
allowing for the amortization of premium are available with respect to Mortgage 
Loans originated after September 27, 1985.                                      

    Original Issue Discount. The original issue discount rules of Code
Section 1271 through 1275 will be applicable to a Securityholder's interest in  
those Mortgage Loans as to which the conditions for the application of those    
sections are met. Rules regarding periodic inclusion of original issue discount 
income generally are applicable to mortgages originated after March 2, 1984.    
Under the OID Regulations, original issue discount could arise by the charging  
of points by the originator of the mortgages in an amount greater than the      
statutory de minimis exception, including a payment of points that is currently 
deductible by the borrower under applicable Code provisions or, under certain   
circumstances, by the presence of "teaser" rates on the Mortgage Loans. See     
"--Stripped Securities" below regarding original issue discount on Stripped     
Securities.                                                                     

      Original issue discount generally must be reported as ordinary gross
income as it accrues under a constant interest method that takes into account   
the compounding of interest, in advance of the cash attributable to such income.
Unless indicated otherwise in the applicable prospectus supplement, no          
prepayment assumption will be assumed for purposes of such accrual. However,    
Code Section 1272 provides for a reduction in the amount of original issue      
discount includable in the income of a holder of an obligation that acquires the
obligation 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 such Mortgage Loans acquired by a  
Securityholder are purchased at a price equal to the then unpaid principal      
amount of such Mortgage Loans, no original issue discount attributable to the   
difference between the issue price and the original principal amount of such    
Mortgage Loans (i.e., points) will be includable by such holder.                

     Market Discount. Securityholders also will be subject to the market
discount rules to the extent that the conditions for application of those       
sections are met. Market discount on the Mortgage Loans will be determined and  
will be reported as ordinary income generally in the manner described above     
under "--REMICs--Taxation of Owners of Regular Securities--Market Discount,"    
except that the ratable accrual methods described therein will not apply.       
Rather, the holder will accrue market discount pro rata over the life of the    
Mortgage Loans, unless the constant yield method is elected. Unless indicated   
otherwise in the applicable prospectus supplement, no prepayment assumption will
be assumed for purposes of such accrual.                                        

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Recharacterization of Servicing Fees                          

If the servicing fees paid to a Servicer were deemed to exceed
reasonable servicing compensation, the amount of such excess would represent    
neither income nor a deduction to Securityholders. In this regard, there are no 
authoritative guidelines for federal income tax purposes as to either the       
maximum amount of servicing compensation that may be considered reasonable in   
the context of this or similar transactions or whether, in the case of Standard 
Securities, the reasonableness of servicing compensation should be determined on
a weighted average or loan-by-loan basis. If a loan-by-loan basis is            
appropriate, the likelihood that such amount would exceed reasonable servicing  
compensation as to some of the Mortgage Loans would be increased. IRS guidance  
indicates that a servicing fee in excess of reasonable compensation ("EXCESS    
SERVICING") will cause the Mortgage Loans to be treated under the "stripped     
bond" rules. Such guidance provides safe harbors for servicing deemed to be     
reasonable and requires taxpayers to demonstrate that the value of servicing    
fees in excess of such amounts is not greater than the value of the services    
provided.                                                                       

         Accordingly, if the IRS's approach is upheld, a Servicer who receives a
servicing fee in excess of such amounts would be viewed as retaining an         
ownership interest in a portion of the interest payments on the Mortgage Loans. 
Under the rules of Code Section 1286, the separation of ownership of the right  
to receive some or all of the interest payments on an obligation from the right 
to receive some or all of the principal payments on the obligation would result 
in treatment of such Mortgage Loans as "stripped coupons" and "stripped bonds." 
Subject to the de minimis rule discussed below under "Stripped Securities," each
stripped bond or stripped coupon could be considered for this purpose as a      
non-interest bearing obligation issued on the date of issue of the Standard     
Securities, and the original issue discount rules of the Code would apply to the
holder thereof. While Securityholders would still be treated as owners of       
beneficial interests in a grantor trust for federal income tax purposes, the    
corpus of such trust could be viewed as excluding the portion of the Mortgage   
Loans the ownership of which is attributed to the Servicer, or as including such
portion as a second Class of equitable interest. Applicable Treasury regulations
treat such an arrangement as a fixed investment trust, since the multiple       
Classes of trust interests should be treated as merely facilitating direct      
investments in the trust assets and the existence of multiple Classes of        
ownership interests is incidental to that purpose. In general, such a           
recharacterization should not have any significant effect upon the timing or    
amount of income reported by a Securityholder, except that the income reported  
by a cash method holder may be slightly accelerated. See "--Stripped Securities"
below for a further description of the federal income tax treatment of stripped 
bonds and stripped coupons.                                                     

Sale or Exchange of Standard Securities                       

       Upon sale or exchange of a Standard Securities, a Securityholder will
recognize gain or loss equal to the difference between the amount realized on   
the sale and its aggregate adjusted basis in the Mortgage Loans and other assets
represented by the Security. In general, the aggregate adjusted basis will equal
the Securityholder's cost for the Standard Security, exclusive of accrued       
interest, increased by the amount of any income previously reported with respect
to the Standard Security and decreased by the amount of any losses previously   
reported with respect to the Standard Security and the amount of any            
distributions (other than accrued interest) received thereon. Except as provided
above with respect to market discount on any Mortgage Loans, and except for     
certain financial institutions subject to the provisions of Code Section 582(c),
any such gain or loss generally would be capital gain or loss if the Standard   
Security was held as a capital asset. However, gain on the sale of a Standard   
Security will be treated as ordinary income (i) if a Standard Security is held  
as part of a "conversion transaction" as defined in Code Section 1258(c), up to 
the amount of interest that would have accrued on the Securityholder's net      
investment in the conversion transaction at 120% of the appropriate applicable  
Federal rate in effect at the time the taxpayer entered into the transaction    
minus any amount previously treated as ordinary income with respect to any prior
disposition of property that was held as part of such transaction or (ii) in the
case of a non-corporate taxpayer, to the extent such taxpayer has made an       
election under Code Section 163(d)(4) to have net capital gains taxed as        
investment income at ordinary income rates. Long-term capital gains of certain  
noncorporate taxpayers generally are subject to a lower maximum tax rate than   
ordinary income or short-term capital gains of such taxpayers for property held 
for more than one year. The maximum tax rate for corporations currently is the  
same with respect to both ordinary income and capital gains.                    

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   A Securityholder that recognize a loss on a sale or exchange of a
Standard Security for federal income tax purposes in excess of certain threshold
amounts should consult their tax advisors as to the need to file IRS Form 8886  
(disclosing certain potential tax shelters) on their federal income tax returns.

STRIPPED SECURITIES                                                             

General                                                       

         Pursuant to Code Section 1286, the separation of ownership of the right
to receive some or all of the principal payments on an obligation from ownership
of the right to receive some or all of the interest payments results in the     
creation of "stripped bonds" with respect to principal payments and "stripped   
coupons" with respect to interest payments. For purposes of this discussion,    
Securities that are subject to those rules will be referred to as "STRIPPED     
SECURITIES." The Securities will be subject to those rules if (i) the Depositor 
or any of its affiliates retains (for its own account or for purposes of        
resale), in the form of Retained Interest or otherwise, an ownership interest in
a portion of the payments on the Mortgage Loans, (ii) the Depositor or any of   
its affiliates is treated as having an ownership interest in the Mortgage Loans 
to the extent it is paid (or retains) servicing compensation in an amount       
greater than reasonable consideration for servicing the Mortgage Loans (see     
"--Standard Securities--Recharacterization of Servicing Fees" above), and (iii) 
a Class of Securities are issued in two or more Classes or subclasses           
representing the right to non-pro-rata percentages of the interest and principal
payments on the Mortgage Loans.                                                 

       In general, a holder of a Stripped Security will be considered to own
"stripped bonds" with respect to its pro rata share of all or a portion of the  
principal payments on each Mortgage Loan and/or "stripped coupons" with respect 
to its pro rata share of all or a portion of the interest payments on each      
Mortgage Loan, including the Stripped Security's allocable share of the         
servicing fees paid to a Servicer, to the extent that such fees represent       
reasonable compensation for services rendered. See the discussion above under   
"--Standard Securities--Recharacterization of Servicing Fees." Although not free
from doubt, for purposes of reporting to Stripped Securityholders, the servicing
fees will be allocated to the Classes of Stripped Securities in proportion to   
the distributions to such Classes for the related period or periods. The holder 
of a Stripped Security generally will be entitled to a deduction each year in   
respect of the servicing fees, as described above under "--Standard             
Securities--General," subject to the limitation described therein.              

         Code Section 1286 treats a stripped bond or a stripped coupon generally
as an obligation issued at an original issue discount on the date that such     
stripped interest is purchased. Although the treatment of Stripped Securities   
for federal income tax purposes is not clear in certain respects, particularly  
where such Stripped Securities are issued with respect to a Mortgage Pool       
containing variable-rate Mortgage Loans, the Depositor has been advised by      
counsel that (i) the Grantor Trust Fund will be treated as a grantor trust under
subpart E, part I of subchapter J of the Code and not as an association taxable 
as a corporation or a "taxable mortgage pool" within the meaning of Code Section
7701(i), and (ii) each Stripped Security should be treated as a single          
installment obligation for purposes of calculating original issue discount and  
gain or loss on disposition. This treatment is based on the interrelationship of
Code Section 1286, Code Sections 1272 through 1275, and the OID Regulations.    
Although it is possible that computations with respect to Stripped Securities   
could be made in one of the ways described below under "--Possible Alternative  
Characterizations," the OID Regulations state, in general, that two or more debt
instruments issued by a single issuer to a single investor in a single          
transaction should be treated as a single debt instrument. Accordingly, for     
original issue discount purposes, all payments on any Stripped Securities should
be aggregated and treated as though they were made on a single debt instrument. 
The Pooling and Servicing Agreement will require that the Trustee make and      
report all computations described below using this aggregate approach, unless   
substantial legal authority requires otherwise.                                 

       Furthermore, Treasury regulations provide for treatment of a Stripped
Security as a single debt instrument issued on the date it is purchased for     
purposes of calculating any original issue discount. In addition, under such    
regulations, a Stripped Security that represents a right to payments of both    
interest and principal may be viewed either as issued with original issue       
discount or market discount (as described below), at a de minimis original issue
discount, or, presumably, at a premium. This treatment indicates that the       
interest component of such a Stripped Security would be treated as qualified    
stated interest under the OID Regulations, assuming it is not an interest-only  
or super-premium Stripped Security. Further, these regulations provide that the 
purchaser of such a Stripped                                                    

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Security will be required to account for any discount as market discount rather 
than original issue discount if either (i) the initial discount with respect to 
the Stripped Security was treated as zero under the de minimis rule, or (ii) no 
more than 100 basis points in excess of reasonable servicing is stripped off the
related Mortgage Loans. Any such market discount would be reportable as         
described above under "--REMICs--Taxation of Owners of Regular                  
Securities--Market Discount," without regard to the de minimis rule therein,    
assuming that a prepayment assumption is employed in such computation.          

         The holder of a Stripped Security will be treated as owning an interest
in each of the Mortgage Loans held by the Grantor Trust Fund and will recognize 
an appropriate share of the income and expenses associated with the Mortgage    
Loans. Accordingly, an individual, trust or estate that holds a Stripped        
Security directly or through a pass-through entity will be subject to the       
limitations on deductions imposed by Code Sections 67 and 68.                   

     A holder of a Stripped Security, particularly any Class of a Series
which is a Subordinate Security, may deduct losses incurred with respect to the 
Stripped Security as described above under "--Standard Securities--General."    

Status of Stripped Securities                                 

       No specific legal authority exists as to whether the character of the
Stripped Securities, for federal income tax purposes, will be the same as that  
of the Mortgage Loans. Although the issue is not free from doubt, counsel has   
advised the Depositor that, except with respect to a Trust Fund consisting of   
Unsecured Home Improvement Loans, Stripped Securities owned by applicable       
holders should be considered to represent "real estate assets" within the       
meaning of Code Section 856(c)(4)(A), "obligation[s] . . . principally secured  
by an interest in real property which is . . . residential real estate" within  
the meaning of Code Section 860G(a)(3)(A), and "loans . . . secured by an       
interest in real property" within the meaning of Code Section 7701(a)(19)(C)(v),
and interest (including original issue discount) income attributable to Stripped
Securities should be considered to represent "interest on obligations secured by
mortgages on real property" within the meaning of Code Section 856(c)(3)(B),    
provided that in each case the Mortgage Loans and interest on such Mortgage     
Loans qualify for such treatment. The application of such Code provisions to    
Buydown Mortgage Loans is uncertain. See "--Standard Securities--Tax Status"    
above.                                                                          

Taxation of Stripped Securities                               

       Original Issue Discount. Except as described above under "--General,"
each Stripped Security will be considered to have been issued at an original    
issue discount for federal income tax purposes. Original issue discount with    
respect to a Stripped Security must be included in ordinary income as it        
accrues, in accordance with a constant yield method that takes into account the 
compounding of interest, which may be prior to the receipt of the cash          
attributable to such income. Based in part on the issue discount required to be 
included in the income of a holder of a Stripped Security (referred to in this  
discussion as a "STRIPPED SECURITYHOLDER") in any taxable year likely will be   
computed generally as described above under "--REMICs--Taxation of Owner of     
Regular Securities--Original Issue Discount" and "--Variable Rate Regular       
Securities." However, with the apparent exception of a Stripped Security        
qualifying as a market discount obligation as described above under "--General,"
the issue price of a Stripped Security will be the purchase price paid by each  
holder thereof, and the stated redemption price at maturity will include the    
aggregate amount of the payments, other than qualified stated interest, to be   
made on the Stripped Security to such Securityholder, presumably under the      
Prepayment Assumption.                                                          

     If the Mortgage Loans prepay at a rate either faster or slower than
that under the Prepayment Assumption, a Securityholder's recognition of original
issue discount will be either accelerated or decelerated and the amount of such 
original issue discount will be either increased or decreased depending on the  
relative interests in principal and interest on each Mortgage Loan represented  
by such Securityholder's Stripped Security. While the matter is not free from   
doubt, the holder of a Stripped Security should be entitled in the year that it 
becomes certain (assuming no further prepayments) that the holder will not      
recover a portion of its adjusted basis in such Stripped Security to recognize a
loss (which may be a capital loss) equal to such portion of unrecoverable basis.

        As an alternative to the method described above, the fact that some or
all of the interest payments with respect to the Stripped Securities will not be
made if the Mortgage Loans are prepaid could lead to the interpretation that    
such interest payments are "contingent" within the meaning of the OID           
Regulations. The OID Regulations, as                                            

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they relate to the treatment of contingent interest, are by their terms not     
applicable to prepayable securities such as the Stripped Securities. However, if
final regulations dealing with contingent interest with respect to the Stripped 
Securities apply the same principles as the OID Regulations, such regulations   
may lead to different timing of income inclusion that would be the case under   
the OID Regulations. Furthermore, application of such principles could lead to  
the characterization of gain on the sale of contingent interest Stripped        
Securities as ordinary income. Investors should consult their tax advisors      
regarding the appropriate tax treatment of Stripped Securities.                 

         Sale or Exchange of Stripped Securities. Sale or exchange of a Stripped
Security prior to its maturity will result in gain or loss equal to the         
difference, if any, between the amount received and the Securityholder's        
adjusted basis in such Stripped Security, as described above under              
"--REMICs--Taxation of Owners of Regular Securities--Sale or Exchange of Regular
Securities." Gain or loss from the sale or exchange of a Stripped Security      
generally will be capital gain or loss to the Securityholder if the Stripped    
Security is held as a "capital asset" within the meaning of Code Section 1221,  
and will be long-term or short-term depending on whether the Stripped Security  
has been held for the long-term capital gain holding period (currently, more    
than one year). To the extent that a subsequent purchaser's purchase price is   
exceeded by the remaining payments on the Stripped Securities, such subsequent  
purchaser will be required for federal income tax purposes to accrue and report 
such excess as if it were original issue discount in the manner described above.
It is not clear for this purpose whether the assumed prepayment rate that is to 
be used in the case of a Securityholder other than an original Securityholder   
should be the Prepayment Assumption or a new rate based on the circumstances at 
the date of subsequent purchase.                                                

 Purchase of More Than One Class of Stripped Securities. When an
investor purchases more than one Class of Stripped Securities, it is currently  
unclear whether for federal income tax purposes such Classes of Stripped        
Securities should be treated separately or aggregated for purposes of the rules 
described above.                                                                

     Possible Alternative Characterization. The characterizations of the
Stripped Securities discussed above are not the only possible interpretations of
the applicable Code provisions. For example, the Securityholder may be treated  
as the owner of (i) one installment obligation consisting of such Stripped      
Security's pro rata share of the payments attributable to principal on each     
Mortgage Loan and a second installment obligation consisting of such Stripped   
Security's pro rata share of the payments attributable to interest on each      
Mortgage Loan, (ii) as many stripped bonds or stripped coupons as there are     
scheduled payments of principal and/or interest on each Mortgage Loan, or (iii) 
a separate installment obligation for each Mortgage Loan, representing the      
Stripped Security's pro rata share of payments of principal and/or interest to  
be made with respect thereto. Alternatively, the holder of one or more Classes  
of Stripped Securities may be treated as the owner of a pro rata fractional     
undivided interest in each Mortgage Loan to the extent that such Stripped       
Security, or Classes of Stripped Securities in the aggregate, represent the same
pro rata portion of principal and interest on each such Mortgage Loan, and a    
stripped bond or stripped coupon (as the case may be), treated as an installment
obligation or contingent payment obligation, as to the remainder. Treasury      
regulations regarding original issue discount on stripped obligations make the  
foregoing interpretations less likely to be applicable. The preamble to such    
regulations states that they are premised on the assumption that an aggregation 
approach is appropriate for determining whether original issue discount on a    
stripped bond or stripped coupon is de minimis, and solicits comments on        
appropriate rules for aggregating stripped bonds and stripped coupons under Code
Section 1286.                                                                   

 Because of these possible varying characterizations of Stripped
Securities and the resultant differing treatment of income recognition,         
Securityholders are urged to consult their own tax advisors regarding the proper
treatment of Stripped Securities for federal income tax purposes.               

Reporting Requirements and Backup Withholding                 

     The Trustee will furnish, within a reasonable time after the end of
each calendar year, to each Securityholder at any time during such year, such   
information (prepared on the basis described above) as is necessary to enable   
such Securityholder to prepare its federal income tax returns. Such information 
will include the amount of original issue discount accrued on Securities held by
persons other than Securityholders exempted from the reporting requirements.    
However, the amount required to be reported by the Trustee may not be equal to  
the proper amount of original issue discount required to be reported as taxable 
income by a Securityholder, other than an original Securityholder that purchased
at the issue price. In particular, in the case of Stripped Securities, unless   
provided otherwise in the applicable prospectus supplement, such reporting will 
be based upon a representative                                                  

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initial offering price of each Class of Stripped Securities. The Trustee will   
also file such original issue discount information with the IRS. If a           
Securityholder fails to supply an accurate taxpayer identification number or if 
the Secretary of the Treasury determines that a Securityholder has not reported 
all interest and dividend income required to be shown on his federal income tax 
return, backup withholding may be required in respect of any reportable         
payments, as described above under "--REMICs--Taxation of Certain Foreign       
Investors--Backup Withholding."                                                 

Taxation of Certain Foreign Investors                         

     To the extent that a Security evidences ownership in Mortgage Loans
that are issued on or before July 18, 1984, interest or original issue discount 
paid by the person required to withhold tax under Code Section 1441 or 1442 to  
nonresident aliens, foreign corporations, or other Non-U.S. Persons generally   
will be subject to 30% United States withholding tax, or such lower rate as may 
be provided for interest by an applicable tax treaty. Accrued original issue    
discount recognized by the Securityholder on the sale or exchange of such a     
Security also will be subject to federal income tax at the same rate.           

       Treasury regulations provide that interest or original issue discount
paid by the Trustee or other withholding agent to a Non-U.S. Person evidencing  
ownership interest in Mortgage Loans issued after July 18, 1984 will be         
"portfolio interest" and will be treated in the manner, and such persons will be
subject to the same certification requirements, described above under           
"--REMICs--Taxation of Certain Foreign Investors--Regular Securities."          

PARTNERSHIP TRUST FUNDS                                                         

Classification of Partnership Trust Funds                     

With respect to each Series of Partnership Securities or Debt 
Securities, Cadwalader, Wickersham & Taft LLP or Hunton & Williams LLP will     
deliver its opinion that the Trust Fund will not be a taxable mortgage pool or  
an association (or publicly traded partnership) taxable as a corporation for    
federal income tax purposes. This opinion will be based on the assumption that  
the terms of the applicable Agreement and related documents will be complied    
with, and on counsel's conclusion that the nature of the income of the Trust    
Fund will exempt it from the rule that certain publicly traded partnerships are 
taxable as corporations.                                                        

    Characterization of Investments in Partnership Securities and Debt
Securities                                                    

      For federal income tax purposes, (i) Partnership Securities and Debt
Securities held by a thrift institution taxed as a domestic building and loan   
association will not constitute "loans . . . secured by an interest in real     
property which is . . . residential real property" within the meaning of Code   
Section 7701(a)(19)(C)(v) and (ii) interest on Debt Securities held by a real   
estate investment trust will not be treated as "interest on obligations secured 
by mortgages on real property or on interests in real property" within the      
meaning of Code Section 856(c)(3)(B), and Debt Securities held by a real estate 
investment trust will not constitute "real estate assets" within the meaning of 
Code Section 856(c)(4)(A), but Partnership Securities held by a real estate     
investment trust will qualify under those sections based on the real estate     
investments trust's proportionate interest in the assets of the Partnership     
Trust Fund qualifying for such treatments based on capital accounts.            

Taxation of Debt Securityholders                              

Treatment of the Debt Securities as Indebtedness              

       The Depositor will agree, and the Securityholders will agree by their
purchase of Debt Securities, to treat the Debt Securities as debt for federal   
income tax purposes. No regulations, published rulings, or judicial decisions   
exist that discuss the characterization for federal income tax purposes of      
securities with terms substantially the same as the Debt Securities. However,   
with respect to each Series of Debt Securities, Cadwalader, Wickersham & Taft   
LLP or Hunton & Williams LLP will deliver its opinion that the Debt Securities  
will be classified as indebtedness for federal income tax purposes. The         
discussion below assumes this characterization of the Debt Securities is        
correct.                                                                        

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       If, contrary to the opinion of counsel, the IRS successfully asserted
that the Debt Securities were not debt for federal income tax purposes, the Debt
Securities might be treated as equity interests in the Partnership Trust, and   
the timing and amount of income allocable to holders of such Debt Securities may
be different than as described in the following paragraph.                      

         Debt Securities generally will be subject to the same rules of taxation
as Regular Securities issued by a REMIC, as described above, except that (i)    
income reportable on Debt Securities is not required to be reported under the   
accrual method unless the holder otherwise uses the accrual method and (ii) the 
special rule treating a portion of the gain on sale or exchange of a Regular    
Security as ordinary income is inapplicable to Debt Securities. See             
"--REMICs--Taxation of Owners of Regular Securities" and "--Sale or Exchange of 
Regular Securities."                                                            

Taxation of Owners of Partnership Securities                  

Treatment of the Partnership Trust Fund as a Partnership      

        If so specified in the applicable prospectus supplement, the Depositor
will agree, and the Securityholders will agree by their purchase of Securities, 
to treat the Partnership Trust Fund as a partnership for purposes of federal and
state income tax, franchise tax and any other tax measured in whole or in part  
by income, with the assets of the partnership being the assets held by the      
Partnership Trust Fund, the partners of the partnership being the               
Securityholders (including the Depositor), and the Debt Securities (if any)     
being debt of the partnership. However, the proper characterization of the      
arrangement involving the Partnership Trust Fund, the Partnership Securities,   
the Debt Securities, and the Depositor is not clear, because there is no        
authority on transactions closely comparable to that contemplated herein.       

       A variety of alternative characterizations are possible. For example,
because one or more of the Classes of Partnership Securities have certain       
features characteristic of debt, the Partnership Securities might be considered 
debt of the Depositor or the Partnership Trust Fund. Any such characterization  
would not result in materially adverse tax consequences to Securityholders as   
compared to the consequences from treatment of the Partnership Securities as    
equity in a partnership, described below. The following discussion assumes that 
the Partnership Securities represent equity interests in a partnership.         

Partnership Taxation                                          

     As a partnership, the Partnership Trust Fund will not be subject to
federal income tax. Rather, each Securityholder will be required to separately  
take into account such holder's allocated share of income, gains, losses,       
deductions and credits of the Partnership Trust Fund. It is anticipated that the
Partnership Trust Fund's income will consist primarily of interest earned on the
Mortgage Loans (including appropriate adjustments for market discount, original 
issue discount and bond premium) as described above under "--Grantor Trust      
Funds-- Standard Securities--General" and "--Premium and Discount") and any gain
upon collection or disposition of Mortgage Loans. The Partnership Trust Fund's  
deductions will consist primarily of interest accruing with respect to the Debt 
Securities, servicing and other fees, and losses or deductions upon collection  
or disposition of Debt Securities.                                              

 The tax items of a partnership are allocable to the partners in
accordance with the Code, Treasury regulations and the partnership agreement    
(here, the Agreements and related documents). The applicable Agreement will     
provide, in general, that the Securityholders will be allocated taxable income  
of the Partnership Trust Fund for each Due Period equal to the sum of (i) the   
interest that accrues on the Partnership Securities in accordance with their    
terms for such Due Period, including interest accruing at the applicable        
pass-through rate for such Due Period and interest on amounts previously due on 
the Partnership Securities but not yet distributed; (ii) any Partnership Trust  
Fund income attributable to discount on the Mortgage Loans that corresponds to  
any excess of the principal amount of the Partnership Securities over their     
initial issue price; and (iii) any other amounts of income payable to the       
Securityholders for such Due Period. Such allocation will be reduced by any     
amortization by the Partnership Trust Fund of premium on Mortgage Loans that    
corresponds to any excess of the issue price of Partnership Securities over     
their principal amount. All remaining taxable income of the Partnership Trust   
Fund will be allocated to the Depositor. Based on the economic arrangement of   
the parties, this approach for allocating Partnership Trust Fund income should  
be permissible under applicable Treasury regulations, although no assurance can 
be given that the IRS would not require a greater amount of income to be        
allocated to Securityholders.                                                   

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Moreover, even under the foregoing method of allocation, Securityholders may be 
allocated income equal to the entire pass-through rate plus the other items     
described above even though the Trust Fund might not have sufficient cash to    
make current cash distributions of such amount. Thus, cash basis holders will in
effect be required to report income from the Partnership Securities on the      
accrual basis and Securityholders may become liable for taxes on Partnership    
Trust Fund income even if they have not received cash from the Partnership Trust
Fund to pay such taxes.                                                         

         Part or all of the taxable income allocated to a Securityholder that is
a pension, profit sharing or employee benefit plan or other tax-exempt entity   
(including an individual retirement account) may constitute "unrelated business 
taxable income" generally taxable to such a holder under the Code.              

      A share of expenses of the Partnership Trust Fund (including fees of
the Master Servicer but not interest expense) allocable to an individual, estate
or trust Securityholder would be miscellaneous itemized deductions subject to   
the limitations described above under "--Grantor Trust Funds--Standard          
Securities--General". Accordingly, such deductions might be disallowed to the   
individual in whole or in part and might result in such holder being taxed on an
amount of income that exceeds the amount of cash actually distributed to such   
holder over the life of the Partnership Trust Fund.                             

       Discount income or premium amortization with respect to each Mortgage
Loan would be calculated in a manner similar to the description above under     
"--Grantor Trust Funds--Standard Securities--General" and "--Premium and        
Discount." Notwithstanding such description, it is intended that the Partnership
Trust Fund will make all tax calculations relating to income and allocations to 
Securityholders on an aggregate basis with respect to all Mortgage Loans held by
the Partnership Trust Fund rather than on a Mortgage Loan-by-Mortgage Loan      
basis. If the IRS were to require that such calculations be made separately for 
each Mortgage Loan, the Partnership Trust Fund might be required to incur       
additional expense, but it is believed that there would not be a material       
adverse effect on Securityholders.                                              

Discount and Premium                                          

        Unless indicated otherwise in the applicable prospectus supplement, it
is not anticipated that the Mortgage Loans will have been issued with original  
issue discount and, therefore, the Partnership Trust Fund should not have       
original issue discount income. However, the purchase price paid by the         
Partnership Trust Fund for the Mortgage Loans may be greater or less than the   
remaining principal balance of the Mortgage Loans at the time of purchase. If   
so, the Mortgage Loans will have been acquired at a premium or discount, as the 
case may be. See "--Grantor Trust Funds--Standard Securities--Premium and       
Discount." (As indicated above, the Partnership Trust Fund will make this       
calculation on an aggregate basis, but might be required to recompute it on a   
Mortgage Loan-by-Mortgage Loan basis).                                          

       If the Partnership Trust Fund acquires the Mortgage Loans at a market
discount or premium, the Partnership Trust Fund will elect to include any such  
discount in income currently as it accrues over the life of the Mortgage Loans  
or to offset any such premium against interest income on the Mortgage Loans. As 
indicated above, a portion of such market discount income or premium deduction  
may be allocated to Securityholders.                                            

Section 708 Termination                                       

   Under Section 708 of the Code, the Partnership Trust Fund will be
deemed to terminate for federal income tax purposes if 50% or more of the       
capital and profits interests in the Partnership Trust Fund are sold or         
exchanged within a 12-month period. If such a termination occurs, it would cause
a deemed contribution of the assets of a Partnership Trust Fund (the "OLD       
PARTNERSHIP") to a new Partnership Trust Fund (the "NEW PARTNERSHIP") in        
exchange for interests in the new partnership. Such interests would be deemed   
distributed to the partners of the old partnership in liquidation thereof, which
would not constitute a sale or exchange. The Partnership Trust Fund will not    
comply with certain technical requirements that might apply when such a         
constructive termination occurs. As a result, the Partnership Trust Fund may be 
subject to certain tax penalties and may incur additional expenses if it is     
required to comply with those requirements. Furthermore, the Partnership Trust  
Fund might not be able to comply due to lack of data.                           

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Disposition of Securities                                     

 Generally, capital gain or loss will be recognized on a sale of
Partnership Securities in an amount equal to the difference between the amount  
realized and the seller's tax basis in the Partnership Securities sold. A       
Securityholder's tax basis in an Partnership Security will generally equal the  
holder's cost increased by the holder's share of Partnership Trust Fund income  
(includable in income) and decreased by any distributions received with respect 
to such Partnership Security. In addition, both the tax basis in the Partnership
Securities and the amount realized on a sale of an Partnership Security would   
include the holder's share of the Debt Securities and other liabilities of the  
Partnership Trust Fund. A holder acquiring Partnership Securities at different  
prices may be required to maintain a single aggregate adjusted tax basis in such
Partnership Securities, and, upon sale or other disposition of some of the      
Partnership Securities, allocate a portion of such aggregate tax basis to the   
Partnership Securities sold (rather than maintaining a separate tax basis in    
each Partnership Security for purposes of computing gain or loss on a sale of   
that Partnership Security).                                                     

    Any gain on the sale of a Partnership Security attributable to the
holder's share of unrecognized accrued market discount on the Mortgage Loans    
would generally be treated as ordinary income to the holder and would give rise 
to special tax reporting requirements. The Partnership Trust Fund does not      
expect to have any other assets that would give rise to such special reporting  
considerations. Thus, to avoid those special reporting requirements, the        
Partnership Trust Fund will elect to include market discount in income as it    
accrues.                                                                        

     If a Securityholder is required to recognize an aggregate amount of
income (not including income attributable to disallowed itemized deductions     
described above) over the life of the Partnership Securities that exceeds the   
aggregate cash distributions with respect thereto, such excess will generally   
give rise to a capital loss upon the retirement of the Partnership Securities.  

Allocations Between Transferors and Transferees               

         In general, the Partnership Trust Fund's taxable income and losses will
be determined each Due Period and the tax items for a particular Due Period will
be apportioned among the Securityholders in proportion to the principal amount  
of Partnership Securities owned by them as of the close of the last day of such 
Due Period. As a result, a holder purchasing Partnership Securities may be      
allocated tax items (which will affect its tax liability and tax basis)         
attributable to periods before the actual transaction.                          

 The use of such a Due Period convention may not be permitted by
existing regulations. If a Due Period convention is not allowed (or only applies
to transfers of less than all of the partner's interest), taxable income or     
losses of the Partnership Trust Fund might be reallocated among the             
Securityholders. The Depositor will be authorized to revise the Partnership     
Trust Fund's method of allocation between transferors and transferees to conform
to a method permitted by future regulations.                                    

Section 731 Distributions                                     

      In the case of any distribution to a Securityholder, no gain will be
recognized to that Securityholder to the extent that the amount of any money    
distributed with respect to such Security does not exceed the adjusted basis of 
such Securityholder's interest in the Security. To the extent that the amount of
money distributed exceeds such Securityholder's adjusted basis, gain will be    
currently recognized. In the case of any distribution to a Securityholder, no   
loss will be recognized except upon a distribution in liquidation of a          
Securityholder's interest. Any gain or loss recognized by a Securityholder will 
be capital gain or loss.                                                        

Section 754 Election                                          

        In the event that a Securityholder sells its Partnership Securities at
a profit (loss), the purchasing Securityholder will have a higher (lower) basis 
in the Partnership Securities than the selling Securityholder had. The tax basis
of the Partnership Trust Fund's assets would not be adjusted to reflect that    
higher (or lower) basis unless the Partnership Trust Fund were to file an       
election under Section 754 of the Code. In order to avoid the administrative    
complexities that would be involved in keeping accurate accounting records, as  
well as potentially                                                             

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onerous information reporting requirements, the Partnership Trust Fund will not 
make such an election. As a result, a Securityholder might be allocated a       
greater or lesser amount of Partnership Trust Fund income than would be         
appropriate based on its own purchase price for Partnership Securities.         

Administrative Matters                                        

    The Trustee is required to keep or have kept complete and accurate
books of the Partnership Trust Fund. Such books will be maintained for financial
reporting and tax purposes on an accrual basis and the fiscal year of the       
Partnership Trust Fund will be the calendar year. The Trustee will file a       
partnership information return (IRS Form 1065) with the IRS for each taxable    
year of the Partnership Trust Fund and will report each Securityholder's        
allocable share of items of Partnership Trust Fund income and expense to holders
and the IRS on Schedule K-1. The Trustee will provide the Schedule K-1          
information to nominees that fail to provide the Partnership Trust Fund with the
information statement described below and such nominees will be required to     
forward such information to the beneficial owners of the Partnership Securities.
Generally, holders must file tax returns that are consistent with the           
information return filed by the Partnership Trust Fund or be subject to         
penalties unless the holder notifies the IRS of all such inconsistencies.       

   Under Section 6031 of the Code, any person that holds Partnership
Securities as a nominee at any time during a calendar year is required to       
furnish the Partnership Trust Fund with a statement containing certain          
information on the nominee, the beneficial owners and the Partnership Securities
so held. Such information includes (i) the name, address and taxpayer           
identification number of the nominee and (ii) as to each beneficial owner (x)   
the name, address and identification number of such person, (y) whether such    
person is a United States person, a tax-exempt entity or a foreign government,  
an international organization, or any wholly-owned agency or instrumentality of 
either of the foregoing, and (z) certain information on Partnership Securities  
that were held, bought or sold on behalf of such person throughout the year. In 
addition, brokers and financial institutions that hold Partnership Securities   
through a nominee are required to furnish directly to the Trustee information as
to themselves and their ownership of Partnership Securities. A clearing agency  
registered under Section 17A of the Exchange Act is not required to furnish any 
such information statement to the Partnership Trust Fund. The information       
referred to above for any calendar year must be furnished to the Partnership    
Trust Fund on or before the following January 31. Nominees, brokers and         
financial institutions that fail to provide the Partnership Trust Fund with the 
information described above may be subject to penalties.                        

    The Depositor will be designated as the tax matters partner in the
Pooling and Servicing Agreement and, as such, will be responsible for           
representing the Securityholders in any dispute with the IRS. The Code provides 
for administrative examination of a partnership as if the partnership were a    
separate and distinct taxpayer. Generally, the statute of limitations for       
partnership items does not expire until three years after the date on which the 
partnership information return is filed. Any adverse determination following an 
audit of the return of the Partnership Trust Fund by the appropriate taxing     
authorities could result in an adjustment of the returns of the Securityholders,
and, under certain circumstances, a Securityholder may be precluded from        
separately litigating a proposed adjustment to the items of the Partnership     
Trust Fund. An adjustment could also result in an audit of a Securityholder's   
returns and adjustments of items not related to the income and losses of the    
Partnership Trust Fund.                                                         

Tax Consequences to Foreign Securityholders                   

        It is not clear whether the Partnership Trust Fund would be considered
to be engaged in a trade or business in the United States for purposes of       
federal withholding taxes with respect to Non-U.S. Persons, because there is no 
clear authority dealing with that issue under facts substantially similar to    
those described herein. Although it is not expected that the Partnership Trust  
Fund would be engaged in a trade or business in the United States for such      
purposes, if so specified in the applicable prospectus supplement, the          
Partnership Trust Fund may withhold as if it were so engaged in order to protect
the Partnership Trust Fund from possible adverse consequences of a failure to   
withhold. The Partnership Trust Fund may withhold on the portion of its taxable 
income that is allocable to Securityholders who are Non-U.S. Persons pursuant to
Section 1446 of the Code, as if such income were effectively connected to a U.S.
trade or business, at the maximum tax rate for corporations or individuals, as  
applicable. Amounts withheld will be deemed distributed to the Non-U.S. Person  
Securityholders. Subsequent adoption of Treasury regulations or the issuance of 
other administrative pronouncements may require the Partnership Trust Fund to   
change its withholding procedures. In determining a holder's withholding status,
the Partnership Trust Fund may                                                  

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rely on IRS Form W-8BEN, IRS Form W-9 or the holder's certification of          
nonforeign status signed under penalties of perjury.                            

      To the extent specified in the applicable prospectus supplement, (i)
each Non-U.S. Person holder might be required to file a U.S. individual or      
corporate income tax return (including, in the case of a corporation, the branch
profits tax) on its share of the Partnership Trust Fund's income; (ii) each     
Non-U.S. Person holder must obtain a taxpayer identification number from the IRS
and submit that number to the Partnership Trust Fund on Form W-8BEN in order to 
assure appropriate crediting of the taxes withheld; and (iii) a Non-U.S. Person 
holder generally would be entitled to file with the IRS a claim for refund with 
respect to taxes withheld by the Partnership Trust Fund, taking the position    
that no taxes were due because the Partnership Trust Fund was not engaged in a  
U.S. trade or business. Notwithstanding the foregoing, interest payments made   
(or accrued) to a Securityholder who is a Non-U.S. Person may be considered     
guaranteed payments to the extent such payments are determined without regard to
the income of the Partnership Trust Fund. If these interest payments are        
properly characterized as guaranteed payments, then the interest may not be     
considered "portfolio interest." As a result, Securityholders who are Non-U.S.  
Persons may be subject to United States federal income tax and withholding tax  
at a rate of 30 percent, unless reduced or eliminated pursuant to an applicable 
treaty. In such case, a Non-U.S. Person holder would only be entitled to claim a
refund for that portion of the taxes in excess of the taxes that should be      
withheld with respect to the guaranteed payments.                               

Backup Withholding                                            

        Distributions made on the Partnership Securities and proceeds from the
sale of the Partnership Securities will be subject to a "backup" withholding tax
of 28% (increasing to 31% after 2010) if, in general, the Securityholder fails  
to comply with certain identification procedures, unless the holder is an exempt
recipient under applicable provisions of the Code.                              

      THE FEDERAL TAX DISCUSSIONS SET FORTH ABOVE ARE INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A SECURITYHOLDER'S    
PARTICULAR TAX SITUATION. PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR TAX       
ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP
AND DISPOSITION OF REMIC SECURITIES, GRANTOR TRUST SECURITIES, PARTNERSHIP      
SECURITIES AND DEBT SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE,     
LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL
OR OTHER TAX LAWS.                                                              

STATE AND OTHER TAX CONSEQUENCES

 In addition to the federal income tax consequences described in
"Federal Income Tax Consequences," potential investors should consider the state
and local tax consequences of the acquisition, ownership, and disposition of the
Securities offered hereunder. State tax law may differ substantially from the   
corresponding federal tax law, and the discussion above does not purport to     
describe any aspect of the tax laws of any state or other jurisdiction.         
Therefore, prospective investors should consult their own tax advisors with     
respect to the various tax consequences of investments in the Securities offered
hereunder.                                                                      

ERISA CONSIDERATIONS

 The Employee Retirement Income Security Act of 1974, as amended
("ERISA" ) and the Code impose certain requirements on employee benefit plans   
and on certain other retirement plans and arrangements, including individual    
retirement accounts, individual retirement annuities, Keogh plans and collective
investment funds and separate accounts in which such plans, accounts or         
arrangements are invested, that are subject to Title I of ERISA and Section 4975
of the Code ("PLANS") and on persons who are fiduciaries with respect to such   
Plans in connection with the investment of Plan assets. 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 Section 3(33) of ERISA) are not subject to ERISA requirements.       
However, such plans may be subject to the provisions of other applicable        
federal, state and local law materially similar to the foregoing provisions of  
ERISA                                                                           

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and the Code. Any such plan which is qualified and exempt from taxation under   
Sections 401(a) and 501(a) of the Code, however, is subject to the prohibited   
transaction rules set forth in Section 503 of the Code.                         

       ERISA generally imposes on Plan fiduciaries certain general fiduciary
requirements, including those of investment prudence and diversification and the
requirement that a Plan's investments be made in accordance with the documents  
governing the Plan. In addition, ERISA and the Code prohibit a broad range of   
transactions involving assets of a Plan and persons ("PARTIES IN INTEREST") who 
have certain specified relationships to the Plan unless a statutory or          
administrative exemption is available. Certain Parties in Interest that         
participate in a prohibited transaction may be subject to an excise tax imposed 
pursuant to Section 4975 of the Code, unless a statutory or administrative      
exemption is available. These prohibited transactions generally are set forth in
Sections 406 and 407 of ERISA and Section 4975 of the Code.                     

 A Plan's investment in Securities may cause the Mortgage Loans,
Contracts, Unsecured Home Improvement Loans and other assets included in a      
related Trust Fund to be deemed Plan assets. Section 2510.3-101 of the          
regulations of the United States Department of Labor ("DOL") provides that when 
a Plan acquires an equity interest in an entity, the Plan's assets include both 
such equity interest and an undivided interest in each of the underlying assets 
of the entity, unless certain exceptions not applicable here apply, or unless   
the equity participation in the entity by "benefit plan investors" (i.e., Plans 
and certain employee benefit plans not subject to ERISA) is not "significant",  
both as defined therein. For this purpose, in general, equity participation by  
benefit plan investors will be "significant" on any date if 25% or more of the  
value of any Class of equity interests in the entity is held by benefit plan    
investors. To the extent the Securities are treated as equity interests for     
purposes of DOL regulations section 2510.3-101, equity participation in a Trust 
Fund will be significant on any date if immediately after the most recent       
acquisition of any Security, 25% or more of any Class of Securities is held by  
benefit plan investors.                                                         

      Any person who has discretionary authority or control respecting the
management or disposition of Plan assets, and any person who provides investment
advice with respect to such assets for a fee, is a fiduciary of the investing   
Plan. If the Mortgage Loans, Contracts, Unsecured Home Improvement Loans and    
other assets included in a Trust Fund constitute Plan assets, then any party    
exercising management or discretionary control regarding those assets, such as  
the Servicer or Master Servicer, may be deemed to be a Plan "fiduciary" and thus
subject to the fiduciary responsibility provisions and prohibited transaction   
provisions of ERISA and the Code with respect to the investing Plan. In         
addition, if the Mortgage Loans, Contracts, Unsecured Home Improvement Loans and
other assets included in a Trust Fund constitute Plan assets, the purchase of   
Securities by a Plan, as well as the operation of the Trust Fund, may constitute
or involve a prohibited transaction under ERISA and the Code.                   

  On May 14, 1993, the DOL granted to NationsBank Corporation, the
predecessor to Bank of America Corporation, the corporate parent of Banc of     
America Securities LLC, an individual administrative exemption, Prohibited      
Transaction Exemption ("PTE") 93-31, as amended by PTE 97-34, PTE 2000-58 and   
PTE 2002-41 (the "EXEMPTION"), which generally exempts from the application of  
the prohibited transaction provisions of Sections 406(a) and 407 of ERISA, and  
the excise taxes imposed on such prohibited transactions pursuant to Section    
4975(a) and (b) of the Code, certain transactions, among others, relating to the
servicing and operation of mortgage pools and the purchase, sale and holding of 
Securities underwritten by an Underwriter (as hereinafter defined), that (a)    
represent a beneficial ownership interest in the assets of a Trust Fund and     
entitle the holder the pass-through payments of principal, interest and/or other
payments made with respect to the assets of the Trust Fund or (b) are           
denominated as a debt instrument and represent an interest in a REMIC or certain
other specified entities, provided that certain conditions set forth in the     
Exemption are satisfied. For purposes of this Section "ERISA Considerations,"   
the term "UNDERWRITER" shall include (a) Bank of America Corporation, (b) any   
person directly or indirectly, through one or more intermediaries, controlling, 
controlled by or under common control with Bank of America Corporation,         
including Banc of America Securities LLC, and (c) any member of the underwriting
syndicate or selling group of which a person described in (a) or (b) is a       
manager or co-manager with respect to a Class of Securities.                    

The Exemption sets forth five general conditions which must be
satisfied for a transaction involving the purchase, sale and holding of         
Securities to be eligible for exemptive relief thereunder. First, the           
acquisition of Securities by a Plan must be on terms that are at least as       
favorable to the Plan as they would be in an arm's-length transaction with an   
unrelated party. Second, the Securities at the time of acquisition by the Plan  
must be rated in one of the four highest generic rating categories by Standard &
Poor's, a division of The McGraw-Hill Companies, Inc.                           

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("S&P"), Moody's Investors Service, Inc. ("MOODY'S") or Fitch Ratings ("FITCH").
Third, the Trustee cannot be an affiliate of any member of the Restricted Group 
other than an Underwriter; the "RESTRICTED GROUP" consists of the Underwriter,  
the Depositor, the Trustee, the Master Servicer, any Servicer, any insurer and  
any obligor with respect to Assets constituting more than 5% of the aggregate   
unamortized principal balance of the Assets in the related Trust Fund as of the 
date of initial issuance of the Securities. Fourth, the sum of all payments made
to and retained by the Underwriter(s) must represent not more than reasonable   
compensation for underwriting the Securities; the sum of all payments made to   
and retained by the Depositor pursuant to the assignment of the Assets to the   
related Trust Fund must represent not more than the fair market value of such   
obligations; and the sum of all payments made to and retained by the Servicer   
must represent not more than reasonable compensation for such person's services 
under the applicable Agreement and reimbursement of such person's reasonable    
expenses in connection therewith. Fifth, the investing Plan must be an          
accredited investor as defined in Rule 501(a)(1) of Regulation D of the         
Securities and Exchange Commission under the Securities Act of 1933, as amended.
In addition, the Trust Fund must meet the following requirements: (i) the assets
of the Trust Fund must consist solely of assets of the type that have been      
included in other investment pools; (ii) securities evidencing interests in such
other investment pools must have been rated in one of the four highest generic  
rating categories by S&P, Moody's or Fitch for at least one year prior to the   
Plan's acquisition of the securities; and (iii) securities evidencing interests 
in such other investment pools must have been purchased by investors other than 
Plans for at least one year prior to any Plan's acquisition of the Securities.  

         A fiduciary of a Plan contemplating purchasing a Security must make its
own determination that the general conditions set forth above will be satisfied 
with respect to such Security. In addition, any Securities representing a       
beneficial ownership interest in Unsecured Home Improvement Loans or Revolving  
Credit Line Loans will not satisfy the general conditions of the Exemption.     

         If the general conditions of the Exemption are satisfied, the Exemption
may provide an exemption from the restrictions imposed by Sections 406(a) and   
407 of ERISA (as well as the excise taxes imposed by Sections 4975(a) and (b) of
the Code by reason of Sections 4975(c)(1)(A) through (D) of the Code) in        
connection with the direct or indirect sale, exchange, transfer, holding or the 
direct or indirect acquisition or disposition in the secondary market of        
Securities by Plans. However, no exemption is provided from the restrictions of 
Sections 406(a)(1)(E), 406(a)(2) and 407 of ERISA for the acquisition or holding
of a Security on behalf of an "EXCLUDED PLAN" by any person who has             
discretionary authority or renders investment advice with respect to the assets 
of such Excluded Plan. For purposes of the Securities, an Excluded Plan is a    
Plan sponsored by any member of the Restricted Group.                           

         If certain specific conditions of the Exemption are also satisfied, the
Exemption may provide an exemption from the restrictions imposed by Sections    
406(b)(1) and (b)(2) of ERISA and the taxes imposed by Sections 4975(a) and (b) 
of the Code by reason of Section 4975(c)(1)(E) of the Code in connection with   
(1) the direct or indirect sale, exchange or transfer of Securities in the      
initial issuance of Securities between the Depositor or an Underwriter and a    
Plan when the person who has discretionary authority or renders investment      
advice with respect to the investment of Plan assets in the Securities is (a) an
obligor with respect to 5% or less of the fair market value of the Assets or (b)
an affiliate of such a person, (2) the direct or indirect acquisition or        
disposition in the secondary market of Securities by a Plan and (3) the holding 
of Securities by a Plan.                                                        

         Further, if certain specific conditions of the Exemption are satisfied,
the Exemption may provide an exemption from the restrictions imposed by Sections
406(a), 406(b) and 407 of ERISA, and the taxes imposed by Sections 4975(a) and  
(b) of the Code by reason of Section 4975(c) of the Code for transactions in    
connection with the servicing, management and operation of the Trust Fund. The  
Depositor expects that the specific conditions of the Exemption required for    
this purpose will be satisfied with respect to the Securities so that the       
Exemption would provide an exemption from the restrictions imposed by Sections  
406(a) and (b) of ERISA (as well as the excise taxes imposed by Sections 4975(a)
and (b) of the Code by reason of Section 4975(c) of the Code) for transactions  
in connection with the servicing, management and operation of the Mortgage      
Pools, provided that the general conditions of the Exemption are satisfied.     

   The Exemption also may provide an exemption from the restrictions
imposed by Sections 406(a) and 407(a) of ERISA, and the taxes imposed by Section
4975(a) and (b) of the Code by reason of Sections 4975(c)(1)(A) through (D) of  
the Code if such restrictions are deemed to otherwise apply merely because a    
person is deemed to be a "party in interest" (within the meaning of Section     
3(14) of ERISA) or a "disqualified person" (within the meaning of Section       
4975(e)(2) of the Code) with respect to an investing Plan by virtue of providing
services to                                                                     

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the Plan (or by virtue of having certain specified relationships to such a      
person) solely as a result of the Plan's ownership of Securities.               

      The Exemption was amended by PTE 97-34, 62 Fed. Reg. 39021 (July 21,
1997), which, among other changes, permits the inclusion of a pre-funding       
account in a trust fund, provided that the following conditions are met: (a) the
pre-funding account may not exceed 25% of the total amount of certificates being
offered; (b) additional obligations purchased generally must meet the same terms
and conditions as those of the original obligations used to create the trust    
fund; (c) the transfer of additional obligations to the trust during the        
pre-funding period must not result in the certificates receiving a lower rating 
at the termination of the pre-funding period than the rating that was obtained  
at the time of the initial issuance of the certificates; (d) the weighted       
average interest rate for all of the obligations in the trust at the end of the 
pre-funding period must not be more than 100 basis points less than the weighted
average interest rate for the obligations which were transferred to the trust on
the closing date; (e) the characteristics of the additional obligations must be 
monitored to confirm that they are substantially similar to those which were    
acquired as of the closing date either by a credit support provider or insurance
provider independent of the sponsor or by an independent accountant retained by 
the sponsor that confirms such conformance in writing; (f) the pre-funding      
period must be described in the prospectus or private placement memorandum      
provided to investing plans; and (g) the trustee of the trust must be a         
substantial financial institution or trust company experienced in trust         
activities and familiar with its duties, responsibilities and liabilities as a  
fiduciary under ERISA.                                                          

   Further, the pre-funding period must be a period beginning on the
closing date and ending no later than the earliest to occur of (x) the date the 
amount on deposit in the pre-funding account is less than the minimum dollar    
amount specified in the pooling and servicing agreement; (y) the date on which  
an event of default occurs under the pooling and servicing agreement; or (z) the
date which is the later of three months or 90 days after the closing date. It is
expected that the Pre-Funding Account will meet all of these requirements.      

      To the extent the Securities are not treated as equity interests for
purposes of DOL regulations section 2510.3-101, a Plan's investment in such     
Securities ("NON-EQUITY SECURITIES") would not cause the assets included in a   
related Trust Fund to be deemed Plan assets. However, the Depositor, the        
Servicer, the Trustee, or Underwriter may be the sponsor of or investment       
advisor with respect to one or more Plans. Because such parties may receive     
certain benefits in connection with the sale of Non-Equity Securities, the      
purchase of Non-Equity Securities using Plan assets over which any such parties 
has investment authority might be deemed to be a violation of the prohibited    
transaction rules of ERISA and the Code for which no exemption may be available.
Accordingly, Non-Equity Securities may not be purchased using the assets of any 
Plan if any of the Depositor, the Servicer, the Trustee or Underwriter has      
investment authority with respect to such assets.                               

         In addition, certain affiliates of the Depositor might be considered or
might become Parties in Interest with respect to a Plan. Also, any holder of    
Securities, because of its activities or the activities of its respective       
affiliates, may be deemed to be a Party in Interest with respect to certain     
Plans, including but not limited to Plans sponsored by such holder. In either   
case, the acquisition or holding of Non-Equity Securities by or on behalf of    
such a Plan could be considered to give rise to an indirect prohibited          
transaction within the meaning of ERISA and the Code, unless it is subject to   
one or more statutory or administrative exemptions such as Prohibited           
Transaction Class Exemption ("PTCE") 84-14, which exempts certain transactions  
effected on behalf of a Plan by a "qualified professional asset manager", PTCE  
90-1, which exempts certain transactions involving insurance company pooled     
separate accounts, PTCE 91-38, which exempts certain transactions involving bank
collective investment funds, PTCE 95-60, which exempts certain transactions     
involving insurance company general accounts, or PTCE 96-23, which exempts      
certain transactions effected on behalf of a Plan by certain "in-house" asset   
managers. It should be noted, however, that even if the conditions specified in 
one or more of these exemptions are met, the scope of relief provided by these  
exemptions may not necessarily cover all acts that might be construed as        
prohibited transactions.                                                        

Any Plan fiduciary which proposes to cause a Plan to purchase 
Securities should consult with its counsel with respect to the potential        
applicability of ERISA and the Code to such investment, the availability of the 
exemptive relief provided in the Exemption and the potential applicability of   
any other prohibited transaction exemption in connection therewith. In          
particular, a Plan fiduciary which proposes to cause a Plan to purchase         
Securities representing a beneficial ownership interest in a pool of            
single-family residential first mortgage loans, a Plan fiduciary should consider
the applicability of PTCE 83-1, which provides exemptive relief for certain     

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transactions involving mortgage pool investment trusts. The prospectus          
supplement with respect to a Series of Securities may contain additional        
information regarding the application of the Exemption, PTCE 83-1 or any other  
exemption, with respect to the Securities offered thereby. In addition, any Plan
fiduciary that proposes to cause a Plan to purchase Strip Securities should     
consider the federal income tax consequences of such investment. Fiduciaries of 
plans not subject to ERISA or the Code, such as governmental plans, should      
consider the application of any applicable federal, state or local law          
materially similar to the provisions of ERISA or the Code, as well as the need  
for and the availability of exemptive relief under such applicable law.         

         ANY PLAN FIDUCIARY CONSIDERING WHETHER TO PURCHASE A SECURITY ON BEHALF
OF A PLAN SHOULD CONSULT WITH ITS COUNSEL REGARDING THE APPLICABILITY OF THE    
FIDUCIARY RESPONSIBILITY AND PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE 
CODE TO SUCH INVESTMENT.                                                        

       THE SALE OF SECURITIES TO A PLAN IS IN NO RESPECT A REPRESENTATION BY
THE DEPOSITOR OR THE UNDERWRITER 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

       As will be specified in the applicable prospectus supplement, certain
Classes of the Securities will constitute "mortgage related securities " for    
purposes of the Secondary Mortgage Market Enhancement Act of 1984, as amended   
("SMMEA"), so long as (i) they are rated in one of the two highest rating       
categories by at least one Rating Agency and (ii) are part of a Series          
representing interests in a Trust Fund consisting of Mortgage Loans originated  
by certain types of originators specified in SMMEA and secured by first liens on
real estate. The appropriate characterization of those Securities not qualifying
as "mortgage related securities" for purposes of SMMEA ("NON-SMMEA SECURITIES") 
under various legal investment restrictions, and thus the ability of investors  
subject to these restrictions to purchase such Securities, may be subject to    
significant interpretive uncertainties. Accordingly, all investors whose        
investment activities are subject to legal investment laws and regulations,     
regulatory capital requirements, or review by regulatory authorities should     
consult with their own legal advisors in determining whether and to what extent 
the Non-SMMEA Securities constitute legal investments for them.                 

        Classes which qualify as "mortgage related securities" will constitute
legal investments for persons, trusts, corporations, partnerships, associations,
business trusts and business entities (including but not limited to depository  
institutions, 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) whose authorized investments are subject  
to state regulation, to the same extent that, under applicable law, obligations 
issued by or guaranteed as to principal and interest by the United States or any
agency or instrumentality thereof constitute legal investments for such         
entities. Pursuant to SMMEA, a number of states enacted legislation, on or      
before the October 3, 1991 cut-off for such enactments, limiting to varying     
extents the ability of certain entities (in particular, insurance companies) to 
invest in "mortgage related securities" secured by loans on residential, or     
mixed residential and commercial properties, in most cases by requiring the     
affected investors to rely solely upon existing state law, and not SMMEA.       
Pursuant to Section 347 of the Riegle Community Development and Regulatory      
Improvement Act of 1994, which amended the definition of "mortgage related      
security" to include, in relevant part, Securities satisfying the rating and    
qualified originator requirements for "mortgage related securities," but        
evidencing interests in a Trust Fund consisting, in whole or in part, of first  
liens on one or more parcels of real estate upon which are located one or more  
commercial structures, states were authorized to enact legislation, on or before
September 23, 2001, specifically referring to Section 347 and prohibiting or    
restricting the purchase, holding or investment by state-regulated entities in  
those types of Securities. Accordingly, the investors affected by such          
legislation will be authorized to invest in the Offered Securities only to the  
extent provided in such legislation.                                            

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 
mortgage related securities without limitation as to the percentage of their    
assets represented thereby, federal credit unions may invest in such securities,
and national banks may purchase mortgage related securities for their own       
account without regard to the limitations generally applicable to investment    
securities set forth in 12 U. S. C. ss.24 (Seventh), subject in each case to    
such regulations as the applicable federal regulatory authority may prescribe.  
In this connection, the Office of the Comptroller of the Currency (the "OCC")   
has amended 12 C. F. R. Part 1 to                                               

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authorize national banks to purchase and sell for their own account, without    
limitation as to a percentage of the bank's capital and surplus (but subject to 
compliance with certain general standards in 12 C. F. R. ss.1.5 concerning      
"safety and soundness" and retention of credit information), certain "Type IV   
securities," defined in 12 C. F. R. ss.1.2(m) to include certain "residential   
mortgage-related securities." As so defined, "residential mortgage-related      
security" means, in relevant part, "mortgage related security" within the       
meaning of SMMEA. The National Credit Union Administration ("NCUA") has adopted 
rules, codified at 12 C.F.R. Part 703, which permit federal credit unions to    
invest in "mortgage related securities," other than stripped mortgage related   
securities, residual interests in mortgage related securities and commercial    
mortgage related securities, subject to compliance with general rules governing 
investment policies and practices; however, credit unions approved for the      
NCUA's "investment pilot program" under 12 C.F.R. ss. 703.19 may be able to     
invest in those prohibited forms of securities. The OTS has issued Thrift       
Bulletin 13a (December 1, 1998), " Management of Interest Rate Risk, Investment 
Securities, and Derivative Activities" and Thrift Bulletin 73a (December 18,    
2001), "Investing in Complex Securities," which thrift institutions subject to  
the jurisdiction of the OTS should consider before investing in any of the      
Offered Securities.                                                             

      All depository institutions considering an investment in the Offered
Securities should review the "Supervisory Policy Statement on Investment        
Securities and End-User Derivatives Activities" (the "1998 POLICY STATEMENT")   
of the Federal Financial Institutions Examination Council ("FFIEC"), which has  
been adopted by the Board of Governors of the Federal Reserve System, the       
Federal Deposit Insurance Corporation, the OCC and the OTS, effective May 26,   
1998, and by the NCUA, effective October 1, 1998. The 1998 Policy Statement sets
forth general guidelines which depository institutions must follow in managing  
risks (including market, credit, liquidity, operational (transaction), and legal
risks) applicable to all securities (including mortgage pass-through securities 
and mortgage-derivative products) used for investment purposes.                 

    Investors whose investment activities are subject to regulation by
federal or state authorities should review rules, policies, and guidelines      
adopted from time to time by those authorities before purchasing any Class of   
the Offered Securities, as certain Classes may be deemed unsuitable investments,
or may otherwise be restricted, under those rules, policies, or guidelines (in  
certain instances irrespective of SMMEA).                                       

     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, but not limited 
to, "prudent investor" provisions, percentage-of-assets limits, provisions which
may restrict or prohibit investment in securities which are not                 
"interest-bearing" or "income-paying," and, with regard to any Class of Offered 
Securities issued in book-entry form, provisions which may restrict or prohibit 
investments in securities which are issued in book-entry form.                  

     Except as to the status of certain Classes of Offered Securities as
"mortgage related securities," no representations are made as to the proper     
characterization of the Offered Securities for legal investment purposes,       
financial institution regulatory purposes, or other purposes, or as to the      
ability of particular investors to purchase any Offered Securities under        
applicable legal investment restrictions. The uncertainties described above (and
any unfavorable future determinations concerning legal investment or financial  
institution regulatory characteristics of the Offered Securities) may adversely 
affect the liquidity of the Offered Securities.                                 

       Accordingly, all investors whose investment activities are subject to
legal investment laws and regulations, regulatory capital requirements or review
by regulatory authorities should consult with their legal advisors in           
determining whether and to what extent the Offered Securities of any Class      
constitute legal investments or are subject to investment, capital or other     
restrictions and, if applicable, whether SMMEA has been overridden in any       
jurisdiction relevant to such investor.                                         

 METHODS OF DISTRIBUTION

         The Securities offered hereby and by the Supplements to this prospectus
will be offered in Series. The distribution of the Securities may be effected   
from time to time in one or more transactions, including negotiated             
transactions, at a fixed public offering price or at varying prices to be       
determined at the time of sale or at the time of commitment therefor. If so     
specified in the related prospectus supplement, the Securities will be          
distributed in a firm commitment underwriting, subject to the terms and         
conditions of the underwriting agreement, by Banc of America Securities LLC     
("BANC OF AMERICA SECURITIES") acting as underwriter with other underwriters, if
any,                                                                            

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named therein. In such event, the prospectus supplement may also specify that   
the underwriters will not be obligated to pay for any Securities agreed to be   
purchased by purchasers pursuant to purchase agreements acceptable to the       
Depositor. In connection with the sale of the Securities, underwriters may      
receive compensation from the Depositor or from purchasers of the Securities in 
the form of discounts, concessions or commissions. The prospectus supplement    
will describe any such compensation paid by the Depositor.                      

Alternatively, the prospectus supplement may specify that the 
Securities will be distributed by Banc of America Securities acting as agent or 
in some cases as principal with respect to Securities which it has previously   
purchased or agreed to purchase. If Banc of America Securities acts as agent in 
the sale of Securities, Banc of America Securities will receive a selling       
commission with respect to each Series of Securities, depending on market       
conditions, expressed as a percentage of the aggregate principal balance of the 
related Mortgage Loans as of the Cut-off Date. The exact percentage for each    
Series of Securities will be disclosed in the related prospectus supplement. To 
the extent that Banc of America Securities elects to purchase Securities as     
principal, Banc of America Securities may realize losses or profits based upon  
the difference between its purchase price and the sales price. The prospectus   
supplement with respect to any Series offered other than through underwriters   
will contain information regarding the nature of such offering and any          
agreements to be entered into between the Depositor and purchasers of Securities
of such Series.                                                                 

   Banc of America Securities is an affiliate of the Depositor. This
prospectus may be used by Banc of America Securities, to the extent required, in
connection with market making transactions in the Securities. Banc of America   
Securities may act as principal or agent in such transactions.                  

 The Depositor will indemnify Banc of America Securities and any
underwriters against certain civil liabilities, including liabilities under the 
Securities Act of 1933, or will contribute to payments Banc of America          
Securities and any underwriters may be required to make in respect thereof.     

        In the ordinary course of business, Banc of America Securities and the
Depositor may engage in various securities and financing transactions, including
repurchase agreements to provide interim financing of the Depositor's mortgage  
loans pending the sale of such mortgage loans or interests therein, including   
the Securities.                                                                 

         The Depositor anticipates that the Securities will be sold primarily to
institutional investors. Purchasers of Securities, including dealers, may,      
depending on the facts and circumstances of such purchases, be deemed to be     
"underwriters" within the meaning of the Securities Act of 1933 in connection   
with reoffers and sales by them of Securities. Securityholders should consult   
with their legal advisors in this regard prior to any such reoffer or sale.     

         As to each Series of Securities, only those Classes rated in one of the
four highest rating categories by any Rating Agency will be offered hereby. Any 
unrated Class may be initially retained by the Depositor, and may be sold by the
Depositor at any time to one or more institutional investors.                   

 LEGAL MATTERS

         Certain legal matters, including the federal income tax consequences to
Securityholders of an investment in the Securities of a Series, will be passed  
upon for the Depositor by Cadwalader, Wickersham & Taft LLP, New York, New York 
or Hunton & Williams LLP, Charlotte, North Carolina.                            

 FINANCIAL INFORMATION

A new Trust Fund will be formed with respect to each Series of
Securities and no Trust Fund will engage in any business activities or have any 
assets or obligations prior to the issuance of the related Series of Securities.
Accordingly, no financial statements with respect to any Trust Fund will be     
included in this prospectus or in the related prospectus supplement.            

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RATING

      It is a condition to the issuance of any Class of Offered Securities
that they shall have been rated not lower than investment grade, that is, in one
of the four highest rating categories, by at least one nationally recognized    
statistical rating organization ("RATING AGENCY").                              

       Ratings on mortgage pass-through securities address the likelihood of
receipt by Securityholders of all distributions on the underlying mortgage      
loans. These ratings address the structural, legal and issuer-related aspects   
associated with such securities, the nature of the underlying assets and the    
credit quality of the guarantor, if any. Ratings on mortgage pass-through       
securities and other asset backed securities do not represent any assessment of 
the likelihood of principal prepayments by borrowers or of the degree by which  
such prepayments might differ from those originally anticipated. As a result,   
securityholders might suffer a lower than anticipated yield, and, in addition,  
holders of stripped interest securities in extreme cases might fail to recoup   
their initial 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.                                     

 WHERE YOU CAN FIND MORE INFORMATION

 The Depositor filed a registration statement (the "REGISTRATION
STATEMENT") relating to the Securities with the Commission or the "SEC". This   
prospectus is part of the Registration Statement, but the Registration Statement
includes additional information.                                                

  Copies of the Registration Statement and any other materials the
Depositor files with the Commission may be read and copied at the Commission's  
Public Reference Room at 450 Fifth Street N.W., Washington, D.C. 20549.         
Information concerning the operation of the Commission's Public Reference Room  
may be obtained by calling the Commission at (800) SEC-0330. The Commission also
maintains a site on the World Wide Web at "http://www.sec.gov" at which you can 
view and download copies of reports, proxy and information statements and other 
information filed electronically through the Electronic Data Gathering, Analysis
and Retrieval ("EDGAR") system. The Depositor has filed the Registration        
Statement, including all exhibits, through the EDGAR system and therefore such  
materials should be available by logging onto the Commission's Web site. Copies 
of any documents incorporated to this prospectus by reference will be provided  
at no cost to each person, including any beneficial owner, to whom a prospectus 
is delivered upon written or oral request directed to Asset Backed Funding      
Corporation, 214 North Tryon Street, Charlotte, North Carolina 28255, telephone 
number (704) 386-2400.                                                          

 INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

        The SEC allows the Depositor to "incorporate by reference" information
it files with the SEC, which means that the Depositor can disclose important    
information to you by referring you to those documents. The information         
incorporated by reference is considered to be part of this prospectus.          
Information that the Depositor files later with the SEC will automatically      
update the information in this prospectus. In all cases, you should rely on the 
later information rather than on any different information included in this     
prospectus or the accompanying prospectus supplement. The Depositor incorporates
by reference any future annual, monthly and special SEC reports filed by or on  
behalf of the Trust until the termination of the offering of the related Series 
of Securities (including market making transactions by Banc of America          
Securities, to the extent required, with respect to such Series of Securities,  
unless such transactions are exempt from the registration provisions of the     
Securities Act of 1933).                                                        
      Copies of any documents incorporated to this prospectus by reference
will be provided at no cost to each person, including any beneficial owner, to  
whom a prospectus is delivered upon written or oral request directed to Asset   
Backed Funding Corporation, 214 North Tryon Street, Charlotte, North Carolina   
28255, telephone number (704) 386-2400.                                         

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INDEX OF SIGNIFICANT DEFINITIONS

TERMS                                            PAGE                           
-----                                            ----                           

1998 Policy Statement.............................119                           
Accrual Period.....................................24                           
Accrual Securities.................................30                           
Accrued Security Interest..........................32                           
Adjustable Rate Assets.............................18                           
Agreement..........................................43                           
ARM Contracts......................................22                           
ARM Loans..........................................19                           
ARM Unsecured Home Improvement Loans...............21                           
Asset Conservation Act.............................74                           
Asset Group........................................30                           
Asset Seller.......................................18                           
Assets.............................................17                           
Available Distribution Amount......................31                           
Balloon Payment Assets.............................18                           
Banc of America Securities........................119                           
Bankruptcy Code....................................70                           
Bi-weekly Assets...................................18                           
Book-Entry Securities..............................30                           
Buy Down Assets....................................18                           
Buydown Funds......................................84                           
Buydown Mortgage Loans.............................26                           
Buydown Period.....................................26                           
California Military Code...........................77                           
Capitalized Interest Account.......................22                           
Cash Flow Agreement................................23                           
Cede...............................................41                           
CERCLA.............................................73                           
Certificates.......................................30                           
Class..............................................30                           
Cleanup Costs......................................73                           
Clearstream........................................41                           
Clearstream Participants...........................41                           
Closing Date........................................5                           
Code...............................................82                           
Collection Account.................................46                           
Commission.........................................19                           
Companion Class....................................35                           
Component..........................................33                           
Contract Borrower..................................65                           
Contract Lender....................................65                           
Contract Rate......................................22                           
Contracts..........................................17                           
Convertible Assets.................................18                           
Cooperative........................................64                           
Cooperative Loans..................................64                           
Cooperatives.......................................19                           
Covered Trust......................................61                           
CPR................................................25                           
Credit Support.....................................23                           
Cut-off Date.......................................19                           
Cut-off Date........................................5                           
Debt Securities....................................82                           
Definitive Securities..............................30                           
Deposit Trust Agreement............................43                           
Depositor..........................................28                           
Depositories.......................................42                           
Determination Date.................................30                           
Disqualified Organization..........................96                           
Distribution Date..................................24                           
DOL...............................................115                           
DTC Participants...................................41                           
Due Period.........................................31                           
EDGAR.............................................121                           
electing large partnership.........................96                           
ERISA.............................................114                           
Euroclear..........................................42                           
Euroclear Operator.................................42                           
Euroclear Participants.............................42                           
Excess Servicing..................................105                           
Exchange Act.......................................41                           
Excluded Plan.....................................116                           
Exemption.........................................115                           
FASIT..............................................82                           
FASIT Securities...................................82                           
FDIC...............................................46                           
FFIEC.............................................119                           
Fitch.............................................116                           
GEM Assets.........................................18                           
GPM Assets.........................................18                           
Grantor Trust Fund.................................82                           
Grantor Trust Securities...........................82                           
Home Equity Loans..................................19                           
Home Improvement Contracts.........................19                           
HOPA...............................................76                           
Increasing Payment Assets..........................18                           
Indenture..........................................43                           
Indenture Servicing Agreement......................43                           
Indenture Trustee..................................43                           
Indirect Participants..............................41                           
Insurance Proceeds.................................31                           
Interest Reduction Assets..........................18                           
IRS................................................51                           
Issuer..............................................5                           
Land Sale Contracts................................19                           
Level Payment Assets...............................18                           
Liquidation Proceeds...............................31                           
Loan-to-Value Ratio................................19                           
Lock-out Date......................................20                           
Lock-out Period....................................20                           
Manufactured Home..................................21                           
Mark to Market Regulations.........................98                           
Master Servicer....................................43                           
MERS...............................................44                           

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Moody's...........................................116                           
Mortgage Loans.....................................17                           
Mortgage Notes.....................................19                           
Mortgage Rate......................................20                           
Mortgaged Properties...............................19                           
Mortgages..........................................19                           
Multifamily Mortgage Loan..........................18                           
Multifamily Property...............................18                           
National Housing Act...............................20                           
NCUA..............................................119                           
new partnership...................................111                           
Non-Equity Securities.............................117                           
Non-Pro Rata Security..............................86                           
Nonrecoverable Advance.............................37                           
Non-SMMEA Securities..............................118                           
Non-U.S. Person...................................101                           
Notes..............................................30                           
OCC...............................................118                           
Offered Securities.................................30                           
OID Regulations....................................82                           
old partnership...................................111                           
Originator.........................................19                           
OTS................................................75                           
PAC................................................34                           
PAC I..............................................34                           
PAC II.............................................34                           
Parity Act.........................................75                           
Parties in Interest...............................115                           
Partnership Securities.............................82                           
Partnership Trust Fund.............................82                           
Pass-Through Entity................................96                           
Pass-Through Rate..................................32                           
PCBs...............................................73                           
Permitted Investments..............................47                           
Plans.............................................114                           
PMI................................................76                           
Pooling and Servicing Agreement....................43                           
Pre-Funded Amount..................................22                           
Pre-Funding Account................................22                           
Pre-Funding Period.................................22                           
Prepayment Assumption..............................86                           
Prepayment Premium.................................20                           
PTCE..............................................117                           
PTE...............................................115                           
Purchase Price.....................................45                           
Rating Agency.....................................121                           
RCRA...............................................73                           
Record Date........................................30                           
Refinance Loans....................................19                           
Registration Statement............................121                           
Regular Securities.................................83                           
Regular Securityholder.............................85                           
Related Proceeds...................................37                           
Relief Act.........................................77                           
REMIC..............................................82                           
REMIC Pool.........................................82                           
REMIC Provisions...................................82                           
REMIC Regulations..................................82                           
REMIC Securities...................................82                           
REO Property.......................................38                           
Residual Holders...................................92                           
Residual Securities................................83                           
Restricted Group..................................116                           
Retained Interest..................................54                           
Revolving Credit Line Loans........................20                           
S&P...............................................116                           
SEC...............................................121                           
Secured-creditor exemption.........................73                           
Securities.........................................30                           
Security...........................................43                           
Security Balance...................................25                           
Security Owners....................................41                           
Securityholder.....................................23                           
Senior Certificates................................30                           
Senior Notes.......................................30                           
Senior Securities..................................30                           
Series.............................................30                           
Servicer............................................5                           
Servicers..........................................43                           
Servicing Standard.................................49                           
Single Family Mortgage Loan........................18                           
Single Family Property.............................18                           
SMMEA.............................................118                           
SPA................................................25                           
Special Servicer...................................55                           
Standard Securities...............................103                           
Startup Day........................................83                           
Statistical Calculation Date........................5                           
Step-up Rate Assets................................18                           
Strip Securities...................................30                           
Stripped Securities...............................106                           
Stripped Securityholder...........................107                           
Subordinate Certificates...........................30                           
Subordinate Securities.............................30                           
Subsequent Assets..................................22                           
Superliens.........................................73                           
TAC................................................35                           
Taxable Mortgage Pools.............................82                           
Terms and Conditions...............................42                           
Texas Home Equity Laws.............................77                           
Tiered REMICs......................................85                           
TILA Amendment.....................................72                           
Title V............................................75                           
Title VIII.........................................76                           
Trust..............................................30                           
Trust Fund.........................................30                           
Trustee............................................43                           
U.S. Person........................................97                           
UCC................................................41                           
Underlying Servicing Agreement.....................43                           
Underwriter.......................................115                           
Unsecured Home Improvement Loans...................17                           

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UST................................................73                           
Value..............................................19                           
Voting Rights......................................56                           
Warranting Party...................................45                           
Withholding Regulations...........................101                           

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$166,147,000
(APPROXIMATE) 

ASSET BACKED FUNDING CORPORATION
 DEPOSITOR

 BANK OF AMERICA, N.A.
SELLER

LITTON LOAN SERVICING LP
SERVICER

ABFC ASSET-BACKED CERTIFICATES, SERIES 2004-AHL1

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

 PROSPECTUS SUPPLEMENT

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

      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 ABFC Asset-Backed Certificates, Series
2004-AHL1 in any state where the offer is not permitted.                        

        We do not claim that the information in this prospectus supplement and
prospectus is accurate as of any date other than the dates stated on the        
respective covers.                                                              

         Dealers will deliver a prospectus supplement and prospectus when acting
as underwriters of the ABFC Asset-Backed Certificates, Series 2004-AHL1 and with
respect to their unsold allotments or subscriptions. In addition, all dealers   
selling the ABFC Asset-Backed Certificates, Series 2004-AHL1 will be required to
deliver a prospectus supplement and prospectus for ninety days following the    
date of this prospectus supplement.                                             

BANC OF AMERICA SECURITIES LLC                                                  
BEAR, STEARNS & CO. INC.        
                                            COUNTRYWIDE SECURITIES CORPORATION
March 26, 2004