Filed Pursuant to Rule 424(b)(5)
                                       Registration Statement No.: 333-131591

PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED FEBRUARY 23, 2006)

                                  $606,775,100
                                  (Approximate)
                                   CWABS, INC.
                                    DEPOSITOR
                   [COUNTRYWIDE HOME LOANS, INC. LOGO OMITTED]
                               SPONSOR AND SELLER
                       COUNTRYWIDE HOME LOANS SERVICING LP
                                 MASTER SERVICER
                  CWABS ASSET-BACKED CERTIFICATES TRUST 2006-4
                                 ISSUING ENTITY
                    ASSET-BACKED CERTIFICATES, SERIES 2006-4

Distributions are payable on the 25th day of each month, beginning in March 2006

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

The issuing entity will issue certificates, including the following classes of
certificates that are offered pursuant to this prospectus supplement and the
accompanying prospectus:

--------------------------------------------------------------------------------
                 ORIGINAL
                CERTIFICATE
                 PRINCIPAL           PRICE TO     UNDERWRITING     PROCEEDS TO
CLASS           BALANCE(1)            PUBLIC        DISCOUNT       DEPOSITOR(2)
--------------------------------------------------------------------------------
1-A-1         $   131,072,000       100.00000%      0.10417%        99.89583%
1-A-1M        $    14,564,000       100.00000%      0.10417%        99.89583%
2-A-1         $   186,589,000       100.00000%      0.05208%        99.94792%
2-A-2         $   137,330,000       100.00000%      0.10417%        99.89583%
2-A-3         $    44,920,000       100.00000%      0.15500%        99.84500%
M-1           $    24,375,000       100.00000%      0.50000%        99.50000%
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
                 ORIGINAL
               CERTIFICATE
                PRINCIPAL            PRICE TO     UNDERWRITING      PROCEEDS TO
CLASS           BALANCE(1)            PUBLIC        DISCOUNT        DEPOSITOR(2)
--------------------------------------------------------------------------------
M-2           $   22,425,000        100.00000%      0.58333%        99.41667%
M-3           $   13,000,000        100.00000%      0.83333%        99.16667%
M-4           $   11,375,000        100.00000%      1.12500%        98.87500%
M-5           $   11,050,000        100.00000%      1.20000%        98.80000%
M-6           $   10,075,000        100.00000%      1.25000%        98.75000%
A-R           $          100            (3)           (3)              (3)
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE S-15 IN THIS PROSPECTUS
SUPPLEMENT AND ON PAGE 2 IN THE PROSPECTUS.

The certificates represent obligations of the issuing entity only and do not
represent an interest in or obligation of CWABS, Inc., Countrywide Home Loans,
Inc. or any of their affiliates.

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

_________________
(1)   This amount is subject to a permitted variance in the aggregate of plus or
      minus 10%.

(2)   Before deducting expenses payable by the Depositor estimated to be
      approximately $625,000 in the aggregate.

(3)   The Class A-R Certificates will not be purchased by the underwriters and
      are being transferred to Countrywide Home Loans, Inc. as partial
      consideration for the sale of the mortgage loans. See "Method of
      Distribution" in this prospectus supplement.

      The classes of certificates offered by this prospectus supplement are
listed, together with their interest rates, in the tables under "Summary --
Description of the Certificates" on pages S-4 and S-5 of this prospectus
supplement. This prospectus supplement and the accompanying prospectus relate
only to the offering of the certificates listed above and not to the other
classes of certificates that will be issued by the issuing entity.

      The certificates represent interests in a pool of adjustable rate and
fixed rate, credit-blemished mortgage loans that are secured by first liens on
one- to four-family residential properties, as described in this prospectus
supplement.

      Credit enhancement for the certificates consists of:

      o   Overcollateralization,

      o   Excess Interest and

      o   Subordination.

      The credit enhancement for each class of certificates varies. Not all
credit enhancement is available for every class. The credit enhancement for the
certificates is described in more detail in this prospectus supplement.

      The offered certificates (other than the Class A-R Certificates) also will
have the benefit of an interest rate swap contract.

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



COUNTRYWIDE SECURITIES CORPORATION
                                            JPMORGAN
                                                                 LEHMAN BROTHERS

March 15, 2006




                                TABLE OF CONTENTS

PROSPECTUS SUPPLEMENT                                                       PAGE
---------------------                                                       ----

Summary..................................................................    S-1
Summary of Transaction Parties...........................................   S-14
Risk Factors.............................................................   S-15
The Mortgage Pool........................................................   S-27
    General..............................................................   S-27
    Assignment of the Mortgage Loans.....................................   S-31
    Pre-Funding..........................................................   S-34
    Underwriting Standards...............................................   S-35
Servicing of the Mortgage Loans..........................................   S-39
    General..............................................................   S-39
    Countrywide Home Loans Servicing LP..................................   S-40
    Countrywide Home Loans...............................................   S-40
    Loan Servicing.......................................................   S-42
    Collection Procedures................................................   S-42
    Servicing Compensation and Payment of
       Expenses...... ...................................................   S-43
    Adjustment to Master Servicing Fee in
       Connection With Certain Prepaid Mortgage Loans ...................   S-43
    Advances.............................................................   S-43
    Certain Modifications and Refinancings...............................   S-44
The Issuing Entity.......................................................   S-44
Static Pool Data.........................................................   S-45
Description of the Certificates..........................................   S-45
    General..............................................................   S-45
    Book-Entry Certificates; Denominations...............................   S-46
    Glossary of Terms....................................................   S-46
    Deposits to the Certificate Account..................................   S-56
    Withdrawals from the Certificate Account.............................   S-57
    Deposits to the Distribution Account.................................   S-58
    Withdrawals from the Distribution Account............................   S-58
    Investments of Amounts Held in Accounts..............................   S-59
    The Swap Account.....................................................   S-59
    Fees and Expenses....................................................   S-61
    Distributions........................................................   S-63
    Overcollateralization Provisions.....................................   S-66
    The Swap Contract....................................................   S-67
    Calculation of One-Month LIBOR.......................................   S-73
    Carryover Reserve Fund...............................................   S-73
    Credit Comeback Excess Account.......................................   S-74
    Applied Realized Loss Amounts........................................   S-74
    Reports to Certificateholders........................................   S-75
    Amendment............................................................   S-76
    Voting Rights........................................................   S-76
    Optional Purchase of Defaulted Loans.................................   S-77
    Events of Default; Remedies..........................................   S-77
    Optional Termination.................................................   S-78
    Certain Matters Regarding the Master
       Servicer, the Depositor, the Sellers and the NIM Insurer .........   S-79
    The Trustee..........................................................   S-79
    Restrictions on Transfer of the Class A-R Certificates ..............   S-81
    Ownership of the Residual Certificates...............................   S-81
    Restrictions on Investment, Suitability Requirements ................   S-81
    Rights of the NIM Insurer Under the Pooling and Servicing
       Agreement ........................................................   S-81
Yield, Prepayment and Maturity Considerations............................   S-82
    General..............................................................   S-82
    Prepayments and Yields for the Offered Certificates..................   S-83
    Last Scheduled Distribution Date.....................................   S-84
    Prepayment Model.....................................................   S-85
    Decrement Tables; Weighted Average Lives.............................   S-86
Legal Proceedings........................................................   S-97
Material Federal Income Tax Consequences.................................   S-97
    Taxation of the REMIC Regular Interest Components
       of the Regular Certificates ......................................   S-98
    Taxation of the Net Rate Carryover Components of the Regular
       Certificates .....................................................   S-98
    Dispositions of Regular Certificates.................................   S-99
    Tax Treatment For Certain Purposes...................................  S-100
    Residual Certificates................................................  S-100
Other Taxes..............................................................  S-101
ERISA Considerations.....................................................  S-101
Method of Distribution...................................................  S-103
Use of Proceeds..........................................................  S-105
Legal Matters............................................................  S-105
Ratings..................................................................  S-105
Index of Defined Terms...................................................  S-106
Annex A..................................................................    A-1
Annex I..................................................................    I-1


                                        i



PROSPECTUS                                                                  PAGE
----------                                                                  ----

Important Notice About Information in This Prospectus and Each
   Accompanying Prospectus Supplement....................................      1
Risk Factors.............................................................      2
The Trust Fund...........................................................     14
Use of Proceeds..........................................................     27
The Depositor............................................................     27
Loan Program.............................................................     27
Static Pool Data.........................................................     30
Description of the Securities............................................     31
Credit Enhancement.......................................................     46
Yield, Maturity and Prepayment Considerations............................     51
The Agreements...........................................................     54
Certain Legal Aspects of the Loans.......................................     73
Material Federal Income Tax Consequences.................................     86
Other Tax Considerations.................................................    107
ERISA Considerations.....................................................    107
Legal Investment.........................................................    110
Method of Distribution...................................................    111
Legal Matters............................................................    112
Financial Information....................................................    112
Rating...................................................................    112
Index to Defined Terms...................................................    114


                                       ii



                                     SUMMARY

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

WHILE THIS SUMMARY CONTAINS AN OVERVIEW OF CERTAIN CALCULATIONS, CASH FLOW
PRIORITIES AND OTHER INFORMATION TO AID YOUR UNDERSTANDING, YOU SHOULD READ
CAREFULLY THE FULL DESCRIPTION OF THESE CALCULATIONS, CASH FLOW PRIORITIES AND
OTHER INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
BEFORE MAKING ANY INVESTMENT DECISION.

ISSUING ENTITY

CWABS Asset-Backed Certificates Trust 2006-4, a common law trust formed under
the laws of the State of New York.

See "The Issuing Entity" in this prospectus supplement.

DEPOSITOR

CWABS, Inc., a Delaware corporation and a limited purpose finance subsidiary of
Countrywide Financial Corporation, a Delaware corporation.

See "The Depositor" in the prospectus.

SPONSOR AND SELLERS

Countrywide Home Loans, Inc. will be the sponsor of the transaction and a seller
of a portion of the mortgage loans. Other sellers may include one or more
special purpose entities established by Countrywide Financial Corporation or one
of its subsidiaries, which acquired the mortgage loans they are selling directly
from Countrywide Home Loans, Inc.

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

MASTER SERVICER

Countrywide Home Loans Servicing LP.

See "Servicing of the Mortgage Loans -- The Master Servicer" in this prospectus
supplement.

TRUSTEE

The Bank of New York, a New York banking corporation

See "Description of the Certificates -- The Trustee" in this prospectus
supplement.

THE NIM INSURER

After the closing date, a separate trust or trusts (or other form of entity) may
be established to issue net interest margin securities secured by all or a
portion of the Class P and Class C Certificates. Those net interest margin
securities may have the benefit of one or more financial guaranty insurance
policies that guaranty payments on those securities. The insurer or insurers
issuing these financial guaranty insurance policies are referred to in this
prospectus supplement as the "NIM Insurer." The references to the NIM Insurer in
this prospectus supplement apply only if the net interest margin securities are
so insured.

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

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

POOLING AND SERVICING AGREEMENT

The pooling and servicing agreement among the sellers, the master servicer, the
depositor and the trustee, under which the issuing entity will be formed.

CUT-OFF DATE

Initial Mortgage Loans:

For any initial mortgage loan, the later of February 1, 2006 and the origination
date of that mortgage loan (referred to as the initial cut-off date).

Subsequent Mortgage Loans:

For any subsequent mortgage loan, the later of the first day of the month of the
related subsequent transfer date and the origination date of that subsequent
mortgage loan (referred to as the subsequent cut-off date).


                                       S-1



CLOSING DATE

On or about March 17, 2006.

PRE-FUNDING

On the closing date, the depositor may elect to deposit an amount of up to 25%
of the initial aggregate certificate principal balance of the certificates
issued by the issuing entity in a pre-funding account (referred to as the
pre-funded amount).

Pre-Funded Amount:

Any pre-funded amount will not exceed 25% of the initial aggregate certificate
principal balance of the certificates issued by the issuing entity, which will
be allocated between the loan groups so that the amount allocated to any loan
group will not exceed 25% of the aggregate certificate principal balance of the
classes of certificates related to that loan group.

Funding Period:

Any funding period will begin on the closing date and end on the earlier of (x)
the date the amount in the pre-funding account is less than $175,000 and (y)
April 28, 2006.

Use of Pre-Funded Amount:

Any pre-funded amount is expected to be used to purchase subsequent mortgage
loans. Any pre-funded amount not used during the funding period to purchase
subsequent mortgage loans will be distributed to holders of the related senior
certificates as a prepayment of principal on the distribution date immediately
following the end of the funding period.

Restrictions on Subsequent Mortgage Loan Purchases:

Purchases of subsequent mortgage loans are subject to the same criteria as the
initial mortgage loans and additional restrictions related to the composition of
the related loan group following the acquisition of the subsequent mortgage
loans, as described in this prospectus supplement.

Interest Shortfall Payments:

To the extent needed to make required interest payments on the interest-bearing
certificates on or prior to the May 2006 distribution date, Countrywide Home
Loans, Inc. will make interest shortfall payments to the issuing entity to
offset shortfalls in interest collections attributable to the pre-funding
mechanism or because newly originated loans do not have a payment due date in
the due period related to the subject distribution date.

See "The Mortgage Pool -- Pre-Funding" in this prospectus supplement.

THE MORTGAGE LOANS

The mortgage pool will consist of fixed and adjustable rate, credit-blemished
mortgage loans that are secured by first liens on one- to four-family
residential properties. The mortgage loans will be divided into two separate
groups. Each group of mortgage loans is referred to as a "loan group." Loan
group 1 will consist of first lien conforming balance fixed and adjustable rate
mortgage loans. Loan group 2 will consist of first lien fixed and adjustable
rate mortgage loans.

See "The Mortgage Pool" in this prospectus supplement.

STATISTICAL CALCULATION INFORMATION

The statistical information presented in this prospectus supplement relates to a
statistical calculation pool that is larger than the pool of mortgage loans that
will be included in the issuing entity. Certain mortgage loans in the
statistical calculation pool will not be included in the mortgage pool on the
closing date, in some instances because they prepaid in full or were determined
not to meet the eligibility requirements for the mortgage pool. Additional
mortgage loans may also be included in the mortgage pool on the closing date,
and subsequent mortgage loans may be included during the funding period.

The information with respect to the statistical calculation pool is, unless
otherwise specified, based on the scheduled principal balances as of February 1,
2006, which is the statistical calculation date. The aggregate stated principal
balance of the statistical calculation pool as of the statistical calculation
date is referred to as the statistical calculation date pool principal balance.
As of the statistical calculation date, the statistical calculation date pool
principal balance was approximately $749,715,176.

Unless otherwise noted, all statistical percentages are measured by the
statistical calculation date pool principal balance.


                                       S-2



As of the statistical calculation date, the group 1 mortgage loans in the
statistical calculation pool had the following characteristics:

Aggregate Current Principal Balance                        $215,120,086

Weighted Average Mortgage Rate                                   7.800%

Range of Mortgage Rates                               5.000% to 12.500%

Average Current Principal Balance                              $193,802

Range of Outstanding Principal Balances             $18,396 to $551,000

Weighted Average Original Loan-to-Value Ratio                    75.75%

Weighted Average Original Term to Maturity                   359 months

Weighted Average Credit Bureau Risk Score                           600

Weighted Average Remaining Term to Stated Maturity           357 months

Weighted Average Gross Margin*                                   6.293%

Weighted Average Maximum Mortgage Rate*                         14.748%

Weighted Average Minimum Mortgage Rate*                          7.748%

Percentage Originated under Full Doc Program                     65.20%

Geographic Concentrations in excess of 10%:

   California                                                    22.70%

   Florida                                                       15.55%

_______________
* Percentage presented only reflects those group 1 mortgage loans in the
statistical calculation pool that are adjustable rate mortgage loans.

As of the statistical calculation date, the group 2 mortgage loans in the
statistical calculation pool had the following characteristics:

Aggregate Current Principal Balance                        $534,595,090

Weighted Average Mortgage Rate                                   7.604%

Range of Mortgage Rates                               5.000% to 15.750%

Average Current Principal Balance                              $214,525

Range of Outstanding Principal Balances           $13,174 to $1,079,191

Weighted Average Original Loan-to-Value Ratio                    77.14%

Weighted Average Original Term to Maturity                   359 months

Weighted Average Credit Bureau Risk Score                           609

Weighted Average Remaining Term to Stated Maturity           357 months

Weighted Average Gross Margin*                                   6.734%

Weighted Average Maximum Mortgage Rate*                         14.475%

Weighted Average Minimum Mortgage Rate*                          7.661%

Percentage Originated under Full Doc Program                     63.08%

Geographic Concentrations in excess of 10%:

   California                                                    31.48%

   Florida                                                       16.37%

______________
* Percentage presented only reflects those group 2 mortgage loans in the
statistical calculation pool that are adjustable rate mortgage loans.

Additional information regarding the mortgage loans in the statistical
calculation pool is attached at Annex A to this prospectus supplement.

The following characteristics of each loan group in the initial mortgage pool as
of the initial cut-off date and the final mortgage pool following any
pre-funding period (measured as of the initial cut-off date for initial mortgage
loans and as of the applicable subsequent cut-off date for any subsequent
mortgage loans) will not vary from the corresponding characteristics of the
statistical calculation pool by more than the permitted variance shown in the
following table:

             CHARACTERISTIC                       PERMITTED VARIANCE
-----------------------------------------         ------------------
Weighted Average Mortgage Rate                         +/-0.10%

Weighted Average Original
   Loan-to-Value Ratio                                 +/-3.00%

Weighted Average Credit Bureau Risk Score            +/-5 points

Percentage Originated under Full Doc
   Program                                             +/-3.00%

Weighted Average Gross Margin                          +/-0.10%

Maximum California Concentration                        50.00%


                                       S-3



DESCRIPTION OF THE CERTIFICATES

The issuing entity will issue seventeen classes of certificates, twelve of which
are offered by this prospectus supplement and the accompanying prospectus:



                               INITIAL                                               LAST SCHEDULED      INITIAL          INITIAL
                        CERTIFICATE PRINCIPAL                                      DISTRIBUTION DATE      RATING        RATING (S&P)
        CLASS                BALANCE (1)                      TYPE                        (2)          (MOODY'S)(3)         (3)
---------------------   ---------------------    ------------------------------    -----------------   ------------     ------------

OFFERED
CERTIFICATES
1-A-1................      $    131,072,000       Super Senior/Adjustable Rate         July 2036            Aaa             AAA
1-A-1M...............      $     14,564,000      Senior Support/Adjustable Rate        July 2036            Aaa             AAA
2-A-1................      $    186,589,000          Senior/Adjustable Rate             May 2028            Aaa             AAA
2-A-2................      $    137,330,000          Senior/Adjustable Rate          December 2034          Aaa             AAA
2-A-3................      $     44,920,000          Senior/Adjustable Rate            July 2036            Aaa             AAA
M-1..................      $     24,375,000       Subordinate/Adjustable Rate          June 2036            Aa1             AA+
M-2..................      $     22,425,000       Subordinate/Adjustable Rate          June 2036            Aa2             AA+
M-3..................      $     13,000,000       Subordinate/Adjustable Rate          June 2036            Aa3              AA
M-4..................      $     11,375,000       Subordinate/Adjustable Rate           May 2036             A1             AA-
M-5..................      $     11,050,000       Subordinate/Adjustable Rate           May 2036             A2              A+
M-6..................      $     10,075,000       Subordinate/Adjustable Rate          April 2036            A3              A
A-R..................      $            100          Senior/REMIC Residual             March 2006           Aaa             AAA
NON-OFFERED
CERTIFICATES (4)
M-7..................      $      9,100,000       Subordinate/Adjustable Rate          March 2036           Baa1             A-
M-8..................      $      8,775,000       Subordinate/Adjustable Rate        February 2036          Baa2            BBB+
B....................      $      6,500,000       Subordinate/Adjustable Rate        December 2035          Baa3            BBB
P....................      $            100            Prepayment Charges                 N/A               N/R             N/R
C....................            N/A                        Residual                      N/A               N/R             N/R


______________

(1)   This amount is subject to a permitted variance in the aggregate of plus or
      minus 10% depending on the amount of mortgage loans actually delivered on
      the closing date.

(2)   Each date was determined as described under "Yield, Prepayment and
      Maturity Considerations" in this prospectus supplement.

(3)   The offered certificates will not be offered unless they are assigned the
      indicated ratings by Moody's Investors Service, Inc. ("MOODY'S") and
      Standard & Poor's Ratings Services, a division of The McGraw-Hill
      Companies, Inc. ("S&P"). "N/R" indicates that the agency was not asked to
      rate the certificates. A rating is not a recommendation to buy, sell or
      hold securities. These ratings may be lowered or withdrawn at any time by
      either of the rating agencies. See "Ratings" in this prospectus
      supplement.

(4)   The Class M-7, Class M-8, Class B, Class P and Class C Certificates are
      not offered by this prospectus supplement. Any information contained in
      this prospectus supplement with respect to the Class M-7, Class M-8, Class
      B, Class P and Class C Certificates is provided only to permit a better
      understanding of the offered certificates.


                                       S-4



The certificates will also have the following characteristics:



                                 PASS-THROUGH RATE         PASS-THROUGH RATE
                                      BEFORE                     AFTER
                   RELATED           OPTIONAL                  OPTIONAL                                           INTEREST ACCRUAL
     CLASS        LOAN GROUP   TERMINATION DATE (1)      TERMINATION DATE (1)          DELAY/ACCRUAL PERIOD          CONVENTION
---------------   ----------   --------------------      --------------------          --------------------       -----------------

OFFERED
CERTIFICATES
1-A-1...........      1         LIBOR + 0.190% (2)         LIBOR + 0.380% (2)                  (3)                  Actual/360 (4)
1-A-1M..........      1         LIBOR + 0.260% (2)         LIBOR + 0.520% (2)                  (3)                  Actual/360 (4)
2-A-1...........      2         LIBOR + 0.070% (2)         LIBOR + 0.140% (2)                  (3)                  Actual/360 (4)
2-A-2...........      2         LIBOR + 0.180% (2)         LIBOR + 0.360% (2)                  (3)                  Actual/360 (4)
2-A-3...........      2         LIBOR + 0.290% (2)         LIBOR + 0.580% (2)                  (3)                  Actual/360 (4)
M-1.............   1 and 2      LIBOR + 0.350% (2)         LIBOR + 0.525% (2)                  (3)                  Actual/360 (4)
M-2.............   1 and 2      LIBOR + 0.370% (2)         LIBOR + 0.555% (2)                  (3)                  Actual/360 (4)
M-3.............   1 and 2      LIBOR + 0.390% (2)         LIBOR + 0.585% (2)                  (3)                  Actual/360 (4)
M-4.............   1 and 2      LIBOR + 0.510% (2)         LIBOR + 0.765% (2)                  (3)                  Actual/360 (4)
M-5.............   1 and 2      LIBOR + 0.530% (2)         LIBOR + 0.795% (2)                  (3)                  Actual/360 (4)
M-6.............   1 and 2      LIBOR + 0.600% (2)         LIBOR + 0.900% (2)                  (3)                  Actual/360 (4)
A-R.............   1 and 2             (5)                        (5)                          N/A                        N/A
NON-OFFERED
CERTIFICATES
M-7.............   1 and 2      LIBOR + 1.300% (2)         LIBOR + 1.950% (2)                  (3)                  Actual/360 (4)
M-8.............   1 and 2      LIBOR + 1.500% (2)         LIBOR + 2.250% (2)                  (3)                  Actual/360 (4)
B...............   1 and 2      LIBOR + 2.250% (2)         LIBOR + 3.375% (2)                  (3)                  Actual/360 (4)
P...............   1 and 2             N/A                        N/A                          N/A                        N/A
C...............   1 and 2             N/A                        N/A                          N/A                        N/A


_________________

(1)   If on any distribution date, the pass-through rate for a class of
      interest-bearing certificates is based on the applicable interest rate
      cap, each holder of the applicable certificates will be entitled to
      receive the resulting shortfall from remaining excess cashflow (if any) to
      the extent described in this prospectus supplement under "Description of
      the Certificates -- Overcollateralization Provisions" and from payments
      allocated to the issuing entity (if any) in respect of the interest rate
      swap contract to the extent available for that purpose as described in
      this prospectus supplement under "Description of the Certificates -- The
      Swap Contract."

(2)   The pass-through rate for this class of offered certificates may adjust
      monthly, will be subject to increase after the optional termination date
      as shown in this table and will be subject to an interest rate cap, in
      each case as described in this prospectus supplement under "Description of
      the Certificates -- Distributions -- Distributions of Interest." LIBOR
      refers to One-Month LIBOR for the related accrual period calculated as
      described in this prospectus supplement under "Description of the
      Certificates -- Calculation of One-Month LIBOR."

(3)   The accrual period for any distribution date will be the period from and
      including the preceding distribution date (or from and including the
      closing date, in the case of the first distribution date) to and including
      the day prior to the current distribution date. These certificates will
      settle without accrued interest.

(4)   Interest accrues at the rate specified in this table based on a 360-day
      year and the actual number of days elapsed during the related accrual
      period.

(5)   The Class A-R Certificates will not accrue any interest.

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


                                       S-5



DESIGNATIONS

    DESIGNATION                     CLASS OF CERTIFICATES
-------------------       -------------------------------------------
Class A                   Class 1-A and Class 2-A Certificates.
  Certificates:

Class 1-A                 Class 1-A-1 and Class 1-A-1M Certificates.
  Certificates:

Class 2-A                 Class 2-A-1, Class 2-A-2 and Class 2-A-3
  Certificates:           Certificates.

Senior Certificates:      Class A and Class A-R Certificates.

Class M                   Class M-1, Class M-2, Class M-3, Class M-4,
  Certificates:           Class M-5, Class M-6, Class M-7 and
                          Class M-8 Certificates.

Subordinate               Class M and Class B Certificates.
  Certificates:

Adjustable Rate           Class A Certificates and Subordinate
  Certificates or         Certificates.
  Swap Certificates:

Offered                   Class A, Class M-1, Class M-2, Class
  Certificates:           M-3, Class M-4, Class M-5, Class M-6 and
                          Class A-R Certificates.

RECORD DATE

Adjustable Rate Certificates:

The business day immediately preceding a distribution date, or if the adjustable
rate certificates are no longer book-entry certificates, the last business day
of the month preceding the month of a distribution date.

Class A-R Certificates:

The last business day of the month preceding the month of a distribution date.

DENOMINATIONS

$20,000 and multiples of $1,000 in excess thereof, except that the Class A-R
Certificates will be issued as two certificates in the denominations specified
in the pooling and servicing agreement.

REGISTRATION OF CERTIFICATES

Adjustable Rate Certificates:

Book-entry form. Persons acquiring beneficial ownership interests in the offered
certificates (other than the Class A-R Certificates) will hold their beneficial
interests through The Depository Trust Company, in the United States, or
Clearstream, Luxembourg or the Euroclear System, in Europe.

Class A-R Certificates:

Fully registered certificated form. The Class A-R Certificates will be subject
to certain restrictions on transfer described in this prospectus supplement and
as more fully provided for in the pooling and servicing agreement.

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

DISTRIBUTION DATES

Beginning on March 27, 2006, and thereafter on the 25th day of each calendar
month, or if the 25th is not a business day, the next business day.

INTEREST PAYMENTS

On each distribution date, holders of each class of interest-bearing
certificates will be entitled to receive:

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

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

The accrual period, interest calculation convention and pass-through rate for
each class of interest-bearing certificates is shown in the table on page S-5.

For each class of subordinate certificates, any interest carry forward amount
(which is interest due on a prior distribution date that was not paid on a prior
distribution date) will be payable from excess cashflow and from amounts in the
swap trust, in each case as and to the extent described in this prospectus
supplement.

There are certain circumstances that could reduce the amount of interest paid to
you.

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

PRINCIPAL PAYMENTS

On each distribution date, certificateholders will receive a distribution of
principal on their certificates only if there is cash available on that date for
the payment of principal. The priority of payments will


                                       S-6



differ, as described in this prospectus supplement, depending upon whether a
distribution date occurs before the stepdown date, or on or after that date, and
will depend on the loss and delinquency performance of the mortgage loans.

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

AMOUNTS AVAILABLE FOR DISTRIBUTIONS ON THE CERTIFICATES

Amounts Available with respect to Interest Distributions

The amount available for interest distributions on the certificates on any
distribution date will be calculated on a loan group by loan group basis and
will generally consist of the following amounts (after the fees and expenses as
described below are subtracted) with respect to the mortgage loans in a loan
group:

o     scheduled payments of interest on the mortgage loans collected during the
      applicable period (other than any credit comeback excess amounts) less the
      related master servicing fees;

o     interest on prepayments to the extent not allocable to the master servicer
      as additional servicing compensation;

o     interest amounts advanced by the master servicer and any required
      compensating interest paid by the master servicer related to certain
      prepayments on certain mortgage loans;

o     liquidation proceeds on the mortgage loans during the applicable period
      (to the extent allocable to interest); and

o     the amount, if any, of the seller interest shortfall payment paid by
      Countrywide Home Loans, Inc. on any distribution date on or prior to the
      May 2006 distribution date.

Amounts Available with respect to Principal Distributions

The amount available for principal distributions on the certificates on any
distribution date will be calculated on a loan group by loan group basis and
will generally consist of the following amounts (after fees and expenses as
described below are subtracted) with respect to the mortgage loans in a loan
group:

o     scheduled payments of principal of the mortgage loans collected during the
      applicable period or advanced by the master servicer;

o     prepayments collected in the applicable period;

o     the stated principal balance of any mortgage loans repurchased by a seller
      or purchased by the master servicer;

o     the difference, if any, between the stated principal balance of a
      substitute mortgage loan and the related deleted mortgage loan;

o     liquidation proceeds on the mortgage loans during the applicable period
      (to the extent allocable to principal);

o     excess interest (to the extent available) to maintain the targeted
      overcollateralization level as described under "Description of the
      Certificates -- Overcollateralization Provisions" in this prospectus
      supplement; and

o     the amount (if any) allocated to that loan group and remaining on deposit
      in the pre-funding account on the distribution date following the end of
      the funding period.

Fees and Expenses

The amounts available for distributions on the certificates on any distribution
date generally will not include the following amounts calculated on a loan group
by loan group basis:

o     the master servicing fee and additional servicing compensation (as
      described in this prospectus supplement under "Description of the
      Certificates -- Withdrawals from the Collection Account" and
      "--Withdrawals from the Distribution Account") due to the master servicer;

o     the portion of the trustee fee due to the trustee;

o     amounts reimbursed to the master servicer and the trustee in respect of
      advances previously made by them and other amounts for which the master
      servicer and servicer are entitled to be reimbursed;

o     all prepayment charges (which are distributable only to the Class P
      Certificates);

o     all other amounts for which the depositor, a seller, the master servicer
      or any NIM Insurer is entitled to be reimbursed; and

o     any net swap payments or any termination payment payable to the swap
      counterparty (other


                                       S-7



      than a swap termination payment resulting from a swap counterparty trigger
      event).

Any amounts netted from the amount available for distribution to the
certificateholders will reduce the amount distributed to the certificateholders.

SERVICING COMPENSATION

Master Servicing Fee:

The master servicer will be paid a monthly fee (referred to as the master
servicing fee) with respect to each mortgage loan equal to one-twelfth of the
stated principal balance of that mortgage loan multiplied by 0.50% per annum
(referred to as the servicing fee rate).

Additional Servicing Compensation:

The master servicer is also entitled to receive additional servicing
compensation from amounts in respect of interest paid on certain principal
prepayments, late payment fees, assumption fees and other similar charges
(excluding prepayment charges) and investment income earned on amounts on
deposit in certain of the issuing entity's accounts.

Source and Priority of Payments:

These amounts will be paid to the master servicer from collections on the
mortgage loans prior to any distributions on the certificates.

See "Servicing of the Mortgage Loans -- Servicing Compensation and Payment of
Expenses," "Description of the Certificates -- Withdrawals from the Certificate
Account" and "-- Withdrawals from the Distribution Account" in this prospectus
supplement.

PRIORITY OF PAYMENTS; DISTRIBUTIONS OF INTEREST

In general, on any distribution date, the loan group 1 and loan group 2 interest
funds will be distributed in the following order:

o     from the interest funds from loan group 1 and loan group 2, pro rata based
      on the interest funds for each loan group, to the swap account, the amount
      of any net swap payment and any swap termination payment (other than a
      swap termination payment due to a swap counterparty trigger event) payable
      to the swap counterparty;

o     from loan group 1 interest funds, concurrently, to each class of Class 1-A
      Certificates, current interest and interest carry forward amount, pro rata
      based on their respective entitlements;

o     from loan group 2 interest funds, concurrently, to each class of Class 2-A
      Certificates, current interest and interest carry forward amount, pro rata
      based on their respective entitlements;

o     from remaining loan group 1 and loan group 2 interest funds, to each class
      of Class A Certificates, any remaining unpaid current interest and any
      interest carry forward amount, allocated pro rata based on the certificate
      principal balance of each class of Class A Certificates, with any
      remaining amounts allocated based on any remaining unpaid current interest
      and interest carry forward amount for each class of Class A Certificates;

o     from any remaining loan group 1 and loan group 2 interest funds,
      sequentially, in order of their distribution priorities, to each class of
      subordinate certificates, current interest for each class; and

o     from any remaining loan group 1 and loan group 2 interest funds, as part
      of the excess cashflow.

PRIORITY OF PAYMENTS; DISTRIBUTIONS OF PRINCIPAL

General

The manner of distributing principal among the classes of certificates will
differ, as described in this prospectus supplement, depending upon whether a
distribution date occurs before the stepdown date, or on or after that date, and
depending on whether a trigger event is in effect.

Effect of the Stepdown Date if a Trigger Event is not in Effect

On any distribution date on or after the stepdown date (and so long as no
trigger event is in effect), instead of allocating all amounts distributable as
principal on the certificates to the senior classes of certificates until those
senior classes are paid in full, a portion of those amounts distributable as
principal will be allocated to the subordinate certificates.

The amount allocated to each class of certificates on or after the stepdown date
and so long as no trigger event is in effect will be based on the targeted level
of overcollateralization and subordination for each class of certificates. These
amounts are described in more detail under "Description of the Certificates --
Distributions -- Distributions of Principal" in this prospectus supplement.


                                       S-8



Trigger Events:

A "trigger event" refers to certain specified levels of losses and/or
delinquencies on the mortgage loans. Prior to the stepdown date or if a trigger
event is in effect on or after the stepdown date, all amounts distributable as
principal on a distribution date will be allocated first to the senior
certificates, until the senior certificate are paid in full, before any
distributions of principal are made on the subordinate certificates.

The Stepdown Date:

The stepdown date will be the earlier of:

o     the date on which the aggregate certificate principal balance of the Class
      A Certificates is reduced to zero; and

o     the later of:

      o     the March 2009 distribution date; and

      o     the date on which the level of subordination for the Class A
            Certificates is 41.70% of the aggregate stated principal balance of
            the mortgage loans.

On any distribution date prior to the stepdown date or on which a trigger event
is in effect, the principal distribution amount for both loan groups will be
distributed in the following order:

o     concurrently,

      (1)   from the loan group 1 principal distribution amount, in the
            following order of priority:

            (i)   to the classes of Class 1-A Certificates, in the amounts and
                  order of priority described below, until the certificate
                  principal balances thereof are reduced to zero; and

            (ii)  to the classes of Class 2-A Certificates (after the
                  distribution of the principal distribution amount from loan
                  group 2 as described in clause (2)(i) below), in the amounts
                  and order of priority described below, until the certificate
                  principal balances thereof are reduced to zero; and

      (2)   from the loan group 2 principal distribution amount, in the
            following order of priority:

            (i)   to the classes of Class 2-A Certificates, in the amounts and
                  order of priority described below, until the certificate
                  principal balances thereof are reduced to zero; and

            (ii)  to the classes of Class 1-A Certificates (after the
                  distribution of the principal distribution amount from loan
                  group 1 as described in clause (1)(i) above), in the amounts
                  and order of priority described below, until the certificate
                  principal balances thereof are reduced to zero; and

o     from the remaining principal distribution amount from both loan groups,
      sequentially,

      (1)  sequentially, in the order of their distribution priorities, to each
           class of subordinate certificates, until the certificate principal
           balances thereof are reduced to zero; and

      (2)  as part of the excess cashflow.

On any distribution date on or after the stepdown date and so long as no trigger
event is in effect, the principal distribution amount for both loan groups will
be distributed in the following order:

o     concurrently,

      (1)   from the loan group 1 principal distribution amount, in an amount up
            to the Class 1-A principal distribution amount, in the following
            order of priority:

            (i)   to the classes of Class 1-A Certificates, in the amounts and
                  order of priority described below, until the certificate
                  principal balances thereof are reduced to zero; and

            (ii)  to the classes of Class 2-A Certificates (after the
                  distribution of the principal distribution amount from loan
                  group 2 as described in clause (2)(i) below), in the amounts
                  and order of priority described below, until the certificate
                  principal balances thereof are reduced to zero; and

      (2)   from the loan group 2 principal distribution amount, in an amount up
            to the Class 2-A principal distribution amount, in the following
            order of priority:


                                       S-9



            (i)   to the classes of Class 2-A Certificates, in the amounts and
                  order of priority described below, until the certificate
                  principal balances thereof are reduced to zero; and

            (ii)  to the classes of Class 1-A Certificates (after the
                  distribution of the principal distribution amount from loan
                  group 1 as described in clause (1)(i) above), in the amounts
                  and order of priority described below, until the certificate
                  principal balances thereof are reduced to zero; and

o     from the remaining principal distribution amount from both loan groups,
      sequentially,

      (1)   sequentially, in the order of their distribution priorities, to each
            class of subordinate certificates, the subordinate class principal
            distribution amount for that class, in each case until the
            certificate principal balance thereof is reduced to zero; and

      (2)   as part of the excess cashflow.

Class 1-A Certificates:

For each distribution date, amounts to be distributed to the Class 1-A
Certificates in respect of principal will be distributed concurrently to the
Class 1-A-1 and Class 1-A-1M Certificates, pro rata on the basis of their
respective certificate principal balances, until the certificate principal
balances thereof are reduced to zero.

Class 2-A Certificates:

For each distribution date, amounts to be distributed to the Class 2-A
Certificates in respect of principal will be distributed sequentially, to the
Class 2-A-1, Class 2-A-2 and Class 2-A-3 Certificates, in that order, until the
certificate principal balances thereof are reduced to zero.

EXCESS CASHFLOW

Excess cashflow generally refers to the remaining amounts (if any) available for
distribution to the certificates after interest and principal distributions have
been made.

On any distribution date, the excess cashflow (if any) and, in the case of the
first two bullet points below and in the case of the payment of unpaid realized
loss amounts pursuant to the third bullet point below, credit comeback excess
cashflow (if any), will be distributed in the following order, in each case,
first to the extent of the remaining credit comeback excess cashflow and, second
to the extent of the remaining excess cashflow:

o     to each class of Class A and subordinate certificates, in the same
      priority as described above with respect to payments of principal, the
      amounts necessary to maintain or restore overcollateralization to the
      target overcollateralization level;

o     concurrently, to each class of Class A Certificates, any unpaid realized
      loss amount for each such class, pro rata based on their respective
      entitlements, except that any amounts otherwise allocable to the Class
      1-A-1 and Class 1-A-1M Certificates will be allocated sequentially to the
      Class 1-A-1 and Class 1-A-1M Certificates, in that order, in an amount
      equal to the unpaid realized loss amount for each such class;

o     sequentially, to the classes of subordinate certificates, in order of
      their distribution priorities, and for each class, first, to pay any
      interest carry forward amount for that class and second to pay any unpaid
      realized loss amount for that class;

o     to each class of Class A and subordinate certificates, pro rata, to the
      extent needed to pay any unpaid net rate carryover for the Class A
      Certificates and subordinate certificates;

o     to the carryover reserve fund, the required carryover reserve fund
      deposit;

o     to the swap account, the amount of any swap termination payment payable to
      the swap counterparty as a result of a swap counterparty trigger event;
      and

o     to the Class C and Class A-R Certificates, as specified in the pooling and
      servicing agreement.

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

CREDIT ENHANCEMENT

Credit enhancement provides limited protection to holders of certain
certificates against shortfalls in payments received on the mortgage loans. This


                                      S-10



transaction employs the following forms of credit enhancement:

Overcollateralization

"Overcollateralization" refers to the amount by which the aggregate stated
principal balance of the mortgage loans and any remaining related pre-funded
amount, exceeds the aggregate certificate principal balance of the certificates.

On the closing date, it is expected that the sum of the aggregate stated
principal balance of the mortgage loans and any amounts on deposit in the
pre-funding account will exceed the initial aggregate certificate principal
balance of the interest-bearing certificates by approximately $18,850,000.

The amount of overcollateralization is equal to the initial level of
overcollateralization required by the pooling and servicing agreement. If the
amount of overcollateralization is reduced, excess interest on the mortgage
loans will be used to reduce the total certificate principal balance of the
certificates, until the required level of overcollateralization has been
maintained or restored.

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

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

Excess Interest

The mortgage loans are expected to generate more interest than is needed to pay
interest on the certificates because the weighted average interest rate of the
mortgage loans is expected to be higher than the weighted average pass-through
rate on the certificates, plus the weighted average expense fee rate and the
effective rate at which any net swap payments may be payable to the swap
counterparty. The "expense fee rate" is the sum of the servicing fee rate, the
trustee fee rate and, with respect to any mortgage loan covered by a lender paid
mortgage insurance policy, the related mortgage insurance premium rate. Any such
interest is referred to as "excess interest" and will be distributed as part of
the excess cashflow as described under "--Excess Cashflow" above.

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

Subordination

The issuance of senior certificates and subordinate certificates by the issuing
entity is designed to increase the likelihood that senior certificateholders
will receive regular payments of interest and principal.

The senior certificates will have a distribution priority over the subordinate
certificates. With respect to the subordinate certificates, the Class M
Certificates with a lower numerical designation will have a distribution
priority over the Class M Certificates with a higher numerical designation, and
all the Class M Certificates will have a distribution priority over the Class B
Certificates.

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

ALLOCATION OF LOSSES

After the credit enhancement provided by excess cashflow and
overcollateralization (if any) have been exhausted, collections otherwise
payable to the subordinate classes will comprise the sole source of funds from
which credit enhancement is provided to the senior certificates. Realized losses
are allocated to the subordinate certificates, beginning with the class of
subordinate certificates with the lowest distribution priority, until the
certificate principal balance of that subordinate class has been reduced to
zero. If the aggregate certificate principal balance of the subordinate
certificates were to be reduced to zero, additional realized losses of a
particular loan group will be allocated to the related senior certificates as
described in this prospectus supplement under "Description of the
Certificates--Applied Realized Loss Amounts."


                                      S-11



THE SWAP CONTRACT

Countrywide Home Loans, Inc. has entered into an interest rate swap contract,
which will be assigned to The Bank of New York, in its capacity as swap contract
administrator, on the closing date. On each distribution date prior to the swap
contract termination date, the swap contract administrator will be obligated to
pay to the swap counterparty an amount equal to the product of (i) 5.070% per
annum, (ii) the lesser of (a) the swap contract notional balance for that
distribution date and (b) the aggregate certificate principal balance of the
swap certificates immediately prior to that distribution date, and (iii) the
number of days in the related calculation period (calculated on the basis of a
360-day year of twelve 30-day months), divided by 360. In addition, on the
business day preceding each distribution date prior to the swap contract
termination date, the swap counterparty will be obligated to pay to the swap
contract administrator an amount equal to the product of (i) one-month LIBOR (as
determined by the swap counterparty), (ii) the lesser of (a) the swap contract
notional balance for that distribution date and (b) the aggregate certificate
principal balance of the swap certificates immediately prior to that
distribution date, and (iii) the actual number of days in the related
calculation period, divided by 360.

To the extent that the payment payable by the swap contract administrator
exceeds the payment payable by the swap counterparty, the trustee will be
required to deduct from the available funds for loan group 1 and loan group 2
the amount of that excess and, in its capacity as trustee of the swap trust, to
remit the amount of that excess to the swap contract administrator for payment
to the swap counterparty. To the extent that the payment payable by the swap
counterparty exceeds the payment payable by the swap contract administrator, the
swap counterparty will be required to pay to the swap contract administrator the
amount of that excess. Any net payment received by the swap contract
administrator from the swap counterparty will be remitted to the swap trust only
to the extent necessary to cover unpaid current interest, net rate carryover and
unpaid realized loss amounts on the swap certificates and to maintain or restore
overcollateralization for those certificates. The remaining portion of any net
payment received by the swap contract administrator from the swap counterparty
will be paid to Countrywide Home Loans, Inc. and will not be available to cover
any amounts on any class of certificates.

See "Description of the Certificates -- The Swap Contract" in this prospectus
supplement.

ADVANCES

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

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

REPURCHASE, SUBSTITUTION AND PURCHASE OF MORTGAGE LOANS

The sellers may be required to repurchase, or substitute a replacement mortgage
loan for, any mortgage loan as to which there exists deficient documentation or
as to which there has been an uncured breach of any representation or warranty
relating to the characteristics of the mortgage loans that materially and
adversely affects the interests of the certificateholders in that mortgage loan.

Additionally, the master servicer may purchase from the issuing entity any
mortgage loan that is delinquent in payment by 150 days or more.

Countrywide Home Loans, Inc. also will be obligated to purchase any mortgage
loan with respect to which it has modified the mortgage rate at the request of
the borrower. See "Servicing of Mortgage Loans - Certain Modifications and
Refinancings" in this prospectus supplement.

The purchase price for any mortgage loans repurchased or purchased by a seller
or the master servicer will be generally equal to the stated principal balance
of the mortgage loan plus interest accrued at the applicable mortgage rate (and
in the case of purchases by the master servicer, less the servicing fee rate).

See "The Mortgage Pool -- Assignment of the Mortgage Loans" and "Description of
the Certificates -- Optional Purchase of Defaulted Loans" in this prospectus
supplement and "Loan Program -- Representations by Sellers; Repurchases" in the
prospectus.


                                      S-12



OPTIONAL TERMINATION

The master servicer may purchase all of the remaining assets of the issuing
entity on any distribution date on or after the first distribution date on which
the aggregate stated principal balance of the mortgage loans and any foreclosed
real estate owned by the issuing entity declines to or below 10% of the sum of
the aggregate stated principal balance of the initial mortgage loans as of the
initial cut-off date and the amount, if any, deposited into the pre-funding
account on the closing date. If the master servicer exercises the optional
termination right it will result in the early retirement of the certificates.
The NIM Insurer may also have the right to purchase all of the remaining assets
in the issuing entity.

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

MATERIAL FEDERAL INCOME TAX CONSEQUENCES

For federal income tax purposes, the issuing entity (exclusive of the credit
comeback excess account, the assets held in the carryover reserve fund and the
pre-funding account) will consist of two or more REMICs: one or more underlying
REMICs and the master REMIC. The assets of the lowest underlying REMIC in this
tiered structure will consist of the mortgage loans and any other assets
designated in the pooling and servicing agreement. The offered certificates
(other than the Class A-R Certificates) will represent beneficial ownership of
"regular interests" in the master REMIC identified in the pooling and servicing
agreement and a beneficial interest in the right to receive payments of net rate
carryover pursuant to the pooling and servicing agreement.

The Class A-R Certificates will represent ownership of both the residual
interest in the master REMIC and the residual interests in any underlying
REMICs.

The swap trust, the swap contract and the swap account will not constitute any
part of any REMIC created under the pooling and servicing agreement.

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

LEGAL INVESTMENT CONSIDERATIONS

The Class A Certificates and the Class M-1, Class M-2, Class M-3 and M-4
Certificates will be "mortgage related securities" for purposes of the Secondary
Mortgage Market Enhancement Act of 1984. None of the other classes of offered
certificates will be "mortgage related securities" for purposes of the Secondary
Mortgage Market Enhancement Act of 1984.

See "Legal Investment" in the prospectus.

ERISA CONSIDERATIONS

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

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


                                      S-13



                         SUMMARY OF TRANSACTION PARTIES


                               [GRAPHIC OMITTED]


                                      S-14



                                  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 CERTIFICATES ARE BACKED BY MORTGAGE LOANS
THAT WILL EXPERIENCE HIGHER RATES OF
DELINQUENCY AND LOSS THAN MORTGAGE LOANS
UNDERWRITTEN TO MORE TRADITIONAL STANDARDS ...   Countrywide Home Loans, Inc.'s credit-blemished mortgage loan
                                                 underwriting standards are more flexible than the standards
                                                 generally used by banks for borrowers with non-blemished
                                                 credit histories with regard to the borrower's credit
                                                 standing and repayment ability. Borrowers who qualify
                                                 generally have impaired credit histories, which may include a
                                                 record of major derogatory credit items such as outstanding
                                                 judgments or prior bankruptcies. On a case by case basis,
                                                 Countrywide Home Loans, Inc. may determine that, based upon
                                                 compensating factors, a prospective borrower not strictly
                                                 qualifying under its applicable underwriting risk category
                                                 guidelines warrants an underwriting exception. It is expected
                                                 that a significant number of the mortgage loans will have
                                                 been originated based on underwriting exceptions of these
                                                 types. As a result of Countrywide Home Loans, Inc.'s
                                                 underwriting standards, including the origination of mortgage
                                                 loans based on underwriting exceptions, the mortgage loans in
                                                 the mortgage pool are likely to experience rates of
                                                 delinquency, foreclosure and bankruptcy that are higher, and
                                                 that may be substantially higher, than those experienced by
                                                 mortgage loans underwritten in a more traditional manner.

HIGH OR INCREASING LOAN-TO-VALUE RATIO MAY
IMPACT MORTGAGE LOAN LOSS AND DELINQUENCY
RATES MORE THAN LOANS ORIGINATED UNDER MORE
TRADITIONAL STANDARDS ........................   Countrywide Home Loans, Inc.'s underwriting standards do not
                                                 prohibit a borrower from obtaining, at the time of
                                                 origination of the originator's first lien mortgage loan,
                                                 additional financing which is subordinate to that first lien
                                                 mortgage loan. This subordinate financing is not reflected in
                                                 the loan-to-value ratio set forth in this prospectus
                                                 supplement. High-loan-to-value ratios may make it more
                                                 difficult for a borrower to make payments under the related
                                                 mortgage loans. Additionally, values of mortgaged properties
                                                 may decrease from the time that the mortgage loan is
                                                 originated, resulting in a higher loan to value ratio. A
                                                 decrease in value of the mortgaged property may limit the
                                                 borrower's ability to refinance the mortgage loan which in
                                                 turn, may lead to a default on the mortgage loan.
                                                 Additionally, in either case, the high loan-to-value ratio
                                                 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. We cannot assure you 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.



                                      S-15





SUBORDINATE CERTIFICATES HAVE A GREATER RISK
OF LOSS BECAUSE OF THE  SUBORDINATION
FEATURES; CREDIT ENHANCEMENT MAY NOT BE
SUFFICIENT TO PROTECT SENIOR CERTIFICATES FROM
LOSSES .......................................   When certain classes of certificates provide credit
                                                 enhancement for other classes of certificates this is
                                                 sometimes referred to as "subordination." The subordination
                                                 feature is intended to enhance the likelihood that senior
                                                 certificateholders will receive regular payments of interest
                                                 and principal. For purposes of this prospectus supplement,
                                                 "related subordinate classes" means:

                                                 o     with respect to the Class A Certificates, the
                                                       subordinate certificates, and

                                                 o     with respect to each class of certificates having an
                                                       "M" designation, (i) each other class of certificates
                                                       having an "M" designation and a higher numerical
                                                       designation than the class, if any, and (ii) the Class
                                                       B Certificates.

                                                 Credit enhancement in the form of subordination will be
                                                 provided for the certificates, by:

                                                 o     the right of the holders of the senior certificates to
                                                       receive certain distributions prior to the subordinate
                                                       classes; and

                                                 o     the allocation of realized losses on the mortgage loans
                                                       to the subordinate classes, beginning with the Class B
                                                       Certificates.

                                                 This type of credit enhancement is provided by:

                                                 o     using collections on the mortgage loans otherwise
                                                       payable to the holders of the subordinate classes to
                                                       pay amounts due on the more senior classes; and

                                                 o     allocating realized losses to the subordinate
                                                       certificates, beginning with the subordinate
                                                       certificates with the lowest distribution priority,
                                                       until the certificate principal balance of that
                                                       subordinate class has been reduced to zero.

                                                 This means that after the credit enhancement provided by
                                                 excess cashflow and overcollateralization (if any) have been
                                                 exhausted,

                                                 o     collections on the mortgage loans in a loan group
                                                       otherwise payable to the subordinate classes will
                                                       comprise the sole source of funds from which credit
                                                       enhancement is provided to the senior certificates
                                                       related to that loan group; and

                                                 o     realized losses on the mortgage loans of a particular
                                                       loan group will be allocated to the most junior class
                                                       of subordinate certificates outstanding, until the
                                                       respective certificate principal balance of that class
                                                       of subordinate certificates has been reduced to zero.



                                      S-16





                                                 If the aggregate certificate principal balance of the
                                                 subordinate certificates were to be reduced to zero,
                                                 additional realized losses of a particular loan group will be
                                                 allocated to the related senior certificates as described in
                                                 this prospectus supplement under "Description of the
                                                 Certificates--Applied Realized Loss Amounts."

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

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

OVERCOLLATERALIZATION AND EXCESS
INTEREST MAY NOT BE SUFFICIENT TO
PROTECT CERTIFICATES FROM LOSSES ON THE
MORTGAGE LOANS................................   The amount by which the sum of the aggregate stated principal
                                                 balance of the mortgage loans and the amount on deposit in
                                                 the pre-funding account exceeds the aggregate certificate
                                                 principal balance of the certificates is called
                                                 "overcollateralization." The mortgage loans are expected to
                                                 generate more interest than is needed to pay interest on the
                                                 certificates and to make any net swap payment payable to the
                                                 swap counterparty because the weighted average interest rate
                                                 on those mortgage loans is expected to be higher than the
                                                 weighted average pass-through rate on these certificates plus
                                                 the expense fee rate and the effective rate at which any net
                                                 swap payments may be payable to the swap counterparty. This
                                                 "excess interest" will be used to make additional principal
                                                 payments on the certificates to the extent described in this
                                                 prospectus supplement. Overcollateralization is intended to
                                                 provide limited protection to certificateholders by absorbing
                                                 losses from liquidated mortgage loans. However, we cannot
                                                 assure you that enough excess interest will be generated on
                                                 the mortgage loans to maintain or restore the required level
                                                 of overcollateralization.

                                                 The excess interest available on any distribution date will
                                                 be affected by the actual amount of interest received,
                                                 collected or advanced in respect of the mortgage loans during
                                                 the preceding month. The amount of interest received,
                                                 collected or advanced will be influenced by changes in the
                                                 weighted average of the mortgage rates resulting from
                                                 prepayments and liquidations of the mortgage loans as well as
                                                 from adjustments of the mortgage rates on adjustable rate
                                                 mortgage loans. Because the amount of excess interest
                                                 available may vary and because the pass-through rates on the
                                                 adjustable rate certificates may increase, it may be
                                                 necessary to apply all or a portion of the available interest
                                                 to cover the interest requirements. As a result, available
                                                 excess interest may be reduced. Furthermore, a
                                                 disproportionately high rate of prepayments of high interest
                                                 rate mortgage loans would have a negative effect on future
                                                 excess interest.



                                      S-17





DIFFERENCE BETWEEN MORTGAGE RATES AND
ADJUSTABLE CERTIFICATE PASS-THROUGH
RATES MAY REDUCE EXCESS INTEREST..............   The pass-through rates on the adjustable rate certificates
                                                 may adjust monthly and are generally based on one-month
                                                 LIBOR. The mortgage rates on the mortgage loans either are
                                                 fixed or adjust either semi-annually based on six-month LIBOR
                                                 or annually based on one-year CMT, each of which is referred
                                                 to as a mortgage index, but in most cases only after a period
                                                 of two, three or five years after origination. Because the
                                                 mortgage indices may respond to various economic and market
                                                 factors different than those affecting one-month LIBOR, there
                                                 is not necessarily a correlation in movement between the
                                                 interest rates on those mortgage loans and the pass-through
                                                 rates of the adjustable rate certificates. For example, it is
                                                 possible that the interest rates on certain of the adjustable
                                                 rate mortgage loans may decline while the pass-through rates
                                                 on the adjustable rate certificates are stable or rising. In
                                                 addition, although it is possible that both the mortgage
                                                 rates and certificate pass-through rates may decline or
                                                 increase during the same period, mortgage rates may decline
                                                 or increase more slowly than the certificate pass-through
                                                 rates because of the difference between interest rate
                                                 adjustment periods and pass-through rate adjustment periods.
                                                 An increase in the interest rates on certain of the
                                                 adjustable rate mortgage loans while the pass-through rates
                                                 on the adjustable rate certificates are stable or rising,
                                                 could result in less amounts being available as excess
                                                 interest.

NET RATE CAP PUTS A LIMIT ON THE PASS-THROUGH
RATES OF THE CERTIFICATES ....................   The absence of a correlation between movement in the mortgage
                                                 rates and the certificate pass-through rates may reduce the
                                                 interest payable on the related interest-bearing certificates
                                                 because of the imposition of a pass-through rate cap called
                                                 the "net rate cap." In addition, prepayments of mortgage
                                                 loans in a loan group or loan groups with relatively higher
                                                 mortgage rates may reduce the applicable net rate cap and
                                                 consequently reduce the pass-through rate for one or more
                                                 related classes of interest-bearing certificates. We intend
                                                 that the amount by which a certificateholder's interest
                                                 payment has been reduced by operation of the applicable net
                                                 rate cap be paid from remaining excess cashflow (if any) as
                                                 described in this prospectus supplement. In addition, prior
                                                 to the swap contract termination date, the swap certificates
                                                 will also be entitled to receive the amount of the reduction
                                                 in interest resulting from the operation of the applicable
                                                 net rate cap from any net swap payment allocated to the swap
                                                 trust to the extent that net payment is available for this
                                                 purpose in the order described in this prospectus supplement.
                                                 However, we cannot assure you that these funds will be
                                                 available, or sufficient, to make any payments with respect
                                                 to these reductions.

                                                 Payments from the swap contract are dependent solely upon the
                                                 performance of the swap counterparty and the swap guarantor.
                                                 Thus, payments of these amounts involve counterparty risk.
                                                 The ratings assigned to the swap certificates do not cover
                                                 the likelihood of the payment of net rate carryover.
                                                 Investors in these certificates should note that the
                                                 long-term ratings of the swap counterparty are lower than
                                                 "AAA."



                                      S-18





CONSIDERATIONS REGARDING THE SWAP CONTRACT....   Any amounts received by the swap contract administrator from
                                                 the swap counterparty under the swap contract and allocated
                                                 to the swap trust will be applied as described in this
                                                 prospectus supplement to pay unpaid interest and net rate
                                                 carryover, maintain or restore overcollateralization and pay
                                                 unpaid realized loss amounts, in each case with respect to
                                                 the swap certificates. However, no amounts will be payable by
                                                 the swap counterparty unless the floating payment owed by the
                                                 swap counterparty on a distribution date exceeds the fixed
                                                 payment owed to the swap counterparty with respect to that
                                                 distribution date. This will not occur except in periods when
                                                 one-month LIBOR (as determined pursuant to the swap contract)
                                                 exceeds 5.070%. We cannot assure you that any amounts will be
                                                 received under the swap contract, or that any amounts that
                                                 are received will be sufficient to maintain or restore
                                                 required overcollateralization or to cover unpaid interest,
                                                 net rate carryover and losses on the mortgage loans. Any net
                                                 payment payable to the swap counterparty under the terms of
                                                 the swap contract will reduce amounts available for
                                                 distribution to certificateholders, and may reduce the
                                                 pass-through rates of the swap certificates. In addition,
                                                 payments due under the swap contract will be based on the
                                                 lesser of a scheduled notional amount that will decline over
                                                 time and the aggregate certificate principal balance of the
                                                 swap certificates. If the rate of prepayments on the mortgage
                                                 loans is slower than anticipated, the schedule on which
                                                 payments due under the swap contract are calculated may be
                                                 less than the aggregate certificate principal balance of the
                                                 swap certificates, thereby decreasing the relative amount of
                                                 any net swap payment payable by the swap counterparty and
                                                 allocated to the swap trust to cover the amounts described
                                                 above. Furthermore, for so long as one-month LIBOR is less
                                                 than 5.070% (which will be adjusted in cases where the
                                                 accrual period for the floating rate payment payable by the
                                                 swap counterparty is not 30 days), available funds that would
                                                 otherwise be available to make distributions on the swap
                                                 certificates will be used to cover the net swap payments due
                                                 to the swap counterparty. In addition, any termination
                                                 payment payable to the swap counterparty (other than a swap
                                                 termination payment resulting from a swap counterparty
                                                 trigger event) in the event of early termination of the swap
                                                 contract will reduce amounts available for distribution to
                                                 holders of the swap certificates.

                                                 Upon early termination of the swap contract, the swap
                                                 counterparty or the swap contract administrator may be liable
                                                 to make a swap termination payment to the other party
                                                 (regardless of which party caused the termination). The swap
                                                 termination payment will be computed in accordance with the
                                                 procedures set forth in the swap contract. In the event that
                                                 a swap termination payment is payable to the swap
                                                 counterparty, other than a swap termination payment resulting
                                                 from a swap counterparty trigger event, that payment will be
                                                 paid with respect to the related distribution date, and on
                                                 any subsequent distribution dates until paid in full, solely
                                                 from collections on the mortgage loans and prior to
                                                 distributions to holders of the swap certificates. This
                                                 feature may result in losses on the swap certificates. Due to
                                                 the priority of the applications of the available funds, the
                                                 subordinate certificates will bear the effects of any
                                                 shortfalls resulting from a net swap payment or swap
                                                 termination payment to the swap counterparty before those
                                                 effects are borne by the senior certificates and one or more
                                                 classes of subordinate certificates may suffer a loss as a
                                                 result of that



                                      S-19





                                                 payment.

                                                 To the extent that distributions on the swap certificates
                                                 depend in part on payments to be received from the swap
                                                 counterparty, the ability of the trustee to make
                                                 distributions on those certificates will be subject to the
                                                 credit risk of the swap counterparty. The credit ratings of
                                                 the swap guarantor as of the date of this prospectus
                                                 supplement are lower than the ratings assigned to the Class A
                                                 Certificates and some of the classes of the subordinate
                                                 certificates. If a credit rating of the swap counterparty is
                                                 qualified, reduced or withdrawn and a substitute counterparty
                                                 is not obtained in accordance with the terms of the swap
                                                 contract, the ratings of the swap certificates may be
                                                 qualified, reduced or withdrawn. As a result, the value and
                                                 marketability of those certificates may be adversely
                                                 affected. See "Description of the Certificates--The Swap
                                                 Contract" in this prospectus supplement.

PREPAYMENTS ON THE MORTGAGE LOANS ARE
UNPREDICTABLE AND COULD ADVERSELY AFFECT YOUR
YIELD AND REINVESTMENT .......................   No one can accurately predict the level of prepayments that
                                                 the mortgage loans will experience. The prepayment experience
                                                 of the mortgage loans may be affected by many factors,
                                                 including:

                                                 o     general economic conditions,

                                                 o     the level of prevailing interest rates,

                                                 o     the availability of alternative financing,

                                                 o     the applicability of prepayment charges, and

                                                 o     homeowner mobility.

                                                 Any mortgage loan may be prepaid in full or in part at any
                                                 time. However, approximately 83.38% and 85.85% of the
                                                 mortgage loans in the statistical calculation pool in respect
                                                 of loan group 1 and loan group 2, respectively, in each case
                                                 by stated principal balance of the mortgage loans in the
                                                 statistical calculation pool in respect of the related loan
                                                 group provide, and any subsequent mortgage loans may provide,
                                                 for the payment by the borrower of a prepayment charge on
                                                 certain prepayments during the period of time specified in
                                                 the related mortgage note. In addition, substantially all of
                                                 the mortgage loans contain due-on-sale provisions, and the
                                                 master servicer intends to enforce those provisions unless
                                                 doing so is not permitted by applicable law or the master
                                                 servicer, in a manner consistent with reasonable commercial
                                                 practice, permits the purchaser of the mortgaged property in
                                                 question to assume the related mortgage loan.

                                                 See "The Mortgage Pool" and "Yield, Prepayment and Maturity
                                                 Considerations" in this prospectus supplement and "Certain
                                                 Legal Aspects of the Loans -- Due-on-Sale Clauses" in the
                                                 prospectus for a description of certain provisions of the
                                                 mortgage loans that may affect their prepayment experience.

                                                 The weighted average lives of the offered certificates will
                                                 be sensitive to the rate and timing of principal payments
                                                 (including prepayments) on the mortgage loans in the related
                                                 loan group or loan groups, which may fluctuate significantly
                                                 from time to time, and will be affected by any



                                      S-20





                                                 prepayment resulting from the distribution of amounts (if
                                                 any) on deposit in the pre-funding account after the end of
                                                 the funding period.

                                                 You should note that:

                                                 o     generally, if you purchase your certificates at a
                                                       discount and principal is repaid on the mortgage loans
                                                       in the related loan group or loan groups slower than
                                                       you anticipate, then your yield may be lower than you
                                                       anticipate,

                                                 o     your yield will also be sensitive to:

                                                       (1)   the level of one-month LIBOR,

                                                       (2)   the timing of adjustment of the pass-through rate
                                                             on your certificate as it relates to the interest
                                                             rates on the applicable mortgage loans and, in
                                                             the case of the adjustable rate mortgage loans,
                                                             the level of the mortgage indices, the timing of
                                                             adjustment of the interest rates on those
                                                             mortgage loans, and periodic and lifetime limits
                                                             on those adjustments,

                                                       (3)   other limitations on the pass-through rates of
                                                             the adjustable rate certificates as described
                                                             further in this prospectus supplement, and

                                                       (4)   the level of one-month LIBOR relative to the
                                                             fixed rate at which the payment made to the swap
                                                             counterparty is calculated, and

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

                                                 See "Yield, Prepayment and Maturity Considerations" in this
                                                 prospectus supplement.

YOUR YIELD WILL BE AFFECTED BY THE
INTEREST-ONLY FEATURE OF SOME OF THE MORTGAGE
LOANS ........................................   Approximately 12.93% and 36.99% of the mortgage loans in the
                                                 statistical calculation pool in respect of loan group 1 and
                                                 loan group 2, respectively, in each case by stated principal
                                                 balance of the mortgage loans in the statistical calculation
                                                 pool in respect of the related loan group require, and any
                                                 subsequent mortgage loans may require, monthly payments of
                                                 only accrued interest for the first two, three or five years
                                                 after origination. The borrower is not required to pay any
                                                 principal on the borrower's loan during this interest-only
                                                 period but thereafter is required to make monthly payments
                                                 sufficient to amortize the loan over its remaining term.
                                                 These loans are sometimes referred to as interest-only loans.
                                                 Interest-only loans have only recently been originated in
                                                 significant volumes. As a result, the long-term performance
                                                 characteristics of interest-only loans are largely unknown.

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

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



                                      S-21





                                                 o     no principal distributions will be made to
                                                       certificateholders from interest-only loans during
                                                       their interest-only period except in the case of a
                                                       prepayment, which may extend the weighted average lives
                                                       of the certificates,

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

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

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

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

YOUR YIELD WILL BE AFFECTED BY THE INCLUSION
OF 40-YEAR MORTGAGE LOANS.....................   The mortgage loans whose mortgage loan program designation,
                                                 as described in the "Mortgage Loan Program" tables in Annex A
                                                 to this prospectus supplement, contain the designation "40/30
                                                 Balloon", have original amortization terms of 40 years and
                                                 original terms to maturity of 30 years. Loans with those
                                                 terms have only begun to be originated recently. As a result,
                                                 there is no basis on which to predict the performance
                                                 characteristics of these mortgage loans.

                                                 Amortization terms of 40 years result in lower monthly
                                                 payments than would be required by a traditional 30-year
                                                 mortgage loan. The lower monthly payments may allow the
                                                 borrower to borrow a larger amount than would have been the
                                                 case for a mortgage loan with a 30-year amortization term. In
                                                 addition, a balloon payment is due at maturity.

                                                 Mortgage loans with 40-year amortization terms and 30-year
                                                 terms to maturity may have risks and payment characteristics
                                                 that are not present with traditional 30-year
                                                 fully-amortizing mortgage loans, including the following:

                                                 o     less principal will be distributed to
                                                       certificateholders on a monthly basis (except in the
                                                       case of a prepayment) which may extend the weighted
                                                       average lives of the certificates,

                                                 o     due to the smaller monthly payment, mortgage loans with
                                                       amortization terms of 40 years may be less likely to be
                                                       prepaid since the perceived benefits of refinancing may
                                                       be less than with a 30-year fully amortizing mortgage
                                                       loan,

                                                 o     the balloon payment due at maturity may increase the
                                                       likelihood of default if borrowers are unable to either
                                                       pay the unpaid principal balance or refinance their
                                                       mortgage loans, and



                                      S-22





                                                 o     if a mortgage loan with a 40-year amortization term
                                                       defaults, the severity of loss is likely to be greater
                                                       due to the larger unpaid principal balance.

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

                                                 Countrywide Home Loans, Inc. will represent and warrant as of
                                                 the closing date that each mortgaged property is free of
                                                 material damage and in good repair. In the event of a breach
                                                 of that representation and warranty, Countrywide Home Loans,
                                                 Inc. will be obligated to repurchase or substitute for the
                                                 related mortgage loan. Any such repurchase would have the
                                                 effect of increasing the rate of principal payment on the
                                                 certificates. Any damage to a mortgaged property that secures
                                                 a mortgage loan in the issuing entity occurring after the
                                                 closing date as a result of any other casualty event will not
                                                 cause a breach of this representation and warranty.

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

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

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

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

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

GEOGRAPHIC CONCENTRATION OF MORTGAGED
PROPERTIES IN CERTAIN STATES INCREASES THE
IMPACT THAT EVENTS IN THOSE STATES COULD HAVE
ON THE CERTIFICATES ..........................   The tables in Annex A related to the state distribution of
                                                 the mortgaged properties for the various groups of mortgage
                                                 loans in the statistical calculation pool set forth the
                                                 geographic concentration of the mortgaged properties,
                                                 including the percentage by stated principal balance of the
                                                 mortgage loans in the statistical calculation pool in each
                                                 loan group, that are secured by mortgaged properties that are
                                                 located in states with concentrations above 10%. Property in
                                                 California may be more susceptible



                                      S-23





                                                 than homes located in other parts of the country to certain
                                                 types of uninsurable hazards, such as earthquakes, floods,
                                                 mudslides and other natural disasters, and property in
                                                 Florida and the southeastern portion of the United States is
                                                 also more susceptible than homes located in other parts of
                                                 the country to certain types of uninsurable hazards, such as
                                                 hurricanes, floods and other natural disasters. In addition:

                                                 o     economic conditions in states with significant
                                                       concentrations (which may or may not affect real
                                                       property values) may affect the ability of borrowers to
                                                       repay their loans,

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

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

INABILITY TO REPLACE SERVICER COULD AFFECT
COLLECTIONS AND RECOVERIES ON THE MORTGAGE
LOANS.........................................   The structure of the master servicing fee might affect the
                                                 ability to find a replacement master servicer. Although the
                                                 trustee is required to replace the master servicer if the
                                                 master servicer is terminated or resigns, if the trustee is
                                                 unwilling (including for example because the master servicing
                                                 fee is insufficient) or unable (including for example,
                                                 because the trustee does not have the systems to service
                                                 mortgage loans), it may be necessary to appoint a replacement
                                                 master servicer. Because the master servicing fee is
                                                 structured as a percentage of the stated principal balance of
                                                 each mortgage loan, it may be difficult to replace the master
                                                 servicer at a time when the balance of the mortgage loans has
                                                 been significantly reduced because the fee may be
                                                 insufficient to cover the costs associated with servicing the
                                                 credit-blemished mortgage loans and related REO properties
                                                 remaining in the pool. The performance of the mortgage loans
                                                 may be negatively impacted, beyond the expected transition
                                                 period during a servicing transfer, if a replacement master
                                                 servicer is not retained within a reasonable amount of time.

YOU MAY RECEIVE A PREPAYMENT BECAUSE
SUBSEQUENT MORTGAGE LOANS ARE NOT ACQUIRED....   The ability of the issuing entity to acquire subsequent
                                                 mortgage loans will depend on the ability of Countrywide Home
                                                 Loans, Inc. to originate or acquire mortgage loans, if
                                                 necessary, during the funding period that meet the
                                                 eligibility criteria for subsequent mortgage loans as
                                                 described in this prospectus supplement. The ability of
                                                 Countrywide Home Loans, Inc. to originate or acquire loans
                                                 for subsequent transfer will be affected by a number of
                                                 factors including prevailing interest rates, employment
                                                 levels, the rate of inflation and economic conditions
                                                 generally.



                                      S-24





                                                 If the full amount of any deposit in the pre-funding account
                                                 cannot be used by the end of the funding period to acquire
                                                 subsequent mortgage loans, the amount remaining on deposit in
                                                 the pre-funding account will be distributed to the holders of
                                                 the related senior certificates as a prepayment of principal
                                                 on the distribution date immediately following the end of the
                                                 funding period. We cannot assure you of the magnitude of any
                                                 amount on deposit in the pre-funding account at the end of
                                                 the funding period.

RIGHTS OF THE NIM INSURER LIMIT YOUR CONTROL
AND NIM INSURER ACTIONS MAY NEGATIVELY
AFFECT YOU ...................................   If there is a NIM Insurer, pursuant to the pooling and
                                                 servicing agreement, unless the NIM Insurer fails to make a
                                                 required payment under the policy insuring the net interest
                                                 margin securities and the failure is continuing or the NIM
                                                 Insurer is the subject of a bankruptcy proceeding, referred
                                                 to as a "NIM Insurer Default", the NIM Insurer will be
                                                 entitled to exercise, among others, the following rights
                                                 without the consent of holders of the offered certificates,
                                                 and the holders of the offered certificates may exercise
                                                 these rights only with the prior written consent of the NIM
                                                 Insurer:

                                                 o     the right to provide notices of master servicer
                                                       defaults and the right to direct the trustee to
                                                       terminate the rights and obligations of the master
                                                       servicer under the pooling and servicing agreement upon
                                                       a default by the master servicer,

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

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

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

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

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

                                                 o     any amendment to the pooling and servicing agreement.

                                                 Investors in the offered certificates should note that:

                                                 o     the rights granted to the NIM Insurer are extensive,

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

                                                 o     the NIM Insurer's exercise of its rights and consents
                                                       may negatively affect the offered certificates and the
                                                       existence of the NIM Insurer's rights, whether or not
                                                       exercised, may adversely affect the liquidity of the
                                                       offered certificates, relative to other securities
                                                       backed by



                                      S-25





                                                       comparable mortgage loans and with comparable payment
                                                       priorities and ratings, and

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

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


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


                                      S-26



                                THE MORTGAGE POOL

GENERAL

      Set forth below and in Annex A to this prospectus supplement is certain
statistical information based on scheduled principal balances as of February 1,
2006, which is the "STATISTICAL CALCULATION DATE," concerning a pool of mortgage
loans that CWABS, Inc. (the "DEPOSITOR") believes is representative of the
mortgage loans to be included in the issuing entity. This pool of mortgage loans
is referred to as the "STATISTICAL CALCULATION POOL," and the mortgage loans are
referred to as the "STATISTICAL CALCULATION POOL MORTGAGE LOANS." The
Statistical Calculation Pool is larger than the pool of mortgage loans (the
"INITIAL MORTGAGE LOANS") to be included in the issuing entity on the Closing
Date (the "INITIAL MORTGAGE POOL"). Certain of the Statistical Calculation Pool
Mortgage Loans will not be included in the Initial Mortgage Pool on the Closing
Date, in some instances because they prepaid in full prior to the Closing Date
or were determined not to meet the eligibility criteria requirements for the
Initial Mortgage Pool. Additional Mortgage Loans may also be included in the
Initial Mortgage Pool on the Closing Date. As a result of the foregoing, the
statistical distribution of characteristics for the Initial Mortgage Pool will
vary from the statistical distribution of the characteristics of the Statistical
Calculation Pool as presented in this prospectus supplement, although certain
characteristics of the Initial Mortgage Loans in each Loan Group will not vary
by more than the permitted variance specified in the tables below.



      LOAN GROUP 1
      CHARACTERISTIC                                                                                 PERMITTED VARIANCE
      ---------------------------                                                                  ----------------------

      Weighted Average Mortgage Rate..................................         7.800%                      +/-0.10%
      Weighted Average Original Loan-to-Value Ratio...................         75.75%                      +/-3.00%
      Weighted Average Credit Bureau Risk Score.......................       600 points                   +/-5 pointS
      Percentage Originated under Full Doc Program....................         65.20%                      +/-3.00%
      Weighted Average Gross Margin...................................         6.293%                      +/-0.10%
      Maximum Concentration of Mortgage Loans with Mortgaged
      Properties in the State of California...........................         50.00%                        N/A




      LOAN GROUP 2
      CHARACTERISTIC                                                                                 PERMITTED VARIANCE
      ---------------------------                                                                  ----------------------

      Weighted Average Mortgage Rate..................................         7.604%                      +/-0.10%
      Weighted Average Original Loan-to-Value Ratio...................         77.14%                      +/-3.00%
      Weighted Average Credit Bureau Risk Score.......................       609 points                   +/-5 pointS
      Percentage Originated under Full Doc Program....................         63.08%                      +/-3.00%
      Weighted Average Gross Margin...................................         6.734%                      +/-0.10%
      Maximum Concentration of Mortgage Loans with Mortgaged
      Properties in the State of California...........................         50.00%                        N/A


      Further statistical information regarding the Statistical Calculation Pool
Mortgage Loans is set forth in Annex A hereto.

      A detailed description (the "DETAILED DESCRIPTION") of the Initial
Mortgage Pool will be filed on Form 8-K with the Securities and Exchange
Commission (the "SEC") after the Closing Date. Additionally, in accordance with
applicable securities laws, if there are material changes in characteristics of
the Initial Mortgage Pool, the Depositor will file on Form 8-K with the SEC
additional information related to those material changes. The Detailed
Description will specify the aggregate of the Stated Principal Balances of the
Initial Mortgage Loans included in the Initial Mortgage Pool as of the later of
(x) February 1, 2006 and (y) the date of origination of each such Initial
Mortgage Loan (the "INITIAL CUT-OFF DATE"). The aggregate of the Stated
Principal Balances of these Initial Mortgage Loans is referred to as the
"INITIAL CUT-OFF DATE POOL PRINCIPAL BALANCE" and the Stated Principal Balance
of any Initial Mortgage Loan as of the Initial Cut-off Date is referred to as
the "INITIAL CUT-OFF DATE PRINCIPAL BALANCE." The Detailed Description will
include for the Initial Mortgage Loans, the information in the same categories
that are presented in Annex A with respect to the Statistical Calculation Pool.


                                      S-27



      The Statistical Calculation Pool consists of approximately 3,602 Mortgage
Loans and is comprised of Mortgage Loans that bear interest at fixed rates,
referred to as "FIXED RATE MORTGAGE LOANS," and adjustable rates, referred to as
"ADJUSTABLE RATE MORTGAGE LOANS." The aggregate Stated Principal Balance of the
Mortgage Loans included in the Statistical Calculation Pool as of the
Statistical Calculation Date is approximately $749,715,176 (the "STATISTICAL
CALCULATION DATE POOL PRINCIPAL BALANCE"), of which approximately $215,120,086
constitute Loan Group 1 Mortgage Loans and approximately $534,595,090 constitute
Loan Group 2 Mortgage Loans. The Depositor believes that the information set
forth in this prospectus supplement with respect to the Statistical Calculation
Pool as presently constituted is representative of the characteristics of the
Initial Mortgage Pool as will be constituted on the Closing Date, although some
characteristics of the Initial Mortgage Loans in the Initial Mortgage Pool will
vary. See "-- The Statistical Calculation Pool" below. Unless otherwise
indicated, information presented below expressed as a percentage (other than
rates of interest) are approximate percentages based on the Statistical
Calculation Date Pool Principal Balance.

      All of the Mortgage Loans to be included in the issuing entity will be
evidenced by promissory notes (the "MORTGAGE NOTES"). The Mortgage Notes will be
secured by first lien deeds of trust, security deeds or mortgages on one- to
four-family residential properties (the "MORTGAGED PROPERTIES"). The Mortgaged
Properties in the Statistical Calculation Pool are located in 50 states and the
District of Columbia. Each Mortgage Loan in the issuing entity will be assigned
to one of two mortgage loan groups ("LOAN GROUP 1" and "LOAN GROUP 2," and each
a "LOAN GROUP"). Loan Group 1 will consist of first lien conforming balance
fixed and adjustable rate mortgage loans and Loan Group 2 will consist of first
lien fixed and adjustable rate mortgage loans.

      Except for balloon loans, the Mortgage Loans to be included in the issuing
entity will provide for the full amortization of the amount financed over a
series of monthly payments, and a substantial majority of the Mortgage Loans are
expected to provide for payments due as of the first day of each month. The
Mortgage Loans to be included in the issuing entity will have been originated or
purchased by Countrywide Home Loans, Inc. ("COUNTRYWIDE HOME LOANS" or a
"SELLER") and will have been originated substantially in accordance with
Countrywide Home Loans' underwriting criteria for credit-blemished mortgage
loans described in this prospectus supplement under "-- Underwriting Standards
-- Credit-Blemished Mortgage Loans." Credit-blemished mortgage loans are
generally mortgage loans made to borrowers with credit difficulties.

      Scheduled monthly payments made by the borrowers on the Mortgage Loans
("SCHEDULED PAYMENTS") either earlier or later than the scheduled due dates
thereof will not affect the amortization schedule or the relative application of
the payments to principal and interest. All of the Mortgage Notes will provide
for a fifteen (15) day grace period for monthly payments. A Scheduled Payment
with respect to a Mortgage Loan is generally considered "delinquent" if the
borrower fails to make the Scheduled Payment prior to the due date occurring
immediately after the due date on which the Scheduled Payment was originally
due. None of the Mortgage Loans will be one payment or more delinquent as of the
related Cut-off Date.

      Any Mortgage Loan may be prepaid in full or in part at any time; however,
approximately 83.38% and 85.85% of the Mortgage Loans in the Statistical
Calculation Pool in respect of Loan Group 1 and Loan Group 2, respectively, in
each case by Stated Principal Balance of the Mortgage Loans in the Statistical
Calculation Pool in respect of the related Loan Group, and any Subsequent
Mortgage Loans may, provide for the payment by the borrower of a prepayment
charge on certain prepayments made with respect to the Mortgage Loans.
Generally, a prepayment charge will apply, in the case of a Fixed Rate Mortgage
Loan, to prepayments made within five years from the date of execution of the
related Mortgage Note and, in the case of an Adjustable Rate Mortgage Loan, to
prepayments made prior to the first Adjustment Date for that Mortgage Loan. In
general, the related Mortgage Note will provide that a prepayment charge will
apply if, during the applicable period, the borrower prepays the Mortgage Loan
in full. The amount of the prepayment charge will generally be equal to six
months' advance interest calculated on the basis of the Mortgage Rate in effect
at the time of the prepayment on the amount prepaid in excess of 20% of the
original balance of the Mortgage Loan. The "MORTGAGE RATE" with respect to a
Mortgage Loan is the annual rate of interest borne by the Mortgage Loan pursuant
to the terms of the related Mortgage Note, except as provided below with respect
to Fixed Rate Credit Comeback Loans.

      The Mortgage Loans will be selected from among the outstanding one- to
four-family mortgage loans in the applicable Seller's portfolio which meet the
criteria described in this prospectus supplement. No selection will be made in a
manner that would adversely affect the interests of certificateholders.


                                      S-28



      Countrywide Home Loans will make all of the representations specified in
the prospectus under "Loan Program -- Representations by Sellers; Repurchases"
with respect to all of the Mortgage Loans. Each other Seller will be a special
purpose entity established by Countywide Financial Corporation or one of its
subsidiaries and will sell mortgage loans that were previously acquired from
Countrywide Home Loans. Consequently, each Seller other than Countrywide Home
Loans will only represent that immediately prior to the assignment of the
Mortgage Loans to be sold by it to the Depositor, the Seller had good title to,
and was the sole owner of, those Mortgage Loans free and clear of any pledge,
lien, encumbrance or security interest and had full right and authority, subject
to no interest or participation of, or agreement with, any other party, to sell
and assign the Mortgage Loans pursuant to the Pooling and Servicing Agreement.
In addition, the Depositor will represent that following the transfer of the
Mortgage Loans to it by the Sellers, the Depositor had good title to the
Mortgage Loans and that each of the Mortgage Notes was subject to no offsets,
claims, defenses or counterclaims.

      Additional Information Regarding the Adjustable Rate Mortgage Loans. Each
of the Adjustable Rate Mortgage Loans will have a Mortgage Rate which is subject
to adjustment on the first day of the months specified in the related Mortgage
Note, referred to as an "ADJUSTMENT DATE"), to equal the sum, rounded to the
nearest 0.125%, of:

            (1)   either (a) the average of the interbank offered rates for
      six-month U.S. dollar-denominated deposits in the London market, as set
      forth in The Wall Street Journal (the "SIX-MONTH LIBOR INDEX", and any
      Adjustable Rate Mortgage Loan bearing interest at a Mortgage Rate based on
      the Six-Month LIBOR Index, a "SIX-MONTH LIBOR ADJUSTABLE RATE MORTGAGE
      LOAN") or (b) the weekly average yield on United States Treasury
      securities adjusted to a constant maturity of one year as published by the
      Federal Reserve Board in Statistical Release H.15(591) (the "ONE-YEAR CMT
      INDEX", and any Adjustable Rate Mortgage Loan bearing interest at a
      Mortgage Rate based on the One-Year CMT Index, a "ONE-YEAR CMT ADJUSTABLE
      RATE MORTGAGE LOAN"), in each case as most recently announced as of a date
      generally 45 days prior to the Adjustment Date (each, a "MORTGAGE INDEX"),
      or, if the applicable Mortgage Index is no longer available, then based
      upon a new index selected by the Master Servicer based on comparable
      information, and

            (2)   a fixed percentage amount specified in the related Mortgage
      Note (the "GROSS MARGIN");

provided, however, that the Mortgage Rate for any Adjustable Rate Mortgage Loan
will not increase or decrease on its initial Adjustment Date by more than a
certain specified percentage (the "INITIAL PERIODIC RATE CAP"), or on any
subsequent Adjustment Date by more than a certain specified percentage (the
"SUBSEQUENT PERIODIC RATE CAP"). The Initial Periodic Rate Cap and Subsequent
Periodic Rate Cap for any Adjustable Rate Mortgage Loan will be specified in the
related Mortgage Note. Substantially all of the Adjustable Rate Mortgage Loans
will have been originated with Mortgage Rates less than the sum of the
then-current applicable Mortgage Index and the related Gross Margin.

      "TWO-YEAR HYBRID MORTGAGE LOANS", "THREE-YEAR HYBRID MORTGAGE LOANS" and
"FIVE-YEAR HYBRID MORTGAGE LOANS" (collectively, "HYBRID MORTGAGE LOANS") have
fixed Mortgage Rates for approximately 24, 36 and 60 months, respectively, after
their origination before the fixed Mortgage Rates become subject to adjustment
based on the applicable Mortgage Index described in the immediately preceding
paragraph. Substantially all of the Adjustable Rate Mortgage Loans in the
Statistical Calculation Pool are Hybrid Mortgage Loans.

      It is expected that substantially all of the Adjustable Rate Mortgage
Loans will provide that, over the life of each Adjustable Rate Mortgage Loan,
the Mortgage Rate will in no event be more than the initial Mortgage Rate plus a
maximum added margin, generally between 4.000% and 10.000%, as provided in the
Mortgage Note. The initial Mortgage Rate plus the maximum added margin is
referred to as the "MAXIMUM MORTGAGE RATE." The weighted average of these
margins (weighted on the basis of the Stated Principal Balances thereof as of
the Initial Cut-off Date) with respect to the Adjustable Rate Mortgage Loans in
the Statistical Calculation Pool is approximately 6.825%.

      In addition, certain of the Two-Year Hybrid Mortgage Loans in the
Statistical Calculation Pool only require payments of interest during the 24- or
60-month period following origination, certain of the Three-Year Hybrid Mortgage
Loans in the Statistical Calculation Pool only require payments of interest
during the 36- or 60-month


                                      S-29



period following origination, and certain of the Five-Year Hybrid Mortgage Loans
in the Statistical Calculation Pool only require payments of interest during the
60-month period following origination, in each case after which amortization of
the principal balance is required over the remaining term of the Mortgage Loan.

      Furthermore, certain of the Adjustable Rate Mortgage Loans in the
Statistical Calculation Pool are 40/30 Balloon Adjustable Rate Mortgage Loans.
"40/30 BALLOON ADJUSTABLE RATE MORTGAGE LOANS" have original amortization terms
of 40 years and original terms to maturity of 30 years.

      Additional Information Regarding the Fixed Rate Mortgage Loans. The Fixed
Rate Mortgage Loans will include "credit comeback loans" that provide borrowers
the potential of four Mortgage Rate reductions for good payment history during
any one or more of the first four consecutive twelve-month periods following the
origination date of the loan ("FIXED RATE CREDIT COMEBACK LOANS"). The Fixed
Rate Credit Comeback Loan payment history is evaluated in the twelfth month of
each such twelve-month period. If the Fixed Rate Credit Comeback Loan borrower
makes Scheduled Payments in full during such twelve-month period with a maximum
of one late payment (which, however, cannot be in the twelfth month of such
period) the Fixed Rate Credit Comeback Loan is eligible for a 0.375% per annum
reduction on the current mortgage rate.

      However, for purposes of all payments made on the Certificates, including
the calculation of each applicable Net Rate Cap as well as other Mortgage Rate
calculations, the Mortgage Rate on each Fixed Rate Credit Comeback Loan will be
deemed to be reduced by 0.375% on the Due Date following the end of each of the
first four annual periods after the origination date, irrespective of whether
the borrower qualifies for the reduction by having a good payment history. Any
interest received in excess of the interest received as a result of such deemed
reduction (such excess, the "CREDIT COMEBACK EXCESS AMOUNT") will be deposited
in the Credit Comeback Excess Account and used to pay certificateholders as
described below under "-- Credit Comeback Excess Account" below. Approximately
1.65% and 2.84% of the Mortgage Loans in the Statistical Calculation Pool in
respect of Loan Group 1 and Loan Group 2, respectively, in each case by Stated
Principal Balance of the Mortgage Loans in the Statistical Calculation Pool in
respect of the related Loan Group are, and any Subsequent Fixed Rate Mortgage
Loans may be, Fixed Rate Credit Comeback Loans.

      In addition, certain of the Fixed Rate Mortgage Loans in the Statistical
Calculation Pool are Fixed 30-Year Interest-Only Loans. A "FIXED 30-YEAR
INTEREST-ONLY LOAN" has only interest due for approximately 60 months after its
origination before amortization of the principal balance is required. Moreover,
certain of the Fixed Rate Mortgage Loans in the Statistical Calculation Pool are
30/15 Balloon Fixed Rate Mortgage Loans. A "30/15 BALLOON FIXED RATE MORTGAGE
LOAN" has an original amortization term of 30 years and an original term to
maturity of 15 years.

      Loan-to-Value Ratio. The "LOAN-TO-VALUE RATIO" of a Mortgage Loan is equal
to:

            (1)   the principal balance of the Mortgage Loan at the date of
      origination, divided by

            (2)   the Collateral Value of the related Mortgaged Property.

      The "COLLATERAL VALUE" of a Mortgaged Property is the lesser of:

            (1)   the appraised value based on an appraisal made for Countrywide
      Home Loans by an independent fee appraiser at the time of the origination
      of the related Mortgage Loan, and

            (2)   the sales price of the Mortgaged Property at the time of
      origination.

      With respect to a Mortgage Loan the proceeds of which were used to
refinance an existing mortgage loan, the Collateral Value is the appraised value
of the Mortgaged Property based upon the appraisal obtained at the time of
refinancing.

      Stated Principal Balance. "STATED PRINCIPAL BALANCE" means, for any
Mortgage Loan and (1) the Initial Cut-off Date or the Subsequent Cut-off Date,
as applicable (the "CUT-OFF DATE"), the unpaid principal balance of the


                                      S-30



Mortgage Loan as of the Cut-Off Date, as specified in its amortization schedule
at the time (before any adjustment to the amortization schedule for any
moratorium or similar waiver or grace period), after giving effect to any
partial prepayments and Liquidation Proceeds received prior to the Cut-Off Date
and to the payment of principal due on the Cut-Off Date and irrespective of any
delinquency in payment by the related borrower or (2) any Distribution Date, the
Stated Principal Balance of the Mortgage Loan as of its Cut-off Date, minus the
sum of (i) the principal portion of any Scheduled Payments due with respect to
the Mortgage Loan on or prior to the end of the most recent Due Period that were
received by the Master Servicer on or prior to the most recent Determination
Date or were advanced by the Master Servicer on or prior to the most recent
Master Servicer Advance Date, (ii) principal prepayments with respect to the
Mortgage Loan received on or prior to the end of the most recent prepayment
period (the period from the 16th day of the month prior to a Distribution Date
(or, in the case of the first Distribution Date, from the Cut-off Date) to and
including the 15th day of the month in which the Distribution Date occurs (each
a "PREPAYMENT PERIOD")) and (iii) Liquidation Proceeds received by the Master
Servicer prior to the end of the most recent Due Period to the extent applied as
recoveries of principal with respect to the Mortgage Loan. The Stated Principal
Balance of any Mortgage Loan as to which the related Mortgaged Property has been
liquidated and as to which a Final Recovery Determination has been made will be
zero on each date following the Due Period in which the Final Recovery
Determination is made. When used with respect to the Mortgage Pool, Stated
Principal Balance means the aggregate Stated Principal Balance of all Mortgage
Loans in the Mortgage Pool. When used with respect to a Loan Group, Stated
Principal Balance means the aggregate Stated Principal Balance of all Mortgage
Loans in the Loan Group. A "DETERMINATION DATE" means with respect to any
Distribution Date, the 15th day of the month of the Distribution Date or, if the
15th day is not a Business Day, the immediately preceding Business Day.

ASSIGNMENT OF THE MORTGAGE LOANS

      Pursuant to the pooling and servicing agreement dated as of February 1,
2006 (the "POOLING AND SERVICING AGREEMENT"), among the Depositor, the Master
Servicer, the Sellers, and The Bank of New York, as trustee (the "TRUSTEE"), the
Depositor on the Closing Date will sell, transfer, assign, set over and
otherwise convey without recourse to the Trustee in trust for the benefit of the
certificateholders, all right, title and interest of the Depositor in and to
each Initial Mortgage Loan and all right, title and interest in and to all other
assets included in the issuing entity, including all principal and interest
received on or with respect to the Initial Mortgage Loans after the Initial
Cut-off Date (exclusive of any scheduled principal due on or prior to the
Initial Cut-off Date and any interest accruing prior to the Initial Cut-off
Date) and the Pre-Funded Amount, if any, deposited in the Pre-Funding Account on
the Closing Date.

      In connection with the transfer and assignment of the Mortgage Loans, the
Depositor will deliver the following documents to the Trustee (collectively
constituting the "MORTGAGE FILE") with respect to each Initial Mortgage Loan and
each Subsequent Mortgage Loan, if any (collectively, the "MORTGAGE LOANS"):

            (1)   the original Mortgage Note, endorsed by manual or facsimile
      signature in blank in the following form: "Pay to the order of
      _______________ without recourse", with all intervening endorsements that
      show a complete chain of endorsement from the originator to the person
      endorsing the Mortgage Note, or, if the original Mortgage Note has been
      lost or destroyed and not replaced, an original lost note affidavit,
      stating that the original Mortgage Note was lost or destroyed, together
      with a copy of the related Mortgage Note and all such intervening
      endorsements,

            (2)   the original recorded Mortgage or a copy thereof with
      recording information,

            (3)   a duly executed assignment of the Mortgage to "Asset-Backed
      Certificates, Series 2006-4, CWABS, Inc., by The Bank of New York, a New
      York banking corporation, as trustee under the Pooling and Servicing
      Agreement dated as of February 1, 2006, without recourse," in recordable
      form, or a copy thereof with recording information as described in the
      Pooling and Servicing Agreement,

            (4)   the original recorded assignment or assignments of the
      Mortgage or a copy of such assignments, with recording information,
      together with all interim recorded assignments of such Mortgage or a copy
      of such assignments, with recording information,


                                      S-31



            (5)   the original or copies of each assumption, modification,
      written assurance or substitution agreement, if any, and

            (6)   the original or duplicate original lender's title policy and
      all riders thereto or a copy of lender's title policy and all riders
      thereto or a printout of the electronic equivalent and all riders thereto
      or, in the event such original title policy has not been received from the
      insurer, such original or duplicate original lender's title policy and all
      riders thereto will be delivered within one year of the Closing Date.

      Notwithstanding the foregoing, in lieu of providing the documents set
forth in clauses (3) and (4) above, the Depositor may at its discretion provide
evidence that the related Mortgage is held through the MERS(R) System. In
addition, the Mortgages for some or all of the Mortgage Loans in the issuing
entity that are not already held through the MERS(R) System may, at the
discretion of the Master Servicer, in the future be held through the MERS(R)
System. For any Mortgage held through the MERS(R) System, the Mortgage is
recorded in the name of Mortgage Electronic Registration Systems, Inc., or
MERS(R), as nominee for the owner of the Mortgage Loan, and subsequent
assignments of the Mortgage were, or in the future may be, at the discretion of
the Master Servicer, registered electronically through the MERS(R) System. For
each of these Mortgage Loans, MERS(R) serves as mortgagee of record on the
Mortgage solely as a nominee in an administrative capacity on behalf of the
Trustee, and does not have any interest in the Mortgage Loan.

      Pursuant to the Pooling and Servicing Agreement, the Depositor will be
required to deliver (or cause delivery of) the Mortgage Files:

            (A)   not later than the Closing Date, with respect to at least 50%
      of the Initial Mortgage Loans in each Loan Group, and not later than the
      relevant Subsequent Transfer Date, with respect to at least 10% of the
      Subsequent Mortgage Loans in each Loan Group conveyed on any related
      Subsequent Transfer Date,

            (B)   not later than twenty days after the Closing Date, with
      respect to at least an additional 40% of the Initial Mortgage Loans in
      each Loan Group, and not later than twenty days after the relevant
      Subsequent Transfer Date with respect to the remaining Subsequent Mortgage
      Loans conveyed on any related Subsequent Transfer Date, and

            (C)   not later than thirty days after the Closing Date, with
      respect to the remaining Initial Mortgage Loans.

      Assignments of the Mortgage Loans to the Trustee (or its nominee) will be
recorded in the appropriate public office for real property records, except in
states (such as California) as to which an opinion of counsel is delivered to
the effect that the recording is not required to protect the Trustee's interests
in the Mortgage Loan against the claim of any subsequent transferee or any
successor to or creditor of the Depositor or the applicable Seller. As to any
Mortgage Loan, the recording requirement exception described in the preceding
sentence is applicable only so long as the related Mortgage File is maintained
in the possession of the Trustee in one of the states to which the exception
applies. In the event an assignment is delivered to the Trustee in blank and the
related Mortgage File is released by the Trustee pursuant to applicable
provisions of the Pooling and Servicing Agreement, the Trustee will complete the
assignment as provided in subparagraph (3) above prior to the release. If the
assignment of the Mortgage Loan is required to be recorded to protect the
interest of the Trustee in the Mortgage Loans, the Master Servicer is required
to cause each previously unrecorded assignment to be submitted for recording.

      The Trustee will review the Initial Mortgage Loan documents on or prior to
the Closing Date (or promptly after the Trustee's receipt of any document
permitted to be delivered after the Closing Date), and the Subsequent Mortgage
Loan documents promptly after the Trustee's receipt thereof on or after the
related Subsequent Transfer Date as described above, and the Trustee will hold
the Mortgage Loan documents in trust for the benefit of the holders of the
Certificates in accordance with its customary procedures, including storing the
documents in fire-resistant facilities. After review of the Mortgage Loan
documents, if any document is found to be missing or defective in any material
respect, the Trustee is required to notify the Master Servicer and Countrywide
Home Loans in writing. If Countrywide Home Loans cannot or does not cure the
omission or defect within 90 days of its receipt


                                      S-32



of notice from the Trustee, Countrywide Home Loans is required to repurchase the
related Mortgage Loan from the issuing entity at a price (the "PURCHASE PRICE")
equal to the sum of:

      (i)   100% of the unpaid principal balance (or, if the purchase or
            repurchase, as the case may be, is effected by the Master Servicer,
            the Stated Principal Balance) of the Mortgage Loan as of the date of
            the purchase,

      (ii)  accrued interest thereon at the applicable Mortgage Rate (or, if the
            purchase or repurchase, as the case may be, is effected by the
            Master Servicer, at the Net Mortgage Rate) from (a) the date through
            which interest was last paid by the borrower (or, if the purchase or
            repurchase, as the case may be, is effected by the Master Servicer,
            the date through which interest was last advanced by, and not
            reimbursed to, the Master Servicer) to (b) the Due Date in the month
            in which the Purchase Price is to be distributed to
            certificateholders, and

      (iii) any costs, expenses and damages incurred by the issuing entity
            resulting from any violation of any predatory or abusive lending law
            in connection with the Mortgage Loan.

      Rather than repurchase the Mortgage Loan as provided above, Countrywide
Home Loans may remove the Mortgage Loan (a "DELETED MORTGAGE LOAN") from the
issuing entity and substitute in its place another Mortgage Loan of like kind (a
"REPLACEMENT MORTGAGE LOAN"); however, a substitution is only permitted within
two years after the Closing Date, and may not be made unless an opinion of
counsel is provided to the effect that the substitution would not disqualify any
REMIC election made by the Trustee or result in a prohibited transaction tax
under the Internal Revenue Code of 1986, as amended (the "CODE"). Any
Replacement Mortgage Loan generally will, on the date of substitution, among
other characteristics set forth in the Pooling and Servicing Agreement:

            (1)   have a Stated Principal Balance, after deduction of the
      principal portion of the Scheduled Payment due in the month of
      substitution, not in excess of, and not less than 90% of, the Stated
      Principal Balance of the Deleted Mortgage Loan (the amount of any
      shortfall to be forwarded by Countrywide Home Loans to the Master Servicer
      and deposited by the Master Servicer in the Certificate Account not later
      than the succeeding Determination Date and held for distribution to the
      holders of the Certificates on the related Distribution Date),

            (2)   if the Deleted Mortgage Loan that is being replaced is an
      Adjustable Rate Mortgage Loan, have a Maximum Mortgage Rate not more than
      1% per annum higher or lower than the Maximum Mortgage Rate of the Deleted
      Mortgage Loan,

            (3)   if the Deleted Mortgage Loan that is being replaced is an
      Adjustable Rate Mortgage Loan, have a minimum Mortgage Rate specified in
      its related Mortgage Note (the "MINIMUM MORTGAGE RATE") not more than 1%
      per annum higher or lower than the Minimum Mortgage Rate of the Deleted
      Mortgage Loan,

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

            (5)   have the same or higher credit quality characteristics than
      that of the Deleted Mortgage Loan,

            (6)   be accruing interest at a rate not more than 1% per annum
      higher or lower than that of the Deleted Mortgage Loan,

            (7)   have a Loan-to-Value Ratio no higher than that of the Deleted
      Mortgage Loan,


                                      S-33



            (8)   have a remaining term to maturity not greater than (and not
      more than one year less than) that of the Deleted Mortgage Loan,

            (9)   not permit conversion of the Mortgage Rate from a fixed rate
      to a variable rate or vice versa,

            (10)  provide for a prepayment charge on terms substantially similar
      to those of the prepayment charge, if any, of the Deleted Mortgage Loan,

            (11)  have the same occupancy type and lien priority as the Deleted
      Mortgage Loan, and

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

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

PRE-FUNDING

      On the Closing Date, the Depositor may elect to deposit an amount of up to
25% of the initial Certificate Principal Balance of the Certificates issued by
the issuing entity (the "PRE-FUNDED AMOUNT") in a pre-funding account (the
"PRE-FUNDING ACCOUNT") established and maintained by the Trustee on behalf of
the certificateholders. The Pre-Funded Amount will be allocated between the Loan
Groups so that the amount allocated to any Loan Group will not exceed 25% of the
initial Certificate Principal Balance of the Certificates related to the Loan
Group. Any investment income earned from amounts in the Pre-Funding Account, if
any, will be paid to the Countrywide Home Loans, and will not be available for
payments on the Certificates. During the period from the Closing Date until the
earlier of (x) the date the amount in the Pre-Funding Account is less than
$175,000 and (y) April 28, 2006 (the "FUNDING PERIOD"), the Depositor will be
expected to purchase additional mortgage loans originated or purchased by a
Seller (the "SUBSEQUENT MORTGAGE LOANS") from a Seller and sell the Subsequent
Mortgage Loans to the issuing entity as described below. The purchase price for
each Subsequent Mortgage Loan will equal the Stated Principal Balance of that
Subsequent Mortgage Loan as of the later of (x) the first day of the month of
the related Subsequent Transfer Date and (y) the origination date of that
Subsequent Mortgage Loan (the related "SUBSEQUENT CUT-OFF DATE") and will be
paid from the Pre-Funding Account. Accordingly, the purchase of Subsequent
Mortgage Loans will decrease the amount on deposit in the Pre-Funding Account
and increase the Stated Principal Balance of the Mortgage Pool.

      Pursuant to the Pooling and Servicing Agreement and a Subsequent Transfer
Agreement to be executed by the applicable Seller, the Depositor and the
Trustee, the conveyance of Subsequent Mortgage Loans may be made on any Business
Day during the Funding Period (a "SUBSEQUENT TRANSFER DATE"), subject to the
fulfillment of certain conditions in the Pooling and Servicing Agreement,
including that:

   o  the Subsequent Mortgage Loans conveyed on the Subsequent Transfer Date
      satisfy the same representations and warranties in the Pooling and
      Servicing Agreement applicable to all Mortgage Loans,

   o  the Subsequent Mortgage Loans conveyed on the Subsequent Transfer Date
      were selected in a manner reasonably believed not to be adverse to the
      interests of the certificateholders,

   o  the Trustee receives an opinion of counsel with respect to the validity of
      the conveyance of the Subsequent Mortgage Loans conveyed on the Subsequent
      Transfer Date,

   o  the Trustee receives an opinion of counsel to the effect that the
      conveyance of the Subsequent Mortgage Loans conveyed on the Subsequent
      Transfer Date will not (i) result in the imposition of the tax on
      "prohibited transactions" on the issuing entity or contributions after the
      Startup Date, as defined in Sections 860F(a)(2) and 860G(d) of the Code,
      respectively, or (ii) cause the issuing entity to fail to qualify as a
      REMIC at any time that any Certificates are outstanding,


                                      S-34



   o  the Trustee receives opinions of counsel to the effect that the conveyance
      of the Subsequent Mortgage Loans conveyed on the Subsequent Transfer Date
      from the applicable Seller to the Depositor and the simultaneous
      conveyance of the Subsequent Mortgage Loans from the Depositor to the
      issuing entity will be characterized as true sales and not loans secured
      by the Subsequent Mortgage Loans,

   o  the conveyance of the Subsequent Mortgage Loans on the Subsequent Transfer
      Date will not result in a reduction or withdrawal of any ratings assigned
      to the Certificates,

   o  no Subsequent Mortgage Loan conveyed on the Subsequent Transfer Date was
      30 or more days delinquent, and

   o  following the conveyance of the Subsequent Mortgage Loans on the
      Subsequent Transfer Date to the issuing entity, the characteristics of the
      Mortgage Loans in each Loan Group will not vary by more than the permitted
      variance specified above under "-- General" above; provided that for the
      purpose of making the calculations, the characteristics for any Initial
      Mortgage Loan will be taken as of the Initial Cut-off Date and the
      characteristics for any Subsequent Mortgage Loan will be taken as of the
      Subsequent Cut-off Date:

      Within thirty days after each Subsequent Transfer Date, the Depositor is
required to deliver to the Trustee a letter of a nationally recognized firm of
independent public accountants stating whether or not the Subsequent Mortgage
Loans conveyed on the related Subsequent Transfer Date conform to the
characteristics described in the last two bullet points set forth above. Other
than the delivery of that letter, no other party will independently verify
satisfaction of the conditions set forth above with respect to a transfer of
Subsequent Mortgage Loans.

UNDERWRITING STANDARDS

GENERAL

      Credit-Blemished Mortgage Loans. The following is a description of the
underwriting procedures customarily employed by Countrywide Home Loans with
respect to credit-blemished mortgage loans. Countrywide Home Loans has been
originating credit-blemished mortgage loans since 1995. Countrywide Home Loans
produces its credit-blemished mortgage loans through its Consumer Markets, Full
Spectrum Lending, Correspondent Lending and Wholesale Lending Divisions. Prior
to the funding of any credit-blemished mortgage loan, Countrywide Home Loans
underwrites the related mortgage loan in accordance with the underwriting
standards established by Countrywide Home Loans. In general, the mortgage loans
are underwritten centrally by a specialized group of underwriters who are
familiar with the unique characteristics of credit-blemished mortgage loans. In
general, Countrywide Home Loans does not purchase any credit-blemished mortgage
loan that it has not itself underwritten.

      Countrywide Home Loans' underwriting standards are primarily intended to
evaluate the value and adequacy of the mortgaged property as collateral for the
proposed mortgage loan and the borrower's credit standing and repayment ability.
On a case by case basis, Countrywide Home Loans may determine that, based upon
compensating factors, a prospective borrower not strictly qualifying under the
underwriting risk category guidelines described below warrants an underwriting
exception. Compensating factors may include low loan-to-value ratio, low
debt-to-income ratio, stable employment, time in the same residence or other
factors. It is expected that a significant number of the Mortgage Loans will
have been originated based on these types of underwriting exceptions.

      Each prospective borrower completes an application which includes
information with respect to the applicant's assets, liabilities, income and
employment history, as well as certain other personal information. Countrywide
Home Loans requires an independent credit bureau report on the credit history of
each applicant in order to evaluate the applicant's prior willingness and/or
ability to repay. The report typically contains information relating to credit
history with local and national merchants and lenders, installment debt payments
and any record of defaults, bankruptcy, repossession, suits or judgments, among
other matters.

      After obtaining all applicable employment, credit and property
information, Countrywide Home Loans uses a debt-to-income ratio to assist in
determining whether the prospective borrower has sufficient monthly income


                                      S-35



available to support the payments of principal and interest on the mortgage loan
in addition to other monthly credit obligations. The "DEBT-TO-INCOME RATIO" is
the ratio of the borrower's total monthly credit obligations to the borrower's
gross monthly income. The maximum monthly debt-to-income ratio varies depending
upon a borrower's credit grade and documentation level (as described below) but
does not generally exceed 55%. Variations in the monthly debt-to-income ratios
limit are permitted based on compensating factors.

      Countrywide Home Loans' underwriting standards are applied in accordance
with applicable federal and state laws and regulations and require an
independent appraisal of the mortgaged property prepared on a Uniform
Residential Appraisal Report (Form 1004) or other appraisal form as applicable
to the specific mortgaged property type. Each appraisal includes a market data
analysis based on recent sales of comparable homes in the area and, where deemed
appropriate, replacement cost analysis based on the current cost of constructing
a similar home and generally is required to have been made not earlier than 180
days prior to the date of origination of the mortgage loan. Every independent
appraisal is reviewed by a representative of Countrywide Home Loans before the
loan is funded, and an additional review appraisal is generally performed in
connection with appraisals not provided by Landsafe Appraisals, Inc., a wholly
owned subsidiary of Countrywide Home Loans. In most cases, properties that are
not at least in average condition (including properties requiring major deferred
maintenance) are not acceptable as collateral for a credit-blemished loan. The
maximum loan amount varies depending upon a borrower's credit grade, Credit
Bureau Risk Score, and documentation level but does not generally exceed
$1,000,000. Variations in maximum loan amount limits are permitted based on
compensating factors.

      Countrywide Home Loans' underwriting standards permit first mortgage loans
with loan-to-value ratios at origination of up to 100% and second mortgage loans
with combined loan-to-value ratios at origination of up to 100% depending on the
program, type and use of the property, documentation level, creditworthiness of
the borrower, debt-to-income ratio and loan amount.

      Countrywide Home Loans requires title insurance on all credit-blemished
mortgage loans. Countrywide Home Loans also requires that fire and extended
coverage casualty insurance be maintained on the mortgaged property in an amount
at least equal to the principal balance or the replacement cost of the mortgaged
property, whichever is less.

      Countrywide Home Loans' credit-blemished mortgage loan underwriting
standards are more flexible than the standards generally acceptable to
Countrywide Home Loans for its non-credit-blemished mortgage loans with regard
to the borrower's credit standing and repayment ability. While more flexible,
Countrywide Home Loans' underwriting guidelines still place primary reliance on
a borrower's ability to repay; however Countrywide Home Loans may require lower
loan-to-value ratios than for loans underwritten to more traditional standards.
Borrowers who qualify generally have payment histories and debt-to-income ratios
which would not satisfy more traditional underwriting guidelines and may have a
record of major derogatory credit items such as outstanding judgments or prior
bankruptcies. Countrywide Home Loans' credit-blemished mortgage loan
underwriting guidelines establish the maximum permitted loan-to-value ratio for
each loan type based upon these and other risk factors with more risk factors
resulting in lower loan-to-value ratios.

      Countrywide Home Loans underwrites or originates credit-blemished mortgage
loans pursuant to alternative sets of underwriting criteria under its Full
Documentation Loan Program (the "FULL DOC PROGRAM"), and Stated Income Loan
Program (the "STATED INCOME PROGRAM"). Under each of the underwriting programs,
Countrywide Home Loans verifies the loan applicant's sources and amounts of
income (except under the Stated Income Program where the amount of income is not
verified), calculates the amount of income from all sources indicated on the
loan application, reviews the credit history of the applicant, calculates the
debt-to-income ratio to determine the applicant's ability to repay the loan, and
reviews the appraisal of the mortgaged property for compliance with Countrywide
Home Loans' underwriting standards.

      Under the Stated Income Program, the borrower's employment and income
sources and amounts must be stated on the borrower's application. The borrower's
income as stated must be reasonable for the related occupation and the
determination as to reasonableness is subject to the loan underwriter's
discretion. However, the borrower's income as stated on the application is not
independently verified. Maximum loan-to-value ratios are generally lower than
those permitted under the Full Doc Program. Except as otherwise stated above,
the same mortgage credit, consumer credit and collateral related underwriting
guidelines apply.


                                      S-36



      Under the Full Doc and Stated Income Programs, various risk categories are
used to grade the likelihood that the borrower will satisfy the repayment
conditions of the mortgage loan. These risk categories establish the maximum
permitted loan-to-value ratio, debt-to-income ratio and loan amount, given the
borrower's credit history, the occupancy status of the mortgaged property and
the type of mortgaged property. In general, more (or more recent) derogatory
credit items such as delinquent mortgage payments or prior bankruptcies result
in a loan being assigned to a higher credit risk category.

      Countrywide Home Loans' underwriting guidelines for credit-blemished
mortgage loans utilize credit grade categories to grade the likelihood that the
borrower will satisfy the repayment conditions of the mortgage loans. In
general, a credit grade category is assigned by evaluating a borrower's mortgage
history, time since bankruptcy, and time since foreclosure or notice of default.
The credit grade categories establish guidelines for determining maximum
allowable loan-to-value ratios and loan amounts given the borrower's Credit
Bureau Risk Score, and maximum allowable debt-to-income ratios for a given
mortgage loan. A summary of the credit grade categories is set forth below.

Credit Grade Category: "A"

      LOAN-TO-VALUE RATIO: Maximum of 100%

      DEBT-TO-INCOME RATIO: Maximum of 55%

      LOAN AMOUNT: Maximum of $1,000,000

      CONSUMER CREDIT HISTORY: Credit Bureau Risk Score must be greater than or
      equal to 500 for loan amounts up to $400,000, 520 for loan amounts up to
      $500,000, 580 for loan amounts up to $650,000, or 600 for loan amounts of
      $650,001 to $1,000,000. If no Credit Bureau Risk Score is available,
      Countrywide Home Loans evaluates the borrower's consumer credit history
      through alternative means in accordance with its underwriting criteria for
      credit-blemished mortgage loans. If the Credit Bureau Risk Score is
      inaccurate, as evidenced by objective criteria provided to Countrywide
      Home Loans by independent third parties, then no more than 4 delinquencies
      of 30 days in the past 12 months and loan amount is restricted to
      $500,000.

      MORTGAGE HISTORY: No more than 1 non-consecutive delinquency of 30 days
      during the past 12 months.

      BANKRUPTCY: At least 2 years since discharge/dismissal of Chapter 7, 11,
      or 13 Bankruptcy.

      FORECLOSURE/NOTICE OF DEFAULT: At least 3 years since foreclosure/notice
      of default released.

Credit Grade Category: "A-"

      LOAN-TO-VALUE RATIO: Maximum of 90%

      DEBT-TO-INCOME RATIO: Maximum of 55%

      LOAN AMOUNT: Maximum of $500,000

      CONSUMER CREDIT HISTORY: Credit Bureau Risk Score must be greater than or
      equal to 500 for loan amounts up to $400,000, or 520 for loan amounts up
      to $500,000. If no Credit Bureau Risk Score is available, Countrywide Home
      Loans evaluates the borrower's consumer credit history through alternative
      means in accordance with its underwriting criteria for credit-blemished
      mortgage loans. If the Credit Bureau Risk Score is inaccurate, as
      evidenced by objective criteria provided to Countrywide Home Loans by
      independent third parties, then no more than 6 delinquencies of 30 days,
      and 2 delinquencies of 60 days in the past 12 months.

      MORTGAGE HISTORY: No more than 2 non-consecutive delinquencies of 30 days
      during the past 12 months.

      BANKRUPTCY: At least 2 years since discharge/dismissal of Chapter 7 or 11
      Bankruptcy, and 2 years since filing or dismissal of Chapter 13
      Bankruptcy. Additionally, a Chapter 13 Bankruptcy must be discharged prior
      to the loan application date if it has not been dismissed.

      FORECLOSURE/NOTICE OF DEFAULT: At least 3 years since foreclosure/notice
      of default released.

Credit Grade Category: "B"

      LOAN-TO-VALUE RATIO: Maximum of 85%

      DEBT-TO-INCOME RATIO: Maximum of 55%

      LOAN AMOUNT: Maximum of $500,000

      CONSUMER CREDIT HISTORY: Credit Bureau Risk Score must be greater than or
      equal to 500 for loan amounts up to $400,000, or 520 for loan amounts up
      to $500,000. If no Credit Bureau Risk Score is available, Countrywide Home
      Loans evaluates the borrower's consumer credit history through alternative


                                      S-37



      means in accordance with its underwriting criteria for credit-blemished
      mortgage loans. If the Credit Bureau Risk Score is inaccurate, as
      evidenced by objective criteria provided to Countrywide Home Loans by
      independent third parties, then no more than 10 delinquencies of 30 days,
      4 delinquencies of 60 days, and 2 delinquencies of 90 days or more in the
      past 12 months.

      MORTGAGE HISTORY: No more than 1 delinquency of 60 days in the past 12
      months. Delinquencies of 30 days are not restricted.

      BANKRUPTCY: At least 18 months since discharge or dismissal of Chapter 7
      or 11 Bankruptcy and 18 months since filing or dismissal of Chapter 13
      Bankruptcy.

      FORECLOSURE/NOTICE OF DEFAULT: At least 2 years since foreclosure/notice
      of default released.

Credit Grade Category: "C"

      LOAN-TO-VALUE RATIO: Maximum of 80%

      DEBT-TO-INCOME RATIO: Maximum of 55%

      LOAN AMOUNT: Maximum of $450,000.

      CONSUMER CREDIT HISTORY: The minimum Credit Bureau Risk Score is 500 for
      loan amounts up to $400,000, or 520 for loan amounts up to $450,000. If no
      Credit Bureau Risk Score is available, Countrywide Home Loans evaluates
      the borrower's consumer credit history through alternative means in
      accordance with its underwriting criteria for credit-blemished mortgage
      loans. If the Credit Bureau Risk Score is inaccurate, as evidenced by
      objective criteria provided to Countrywide Home Loans by independent third
      parties, then no more than 8 delinquencies of 60 days, and 4 delinquencies
      of 90 days or more in the past 12 months.

      MORTGAGE HISTORY: No more than 1 delinquency of 90 days during the past 12
      months. Delinquencies of 30 days and 60 days are not restricted.

      BANKRUPTCY: At least 1 year since discharge or dismissal of Chapter 7 or
      11 Bankruptcy and 1 year since filing or dismissal of Chapter 13
      Bankruptcy.

      FORECLOSURE/NOTICE OF DEFAULT: At least 1 year since foreclosure/notice of
      default released.

Credit Grade Category: "C-"

      LOAN-TO-VALUE RATIO: Maximum of 70%

      DEBT-TO-INCOME RATIO: Maximum of 55%

      LOAN AMOUNT: Maximum of $350,000.

      CONSUMER CREDIT HISTORY: The minimum Credit Bureau Risk Score is 500. If
      no Credit Bureau Risk Score is available, Countrywide Home Loans evaluates
      the borrower's consumer credit history through alternative means in
      accordance with its underwriting criteria for credit-blemished mortgage
      loans. If the Credit Bureau Risk Score is inaccurate, as evidenced by
      objective criteria provided to Countrywide Home Loans by independent third
      parties, then no more than 12 delinquencies of 60 days, and 8
      delinquencies of 90 days or more in the past 12 months.

      MORTGAGE HISTORY: No more than 2 delinquencies of 90 days during the past
      12 months. Delinquencies of 30 days and 60 days are not restricted.

      BANKRUPTCY: Chapter 13 Bankruptcy must be discharged/dismissed, or
      paid-off through escrow at funding. Chapter 7 Bankruptcy must be
      discharged/dismissed at least 1 day prior to funding.

      FORECLOSURE/NOTICE OF DEFAULT: None at time of funding.


Credit Grade Category: "D"

      LOAN-TO-VALUE RATIO: Maximum of 65%

      DEBT-TO-INCOME RATIO: Maximum of 45%

      LOAN AMOUNT: Maximum of $250,000

      CONSUMER CREDIT HISTORY: The minimum Credit Bureau Risk Score is 500. If
      no Credit Bureau Risk Score is available, Countrywide Home Loans evaluates
      the borrower's consumer credit history through alternative means in
      accordance with its underwriting criteria for credit-blemished mortgage
      loans. If the Credit Bureau Risk Score is inaccurate, as evidenced by
      objective criteria provided to Countrywide Home Loans by independent third
      parties, then no more than 12 delinquencies of 60 days, and 8
      delinquencies of 90 days or more in the past 12 months.

      MORTGAGE HISTORY: Open Notice of default must be cured at time of funding.


                                      S-38



      BANKRUPTCY: Chapter 13 Bankruptcy must be discharged/dismissed, or
      paid-off through escrow at funding. Chapter 7 Bankruptcy must be
      discharged or dismissed at least 1 day prior to funding.

      FORECLOSURE/NOTICE OF DEFAULT: Notice of default is acceptable but must be
      cured at time of funding.

      The loan-to-value ratios, debt-to-income ratios, and loan amounts stated
above are maximum levels for a given credit grade category. There are additional
restrictions on loan-to-value ratios, debt-to-income ratios, and loan amounts
depending on, but not limited to, the occupancy status of the mortgaged
property, the type of mortgaged property, and the documentation program.

      The "CREDIT BUREAU RISK SCORE" is a statistical credit score obtained by
Countrywide Home Loans in connection with the loan application to help assess a
borrower's creditworthiness. Credit Bureau Risk Scores are generated by models
developed by a third party and are made available to mortgage 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 Bureau Risk Scores are based
on a borrower's historical credit data, including, among other things, payment
history, delinquencies on accounts, levels of outstanding indebtedness, length
of client history, types of credit, and bankruptcy experience. Credit Bureau
Risk Scores range from approximately 250 to approximately 900, with higher
scores indicating an individual with a more favorable credit history compared to
an individual with a lower score. However, a Credit Bureau Risk 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 Bureau Risk 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 Bureau Risk
Scores were not developed specifically for use in connection with mortgage
loans, but for consumer loans in general. Therefore, a Credit Bureau Risk Score
does not take into consideration the effect of mortgage loan characteristics on
the probability of repayment by the borrower. The Credit Bureau Risk Scores set
forth in Annex A hereto were obtained either at the time of origination of the
Mortgage Loan or more recently. The Credit Bureau Risk Score is used as an aid
to, not a substitute for, the underwriter's judgment.

      In determining a Credit Bureau Risk Score for a particular borrower,
Countrywide Home Loans attempts to obtain Credit Bureau Risk Scores from each of
the three national credit bureaus that produce these scores. Although different
scores may be available from each of the three national credit bureaus for a
particular borrower, Countrywide Home Loans will use only one score in its
determination of whether to underwrite a mortgage loan, based on the following
methodology: if scores are available from each of the three national credit
bureaus, Countrywide Home Loans will disregard the highest and lowest scores,
and use the remaining score; and if scores are available from only two of the
three national credit bureau, Countrywide Home Loans will use the lower of the
two scores. In the case of a mortgage loan with more than one applicant,
Countrywide Home Loans will use the Credit Bureau Risk Score of the applicant
contributing the highest percentage of the total qualifying income.

      If only one score is available, or no score is available, Countrywide Home
Loans will follow its Limited Credit guidelines. Under the Limited Credit
guidelines, credit histories may be developed using rent verification from
current and/or previous landlords, proof of payment to utilities such as
telephone, or verification from other sources of credit or services for which
the applicant has (or had) a regular financial obligation. In general,
applications with the aforementioned type of credit documentation are limited to
A- risk and 80% loan-to-value ratio. For applicants with established mortgage
payment history of at least 12 months and one credit score or no credit score,
the mortgage payment history may be used in lieu of a credit score to determine
a risk grade.

                         SERVICING OF THE MORTGAGE LOANS

GENERAL

      The Master Servicer will master service all of the Mortgage Loans in
accordance with the terms set forth in the Pooling and Servicing Agreement. The
Master Servicer has agreed to service and administer the mortgage loans in
accordance with customary and usual standards of practice of prudent mortgage
loan lenders. The Master Servicer has also agreed to represent and protect the
interest of the Trustee in the Mortgage Loans in the same manner as it currently
protects its own interest in mortgage loans in its own portfolio in any claim,
proceeding or


                                      S-39



litigation regarding a Mortgage Loan. The Master Servicer is permitted to make a
modification, waiver or amendment of a Mortgage Loan so long as the
modification, waiver or amendment would comply with the general servicing
standard described above, not cause any REMIC to fail to qualify as a REMIC, not
result in the imposition of certain taxes and not extend the due date for a
payment due on the related Mortgage Note for a period greater than 180 days. A
modification, waiver or amendment may initially result in a reduction in the
payments made under a Mortgage Loan, but it is expected that a modification,
waiver or amendment will increase the payments made under the Mortgage Loan over
the life of the Mortgage Loan.

      The Master Servicer may perform any of its obligations under the Pooling
and Servicing Agreement through one or more subservicers (including a special
servicer). Notwithstanding any subservicing arrangement, the Master Servicer
will remain liable for its servicing duties and obligations under the Pooling
and Servicing Agreement as if the Master Servicer alone were servicing the
Mortgage Loans.

COUNTRYWIDE HOME LOANS SERVICING LP

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

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

      In connection with the establishment of Countrywide Servicing, certain
employees of Countrywide Home Loans became employees of Countrywide Servicing.
Countrywide Servicing has engaged Countrywide Home Loans as a subservicer to
perform certain loan servicing activities on its behalf.

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

COUNTRYWIDE HOME LOANS

      Countrywide Home Loans is the sponsor for the transaction and also a
seller. Countrywide Home Loans is a New York corporation and a direct wholly
owned subsidiary of Countrywide Financial Corporation, a Delaware corporation
("COUNTRYWIDE FINANCIAL"). The principal executive offices of Countrywide Home
Loans are located at 4500 Park Granada, Calabasas, California 91302. Countrywide
Home Loans is engaged primarily in the mortgage banking business, and as part of
that business, originates, purchases, sells and services mortgage loans.
Countrywide Home Loans originates mortgage loans through a retail branch system
and through mortgage loan


                                      S-40



brokers and correspondents nationwide. Mortgage loans originated by Countrywide
Home Loans are principally first-lien, fixed or adjustable rate mortgage loans
secured by single-family residences.

      Countrywide Home Loans has historically sold substantially all the
mortgage loans that it has originated and purchased, generally through
securitizations. Countrywide Home Loans does not always sell mortgage loans
immediately after origination or acquisition, but may decide to sell certain
mortgage loans in later periods as part of its overall management of interest
rate risk. Countrywide Home Loans has been involved in the securitization of
mortgage loans since 1969 when it was approved as a Federal National Mortgage
Association seller/servicer. Countrywide Home Loans reviews the structure of its
securitizations and discusses the structure with the related underwriters.

      Except as otherwise indicated, reference in the remainder of this
prospectus supplement to "COUNTRYWIDE HOME LOANS" should be read to include
Countrywide Home Loans and its consolidated subsidiaries, including Countrywide
Servicing. Countrywide Home Loans services substantially all of the mortgage
loans it originates or acquires. In addition, Countrywide Home Loans has
purchased in bulk the rights to service mortgage loans originated by other
lenders. Countrywide Home Loans has in the past and may in the future sell to
mortgage bankers and other institutions a portion of its portfolio of loan
servicing rights. As of December 31, 2002, December 31, 2003, December 31, 2004
and December 31, 2005, Countrywide Home Loans provided servicing for mortgage
loans with an aggregate principal balance of approximately $452.405 billion,
$644.855 billion, $838.322 billion and $1,111.090 billion, respectively,
substantially all of which were being serviced for unaffiliated persons. As of
December 31, 2005, Countrywide Home Loans provided servicing for approximately
$117.488 billion in credit-blemished mortgage loans (excluding mortgage loans
being subserviced by Countrywide Home Loans).

      Mortgage Loan Production

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



                                                                  CONSOLIDATED MORTGAGE LOAN PRODUCTION
                                                           -----------------------------------------------------
                                               TEN MONTHS                        YEARS ENDED
                                                  ENDED                         DECEMBER 31,
                                              DECEMBER 31,  -----------------------------------------------------
                                                 2001          2002          2003         2004            2005
                                             -------------  ----------  -------------  -------------  -----------
                                                           (DOLLARS IN MILLIONS, EXCEPT AVERAGE LOAN AMOUNT)

Conventional Conforming Loans
  Number of Loans........................        504,975       999,448     1,517,743       846,395        809,630
  Volume of Loans........................    $    76,432   $   150,110   $   235,868   $   138,845    $   167,675
     Percent of Total Dollar Volume......           61.7%         59.6%         54.2%         38.2%          34.1%
Conventional Non-conforming Loans
  Number of Loans........................        137,593       277,626       554,571       509,711        826,178
  Volume of Loans........................    $    22,209   $    61,627   $   136,664   $   140,580    $   225,217
     Percent of Total Dollar Volume......           17.9%         24.5%         31.4%         38.7%          45.9%
FHA/VA Loans
  Number of Loans........................        118,734       157,626       196,063       105,562         80,528
  Volume of Loans........................    $    14,109   $    19,093   $    24,402   $    13,247    $    10,712
     Percent of Total Dollar Volume......           11.4%          7.6%          5.6%          3.6%           2.2%
Prime Home Equity Loans
  Number of Loans........................        164,503       316,049       453,817       587,046        683,887
  Volume of Loans........................    $     5,639   $    11,650   $    18,103   $    30,893    $    42,706
     Percent of Total Dollar Volume......            4.5%          4.6%          4.2%          8.5%           8.7%
Nonprime Mortgage Loans
  Number of Loans........................         43,359        63,195       124,205       250,030        278,112
  Volume of Loans........................    $     5,580   $     9,421   $    19,827   $    39,441    $    44,637
     Percent of Total Dollar Volume......            4.5%          3.7%          4.6%         11.0%           9.1%
Total Loans
  Number of Loans........................        969,164     1,813,944     2,846,399     2,298,744      2,678,335
  Volume of Loans........................    $   123,969   $   251,901   $   434,864   $   363,006    $   490,947
  Average Loan Amount....................    $   128,000   $   139,000   $   153,000   $   158,000    $   183,000
  Non-Purchase Transactions(1)...........             63%           66%           72%           51%            53%
  Adjustable-Rate Loans(1)...............             12%           14%           21%           52%            52%


_______________

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


                                      S-41



LOAN SERVICING

      The Master Servicer has established standard policies for the servicing
and collection of mortgages. Servicing includes, but is not limited to:

            (a) collecting, aggregating and remitting mortgage loan payments;

            (b) accounting for principal and interest;

            (c) holding escrow (impound) funds for payment of taxes and
                insurance;

            (d) making inspections as required of the mortgaged properties;

            (e) preparation of tax related information in connection with the
                mortgage loans;

            (f) supervision of delinquent mortgage loans;

            (g) loss mitigation efforts;

            (h) foreclosure proceedings and, if applicable, the disposition of
                mortgaged properties; and

            (i) generally administering the mortgage loans, for which it
                receives servicing fees.

      Billing statements with respect to mortgage loans are mailed monthly by
the Master Servicer. The statement details all debits and credits and specifies
the payment due. Notice of changes in the applicable loan rate are provided by
the Master Servicer to the borrower with these statements.

COLLECTION PROCEDURES

      Credit-Blemished Mortgage Loans. When a borrower fails to make a payment
on a credit-blemished mortgage loan, the Master Servicer attempts to cause the
deficiency to be cured by corresponding with the borrower. In most cases,
deficiencies are cured promptly. Pursuant to the Master Servicer's servicing
procedures for credit-blemished loans, the Master Servicer generally mails to
the borrower a notice of intent to foreclose after the loan becomes 31 days past
due (two payments due but not received) and, generally within 59 days
thereafter, if the loan remains delinquent, institutes appropriate legal action
to foreclose on the mortgaged property. Foreclosure proceedings may be
terminated if the delinquency is cured. Mortgage loans to borrowers in
bankruptcy proceedings may be restructured in accordance with law and with a
view to maximizing recovery of the loans, including any deficiencies.

      Once foreclosure is initiated by the Master Servicer, a foreclosure
tracking system is used to monitor the progress of the proceedings. The system
includes state specific parameters to monitor whether proceedings are
progressing within the time frame typical for the state in which the mortgaged
property is located. During the foreclosure proceeding, the Master Servicer
determines the amount of the foreclosure bid and whether to liquidate the
mortgage loan.

      If foreclosed, the mortgaged property is sold at a public or private sale
and may be purchased by Countrywide Home Loans. After foreclosure, the Master
Servicer may liquidate the mortgaged property and charge-off the loan balance
which was not recovered through liquidation proceeds.

      Servicing and charge-off policies and collection practices with respect to
credit-blemished mortgage loans may change over time in accordance with, among
other things, the Master Servicer's business judgment, changes in the servicing
portfolio and applicable laws and regulations.


                                      S-42



SERVICING COMPENSATION AND PAYMENT OF EXPENSES

      The Master Servicer will be paid a monthly fee (the "MASTER SERVICING
FEE") from collections with respect to each Mortgage Loan (as well as from any
liquidation proceeds or Subsequent Recoveries) equal to one-twelfth of the
Stated Principal Balance thereof multiplied by the Servicing Fee Rate. The
"SERVICING FEE RATE" for each Mortgage Loan will equal 0.50% per annum. The
amount of the monthly Master Servicing Fee is subject to adjustment with respect
to Mortgage Loans that are prepaid in full, as described in this prospectus
supplement under "-- Adjustment to Master Servicing Fee in Connection with
Certain Prepaid Mortgage Loans."

      The Master Servicer is also entitled to receive, as additional servicing
compensation, amounts in respect of interest paid on Principal Prepayments
received during that portion of a Prepayment Period from the related Due Date to
the end of the Prepayment Period ("PREPAYMENT INTEREST EXCESS"), all late
payment fees, assumption fees and other similar charges (excluding prepayment
charges), with respect to the Mortgage Loans, and all investment income earned
on amounts on deposit in the Certificate Account and Distribution Account. The
Master Servicer is obligated to pay certain ongoing expenses associated with the
Mortgage Loans and incurred by the Trustee in connection with its
responsibilities under the Pooling and Servicing Agreement.

ADJUSTMENT TO MASTER SERVICING FEE IN CONNECTION WITH CERTAIN PREPAID
MORTGAGE LOANS

      When a borrower prepays all or a portion of a Mortgage Loan between
scheduled monthly payment dates ("DUE DATES"), the borrower pays interest on the
amount prepaid only to the date of prepayment. Principal Prepayments which are
received during that portion of the Prepayment Period from the related Due Date
in the Prepayment Period to the end of the Prepayment Period reduce the
Scheduled Payment of interest for the following Due Date but are included in a
distribution that occurs on or prior to the distribution of the Scheduled
Payment, and accordingly no shortfall in interest otherwise distributable to
holders of the Certificates results. Conversely, Principal Prepayments received
from that portion of the Prepayment Period from the beginning of the Prepayment
Period to related Due Date in that Prepayment Period reduce the Scheduled
Payment of interest for that Due Date and are included in a distribution that
occurs on or after the distribution of the Scheduled Payment, and accordingly an
interest shortfall (a "PREPAYMENT INTEREST SHORTFALL") could result. In order to
mitigate the effect of any Prepayment Interest Shortfall on interest
distributions to holders of the Certificates on any Distribution Date, one-half
of the amount of the Master Servicing Fee otherwise payable to the Master
Servicer for the month will, to the extent of the Prepayment Interest Shortfall,
be deposited by the Master Servicer in the Certificate Account for distribution
to holders of the Certificates entitled thereto on the Distribution Date. The
amount of this deposit by the Master Servicer is referred to as "COMPENSATING
INTEREST" and will be reflected in the distributions to holders of the
Certificates entitled thereto made on the Distribution Date on which the
Principal Prepayments received would be distributed.

ADVANCES

      Subject to the following limitations, on the Business Day prior to each
Distribution Date, the Master Servicer will be required to advance (an
"ADVANCE") from its own funds, or funds in the Certificate Account that are not
required to be distributed on the Distribution Date, on the Business Day
immediately preceding the Distribution Date (a "MASTER SERVICER ADVANCE DATE"),
the sum of:

   o  an amount equal to the aggregate of payments of principal and interest on
      the Mortgage Loans (with the Mortgage Rate adjusted to a rate equal to the
      Mortgage Rate minus the Servicing Fee Rate (as so adjusted, the "NET
      MORTGAGE RATE")) that were due on the related Due Date and delinquent on
      the related Determination Date; and

   o  an amount equivalent to interest (adjusted to the Net Mortgage Rate)
      deemed due on each Mortgage Loan (i) as to which the related Mortgaged
      Property has been acquired by the Master Servicer through foreclosure or
      deed-in-lieu of foreclosure in connection with a defaulted Mortgage Loan
      ("REO PROPERTY"), which is calculated after taking into account any rental
      income from such Mortgaged Property or (ii) as to which the related
      Mortgaged Property has been liquidated but as to that Mortgage Loan a
      Final Recovery Determination has not been made.


                                      S-43



      Advances are intended to maintain a regular flow of scheduled interest and
principal payments on the Certificates rather than to guarantee or insure
against losses. The Master Servicer is obligated to make Advances to the extent
that those Advances are, in its judgment, reasonably recoverable from future
payments and collections or insurance payments or proceeds of liquidation of the
related Mortgage Loan. If the Master Servicer determines on any Determination
Date to make an Advance, that Advance will be included with the distribution to
holders of the Certificates on the related Distribution Date. Any failure by the
Master Servicer to make an Advance as required under the Pooling and Servicing
Agreement will constitute an event of default thereunder, in which case the
Trustee, as successor master servicer, or any other entity that is appointed as
successor master servicer, will be obligated to make Advances in accordance with
the terms of the Pooling and Servicing Agreement. An Advance will be reimbursed
from the payments on the Mortgage Loan with respect to which the Advance was
made. However, if an Advance is determined to be nonrecoverable and the Master
Servicer delivers an officer's certificate to the Trustee indicating that the
Advance is nonrecoverable, the Master Servicer will be entitled to withdraw from
the Certificate Account an amount equal to the nonrecoverable Advance.
Reimbursement for Advances and nonrecoverable Advances will be made prior to
distributions on the Certificates.

CERTAIN MODIFICATIONS AND REFINANCINGS

      Countrywide Home Loans will be permitted under the Pooling and Servicing
Agreement to solicit borrowers for reductions to the Mortgage Rates of their
respective Mortgage Loans. If a borrower requests such a reduction, the Master
Servicer will be permitted to agree to the rate reduction provided that (i)
Countrywide Home Loans purchases the Mortgage Loan from the Trust Fund
immediately following the modification and (ii) the Stated Principal Balance of
such Mortgage Loan, when taken together with the aggregate of the Stated
Principal Balances of all other Mortgage Loans in the same Loan Group that have
been so modified since the Closing Date at the time of those modifications, does
not exceed an amount equal to 5% of the aggregate Certificate Principal Balance
of the related Certificates. Any purchase of a Mortgage Loan subject to a
modification will be for a price equal to 100% of the Stated Principal Balance
of that Mortgage Loan, plus accrued and unpaid interest on the Mortgage Loan up
to the next Due Date at the applicable Net Mortgage Rate, net of any
unreimbursed Advances of principal and interest on the Mortgage Loan made by the
Master Servicer. Countrywide Home Loans will remit the purchase price to the
Master Servicer for deposit into the Certificate Account within one Business Day
of the purchase of that Mortgage Loan. Purchases of Mortgage Loans may occur
when prevailing interest rates are below the Mortgage Rates on the Mortgage
Loans and borrowers request modifications as an alternative to refinancings.
Countrywide Home Loans will indemnify the Trust Fund against liability for any
prohibited transactions taxes and related interest, additions or penalties
incurred by any REMIC as a result of any modification or purchase.

                               THE ISSUING ENTITY

      In connection with the issuance of the Certificates, the Depositor has
formed CWABS Asset-Backed Certificates Trust 2006-4, a common law trust created
under the laws of the State of New York pursuant to the Pooling and Servicing
Agreement. CWABS Asset-Backed Certificates Trust 2006-4 is referred to in this
prospectus supplement as the "ISSUING ENTITY" and is referred to in the
prospectus as the "TRUST" or the "TRUST FUND." The Trustee serves as trustee of
the issuing entity and acts on behalf of the issuing entity as the issuing
entity does not have any directors, officers or employees. The fiscal year end
of the issuing entity is December 31.

      The issuing entity's activities are limited to the transactions and
activities entered into in connection with the securitization described in this
prospectus supplement, and except for those activities, the issuing entity is
not authorized and has no power to borrow money or issue debt, merge with
another entity, reorganize, liquidate or sell assets or engage in any business
or activities. Consequently, the issuing entity is not permitted to hold any
assets, or incur any liabilities, other than those described in this prospectus
supplement. Since the issuing entity is created pursuant to the Pooling and
Servicing Agreement, the issuing entity and its permissible activities can only
be amended or modified by amending the Pooling and Servicing Agreement.

      Since the issuing entity is a common law trust, it may not be eligible for
relief under the federal bankruptcy laws, unless it can be characterized as a
"business trust" for purposes of the federal bankruptcy laws. Bankruptcy courts
look at various considerations in making this determination, so it is not
possible to predict with any certainty whether or not the issuing entity would
be characterized as a "business trust."


                                      S-44



                                STATIC POOL DATA

      Certain static pool data with respect to the delinquency, cumulative loss
and prepayment data for Countrywide Home Loans is available online at
http://www.countrywidedealsdata.com?CWDD=02200603. This static pool data is not
deemed part of the prospectus or the registration statement of which the
prospectus is a part to the extent that the static pool data relates to:

   o  prior securitized pools of Countrywide Home Loans that do not include the
      Mortgage Loans and that were established before January 1, 2006; or

   o  in the case of information regarding the Mortgage Loans, information about
      the Mortgage Loans for periods before January 1, 2006.

                         DESCRIPTION OF THE CERTIFICATES

GENERAL

      The Certificates will be issued pursuant to the Pooling and Servicing
Agreement. We summarize below the material terms and provisions pursuant to
which the Certificates will be issued. The summaries are subject to, and are
qualified in their entirety by reference to, the provisions of the Pooling and
Servicing Agreement. When particular provisions or terms used in the Pooling and
Servicing Agreement are referred to, the actual provisions (including
definitions of terms) are incorporated by reference. We will file a final copy
of the Pooling and Servicing Agreement after the issuing entity issues the
Certificates.

      The CWABS, Inc., Asset-Backed Certificates, Series 2006-4 (the
"CERTIFICATES") will consist of: Class 1-A-1, Class 1-A-1M, Class 2-A-1, Class
2-A-2, Class 2-A-3, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6, Class M-7, Class M-8, Class B, Class A-R, Class P and Class C Certificates.

      When describing the Certificates in this prospectus supplement we use the
following terms:



        DESIGNATION                                                 CLASS OF CERTIFICATES
------------------------------------     ----------------------------------------------------------------------------

CLASS A CERTIFICATES:                    Class 1-A and Class 2-A Certificates

CLASS 1-A CERTIFICATES:                  Class 1-A-1 and Class 1-A-1M Certificates

CLASS 2-A CERTIFICATES:                  Class 2-A-1, Class 2-A-2 and Class 2-A-3 Certificates

SENIOR CERTIFICATES:                     Class A and Class A-R Certificates

CLASS M CERTIFICATES:                    Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7
                                         and Class M-8 Certificates

SUBORDINATE CERTIFICATES:                Class M and Class B Certificates

ADJUSTABLE RATE CERTIFICATES
   OR SWAP CERTIFICATES:                 Class A and Subordinate Certificates

OFFERED CERTIFICATES:                    Class A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6
                                         and Class A-R Certificates


The Certificates are generally referred to as the following types:

      CLASS                                                     TYPE
------------------------------------------------     ---------------------------
Class A Certificates:                                Senior/Adjustable Rate
Subordinate Certificates:                            Subordinate/Adjustable Rate
Class A-R Certificates:                              Senior/REMIC Residual
Class P Certificates:                                Prepayment Charges
Class C Certificates:                                Residual


                                      S-45



      Generally:

      o     distributions of principal and interest on the Class 1-A
            Certificates will be based on amounts available for distribution in
            respect of the Mortgage Loans in Loan Group 1;

      o     distributions of principal and interest on the Class 2-A
            Certificates will be based on amounts available for distribution in
            respect of the Mortgage Loans in Loan Group 2;

      o     distributions of principal and interest on the Subordinate
            Certificates will be based on amounts available for distribution in
            respect of the Mortgage Loans in Loan Group 1 and Loan Group 2;

      o     distributions on the Class P and Class C Certificates, to the extent
            provided in the Pooling and Servicing Agreement, will be based on
            amounts available for distribution in respect of the Mortgage Loans
            in Loan Group 1 and Loan Group 2; and

      o     distributions on the Class A-R Certificates, to the extent provided
            in the Pooling and Servicing Agreement, will be based on amounts
            available for distribution in respect of the Mortgage Loans in Loan
            Group 1 and Loan Group 2.

BOOK-ENTRY CERTIFICATES; DENOMINATIONS

      The Offered Certificates (other than the Class A-R Certificates) will be
book-entry certificates (the "BOOK-ENTRY CERTIFICATES"). The Class A-R
Certificates will be issued as two certificates in fully registered certificated
form. Persons acquiring beneficial ownership interests in the Book-Entry
Certificates ("CERTIFICATE OWNERS") may elect to hold their Book-Entry
Certificates through the Depository Trust Company ("DTC") in the United States,
or Clearstream, Luxembourg or the Euroclear System ("EUROCLEAR"), in Europe, if
they are participants of these systems, or indirectly through organizations
which are participants in these systems. Each class of Book-Entry Certificates
will be issued in one or more certificates which equal the aggregate Certificate
Principal Balance of the applicable class of the Book-Entry Certificates and
will initially be registered in the name of Cede & Co., the nominee of DTC.
Beneficial interests in the Book-Entry Certificates may be held in minimum
denominations representing Certificate Principal Balances of $20,000 and
integral multiples of $1,000 in excess thereof. Except as set forth under
"Description of the Securities--Book-Entry Registration of the Securities" in
the prospectus, no person acquiring a beneficial ownership interest in a
Book-Entry Certificate (each, a "BENEFICIAL OWNER") will be entitled to receive
a physical certificate representing the person's beneficial ownership interest
in the Book-Entry Certificate (a "DEFINITIVE CERTIFICATE"). Unless and until
Definitive Certificates are issued, it is anticipated that the only
certificateholder of the Book-Entry Certificates will be Cede & Co., as nominee
of DTC. Certificate Owners will not be certificateholders as that term is used
in the Pooling and Servicing Agreement. Certificate Owners are only permitted to
exercise their rights indirectly through the participating organizations that
utilize the services of DTC, including securities brokers and dealers, banks and
trust companies and clearing corporations and certain other organizations
("PARTICIPANTS") and DTC. See "Description of the Securities--Book-Entry
Registration of the Securities" in the prospectus.

GLOSSARY OF TERMS

      The following terms have the meanings shown below to help describe the
cash flow on the Certificates. The definitions are organized based on the
context in which they are most frequently used. However, certain definitions may
be used in multiple contexts.

      General Definitions.

      "ADJUSTED NET MORTGAGE RATE" with respect to each Mortgage Loan means the
Mortgage Rate less the related Expense Fee Rate.


                                      S-46



      "BUSINESS DAY" is any day other than:

            (1)   a Saturday or Sunday or

            (2)   a day on which banking institutions in the state of New York
      or California are required or authorized by law to be closed.

      "CERTIFICATE PRINCIPAL BALANCE" means for any class of Certificates (other
than the Class C Certificates), the aggregate outstanding principal balance of
all Certificates of the class, less:

            (1)   all amounts previously distributed to holders of Certificates
      of that class as scheduled and unscheduled payments of principal; and

            (2)   the Applied Realized Loss Amounts allocated to the class;

provided, however, that if Applied Realized Loss Amounts have been allocated to
the Certificate Principal Balance of any class of Certificates, the Certificate
Principal Balance thereof will be increased on each Distribution Date after the
allocation of Applied Realized Loss Amounts, sequentially by class in the order
of distribution priority, by the amount of Subsequent Recoveries for the related
Loan Group or Loan Groups, collected during the related Due Period (if any) (but
not by more than the amount of the Unpaid Realized Loss Amount for the class);
and provided further, however, that any amounts distributed to one or more
classes of Senior Certificates related to a Loan Group in respect of Applied
Realized Loss Amounts will be distributed to those classes on a pro rata basis
according to the respective Unpaid Realized Loss Amounts for those classes,
except that any amounts distributed in respect of Applied Realized Loss Amounts
with respect to the Class 1-A-1 and 1-A-1M Certificates will be allocated
sequentially to the Class 1-A-1 and Class 1-A-1M Certificates, in that order, in
an amount equal to the Unpaid Realized Loss Amount for each such class.

      After any allocation of amounts in respect of Subsequent Recoveries to the
Certificate Principal Balance of a class of Certificates, a corresponding
decrease will be made on the Distribution Date to the Unpaid Realized Loss
Amount for that class or classes. Although Subsequent Recoveries, if any, will
be allocated to increase the Certificate Principal Balance of a class of
Certificates, the Subsequent Recoveries will be included in the applicable
Principal Remittance Amount and distributed in the priority set forth below
under "--Distributions--Distributions of Principal." Therefore these Subsequent
Recoveries may not be used to make any principal payments on the class or
classes of Certificates for which the Certificate Principal Balances have been
increased by allocation of Subsequent Recoveries. Additionally, holders of these
Certificates will not be entitled to any payment in respect of interest that
would have accrued on the amount of the increase in Certificate Principal
Balance for any Accrual Period preceding the Distribution Date on which the
increase occurs.

      "DISTRIBUTION DATE" means the 25th day of each month, or if the 25th day
is not a Business Day, on the first Business Day thereafter, commencing in March
2006.

      "DUE PERIOD" means with respect to any Distribution Date, the period
beginning on the second day of the calendar month preceding the calendar month
in which the Distribution Date occurs and ending on the first day of the month
in which the Distribution Date occurs.

      "EXCESS PROCEEDS" with respect to a liquidated Mortgage Loan means the
amount, if any, by which the sum of any Liquidation Proceeds and Subsequent
Recoveries exceed the sum of (i) the unpaid principal balance of the Mortgage
Loan plus (ii) accrued interest on the Mortgage Loan at the Mortgage Rate during
each Due Period as to which interest was not paid or advanced on the Mortgage
Loan.

      "FINAL RECOVERY DETERMINATION" means a determination by the Master
Servicer that it has received all proceeds it expects to receive with respect to
the liquidation of a Mortgage Loan.

      "INSURANCE PROCEEDS" means all proceeds of any insurance policy received
prior to or in connection with a Final Recovery Determination (to the extent
that the proceeds are not applied to the restoration of the property or


                                      S-47



released to the borrower in accordance with the Master Servicer's normal
servicing procedures), other than proceeds that represent reimbursement of the
Master Servicer's costs and expenses incurred in connection with presenting
claims under the related insurance policy.

      "LIQUIDATION PROCEEDS" means any Insurance Proceeds and all other net
proceeds received prior to or in connection with a Final Recovery Determination
in connection with the partial or complete liquidation of a Mortgage Loan
(whether through trustee's sale, foreclosure sale or otherwise) or in connection
with any condemnation or partial release of the related Mortgaged Property,
together with the net proceeds received prior to or in connection with a Final
Recovery Determination with respect to any Mortgaged Property acquired by the
Master Servicer by foreclosure or deed in lieu of foreclosure in connection with
a defaulted Mortgage Loan (other than the amount of the net proceeds
representing Excess Proceeds and net of reimbursable expenses).

      "PERCENTAGE INTEREST" with respect to any Certificate, means the
percentage derived by dividing the denomination of the Certificate by the
aggregate denominations of all Certificates of the applicable class.

      "RECORD DATE" means:

            (1)   in the case of the Adjustable Rate Certificates, the Business
      Day immediately preceding the Distribution Date, unless the Adjustable
      Rate Certificates are no longer book-entry certificates, in which case the
      Record Date will be the last Business Day of the month preceding the month
      of the Distribution Date, and

            (2)   in the case of the Class A-R Certificates, the last Business
      Day of the month preceding the month of the Distribution Date.

      "SUBSEQUENT RECOVERIES" means, with respect to any Mortgage Loan in
respect of which a Realized Loss was incurred, any proceeds of the type
described in the definitions of "Insurance Proceeds" and "Liquidation Proceeds"
received in respect of the Mortgage Loan after a Final Recovery Determination
(other than the amount of the net proceeds representing Excess Proceeds and net
of reimbursable expenses).

      Definitions related to Interest Calculations and Distributions.

      "ACCRUAL PERIOD" for any Distribution Date and the Adjustable Rate
Certificates, means the period from and including the preceding Distribution
Date (or from and including the Closing Date in the case of the first
Distribution Date) to and including the day prior to the current Distribution
Date.

      "CURRENT INTEREST" with respect to each class of interest-bearing
certificates and each Distribution Date means the interest accrued at the
Pass-Through Rate for the applicable Accrual Period on the Certificate Principal
Balance of the class immediately prior to the Distribution Date.

      "EXPENSE FEE RATE" with respect to each Mortgage Loan is equal to the sum
of the Servicing Fee Rate and the Trustee Fee Rate and, with respect to any
Mortgage Loan covered by a lender paid mortgage insurance policy, the related
mortgage insurance premium rate.

      "INTEREST CARRY FORWARD AMOUNT," with respect to each class of
interest-bearing certificates and each Distribution Date, is the excess of:

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

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

      "INTEREST DETERMINATION DATE" means for the Adjustable Rate Certificates,
the second LIBOR Business Day preceding the commencement of each Accrual Period.


                                      S-48



      "INTEREST FUNDS" means for any Loan Group and any Distribution Date, (1)
the Interest Remittance Amount for that Loan Group and the Distribution Date,
less (2) the portion of the Trustee Fee allocable to that Loan Group for the
Distribution Date, plus (3) the Adjusted Replacement Upfront Amount, if any,
allocable to that Loan Group.

      "INTEREST REMITTANCE AMOUNT" means with respect to each Loan Group and any
Distribution Date:

            (a)   the sum, without duplication, of:

                  (1)   all scheduled interest collected during the related Due
            Period (other than Credit Comeback Excess Amounts (if any)), less
            the related Master Servicing Fees,

                  (2)   all interest on prepayments, other than Prepayment
            Interest Excess,

                  (3)   all Advances relating to interest,

                  (4)   all Compensating Interest,

                  (5)   all Liquidation Proceeds collected during the related
            Due Period (to the extent that the Liquidation Proceeds relate to
            interest), and

                  (6)   the allocable portion of any Seller Shortfall Interest
            Requirement, less

            (b)   all Advances relating to interest and certain expenses
      reimbursed during the related Due Period,

in each case with respect to the Mortgage Loans in the Loan Group.

      "NET RATE CAP" for each Distribution Date means:

      (i) with respect to each class of Class 1-A Certificates, the weighted
average Adjusted Net Mortgage Rate of the Mortgage Loans in Loan Group 1 as of
the first day of the related Due Period (after giving effect to principal
prepayments received during the Prepayment Period that ends during such Due
Period), adjusted to an effective rate reflecting the calculation of interest on
the basis of the actual number of days elapsed during the related Accrual Period
and a 360-day year, minus a fraction, expressed as a percentage, the numerator
of which is (a) the product of (x) the sum of (1) the Net Swap Payment payable
to the Swap Counterparty with respect to such Distribution Date times a
fraction, the numerator of which is equal to 360 and the denominator of which is
equal to the actual number of days in the related Accrual Period and (2) any
Swap Termination Payment payable to the Swap Counterparty for such Distribution
Date (other than a Swap Termination Payment due to a Swap Counterparty Trigger
Event) and (y) a fraction, the numerator of which is the Interest Funds for Loan
Group 1 for such Distribution Date, and the denominator of which is the Interest
Funds for Loan Group 1 and Loan Group 2 for such Distribution Date, and the
denominator of which is (b) the sum of the aggregate Stated Principal Balance of
the Mortgage Loans in Loan Group 1 as of the first day of the related Due Period
(after giving effect to principal prepayments received during the Prepayment
Period that ends during such Due Period) plus any amounts on deposit in the
Pre-Funding Account in respect of Loan Group 1 as of the first day of that Due
Period,

      (ii) with respect to each class of Class 2-A Certificates, the weighted
average Adjusted Net Mortgage Rate of the Mortgage Loans in Loan Group 2 as of
the first day of the related Due Period (after giving effect to principal
prepayments received during the Prepayment Period that ends during such Due
Period), adjusted to an effective rate reflecting the calculation of interest on
the basis of the actual number of days elapsed during the related Accrual Period
and a 360-day year, minus a fraction, expressed as a percentage, the numerator
of which is (a) the product of (x) the sum of (1) the Net Swap Payment payable
to the Swap Counterparty with respect to such Distribution Date times a
fraction, the numerator of which is equal to 360 and the denominator of which is
equal to the actual number of days in the related Accrual Period and (2) any
Swap Termination Payment payable to the Swap Counterparty for such Distribution
Date (other than a Swap Termination Payment due to a Swap Counterparty Trigger
Event) and (y)


                                      S-49



a fraction, the numerator of which is the Interest Funds for Loan Group 2 for
such Distribution Date, and the denominator of which is the Interest Funds for
Loan Group 1 and Loan Group 2 for such Distribution Date, and the denominator of
which is (b) the sum of the aggregate Stated Principal Balance of the Mortgage
Loans in Loan Group 2 as of the first day of the related Due Period (after
giving effect to principal prepayments received during the Prepayment Period
that ends during such Due Period) plus any amounts on deposit in the Pre-Funding
Account in respect of Loan Group 2 as of the first day of that Due Period, and

           (iii) with respect to each class of Subordinate Certificates, the
weighted average of the Net Rate Cap for the Class 1-A and Class 2-A
Certificates (weighted by an amount equal to the positive difference (if any) of
the sum of the aggregate Stated Principal Balance of the Mortgage Loans in the
related Loan Group and the amount on deposit in the Pre-Funding Account in
respect of that Loan Group) over the outstanding aggregate Certificate Principal
Balance of the Class 1-A and Class 2-A Certificates, respectively.

      "NET RATE CARRYOVER" for a class of interest-bearing certificates on any
Distribution Date means the excess of:

            (1)   the amount of interest that the class would have accrued for
      the Distribution Date had the Pass-Through Rate for that class and the
      related Accrual Period not been calculated based on the applicable Net
      Rate Cap, over

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

      plus the unpaid portion of this excess from prior Distribution Dates (and
interest accrued thereon at the then applicable Pass-Through Rate, without
giving effect to the applicable Net Rate Cap).

      "PASS-THROUGH MARGIN" for each class of Adjustable Rate Certificates means
the following:

                                                      (1)              (2)
                                                 -------------    ------------
                 Class 1-A-1....................     0.190%          0.380%
                 Class 1-A-1M...................     0.260%          0.520%
                 Class 2-A-1....................     0.070%          0.140%
                 Class 2-A-2....................     0.180%          0.360%
                 Class 2-A-3....................     0.290%          0.580%
                 Class M-1......................     0.350%          0.525%
                 Class M-2......................     0.370%          0.555%
                 Class M-3......................     0.390%          0.585%
                 Class M-4......................     0.510%          0.765%
                 Class M-5......................     0.530%          0.795%
                 Class M-6......................     0.600%          0.900%
                 Class M-7......................     1.300%          1.950%
                 Class M-8......................     1.500%          2.250%
                 Class B........................     2.250%          3.375%

_____________
(1)   For each Accrual Period relating to any Distribution Date occurring on or
      prior to the Optional Termination Date.

(2)   For each Accrual Period relating to any Distribution Date occurring after
      the Optional Termination Date.

      "PASS-THROUGH RATE" with respect to each Accrual Period and each class of
Adjustable Rate Certificates means a per annum rate equal to the lesser of:

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

            (2)   the applicable Net Rate Cap for the related Distribution Date.


                                      S-50



      "SELLER SHORTFALL INTEREST REQUIREMENT" with respect to the Master
Servicer Advance Date in each of March 2006, April 2006 and May 2006 means the
sum of:

            (a)   the product of (1) the excess of the aggregate Stated
      Principal Balance for the Distribution Date of all the Mortgage Loans in
      the Mortgage Pool (including the Subsequent Mortgage Loans, if any) owned
      by the issuing entity at the beginning of the related Due Period, over the
      aggregate Stated Principal Balance for the Distribution Date of the
      Mortgage Loans (including the Subsequent Mortgage Loans, if any) that have
      a scheduled payment of interest due in the related Due Period, and (2) a
      fraction, the numerator of which is the weighted average Net Mortgage Rate
      of all the Mortgage Loans in the Mortgage Pool (including the Subsequent
      Mortgage Loans, if any) (weighted on the basis of the Stated Principal
      Balances thereof for the Distribution Date) and the denominator of which
      is 12; and

            (b)   the lesser of:

                  (i)   the product of (1) the amount on deposit in the
            Pre-Funding Account at the beginning of the related Due Period, and
            (2) a fraction, the numerator of which is the weighted average Net
            Mortgage Rate of the Mortgage Loans (including Subsequent Mortgage
            Loans, if any) owned by the issuing entity at the beginning of the
            related Due Period (weighted on the basis of the Stated Principal
            Balances thereof for the Distribution Date) and the denominator of
            which is 12; and

                  (ii)   the excess of (x) the sum of the amount of Current
            Interest and Interest Carry Forward Amount due and payable on the
            Adjustable Rate Certificates for the Distribution Date over (y) the
            sum of (1) Interest Funds (less any portion of Interest Funds
            allocated to the swap trust to cover any Net Swap Payment due to the
            Swap Counterparty with respect to such Distribution Date) available
            to pay the amounts specified in clause (b)(ii)(x) of this definition
            (after giving effect to the addition of any amounts in clause (a) of
            this definition of Seller Shortfall Interest Requirement to Interest
            Funds for the Distribution Date) and (2) any Net Swap Payment
            received by the Swap Contract Administrator from the Swap
            Counterparty for the Distribution Date and allocated to the swap
            trust to pay Current Interest and Interest Carry Forward Amounts on
            the Adjustable Rate Certificates for the Distribution Date.

      "TRUSTEE FEE RATE" means a rate equal to 0.009% per annum.

      Definitions related to Principal Calculations and Distributions.

      "CLASS 1-A PRINCIPAL DISTRIBUTION AMOUNT" for any Distribution Date means
the product of (x) the Class A Principal Distribution Target Amount and (y) a
fraction, the numerator of which is the Principal Remittance Amount for Loan
Group 1 and the denominator of which is the sum of the Principal Remittance
Amounts for both Loan Groups.

      "CLASS 2-A PRINCIPAL DISTRIBUTION AMOUNT" for any Distribution Date means
the product of (x) the Class A Principal Distribution Target Amount and (y) a
fraction, the numerator of which is the Principal Remittance Amount for Loan
Group 2 and the denominator of which is the sum of the Principal Remittance
Amounts for both Loan Groups.

      "CLASS A PRINCIPAL DISTRIBUTION TARGET AMOUNT" for any Distribution Date
means the excess of:

            (1)   the aggregate Certificate Principal Balance of the Class A
      Certificates immediately prior to the Distribution Date, over

            (2)   the lesser of (i) 58.30% of the aggregate Stated Principal
      Balance of the Mortgage Loans for the Distribution Date and (ii) the
      aggregate Stated Principal Balance of the Mortgage Loans for the
      Distribution Date minus the OC Floor.


                                      S-51



      "CUMULATIVE LOSS TRIGGER EVENT" with respect to any Distribution Date on
or after the Stepdown Date, a Cumulative Loss Trigger Event is in effect if (x)
the aggregate amount of Realized Losses on the Mortgage Loans from the Cut-off
Date for each Mortgage Loan to (and including) the last day of the related Due
Period (reduced by the aggregate amount of any Subsequent Recoveries received
through the last day of that Due Period) exceeds (y) the applicable percentage,
for the Distribution Date, of the sum of the aggregate Initial Cut-off Date Pool
Principal Balance and the original Pre-Funded Amount, as set forth below:



Distribution Date                                             Percentage
---------------------------                                   ---------------------

March 2008 -- February 2009.................................  1.40% with respect to March 2008, plus an
                                                              additional 1/12th of 1.70% for each month
                                                              thereafter through February 2009

March 2009 -- February 2010.................................  3.10% with respect to March 2009, plus an
                                                              additional 1/12th of 1.75% for each month
                                                              thereafter through February 2010

March 2010 -- February 2011.................................  4.85% with respect to March 2010, plus an
                                                              additional 1/12th of 1.40% for each month
                                                              thereafter through February 2011

March 2011 -- February 2012.................................  6.25% with respect to March 2011, plus an
                                                              additional 1/12th of 0.25% for each month
                                                              thereafter through February 2012

March 2012 and thereafter..................................   6.50%


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

                            Class                  Percentage
                --------------------------      ----------------
                A.........................           38.00%
                M-1.......................           46.25%
                M-2.......................           58.00%
                M-3.......................           68.00%
                M-4.......................           80.00%
                M-5.......................           96.50%
                M-6.......................          119.00%
                M-7.......................          150.75%
                M-8.......................          203.00%
                B.........................          273.00%

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

      "EXTRA PRINCIPAL DISTRIBUTION AMOUNT" with respect to any Distribution
Date means the lesser of (1) the Overcollateralization Deficiency Amount and (2)
the sum of the Excess Cashflow and the Credit Comeback Excess Cashflow available
for payment thereof, to be allocated between Loan Group 1 and Loan Group 2, pro
rata, based on the Principal Remittance Amount for each such Loan Group for that
Distribution Date.

      "GROUP 1 OVERCOLLATERALIZATION REDUCTION AMOUNT" for any Distribution Date
is the Overcollateralization Reduction Amount for such Distribution Date
multiplied by a fraction, the numerator of which is the Principal


                                      S-52



Remittance Amount for Loan Group 1 for such Distribution Date, and the
denominator of which is the aggregate Principal Remittance Amount for Loan Group
1 and Loan Group 2 for such Distribution Date.

      "GROUP 2 OVERCOLLATERALIZATION REDUCTION AMOUNT" for any Distribution Date
is the Overcollateralization Reduction Amount for such Distribution Date
multiplied by a fraction, the numerator of which is the Principal Remittance
Amount for Loan Group 2 for such Distribution Date, and the denominator of which
is the aggregate Principal Remittance Amount for Loan Group 1 and Loan Group 2
for such Distribution Date.

      "OC FLOOR" means an amount equal to 0.50% of the sum of the aggregate
Initial Cut-off Date Pool Principal Balance and the original Pre-Funded Amount.

      "OVERCOLLATERALIZATION DEFICIENCY AMOUNT" with respect to any Distribution
Date means the amount, if any, by which the Overcollateralization Target Amount
exceeds the Overcollateralized Amount on the Distribution Date (after giving
effect to distribution of the Principal Distribution Amount (other than the
portion thereof consisting of the Extra Principal Distribution Amount) on the
Distribution Date).

      "OVERCOLLATERALIZATION REDUCTION AMOUNT" for any Distribution Date is an
amount equal to the lesser of (i) the Excess Overcollateralization Amount for
the Distribution Date and (ii) the Principal Remittance Amount for Loan Group 1
and Loan Group 2 for the Distribution Date.

      "OVERCOLLATERALIZATION TARGET AMOUNT" with respect to any Distribution
Date means (a) prior to the Stepdown Date, an amount equal to 2.90% of the sum
of the aggregate Initial Cut-off Date Pool Principal Balance and the original
Pre-Funded Amount and (b) on or after the Stepdown Date, the greater of (i) an
amount equal to 5.80% of the aggregate Stated Principal Balance of the Mortgage
Loans for the current Distribution Date and (ii) the OC Floor; provided,
however, that if a Trigger Event is in effect on any Distribution Date, the
Overcollateralization Target Amount will be the Overcollateralization Target
Amount as in effect for the prior Distribution Date.

      "OVERCOLLATERALIZED AMOUNT" for any Distribution Date means the amount, if
any, by which (x) the sum of the aggregate Stated Principal Balance of the
Mortgage Loans for the Distribution Date and any amount on deposit in the
Pre-Funding Account on the Distribution Date exceeds (y) the sum of the
aggregate Certificate Principal Balance of the Adjustable Rate Certificates as
of the Distribution Date (after giving effect to distribution of the Principal
Remittance Amounts to be made on the Distribution Date and, in the case of the
Distribution Date immediately following the end of the Funding Period, any
amounts to be released from the Pre-Funding Account).

      "PRINCIPAL DISTRIBUTION AMOUNT" with respect to each Distribution Date and
a Loan Group means the sum of:

            (1)   the Principal Remittance Amount for the Loan Group for the
      Distribution Date, less any portion of such amount used to cover any
      payment due to the Swap Counterparty with respect to such Distribution
      Date,

            (2)   the Extra Principal Distribution Amount for the Loan Group for
      the Distribution Date, and

            (3)   with respect to the Distribution Date immediately following
      the end of the Funding Period, the amount, if any, remaining in the
      Pre-Funding Account at the end of the Funding Period (net of any
      investment income therefrom) allocable to the Loan Group.

            minus

            (4)  (a) the Group 1 Overcollateralization Reduction Amount for the
      Distribution Date, in the case of Loan Group 1, and (b) the Group 2
      Overcollateralization Reduction Amount for the Distribution Date, in the
      case of Loan Group 2.


                                      S-53



      "PRINCIPAL REMITTANCE AMOUNT" with respect to each Loan Group and any
Distribution Date means:

            (a)   the sum, without duplication, of:

                  (1)   the scheduled principal collected during the related Due
            Period or advanced with respect to the Distribution Date,

                  (2)   prepayments collected in the related Prepayment Period,

                  (3)   the Stated Principal Balance of each Mortgage Loan that
            was repurchased by a Seller or purchased by the Master Servicer,

                  (4)   the amount, if any, by which the aggregate unpaid
            principal balance of any Replacement Mortgage Loans delivered by
            Countrywide Home Loans in connection with a substitution of a
            Mortgage Loan is less than the aggregate unpaid principal balance of
            any Deleted Mortgage Loans, and

                  (5)   all Liquidation Proceeds (to the extent that the
            Liquidation Proceeds relate to principal) and Subsequent Recoveries
            collected during the related Due Period, less

            (b)   all Advances relating to principal and certain expenses
      reimbursed during the related Due Period,

in each case with respect to the Mortgage Loans in the Loan Group.

      "REALIZED LOSS" means with respect to any defaulted Mortgage Loan, the
excess of the Stated Principal Balance of the defaulted Mortgage Loan over the
Liquidation Proceeds allocated to principal that have been received with respect
to the defaulted Mortgage Loan on or at any time prior to the last day of the
related Due Period during which the defaulted Mortgage Loan is liquidated.

      "ROLLING SIXTY-DAY DELINQUENCY RATE" with respect to any Distribution Date
on or after the Stepdown Date, means the average of the Sixty-Day Delinquency
Rates for the Distribution Date and the two immediately preceding Distribution
Dates.

      "SENIOR ENHANCEMENT PERCENTAGE" with respect to any Distribution Date on
or after the Stepdown Date means a fraction (expressed as a percentage):

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

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

                  (b)   (i) before the Certificate Principal Balances of the
            Class A Certificates have been reduced to zero, the sum of the
            Certificate Principal Balances of the Class A Certificates, or (ii)
            after the Certificate Principal Balances of the Class A Certificates
            have been reduced to zero, the Certificate Principal Balance of the
            most senior class of Subordinate Certificates outstanding, as of the
            preceding Master Servicer Advance Date, and

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

           "STEPDOWN DATE" is the earlier to occur of:

            (a)   the Distribution Date on which the aggregate Certificate
Principal Balance of the Class A Certificates is reduced to zero, and


                                      S-54



            (b)   the later to occur of (x) the Distribution Date in March 2009
      and (y) the first Distribution Date on which the aggregate Certificate
      Principal Balance of the Class A Certificates (after calculating
      anticipated distributions on the Distribution Date) is less than or equal
      to 58.30% of the aggregate Stated Principal Balance of the Mortgage Loans
      for the Distribution Date.

      "SIXTY-DAY DELINQUENCY RATE" with respect to any Distribution Date on or
after the Stepdown Date means a fraction, expressed as a percentage, the
numerator of which is the aggregate Stated Principal Balance for the
Distribution Date of all Mortgage Loans 60 or more days delinquent as of the
close of business on the last day of the calendar month preceding the
Distribution Date (including Mortgage Loans in foreclosure, bankruptcy and REO
Properties) and the denominator of which is the aggregate Stated Principal
Balance for the Distribution Date of all Mortgage Loans.

      "INITIAL TARGET SUBORDINATION PERCENTAGE" and "STEPDOWN TARGET
SUBORDINATION PERCENTAGE" for any class of Subordinate Certificates means the
respective percentages indicated in the following table:

                                 Initial Target        Stepdown Target
                                  Subordination         Subordination
                                   Percentage            Percentage
                              --------------------   -------------------
      Class M-1............          17.10%                 34.20%
      Class M-2............          13.65%                 27.30%
      Class M-3............          11.65%                 23.30%
      Class M-4............           9.90%                 19.80%
      Class M-5............           8.20%                 16.40%
      Class M-6............           6.65%                 13.30%
      Class M-7............           5.25%                 10.50%
      Class M-8............           3.90%                  7.80%
      Class B..............           2.90%                  5.80%

      The Initial Target Subordination Percentages will not be used to calculate
distributions on the Subordinate Certificates, but rather are presented in order
to provide a better understanding of the credit enhancement provided by the
Subordinate Certificates and the related overcollateralization amount. The
Initial Target Subordination Percentage for any class of Subordinate
Certificates is equal to a fraction, expressed as a percentage, the numerator of
which is equal to the aggregate original Certificate Principal Balance of any
class(es) of Certificates subordinate to the subject class plus the initial
Overcollateralization Target Amount and the denominator of which is equal to the
sum of the aggregate Initial Cut-off Date Pool Principal Balance and the
original Pre-Funded Amount.

      "SUBORDINATE CLASS PRINCIPAL DISTRIBUTION AMOUNT" for each class of
Subordinate Certificates and Distribution Date means the excess of:

            (1)   the sum of:

                  (a)   the aggregate Certificate Principal Balance of the
            Class A Certificates (after taking into account distribution of the
            Class 1-A Principal Distribution Amount and the Class 2-A Principal
            Distribution Amount for the Distribution Date),

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

                  (c)   the Certificate Principal Balance of the subject class
            of Subordinate Certificates immediately prior to the Distribution
            Date over

           (2)    the lesser of (a) the product of (x) 100% minus the Stepdown
      Target Subordination Percentage for the subject class of Certificates and
      (y) the aggregate Stated Principal Balance of the


                                      S-55



      Mortgage Loans for the Distribution Date and (b) the aggregate Stated
      Principal Balance of the Mortgage Loans for the Distribution Date minus
      the OC Floor;

provided, however, that if a class of Subordinate Certificates is the only class
of Subordinate Certificates outstanding on the Distribution Date, that class
will be entitled to receive the entire remaining Principal Distribution Amount
for Loan Group 1 and Loan Group 2 until the Certificate Principal Balance
thereof is reduced to zero.

      "TRIGGER EVENT" with respect to any Distribution Date on or after the
Stepdown Date means either a Delinquency Trigger Event with respect to that
Distribution Date or a Cumulative Loss Trigger Event with respect to that
Distribution Date.

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

DEPOSITS TO THE CERTIFICATE ACCOUNT

      The Master Servicer will establish and initially maintain a certificate
account (the "CERTIFICATE ACCOUNT") for the benefit of the Trustee on behalf of
the certificateholders. The Master Servicer will initially establish the
Certificate Account at Countrywide Bank, N.A., which is an affiliate of the
Master Servicer. On a daily basis within two Business Days after receipt, the
Master Servicer will deposit or cause to be deposited into the Certificate
Account the following payments and collections received by it in respect to the
Mortgage Loans after the Cut-off Date (other than any scheduled principal due on
or prior to the Cut-off Date and any interest accruing prior to the Cut-off
Date):

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

            (2)   all payments on account of interest (other than interest
      accruing on the Mortgage Loans prior to the Cut-off Date) on the Mortgage
      Loans, net of the related Master Servicing Fees on the Mortgage Loans and
      net of Prepayment Interest Excess,

            (3)   all Insurance Proceeds, Liquidation Proceeds and Subsequent
      Recoveries,

            (4)   all payments made by the Master Servicer in respect of
      Compensating Interest,

            (5)   all payments made by a Seller in connection with the
      repurchase of any Mortgage Loan due to the breach of certain
      representations, warranties or covenants by the Seller that obligates the
      Seller to repurchase the Mortgage Loan in accordance with the Pooling and
      Servicing Agreement,

            (6)   all payments made by the Master Servicer in connection with
      the purchase of any Mortgage Loans which are 150 days delinquent in
      accordance with the Pooling and Servicing Agreement,

            (7)   all prepayment charges paid by a borrower in connection with
      the full or partial prepayment of the related Mortgage Loan,

            (8)   any amount required to be deposited by the Master Servicer in
      connection with any losses on investment of funds in the Certificate
      Account,

            (9)   any amounts required to be deposited by the Master Servicer
      with respect to any deductible clause in any blanket hazard insurance
      policy maintained by the Master Servicer in lieu of requiring each
      borrower to maintain a primary hazard insurance policy,


                                      S-56



            (10)  all amounts required to be deposited in connection with
      shortfalls in the principal amount of Replacement Mortgage Loans, and

            (11)  all Advances.

      On the Business Day prior to the Master Servicer Advance Date in each of
March 2006, April 2006 and May 2006, Countrywide Home Loans will remit to the
Master Servicer, and the Master Servicer will deposit in the Certificate
Account, the Seller Shortfall Interest Requirement (if any) for the Master
Servicer Advance Date. Prior to their deposit in the Collection Account,
payments and collections on the Mortgage Loans will be commingled with payments
and collections on other mortgage loans and other funds of the Master Servicer.
For a discussion of the risks that arise from the commingling of payments and
collections, see "Risk Factors -- Bankruptcy Or Insolvency May Affect The Timing
And Amount Of Distributions On The Securities" in the prospectus.

WITHDRAWALS FROM THE CERTIFICATE ACCOUNT

      The Master Servicer may from time to time withdraw funds from the
Certificate Account prior to the related Distribution Account Deposit Date for
the following purposes:

            (1)   to pay to the Master Servicer the Master Servicing Fees on the
      Mortgage Loans to the extent not previously paid to or withheld by the
      Master Servicer (subject, in the case of Master Servicing Fees, to
      reduction as described above under "Servicing of the Mortgage Loans --
      Adjustment to Master Servicing Fee in Connection with Prepaid Mortgage
      Loans") and, as additional servicing compensation, assumption fees, late
      payment charges (excluding prepayment charges), net earnings on or
      investment income with respect to funds in or credited to the Certificate
      Account and the amount of Prepayment Interest Excess for the related
      Prepayment Period,

            (2)   to reimburse the Master Servicer for Advances, which right of
      reimbursement with respect to any Mortgage Loan pursuant to this clause
      (2) is limited to amounts received that represent late recoveries of
      payments of principal and/or interest on the related Mortgage Loan (or
      Insurance Proceeds, Liquidation Proceeds or Subsequent Recoveries with
      respect thereto) with respect to which the Advance was made,

            (3)   to reimburse the Master Servicer for any Advances previously
      made that the Master Servicer has determined to be nonrecoverable (and
      prior to the reimbursement, the Master Servicer will deliver to the
      Trustee an officer's certificate indicating the amount of the
      nonrecoverable Advance and identifying the related Mortgage Loan(s), and
      their respective portions of the nonrecoverable advance),

            (4)   to reimburse the Master Servicer from Insurance Proceeds for
      expenses incurred by the Master Servicer and covered by the related
      insurance policy,

            (5)   to pay to the Master Servicer any unpaid Master Servicing Fees
      and to reimburse it for any unreimbursed ordinary and necessary
      out-of-pocket costs and expenses incurred by the Master Servicer in the
      performance of its master servicing obligations including, but not limited
      to, the cost of (i) the preservation, restoration and protection of a
      Mortgaged Property, (ii) any enforcement or judicial proceedings,
      including foreclosures, (iii) the management and liquidation of any REO
      Property and (iv) maintaining any required insurance policies ("SERVICING
      ADVANCES"), which right of reimbursement pursuant to this clause (5) is
      limited to amounts received representing late recoveries of the payments
      of these costs and expenses (or Liquidation Proceeds or Subsequent
      Recoveries, purchase proceeds or repurchase proceeds with respect
      thereto),

            (6)   to pay to the applicable Seller or the Master Servicer, as
      applicable, with respect to each Mortgage Loan or Mortgaged Property
      acquired in respect thereof that has been purchased by that Seller or the
      Master Servicer from the issuing entity pursuant to the Pooling and
      Servicing Agreement, all amounts received thereon and not taken into
      account in determining the related Purchase Price of the purchased
      Mortgage Loan,


                                      S-57



            (7)   after the transfer from the Certificate Account for deposit to
      the Distribution Account of the Interest Remittance Amount and the
      Principal Remittance Amount on the related Distribution Account Deposit
      Date, to reimburse the applicable Seller, the Master Servicer, the NIM
      Insurer or the Depositor for expenses incurred and reimbursable pursuant
      to the Pooling and Servicing Agreement,

            (8)   to withdraw any amount deposited in the Certificate Account
      and not required to be deposited therein, and

            (9)   to clear and terminate the Certificate Account upon
      termination of the Pooling and Servicing Agreement.

      In addition, not later than 1:00 p.m. Pacific Time on the Business Day
immediately preceding each Distribution Date (the "DISTRIBUTION ACCOUNT DEPOSIT
DATE"), the Master Servicer will withdraw from the Certificate Account and remit
to the Trustee the Prepayment Charges collected, the Interest Remittance Amount
and the Principal Remittance Amount to the extent on deposit in the Certificate
Account, and the Trustee will deposit the amount in the Distribution Account, as
described below.

      The Master Servicer is required to maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Certificate Account pursuant to clauses (1) through (6)
above.

DEPOSITS TO THE DISTRIBUTION ACCOUNT

      The Trustee will establish and maintain a distribution account (the
"DISTRIBUTION ACCOUNT") on behalf of the certificateholders. The Trustee will,
promptly upon receipt, deposit in the Distribution Account and retain therein:

            (1)   the aggregate amount remitted by the Master Servicer to the
      Trustee,

            (2)   any amount required to be deposited by the Master Servicer in
      connection with any losses on investment of funds in the Distribution
      Account, and

            (3)   the amount, if any, remaining in the Pre-Funding Account (net
      of any investment income therefrom) on the Distribution Date immediately
      following the end of the Funding Period.

WITHDRAWALS FROM THE DISTRIBUTION ACCOUNT

      The Trustee will withdraw funds from the Distribution Account for
distribution to the certificateholders and remittances to the Swap Account as
described below under "-- Distributions" and may from time to time make
withdrawals from the Distribution Account:

            (1)   to pay the Trustee Fee to the Trustee,

            (2)   to pay to the Master Servicer, as additional servicing
      compensation, earnings on or investment income with respect to funds in or
      credited to the Distribution Account,

            (3)   to withdraw any amount deposited in the Distribution Account
      and not required to be deposited therein (which withdrawal may be at the
      direction of the Master Servicer through delivery of a written notice to
      the Trustee describing the amounts deposited in error), and

            (4)   to clear and terminate the Distribution Account upon the
      termination of the Pooling and Servicing Agreement.

      There is no independent verification of the transaction accounts or the
transaction activity with respect to the Distribution Account.


                                      S-58



      Prior to each Determination Date, the Master Servicer is required to
provide the Trustee a report containing the data and information concerning the
Mortgage Loans that is required by the Trustee to prepare the monthly statement
to certificateholders for the related Distribution Date. See " -- Reports to
Certificateholders" in this prospectus supplement. The Trustee is not
responsible for recomputing, recalculating or verifying the information provided
to it by the Master Servicer in that report and will be permitted to
conclusively rely on any information provided to it by the Master Servicer.

INVESTMENTS OF AMOUNTS HELD IN ACCOUNTS

      The Certificate Account, the Distribution Account and the Pre-Funding
Account. All funds in the Certificate Account, the Distribution Account and the
Pre-Funding Account will be invested in Permitted Investments at the direction
of the Master Servicer. In the case of:

      o     the Certificate Account and the Distribution Account, all income and
            gain net of any losses realized from the investment will be for the
            benefit of the Master Servicer as additional servicing compensation
            and will be remitted to it monthly as described herein; and

      o     the Pre-Funding Account, all income and gain net of any losses
            realized from the investment will be for the benefit of Countrywide
            Home Loans and will be remitted to Countrywide Home Loans as
            described herein.

      The amount of any losses incurred in the Certificate Account or the
Distribution Account in respect of the investments will be deposited by the
Master Servicer in the Certificate Account or paid to the Trustee for deposit
into the Distribution Account out of the Master Servicer's own funds immediately
as realized. The amount of any losses incurred in the Pre-Funding Account in
respect of the investments will be paid by Countrywide Home Loans to the Trustee
for deposit into the Pre-Funding Account out of Countrywide Home Loans' own
funds immediately as realized. The Trustee will not be liable for the amount of
any loss incurred in respect of any investment or lack of investment of funds
held in the Certificate Account, the Distribution Account or the Pre-Funding
Account and made in accordance with the Pooling and Servicing Agreement.

      Carryover Reserve Fund and Credit Comeback Excess Account. Funds in the
Carryover Reserve Fund and in the Credit Comeback Excess Account may be invested
in Permitted Investments, at the written direction of the majority holder of the
Class C Certificates.

      If the Trustee does not receive written directions regarding investment,
it will invest all funds in the Carryover Reserve Fund and in the Credit
Comeback Excess Account in Permitted Investments. Any net investment earnings
will be paid pro rata to the holders of the class of Certificates entitled to
direct the investments of the amounts, in accordance with their Percentage
Interests. Any losses incurred in the Carryover Reserve Fund or the Credit
Comeback Excess Account in respect of the investments will be charged against
amounts on deposit in the Carryover Reserve Fund (or the investments) or Credit
Comeback Excess Account (or the investments), as applicable, immediately as
realized. The Trustee will not be liable for the amount of any loss incurred in
respect of any investment or lack of investment of funds held in the Carryover
Reserve Fund or Credit Comeback Excess Account and made in accordance with the
Pooling and Servicing Agreement.

      Swap Account.  Funds in the Swap Account will not be invested.

THE SWAP ACCOUNT

      The Trustee, in its capacity as trustee of the swap trust, will establish
and maintain a swap account (the "SWAP ACCOUNT") on behalf of the holders of the
Swap Certificates and the Swap Counterparty. With respect to each Distribution
Date, the Trustee will deposit into the Swap Account any portion of the Interest
Funds for Loan Group 1 and Loan Group 2 for that Distribution Date (and, if
necessary, any portion of the Principal Remittance Amount for Loan Group 1 and
Loan Group 2 for that Distribution Date) that are to be remitted to the Swap
Contract Administrator for payment to the Swap Counterparty, as well as any
amounts received from the Swap Contract Administrator in respect of the Swap
Contract, each as described below under "-- The Swap Contract". With


                                      S-59



respect to each Distribution Date, following the deposits to the Swap Account
described in the preceding sentence, the Trustee will make a corresponding
withdrawal from the Swap Account for remittance to the Swap Contract
Administrator or distribution to the holders of the Swap Certificates, as the
case may be depending on whether a Net Swap Payment is due to the Swap
Counterparty or from the Swap Counterparty, as described below under "-- The
Swap Contract".


                                      S-60



FEES AND EXPENSES

      The following summarizes the related fees and expenses to be paid from the
assets of the issuing entity and the source of payments for the fees and
expenses:



 TYPE / RECIPIENT (1)                  AMOUNT                  GENERAL PURPOSE               SOURCE (2)                  FREQUENCY
----------------------  ------------------------------------  ------------------  ---------------------------------  -------------

FEES

Master Servicing Fee    One-twelfth of the Servicing Fee      Compensation        Collections with respect to each         Monthly
/ Master Servicer       Rate multiplied by the Stated                             Mortgage Loan and any
                        Principal Balance of each Mortgage                        Liquidation Proceeds or
                        Loan (3)                                                  Subsequent Recoveries

Additional Servicing    o  Prepayment Interest Excess (4)     Compensation        Interest collections with           Time to time
Compensation / Master                                                             respect to each Mortgage Loan
Servicer
                        o  All late payment fees, assumption  Compensation        Payments made by obligors with      Time to time
                           fees and other similar charges                         respect to the Mortgage Loans
                           (excluding prepayment
                           charges)

                        o  All investment income earned       Compensation        Investment income related to the         Monthly
                           on amounts on deposit in                               Certificate Account and
                           the Certificate Account and                            Distribution Account
                           Distribution Account

                        o  Excess Proceeds (5)                Compensation        Liquidation Proceeds and            Time to time
                                                                                  Subsequent Recoveries with
                                                                                  respect to each Mortgage Loan

Trustee Fee (the        One-twelfth of the Trustee Fee Rate   Compensation        Interest Remittance Amount               Monthly
"TRUSTEE FEE") /        multiplied by the sum of (i) the
Trustee                 aggregate Stated Principal Balance
                        of the outstanding Mortgage Loans
                        and (ii) any amounts remaining in
                        the Pre-Funding Account (excluding
                        any investment earnings thereon) (6)

EXPENSES

Insurance premiums /    Insurance premium(s) for Mortgage     Expense             Interest collections on the              Monthly
Mortgage Insurer        Loan(s) covered by lender-paid                            related Mortgage Loan(s)
                        mortgage insurance policies

Insurance expenses /    Expenses incurred by the Master       Reimbursement of    To the extent the expenses are      Time to time
Master Servicer         Servicer                              Expenses            covered by an insurance policy
                                                                                  with respect to the Mortgage Loan



                                      S-61





 TYPE / RECIPIENT (1)                  AMOUNT                  GENERAL PURPOSE               SOURCE (2)                  FREQUENCY
----------------------  ------------------------------------  ------------------  ---------------------------------  -------------

Servicing Advances /    To the extent of funds available,     Reimbursement of    With respect to each Mortgage       Time to time
Master Servicer         the amount of any Servicing           Expenses            Loan, late recoveries of the
                        Advances.                                                 payments of the costs and
                                                                                  expenses, Liquidation Proceeds,
                                                                                  Subsequent Recoveries, purchase
                                                                                  proceeds or repurchase proceeds
                                                                                  for that Mortgage Loan (7)

Indemnification         Amounts for which the Sellers, the    Indemnification     Amounts on deposit on the                Monthly
expenses / the          Master Servicer, the NIM Insurer                          Certificate Account on any
Sellers, the Master     and Depositor are entitled to                             Distribution Account Deposit
Servicer, the NIM       indemnification (8)                                       Date, following the transfer to
Insurer and the                                                                   the Distribution Account
Depositor


____________
(1)   If the Trustee succeeds to the position of Master Servicer, it will be
      entitled to receive the same fees and expenses of the Master Servicer
      described in this prospectus supplement. Any change to the fees and
      expenses described in this prospectus supplement would require an
      amendment to the Pooling and Servicing Agreement. See "-- Amendment" in
      this prospectus supplement.

(2)   Unless otherwise specified, the fees and expenses shown in this table are
      paid (or retained by the Master Servicer in the case of amounts owed to
      the Master Servicer) prior to distributions on the Certificates.

(3)   The Servicing Fee Rate for each Mortgage Loan will equal 0.50% per annum.
      The amount of the monthly Master Servicing Fee is subject to adjustment
      with respect to Mortgage Loans that are prepaid in full, as described in
      this prospectus supplement under "Servicing of the Mortgage Loans --
      Adjustment to Master Servicing Fee in Connection with Certain Prepaid
      Mortgage Loans."

(4)   Prepayment Interest Excess is described above in the prospectus supplement
      under "Servicing of the Mortgage Loans -- Servicing Compensation and
      Payment of Expenses."

(5)   Excess Proceeds is described above in this prospectus supplement under "--
      Glossary of Terms -- General Definitions."

(6)   The Trustee Fee Rate will equal 0.009% per annum.

(7)   Reimbursement of Servicing Advances for a Mortgage Loan is limited to the
      late recoveries of the payments of the costs and expenses, Liquidation
      Proceeds, Subsequent Recoveries, purchase proceeds or repurchase proceeds
      for that Mortgage Loan.

(8)   Each of the Sellers, the Master Servicer, the NIM Insurer and the
      Depositor are entitled to indemnification of certain expenses as described
      in this prospectus supplement under "-- Certain Matters related to the
      Master Servicer, the Depositor, the Sellers and the NIM Insurer."


                                      S-62



DISTRIBUTIONS

      General. Distributions on the Certificates will be made by the Trustee on
each Distribution Date to the persons in whose names the Certificates are
registered at the close of business on the Record Date.

      Distributions will be made by check mailed to the address of the person
entitled thereto as it appears on the Certificate Register or, in the case of
any certificateholder that holds 100% of a class of Certificates or who holds a
class of Certificates with an aggregate initial Certificate Principal Balance of
$1,000,000 or more and that has so notified the Trustee in writing in accordance
with the Pooling and Servicing Agreement, by wire transfer in immediately
available funds to the account of the certificateholder at a bank or other
depository institution having appropriate wire transfer facilities; provided,
however, that the final distribution in retirement of the Certificates will be
made only upon presentation and surrender of the Certificates at the Corporate
Trust Office of the Trustee. On each Distribution Date, a holder of a
Certificate will receive its Percentage Interest of the amounts required to be
distributed with respect to the applicable class of Certificates.

      On each Distribution Date, the Trustee will withdraw all prepayment
charges in the Distribution Account and distribute them to the Class P
Certificates.

      Distributions of Interest. On each Distribution Date, the interest
distributable with respect to the interest-bearing certificates is the interest
which has accrued on the Certificate Principal Balance thereof immediately prior
to that Distribution Date at the Pass-Through Rate during the applicable Accrual
Period, and in the case of the Senior Certificates, any Interest Carry Forward
Amount. For each class of Subordinate Certificates, any Interest Carry Forward
Amount will be payable only from excess cashflow (if any) as and to the extent
described under "-- Overcollateralization Provisions."

      All calculations of interest on the Adjustable Rate Certificates will be
made on the basis of a 360-day year and the actual number of days elapsed in the
applicable Accrual Period.

      The Pass-Through Rates for the Adjustable Rate Certificates are variable
rates that may change from Distribution Date to Distribution Date. Additionally,
the Pass-Through Rate for each of the Adjustable Rate Certificates is subject to
increase after the Optional Termination Date. On each Distribution Date, the
Pass-Through Rate for each class of Adjustable Rate Certificates will be subject
to the applicable Net Rate Cap. See the related definitions in "-- Glossary of
Terms -- Definitions related to Interest Calculations and Distributions" for a
more detailed understanding as to how the Net Rate Cap is calculated, and
applied to the Pass-Through Rate.

      If on any Distribution Date, the Pass-Through Rate for a class of
Adjustable Rate Certificates is based on the applicable Net Rate Cap, each
holder of the applicable Certificates will be entitled to receive the resulting
shortfall only from remaining excess cashflow (if any) to the extent described
in this prospectus supplement under "-- Overcollateralization Provisions", and
from payments (if any) allocated to the issuing entity in respect of the Swap
Contract that are available for that purpose.

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

            (1)   from the Interest Funds for both Loan Groups, pro rata based
      on the Interest Funds for each such Loan Group, to the Swap Account, the
      amount of any Net Swap Payment and any Swap Termination Payment (other
      than a Swap Termination Payment due to a Swap Counterparty Trigger Event)
      payable to the Swap Counterparty with respect to such Distribution Date;

            (2)   concurrently:

                  (a)   from the Interest Funds for Loan Group 1, concurrently
            to each class of Class 1-A Certificates, the Current Interest and
            Interest Carry Forward Amount for each such class, pro rata based on
            their respective entitlements,


                                      S-63



                  (b)   from the Interest Funds for Loan Group 2, concurrently
            to each class of Class 2-A Certificates, the Current Interest and
            Interest Carry Forward Amount for each such class, pro rata based on
            their respective entitlements,

            (3)   from the remaining Interest Funds for both Loan Groups,
      concurrently to each class of Class A Certificates, any remaining Current
      Interest and Interest Carry Forward Amount not paid pursuant to clauses
      2(a) and 2(b) above, pro rata based on the Certificate Principal Balances
      thereof, to the extent needed to pay any Current Interest and Interest
      Carry Forward Amount for each such class. Interest Funds remaining after
      such allocation to pay any Current Interest and Interest Carry Forward
      Amount based on the Certificate Principal Balances of the Certificates
      will be distributed to each class of Class A Certificates with respect to
      which there remains any unpaid Current Interest and Interest Carry Forward
      Amount (after the distribution based on Certificate Principal Balances),
      pro rata based on the amount of such remaining unpaid Current Interest and
      Interest Carry Forward Amount,

            (4)   from the remaining Interest Funds for both Loan Groups,
      sequentially:

                  (a)   sequentially, to the Class M-1, Class M-2, Class M-3,
            Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class B
            Certificates, in that order, the Current Interest for that class,
            and

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

      Distributions of Principal. The manner of distributing principal among the
classes of Certificates will differ depending upon whether a Distribution Date
occurs on or after the Stepdown Date and, on or after that date, whether a
Trigger Event is in effect. Prior to the Stepdown Date or if a Trigger Event is
in effect, all amounts distributable as principal on a Distribution Date will be
allocated first to the related Senior Certificates, until those Senior
Certificates are paid in full, before any distributions of principal are made on
the Subordinate Certificates.

      On any Distribution Date on or after the Stepdown Date and so long as no
Trigger Event is in effect, instead of allocating all amounts distributable as
principal on the Certificates to the Senior Certificates until those Senior
Certificates are paid in full, a portion of those amounts distributable as
principal will be allocated to the Subordinate Certificates. The amount
allocated to each class of Certificates on or after the Stepdown Date and so
long as no Trigger Event is in effect will be based on the targeted level of
overcollateralization and subordination for each class of Certificates. After
the Stepdown Date, if a Trigger Event is in effect, the priority of principal
payments will revert to the distribution priority prior to the Stepdown Date.
The amount to be distributed as principal on each Distribution Date are
described in more detail under "-- Glossary of Terms -- Definitions related to
Principal Calculations and Distributions" in this prospectus supplement.

      On each Distribution Date, the Principal Distribution Amount for each of
Loan Group 1 and Loan Group 2 is required to be distributed as follows until
such Principal Distribution Amount has been fully distributed (with the
Principal Distribution Amount exclusive of the portion thereof consisting of the
Extra Principal Distribution Amount being applied first and the Extra Principal
Distribution Amount being applied thereafter):

            (1)   For each Distribution Date prior to the Stepdown Date or on
      which a Trigger Event is in effect, sequentially:

                  (A)   concurrently:

                        (i)   from the Principal Distribution Amount for Loan
                        Group 1, sequentially:

                              (a)   to the classes of Class 1-A Certificates, in
                        the amounts and order of priority set forth in clause
                        (3) below, until the Certificate Principal Balances
                        thereof are reduced to zero, and


                                      S-64



                              (b)   to the classes of Class 2-A Certificates
                        (after the distribution of the Principal Distribution
                        Amount from Loan Group 2 as provided in clause
                        (1)(A)(ii)(a) below), in the amounts and order of
                        priority set forth in clause (4) below, until the
                        Certificate Principal Balances thereof are reduced to
                        zero,

                        (ii)  from the Principal Distribution Amount for Loan
                  Group 2, sequentially:

                              (a)   to the classes of Class 2-A Certificates, in
                        the amounts and order of priority set forth in clause
                        (4) below, until the Certificate Principal Balances
                        thereof are reduced to zero, and

                              (b)   to the classes of Class 1-A Certificates
                        (after the distribution of the Principal Distribution
                        Amount from Loan Group 1 as provided in clause
                        (1)(A)(i)(a) above), in the amounts and order of
                        priority set forth in clause (3) below, until the
                        Certificate Principal Balances thereof are reduced to
                        zero,

                  (B)   from the remaining Principal Distribution Amounts for
            both Loan Groups, sequentially:

                        (i)   sequentially, to the Class M-1, Class M-2, Class
                  M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and
                  Class B Certificates, in that order, in each case until the
                  Certificate Principal Balance thereof is reduced to zero, and

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

            (2)   For each Distribution Date on or after the Stepdown Date and
      so long as a Trigger Event is not in effect, sequentially:

                  (A)   concurrently:

                        (i) from the Principal Distribution Amount for Loan
                  Group 1, in an amount up to the Class 1-A Principal
                  Distribution Amount, sequentially:

                              (a)   to the classes of Class 1-A Certificates, in
                        the amounts and order of priority set forth in clause
                        (3) below, until the Certificate Principal Balances
                        thereof are reduced to zero, and

                              (b)   to the classes of Class 2-A Certificates
                        (after the distribution of the Principal Distribution
                        Amount from Loan Group 2 as provided in clause
                        (2)(A)(ii)(a) below), in the amounts and order of
                        priority set forth in clause (4) below, until the
                        Certificate Principal Balances thereof are reduced to
                        zero,

                        (ii) from the Principal Distribution Amount for Loan
                  Group 2, in an amount up to the Class 2-A Principal
                  Distribution Amount, sequentially:

                              (a)   to the classes of Class 2-A Certificates, in
                        the amounts and order of priority set forth in clause
                        (4) below, until the Certificate Principal Balances
                        thereof are reduced to zero, and

                              (b)   to the classes of Class 1-A Certificates
                        (after the distribution of the Principal Distribution
                        Amount from Loan Group 1 as provided in clause
                        (2)(A)(i)(a) above), in the amounts and order of
                        priority set forth in clause (3) below, until the
                        Certificate Principal Balances thereof are reduced to
                        zero,


                                      S-65



                  (B)  from the remaining Principal Distribution Amounts for
            Loan Group 1 and Loan Group 2, sequentially:

                        (i)   sequentially, to the Class M-1, Class M-2, Class
                  M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and
                  Class B Certificates, in that order, the Subordinate Class
                  Principal Distribution Amount for that class, in each case
                  until the Certificate Principal Balance thereof is reduced to
                  zero, and

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

            (3)   On each Distribution Date on which any principal amounts are
      to be distributed to the Class 1-A Certificates, those amounts will be
      distributed concurrently to the Class 1-A-1 and Class 1-A-1M Certificates,
      pro rata based on their respective Certificate Principal Balances, until
      the Certificate Principal Balances thereof are reduced to zero.

            (4)   On each Distribution Date on which any principal amounts are
      to be distributed to the Class 2-A Certificates, those amounts will be
      distributed sequentially, to the Class 2-A-1, Class 2-A-2 and Class 2-A-3
      Certificates, in that order, until the Certificate Principal Balances
      thereof are reduced to zero.

      Residual Certificates. The Class A-R Certificates do not bear interest.
The Class A-R Certificates will receive a distribution of $100 of principal on
the first Distribution Date, after which their Certificate Principal Balance
will equal zero. The $100 will be withdrawn from a reserve account established
by the Trustee and funded by the Depositor on the Closing Date for the purposes
of making distributions on the Class A-R and Class P Certificates. The Class A-R
Certificates will remain outstanding for so long as the issuing entity will
exist. In addition to the distribution of principal on the first Distribution
Date, on each Distribution Date, the holders of the Class A-R Certificates, as
provided in the Pooling and Servicing Agreement, will be entitled to receive any
available funds remaining after payment of interest and principal on the Senior
Certificates and on the Subordinate Certificates (as described above) and
payments to the Swap Counterparty (each as described above) and the Class C
Certificates (as provided in the Pooling and Servicing Agreement). It is not
anticipated that there will be any significant amounts remaining for
distribution to the Class A-R Certificates.

OVERCOLLATERALIZATION PROVISIONS

      On the Closing Date, it is expected that the sum of the Initial Cut-off
Date Pool Principal Balance and the original Pre-Funded Amount will exceed the
initial aggregate Certificate Principal Balance of the Adjustable Rate
Certificates by approximately $18,850,000, which is approximately 2.90% of the
sum of the Initial Cut-off Date Pool Principal Balance and the original
Pre-Funded Amount.

      The amount of overcollateralization is equal to the initial level of
overcollateralization required by the Pooling and Servicing Agreement. The
weighted average Adjusted Net Mortgage Rate for the Mortgage Loans is generally
expected to be higher than the weighted average of the Pass-Through Rates on the
Adjustable Rate Certificates. As a result, interest collections on the Mortgage
Loans are expected to be generated in excess of the amount of interest payable
to the holders of the Adjustable Rate Certificates and the related fees and
expenses payable by the issuing entity. Any interest payments received in
respect of the Mortgage Loans in a Loan Group or Loan Groups in excess of the
amount that is needed to pay interest on the related Certificates and the
issuing entity's expenses related to that Loan Group (including any Net Swap
Payments that may be payable to the Swap Counterparty) will be used to reduce
the total Certificate Principal Balance of the Certificates, until the required
level of overcollateralization has been maintained or restored. The excess
cashflow, if any, will be applied on each Distribution Date as a payment of
principal on the related class or classes of Certificates then entitled to
receive distributions in respect of principal, but only to the limited extent
hereafter described. Thereafter, any remaining excess cashflow will be allocated
to pay Net Rate Carryover and Unpaid Realized Loss Amounts in the amount and the
priority described below.


                                      S-66



      The "EXCESS CASHFLOW" with respect to any Distribution Date is the sum of
(i) the amounts remaining as set forth in clause (4)(b) in "--Distributions --
Distributions of Interest" and clause (1)(B)(ii) or (2)(B)(ii), as applicable,
in "-- Distributions -- Distributions of Principal" and (ii) the
Overcollateralization Reduction Amount for that Distribution Date, if any.

      With respect to any Distribution Date, any Excess Cashflow and, in the
case of clauses 1 and 2 below and in the case of the payment of Unpaid Realized
Loss Amounts pursuant to clause 3 below, any amounts in the Credit Comeback
Excess Account and available for such Distribution Date ("CREDIT COMEBACK EXCESS
CASHFLOW"), will be paid to the classes of Certificates in the following order
of priority, in each case first to the extent of the remaining Credit Comeback
Excess Cashflow, if applicable, and second to the extent of the remaining Excess
Cashflow:

      1.    to the holders of the class or classes of Adjustable Rate
            Certificates then entitled to receive distributions in respect of
            principal, in an aggregate amount equal to the Extra Principal
            Distribution Amount for Loan Group 1 and Loan Group 2, payable to
            those holders as part of the related Principal Distribution Amount
            as described under "--Distributions--Distributions of Principal"
            above;

      2.    concurrently, to the holders of each class of Class A Certificates,
            pro rata based on the Unpaid Realized Loss Amounts for those
            classes, in each case in an amount equal to the Unpaid Realized Loss
            Amount for the class, except that any amounts otherwise allocable to
            the Class 1-A-1 and Class 1-A-1M Certificates will be allocated
            sequentially to the Class 1-A-1 and Class 1-A-1M Certificates, in
            that order, in an amount equal to the Unpaid Realized Loss Amount
            for each such class;

      3.    sequentially, to the holders of the Class M-1, Class M-2, Class M-3,
            Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class B
            Certificates, in that order, in each case, first in an amount equal
            to any Interest Carry Forward Amount for that class, and second in
            an amount equal to any Unpaid Realized Loss Amount for that class;

      4.    to each class of Adjustable Rate Certificates, pro rata based on the
            Certificate Principal Balances thereof, to the extent needed to pay
            any Net Rate Carryover for each such class; provided that any Excess
            Cashflow remaining after the allocation to pay Net Rate Carryover
            based on the Certificate Principal Balances of those Certificates
            will be distributed to each class of Adjustable Rate Certificates
            with respect to which there remains any unpaid Net Rate Carryover
            (after the distribution based on Certificate Principal Balances),
            pro rata, based on the amount of the unpaid Net Rate Carryover;

      5.    to the Carryover Reserve Fund, in an amount equal to the Required
            Carryover Reserve Fund Deposit (after giving effect to other
            deposits and withdrawals therefrom on the Distribution Date);

      6.    to the Swap Account, in an amount equal to any Swap Termination
            Payment due to the Swap Counterparty as a result of a Swap
            Counterparty Trigger Event; and

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

      Following the distributions pursuant to clauses 1 through 4 of the
preceding paragraph but prior to the distributions pursuant to clauses 5 through
7 of the preceding paragraph, the Trustee will make certain distributions from
the Swap Account, as described in further detail below under " -- The Swap
Contract".

THE SWAP CONTRACT

      Countrywide Home Loans has entered into an interest rate swap transaction
with Lehman Brothers Special Financing Inc. (the "SWAP COUNTERPARTY"), as
evidenced by a confirmation between Countrywide Home Loans and the Swap
Counterparty (the "SWAP CONTRACT"). The obligations of the Swap Counterparty
will be fully and unconditionally guaranteed by Lehman Brothers Holdings Inc.
(the "SWAP GUARANTOR") pursuant to a guaranty in


                                      S-67



favor of Countrywide Home Loans (the "SWAP GUARANTY"). In addition, on the
Closing Date, Countrywide Home Loans and the Swap Counterparty will execute an
ISDA Master Agreement. The Swap Contract is subject to certain ISDA definitions.
On the Closing Date, Countrywide Home Loans will assign its rights under the
Swap Contract and the Swap Guaranty to The Bank of New York, as swap contract
administrator (in such capacity, the "SWAP CONTRACT ADMINISTRATOR"), and
Countrywide Home Loans, the Swap Contract Administrator and the Trustee (acting
as trustee of the swap trust) will enter into a swap contract administration
agreement (the "SWAP CONTRACT ADMINISTRATION AGREEMENT") pursuant to which the
Swap Contract Administrator will allocate any payments received under the Swap
Contract between the Trustee (acting as trustee of the swap trust) and
Countrywide Home Loans as described below and pursuant to which the Swap
Contract Administrator will remit to the Swap Counterparty any funds received
from the Trustee (acting as trustee of the swap trust) for payment to the Swap
Counterparty.

      With respect to any Distribution Date on or prior to the Swap Contract
Termination Date, the amount payable by the Swap Contract Administrator to the
Swap Counterparty under the Swap Contract will equal the product of:

      (i)   a fixed rate of 5.070% per annum,

      (ii)  the lesser of (a) the Swap Contract Notional Balance for the
Distribution Date and (b) the aggregate Certificate Principal Balance of the
Swap Certificates immediately prior to such Distribution Date, and

      (iii) the number of days in the related calculation period (calculated on
the basis of a 360-day year of twelve 30-day months), divided by 360.

      With respect to any Distribution Date on or prior to the Swap Contract
Termination Date, the amount payable by the Swap Counterparty to the Swap
Contract Administrator under the Swap Contract will equal the product of:

      (i)   One-Month LIBOR (as determined by the Swap Counterparty),

      (ii)  the lesser of (a) the Swap Contract Notional Balance for the
Distribution Date and (b) the aggregate Certificate Principal Balance of the
Swap Certificates immediately prior to such Distribution Date, and

      (iii) the actual number of days in the related calculation period, divided
by 360.

      With respect to any Distribution Date, the Swap Contract Administrator or
the Swap Counterparty, as the case may be, will only be required to make a "NET
SWAP PAYMENT" to the other party that is equal to the excess of the payment that
it is obligated to make to the other party as described in the two preceding
paragraphs over the payment that it is entitled to receive from that other party
as described in the two preceding paragraphs. Any Net Swap Payment owed by the
Swap Counterparty with respect to any Distribution Date will be payable on the
business day preceding such Distribution Date, while any Net Swap Payment owed
to the Swap Counterparty with respect to any Distribution Date will be payable
on such Distribution Date.

      In the event that a Net Swap Payment and/or a Swap Termination Payment
(other than a Swap Termination Payment due to a Swap Counterparty Trigger Event)
is payable to the Swap Counterparty with respect to any Distribution Date, the
Trustee will deduct from Interest Funds for Loan Group 1 and Loan Group 2 the
amount of such Net Swap Payment or Swap Termination Payment as described under
clause (1) under "-- Distributions -- Distributions of Interest" above (and to
the extent that Interest Funds for Loan Group 1 and Loan Group 2 are
insufficient, the Trustee will deduct from the Principal Remittance Amount for
Loan Group 1 and Loan Group 2, pro rata on the basis of the respective Principal
Remittance Amounts, any additional amounts necessary to make such Net Swap
Payment and/or Swap Termination Payment due to the Swap Counterparty) and
deposit the amount of such Net Swap Payment or Swap Termination Payment in the
Swap Account maintained on behalf of the swap trust.

      In the event that a Swap Termination Payment due to a Swap Counterparty
Trigger Event is payable to the Swap Counterparty with respect to any
Distribution Date, the Trustee will deduct from Excess Cashflow the amount


                                      S-68



of such Swap Termination Payment as described under clause (6) under "--
Overcollateralization Provisions --Excess Cashflow" above and remit such amount
to the Swap Account maintained on behalf of the swap trust.

      In the event that a Net Swap Payment is payable from the Swap Counterparty
with respect to any Distribution Date, the Swap Contract Administrator will
remit to the Trustee on behalf of the swap trust and for deposit into the Swap
Account an amount equal to the sum of (a) any Current Interest and Interest
Carry Forward Amounts with respect to the Swap Certificates, (b) any Net Rate
Carryover with respect to the Swap Certificates and (c) any Unpaid Realized Loss
Amounts with respect to the Swap Certificates, in each case that remain unpaid
following distribution of the Interest Funds for Loan Group 1 and Loan Group 2
and the Excess Cashflow and Credit Comeback Excess Cashflow for the Distribution
Date, as well as (d) any remaining Overcollateralization Deficiency Amount that
remains following distribution of the Interest Funds for Loan Group 1 and Loan
Group 2 and the Excess Cashflow and Credit Comeback Excess Cashflow for the
Distribution Date. Any portion of any Net Swap Payment not remitted by the Swap
Contract Administrator to the Trustee (acting as trustee of the swap trust) with
respect to any Distribution Date will be remitted to Countrywide Home Loans and
will not be available to make distributions in respect of any class of
Certificates.

      In the event that the Swap Contract is terminated, Countrywide Home Loans
will be required to assist the Swap Contract Administrator in procuring a
replacement swap contract with terms approximating those of the original Swap
Contract. In the event that a Swap Termination Payment was payable by the Swap
Counterparty in connection with the termination of the original Swap Contract,
that Swap Termination Payment will be used to pay any upfront amount in
connection with the replacement swap contract, and any remaining portion of that
Swap Termination Payment will be distributed to Countrywide Home Loans and will
not be available for distribution on any class of Certificates. In the event
that the swap counterparty in respect of a replacement swap contract pays any
upfront amount to the Swap Contract Administrator in connection with entering
into the replacement swap contract, if that upfront amount is received prior to
the Distribution Date on which the Swap Termination Payment is due to the Swap
Counterparty under the original Swap Contract, a portion of that upfront amount
equal to the lesser of (x) that upfront amount and (y) the amount of the Swap
Termination Payment due to the Swap Counterparty under the original Swap
Contract (the "ADJUSTED REPLACEMENT UPFRONT AMOUNT") will be included in the
Interest Funds for Loan Group 1 and Loan Group 2 on that Distribution Date, to
be allocated between Loan Group 1 and Loan Group 2 pro rata based on their
respective Interest Funds for that Distribution Date, and any upfront amount
paid by the replacement swap counterparty in excess of the Adjusted Replacement
Upfront Amount will be distributed to Countrywide Home Loans, Inc. If that
upfront amount is received after the Distribution Date on which the Swap
Termination Payment was due to the Swap Counterparty under the original Swap
Contract, or in the event that the Swap Contract is terminated and no
replacement swap contract can be procured on terms approximating those of the
original Swap Contract and a Swap Termination Payment was payable by the Swap
Counterparty, that upfront amount or Swap Termination Payment payable by the
Swap Counterparty, as the case may be, will be retained by the Swap Contract
Administrator and remitted to the Trustee on behalf of the swap trust on
subsequent Distribution Dates up to and including the Swap Contract Termination
Date to cover the amounts described in clauses (a), (b), (c) and (d) of the
preceding paragraph. Following the Swap Contract Termination Date, any remainder
of an upfront amount paid by a replacement swap counterparty, or of a Swap
Termination Payment paid by a Swap Counterparty, will be distributed to
Countrywide Home Loans and will not be available to make distributions in
respect of any class of Certificates.

      Following the distributions of Excess Cashflow and Credit Comeback Excess
Cashflow as described under " -- Overcollateralization Provisions --Excess
Cashflow", the Trustee, acting on behalf of the swap trust, shall distribute all
amounts on deposit in the Swap Account in the following amounts and order of
priority:

            (1)   to the Swap Contract Administrator for payment to the Swap
      Counterparty, any Net Swap Payment payable to the Swap Counterparty with
      respect to such Distribution Date;

            (2)   to the Swap Contract Administrator for payment to the Swap
      Counterparty, any Swap Termination Payment (other than a Swap Termination
      Payment due to a Swap Counterparty Trigger Event) payable to the Swap
      Counterparty with respect to such Distribution Date;

            (3)   concurrently to the holders of each class of Class A
      Certificates, any remaining Current Interest and Interest Carry Forward
      Amount, pro rata based on their respective entitlements;


                                      S-69



            (4)   sequentially, to the holders of the Class M-1, Class M-2,
      Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class
      B Certificates, in that order, in each case in an amount equal to any
      remaining Current Interest and Interest Carry Forward Amount for the
      class;

            (5)   to the holders of the class or classes of Adjustable Rate
      Certificates then entitled to receive distributions in respect of
      principal, in an aggregate amount equal to the Overcollateralization
      Deficiency Amount remaining unpaid following the distribution of Excess
      Cashflow and Credit Comeback Excess Cashflow as described above under " --
      Overcollateralization Provisions" payable to such holders of each such
      class in the same manner in which the Extra Principal Distribution Amount
      in respect of Loan Group 1 and Loan Group 2 would be distributed to such
      classes as described under " -- Overcollateralization Provisions -- Excess
      Cashflow" above;

            (6)   to the holders of each class of Adjustable Rate Certificates,
      to the extent needed to pay any remaining Net Rate Carryover for each such
      class, pro rata, based on the amount of such remaining Net Rate Carryover;

            (7)   concurrently, to the holders of each class of Class A
      Certificates, pro rata based on the remaining Unpaid Realized Loss Amounts
      for those classes, in each case in an amount equal to the remaining Unpaid
      Realized Loss Amount for the class, except that any amounts otherwise
      allocable to the Class 1-A-1 and Class 1-A-1M Certificates will be
      allocated sequentially to the Class 1-A-1 and Class 1-A-1M Certificates,
      in that order, in an amount equal to the Unpaid Realized Loss Amount for
      each such class;

            (8)   sequentially, to the holders of the Class M-1, Class M-2,
      Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class
      B Certificates, in that order, in each case in an amount equal to the
      remaining Unpaid Realized Loss Amount for the class; and

            (9)   to the Swap Contract Administrator for payment to the Swap
      Counterparty, only to the extent necessary to cover any Swap Termination
      Payment due to a Swap Counterparty Trigger Event payable to the Swap
      Counterparty with respect to such Distribution Date.

      The "SWAP CONTRACT NOTIONAL BALANCE" for each Distribution Date is as
described in the following table. In addition, the Distribution Date occurring
in the latest calendar month listed in the following table is the date through
which the Swap Contract is scheduled to remain in effect and is referred to as
the "SWAP CONTRACT TERMINATION DATE" for the Swap Contract.

                                      SWAP CONTRACT
                  MONTH OF           NOTIONAL BALANCE
              DISTRIBUTION DATE            ($)
             ------------------      ----------------
             March 2006........         498,160,000
             April 2006........         493,175,598
             May 2006..........         487,598,586
             June 2006.........         481,436,221
             July 2006.........         474,698,061
             August 2006.......         467,395,972
             September 2006....         459,544,117
             October 2006......         451,367,265
             November 2006.....         442,676,853
             December 2006.....         433,788,156
             January 2007......         424,382,012
             February 2007.....         414,480,160
             March 2007........         404,110,921
             April 2007........         393,557,724
             May 2007..........         382,637,696
             June 2007.........         371,382,861
             July 2007.........         359,934,943
             August 2007.......         348,321,585
             September 2007....         336,696,706
             October 2007......         325,469,000
             November 2007.....         314,645,375
             December 2007.....         304,212,242
             January 2008......         294,156,478
             February 2008.....         284,465,413
             March 2008........         270,086,903
             April 2008........         256,801,816
             May 2008..........         244,283,154
             June 2008.........         232,486,747
             July 2008.........         221,371,113
             August 2008.......         210,897,298
             September 2008....         203,929,345
             October 2008               197,232,106
             November 2008.....         190,799,406
             December 2008.....         184,622,343
             January 2009......         178,692,336
             February 2009.....         171,929,253
             March 2009........         164,803,942
             April 2009........         158,080,508
             May 2009..........         151,704,376
             June 2009.........         145,658,408
             July 2009.........         139,926,410
             August 2009.......         135,159,389
             September 2009....         130,838,555
             October 2009......         126,693,913
             November 2009.....         122,721,653
             December 2009.....         118,916,175
             January 2010......         115,258,400
             February 2010.....         111,733,377
             March 2010........         108,278,568
             April 2010........         104,853,326
             May 2010..........         101,569,871
             June 2010.........          98,423,612
             July 2010.........          95,403,743
             August 2010.......          92,493,867
             September 2010....          89,663,145
             October 2010......          86,935,324
             November 2010.....          84,306,602
             December 2010.....          81,769,784
             January 2011......          79,321,801
             February 2011.....          76,959,513


                                      S-70



      A "SWAP TERMINATION PAYMENT" is a termination payment required to be made
by either the Swap Contract Administrator or the Swap Counterparty pursuant to
the Swap Contract as a result of an early termination of the Swap Contract.

      The Swap Contract will be subject to early termination upon an event of
default or an early termination event under the Swap Contract. Events of default
under the Swap Contract include, among other things, the following:

      o     failure to make a payment due under the Swap Contract, three
            business days after notice of such failure is received,

      o     certain insolvency or bankruptcy events, and

      o     a merger by the Swap Counterparty without an assumption of its
            obligations under the Swap Contract.

      Early termination events under the Swap Contract include, among other
things:

      o     illegality (which generally relates to changes in law causing it to
            become unlawful for either party (or its guarantor, if applicable)
            to perform its obligations under the Swap Contract or guaranty, as
            applicable),

      o     a tax event (which generally relates to either party to the Swap
            Contract receiving a payment under the Swap Contract from which an
            amount has been deducted or withheld for or on account of taxes or
            paying an additional amount on account of an indemnifiable tax),

      o     a tax event upon merger (which generally relates to either party
            receiving a payment under the Swap Contract from which an amount has
            been deducted or withheld for or on account of taxes or paying an
            additional amount on account of an indemnifiable tax, in each case,
            resulting from a merger), and

      o     an amendment to the Pooling and Servicing Agreement that would
            materially adversely affect the Swap Counterparty is made without
            the prior written consent of the Swap Counterparty.

           In addition to the termination events specified above, it will be a
termination event under the Swap Contract in the event that (A) either (i) the
unsecured, long-term senior debt obligations of the Swap Guarantor are rated
below "A1" by Moody's or are rated "A1" by Moody's and such rating is on watch
for possible downgrade (but only for so long as it is on watch for possible
downgrade) or (ii) the unsecured, short-term debt obligations of the Swap
Guarantor are rated below "P-1" by Moody's or are rated "P-1" by Moody's and
such rating is on watch for possible downgrade (but only for so long as it is on
watch for possible downgrade), (B) no short-term rating is available from
Moody's and the unsecured, long-term senior debt obligations of the Swap
Guarantor are rated below "Aa3" by Moody's or are rated "Aa3" by Moody's and
such rating is on watch for possible downgrade (but only for so long as it is on
watch for possible downgrade), or (C) either (i) the unsecured, short-term debt
obligations of the Swap Guarantor are rated below "A-1" by S&P or (ii) if the
Swap Guarantor does not have a short-term rating from S&P, the unsecured,
long-term senior debt obligations of the Swap Guarantor are rated below "A+" by
S&P (such event, a "COLLATERALIZATION EVENT"), and the Swap Counterparty does
not, within 30 days, (a) cause another entity to replace the Swap Counterparty
that satisfies the Swap Counterparty Ratings Requirement and that is approved by
the Swap Contract Administrator on terms substantially similar to the Swap
Contract; (b) obtain a guaranty of, or a contingent agreement of another person
that satisfies the Swap Counterparty Ratings Requirement, to honor the Swap
Counterparty's obligations under the Swap Contract, provided that such other
person is approved by the Swap Contract Administrator; (c) post collateral
satisfactory to the applicable Rating Agencies; or (d) establish any other
arrangement satisfactory to the applicable Rating Agency which will be
sufficient to restore the immediately prior ratings of the Swap Certificates.


                                      S-71



      "SWAP COUNTERPARTY RATINGS REQUIREMENT" means (a) either (i) the
unsecured, short-term debt obligations of the substitute counterparty (or its
credit support provider) are rated at least "A-1" by S&P or (ii) if the
substitute counterparty does not have a short-term rating from S&P, the
unsecured, long-term senior debt obligations of the substitute counterparty (or
its credit support provider) are rated at least "A+" by S&P, and (b) either (i)
the unsecured, long-term senior debt obligations of such substitute counterparty
(or its credit support provider) are rated at least "A1" by Moody's (and if
rated "A1" by Moody's, such rating is not on watch for possible downgrade) and
the unsecured, short-term debt obligations of such substitute counterparty (or
its credit support provider) are rated at least "P-1" by Moody's (and if rated
"P-1" by Moody's, such rating is not on watch for possible downgrade and
remaining on watch for possible downgrade), or (ii) if such substitute
counterparty (or its credit support provider) does not have a short-term debt
rating from Moody's, the unsecured, long-term senior debt obligations of such
substitute counterparty (or its credit support provider) are rated at least
"Aa3" by Moody's (and if rated "Aa3" by Moody's, such rating is not on watch for
possible downgrade).

      It will also be a termination event under the Swap Contract in the event
that the Swap Guarantor fails to satisfy the following ratings criteria: (A) the
unsecured, long-term senior debt obligations of the Swap Guarantor are rated at
least "BBB-" by S&P, and (B) either (i) the unsecured, long-term senior debt
obligations of the Swap Guarantor are rated at least "A2" by Moody's (including
if such rating is on watch for possible downgrade) and the unsecured, short-term
debt obligations of the Swap Guarantor are rated at least "P-1" by Moody's
(including if such rating is on watch for possible downgrade) or (ii) if the
Swap Guarantor does not have a short-term rating from Moody's, the unsecured,
long-term senior debt obligations of the Swap Guarantor are rated at least "A1"
by Moody's (including if such rating is on watch for possible downgrade); and
the Swap Counterparty does not, within 10 days, after the occurrence of such a
downgrade or withdrawal by S&P or Moody's, as applicable, take the action
described in either clause (a) or (b) above.

      The rating levels and obligations following a ratings downgrade referred
to in this section are determined by the Rating Agencies and may be changed by
the Rating Agencies prior to the execution of the Swap Contract. As such, this
summary is subject to, and qualified in its entirety by reference to, the
provisions of the Swap Contract.

      Finally, an additional termination event under the Swap Contract will
exist if the Swap Counterparty has failed to deliver any information, report,
certification or accountants' consent when and as required under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT") and Item 1115(b)(1) or
(b)(2) of Regulation AB with respect to certain reporting obligations of the
Depositor with respect to the issuing entity, which continues unremedied for the
time period provided in the Swap Contract, and the Swap Counterparty fails to
transfer the Swap Contract at its sole cost and expense, in whole, but not in
part, to a counterparty that, (i) has agreed to deliver any information, report,
certification or accountants' consent when and as required under the Exchange
Act and Regulation AB with respect to certain reporting obligations of the
Depositor and the issuing entity, (ii) satisfies any rating requirement set
forth in the Swap Contract, and (iii) is approved by the Depositor (which
approval shall not be unreasonably withheld) and any rating agency, if
applicable.

      "SWAP COUNTERPARTY TRIGGER EVENT" means an event of default under the Swap
Contract with respect to which the Swap Counterparty is the sole defaulting
party or a termination event under the Swap Contract (other than illegality, a
tax event or a tax event upon merger of the Swap Counterparty) with respect to
which the Swap Counterparty is the sole affected party or with respect to a
termination resulting from a ratings downgrade of the Swap Counterparty (as
described above).

      The Swap Counterparty is a Delaware corporation. The Swap Counterparty is
Lehman Brothers' principal dealer in a broad range of OTC derivative products
including interest rate, currency, credit and mortgage derivatives. The
long-term, unsecured, unsubordinated debt obligations of the Swap Guarantor are
rated "A1" and "A+" by Moody's and S&P, respectively.

      The significance percentage for the Swap Contract is less than 10%. The
"SIGNIFICANCE PERCENTAGE" for the Swap Contract is the percentage that the
significance estimate of the Swap Contract represents of the aggregate
Certificate Principal Balance of the Swap Certificates. The "SIGNIFICANCE
ESTIMATE" of the Swap Contract is determined based on a reasonable good-faith
estimate of the maximum probable exposure of the Swap Contract, made in
substantially the same manner as that used in Countrywide Home Loans' internal
risk management process in respect of similar instruments.


                                      S-72



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

      The Swap Counterparty and the Swap Guarantor are each affiliates of Lehman
Brothers Inc., one of the Underwriters.

      The Swap Contract, the Swap Guaranty, the Swap Contract Assignment
Agreement and the Swap Contract Administration Agreement will each be filed with
the SEC as an exhibit to a Current Report on Form 8-K after the Closing Date.

CALCULATION OF ONE-MONTH LIBOR

      On the second LIBOR Business Day preceding the commencement of each
Accrual Period for the Adjustable Rate Certificates (each such date, an
"INTEREST DETERMINATION DATE"), the Trustee will determine the London interbank
offered rate for one-month United States dollar deposits ("ONE-MONTH LIBOR") for
the Accrual Period on the basis of such rate as it is quoted on the Bloomberg
Terminal for that Interest Determination Date. If such rate is not quoted on the
Bloomberg terminal (or if such service is no longer offered, such other service
for displaying LIBOR or comparable rates as may be reasonably selected by the
Trustee), One-Month LIBOR for the applicable Accrual Period will be the
Reference Bank Rate as defined in this prospectus supplement. If no such
quotations can be obtained and no Reference Bank Rate is available, One-Month
LIBOR will be the One-Month LIBOR applicable to the preceding Accrual Period.
The "REFERENCE BANK RATE" with respect to any Accrual Period, means the
arithmetic mean (rounded upwards, if necessary, to the nearest whole multiple of
0.03125%) of the offered rates for United States dollar deposits for one month
that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on
the related Interest 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 all Adjustable Rate Certificates for the
Accrual Period, provided that at least two such Reference Banks provide such
rate. If fewer than two offered rates appear, the Reference Bank Rate will be
the arithmetic mean (rounded upwards, if necessary, to the nearest whole
multiple of 0.03125%) of the rates quoted by one or more major banks in New York
City, selected by the Trustee, as of 11:00 a.m., New York City time, on such
date for loans in U.S. dollars to leading European banks for a period of one
month in amounts approximately equal to the aggregate Certificate Principal
Balance of all Adjustable Rate Certificates for the Accrual Period. As used in
this section, "LIBOR BUSINESS DAY" means a day on which banks are open for
dealing in foreign currency and exchange in London and New York City; and
"REFERENCE BANKS" means leading banks selected by the Trustee and engaged in
transactions in Eurodollar deposits in the international Eurocurrency market:

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

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

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

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

CARRYOVER RESERVE FUND

      The Pooling and Servicing Agreement will require the Trustee to establish
an account (the "CARRYOVER RESERVE FUND"), which is held in trust by the Trustee
on behalf of the holders of the interest-bearing certificates.


                                      S-73



On the Closing Date, Countrywide Home Loans will deposit $1,000 in the Carryover
Reserve Fund. The Carryover Reserve Fund will not be an asset of any REMIC.

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

      On each Distribution Date, to the extent that Excess Cashflow is available
as described under "-- Overcollateralization Provisions" above, the Trustee will
deposit in the Carryover Reserve Fund an amount equal to the excess, if any, of
(i) $1,000 over (ii) the amount of funds on deposit in the Carryover Reserve
Fund following all other deposits to, and withdrawals from, the Carryover
Reserve Fund on the Distribution Date (the "REQUIRED CARRYOVER RESERVE FUND
DEPOSIT").

CREDIT COMEBACK EXCESS ACCOUNT

      The Pooling and Servicing Agreement will require the Trustee to establish
a reserve account (the "CREDIT COMEBACK EXCESS ACCOUNT"), which is held in trust
by the Trustee on behalf of the holders of the Adjustable Rate Certificates. The
Credit Comeback Excess Account will not be an asset of any REMIC.

      On each Distribution Date, the Trustee will deposit in the Credit Comeback
Excess Account, all Credit Comeback Excess Amounts received during the related
Due Period. On each Distribution Date, all such Credit Comeback Excess Amounts
received during such period will be distributed to the Adjustable Rate
Certificates to restore overcollateralization and to cover any Unpaid Realized
Loss Amounts as described under "--Overcollateralization Provisions." Any Credit
Comeback Excess Amounts remaining after the application of such amounts as
described under "-- Overcollateralization Provisions" will be distributed to the
Class C Certificates and will not be available thereafter.

APPLIED REALIZED LOSS AMOUNTS

      If on any Distribution Date, after giving effect to the distributions
described above, the aggregate Certificate Principal Balance of the Adjustable
Rate Certificates exceeds the sum of the aggregate Stated Principal Balance of
the Mortgage Loans and the amount on deposit in the Pre-Funding Account, the
amount of the excess will be applied first to reduce the Certificate Principal
Balances of the Class B, Class M-8, 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, in each case
until the Certificate Principal Balance of the class has been reduced to zero.
After the Certificate Principal Balances of the Subordinate Certificates have
been reduced to zero, (i) if the aggregate Certificate Principal Balance of the
Class 1-A Certificates exceeds the aggregate Stated Principal Balance of the
Mortgage Loans in Loan Group 1, the amount of such excess will be applied to
reduce the Certificate Principal Balances of the Class 1-A-1M and Class 1-A-1
Certificates, sequentially, in that order, until the Certificate Principal
Balances of such classes have been reduced to zero, and (ii) if the aggregate
Certificate Principal Balance of the Class 2-A Certificates exceeds the
aggregate Stated Principal Balance of the Mortgage Loans in Loan Group 2, the
amount of such excess will be applied to reduce the Certificate Principal
Balance of each class of Class 2-A Certificates, pro rata, until the Certificate
Principal Balances of such classes have been reduced to zero. A reduction
described in this paragraph is referred to as an "APPLIED REALIZED LOSS AMOUNT."

      If the Certificate Principal Balance of a class of Certificates has been
reduced through the application of Applied Realized Loss Amounts as described
above, interest will accrue on the Certificate Principal Balance as so reduced
unless the Certificate Principal Balance is subsequently increased due to the
allocation of Subsequent Recoveries to the Certificate Principal Balance of the
class as described in the definition of "Certificate Principal Balance"
described in this prospectus supplement under "-- Glossary of Terms --
Definitions Related to Distribution Dates and Collections."


                                      S-74



REPORTS TO CERTIFICATEHOLDERS

      On each Distribution Date, the Trustee will forward by first class mail to
each certificateholder, the Master Servicer and the Depositor a statement
generally setting forth, among other information:

            (1)   the amount of the related distribution to holders of the
      Certificates allocable to principal, separately identifying:

                  (a)   the aggregate amount of any Principal Prepayments
                        included therein, and

                  (b)   the aggregate of all Scheduled Payments of principal
                        included therein,

            (2)   the amount of the distribution to holders of the Certificates
      allocable to interest,

            (3)   the Interest Carry Forward Amounts for each class of
      Certificates (if any),

            (4)   the Certificate Principal Balance of each class of
      Certificates after giving effect to (i) all distributions allocable to
      principal on the Distribution Date, (ii) the allocation of any Applied
      Realized Loss Amounts for the Distribution Date and (iii) the allocation
      of any Subsequent Recoveries for the Distribution Date,

            (5)   the aggregate Stated Principal Balance of the Mortgage Loans
      in each Loan Group for the following Distribution Date,

            (6)   the amount of the Master Servicing Fees paid to or retained by
      the Master Servicer for the related Due Period,

            (7)   the Pass-Through Rate for each class of Certificates for the
      Distribution Date,

            (8)   the amount of Advances for each Loan Group included in the
      distribution on the Distribution Date,

            (9)   the number and aggregate principal amounts of Mortgage Loans
      in each Loan Group:

                  (a)   delinquent (exclusive of related Mortgage Loans in
           foreclosure):

                        30 to 59 days,
                        60 to 89 days and
                        90 or more days, and

                  (b)   in foreclosure and delinquent:

                        30 to 59 days,
                        60 to 89 days and
                        90 or more days,

      in each case as of the close of business on the last day of the calendar
      month preceding the Distribution Date,

            (10)  with respect to any Mortgage Loan in each Loan Group that
      became an REO Property during the preceding calendar month, the loan
      number and Stated Principal Balance for the Distribution Date of the
      Mortgage Loan and the date of acquisition thereof,

            (11)  whether a Trigger Event is in effect,


                                      S-75



            (12)  the total number and Stated Principal Balance of any REO
      Properties in each Loan Group as of the close of business on the
      Determination Date preceding the Distribution Date,

            (13)  any Net Rate Carryover paid and all remaining Net Rate
      Carryover remaining on each class of Certificates on the Distribution
      Date,

            (14)  the amount of any Net Swap Payment and any Swap Termination
      Payment (a) payable to the Swap Counterparty with respect to such
      Distribution Date or (b) payable to the Swap Contract Administrator for
      the Distribution Date and allocated to the swap trust;

            (15)  the amount of Applied Realized Loss Amounts and Subsequent
      Recoveries, if any, applied to each class of Certificates for the
      Distribution Date, and

            (16)  all payments made by the Master Servicer in respect of
      Compensating Interest for the Distribution Date.

      The monthly statement is prepared by the Trustee based on information
provided by the Master Servicer. The Trustee is not responsible for recomputing,
recalculating or verifying the information provided to it by the Master Servicer
and will be permitted to conclusively rely on any information provided to it by
the Master Servicer. The report to certificateholders may include additional or
other information of a similar nature to that specified above.

      The Trustee may, at its option, make the statements described above
available to certificateholders on the Trustee's website (assistance in using
the website service may be obtained by calling the Trustee's customer service
desk at (800) 254-2826). In addition, within 60 days after the end of each
calendar year, the Trustee will prepare and deliver to each certificateholder of
record during the previous calendar year a statement containing information
necessary to enable certificateholders to prepare their tax returns. The
statements will not have been examined and reported upon by an independent
public accountant.

AMENDMENT

      The Pooling and Servicing Agreement may be amended by the Depositor, the
Master Servicer, the Sellers and the Trustee, with the consent of the NIM
Insurer but without the consent of any of the certificateholders, for any of the
purposes set forth under "The Agreements -- Amendment" in the prospectus. In
addition, the Pooling and Servicing Agreement may be amended by the Depositor,
the Master Servicer, the Sellers, the Trustee and the holders of a majority in
interest of each 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 certificateholders; provided, however, that no amendment may:

            (1)   reduce in any manner the amount of, or delay the timing of,
      payments required to be distributed on any Certificate without the consent
      of the holder of the Certificate,

            (2)   adversely affect in any material respect the interests of the
      holders of any class of Certificates in a manner other than as set forth
      in clause (1) above, without the consent of the holders of Certificates of
      the class evidencing, as to that class, Percentage Interests aggregating
      66%, or

            (3)   reduce the aforesaid percentage of aggregate outstanding
      principal amounts of Certificates of each class, the holders of which are
      required to consent to an amendment, without the consent of the holders of
      all Certificates of the class.

VOTING RIGHTS

           As of any date of determination:


                                      S-76



      o    holders of the Class P, Class C and Class A-R Certificates will each
           be allocated 1% of all voting rights in respect of the Certificates
           (collectively, the "VOTING RIGHTS") (for a total of 3% of the Voting
           Rights), and

      o    holders of the other classes of Certificates will be allocated the
           remaining Voting Rights in proportion to their respective outstanding
           Certificate Principal Balances.

           Voting Rights will be allocated among the Certificates of each class
in accordance with their respective Percentage Interests.

OPTIONAL PURCHASE OF DEFAULTED LOANS

      As to any Mortgage Loan that is delinquent in payment by 150 days or more,
the Master Servicer may, at its option but subject to certain conditions
specified in the Pooling and Servicing Agreement, purchase the Mortgage Loan at
a price equal to 100% of the Stated Principal Balance thereof plus accrued
interest thereon at the applicable Net Mortgage Rate from the date through which
interest was last paid by the related borrower or advanced to the first day of
the month in which the amount is to be distributed to certificateholders. The
Master Servicer must exercise this right, if at all, on or before the last day
of the calendar month in which the related Mortgage Loan became 150 days
delinquent.

EVENTS OF DEFAULT; REMEDIES

      Events of Default will consist of:

            (1)   any failure by the Master Servicer to deposit in the
      Certificate Account or the Distribution Account the required amounts or
      remit to the Trustee any payment (including an Advance required to be made
      under the terms of the Pooling and Servicing Agreement) which continues
      unremedied for five calendar days (or in the case of an Advance, one
      Business Day) after written notice of the failure shall have been given to
      the Master Servicer by the Trustee, the NIM Insurer or the Depositor, or
      to the Trustee, the NIM Insurer and the Master Servicer by the holders of
      Certificates evidencing not less than 25% of the Voting Rights,

            (2)   any failure by the Master Servicer to observe or perform in
      any material respect any other of its covenants or agreements, or any
      breach of a representation or warranty made by the Master Servicer, in the
      Pooling and Servicing Agreement, which in each case continues unremedied
      for 60 days after the giving of written notice of the failure to the
      Master Servicer by the Trustee, the NIM Insurer or the Depositor, or to
      the Trustee by the holders of Certificates evidencing not less than 25% of
      the Voting Rights,

            (3)   a decree or order of a court or agency or supervisory
      authority having jurisdiction in the premises for the appointment of a
      receiver or liquidator in any insolvency, readjustment of debt,
      marshalling of assets and liabilities or similar proceedings, or for the
      winding-up or liquidation of its affairs, shall have been entered against
      the Master Servicer and the decree or order shall have remained in force
      undischarged or unstayed for a period of 60 consecutive days,

            (4)   the Master Servicer shall consent to the appointment of a
      receiver or liquidator in any insolvency, readjustment of debt,
      marshalling of assets and liabilities or similar proceedings of or
      relating to the Master Servicer or all or substantially all of the
      property of the Master Servicer,

            (5)   the Master Servicer shall admit in writing its inability to
      pay its debts generally as they become due, file a petition to take
      advantage of, or commence a voluntary case under, any applicable
      insolvency or reorganization statute, make an assignment for the benefit
      of its creditors, or voluntarily suspend payment of its obligations, or


                                      S-77



            (6)   the Master Servicer shall fail to reimburse, in full, the
      Trustee not later than 6:00 p.m., New York City time, on the Business Day
      following the related Distribution Date for any Advance made by the
      Trustee together with accrued and unpaid interest.

      So long as an Event of Default under the Pooling and Servicing Agreement
remains unremedied, subject to the rights of the NIM Insurer, the Trustee shall,
but only upon the receipt of instructions from the NIM Insurer or from holders
of Certificates having not less than 25% of the Voting Rights terminate all of
the rights and obligations of the Master Servicer under the Pooling and
Servicing Agreement and in and to the Mortgage Loans, whereupon the Trustee will
succeed to all of the responsibilities and duties of the Master Servicer under
the Pooling and Servicing Agreement, including the obligation to make Advances.
Additionally, if the Master Servicer fails to provide certain information or
perform certain duties related to the Depositor's reporting obligations under
the Exchange Act, with respect to the issuing entity, the Depositor, may,
without the consent of any of the certificateholders, terminate the Master
Servicer. We cannot assure you that termination of the rights and obligations of
the Master Servicer under the Pooling and Servicing Agreement would not
adversely affect the servicing of the Mortgage Loans, including the delinquency
experience of the Mortgage Loans.

      No certificateholder, solely by virtue of the holder's status as a
certificateholder, will have any right under the Pooling and Servicing Agreement
to institute any proceeding with respect thereto, unless the holder previously
has given to the Trustee written notice of the continuation of an Event of
Default and unless the holders of Certificates having not less than 25% of the
Voting Rights have made a written request to the Trustee to institute the
proceeding in its own name as Trustee thereunder and have offered to the Trustee
reasonable indemnity and the Trustee for 60 days has neglected or refused to
institute the proceeding and in which case the rights of the certificateholders
shall be subject to the rights of the NIM Insurer.

      Within 60 days after the occurrence of any Event of Default, the Trustee
shall transmit by mail to all holders of the Certificates notice of each Event
of Default known to the Trustee, except for any Event of Default that has been
cured or waived.

OPTIONAL TERMINATION

      The Master Servicer will have the right to purchase all remaining Mortgage
Loans and REO Properties in the issuing entity and thereby effect early
retirement of all the Certificates, on any Distribution Date on or after the
first Distribution Date on which the aggregate Stated Principal Balance of the
Mortgage Loans and REO Properties in the issuing entity is less than or equal to
10% of the sum of the Initial Cut-off Date Pool Principal Balance and the
original Pre-Funded Amount (the "OPTIONAL TERMINATION DATE"). The Master
Servicer is an affiliate of the Sellers and the Depositor.

           In the event the option is exercised by the Master Servicer, the
purchase will be made at a price equal to the sum of:

            (1)   100% of the Stated Principal Balance of each Mortgage Loan in
      the issuing entity (other than in respect of REO Property) plus accrued
      interest thereon at the applicable Net Mortgage Rate, and

            (2)   the appraised value of any REO Property (up to the Stated
      Principal Balance of the related Mortgage Loan) in the issuing entity;

provided, however, that unless the NIM Insurer otherwise consents, the purchase
price will in no event be less than an amount that would result in a final
distribution on any NIM Insurer guaranteed notes that is sufficient (x) to pay
the notes in full and (y) to pay any amounts due and payable to the NIM Insurer
pursuant to the indenture related to the notes.

      The NIM Insurer may also have the right to purchase all remaining Mortgage
Loans and REO Properties in the issuing entity at the price set forth above
(plus any unreimbursed Servicing Advances, and the principal portion of any
unreimbursed Advances, made on the Mortgage Loans prior to the exercise of the
option), subject to the same


                                      S-78



restrictions. The identity of any NIM Insurer is not known as of the date of
this prospectus supplement. It is possible that the NIM Insurer will be an
affiliate of one of the Underwriters.

      Notice of any termination, specifying the Distribution Date on which
certificateholders may surrender their Certificates for payment of the final
distribution and cancellation, will be given promptly by the Trustee by letter
to certificateholders mailed not earlier than the 10th day and no later than the
15th day of the month immediately preceding the month of the final distribution.
The notice will specify (a) the Distribution Date upon which final distribution
on related Certificates will be made upon presentation and surrender of the
Certificates at the office therein designated, (b) the amount of the final
distribution, (c) the location of the office or agency at which the presentation
and surrender must be made, and (d) that the Record Date otherwise applicable to
the Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office therein specified.

      In the event a notice of termination is given, the Master Servicer will
cause all funds in the Certificate Account to be remitted to the Trustee for
deposit in the Distribution Account on the Business Day prior to the applicable
Distribution Date in an amount equal to the final distribution in respect of the
Certificates. At or prior to the time of making the final payment on the
Certificates, the Master Servicer as agent of the Trustee will sell all of the
assets of the issuing entity to the Master Servicer or the NIM Insurer, as
applicable, for cash. Proceeds from a purchase will be distributed to the
certificateholders in the priority described above under "-- Distributions" and
"-- Overcollateralization Provisions" and will reflect the current Certificate
Principal Balance and other entitlements of each class at the time of
liquidation. As a result, if any Applied Realized Loss Amounts have been
allocated to any class or classes of Certificates, any Unpaid Realized Loss
Amounts would be paid in the order and priority set forth above under "--
Overcollateralization Provisions."

      The proceeds from any sale in connection the exercise of the option may
not be sufficient to distribute the full amount to which each class of
Certificates is entitled if the purchase price is based in part on the appraised
value of any REO Property and that appraised value is less than the Stated
Principal Balance of the related Mortgage Loan. Any purchase of the Mortgage
Loans and REO Properties will result in an early retirement of the Certificates.
At the time of the making of the final payment on the Certificates, the Trustee
shall distribute or credit, or cause to be distributed or credited, to the
holder of the Class A-R Certificates all cash on hand related to the Class A-R
Certificates, and the issuing entity will terminate at that time. Once the
issuing entity has been terminated, certificateholders will not be entitled to
receive any amounts that are recovered subsequent to the termination.

CERTAIN MATTERS REGARDING THE MASTER SERVICER, THE DEPOSITOR, THE SELLERS AND
THE NIM INSURER

      The prospectus describes the indemnification to which the Master Servicer
and the Depositor (and their respective directors, officers, employees and
agents) are entitled and also describes the limitations on any liability of the
Master Servicer and the Depositor (and their respective directors, officers,
employees and agents) to the issuing entity. See "The Agreements -- Certain
Matters Regarding the Master Servicer and the Depositor" in the prospectus. The
Pooling and Servicing Agreement provides that these same provisions regarding
indemnification and exculpation apply to each Seller and any NIM Insurer.

THE TRUSTEE

      The Bank of New York will be the Trustee under the Pooling and Servicing
Agreement. The Bank of New York has been, and currently is, serving as indenture
trustee and trustee for numerous securitization transactions and programs
involving pools of residential mortgages. The Bank of New York has been
providing trust services on securitization transactions for more than a decade
and currently provides trust services for hundreds of securitization
transactions. The Depositor and Countrywide Home Loans may maintain other
banking relationships in the ordinary course of business with the Trustee. The
Offered Certificates may be surrendered at the Corporate Trust Office of the
Trustee located at 101 Barclay Street, New York, New York 10286, Attention:
Corporate Trust MBS Administration or another addresses as the Trustee may
designate from time to time.

      The Trustee will be liable for its own grossly negligent action, its own
grossly negligent failure to act or its own misconduct, its grossly negligent
failure to perform its obligations in compliance with the Pooling and


                                      S-79



Servicing Agreement, or any liability that would be imposed by reason of its
willful misfeasance or bad faith. However, the Trustee will not be liable,
individually or as trustee,

   o  for an error of judgment made in good faith by a responsible officer of
      the Trustee, unless the Trustee was grossly negligent or acted in bad
      faith or with willful misfeasance,

   o  with respect to any action taken, suffered or omitted to be taken by it in
      good faith in accordance with the direction of the holders of each Class
      of Certificates evidencing not less than 25% of the Voting Rights of the
      Class relating to the time, method and place of conducting any proceeding
      for any remedy available to the Trustee, or exercising any trust or power
      conferred upon the Trustee under the Pooling and Servicing Agreement,

   o  for any action taken or suffered or omitted by it under the Pooling and
      Servicing Agreement in good faith and in accordance with an opinion of
      counsel, or

   o  for any loss on any investment of funds pursuant to the Pooling and
      Servicing Agreement (other than as issuer of the investment security).

      The Trustee is also entitled to rely without further investigation upon
any resolution, officer's certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties.

      The Trustee and any successor trustee will, at all times, be a corporation
or association organized and doing business under the laws of a state or the
United States of America, authorized under the laws of the United States of
America to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000, subject to supervision or examination by
federal or state authority and with a credit rating that would not cause any of
the Rating Agencies to reduce their respective ratings of any Class of
Certificates below the ratings issued on the Closing Date (or having provided
security from time to time as is sufficient to avoid the reduction). If the
Trustee no longer meets the foregoing requirements, the Trustee has agreed to
resign immediately.

      The Trustee may at any time resign by giving written notice of resignation
to the Depositor, the Master Servicer, each Rating Agency and the
certificateholders, not less than 60 days before the specified resignation date.
The resignation shall not be effective until a successor trustee has been
appointed. If a successor trustee has not been appointed within 30 days after
the Trustee gives notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.

      The Depositor, the NIM Insurer or the Master Servicer may remove the
Trustee and appoint a successor trustee reasonably acceptable to the NIM Insurer
if:

   o  the Trustee ceases to meet the eligibility requirements described above
      and fails to resign after written request to do so is delivered to the
      Trustee by the NIM Insurer or the Depositor,

   o  the Trustee becomes incapable of acting, or is adjudged as bankrupt or
      insolvent, or a receiver of the Trustee or of its property is appointed,
      or any public officer takes charge or control of the Trustee or of its
      property or affairs for the purpose of rehabilitation, conservation or
      liquidation, or

   o  (iii)(A) a tax is imposed with respect to the issuing entity by any state
      in which the Trustee or the issuing entity is located, (B) the imposition
      of the tax would be avoided by the appointment of a different trustee and
      (C) the Trustee fails to indemnify the issuing entity against the tax.

      In addition, the holders of Certificates evidencing at least 51% of the
Voting Rights of each Class of Certificates may at any time remove the Trustee
and appoint a successor trustee. In addition, if the Trustee fails to provide
certain information or perform certain duties related to the Depositor's
reporting obligations under the Exchange Act with respect to the issuing entity,
the Depositor, may, without the consent of any of the


                                      S-80



certificateholders, terminate the Trustee.  Notice of any removal of the Trustee
shall be given to each Rating Agency by the successor Trustee.

      Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions described above will become effective
upon acceptance of appointment by the successor trustee.

      A successor trustee will not be appointed unless the successor trustee
meets the eligibility requirements described above, is reasonably acceptable to
the NIM Insurer and its appointment does not adversely affect the then-current
ratings of the Certificates.

RESTRICTIONS ON TRANSFER OF THE CLASS A-R CERTIFICATES

      The Class A-R Certificates will be subject to the restrictions on transfer
described in the prospectus under "Material Federal Income Tax Consequences --
Taxation of Holders of Residual Interest Securities -- Restrictions on Ownership
and Transfer of Residual Interest Securities." The Class A-R Certificates (in
addition to other ERISA restricted classes of Certificates, as described in the
Pooling and Servicing Agreement), may not be acquired by a Plan or with assets
of a Plan unless certain conditions are met. See "ERISA Considerations" in this
prospectus supplement. Each Class A-R Certificate will contain a legend
describing the foregoing restrictions.

OWNERSHIP OF THE RESIDUAL CERTIFICATES

      On the Closing Date, the Class C and Class A-R Certificates (except as
described below) will be acquired by CW Securities Holdings, Inc., an affiliate
of the Depositor, the Sellers and the Master Servicer. On the Closing Date, CW
Securities Holdings, Inc. is expected to sell the Class C Certificates to
Sunfish Mortgage Fund Ltd., which is an affiliate of the Depositor, the Sellers
and the Master Servicer. However, CW Securities Holdings, Inc. may retain these
Certificates or transfer any of them in other transactions. See " -- Rights of
the NIM Insurer Under the Pooling and Servicing Agreement" in this prospectus
supplement.

      The Trustee will be initially designated as "tax matters person" under the
Pooling and Servicing Agreement and in that capacity will hold a Class A-R
Certificate in the amount of $0.05. As tax matters person, the Trustee will be
responsible for various tax administrative matters relating to the issuing
entity, including the making of a REMIC election with respect to each REMIC
created under the Pooling and Servicing Agreement and the preparation and filing
of tax returns with respect to each such REMIC.

RESTRICTIONS ON INVESTMENT, SUITABILITY REQUIREMENTS

      An investment in the Certificates may not be appropriate for all investors
due to tax, ERISA or other legal requirements. Investors should review the
disclosure included in this prospectus supplement and the prospectus under
"Material Federal Income Tax Consequences," "ERISA Considerations" and "Legal
Matters" prior to any acquisition and are encouraged to consult with their
advisors prior to purchasing the Certificates.

RIGHTS OF THE NIM INSURER UNDER THE POOLING AND SERVICING AGREEMENT

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

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


                                      S-81



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

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

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

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

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

                  YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS

GENERAL

      The weighted average life of, and the yield to maturity on, each class of
interest-bearing certificates generally will be directly related to the rate of
payment of principal (including prepayments) of the Mortgage Loans in the
related Loan Group or Loan Groups. The actual rate of principal prepayments on
the mortgage loans is influenced by a variety of economic, tax, geographic,
demographic, social, legal and other factors and has fluctuated considerably in
recent years. In addition, the rate of principal prepayments may differ among
pools of mortgage loans at any time because of specific factors relating to the
mortgage loans in the particular pool, including, among other things, the age of
the mortgage loans, the geographic locations of the properties securing the
loans, the extent of the borrower's equity in the properties, and changes in the
borrowers' housing needs, job transfers and employment status. Furthermore, as
described under "The Mortgage Pool -- Assignment of the Mortgage Loans" with
respect to up to 50% of the Initial Mortgage Loans in each Loan Group and 90% of
the Subsequent Mortgage Loans in each Loan Group (the "DELAY DELIVERY MORTGAGE
LOANS"), the Depositor may deliver the related Mortgage Files after the Closing
Date. Should a Seller fail to deliver to the Depositor or other designee of the
Depositor all or a portion of the Mortgage Files relating to Mortgage Loans sold
by it, or, at the Depositor's direction, to the Trustee within the time periods
described under "The Mortgage Pool -- Assignment of the Mortgage Loans"
Countrywide Home Loans will be required to use its best efforts to deliver a
Substitute Mortgage Loan for the related Delay Delivery Mortgage Loan or
repurchase the related Delay Delivery Mortgage Loan. Any repurchases pursuant to
this provision would also have the effect of accelerating the rate of
prepayments on the Mortgage Loans. In addition, no less than approximately
83.38% and 85.85% of the Mortgage Loans in the Statistical Calculation Pool in
respect of Loan Group 1 and Loan Group 2, respectively, in each case by Stated
Principal Balance of the Mortgage Loans in the Statistical Calculation Pool in
respect of the related Loan Group, require the payment of a prepayment charge in
connection with certain prepayments, generally no later than the first five
years following origination of the related Mortgage Loan. These charges, if
enforced by the Master Servicer, may affect the rate of prepayments on the
Mortgage Loans.

      In addition, no less than approximately 12.93% and 36.99% of the Mortgage
Loans in the Statistical Calculation Pool in respect of Loan Group 1 and Loan
Group 2, respectively, in each case by Stated Principal Balance of the Mortgage
Loans in the Statistical Calculation Pool in respect of the related Loan Group
provide for only payments of interest and do not provide for any payments of
principal for an extended period following their origination. These Mortgage
Loans may involve a greater degree of risk because, if the related borrower
defaults, the outstanding principal balance of the Mortgage Loans will be higher
than for amortizing Mortgage Loans. During their interest only periods, these
Mortgage Loans may be less likely to prepay as the interest only feature may
reduce the perceived benefits of refinancing due to the smaller monthly payment.
However, as an interest only mortgage loan approaches the end of its interest
only period, it may be more likely to be prepaid, even if market interest rates
at the time are only slightly higher or lower than the interest rate on the
interest only mortgage loans as the related borrowers seek to avoid increases in
their respective monthly mortgage payment.


                                      S-82



      The timing of changes in the rate of prepayments may significantly affect
the actual yield to investors who purchase the Certificates at prices other than
par, even if the average rate of principal prepayments is consistent with the
expectations of investors. In general, the earlier the payment of principal of
the Mortgage Loans the greater the effect on an investor's yield to maturity. As
a result, 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 Certificates may not be offset
by a subsequent like reduction (or increase) in the rate of principal
prepayments. Investors must make their own decisions as to the appropriate
prepayment assumptions to be used in deciding whether to purchase any of the
Certificates. The Depositor does not make any representations or warranties as
to the rate of prepayment or the factors to be considered in connection with
these determinations.

PREPAYMENTS AND YIELDS FOR THE OFFERED CERTIFICATES

      The extent to which the yield to maturity of the Certificates may vary
from the anticipated yield will depend upon the degree to which it is purchased
at a discount or premium and, correspondingly, the degree to which the timing of
payments thereon is sensitive to prepayments, liquidations and purchases of the
Mortgage Loans in the related Loan Group or Loan Groups. In particular, in the
case of a Certificate purchased at a discount, an investor should consider the
risk that a slower than anticipated rate of principal payments, liquidations and
purchases of the applicable Mortgage Loans could result in an actual yield to
the investor that is lower than the anticipated yield and, in the case of an
Offered Certificate purchased at a premium, the risk that a faster than
anticipated rate of principal payments, liquidations and purchases of the
Mortgage Loans could result in an actual yield to the investor that is lower
than the anticipated yield.

      In general with respect to fixed rate mortgage loans, if prevailing
interest rates fall significantly below the interest rates on fixed rate
mortgage loans, these mortgage loans are likely to be subject to higher
prepayment rates than if prevailing rates remain at or above the interest rates
on these mortgage loans. Conversely, if prevailing interest rates rise
appreciably above the interest rates on fixed rate mortgage loans, the fixed
rate mortgage loans are likely to experience a lower prepayment rate than if
prevailing rates remain at or below the interest rates on these mortgage loans.
In the event that Fixed Rate Mortgage Loans in either Loan Group with higher
Mortgage Rates prepay at rates higher than other Mortgage Loans in that Loan
Group, the applicable Net Rate Cap may be lower than otherwise would be the
case. As a result, the interest payable on the related Certificates on a
Distribution Date could be reduced because of the imposition of the applicable
Net Rate Cap. We cannot give any assurance as to the level of prepayment that
the Fixed Rate Mortgage Loans will experience.

      As is the case with fixed rate mortgage loans, adjustable rate mortgage
loans may be subject to a greater rate of principal prepayments in a declining
interest rate environment. For example, if prevailing interest rates fall
significantly, adjustable rate mortgage loans could be subject to higher
prepayment rates than if prevailing interest rates remain constant because the
availability of fixed rate mortgage loans at lower interest rates may encourage
borrowers to refinance their adjustable rate mortgage loans to a lower fixed
interest rate. Prepayments on the Hybrid Mortgage Loans may differ as they
approach their respective initial Adjustment Dates, and prepayments on Mortgage
Loans with interest-only terms may differ as they approach the ends of their
interest-only periods. In the event that Adjustable Rate Mortgage Loans in
either Loan Group with higher Gross Margins prepay at rates higher than other
Mortgage Loans in that Loan Group, the applicable Net Rate Cap may be lower than
otherwise would be the case. We can give no assurance as to the level of
prepayment that the Adjustable Rate Mortgage Loans will experience.

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


                                      S-83



Rate Mortgage Loans will have Mortgage Rates which will not adjust for a
substantial period of time after origination. See "The Mortgage Pool" in this
prospectus supplement.

      The portion of any proceeds of the Swap Contract that will be payable to
the swap trust under the Swap Contract Administration Agreement are intended to
provide amounts to the Swap Certificates to cover any unpaid Current Interest,
Interest Carry Forward Amounts, Net Rate Carryover and Unpaid Realized Loss
Amounts and to restore or maintain overcollateralization. However, any Net Swap
Payment payable by the Swap Contract Counterparty will be based on the lesser of
the applicable Swap Contract Notional Balance and the aggregate Certificate
Principal Balance of the Swap Certificates, and not on the actual Stated
Principal Balances of the Mortgage Loans. Therefore, the Swap Contract may not
provide sufficient funds to cover any unpaid Current Interest, Interest Carry
Forward Amounts, Net Rate Carryover and Unpaid Realized Loss Amounts with
respect to the Swap Certificates and to restore or maintain
overcollateralization for those Certificates. See "Description of the
Certificates -- The Swap Contract" above.

      Although amounts allocated to the swap trust in respect of the Swap
Contract will be available to cover any unpaid Current Interest, Interest Carry
Forward Amounts, Net Rate Carryover and Unpaid Realized Loss Amounts with
respect to the Swap Certificates and to restore or maintain
overcollateralization for those Certificates to the extent described under
"Description of the Certificates -- The Swap Contract" above, on or prior to the
Swap Contract Termination Date, there is no assurance that funds will be
available or sufficient to pay such amounts.

      In addition, for so long as one-month LIBOR is less than 5.070% (or, in
cases where the accrual period for the floating rate payment payable by the swap
counterparty is not 30 days, 5.070% multiplied by a fraction, the numerator of
which is 30 and the denominator of which is the actual number of days in that
accrual period), the issuing entity will be required to cover Net Swap Payments
due to the Swap Counterparty, thereby reducing the amount of available funds
that are available to make distributions on the Swap Certificates. In addition,
any Swap Termination Payment payable to the Swap Counterparty (other than a Swap
Termination Payment resulting from a Swap Counterparty Trigger Event) in the
event of early termination of the Swap Contract will reduce amounts available
for distribution to holders of the Swap Certificates. As of March 15, 2006,
One-Month LIBOR is 4.75250%.

LAST SCHEDULED DISTRIBUTION DATE

      Assuming that, among other things,

      o     no prepayments are received on the Mortgage Loans and

      o     scheduled monthly payments of principal of and interest on each of
            the Mortgage Loans are timely received,

the Distribution Date (the "LAST SCHEDULED DISTRIBUTION DATE") that occurs six
months following the Distribution Date (or, in the case of the Class A-R
Certificates, zero months) on which the Certificate Principal Balance of the
applicable class of Certificates would be reduced to zero is:


                                      S-84



         CLASS OF CERTIFICATES                       DISTRIBUTION DATE
      ----------------------------               ------------------------
            Class 1-A-1                                  July 2036
            Class 1-A-1M                                 July 2036
            Class 2-A-1                                   May 2028
            Class 2-A-2                                December 2034
            Class 2-A-3                                  July 2036
            Class M-1                                    June 2036
            Class M-2                                    June 2036
            Class M-3                                    June 2036
            Class M-4                                     May 2036
            Class M-5                                     May 2036
            Class M-6                                    April 2036
            Class A-R                                    March 2006

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

   o  prepayments are likely to occur which will be applied to the payment of
      the Certificate Principal Balances thereof, and

   o  the Master Servicer may purchase all the Mortgage Loans in the issuing
      entity when the aggregate Stated Principal Balance of the Mortgage Loans
      and REO Properties in the issuing entity is less than or equal to 10% of
      the sum of the Initial Cut-off Date Pool Principal Balance and the
      original Pre-Funded Amount.

PREPAYMENT MODEL

      Prepayments on mortgage loans are commonly measured relative to a
prepayment model or standard. The prepayment models used in this prospectus
supplement ("PREPAYMENT MODELS") are based on an assumed rate of prepayment each
month of the then unpaid principal balance of a pool of mortgage loans similar
to the Mortgage Loans in each Loan Group. For the Fixed Rate Mortgage Loans, the
Prepayment Model used in this prospectus supplement (the "FIXED RATE PREPAYMENT
VECTOR" or "FRPV") is a prepayment assumption which represents an assumed rate
of prepayment each month relative to the then outstanding principal balance of a
pool of mortgage loans for the life of the mortgage loans. For example, a 100%
FRPV assumes a constant prepayment rate ("CPR") of 2.2% per annum of the then
outstanding principal balance of the Fixed Rate Mortgage Loans in the first
month of the life of the Mortgage Loans and an additional 2.2% per annum (i.e.,
1/10 of the final per annum rate) in each month thereafter up to and including
the tenth month. Beginning in the eleventh month and in each month thereafter
during the life of the Fixed Rate Mortgage Loans, a 100% FRPV assumes a CPR of
22% per annum.

      For the Adjustable Rate Mortgage Loans, the Prepayment Model used in this
prospectus supplement ("ADJUSTABLE RATE PREPAYMENT VECTOR" or "ARPV") represents
an assumed rate of prepayment each month relative to the then outstanding
principal balance of a pool of mortgage loans for the life of the mortgage
loans. 100% ARPV assumes 6% CPR in month 1, an additional 1/11th of 22% CPR for
each month thereafter, increasing to 28% CPR in month 12 and remaining constant
at 28% CPR until month 33, increasing to and remaining constant at 50% CPR from
month 34 until month 38, decreasing 1/4th of 20% CPR for each month thereafter,
decreasing to 30% CPR in month 42 and remaining constant at 30% CPR from month
43 and thereafter; provided, however, the prepayment rate will not exceed 85%
CPR in any period for any given percentage of ARPV. As used in the tables, 100%
of the applicable Prepayment Model means 100% FRPV or 100% ARPV, as the case may
be.

      We cannot assure you, however, that prepayments on the Mortgage Loans will
conform to any level of the Prepayment Model, and no representation is made that
the Mortgage Loans will prepay at the prepayment rates shown or any other
prepayment rate. The rate of principal payments on mortgage loans is influenced
by a variety of economic, geographic, social and other factors, including the
level of interest rates. Other factors affecting prepayment of mortgage loans
include changes in obligors' housing needs, job transfers and unemployment. In
the case of mortgage loans in general, if prevailing interest rates fall
significantly below the interest rates on the mortgage loans, the mortgage loans
are likely to be subject to higher prepayment rates than if prevailing interest


                                      S-85



rates remain at or above the rates borne by the mortgage loans. Conversely, if
prevailing interest rates rise above the interest on the mortgage loans, the
rate of prepayment would be expected to decrease.

DECREMENT TABLES; WEIGHTED AVERAGE LIVES

      The tables below set forth the percentages of the initial Certificate
Principal Balance of each class of Offered Certificates that will be outstanding
as of the twelfth Distribution Date and every twelfth Distribution Date
thereafter at the respective percentages of the Prepayment Model. Those
percentages have been rounded to the nearest whole percentages, and an asterisk
(*) indicates a percentage less than 0.5% and greater than 0%. In addition, the
tables below set forth the weighted average lives of each class of Offered
Certificates to maturity and to optional termination at the respective
percentages of the Prepayment Model. Each weighted average life of any class of
Certificates presented below is determined by (a) multiplying the amount of each
principal payment by the number of years from the date of issuance to the
related Distribution Date, (b) adding the results, and (c) dividing the sum by
the initial respective Certificate Principal Balance for that class of
Certificates.

      The following tables have been prepared on the basis of the following
assumptions (collectively, the "MODELING ASSUMPTIONS"):

            (1)   the Mortgage Loans prepay at the indicated percentage of the
      related Prepayment Model,

            (2)   distributions on the Certificates are received, in cash, on
      the 25th day of each month, commencing in March 2006, in accordance with
      the payment priorities defined in this prospectus supplement,

            (3)   no defaults or delinquencies in, or modifications, waivers or
      amendments respecting, the payment by the borrowers of principal and
      interest on the Mortgage Loans occur,

            (4)   Scheduled Payments are assumed to be received on the first day
      of each month commencing in March 2006, and prepayments represent payment
      in full of individual Mortgage Loans and are assumed to be received on the
      last day of each month, commencing in February 2006, and include 30 days'
      interest thereon,

            (5)   the level of the Six-Month LIBOR Index remains constant at
      4.979% per annum, the level of the One-Year CMT Index remains constant at
      4.728% per annum, and the level of One-Month LIBOR remains constant at
      4.630% per annum,

            (6)   the Pass-Through Margins for the Adjustable Rate Certificates
      remain constant at the rates applicable on or prior to the Optional
      Termination Date and the Pass-Through Margins for those Certificates are
      adjusted accordingly on any Distribution Date after the Optional
      Termination Date,

            (7)   the Certificates are issued on March 17, 2006,

            (8)   the Mortgage Rate for each Adjustable Rate Mortgage Loan is
      adjusted on its next Adjustment Date (and on subsequent Adjustment Dates,
      if necessary) to equal the sum of

                  (a)   the assumed level of the applicable Mortgage Index, and

                  (b)   the respective Gross Margin (which sum is subject to the
            applicable periodic adjustment caps and floors and the applicable
            lifetime adjustment caps and floors),

            (9)   except as indicated with respect to the weighted average lives
      to maturity, the optional termination is exercised on the Optional
      Termination Date,

            (10)  the scheduled monthly payment for each Mortgage Loan, except
      for the interest-only Mortgage Loans during their respective interest-only
      periods, is calculated based on its principal balance,


                                      S-86



      mortgage rate and remaining amortization term so that each Mortgage Loan
      will amortize in amounts sufficient to repay the remaining principal
      balance of the Mortgage Loan over the remaining term to maturity (except
      in the case of balloon loans), as indicated in the table below,

            (11)  any Mortgage Loan with a remaining interest-only term greater
      than zero does not amortize during the remaining interest-only term, and
      at the end of the remaining interest-only term, will amortize in amounts
      sufficient to repay the current balance of any Mortgage Loan over the
      remaining term to maturity calculated at the expiration of the remaining
      interest-only term based on the applicable amortization method,

            (12)  scheduled monthly payments on each Adjustable Rate Mortgage
      Loan will be adjusted in the month immediately following each related
      interest adjustment date (as necessary) for the Mortgage Loan to equal the
      fully amortizing payment described above,

            (13)  the scheduled amortization for all Mortgage Loans is based
      upon their respective gross interest rates and the interest rate on each
      Fixed Rate Credit Comeback Loan will be deemed to be reduced by 0.375% on
      the Due Date following the end of each of the first four annual periods
      after the origination date, irrespective of whether the borrower qualifies
      for the reduction by having a good payment history,

            (14)  all of the Pre-Funded Amount, if any, is used to purchase
      Subsequent Mortgage Loans for inclusion on the Closing Date, and

            (15)  each Loan Group consists of Mortgage Loans having the
      approximate characteristics described below:


                                      S-87



                     LOAN GROUP 1 FIXED RATE MORTGAGE LOANS



                                                                             REMAINING      ORIGINAL
                         ADJUSTED                           REMAINING         TERM TO    INTEREST-ONLY                   CREDIT
   PRINCIPAL           NET MORTGAGE         MORTGAGE      AMORTIZATION       MATURITY         TERM          AGE         COMEBACK
  BALANCE($)           RATE (%) (1)       RATE (%) (2)    TERM (MONTHS)      (MONTHS)       (MONTHS)      (MONTHS)      FEATURE
----------------     ---------------     --------------  ---------------    -----------  --------------   --------    -----------

     40,561.88          9.213791           10.292020           298             118            N/A            62            No
    231,151.16          6.861000            8.300000           309             129            N/A            51            No
     30,951.37         11.991000           12.500000           284             104            N/A            76            No
    418,278.82          7.038746            7.547746           168             168            N/A            12            No
     78,519.86          7.366000            7.875000           180             180            N/A            0            Yes
    140,981.73          8.897241            9.406241           117             117            N/A            63            No
    113,904.43          5.411000            5.920000           178             178            N/A            2             No
     33,226.69         10.366000           10.875000           176             176            N/A            4             No
     80,230.54          5.991000            6.500000           180             180            N/A            0             No
    205,231.31          8.226864            8.735864           179             179            N/A            1             No
  6,293,860.20          8.421944            8.977147           353             353            N/A            6             No
  1,484,792.32          8.312965            8.821965           358             358            N/A            2            Yes
     57,478.59          8.291000            8.800000           360             360            N/A            0             No
    199,293.34          5.991000            6.500000           360             360            N/A            0             No
    386,966.63          7.931953            8.440953           359             359            N/A            1             No
    311,533.27          8.938793           10.739687           296             296            N/A            62            No
  7,515,409.11          7.631349            8.176450           354             354            N/A            6             No
    679,911.69          8.390712            8.899712           360             360            N/A            0            Yes
    226,330.01          7.561000            9.000000           262             262            N/A            51            No
     70,090.51          7.491000            8.000000           359             359            N/A            1             No
    187,870.21          7.241000            7.750000           359             359            N/A            1            Yes
    114,621.21          7.116000            7.625000           356             356            N/A            4             No
    125,096.14         11.041000           11.550000           359             359            N/A            1             No
  3,968,713.34          7.332544            7.928419           344             344            N/A            13            No
    159,691.27          9.616000           10.125000           360             360            N/A            0            Yes
  1,476,883.25          7.538728            8.217970           346             346            N/A            14            No
    292,610.52          8.584650            9.093650           360             360            N/A            0            Yes
    696,229.92          6.912613            7.421613           359             359            N/A            1             No
    205,108.23          6.366000            6.875000           359             359            N/A            1             No
    128,222.71          7.991000            8.500000           359             359            N/A            1             No
    540,016.52          6.490337            6.999337           360             360            N/A            0             No
    149,780.84          7.241000            7.750000           353             353            N/A            7            Yes
  1,119,184.99          7.274583            7.783583           359             359            N/A            1             No
    443,604.16          6.218537            6.727537           359             359            N/A            1             No
 12,268,731.09          6.655388            7.164388           359             359            N/A            1             No


_______________

(1)   In the above table, the Adjusted Net Mortgage Rate percentages that
      include Fixed Rate Credit Comeback Loans have been calculated without
      subtracting any Credit Comeback Excess Amounts. However, for purposes of
      actual payments to be made on the Certificates, including the calculation
      of each applicable Net Rate Cap as well as other Mortgage Rate
      calculations, the Mortgage Rate for each Fixed Rate Credit Comeback Loan
      will be deemed to be reduced by 0.375% on the Due Date following the end
      of each of the first four annual periods after the origination date,
      irrespective of whether the borrower qualifies for the reduction by having
      a good payment history.

(2)   In the above table, the Mortgage Rate percentages that include Fixed Rate
      Credit Comeback Loans have been calculated without subtracting any Credit
      Comeback Excess Amounts. However, for purposes of actual payments to be
      made on the Certificates, including the calculation of each applicable Net
      Rate Cap as well as other Mortgage Rate calculations, the Mortgage Rate
      for each Fixed Rate Credit Comeback Loan will be deemed to be reduced by
      0.375% on the Due Date following the end of each of the first four annual
      periods after the origination date, irrespective of whether the borrower
      qualifies for the reduction by having a good payment history.


                                      S-88



                     LOAN GROUP 2 FIXED RATE MORTGAGE LOANS





                                                                            REMAINING     ORIGINAL
                       ADJUSTED                           REMAINING          TERM TO    INTEREST-ONLY                  CREDIT
   PRINCIPAL         NET MORTGAGE         MORTGAGE      AMORTIZATION        MATURITY        TERM           AGE        COMEBACK
   BALANCE($)        RATE (%) (1)       RATE (%) (2)    TERM (MONTHS)       (MONTHS)      (MONTHS)       (MONTHS)     FEATURE
----------------    ---------------     --------------  ---------------    -----------  --------------   --------    -----------

    94,993.43        12.523662           13.080179           291             111            N/A              69            No
   431,511.93         8.248002            9.992718           299             119            N/A              61            No
    15,842.36        12.491000           13.000000            91              91            N/A              74            No
   206,415.66         7.241000            7.750000           180             180            N/A              0            Yes
   157,622.94         7.579708            8.088708           180             180            N/A              0            Yes
 1,479,018.66         7.189713            7.754355           168             168            N/A              12            No
   495,516.47         7.827128            8.336128           174             174            N/A              5            Yes
   615,119.50         7.845174            8.382049           349             349            N/A              11            No
 1,384,311.70         5.851307            6.360307           360             360            N/A              0             No
   967,573.42         6.366000            6.875000           360             360            N/A              0             No
   104,019.55        10.550321           11.059321           331             331            N/A              29            No
 1,872,115.32         6.275282            6.784282           359             359            N/A              1             No
    94,859.55         8.351000           10.250000           300             300            N/A              60            No
   563,705.77         7.636480            8.262286           352             352            N/A              8             No
   356,520.30         8.204020            8.713020           360             360            N/A              0            Yes
 5,198,534.83         7.042042            7.551042           360             360            N/A              0             No
   876,345.05         8.199593            8.708593           360             360            N/A              0            Yes
   353,360.43         8.249819            8.758819           360             360            N/A              0             No
    82,810.34        10.866000           11.375000           360             360            N/A              0            Yes
   288,286.57         9.103063            9.612063           360             360            N/A              0             No
   297,963.06         8.757453            9.266453           359             359            N/A              1            Yes
   288,304.86         5.867980            7.301669           312             312            N/A              43            No
57,588,352.38         6.466533            6.998088           357             357            N/A              3             No
10,777,630.69         7.711126            8.226509           352             352            N/A              7            Yes
   492,067.74         5.548684            6.057684           300             360            60               0             No
   505,143.06         6.298161            6.807161           300             360            60               0             No
    67,642.97         7.616000            8.125000           300             360            60               0             No
   401,399.14         6.094819            6.603819           300             359            60               1             No
   214,435.19         7.236427            7.745427           300             360            60               0             No
   176,940.41         6.366000            6.875000           300             360            60               0             No
   211,820.13         5.991000            6.500000           300             358            60               2             No
 1,392,041.78         6.252224            6.761224           300             359            60               1             No
   926,909.19         6.420515            6.929515           300             360            60               0             No
13,516,615.93         6.128439            6.637439           300             360            60               0             No


____________

(1)   In the above table, the Adjusted Net Mortgage Rate percentages that
      include Fixed Rate Credit Comeback Loans have been calculated without
      subtracting any Credit Comeback Excess Amounts. However, for purposes of
      actual payments to be made on the Certificates, including the calculation
      of each applicable Net Rate Cap as well as other Mortgage Rate
      calculations, the Mortgage Rate for each Fixed Rate Credit Comeback Loan
      will be deemed to be reduced by 0.375% on the Due Date following the end
      of each of the first four annual periods after the origination date,
      irrespective of whether the borrower qualifies for the reduction by having
      a good payment history.

(2)   In the above table, the Mortgage Rate percentages that include Fixed Rate
      Credit Comeback Loans have been calculated without subtracting any Credit
      Comeback Excess Amounts. However, for purposes of actual payments to be
      made on the Certificates, including the calculation of each applicable Net
      Rate Cap as well as other Mortgage Rate calculations, the Mortgage Rate
      for each Fixed Rate Credit Comeback Loan will be deemed to be reduced by
      0.375% on the Due Date following the end of each of the first four annual
      periods after the origination date, irrespective of whether the borrower
      qualifies for the reduction by having a good payment history.


                                      S-89



                 LOAN GROUP 1 ADJUSTABLE RATE MORTGAGE LOANS (1)



                                                                  REMAINING    ORIGINAL
                  ADJUSTED NET                     REMAINING       TERM TO     INTEREST-                 INITIAL       SUBSEQUENT
 PRINCIPAL          MORTGAGE        MORTGAGE      AMORTIZATION    MATURITY     ONLY TERM     AGE      PERIODIC RATE     PERIODIC
BALANCE ($)         RATE (%)        RATE (%)     TERM (MONTHS)    (MONTHS)     (MONTHS)    (MONTHS)      CAP (%)      RATE CAP (%)
-------------     ------------      --------     -------------    ---------    ---------   --------   -------------   ------------

 1,019,218.63        6.704445       7.213445          360            360          N/A          0         1.000000       1.000000
   111,621.38        6.241000       6.750000          360            360          N/A          0         1.000000       1.000000
 2,087,124.11        6.545465       7.054465          360            360          N/A          0         1.000000       1.000000
   195,016.66        6.491000       7.000000          360            360          N/A          0         1.000000       1.000000
   421,509.69        6.514691       7.023691          360            360          N/A          0         1.000000       1.000000
   535,868.14        6.660792       7.169792          360            360          N/A          0         1.000000       1.000000
   271,526.48        6.614244       7.123244          360            360          N/A          0         1.000000       1.000000
   312,625.39        7.941000       8.450000          360            360          N/A          0         1.000000       1.000000
   324,193.81        6.924052       7.433052          360            360          N/A          0         1.000000       1.000000
   319,211.48        7.125486       7.634486          360            360          N/A          0         1.000000       1.000000
12,626,089.51        7.583233       8.092233          360            360          N/A          0         1.491193       1.491193
   410,989.05        8.751796       9.260796          360            360          N/A          0         1.500000       1.500000
   138,992.13        5.366000       5.875000          360            360          N/A          0         1.500000       1.500000
 4,182,704.99        7.603131       8.112131          360            360          N/A          0         1.500000       1.500000
 3,180,199.16        8.010548       8.519548          360            360          N/A          0         1.500000       1.500000
 4,578,918.66        7.194115       7.703115          360            360          N/A          0         1.500000       1.500000
   354,536.86        6.741362       7.250362          360            360          N/A          0         1.500000       1.500000
 2,031,191.71        7.172848       7.681848          360            360          N/A          0         1.500000       1.500000
   492,028.53        7.389158       7.898158          360            360          N/A          0         1.500000       1.500000
60,679,220.10        7.244788       7.753788          360            360          N/A          0         1.500000       1.500000
   186,805.43        9.397044       9.906044          360            360          N/A          0         1.500000       1.500000
   457,177.21        8.824059       9.333059          336            360          24           0         1.500000       1.500000
   382,078.69        5.952859       6.461859          300            360          60           0         1.152563       1.152563
   121,799.88        7.291000       7.800000          336            359          24           1         1.500000       1.500000
   200,071.69        8.741000       9.250000          300            360          60           0         1.500000       1.500000
   357,137.08        7.407798       7.916798          336            360          24           0         1.500000       1.500000
   321,606.42        7.191000       7.700000          336            360          24           0         1.500000       1.500000
   588,449.93        6.037522       6.546522          300            360          60           0         1.500000       1.500000
   181,331.28        7.191000       7.700000          300            360          60           0         1.500000       1.500000
   121,885.41        7.366000       7.875000          336            360          24           0         1.500000       1.500000
 9,755,225.85        6.648644       7.157644          336            360          24           0         1.500000       1.500000
 7,169,848.33        6.706231       7.215231          300            360          60           0         1.500000       1.500000
 7,351,245.79        7.809338       8.318338          360            360          N/A          0         1.464398       1.464398
   284,399.29        8.241000       8.750000          360            360          N/A          0         1.500000       1.500000
   248,047.50        6.991000       7.500000          360            360          N/A          0         1.500000       1.500000
   256,600.86        7.782667       8.291667          360            360          N/A          0         1.500000       1.500000
 1,298,415.06        7.818139       8.327139          360            360          N/A          0         1.500000       1.500000
 1,005,494.91        7.842182       8.351182          360            360          N/A          0         1.500000       1.500000
 1,091,172.77        7.120599       7.629599          360            360          N/A          0         1.500000       1.500000
   317,757.40        7.126599       7.635599          360            360          N/A          0         1.500000       1.500000
   174,310.69        5.366000       5.875000          359            359          N/A          1         1.500000       1.500000
13,255,638.41        7.208596       7.717596          360            360          N/A          0         1.500000       1.500000
   424,862.60        7.778889       8.287889          324            360          36           0         1.500000       1.500000


                                    MAXIMUM        MINIMUM       MONTHS TO       RESET
 PRINCIPAL        GROSS MARGIN     MORTGAGE     MORTGAGE RATE    NEXT RATE     FREQUENCY
BALANCE ($)           (%)          RATE (%)          (%)         ADJUSTMENT     (MONTHS)
-------------     ------------     ---------    -------------    ----------    ----------

 1,019,218.63       6.498649       14.213445       7.213445          6             6
   111,621.38       6.875000       13.750000       6.750000          6             6
 2,087,124.11       6.536969       14.054465       7.054465          6             6
   195,016.66       5.500000       14.000000       7.000000          6             6
   421,509.69       6.156859       14.023691       7.023691          6             6
   535,868.14       5.946329       14.169793       7.169792          6             6
   271,526.48       6.025571       14.123244       7.123244          6             6
   312,625.39       6.450000       15.450000       8.450000          6             6
   324,193.81       7.177825       14.433052       7.433052          6             6
   319,211.48       6.090273       14.634486       7.634486          6             6
12,626,089.51       6.129492       15.092233       8.092233          24            6
   410,989.05       6.446930       16.260796       9.260796          24            6
   138,992.13       6.500000       12.875000       5.875000          24            6
 4,182,704.99       6.296672       15.112131       8.112131          24            6
 3,180,199.16       6.895436       15.519548       8.519548          24            6
 4,578,918.66       6.301150       14.703115       7.703115          24            6
   354,536.86       6.381846       14.250362       7.250362          24            6
 2,031,191.71       4.908649       14.681848       7.681848          24            6
   492,028.53       6.607011       14.898158       7.898158          24            6
60,679,220.10       6.286590       14.753788       7.753788          24            6
   186,805.43       6.928022       16.906044       9.906044          24            6
   457,177.21       7.051403       16.333059       9.333059          24            6
   382,078.69       6.426237       13.461859       6.461859          24            6
   121,799.88       6.800000       14.800000       7.800000          23            6
   200,071.69       7.875000       16.250000       9.250000          24            6
   357,137.08       6.916798       14.916798       7.916798          24            6
   321,606.42       6.700000       14.700000       7.700000          24            6
   588,449.93       6.226739       13.546522       6.546522          24            6
   181,331.28       6.700000       14.700000       7.700000          24            6
   121,885.41       7.375000       14.875000       7.875000          24            6
 9,755,225.85       6.242030       14.157644       7.157644          24            6
 7,169,848.33       6.218941       14.215231       7.215231          24            6
 7,351,245.79       6.674090       15.318338       8.318338          36            6
   284,399.29       6.625000       15.750000       8.750000          36            6
   248,047.50       6.000000       14.500000       7.500000          36            6
   256,600.86       6.529167       15.291667       8.291667          36            6
 1,298,415.06       6.778415       15.327139       8.327139          36            6
 1,005,494.91       6.515916       15.351182       8.351182          36            6
 1,091,172.77       5.785317       14.629599       7.629599          36            6
   317,757.40       4.665545       14.635599       7.635599          36            6
   174,310.69       5.250000       12.875000       5.875000          35            6
13,255,638.41       6.212768       14.717596       7.717596          36            6
   424,862.60       7.287889       15.287889       8.287889          36            6



                                      S-90





                                                                  REMAINING    ORIGINAL
                  ADJUSTED NET                     REMAINING       TERM TO     INTEREST-                 INITIAL       SUBSEQUENT
 PRINCIPAL          MORTGAGE        MORTGAGE      AMORTIZATION    MATURITY     ONLY TERM     AGE      PERIODIC RATE     PERIODIC
BALANCE ($)         RATE (%)        RATE (%)     TERM (MONTHS)    (MONTHS)     (MONTHS)    (MONTHS)      CAP (%)      RATE CAP (%)
-------------     ------------      --------     -------------    ---------    ---------   --------   -------------   ------------

   224,440.22        6.263256       6.772256          324            360          36           0         1.500000       1.500000
 1,997,466.66        6.867751       7.376751          324            360          36           0         1.500000       1.500000
 1,478,876.31        6.843504       7.352504          300            360          60           0         1.500000       1.500000


                                    MAXIMUM        MINIMUM       MONTHS TO       RESET
 PRINCIPAL        GROSS MARGIN     MORTGAGE     MORTGAGE RATE    NEXT RATE     FREQUENCY
BALANCE ($)           (%)          RATE (%)          (%)         ADJUSTMENT     (MONTHS)
-------------     ------------     ---------    -------------    ----------    ----------

   224,440.22       5.772256       13.772256       6.772256          36            6
 1,997,466.66       6.352183       14.376751       7.376751          36            6
 1,478,876.31       6.409980       14.352504       7.352504          36            6


______________

(1)   All Loan Group 1 Adjustable Rate Mortgage Loans are Six-Month LIBOR
      Adjustable Rate Mortgage Loans.

                 LOAN GROUP 2 ADJUSTABLE RATE MORTGAGE LOANS (1)



                                                                   REMAINING    ORIGINAL
                   ADJUSTED NET                     REMAINING       TERM TO     INTEREST-                 INITIAL       SUBSEQUENT
  PRINCIPAL          MORTGAGE        MORTGAGE      AMORTIZATION    MATURITY     ONLY TERM     AGE      PERIODIC RATE     PERIODIC
 BALANCE ($)         RATE (%)        RATE (%)     TERM (MONTHS)    (MONTHS)     (MONTHS)    (MONTHS)      CAP (%)      RATE CAP (%)
-------------     ------------       ---------    -------------    ---------    ---------   --------   -------------   ------------

 1,121,732.38         7.798923        8.307923         360            360          N/A          0         1.000000       1.000000
   105,212.71         6.991000        7.500000         360            360          N/A          0         1.000000       1.000000
   224,897.55         6.866000        7.375000         355            355          N/A          5         1.000000       1.000000
 1,873,240.65         6.111757        6.620757         359            359          N/A          1         1.000000       1.000000
   146,443.54         4.991000        5.500000         360            360          N/A          0         1.000000       1.000000
 1,146,122.12         6.613833        7.122833         349            349          N/A         11         1.000000       1.000000
   640,298.25         7.647473        8.156473         360            360          N/A          0         1.000000       1.000000
   185,146.48         8.366000        8.875000         360            360          N/A          0         1.000000       1.000000
   157,252.47         8.591000        9.100000         360            360          N/A          0         1.000000       1.000000
    66,761.60        10.241000       10.750000         297            297          N/A         63         1.000000       1.000000
 1,599,758.44         6.799872        7.308872         479            359          N/A          1         3.000000       1.500000
   378,383.90         5.491000        6.000000         479            359          N/A          1         3.000000       1.500000
   156,843.85         6.481000        6.990000         479            359          N/A          1         3.000000       1.500000
    91,613.97*        4.866000        5.375000         288            288          N/A         72         2.000000       2.000000
    82,350.98*        7.616000        8.125000         288            288          N/A         72         2.000000       2.000000
12,665,222.69         8.122664        8.641241         359            359          N/A          1         1.805124       1.395329
   259,144.07         7.241000        7.750000         359            359          N/A          1         3.000000       1.000000
 3,986,050.20         7.999239        8.508239         359            359          N/A          1         2.086310       1.378388
 3,752,780.69         8.111653        8.632904         358            358          N/A          2         1.867193       1.377602
 4,824,875.44         7.438320        7.947320         359            359          N/A          1         1.962550       1.345817
   189,156.25         6.441000        6.950000         360            360          N/A          0         1.500000       1.500000
   232,592.23         7.741000        8.250000         359            359          N/A          1         3.000000       1.000000
   212,729.86         8.866000        9.375000         354            354          N/A          6         1.500000       1.500000
   404,832.21         8.243338        8.752338         359            359          N/A          1         1.500000       1.500000
 5,321,688.17         7.353025        7.862025         359            359          N/A          1         2.392902       1.193370
   205,516.10         7.454120        7.963120         359            359          N/A          1         3.000000       1.000000
80,842,135.07         7.288019        7.803726         359            359          N/A          1         2.051480       1.347389
   299,260.20         8.975385        9.792903         317            317          N/A         43         2.404025       1.198658



                                     MAXIMUM        MINIMUM       MONTHS TO       RESET
  PRINCIPAL        GROSS MARGIN     MORTGAGE     MORTGAGE RATE    NEXT RATE     FREQUENCY
 BALANCE ($)           (%)          RATE (%)          (%)         ADJUSTMENT     (MONTHS)
-------------      ------------     ---------    -------------    ----------    ----------

 1,121,732.38        6.235145       15.307923       8.307923          6             6
   105,212.71        5.750000       14.500000       7.500000          6             6
   224,897.55        7.250000       14.375000       7.375000          1             6
 1,873,240.65        6.197018       13.620757       6.620757          5             6
   146,443.54        5.750000       12.500000       5.500000          6             6
 1,146,122.12        6.313274       14.055633       6.734346          6             6
   640,298.25        6.796942       15.156473       8.156473          6             6
   185,146.48        6.750000       15.875000       8.875000          6             6
   157,252.47        7.100000       16.100000       9.100000          6             6
    66,761.60        6.750000       17.750000       8.500000          3             6
 1,599,758.44        7.060801       14.308872       7.278044          23            6
   378,383.90        5.750000       13.000000       6.000000          23            6
   156,843.85        6.750000       13.990000       6.750000          35            6
    91,613.97*       2.750000       12.375000       2.750000          12            12
    82,350.98*       5.575000       15.125000       5.575000          12            12
12,665,222.69        7.096597       15.440127       8.578478          23            6
   259,144.07        5.000000       13.750000       7.750000          23            6
 3,986,050.20        7.289453       15.217867       8.378948          23            6
 3,752,780.69        7.582436       15.388108       8.617583          23            6
 4,824,875.44        6.982003       14.672421       7.800315          23            6
   189,156.25        5.950000       13.950000       6.950000          24            6
   232,592.23        6.000000       14.250000       8.250000          23            6
   212,729.86        6.875000       16.375000       9.375000          18            6
   404,832.21        7.840462       15.752338       8.752338          23            6
 5,321,688.17        6.924627       14.551812       7.796980          23            6
   205,516.10        7.733236       13.963120       7.963120          23            6
80,842,135.07        6.985602       14.503951       7.730051          23            6
   299,260.20        7.216401       16.190220       9.698896          8             6



                                      S-91





                                                                   REMAINING    ORIGINAL
                   ADJUSTED NET                     REMAINING       TERM TO     INTEREST-                 INITIAL       SUBSEQUENT
  PRINCIPAL          MORTGAGE        MORTGAGE      AMORTIZATION    MATURITY     ONLY TERM     AGE      PERIODIC RATE     PERIODIC
 BALANCE ($)         RATE (%)        RATE (%)     TERM (MONTHS)    (MONTHS)     (MONTHS)    (MONTHS)      CAP (%)      RATE CAP (%)
-------------      ------------      ---------    -------------    ---------    ---------   --------   -------------   ------------

   110,108.44         7.841000        8.350000         354            354          N/A          6         1.500000       1.500000
    93,377.02         8.442000       10.341000         300            300          N/A         60         3.000000       1.000000
   439,015.31        10.035375       11.073498         296            296          N/A         64         3.000000       1.098523
 2,589,956.50         7.967246        8.562627         349            349          N/A         11         2.440603       1.140196
    99,078.23         9.078794        9.587794         281            281          N/A         79         1.500000       1.500000
   100,096.87         8.041000        8.550000         359            359          N/A          1         1.500000       1.500000
   326,704.61         9.212003       10.086649         288            288          N/A         72         1.500000       1.500000
 3,653,329.29         7.506966        8.015966         336            360          24           0         1.500000       1.500000
 2,672,150.13         7.415357        7.924357         300            360          60           0         1.853185       1.382272
   237,099.07         6.491000        7.000000         336            360          24           0         1.500000       1.500000
 1,131,450.72         7.034047        7.543047         336            360          24           0         1.500000       1.500000
 2,138,766.48         7.320991        7.829991         300            359          60           1         2.292113       1.278186
   244,072.57         7.616000        8.125000         300            358          60           2         3.000000       1.500000
   541,841.12         7.517641        8.026641         336            360          24           0         1.500000       1.500000
   538,964.55         7.772457        8.281457         300            360          60           0         1.500000       1.500000
   211,166.36         7.741000        8.250000         300            359          60           1         3.000000       2.000000
 2,407,838.71         6.858700        7.367700         336            360          24           0         1.972741       1.342420
 2,308,272.79         7.152540        7.661540         300            359          60           1         2.581673       1.139442
   163,877.30         6.541000        7.050000         336            360          24           0         1.500000       1.500000
    56,223.86         6.991000        7.500000         336            360          24           0         1.500000       1.500000
 2,575,113.85         7.212015        7.721015         300            359          60           1         2.172240       1.203196
   463,737.89         8.449553        8.958553         300            358          60           2         3.000000       1.000000
38,688,705.63         6.705013        7.214013         336            359          24           1         1.647387       1.450871
42,117,561.49         6.677814        7.186814         300            359          60           1         2.125091       1.335697
   370,990.31         5.845511        6.354511         336            360          24           0         2.458647       1.180451
 2,041,447.70         6.490158        6.999158         300            358          60           2         2.790346       1.284154
   284,388.13         6.866000        7.375000         300            360          60           0         1.500000       1.500000
30,727,434.91         7.780624        8.289624         358            358          N/A          2         1.720857       1.425388
   168,476.92         7.741000        8.250000         359            359          N/A          1         3.000000       1.000000
   799,216.80         7.312727        7.821727         359            359          N/A          1         1.500000       1.500000
   172,499.70         8.481000        8.990000         359            359          N/A          1         1.500000       1.500000
 3,416,520.32         7.904093        8.413093         358            358          N/A          2         1.877792       1.374069
   129,373.43         8.391000        8.900000         359            359          N/A          1         3.000000       1.000000
   117,939.35         6.991000        7.500000         360            360          N/A          0         1.500000       1.500000
   182,858.87         8.616000        9.125000         358            358          N/A          2         3.000000       1.000000
 2,407,993.42         7.475389        7.984389         357            357          N/A          3         1.863725       1.411107
 3,625,598.49         8.495716        9.019980         356            356          N/A          4         1.774250       1.363454
 4,615,619.98         7.139974        7.648974         360            360          N/A          0         2.023196       1.321289
   191,055.98         7.291000        7.800000         355            355          N/A          5         3.000000       1.000000
    52,801.48        10.616000       11.125000         285            285          N/A         75         1.500000       1.500000
   534,232.23         7.196842        7.705842         358            358          N/A          2         1.500000       1.500000
   999,088.77         7.974075        8.483075         359            359          N/A          1         2.047782       1.317406
   847,990.42         7.654592        8.163592         359            359          N/A          1         2.794844       1.068385
34,060,152.54         7.263687        7.772687         358            358          N/A          2         1.940761       1.359990
   239,536.23         6.991000        7.500000         359            359          N/A          1         1.500000       1.500000




                                    MAXIMUM         MINIMUM       MONTHS TO       RESET
  PRINCIPAL        GROSS MARGIN     MORTGAGE     MORTGAGE RATE    NEXT RATE     FREQUENCY
 BALANCE ($)           (%)          RATE (%)          (%)         ADJUSTMENT     (MONTHS)
-------------      ------------     ---------    -------------    ----------    ----------

   110,108.44        8.350000       15.350000       8.350000          18            6
    93,377.02        5.750000       16.341000       5.750000          6             6
   439,015.31        6.474974       18.073498       8.672860          5             6
 2,589,956.50        7.371747       14.963281       8.546731          20            6
    99,078.23        5.382941       16.587794       8.438970          3             6
   100,096.87        7.550000       15.550000       8.550000          23            6
   326,704.61        6.197558       16.972334       9.032762          3             6
 3,653,329.29        6.675969       15.015966       8.015966          24            6
 2,672,150.13        6.709065       14.688900       7.924357          24            6
   237,099.07        6.000000       14.000000       7.000000          24            6
 1,131,450.72        6.351021       14.543047       7.543047          24            6
 2,138,766.48        6.921506       14.446682       7.765236          23            6
   244,072.57        7.875000       15.125000       8.125000          22            6
   541,841.12        7.214543       15.026641       8.026641          24            6
   538,964.55        6.897986       15.281457       8.281457          24            6
   211,166.36        8.250000       15.250000       8.250000          23            6
 2,407,838.71        6.823796       14.052539       7.367700          24            6
 2,308,272.79        7.194338       13.940425       7.661540          23            6
   163,877.30        7.050000       14.050000       7.050000          24            6
    56,223.86        8.500000       14.500000       7.500000          24            6
 2,575,113.85        7.032397       14.127407       7.721015          23            6
   463,737.89        7.746711       14.958553       8.958553          22            6
38,688,705.63        6.399754       14.115755       7.195099          23            6
42,117,561.49        6.360119       13.895266       7.136838          23            6
   370,990.31        5.813158       12.715414       6.354511          24            6
 2,041,447.70        6.648100       13.704105       6.999158          22            6
   284,388.13        5.750000       14.375000       7.375000          24            6
30,727,434.91        7.071909       15.136149       8.244557          35            6
   168,476.92        7.250000       14.250000       8.250000          35            6
   799,216.80        5.821727       14.821727       7.821727          35            6
   172,499.70        6.990000       15.990000       8.990000          35            6
 3,416,520.32        7.160828       15.161232       8.176854          34            6
   129,373.43        8.900000       14.900000       8.900000          35            6
   117,939.35        5.750000       14.500000       7.500000          36            6
   182,858.87        8.875000       15.125000       9.125000          34            6
 2,407,993.42        6.479741       14.806602       7.984389          33            6
 3,625,598.49        7.561344       15.754513       8.943429          33            6
 4,615,619.98        6.669263       14.319095       7.648974          36            6
   191,055.98        7.800000       13.800000       7.800000          31            6
    52,801.48        7.000000       18.125000      10.950000          3             6
   534,232.23        4.320183       14.705842       7.705842          34            6
   999,088.77        6.696023       15.255303       8.397190          35            6
   847,990.42        7.684251       14.518144       8.085364          35            6
34,060,152.54        6.727531       14.512049       7.735276          35            6
   239,536.23        6.500000       14.500000       6.500000          35            6



                                      S-92





                                                                   REMAINING    ORIGINAL
                   ADJUSTED NET                     REMAINING       TERM TO     INTEREST-                 INITIAL       SUBSEQUENT
  PRINCIPAL          MORTGAGE        MORTGAGE      AMORTIZATION    MATURITY     ONLY TERM     AGE      PERIODIC RATE     PERIODIC
 BALANCE ($)         RATE (%)        RATE (%)     TERM (MONTHS)    (MONTHS)     (MONTHS)    (MONTHS)      CAP (%)      RATE CAP (%)
-------------      ------------      ---------    -------------    ---------    ---------   --------   -------------   ------------

   100,514.71         9.351000       11.250000         304            304          N/A         56         3.000000       1.000000
    68,250.42         9.561000       10.890000         296            296          N/A         64         3.000000       1.000000
   136,581.71         7.116000        7.625000         359            359          N/A          1         3.000000       1.000000
 7,619,786.17         7.221581        7.730581         324            359          36           1         1.601886       1.466038
 6,080,209.58         7.679327        8.188327         300            359          60           1         2.111121       1.296293
   156,903.80         8.366000        8.875000         324            359          36           1         1.500000       1.500000
   794,935.66         8.196041        8.705041         300            359          60           1         3.000000       1.000000
 1,115,498.83         7.357076        7.866076         324            356          36           4         1.701258       1.432914
 1,030,979.99         7.080269        7.589269         300            359          60           1         1.500000       1.500000
   322,524.47         8.521000        9.030000         300            359          60           1         3.000000       1.000000
 1,313,425.77         6.937796        7.446796         324            358          36           2         1.709441       1.430186
   103,130.43         5.366000        5.875000         300            360          60           0         1.500000       1.500000
   668,880.89         6.950573        7.459573         324            359          36           1         1.804950       1.398350
   777,414.73         6.636027        7.145027         324            359          36           1         1.500000       1.500000
 1,727,467.23         7.341088        7.850088         300            359          60           1         2.677179       1.190867
   241,457.51         6.616000        7.125000         300            359          60           1         3.000000       1.000000
   179,567.68         9.141000        9.650000         300            360          60           0         1.500000       1.500000
   224,895.44         7.041000        7.550000         324            358          36           2         1.500000       1.500000
 1,379,097.22         7.142293        7.651293         300            359          60           1         2.640667       1.119778
18,700,507.44         6.456561        6.965561         324            359          36           1         1.646040       1.464741
 9,164,155.26         6.603845        7.112845         300            359          60           1         2.241712       1.224770
    52,528.81         7.041000        7.550000         358            358          N/A          2         2.000000       1.000000
   428,956.91         5.951000        6.460000         358            358          N/A          2         3.000000       1.000000
    50,812.19         8.851000       10.750000         302            302          N/A         58         3.000000       1.000000




                                  MAXIMUM         MINIMUM       MONTHS TO       RESET
  PRINCIPAL      GROSS MARGIN     MORTGAGE     MORTGAGE RATE    NEXT RATE     FREQUENCY
 BALANCE ($)         (%)          RATE (%)          (%)         ADJUSTMENT     (MONTHS)
-------------    ------------     ---------    -------------    ----------    ----------

   100,514.71      6.880000       17.250000       9.990000          4             6
    68,250.42      5.590000       17.890000      10.890000          2             6
   136,581.71      7.625000       13.625000       7.625000          35            6
 7,619,786.17      6.462523       14.662657       7.682762          35            6
 6,080,209.58      6.657029       14.780913       8.096910          35            6
   156,903.80      6.375000       15.875000       8.875000          35            6
   794,935.66      7.705041       14.705041       8.705041          35            6
 1,115,498.83      7.473445       14.731904       7.866076          32            6
 1,030,979.99      5.589269       14.589269       7.589269          35            6
   322,524.47      8.000000       15.030000       9.030000          35            6
 1,313,425.77      6.179721       14.307169       7.446796          34            6
   103,130.43      5.500000       12.875000       5.875000          36            6
   668,880.89      6.766087       14.256274       7.459573          35            6
   777,414.73      6.547505       14.145027       7.145027          35            6
 1,727,467.23      7.178806       14.231821       7.850088          35            6
   241,457.51      7.125000       13.125000       7.125000          35            6
   179,567.68      8.650000       16.650000       9.650000          36            6
   224,895.44      7.550000       14.550000       7.550000          34            6
 1,379,097.22      7.146237       13.890848       7.651293          35            6
18,700,507.44      6.078239       13.870885       6.947315          35            6
 9,164,155.26      6.128036       13.696009       6.934572          35            6
    52,528.81      6.550000       13.550000       7.550000          58            6
   428,956.91      6.210000       12.460000       6.460000          58            6
    50,812.19      8.950000       16.750000      10.750000          2             6


______________

(1)   All Loan Group 2 Adjustable Rate Mortgage Loans are Six-Month LIBOR
      Adjustable Rate Mortgage Loans, with the exception of those Loan Group 2
      Adjustable Rate Mortgage Loans that are marked with an asterisk in the
      Principal Balance column, which Mortgage Loans are One-Year CMT Adjustable
      Rate Mortgage Loans.


                                      S-93



    PERCENTAGES OF THE INITIAL CERTIFICATE PRINCIPAL BALANCES OF THE OFFERED
       CERTIFICATES AT THE RESPECTIVE PERCENTAGES OF THE PREPAYMENT MODEL



                                             CLASS 1-A-1 AND CLASS 1-A-1M                              CLASS 2-A-1
                                     ---------------------------------------------     --------------------------------------------
DISTRIBUTION DATE                    50%       75%       100%      125%       150%     50%       75%       100%       125%     150%
-----------------                    ----      ----      ----      ----       ----     ----      ----      ----       ----     ----

Initial Percentage...............    100%      100%      100%      100%       100%     100%      100%      100%       100%     100%
February 25, 2007................     88        83        77        71         66       75        63        51         39       27
February 25, 2008................     72        60        49        38         28       44        19         0          0        0
February 25, 2009................     56        39        25        12          1       11         0         0          0        0
February 25, 2010................     42        29        21        12          1        0         0         0          0        0
February 25, 2011................     34        23        15        10          0        0         0         0          0        0
February 25, 2012................     29        18        11         0          0        0         0         0          0        0
February 25, 2013................     25        14         0         0          0        0         0         0          0        0
February 25, 2014................     21        11         0         0          0        0         0         0          0        0
February 25, 2015................     18         9         0         0          0        0         0         0          0        0
February 25, 2016................     15         0         0         0          0        0         0         0          0        0
February 25, 2017................     13         0         0         0          0        0         0         0          0        0
February 25, 2018................     11         0         0         0          0        0         0         0          0        0
February 25, 2019................      9         0         0         0          0        0         0         0          0        0
February 25, 2020................      8         0         0         0          0        0         0         0          0        0
February 25, 2021................      0         0         0         0          0        0         0         0          0        0

Weighted Average Life to
Optional Termination (in years)..    4.85      3.35      2.53      1.94       1.46     1.77      1.28      1.00       0.83     0.71
Weighted Average Life to
Maturity (in years)..............    5.20      3.68      2.84      2.19       1.52     1.77      1.28      1.00       0.83     0.71




                                                      CLASS 2-A-2                                      CLASS 2-A-3
                                     ---------------------------------------------     --------------------------------------------
DISTRIBUTION DATE                    50%       75%       100%      125%       150%     50%       75%       100%       125%     150%
-----------------                    ----      ----      ----      ----       ----     ----      ----      ----       ----     ----

Initial Percentage...............    100%      100%      100%      100%       100%     100%      100%      100%       100%     100%
February 25, 2007................    100       100       100       100        100      100       100       100        100      100
February 25, 2008................    100       100        95        66         39      100       100       100        100      100
February 25, 2009................    100        68        29         0          0      100       100       100         84        0
February 25, 2010................     80        43        19         0          0      100       100       100         84        0
February 25, 2011................     58        27         4         0          0      100       100       100         66        0
February 25, 2012................     45        14         0         0          0      100       100        80          0        0
February 25, 2013................     33         4         0         0          0      100       100         0          0        0
February 25, 2014................     23         0         0         0          0      100        87         0          0        0
February 25, 2015................     15         0         0         0          0      100        68         0          0        0
February 25, 2016................      8         0         0         0          0      100         0         0          0        0
February 25, 2017................      1         0         0         0          0      100         0         0          0        0
February 25, 2018................      0         0         0         0          0       88         0         0          0        0
February 25, 2019................      0         0         0         0          0       74         0         0          0        0
February 25, 2020................      0         0         0         0          0       63         0         0          0        0
February 25, 2021................      0         0         0         0          0        0         0         0          0        0

Weighted Average Life to
Optional Termination (in years)..    6.13      4.09      3.00      2.23       1.88    13.56      9.06      6.56       4.83     2.78
Weighted Average Life to
Maturity (in years)..............    6.13      4.09      3.00      2.23       1.88    16.37     11.13      7.96       5.87     2.78



                                      S-94





                                                       CLASS M-1                                        CLASS M-2
                                     ---------------------------------------------     --------------------------------------------
DISTRIBUTION DATE                    50%       75%       100%      125%       150%     50%       75%       100%       125%     150%
-----------------                    ----      ----      ----      ----       ----     ----      ----      ----       ----     ----

Initial Percentage...............    100%      100%      100%      100%       100%     100%      100%      100%       100%     100%
February 25, 2007................    100       100       100       100        100      100       100       100        100      100
February 25, 2008................    100       100       100       100        100      100       100       100        100      100
February 25, 2009................    100       100       100       100        100      100       100       100        100      100
February 25, 2010................    100        77        54        84        100      100        77        54         36      100
February 25, 2011................     92        61        39        23          0       92        61        39         23        0
February 25, 2012................     79        48        28         0          0       79        48        28          0        0
February 25, 2013................     67        37         0         0          0       67        37         0          0        0
February 25, 2014................     57        29         0         0          0       57        29         0          0        0
February 25, 2015................     48        23         0         0          0       48        23         0          0        0
February 25, 2016................     41         0         0         0          0       41         0         0          0        0
February 25, 2017................     35         0         0         0          0       35         0         0          0        0
February 25, 2018................     29         0         0         0          0       29         0         0          0        0
February 25, 2019................     25         0         0         0          0       25         0         0          0        0
February 25, 2020................     21         0         0         0          0       21         0         0          0        0
February 25, 2021................      0         0         0         0          0        0         0         0          0        0

Weighted Average Life to
Optional Termination (in years)..    9.36      6.22      4.75      4.45       4.19     9.36      6.22      4.70       4.17     4.19
Weighted Average Life to
Maturity (in years)..............   10.25      6.92      5.28      4.86       6.72    10.23      6.89      5.22       4.57     4.86




                                                       CLASS M-3                                        CLASS M-4
                                     ---------------------------------------------     --------------------------------------------
DISTRIBUTION DATE                    50%       75%       100%      125%       150%     50%       75%       100%       125%     150%
-----------------                    ----      ----      ----      ----       ----     ----      ----      ----       ----     ----

Initial Percentage...............    100%      100%      100%      100%       100%     100%      100%      100%       100%     100%
February 25, 2007................    100       100       100       100        100      100       100       100        100      100
February 25, 2008................    100       100       100       100        100      100       100       100        100      100
February 25, 2009................    100       100       100       100        100      100       100       100        100      100
February 25, 2010................    100        77        54        36         59      100        77        54         36       22
February 25, 2011................     92        61        39        23          0       92        61        39         23        0
February 25, 2012................     79        48        28         0          0       79        48        28          0        0
February 25, 2013................     67        37         0         0          0       67        37         0          0        0
February 25, 2014................     57        29         0         0          0       57        29         0          0        0
February 25, 2015................     48        23         0         0          0       48        23         0          0        0
February 25, 2016................     41         0         0         0          0       41         0         0          0        0
February 25, 2017................     35         0         0         0          0       35         0         0          0        0
February 25, 2018................     29         0         0         0          0       29         0         0          0        0
February 25, 2019................     25         0         0         0          0       25         0         0          0        0
February 25, 2020................     21         0         0         0          0       21         0         0          0        0
February 25, 2021................      0         0         0         0          0        0         0         0          0        0

Weighted Average Life to
Optional Termination (in years)..    9.36      6.22      4.68      4.03       4.02     9.36      6.22      4.66       3.96     3.80
Weighted Average Life to
Maturity (in years)..............   10.20      6.87      5.18      4.41       4.33    10.17      6.84      5.14       4.32     4.10



                                      S-95





                                                       CLASS M-5                                        CLASS M-6
                                     ---------------------------------------------     --------------------------------------------
DISTRIBUTION DATE                    50%       75%       100%      125%       150%     50%       75%       100%       125%     150%
-----------------                    ----      ----      ----      ----       ----     ----      ----      ----       ----    ----

Initial Percentage...............    100%      100%      100%      100%       100%     100%      100%      100%       100%     100%
February 25, 2007................    100       100       100       100        100      100       100       100        100      100
February 25, 2008................    100       100       100       100        100      100       100       100        100      100
February 25, 2009................    100       100       100       100        100      100       100       100        100      100
February 25, 2010................    100        77        54        36         22      100        77        54         36       22
February 25, 2011................     92        61        39        23          0       92        61        39         23        0
February 25, 2012................     79        48        28         0          0       79        48        28          0        0
February 25, 2013................     67        37         0         0          0       67        37         0          0        0
February 25, 2014................     57        29         0         0          0       57        29         0          0        0
February 25, 2015................     48        23         0         0          0       48        23         0          0        0
February 25, 2016................     41         0         0         0          0       41         0         0          0        0
February 25, 2017................     35         0         0         0          0       35         0         0          0        0
February 25, 2018................     29         0         0         0          0       29         0         0          0        0
February 25, 2019................     25         0         0         0          0       25         0         0          0        0
February 25, 2020................     21         0         0         0          0       21         0         0          0        0
February 25, 2021................      0         0         0         0          0        0         0         0          0        0

Weighted Average Life to
Optional Termination (in years)..    9.36      6.22      4.66      3.91       3.64     9.36      6.22      4.66       3.89     3.53
Weighted Average Life to
Maturity (in years)..............   10.13      6.80      5.11      4.26       3.93    10.07      6.76      5.07       4.20     3.79




                                                       CLASS A-R
                                     ---------------------------------------------
DISTRIBUTION DATE                    50%       75%       100%      125%       150%
-----------------                    ----      ----      ----      ----       ----

Initial Percentage...............    100%      100%      100%      100%       100%
February 25, 2007................      0         0         0         0          0
February 25, 2008................      0         0         0         0          0
February 25, 2009................      0         0         0         0          0
February 25, 2010................      0         0         0         0          0
February 25, 2011................      0         0         0         0          0
February 25, 2012................      0         0         0         0          0
February 25, 2013................      0         0         0         0          0
February 25, 2014................      0         0         0         0          0
February 25, 2015................      0         0         0         0          0
February 25, 2016................      0         0         0         0          0
February 25, 2017................      0         0         0         0          0
February 25, 2018................      0         0         0         0          0
February 25, 2019................      0         0         0         0          0
February 25, 2020................      0         0         0         0          0
February 25, 2021................      0         0         0         0          0
February 25, 2022................      0         0         0         0          0

Weighted Average Life to
Optional Termination (in years)..    0.02      0.02      0.02      0.02       0.02
Weighted Average Life to
Maturity (in years)..............    0.02      0.02      0.02      0.02       0.02



                                      S-96



                                LEGAL PROCEEDINGS

      There are no legal proceedings against Countrywide Home Loans, the
Depositor, the Trustee, the issuing entity or the Master Servicer, or to which
any of their respective properties are subject, that is material to the
certificateholders, nor is the Depositor aware of any proceedings of this type
contemplated by governmental authorities.

                    MATERIAL FEDERAL INCOME TAX CONSEQUENCES

      The following discussion and the discussion in the prospectus under the
caption "Material Federal Income Tax Consequences" is the opinion of Sidley
Austin LLP ("TAX COUNSEL") on the anticipated material federal income tax
consequences of the purchase, ownership, and disposition of the Offered
Certificates. It is based on the current provisions and interpretations of the
Internal Revenue Code of 1986, as amended (the "CODE") and the accompanying
Treasury regulations and on current judicial and administrative rulings. All of
these authorities are subject to change and any change can apply retroactively.

      For federal income tax purposes, the issuing entity (exclusive of the
Credit Comeback Excess Account, the Carryover Reserve Fund and the Pre-Funding
Account) will consist of two or more REMICs in a tiered structure. The highest
REMIC will be referred to as the "MASTER REMIC," and each REMIC below the Master
REMIC will be referred to as an "UNDERLYING REMIC." Each underlying REMIC will
issue multiple classes of uncertificated, regular interests (the "UNDERLYING
REMIC REGULAR INTERESTS") that will be held by another REMIC above it in the
tiered structure. The assets of the lowest underlying REMICs will consist of the
Mortgage Loans and any other assets designated in the Pooling and Servicing
Agreement. The Master REMIC will issue the Senior Certificates and the
Subordinate Certificates (together, excluding the Class A-R Certificate, the
"REGULAR CERTIFICATES"), which will be designated as the regular interests in
the Master REMIC. The Class A-R Certificates (also, the "RESIDUAL CERTIFICATES")
will represent the beneficial ownership of the residual interest in each
underlying REMIC and the residual interest in the Master REMIC. The assets of
the Master REMIC will consist of the underlying REMIC Regular Interests.
Aggregate distributions on the underlying REMIC Regular Interests held by the
Master REMIC will equal the aggregate distributions on the Regular Certificates
issued by the Master REMIC. The swap trust, the Swap Contract and the Swap
Account will not constitute any part of any REMIC created under the Pooling and
Servicing Agreement.

      All classes of the Regular Certificates will be treated as representing
interests in REMIC regular interests (the "REMIC REGULAR INTEREST COMPONENT"),
entitlement to receive payments of Net Rate Carryover and the deemed obligation
to make payments with respect to the Swap Contract (the entitlement to payments
of Net Rate Carryover and any obligation to make payments with respect to the
Swap Contract together, the "NET RATE CARRYOVER COMPONENT"). Holders of the
Regular Certificates ("REGULAR CERTIFICATEHOLDERS") must allocate the purchase
price for their Regular Certificates between the REMIC Regular Interest
Component and the Net Rate Carryover Component.

      Potential sources of Net Rate Carryover payments include the Swap Contract
and Excess Cashflow. Potential sources for making payments with respect to the
Swap Contract include interest and principal payments otherwise payable on the
Regular Certificates. For federal income tax purposes, the trustee intends to
treat the rights and the obligations of a Regular Certificateholder with respect
to Net Rate Carryover and the Swap Contract as embodied in a single contract
(that is, the Net Rate Carryover Component). The remainder of this discussion
assumes such treatment is correct.

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


                                      S-97



TAXATION OF THE REMIC REGULAR INTEREST COMPONENTS OF THE REGULAR CERTIFICATES

      The REMIC Regular Interest Components of the Regular Certificates will be
treated as debt instruments issued by the Master REMIC for federal income tax
purposes. Income on the REMIC Regular Interest Components of the Regular
Certificates (including income otherwise payable on the REMIC Regular Interest
Component but used for making payments to the Swap Counterparty) must be
reported under an accrual method of accounting. Under an accrual method of
accounting, interest income may be required to be included in a holder's gross
income in advance of the holder's actual receipt of that interest income.

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

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

TAXATION OF THE NET RATE CARRYOVER COMPONENTS OF THE REGULAR CERTIFICATES

In General

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

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

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

      The portion of the overall purchase price of a Regular Certificate
attributable to the Net Rate Carryover Component must be amortized over the life
of the Certificate, taking into account the declining balance of the


                                      S-98



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

      Subject to the discussion below under the caption "Alternative Treatment
of Termination-Related Payments," any payments received by a holder of a Regular
Certificate as Net Rate Carryover will be treated as periodic payments received
under a notional principal contract. For any taxable year, to the extent the sum
of (1) the periodic payments received exceeds the amortization of the purchase
price of the Net Rate Carryover Component, and (2) any amount payable on the
REMIC Regular Interest Component used to cover payments to the Swap
Counterparty, such excess will be ordinary income. Conversely, to the extent the
sum of (1) the amortization of the purchase price, and (2) any amount payable on
the REMIC Regular Interest Component used to cover payments to the Swap
Counterparty, exceeds the periodic payments, such excess will be allowable as an
ordinary deduction. In the case of an individual, such deduction will be subject
to the 2-percent floor imposed on miscellaneous itemized deductions under
section 67 of the Code and may be subject to the overall limitation on itemized
deductions imposed under section 68 of the Code. In addition, miscellaneous
itemized deductions are not allowed for purposes of computing the alternative
minimum tax. IN THE CASE OF INDIVIDUALS, THESE LIMITATIONS MEAN THAT INCOME
PAYABLE ON THE REMIC REGULAR INTEREST COMPONENT WILL BE INCLUDIBLE IN GROSS
INCOME BUT THAT THE USE OF SUCH INCOME TO MAKE A PAYMENT TO THE SWAP
COUNTERPARTY MAY NOT BE DEDUCTIBLE.

Alternative Treatment of Termination-Related Payments

      Holders of the Certificates have certain rights and obligations with
respect to payments that may be made or received if the Swap Contract terminates
("TERMINATION PAYMENTS"). Because the termination of the Swap Contract does not
necessarily mean the termination of the rights and obligations of the
Certificateholders, however, the income tax treatment of the Termination
Payments is uncertain. For income tax reporting purposes, the trustee intends to
treat any Termination Payment as part of the periodic payments made or received
with respect to the Net Rate Carryover Component, and therefore, as part of
ordinary income or ordinary deductions with respect to the Net Rate Carryover
Component. The IRS, however, could assert that the Termination Payments should
be treated as capital gain or loss. The use of any capital loss may be limited.
Prospective investors in the Certificates are encouraged to consult their tax
advisors regarding the appropriate tax treatment of any Termination Payments.

DISPOSITIONS OF REGULAR CERTIFICATES

      Upon the sale, exchange, or other disposition of a Regular Certificate,
the Regular Certificateholder must allocate the amount realized between the
REMIC Regular Interest Component and the Net Rate Carryover Component based on
the relative fair market values of those components at the time of sale.
Assuming that the Regular Certificates are held as "capital assets" within the
meaning of Section 1221 of the Code, any gain or loss on the disposition of the
Net Rate Carryover Component should result in capital gain or loss and any gain
or loss on the disposition of the REMIC Regular Interest Component should result
in capital gain or loss. Gain with respect to the REMIC Regular Interest
Component, however, will be treated as ordinary income, to the extent it does
not exceed the excess (if any) of:

            (1)   the amount that would have been includible in the holder's
                  gross income with respect to the REMIC Regular Interest
                  Component had income thereon accrued at a rate equal to 110%
                  of the applicable federal rate as defined in section 1274(d)
                  of the Code determined as of the date of purchase of the
                  Certificate

                  over

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


                                      S-99



TAX TREATMENT FOR CERTAIN PURPOSES

      As described more fully under "Material Federal Income Tax Consequences--
Taxation of the REMIC and Its Holders" in the prospectus, the REMIC Regular
Interest Components of the Regular Certificates will represent "real estate
assets" under Section 856(c)(5)(B) of the Code and qualifying assets under
Section 7701(a)(19)(C) of the Code in the same (or greater) proportion that the
assets of the issuing entity will be so treated, and income on the REMIC Regular
Interest Components of the Regular Certificates will represent "interest on
obligations secured by mortgages on real property or on interests in real
property" under Section 856(c)(3)(B) of the Code in the same (or greater)
proportion that the income on the assets of the issuing entity will be so
treated. The Net Rate Carryover Component of the Regular Certificates will not
qualify as assets described in Section 7701(a)(19)(C) of the Code or as real
estate assets under Section 856(c)(5)(B) of the Code. The REMIC Regular Interest
Component of the Regular Certificates (but not the Net Rate Carryover Component)
will represent qualifying assets under Section 860G(a)(3) of the Code if
acquired by a REMIC within the presecribed time periods of the Code. Because of
the Net Rate Carryover Components, however, holders of the Regular Certificates
are encouraged to consult with their tax advisors before resecuritizing those
Certificates in a REMIC.

      BECAUSE OF THE NET RATE CARRYOVER COMPONENT OF A REGULAR CERTIFICATE (AND
IN PARTICULAR, THE DEEMED OBLIGATION TO MAKE PAYMENTS WITH RESPECT TO THE SWAP
CONTRACT), HOLDERS OF THE REGULAR CERTIFICATES ARE ENCOURAGED TO CONSULT WITH
THEIR TAX ADVISORS BEFORE RESECURITIZING THEIR REGULAR CERTIFICATES IN A REMIC.

RESIDUAL CERTIFICATES

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

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

      Purchasers of a Residual Certificate (that is, one of the Class A-R
Certificates) are encouraged to consider carefully the tax consequences of an
investment in Residual Certificates discussed in the prospectus and consult
their tax advisors with respect to those consequences. See "Material Federal
Income Tax Consequences -- Taxation of Holders of Residual Interest Securities"
in the prospectus. In particular, prospective holders of Residual Certificates
are encouraged to consult their tax advisors regarding whether a Residual
Certificate will be treated as a "noneconomic" residual interest, as a "tax
avoidance potential" residual interest, or as both. Among other things, holders
of Noneconomic Residual Certificates should be aware of REMIC regulations that
govern the treatment of "inducement fees" and that may affect their ability to
transfer their Residual Certificates. See "Material Federal Income Tax
Consequences -- Taxation of Holders of Residual Interest Securities --
Restrictions on Ownership and Transfer of Residual Interest Securities --
Treatment of Inducement Fees," and "Material Federal Income Tax Consequences --
Tax Treatment of Foreign Investors" in the prospectus.

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

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


                                      S-100



                                   OTHER TAXES

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

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

                              ERISA CONSIDERATIONS

      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 or other arrangement subject to ERISA from engaging in certain
transactions involving the 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 "DISQUALIFIED
PERSONS" and employee benefit plans or other arrangements (including, but not
limited to, individual retirement accounts) described under that section
(collectively with employee benefit plans subject to ERISA, "PLANS"); ERISA
authorizes the imposition of civil penalties for prohibited transactions
involving Plans not covered under Section 4975 of the Code. Any Plan fiduciary
which proposes to cause a Plan to acquire the Offered Certificates (directly or
indirectly through investment by an entity or account holding assets of the
Plan) are encouraged to consult with its counsel with respect to the potential
consequences under ERISA and the Code of the Plan's acquisition and ownership of
Offered Certificates. See "ERISA Considerations" in the prospectus.

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

      Investments by Plans or with assets of Plans that are subject to ERISA
must satisfy ERISA's general fiduciary requirements, including the requirement
of investment prudence and diversification and the requirement that a Plan's
investments be made in accordance with the documents governing the Plan. A
fiduciary 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. It is anticipated that the certificates will constitute "equity
interests" in the issuing entity for the purpose of the Plan Assets Regulation.

      The U.S. Department of Labor has granted to one or more of the
underwriters substantially identical administrative exemptions (collectively,
the "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
securities, including certificates, issued by entities that hold investment
pools consisting of certain receivables, loans and other obligations and the
servicing, operation and management of these entities, provided that the
conditions and requirements of the Exemption, including the requirement that an
investing Plan be an "accredited investor" as defined in Rule 501(a)(1) of
Regulation D under the Securities Act of 1933, as amended, are met. The
Exemption extends exemptive relief to certificates, including subordinate
certificates, rated in the four highest generic rating categories in certain
designated transactions when the conditions of the Exemption are met.

      The Exemption provides exemptive relief to certain mortgage-backed and
asset-backed securities transactions using a pre-funding account. Mortgage loans
or other secured receivables supporting payments to certificateholders, and
having a value equal to no more than twenty-five percent (25%) of the total
principal amount of the certificates being offered by the entity, may be
transferred to the entity within a 90-day or three-month period following the
closing date, instead of being required to be either identified or transferred
on or before the closing date. The relief is available when the pre-funding
arrangements satisfy certain conditions.


                                      S-101



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

      Except as provided below with respect to the Swap Certificates, it is
expected that the Exemption will apply to the acquisition and holding of the
Offered Certificates (other than the Class A-R Certificates) by Plans and that
all conditions of the Exemption other than those within the control of the
investors will be met. In addition, as of the date hereof, there is no single
borrower that is the obligor on five percent (5%) of the Mortgage Loans included
in the issuing entity by aggregate unamortized principal balance of the assets
of the issuing entity.

      The rating of a Certificate may change. If a class of Certificates no
longer has a rating of at least BBB- or its equivalent from at least one Rating
Agency, Certificates of that class will no longer be eligible for relief under
the Exemption (although a Plan that had purchased the security when it had a
permitted rating would not be required by the Exemption to dispose of it). An
Offered Certificate that satisfies the requirements of the Exemption other than
the rating requirement may be eligible for purchase by an insurance company
general account that includes plan assets in reliance on Sections I and III of
Prohibited Transaction Class Exemption 95-60.

      The Swap Contract does not meet all of the requirements for an "eligible
swap" under the Exemption and has not been included in the issuing entity, and
consequently an interest in the Swap Contract is not eligible for the exemptive
relief available under the Exemption. For ERISA purposes, an interest in a Swap
Certificate should represent a beneficial interest in two assets: (i) the right
to receive payments from the issuing entity with respect to the applicable class
and without taking into account payments made or received with respect to the
Swap Contract, and (ii) the right to receive payments derived from the Swap
Contract. A Plan's purchase and holding of a Swap Certificate could constitute
or otherwise result in a prohibited transaction under ERISA and Section 4975 of
the Code unless an exemption is available.

      Accordingly, so long as the Swap Contract is in effect, no Plan or other
person using plan assets may acquire or hold any interest in a Swap Certificate
unless, in addition to satisfying the conditions, above, of the Exemption, such
acquisition and holding are eligible for the exemptive relief available under
Department of Labor Prohibited Transaction Class Exemption ("PTCE") 84-14 (for
transactions effected by independent "qualified professional asset managers",
PTCE 90-1 (for transactions by insurance company pooled separate accounts), PTCE
91-38 (for transactions by bank collective investment funds), PTCE 95-60 (for
transactions by insurance company general accounts), or PTCE 96-23 (for
transactions effected by "in-house asset managers") (collectively, the
"INVESTOR-BASED EXEMPTIONS") or a similar exemption. It should be noted,
however, that even if the conditions specified in one or more Investor-Based
Exemptions are met, the scope of relief may not necessarily cover all acts that
might be construed as prohibited transactions. Plan fiduciaries should consult
legal counsel concerning these issues.

      As long as the Swap Contract is in effect, each beneficial owner of a Swap
Certificate or any interest in a Swap Certificate, by its acceptance and holding
of such Swap Certificate or interest therein, will be deemed to have represented
that either (i) it is not a Plan or a person investing plan assets in such Swap
Certificate, or (ii) its acquisition and holding of such Swap Certificate are
eligible for the exemptive relief available under at least one of the
Investor-Based Exemptions.

      THE CLASS A-R CERTIFICATES DO NOT MEET THE REQUIREMENTS OF THE EXEMPTION
OR ANY COMPARABLE INDIVIDUAL ADMINISTRATIVE EXEMPTION GRANTED TO ANY
UNDERWRITER. CONSEQUENTLY, THE CLASS A-R CERTIFICATES MAY BE TRANSFERRED ONLY IF
THE TRUSTEE RECEIVES:

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

      o     AN OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE THAT THE PURCHASE
            AND HOLDING OF THE CERTIFICATE BY A PLAN, OR A PERSON ACTING ON
            BEHALF OF A PLAN OR USING A PLAN'S ASSETS, WILL NOT RESULT IN A
            NON-EXEMPT PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE
            CODE AND WILL NOT


                                      S-102



            SUBJECT THE TRUSTEE OR THE MASTER SERVICER TO ANY OBLIGATION IN
            ADDITION TO THOSE UNDERTAKEN IN THE POOLING AND SERVICING AGREEMENT.

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

      Prospective Plan investors are encouraged to consult with their legal
advisors concerning the impact of ERISA and the Code, the effect of the Plan
Assets Regulation, the applicability of the Exemption, 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 issuing entity (and, in the case of the
Swap Certificates, in rights to payments derived from the Swap Contract)
represented by an interest 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.

      The sale of the Offered Certificates to a Plan is in no respect a
representation by the issuing entity or any underwriter of the Certificates that
this investment meets all relevant legal requirements with respect to
investments by Plans generally or any particular Plan, or that this investment
is appropriate for Plans generally or any particular Plan.

                             METHOD OF DISTRIBUTION

      Subject to the terms and conditions set forth in the Underwriting
Agreement among the Depositor, Countrywide Securities Corporation (an affiliate
of the Depositor, the Sellers and the Master Servicer), J.P. Morgan Securities
Inc. and Lehman Brothers Inc. (collectively, the "UNDERWRITERS"), the Depositor
has agreed to sell the Offered Certificates (other than the Class A-R
Certificates) (the "UNDERWRITTEN CERTIFICATES") to the Underwriters, and each
Underwriter has severally agreed to purchase from the Depositor the initial
Certificate Principal Balance of each class of Underwritten Certificates set
forth under its name below.



                                COUNTRYWIDE
                                 SECURITIES           J.P. MORGAN        LEHMAN BROTHERS
CLASS                           CORPORATION         SECURITIES INC.            INC.
-----                        -----------------     -----------------    -----------------

Class 1-A-1............      $     117,964,800     $       6,553,600    $       6,553,600
Class 1-A-1M...........      $      13,107,600     $         728,200    $         728,200
Class 2-A-1............      $     167,930,100     $       9,329,450    $       9,329,450
Class 2-A-2............      $     123,597,000     $       6,866,500    $       6,866,500
Class 2-A-3............      $      40,428,000     $       2,246,000    $       2,246,000
Class M-1..............      $      21,937,500     $       1,218,750    $       1,218,750
Class M-2..............      $      20,182,500     $       1,121,250    $       1,121,250
Class M-3..............      $      11,700,000     $         650,000    $         650,000
Class M-4..............      $      10,237,500     $         568,750    $         568,750
Class M-5..............      $       9,945,000     $         552,500    $         552,500
Class M-6..............      $       9,067,500     $         503,750    $         503,750
                             -----------------     -----------------    -----------------
           Total.......      $     546,097,500     $      30,338,750    $      30,338,750


      The Depositor has been advised by each Underwriter that it proposes
initially to offer the Underwritten Certificates to certain dealers at the
prices set forth on the cover page less a selling concession not to exceed the
percentage of the Certificate denomination set forth below, and that each
Underwriter may allow, and the dealers may reallow, a reallowance discount not
to exceed the percentage of the Certificate denomination set forth below:


                                      S-103



                                        SELLING          REALLOWANCE
CLASS                                  CONCESSION         DISCOUNT
-----                                  ----------        -----------
Class 1-A-1.......................      0.06250%          0.03125%
Class 1-A-1M......................      0.06250%          0.03125%
Class 2-A-1.......................      0.03125%          0.01563%
Class 2-A-2.......................      0.06250%          0.03125%
Class 2-A-3.......................      0.09300%          0.04650%
Class M-1.........................      0.30000%          0.15000%
Class M-2.........................      0.35000%          0.17500%
Class M-3.........................      0.50000%          0.25000%
Class M-4.........................      0.67500%          0.33750%
Class M-5.........................      0.72000%          0.36000%
Class M-6.........................      0.75000%          0.37500%

      After the initial public offering, the public offering prices, the
concessions and the discounts may be changed.

      The Depositor has been advised by each Underwriter that it intends to make
a market in the Underwritten Certificates purchased by it, but no Underwriter
has any obligation to do so. We cannot assure you that a secondary market for
the Underwritten Certificates (or any particular class thereof) will develop or,
if it does develop, that it will continue or that this market will provide
sufficient liquidity to certificateholders.

      Until the distribution of the Underwritten Certificates is completed, the
rules of the SEC may limit the ability of the Underwriters and certain selling
group members to bid for and purchase the Underwritten Certificates. As an
exception to these rules, the Underwriters are permitted to engage in certain
transactions that stabilize the price of the Underwritten Certificates. The
transactions consist of bids or purchases for the purpose of pegging, fixing or
maintaining the price of the Underwritten Certificates.

      In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of the purchases.

      Neither the Depositor nor any of the Underwriters makes any representation
or prediction as to the direction or magnitude of any effect that the
transactions described above may have on the prices of the Underwritten
Certificates. In addition, neither the Depositor nor any of the Underwriters
makes any representation that the Underwriters will engage in these transactions
or that the transactions, once commenced, will not be discontinued without
notice.

      The Depositor has agreed to indemnify the Underwriters against, or make
contributions to the Underwriters with respect to, certain liabilities,
including liabilities under the Securities Act of 1933, as amended (the
"SECURITIES ACT").

      Lehman Brothers Inc. is an affiliate of the Swap Counterparty and the Swap
Guarantor.

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


                                      S-104



                                 USE OF PROCEEDS

      It is expected that the proceeds to the Depositor from the sale of the
Underwritten Certificates will be approximately $605,565,909, before deducting
issuance expenses payable by the Depositor, estimated to be approximately
$625,000. The Depositor will apply the net proceeds of the sale of the Offered
Certificates against the purchase price of the Initial Mortgage Loans on the
Closing Date and to deposit the Pre-Funded Amount, if any, in the Pre-Funding
Account.

                                  LEGAL MATTERS

      The validity of the Certificates, including certain federal income tax
consequences with respect thereto, will be passed upon for the Depositor by
Sidley Austin LLP, New York, New York. Certain legal matters will be passed upon
for the Underwriters by McKee Nelson LLP.

                                     RATINGS

      It is a condition of the issuance of the Offered Certificates that each
class of Offered Certificates set forth below be assigned the ratings at least
as high as those designated below by Moody's Investors Service, Inc. ("MOODY'S")
and Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc. ("S&P") and together with Moody's, the "RATING AGENCIES").

              MOODY'S      S&P                  MOODY'S      S&P
CLASS         RATING      RATING      CLASS     RATING      RATING
-----         -------     ------      -----     -------     ------
1-A-1           Aaa        AAA         M-1        Aa1        AA+
1-A-1M          Aaa        AAA         M-2        Aa2        AA+
2-A-1           Aaa        AAA         M-3        Aa3         AA
2-A-2           Aaa        AAA         M-4        A1         AA-
2-A-3           Aaa        AAA         M-5        A2          A+
A-R             Aaa        AAA         M-6        A3          A

      The ratings assigned to the Class A-R Certificates only address the return
of its Certificate Principal Balance. The Depositor has requested that each
Rating Agency maintain ongoing surveillance of the ratings assigned to the
Offered Certificates in accordance with the Rating Agency's policy, but we
cannot assure you that a Rating Agency will continue its surveillance of the
ratings assigned to the Offered Certificates.

      The security ratings assigned to the Offered Certificates should be
evaluated independently from similar ratings on other types of securities. A
security rating is not a recommendation to buy, sell or hold securities and may
be subject to revision or withdrawal at any time by the Rating Agencies. The
ratings on the Offered Certificates do not, however, constitute statements
regarding the likelihood or frequency of prepayments on the Mortgage Loans, the
payment of Net Rate Carryover or the anticipated yields in light of prepayments.

      The Depositor has not requested a rating of any Offered Certificates by
any rating agency other than Moody's and S&P. However, we cannot assure you as
to whether any other rating agency will rate the Offered Certificates or, if it
does, what ratings would be assigned by another rating agency. The ratings
assigned by another rating agency to the Offered Certificates could be lower
than the respective ratings assigned by the Rating Agencies.


                                      S-105



                             INDEX OF DEFINED TERMS

2001 Act.................................................................  S-100
2003 Act.................................................................  S-100
30/15 Balloon Fixed Rate Mortgage Loan....................................  S-30
40/30 Balloon Adjustable Rate Mortgage Loans..............................  S-30
Accrual Period............................................................  S-48
Adjustable Rate Certificates..............................................  S-45
Adjustable Rate Mortgage Loans............................................  S-28
Adjustable Rate Prepayment Vector.........................................  S-85
Adjusted Net Mortgage Rate................................................  S-46
Adjusted Replacement Upfront Amount.......................................  S-69
Adjustment Date...........................................................  S-29
Advance...................................................................  S-43
Applied Realized Loss Amount..............................................  S-74
Approved Rating Thresholds................................................  S-71
ARPV......................................................................  S-85
beneficial owner..........................................................  S-46
Book-Entry Certificates...................................................  S-46
Business Day..............................................................  S-47
Carryover Reserve Fund....................................................  S-73
Certificate Account.......................................................  S-56
Certificate Owners........................................................  S-46
Certificates..............................................................  S-45
Class 1-A Principal Distribution Amount...................................  S-51
Class 2-A Certificates....................................................  S-45
Class 2-A Principal Distribution Amount...................................  S-51
Class A Certificates......................................................  S-45
Class A Principal Distribution Target Amount..............................  S-51
Class M Certificates......................................................  S-45
CMT Adjustable Rate Mortgage Loan.........................................  S-29
Code.........................................................  S-33, S-97, S-100
Collateral Value..........................................................  S-30
Compensating Interest.....................................................  S-43
Countrywide Financial.....................................................  S-40
Countrywide Home Loans..............................................  S-28, S-41
Countrywide Servicing.....................................................  S-40
CPR.......................................................................  S-85
Credit Bureau Risk Score..................................................  S-39
Credit Comeback Excess Account............................................  S-74
Credit Comeback Excess Amount.............................................  S-30
Credit Comeback Excess Cashflow...........................................  S-67
Cumulative Loss Trigger Event.............................................  S-52
Current Interest..........................................................  S-48
Cut-off Date..............................................................  S-30
debt-to-income ratio......................................................  S-36
Definitive Certificate....................................................  S-46
Delay Delivery Mortgage Loans.............................................  S-82
Deleted Mortgage Loan.....................................................  S-33
Delinquency Trigger Event.................................................  S-52
Depositor.................................................................  S-27
Detailed Description......................................................  S-27
Determination Date........................................................  S-31
disqualified persons.....................................................  S-101
Distribution Account......................................................  S-58
Distribution Account Deposit Date.........................................  S-58
Distribution Date.........................................................  S-47
DTC.......................................................................  S-46
Due Dates.................................................................  S-43
Due Period................................................................  S-47
ERISA....................................................................  S-101
Euroclear.................................................................  S-46
Excess Cashflow...........................................................  S-67
Excess Overcollateralization Amount.......................................  S-52
Excess Proceeds...........................................................  S-47
Exchange Act..............................................................  S-72
Exemption................................................................  S-101
Expense Fee Rate..........................................................  S-48
Extra Principal Distribution Amount.......................................  S-52
Final Recovery Determination..............................................  S-47
Five-Year Hybrid Mortgage Loans...........................................  S-29
Fixed 30-Year Interest-Only Loan..........................................  S-30
Fixed Rate Credit Comeback Loans..........................................  S-30
Fixed Rate Mortgage Loans.................................................  S-28
Fixed Rate Prepayment Vector..............................................  S-85
FRPV......................................................................  S-85
Full Doc Program..........................................................  S-36
Funding Period............................................................  S-34
Global Securities.........................................................   I-1
Gross Margin..............................................................  S-29
Group 1 Overcollateralization Reduction Amount............................  S-52
Group 2 Overcollateralization Reduction Amount............................  S-53
Hybrid Mortgage Loans.....................................................  S-29
Initial Cut-off Date......................................................  S-27
Initial Cut-off Date Pool Principal Balance...............................  S-27
Initial Cut-off Date Principal Balance....................................  S-27
Initial Mortgage Loans....................................................  S-27
Initial Mortgage Pool.....................................................  S-27
Initial Periodic Rate Cap.................................................  S-29
Initial Target Subordination Percentage...................................  S-55
Insurance Proceeds........................................................  S-47
Interest Carry Forward Amount.............................................  S-48
Interest Determination Date.........................................  S-48, S-73
Interest Funds............................................................  S-49
Interest Remittance Amount................................................  S-49
Investor-Based Exemptions................................................  S-102
issuing entity............................................................  S-44
Last Scheduled Distribution Date..........................................  S-84
LIBOR Business Day........................................................  S-73
Liquidation Proceeds......................................................  S-48
Loan Group................................................................  S-28
Loan Group 1..............................................................  S-28
Loan Group 2..............................................................  S-28
Loan-to-Value Ratio.......................................................  S-30
Master REMIC..............................................................  S-97
Master Servicer Advance Date..............................................  S-43


                                      S-106



Master Servicing Fee......................................................  S-43
Maximum Mortgage Rate.....................................................  S-29
Minimum Mortgage Rate.....................................................  S-33
Modeling Assumptions......................................................  S-86
Moody's.............................................................  S-4, S-105
Mortgage File.............................................................  S-31
Mortgage Index............................................................  S-29
Mortgage Loans............................................................  S-31
Mortgage Notes............................................................  S-28
Mortgage Rate.............................................................  S-28
Mortgaged Properties......................................................  S-28
Net Mortgage Rate.........................................................  S-43
net rate cap..............................................................  S-18
Net Rate Cap..............................................................  S-49
Net Rate Carryover........................................................  S-50
Net Rate Carryover Component..............................................  S-97
Net Swap Payment..........................................................  S-68
NIM Insurer..........................................................  S-1, S-81
NIM Insurer Default.......................................................  S-25
OC Floor..................................................................  S-53
Offered Certificates......................................................  S-45
OID.......................................................................  S-98
One-Month LIBOR...........................................................  S-73
One-Year CMT Index........................................................  S-29
Optional Termination Date.................................................  S-78
Overcollateralization Deficiency Amount...................................  S-53
Overcollateralization Reduction Amount....................................  S-53
Overcollateralization Target Amount.......................................  S-53
Overcollateralized Amount.................................................  S-53
Participants..............................................................  S-46
parties in interest......................................................  S-101
Pass-Through Margin.......................................................  S-50
Pass-Through Rate.........................................................  S-50
Percentage Interest.......................................................  S-48
Plans....................................................................  S-101
Pooling and Servicing Agreement...........................................  S-31
Pre-Funded Amount.........................................................  S-34
Pre-Funding Account.......................................................  S-34
Prepayment Interest Excess................................................  S-43
Prepayment Interest Shortfall.............................................  S-43
Prepayment Models.........................................................  S-85
Prepayment Period.........................................................  S-31
Principal Distribution Amount.............................................  S-53
Principal Remittance Amount...............................................  S-54
PTCE.....................................................................  S-102
Purchase Price............................................................  S-33
Rating Agencies........................................................... S-105
Realized Loss.............................................................  S-54
Record Date...............................................................  S-48
Reference Bank Rate.......................................................  S-73
Reference Banks...........................................................  S-73
Regular Certificateholders................................................  S-97
Regular Certificates......................................................  S-97
related subordinate classes...............................................  S-16
REMIC Regular Interest Component..........................................  S-97
REO Property..............................................................  S-43
Replacement Mortgage Loan.................................................  S-33
Required Carryover Reserve Fund Deposit...................................  S-74
Residual Certificates...............................................  S-66, S-97
Rolling Sixty-Day Delinquency Rate........................................  S-54
S&P.................................................................  S-4, S-105
Scheduled Payments........................................................  S-28
SEC.......................................................................  S-27
Securities Act............................................................ S-104
Seller....................................................................  S-28
Seller Shortfall Interest Requirement.....................................  S-51
Senior Certificates.......................................................  S-45
Senior Enhancement Percentage.............................................  S-54
Servicing Advances........................................................  S-57
Servicing Fee Rate........................................................  S-43
significance estimate.....................................................  S-72
significance percentage...................................................  S-72
Six-Month LIBOR Adjustable Rate Mortgage Loan.............................  S-29
Six-Month LIBOR Index.....................................................  S-29
Sixty-Day Delinquency Rate................................................  S-55
Stated Income Program.....................................................  S-36
Stated Principal Balance..................................................  S-30
Statistical Calculation Date..............................................  S-27
Statistical Calculation Date Pool Principal Balance.......................  S-28
Statistical Calculation Pool..............................................  S-27
Statistical Calculation Pool Mortgage Loans...............................  S-27
Stepdown Date.............................................................  S-54
Stepdown Target Subordination Percentage..................................  S-55
Subordinate Certificates..................................................  S-45
Subordinate Class Principal Distribution Amount...........................  S-55
subordination.............................................................  S-16
Subsequent Cut-off Date...................................................  S-34
Subsequent Mortgage Loans.................................................  S-34
Subsequent Periodic Rate Cap..............................................  S-29
Subsequent Recoveries.....................................................  S-48
Subsequent Transfer Date..................................................  S-34
Swap Account..............................................................  S-59
Swap Certificates.........................................................  S-45
Swap Contract.............................................................  S-67
Swap Contract Administration Agreement....................................  S-68
Swap Contract Administrator...............................................  S-68
Swap Contract Notional Balance............................................  S-70
Swap Contract Termination Date............................................  S-70
Swap Counterparty.........................................................  S-67
Swap Counterparty Ratings Requirement.....................................  S-72
Swap Counterparty Trigger Event...........................................  S-72
Swap Guarantor............................................................  S-67
Swap Guaranty.............................................................  S-68
Swap Termination Payment..................................................  S-71
Tax Counsel...............................................................  S-97
Termination Payments......................................................  S-99
Three-Year Hybrid Mortgage Loans..........................................  S-29
Trigger Event.............................................................  S-56


                                      S-107



Trust....................................................................   S-44
Trust Fund...............................................................   S-44
Trustee..................................................................   S-31
Trustee Fee..............................................................   S-61
Trustee Fee Rate.........................................................   S-51
Two-Year Hybrid Mortgage Loans...........................................   S-29
U.S. Person..............................................................    I-4
underlying REMIC.........................................................   S-97
underlying REMIC Regular Interests.......................................   S-97
Underwriters.............................................................  S-103
Underwritten Certificates................................................  S-103
Unpaid Realized Loss Amount..............................................   S-56


                                      S-108




                                                                         ANNEX A

                        THE STATISTICAL CALCULATION POOL

      The following information sets forth in tabular format certain
information, as of the Statistical Calculation Date, about the Mortgage Loans
included in the Statistical Calculation Pool in respect of Loan Group 1, Loan
Group 2 and the Statistical Calculation Pool as a whole. Other than with respect
to rates of interest, percentages are approximate and are stated by that portion
of the Statistical Calculation Date Pool Principal Balance representing Loan
Group 1, Loan Group 2 or the Statistical Calculation Pool as a whole. The sum of
the columns below may not equal the total indicated due to rounding. In
addition, each weighted average Credit Bureau Risk Score set forth below has
been calculated without regard to any Mortgage Loan for which the Credit Bureau
Risk Score is unknown.

                             GROUP 1 MORTGAGE LOANS

              MORTGAGE LOAN PROGRAMS FOR THE GROUP 1 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL


                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
MORTGAGE LOAN PROGRAM           LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

30-Year 6-month LIBOR.....         31     $     6,544,696       3.04%    $ 211,119        7.220%     359.95      589        79.7%
2/28 6-month LIBOR........        543         103,890,932      48.29       191,328        7.849      359.94      587        75.4
2/28 6-month LIBOR -
  24-month Interest Only..         55          13,018,076       6.05       236,692        7.302      359.86      679        80.5
2/28 6-month LIBOR -
  60-month Interest Only..         36           9,963,076       4.63       276,752        7.193      360.00      671        79.2
3/27 6-month LIBOR........        169          29,559,233      13.74       174,907        7.947      359.87      596        75.5
3/27 6-month LIBOR -
  36-month Interest Only..         14           3,094,420       1.44       221,030        7.472      359.70      666        76.4
3/27 6-month LIBOR -
  60-month Interest Only..          7           1,729,000       0.80       247,000        7.353      360.00      683        76.3
15-Year Fixed.............         13           1,159,607       0.54        89,201        7.898      165.58      595        74.1
15-Year Fixed -
  Credit Comeback.........          1              91,800       0.04        91,800        7.875      180.00      573        68.0
30-Year Fixed.............        217          42,261,011      19.65       194,751        7.910      353.60      590        74.4
30-Year Fixed -
  Credit Comeback.........         20           3,454,381       1.61       172,719        8.815      358.58      569        69.9
30/15 Fixed  Balloon......          4             353,854       0.16        88,464        8.996      124.95      563        74.9
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,110     $   215,120,086     100.00%
                               ========   ===============  ===========


         ORIGINAL TERM TO STATED MATURITY FOR THE GROUP 1 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
ORIGINAL TERM (MONTHS)          LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

ARM 360...................        855     $   167,799,433      78.00%    $ 196,257        7.748%     359.92      603        76.2%
Fixed 180.................         18           1,605,261       0.75        89,181        8.138      157.45      587        73.9
Fixed 360.................        237          45,715,392      21.25       192,892        7.978      353.98      589        74.1
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,110     $   215,120,086     100.00%
                               ========   ===============  ===========



                                       A-1



         MORTGAGE LOAN PRINCIPAL BALANCES FOR THE GROUP 1 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF MORTGAGE LOAN         MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
PRINCIPAL BALANCES              LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

$0.01 - $25,000.00........          2     $        37,225       0.02%    $  18,613       10.786%     197.56      535        74.9%
$25,000.01 - $50,000.00...         15             588,353       0.27        39,224       10.170      243.65      575        80.5
$50,000.01 - $75,000.00...         68           4,361,272       2.03        64,136        9.304      349.44      593        83.8
$75,000.01 - $100,000.00..         95           8,376,209       3.89        88,171        8.313      353.60      596        80.6
$100,000.01 - $150,000.00.        202          25,656,111      11.93       127,010        7.858      354.90      606        79.0
$150,000.01 - $200,000.00.        253          44,513,204      20.69       175,942        8.110      358.55      588        73.8
$200,000.01 - $250,000.00.        185          41,488,992      19.29       224,265        7.745      358.57      591        75.3
$250,000.01 - $300,000.00.        153          41,760,648      19.41       272,945        7.800      356.22      604        75.6
$300,000.01 - $350,000.00.         77          25,116,967      11.68       326,194        7.481      359.23      601        76.0
$350,000.01 - $400,000.00.         46          17,042,421       7.92       370,487        7.153      359.72      613        73.8
$400,000.01 - $450,000.00.         10           4,150,584       1.93       415,058        6.703      359.41      659        74.6
$450,000.01 - $500,000.00.          2             963,999       0.45       482,000        6.930      360.00      691        72.3
$500,000.01 - $550,000.00.          1             513,100       0.24       513,100        6.850      360.00      634        54.0
$550,000.01 - $600,000.00.          1             551,000       0.26       551,000        6.990      360.00      633        63.1
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,110     $   215,120,086     100.00%
                               ========   ===============  ===========



                                       A-2



  STATE DISTRIBUTION OF THE MORTGAGED PROPERTIES FOR THE GROUP 1 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
STATE                           LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

Alabama...................          6     $       624,603       0.29%    $ 104,101        8.394%     359.81      589        88.7%
Alaska....................          1             145,600       0.07       145,600        7.700      360.00      585        80.0
Arizona...................         91          17,379,249       8.08       190,981        7.904      359.92      576        75.5
Arkansas..................          5             973,463       0.45       194,693        8.217      359.49      629        91.3
California................        179          48,828,265      22.70       272,784        7.129      359.82      620        69.5
Colorado..................         23           3,720,567       1.73       161,764        7.821      359.79      617        80.1
Connecticut...............         10           1,885,550       0.88       188,555        8.349      360.00      586        67.6
Delaware..................         11           2,014,469       0.94       183,134        8.176      359.95      579        80.1
District of Columbia......         10           1,875,031       0.87       187,503        7.373      350.59      615        70.9
Florida...................        174          33,457,226      15.55       192,283        7.791      359.76      598        77.1
Georgia...................         16           2,438,296       1.13       152,394        8.442      343.81      613        86.5
Hawaii....................          9           2,555,357       1.19       283,929        7.215      359.94      608        64.3
Idaho.....................          4             517,318       0.24       129,330        8.331      352.84      580        85.6
Illinois..................         46           9,257,955       4.30       201,260        8.533      355.52      598        82.2
Indiana...................         11           1,347,038       0.63       122,458        8.355      359.54      581        79.7
Iowa......................          6             681,609       0.32       113,602        7.904      360.00      600        79.0
Kansas....................         12           1,618,473       0.75       134,873        9.075      359.79      590        86.0
Kentucky..................         10             871,705       0.41        87,170       10.610      359.75      568        92.8
Louisiana.................          2             234,060       0.11       117,030        8.607      359.00      631        84.7
Maine.....................          9           1,433,376       0.67       159,264        7.223      359.79      607        80.4
Maryland..................         27           5,745,129       2.67       212,783        8.077      358.98      578        74.1
Massachusetts.............         32           6,959,292       3.24       217,478        7.932      359.46      569        67.0
Michigan..................         60           8,302,460       3.86       138,374        8.282      349.95      599        81.3
Minnesota.................         12           2,562,641       1.19       213,553        8.283      359.72      600        80.4
Mississippi...............          7             876,461       0.41       125,209        7.325      359.05      581        84.4
Missouri..................         23           2,684,366       1.25       116,712        8.364      359.81      609        82.0
Montana...................          3             489,200       0.23       163,067        7.648      360.00      626        81.9
Nebraska..................          4             250,062       0.12        62,515        8.649      344.17      670        93.8
Nevada....................         30           6,827,825       3.17       227,594        7.393      350.60      619        75.4
New Hampshire.............          8           1,557,808       0.72       194,726        7.458      359.36      584        77.1
New Jersey................         10           1,965,570       0.91       196,557        8.141      359.54      594        75.8
New Mexico................          2             346,900       0.16       173,450        9.298      360.00      655        93.4
New York..................         46          10,814,246       5.03       235,092        8.108      349.16      577        69.8
North Carolina............          6           1,004,723       0.47       167,454        8.604      352.12      576        79.7
North Dakota..............          3             357,420       0.17       119,140        7.768      360.00      598        76.1
Ohio......................          3             439,446       0.20       146,482        8.050      359.15      668        91.3
Oklahoma..................         10             967,156       0.45        96,716        8.472      352.61      597        84.8
Oregon....................         13           2,291,770       1.07       176,290        7.990      350.95      591        78.7
Pennsylvania..............         25           3,988,168       1.85       159,527        8.544      358.41      579        78.0
Rhode Island..............          7           1,538,331       0.72       219,762        8.762      359.71      571        77.9
South Carolina............          2             370,262       0.17       185,131        8.652      359.61      528        75.8
Tennessee.................         13           1,628,211       0.76       125,247        8.011      356.77      640        94.3
Texas.....................         48           6,131,189       2.85       127,733        7.936      344.30      616        83.9
Utah......................          6             975,345       0.45       162,558        8.289      323.83      598        80.9
Vermont...................          1             220,500       0.10       220,500        6.875      360.00      561        89.6
Virginia..................         50           9,962,914       4.63       199,258        7.577      359.44      584        76.8
Washington................          9           1,827,607       0.85       203,067        7.472      359.79      623        81.8
West Virginia.............          1              62,400       0.03        62,400       10.375      360.00      647        80.0
Wisconsin.................         10           1,497,504       0.70       149,750        8.688      345.80      609        84.5
Wyoming...................          4             615,972       0.29       153,993        8.729      359.77      590        85.3
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,110     $   215,120,086     100.00%
                               ========   ===============  ===========



                                       A-3



               LOAN-TO-VALUE RATIOS FOR THE GROUP 1 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF LOAN-TO-VALUE         MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
RATIOS (%)                      LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

50.00 or Less.............         33     $     5,928,088       2.76%    $ 179,639        7.591%     354.28      582        41.0%
50.01 - 55.00.............         39           7,713,009       3.59       197,769        7.517      358.63      577        52.8
55.01 - 60.00.............         57          11,659,083       5.42       204,545        7.657      359.83      557        58.0
60.01 - 65.00.............         85          20,022,057       9.31       235,554        7.622      358.25      567        63.4
65.01 - 70.00.............         96          19,294,256       8.97       200,982        7.656      355.79      570        67.9
70.01 - 75.00.............         97          20,870,491       9.70       215,160        7.700      355.63      573        73.6
75.01 - 80.00.............        379          75,245,516      34.98       198,537        7.656      357.30      627        79.6
80.01 - 85.00.............        102          19,317,116       8.98       189,383        8.042      355.96      597        84.3
85.01 - 90.00.............        131          23,068,562      10.72       176,096        8.174      357.68      608        89.5
90.01 - 95.00.............         37           5,590,800       2.60       151,103        8.703      359.50      622        94.8
95.01 - 100.00............         54           6,411,107       2.98       118,724        8.739      356.56      643        99.7
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,110     $   215,120,086     100.00%
                               ========   ===============  ===========


              CURRENT MORTGAGE RATES FOR THE GROUP 1 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF CURRENT MORTGAGE      MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
RATES (%)                       LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

4.501 - 5.000.............          2     $       355,000       0.17%    $ 177,500        5.000%     360.00      617        72.8%
5.001 - 5.500.............          7           1,654,708       0.77       236,387        5.500      360.00      618        69.4
5.501 - 6.000.............         24           5,115,059       2.38       213,127        5.879      354.85      601        67.9
6.001 - 6.500.............         77          17,468,447       8.12       226,863        6.384      358.81      615        69.7
6.501 - 7.000.............        193          43,638,701      20.29       226,107        6.836      358.36      613        73.8
7.001 - 7.500.............        145          30,968,953      14.40       213,579        7.308      359.16      604        75.4
7.501 - 8.000.............        210          42,964,094      19.97       204,591        7.797      357.93      611        77.2
8.001 - 8.500.............        125          21,987,137      10.22       175,897        8.314      356.77      592        77.8
8.501 - 9.000.............        138          23,218,504      10.79       168,250        8.789      357.26      594        79.5
9.001 - 9.500.............         47           7,991,246       3.71       170,027        9.328      355.18      586        81.0
9.501 - 10.000............         64           9,740,320       4.53       152,193        9.808      354.13      555        77.2
10.001 - 10.500...........         26           4,014,507       1.87       154,404       10.335      348.79      527        73.0
10.501 - 11.000...........         26           2,765,515       1.29       106,366       10.813      341.30      540        77.6
11.001 - 11.500...........         14           1,640,540       0.76       117,181       11.355      348.07      540        82.8
11.501 - 12.000...........          9           1,407,676       0.65       156,408       11.768      345.52      523        74.4
12.001 - 12.500...........          3             189,678       0.09        63,226       12.343      292.79      581        86.1
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,110     $   215,120,086     100.00%
                               ========   ===============  ===========



                                       A-4



          TYPES OF MORTGAGED PROPERTIES FOR THE GROUP 1 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
MORTGAGED PROPERTY TYPE         LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

Single Family Residence...        803     $   151,756,725      70.55%    $ 188,987        7.776%     356.98      598        75.7%
Planned Unit Development..        162          34,691,405      16.13       214,144        7.687      357.42      601        77.0
Low-Rise Condominium......         77          13,307,226       6.19       172,821        7.752      359.54      613        77.4
Two Family Home...........         50          10,968,128       5.10       219,363        8.295      357.33      599        72.5
Three Family Home.........          9           2,379,886       1.11       264,432        8.895      352.48      612        69.7
High-Rise Condominium.....          5           1,030,615       0.48       206,123        7.995      359.47      665        82.7
Four Family Home..........          4             986,100       0.46       246,525        7.877      347.71      608        65.7
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,110     $   215,120,086     100.00%
                               ========   ===============  ===========


                  LOAN PURPOSES FOR THE GROUP 1 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
LOAN PURPOSE                    LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

Refinance - Cash Out......        800     $   159,781,309      74.28%    $ 199,727        7.787%     356.91      585        73.8%
Purchase..................        266          47,340,564      22.01       177,972        7.865      358.30      646        82.1
Refinance - Rate/Term.....         44           7,998,213       3.72       181,778        7.678      355.04      614        76.4
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,110     $   215,120,086     100.00%
                               ========   ===============  ===========


                 OCCUPANCY TYPES FOR THE GROUP 1 MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
OCCUPANCY TYPE                  LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

Owner Occupied............      1,050     $   205,614,501      95.58%    $ 195,823        7.782%     357.17      599        75.4%
Investment Property.......         48           7,178,065       3.34       149,543        8.340      355.66      629        82.1
Second Home...............         12           2,327,520       1.08       193,960        7.709      359.91      611        84.4
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,110     $   215,120,086     100.00%
                               ========   ===============  ===========


____________
(1)   Based on representations by the Mortgagors at the time of origination of
      the related Mortgage Loans.


                                       A-5



        REMAINING TERMS TO STATED MATURITY FOR THE GROUP 1 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF REMAINING TERMS       MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
(MONTHS)                        LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

  1 - 120.................          6     $       298,431       0.14%    $  49,739       10.059%     112.14      609        48.7%
121 - 180.................         12           1,306,830       0.61       108,902        7.700      167.80      582        79.7
181 - 300.................         24           2,733,645       1.27       113,902        9.986      283.81      554        78.7
301 - 360.................      1,068         210,781,180      97.98       197,361        7.769      359.62      600        75.7
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,110     $   215,120,086     100.00%
                               ========   ===============  ===========


             LOAN DOCUMENTATION TYPE FOR THE GROUP 1 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
LOAN DOCUMENTATION TYPE         LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

Full Documentation........        778     $   140,251,617      65.20%    $ 180,272        7.685%     356.44      591        76.8%
Stated Income.............        332          74,868,469      34.80       225,507        8.016      358.48      616        73.7
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,110     $   215,120,086     100.00%
                               ========   ===============  ===========


           CREDIT BUREAU RISK SCORES(1) FOR THE GROUP 1 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF CREDIT BUREAU         MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
RISK SCORES                     LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

761 - 780.................          6     $     1,117,010       0.52%    $ 186,168        7.510%     359.58      770        81.7%
741 - 760.................         18           4,475,600       2.08       248,644        7.465      360.00      752        80.9
721 - 740.................         17           3,298,861       1.53       194,051        7.380      359.71      729        82.8
701 - 720.................         16           3,670,213       1.71       229,388        7.311      352.77      711        80.8
681 - 700.................         35           7,986,247       3.71       228,178        7.246      358.43      688        81.2
661 - 680.................         54          10,417,788       4.84       192,922        7.407      356.31      669        80.1
641 - 660.................         99          19,202,566       8.93       193,965        7.596      358.00      650        80.3
621 - 640.................        138          28,116,177      13.07       203,740        7.558      358.93      632        77.9
601 - 620.................        133          25,409,127      11.81       191,046        7.659      358.75      611        79.2
581 - 600.................        143          25,891,097      12.04       181,057        7.515      357.07      590        74.9
561 - 580.................        120          22,846,158      10.62       190,385        8.082      357.24      570        73.6
541 - 560.................        123          23,248,193      10.81       189,010        7.888      355.20      550        72.2
521 - 540.................         92          18,281,189       8.50       198,709        8.245      357.44      531        72.3
501 - 520.................         99          17,946,664       8.34       181,279        8.602      358.87      511        67.0
500 or Less...............         17           3,213,197       1.49       189,012        9.099      323.65      489        70.8
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,110     $   215,120,086     100.00%
                               ========   ===============  ===========


______________
(1)   The Credit Bureau Risk Scores referenced in this table with respect to
      substantially all of the Group 1 Mortgage Loans were obtained by the
      respective originators from one or more credit reporting agencies, and
      were determined at the time of origination.


                                       A-6



             CREDIT GRADE CATEGORIES FOR THE GROUP 1 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
CREDIT GRADE CATEGORY           LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

A.........................        692     $   141,057,986      65.57%    $ 203,841        7.623%     356.48      615        77.1%
A-........................         43           8,457,031       3.93       196,675        7.858      353.97      560        75.8
B.........................         89          17,311,940       8.05       194,516        7.953      358.73      571        71.8
C.........................        148          24,855,391      11.55       167,942        8.295      358.35      565        72.6
C-........................        115          19,103,248       8.88       166,115        8.090      359.89      584        75.7
D.........................         23           4,334,490       2.01       188,456        8.724      359.85      554        65.9
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,110     $   215,120,086     100.00%
                               ========   ===============  ===========


            PREPAYMENT PENALTY PERIOD FOR THE GROUP 1 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
PREPAYMENT PENALTY PERIOD      MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
(MONTHS)                        LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

0.........................        204     $    35,748,148      16.62%    $ 175,236        8.331%     355.10      592        77.2%
12........................         85          19,965,628       9.28       234,890        8.105      354.02      581        73.5
24........................        573         114,500,577      53.23       199,826        7.692      358.24      602        75.9
36........................        248          44,905,733      20.87       181,072        7.517      357.38      608        75.3
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,110     $   215,120,086     100.00%
                               ========   ===============  ===========


             RANGE OF MONTHS TO NEXT ADJUSTMENT DATE FOR THE GROUP 1
       ADJUSTABLE RATE MORTGAGE LOANS IN THE STATISTICAL CALCULATION POOL



                           WEIGHTED                                                                              WEIGHTED
                           AVERAGE                               PERCENT OF                           WEIGHTED    AVERAGE   WEIGHTED
                          MONTHS TO    NUMBER      AGGREGATE      AGGREGATE    AVERAGE    WEIGHTED    AVERAGE     CREDIT     AVERAGE
                             NEXT        OF        PRINCIPAL      PRINCIPAL    CURRENT    AVERAGE    REMAINING    BUREAU    LOAN-TO-
RANGE OF MONTHS TO        ADJUSTMENT  MORTGAGE      BALANCE        BALANCE    PRINCIPAL   MORTGAGE      TERM       RISK       VALUE
NEXT ADJUSTMENT DATE         DATE       LOANS     OUTSTANDING    OUTSTANDING   BALANCE      RATE      (MONTHS)     SCORE      RATIO
-----------------------   ----------  --------  ---------------  -----------  ---------   ---------   --------    -------   --------

0 - 6................           6          31   $     6,544,696       3.90%   $ 211,119      7.220%    359.95       589        79.7%
19 - 24..............          24         634       126,872,084      75.61      200,114      7.742     359.94       603        76.2
32 - 37..............          36         190        34,382,653      20.49      180,961      7.874     359.86       606        75.6
                                      --------  ---------------  -----------
  Total/Avg./Wtd. Avg.                    855   $   167,799,433     100.00%
                                      ========  ===============  ===========



                                       A-7



          GROSS MARGINS FOR THE GROUP 1 ADJUSTABLE RATE MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF GROSS                 MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
MARGINS (%)                     LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

2.001 - 3.000.............          2     $       331,500       0.20%    $ 165,750        6.709%     360.00      567        39.8%
3.001 - 4.000.............          5           1,031,000       0.61       206,200        7.510      360.00      536        64.8
4.001 - 5.000.............         43           8,971,164       5.35       208,632        7.075      359.98      582        66.1
5.001 - 6.000.............        301          63,762,350      38.00       211,835        7.362      359.91      600        74.5
6.001 - 7.000.............        301          59,597,239      35.52       197,997        7.755      359.94      611        77.6
7.001 - 8.000.............        203          34,106,181      20.33       168,011        8.653      359.91      603        80.4
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...        855     $   167,799,433     100.00%
                               ========   ===============  ===========


______________
(1)   The weighted average Gross Margin for the Group 1 Adjustable Rate Mortgage
      Loans in the Statistical Calculation Pool as of the Cut-off Date was
      approximately 6.293%.

      MAXIMUM MORTGAGE RATES FOR THE GROUP 1 ADJUSTABLE RATE MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF MAXIMUM               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
MORTGAGE RATES (%)              LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

11.501 - 12.000...........          1     $       280,000       0.17%    $ 280,000        5.000%     360.00      629        65.6%
12.001 - 12.500...........          7           1,654,708       0.99       236,387        5.500      360.00      618        69.4
12.501 - 13.000...........         21           4,327,644       2.58       206,078        5.871      359.91      585        67.1
13.001 - 13.500...........         56          13,211,695       7.87       235,923        6.382      359.93      611        69.0
13.501 - 14.000...........        136          30,581,183      18.22       224,862        6.848      359.90      616        74.4
14.001 - 14.500...........        119          25,105,905      14.96       210,974        7.304      359.94      608        75.4
14.501 - 15.000...........        182          37,397,189      22.29       205,479        7.793      359.89      616        77.0
15.001 - 15.500...........        104          18,582,995      11.07       178,683        8.301      359.95      594        77.6
15.501 - 16.000...........        112          18,956,195      11.30       169,252        8.789      359.94      595        80.4
16.001 - 16.500...........         38           6,499,499       3.87       171,039        9.324      359.94      587        84.3
16.501 - 17.000...........         42           6,670,806       3.98       158,829        9.772      359.94      549        77.9
17.001 - 17.500...........         13           1,845,629       1.10       141,971       10.366      359.97      534        79.2
17.501 - 18.000...........         13           1,473,875       0.88       113,375       10.805      359.95      545        80.3
18.001 - 18.500...........          7             757,801       0.45       108,257       11.324      359.78      542        93.4
18.501 - 19.000...........          3             339,110       0.20       113,037       11.810      360.00      543        78.3
19.001 - 19.500...........          1             115,200       0.07       115,200       12.375      360.00      603        90.0
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...        855     $   167,799,433     100.00%
                               ========   ===============  ===========


______________
(1)   The weighted average Maximum Mortgage Rate for the Group 1 Adjustable Rate
      Mortgage Loans in the Statistical Calculation Pool as of the Cut-off Date
      was approximately 14.748%.


                                      A-8



    INITIAL PERIODIC RATE CAP FOR THE GROUP 1 ADJUSTABLE RATE MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
INITIAL PERIODIC RATE          MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
CAP (%)                         LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

1.000.....................         38     $     7,727,073       4.60%    $ 203,344        7.217%     359.92      594        80.0%
1.500.....................        817         160,072,361      95.40       195,927        7.774      359.92      603        76.0
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...        855     $   167,799,433     100.00%
                               ========   ===============  ===========


______________
(1)   The weighted average Initial Periodic Rate Cap for the Group 1 Adjustable
      Rate Mortgage Loans in the Statistical Calculation Pool as of the Cut-off
      Date was approximately 1.477%.

   SUBSEQUENT PERIODIC RATE CAP FOR THE GROUP 1 ADJUSTABLE RATE MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
SUBSEQUENT PERIODIC RATE       MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
CAP (%)                         LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

1.000.....................         38     $     7,727,073       4.60%    $ 203,344        7.217%     359.92      594        80.0%
1.500.....................        817         160,072,361      95.40       195,927        7.774      359.92      603        76.0
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...        855     $   167,799,433     100.00%
                               ========   ===============  ===========


______________
(1)   The weighted average Subsequent Periodic Rate Cap for the Group 1
      Adjustable Rate Mortgage Loans in the Statistical Calculation Pool as of
      the Cut-off Date was approximately 1.477%.

      MINIMUM MORTGAGE RATES FOR THE GROUP 1 ADJUSTABLE RATE MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF MINIMUM               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
MORTGAGE RATES (%)              LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

4.001 - 5.000.............          1     $       280,000       0.17%    $ 280,000        5.000%     360.00      629        65.6%
5.001 - 6.000.............         28           5,982,352       3.57       213,655        5.769      359.94      594        67.7
6.001 - 7.000.............        192          43,792,878      26.10       228,088        6.707      359.91      614        72.8
7.001 - 8.000.............        301          62,503,094      37.25       207,651        7.596      359.91      613        76.4
8.001 - 9.000.............        216          37,539,190      22.37       173,793        8.547      359.95      594        79.0
9.001 - 10.000............         80          13,170,305       7.85       164,629        9.551      359.94      568        81.0
Greater than 10.000.......         37           4,531,615       2.70       122,476       10.828      359.93      541        82.1
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...        855     $   167,799,433     100.00%
                               ========   ===============  ===========


______________
(1)   The weighted average Minimum Mortgage Rate for the Group 1 Adjustable Rate
      Mortgage Loans in the Statistical Calculation Pool as of the Cut-off Date
      was approximately 7.748%.

                                       A-9



       NEXT ADJUSTMENT DATE FOR THE GROUP 1 ADJUSTABLE RATE MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
NEXT ADJUSTMENT DATE            LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

July 2006.................          1     $       315,771       0.19%    $ 315,771        7.625%     359.00      539        80.0%
August 2006...............         30           6,228,925       3.71       207,631        7.200      360.00      592        79.7
January 2008..............         37           7,936,591       4.73       214,502        7.692      359.00      617        80.1
February 2008.............        595         118,717,093      70.75       199,525        7.741      360.00      602        75.9
March 2008................          2             218,400       0.13       109,200        9.906      360.00      606        85.3
January 2009..............         29           4,754,760       2.83       163,957        7.514      359.00      622        79.7
February 2009.............        161          29,627,893      17.66       184,024        7.932      360.00      604        75.0
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...        855     $   167,799,433     100.00%
                               ========   ===============  ===========


______________
(1)   The weighted average Next Adjustment Date for the Group 1 Adjustable Rate
      Mortgage Loans in the Statistical Calculation Pool as of the Cut-off Date
      is March 2008.

               INTEREST ONLY PERIOD FOR THE GROUP 1 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                 WEIGHTED     WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     AVERAGE      AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     CURRENT     REMAINING    BUREAU    LOAN-TO-
INTEREST ONLY PERIOD           MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
(MONTHS)                        LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

0.........................        998     $   187,315,514      87.07%    $ 187,691      7.877%       356.74      589        75.2%
24........................         55          13,018,076       6.05       236,692      7.302        359.86      679        80.5
36........................         14           3,094,420       1.44       221,030      7.472        359.70      666        76.4
60........................         43          11,692,076       5.44       271,909      7.217        360.00      673        78.8
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,110     $   215,120,086     100.00%
                               ========   ===============  ===========



                                      A-10



                             GROUP 2 MORTGAGE LOANS

              MORTGAGE LOAN PROGRAMS FOR THE GROUP 2 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
MORTGAGE LOAN PROGRAM           LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

30-Year 6-month LIBOR.....         25     $     6,501,305       1.22%    $ 260,052        7.438%     356.52      592        85.2%
30-Year One-Year CMT......          2             199,573       0.04        99,786        6.677      288.00      611        70.2
2/28 6-month LIBOR........        671         134,169,968      25.10       199,955        8.005      357.72      591        77.5
2/28 6-month LIBOR -
  24-month Interest Only..        203          54,206,744      10.14       267,028        7.293      359.28      633        80.0
2/28 6-month LIBOR -
  60-month Interest Only..        251          63,779,307      11.93       254,101        7.319      359.23      632        79.1
2/28 6-month LIBOR -
  40/30 Balloon...........          8           2,269,324       0.42       283,666        7.059      359.00      615        72.1
3/27 6-month LIBOR........        526          95,898,715      17.94       182,317        8.070      358.06      599        77.5
3/27 6-month LIBOR -
  36-month Interest Only..        132          35,078,286       6.56       265,745        7.239      358.91      626        78.3
3/27 6-month LIBOR -
  60-month Interest Only..         93          24,118,183       4.51       259,335        7.649      359.03      635        77.0
3/27 6-month LIBOR -
  40/30 Balloon ..........          1             179,931       0.03       179,931        6.990      359.00      593        64.3
5/25 6-month LIBOR........          3             610,652       0.11       203,551        6.977      352.65      676        96.6
15-Year Fixed.............         14           1,714,904       0.32       122,493        7.810      166.88      600        70.6
15-Year Fixed -
  Credit Comeback.........          8             986,081       0.18       123,260        8.150      176.63      590        76.2
30-Year Fixed.............        388          79,522,217      14.88       204,954        7.074      356.91      604        71.9
30-Year Fixed -
  Credit Comeback.........         83          14,215,261       2.66       171,268        8.321      353.34      583        78.2
30-Year Fixed -
  60-month Interest Only..         76          20,540,630       3.84       270,271        6.670      359.78      632        75.0
30/15 Fixed Balloon.......          8             604,007       0.11        75,501       10.550      117.76      540        83.1
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,492     $   534,595,090     100.00%
                               ========   ===============  ===========


         ORIGINAL TERM TO STATED MATURITY FOR THE GROUP 2 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
ORIGINAL TERM (MONTHS)          LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

ARM 360...................      1,915     $   417,011,989      78.01%    $ 217,761        7.721%     358.35      610        78.2%
Fixed 180.................         30           3,304,992       0.62       110,166        8.412      160.82      586        74.5
Fixed 360.................        547         114,278,108      21.38       208,918        7.156      356.98      606        73.3
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,492     $   534,595,090     100.00%
                               ========   ===============  ===========



                                      A-11



         MORTGAGE LOAN PRINCIPAL BALANCES FOR THE GROUP 2 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF MORTGAGE LOAN         MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
PRINCIPAL BALANCES              LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

$0.01 - $25,000.00........          9     $       168,765       0.03%    $  18,752       11.548%     269.91      556        79.0%
$25,000.01 - $50,000.00...         31           1,174,542       0.22        37,888       11.344      261.75      546        80.1
$50,000.01 - $75,000.00...        141           8,801,607       1.65        62,423        9.241      344.67      589        88.6
$75,000.01 - $100,000.00..        175          15,096,293       2.82        86,265        8.332      347.22      598        83.8
$100,000.01 - $150,000.00.        415          52,946,704       9.90       127,582        7.988      354.19      597        81.3
$150,000.01 - $200,000.00.        546          95,529,346      17.87       174,962        7.923      357.32      598        76.4
$200,000.01 - $250,000.00.        422          94,839,999      17.74       224,739        7.684      357.34      607        75.9
$250,000.01 - $300,000.00.        307          83,988,952      15.71       273,580        7.495      358.72      611        76.3
$300,000.01 - $350,000.00.        167          54,114,815      10.12       324,041        7.270      357.72      615        74.9
$350,000.01 - $400,000.00.        100          37,340,547       6.98       373,405        7.153      358.86      613        76.9
$400,000.01 - $450,000.00.         62          26,414,604       4.94       426,042        7.120      359.40      628        75.4
$450,000.01 - $500,000.00.         46          22,001,857       4.12       478,301        6.839      359.49      628        75.2
$500,000.01 - $550,000.00.         30          15,652,908       2.93       521,764        7.381      359.36      631        78.9
$550,000.01 - $600,000.00.         20          11,456,088       2.14       572,804        7.250      358.80      629        77.7
$600,000.01 - $650,000.00.          7           4,386,000       0.82       626,571        7.617      360.00      618        80.9
$650,000.01 - $700,000.00.          6           4,034,151       0.75       672,359        6.937      357.99      645        80.4
$700,000.01 - $750,000.00.          4           2,957,627       0.55       739,407        7.584      359.75      665        82.1
$750,000.01 - $800,000.00.          1             823,494       0.15       823,494        5.750      360.00      621        69.5
$800,000.01 - $850,000.00.          1             862,100       0.16       862,100        6.250      360.00      629        69.2
Greater than $900,000.00..          2           2,004,691       0.37     1,002,346        6.606      319.09      570        67.4
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,492     $   534,595,090     100.00%
                               ========   ===============  ===========



                                      A-12



  STATE DISTRIBUTION OF THE MORTGAGED PROPERTIES FOR THE GROUP 2 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
STATE                           LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

Alabama...................         15     $     1,818,505       0.34%    $ 121,234        8.433%     329.34      584        88.5%
Arizona...................        174          35,063,232       6.56       201,513        7.698      358.26      602        77.0
Arkansas..................          8             737,424       0.14        92,178        9.137      359.19      641        96.1
California................        538         168,265,995      31.48       312,762        7.042      358.07      621        72.1
Colorado..................         39           7,408,742       1.39       189,968        7.570      356.82      621        84.2
Connecticut...............         22           5,145,001       0.96       233,864        7.535      359.43      586        72.4
Delaware..................         15           3,242,758       0.61       216,184        7.889      359.18      607        86.1
District of Columbia......          7           1,640,900       0.31       234,414        7.245      359.62      610        70.2
Florida...................        442          87,500,745      16.37       197,965        7.793      357.80      602        77.8
Georgia...................         53           8,515,946       1.59       160,678        8.468      354.33      592        82.3
Hawaii....................         20           6,751,633       1.26       337,582        7.019      359.60      609        73.3
Idaho.....................         13           1,991,289       0.37       153,176        7.589      359.75      610        77.8
Illinois..................         83          17,256,040       3.23       207,904        8.023      359.14      611        82.7
Indiana...................         36           3,911,949       0.73       108,665        8.044      350.18      594        86.7
Iowa......................          5             730,636       0.14       146,127        9.746      358.82      578        81.8
Kansas....................          8             815,824       0.15       101,978        8.577      356.52      589        85.4
Kentucky..................         20           2,205,461       0.41       110,273        8.839      325.36      568        83.2
Louisiana.................          8             741,981       0.14        92,748        9.217      359.07      592        91.0
Maine.....................          2             285,000       0.05       142,500        8.162      360.00      540        79.8
Maryland..................         47          11,185,462       2.09       237,989        7.534      359.23      605        77.0
Massachusetts.............         26           5,554,984       1.04       213,653        8.104      358.19      580        70.4
Michigan..................         92          12,581,864       2.35       136,759        8.584      352.10      602        84.9
Minnesota.................         28           5,902,180       1.10       210,792        8.009      357.54      600        80.5
Mississippi...............         12           1,417,035       0.27       118,086        8.574      359.11      597        87.4
Missouri..................         58           6,683,351       1.25       115,230        8.923      353.14      588        86.7
Montana...................          7           1,020,825       0.19       145,832        7.941      358.23      588        81.0
Nebraska..................          7             648,482       0.12        92,640        8.204      358.97      635        84.3
Nevada....................         86          20,733,063       3.88       241,082        7.205      358.78      616        76.1
New Hampshire.............         15           2,892,782       0.54       192,852        7.322      359.46      595        76.8
New Jersey................         35           7,866,127       1.47       224,746        7.968      358.62      606        78.6
New Mexico................          4           1,100,931       0.21       275,233        8.372      348.23      606        80.4
New York..................         63          16,434,949       3.07       260,872        7.701      358.25      616        74.7
North Carolina............         23           3,879,153       0.73       168,659        8.187      355.85      590        80.9
North Dakota..............          1              70,959       0.01        70,959        6.875      356.00      726        80.0
Ohio......................         37           4,080,090       0.76       110,273        9.057      329.54      593        90.5
Oklahoma..................         13           1,324,175       0.25       101,860        9.444      322.08      604        91.9
Oregon....................         12           2,707,884       0.51       225,657        7.577      353.53      586        80.9
Pennsylvania..............         49           8,002,632       1.50       163,319        7.908      354.68      596        79.4
Rhode Island..............          2             342,000       0.06       171,000        8.342      359.47      577        76.9
South Carolina............          9           1,580,553       0.30       175,617        9.074      355.42      645        90.8
South Dakota..............          5             374,150       0.07        74,830        9.657      360.00      622        93.1
Tennessee.................         50           6,450,874       1.21       129,017        8.080      355.97      618        88.5
Texas.....................         79          10,302,989       1.93       130,418        8.305      349.46      613        86.8
Utah......................         22           4,034,710       0.75       183,396        7.823      343.57      626        78.3
Vermont...................          5             735,100       0.14       147,020        7.281      360.00      577        77.8
Virginia..................        126          29,390,572       5.50       233,259        7.617      359.23      600        79.0
Washington................         45           9,987,523       1.87       221,945        7.404      353.34      619        78.5
West Virginia.............          4             325,125       0.06        81,281        8.426      312.50      581        71.2
Wisconsin.................         19           2,526,757       0.47       132,987        9.281      354.43      604        87.3
Wyoming...................          3             428,750       0.08       142,917        7.295      358.77      652        80.6
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,492     $   534,595,090     100.00%
                               ========   ===============  ===========



                                      A-13



               LOAN-TO-VALUE RATIOS FOR THE GROUP 2 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF LOAN-TO-VALUE         MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
RATIOS (%)                      LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

50.00 or Less.............         74     $    15,595,567       2.92%    $ 210,751        7.462%     358.80      586        42.8%
50.01 - 55.00.............         60          13,403,788       2.51       223,396        7.282      359.44      590        53.0
55.01 - 60.00.............        107          25,265,938       4.73       236,130        7.124      356.76      590        57.8
60.01 - 65.00.............        166          40,597,692       7.59       244,564        7.255      354.85      582        63.2
65.01 - 70.00.............        223          53,240,107       9.96       238,745        7.440      356.52      584        68.7
70.01 - 75.00.............        214          47,742,564       8.93       223,096        7.511      357.16      594        73.7
75.01 - 80.00.............        776         178,790,210      33.44       230,400        7.397      357.31      633        79.6
80.01 - 85.00.............        206          43,586,589       8.15       211,585        7.881      357.40      597        84.3
85.01 - 90.00.............        363          72,008,127      13.47       198,369        7.924      356.79      612        89.5
90.01 - 95.00.............        136          23,460,535       4.39       172,504        8.513      355.41      608        94.5
95.01 - 100.00............        167          20,903,973       3.91       125,173        8.883      354.26      632        99.9
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,492     $   534,595,090     100.00%
                               ========   ===============  ===========


              CURRENT MORTGAGE RATES FOR THE GROUP 2 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF CURRENT MORTGAGE      MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
RATES (%)                       LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

4.501 - 5.000.............          1     $       175,000       0.03%    $ 175,000        5.000%     360.00      581        78.5%
5.001 - 5.500.............         15           3,891,165       0.73       259,411        5.432      357.89      615        74.4
5.501 - 6.000.............         71          21,248,549       3.97       299,275        5.911      359.12      629        73.1
6.001 - 6.500.............        276          73,650,391      13.78       266,849        6.344      358.86      628        71.6
6.501 - 7.000.............        416         105,082,594      19.66       252,602        6.823      357.33      627        75.1
7.001 - 7.500.............        351          82,323,815      15.40       234,541        7.326      357.92      614        77.8
7.501 - 8.000.............        426          89,232,380      16.69       209,466        7.792      357.49      606        77.1
8.001 - 8.500.............        268          53,542,314      10.02       199,785        8.310      357.49      592        79.6
8.501 - 9.000.............        255          45,972,390       8.60       180,284        8.804      356.73      587        81.3
9.001 - 9.500.............        156          25,432,084       4.76       163,026        9.288      355.49      583        81.9
9.501 - 10.000............        112          18,717,159       3.50       167,117        9.742      354.19      577        83.9
10.001 - 10.500...........         49           6,144,927       1.15       125,407       10.302      340.24      578        81.8
10.501 - 11.000...........         39           4,791,916       0.90       122,870       10.786      335.94      558        79.3
11.001 - 11.500...........         28           2,369,353       0.44        84,620       11.307      326.06      567        89.0
11.501 - 12.000...........         15           1,084,284       0.20        72,286       11.807      338.39      594        91.0
12.001 - 12.500...........          3             439,828       0.08       146,609       12.155      346.14      591        98.8
12.501 - 13.000...........          1              18,174       0.00        18,174       13.000       91.00      546        62.5
13.001 - 13.500...........          5             238,891       0.04        47,778       13.285      258.53      549        82.7
13.501 - 14.000...........          2              71,550       0.01        35,775       13.844      197.68      501        68.4
Greater than 14.000.......          3             168,326       0.03        56,109       15.046      318.77      547        93.1
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,492     $   534,595,090     100.00%
                               ========   ===============  ===========



                                      A-14




          TYPES OF MORTGAGED PROPERTIES FOR THE GROUP 2 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
MORTGAGED PROPERTY TYPE         LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

Single Family Residence...      1,796     $   377,346,353      70.59%    $ 210,104        7.560%     356.58      607        76.7%
Planned Unit Development..        407         100,273,111      18.76       246,371        7.611      357.95      614        78.8
Low-Rise Condominium......        152          27,550,493       5.15       181,253        7.835      357.85      618        79.9
Two Family Home...........         87          16,640,535       3.11       191,271        7.891      355.46      607        73.4
Three Family Home.........         15           4,113,461       0.77       274,231        7.880      359.60      608        73.7
High-Rise Condominium.....         15           3,997,722       0.75       266,515        7.739      358.99      643        78.0
Four Family Home..........         14           3,895,018       0.73       278,216        8.268      357.53      621        74.3
Manufactured Housing (1) .          6             778,397       0.15       129,733        8.476      304.86      588        75.7
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,492     $   534,595,090     100.00%
                               ========   ===============  ===========


______________
(1)   Treated as real property.

                  LOAN PURPOSES FOR THE GROUP 2 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
LOAN PURPOSE                    LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

Refinance - Cash Out......      1,736     $   382,525,796      71.55%    $ 220,349        7.563%     357.09      596        75.0%
Purchase..................        684         140,345,276      26.25       205,183        7.701      356.66      644        82.8
Refinance - Rate/Term.....         72          11,724,018       2.19       162,834        7.784      350.69      609        78.8
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,492     $   534,595,090     100.00%
                               ========   ===============  ===========


                 OCCUPANCY TYPES FOR THE GROUP 2 MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
OCCUPANCY TYPE                  LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

Owner Occupied............      2,355     $   509,776,019      95.36%    $ 216,465        7.562%     357.03      609        77.0%
Investment Property.......        102          17,506,636       3.27       171,634        8.600      355.04      626        80.9
Second Home...............         35           7,312,435       1.37       208,927        8.191      348.06      609        75.6
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,492     $   534,595,090     100.00%
                               ========   ===============  ===========


______________
(1)   Based on representations by the Mortgagors at the time of origination of
      the related Mortgage Loans.


                                      A-15




        REMAINING TERMS TO STATED MATURITY FOR THE GROUP 2 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED      AVERAGE    CREDIT    AVERAGE
                                 OF          PRINCIPAL      PRINCIPAL      CURRENT      AVERAGE     REMAINING   BUREAU    LOAN-TO-
RANGE OF REMAINING             MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
TERMS (MONTHS)                  LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

  1 - 120.................         14     $       962,209       0.18%    $  68,729       10.183%     114.40      582        78.6%
121 - 180.................         18           2,458,492       0.46       136,583        7.829      178.40      582        73.6
181 - 300.................         60           6,241,306       1.17       104,022        9.535      287.51      561        78.2
301 - 360.................      2,400         524,933,083      98.19       218,722        7.576      358.94      610        77.1
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,492     $   534,595,090     100.00%
                               ========   ===============  ===========


             LOAN DOCUMENTATION TYPE FOR THE GROUP 2 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
LOAN DOCUMENTATION TYPE         LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

Full Documentation........      1,661     $   337,232,368      63.08%    $ 203,030        7.446%     356.23      603        78.0%
Stated Income.............        830         197,297,022      36.91       237,707        7.873      357.89      620        75.6
Streamlined...............          1              65,700       0.01        65,700       11.750      360.00      540        90.0
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,492     $   534,595,090     100.00%
                               ========   ===============  ===========


           CREDIT BUREAU RISK SCORES(1) FOR THE GROUP 2 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF CREDIT BUREAU         MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
RISK SCORES                     LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

781 - 800.................         10     $     2,763,346       0.52%    $ 276,335        7.304%     359.24      792        78.0%
761 - 780.................         16           3,558,257       0.67       222,391        7.317      353.50      769        81.1
741 - 760.................         24           5,764,499       1.08       240,187        7.538      359.29      750        80.8
721 - 740.................         45          10,441,929       1.95       232,043        7.200      357.95      730        81.5
701 - 720.................         80          21,060,016       3.94       263,250        7.072      356.61      710        81.3
681 - 700.................         89          23,414,337       4.38       263,082        7.172      359.23      689        80.2
661 - 680.................        114          26,265,525       4.91       230,399        6.997      357.30      670        79.4
641 - 660.................        173          42,101,159       7.88       243,359        7.294      357.29      649        80.2
621 - 640.................        296          66,370,891      12.42       224,226        7.478      358.50      629        79.1
601 - 620.................        397          86,420,832      16.17       217,685        7.469      358.17      610        79.1
581 - 600.................        383          80,318,591      15.02       209,709        7.522      357.60      590        76.2
561 - 580.................        330          67,165,232      12.56       203,531        7.806      356.71      570        74.1
541 - 560.................        205          38,900,973       7.28       189,761        8.177      354.21      551        72.6
521 - 540.................        151          31,281,327       5.85       207,161        8.225      355.97      531        71.3
501 - 520.................        138          23,744,408       4.44       172,061        8.570      350.85      511        71.8
500 or Less...............         41           5,023,771       0.94       122,531        8.679      335.02      488        83.7
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,492     $   534,595,090     100.00%
                               ========   ===============  ===========


______________
(1)   The Credit Bureau Risk Scores referenced in this table with respect to
      substantially all of the Group 2 Mortgage Loans were obtained by the
      respective originators from one or more credit reporting agencies, and
      were determined at the time of origination.


                                      A-16



             CREDIT GRADE CATEGORIES FOR THE GROUP 2 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
CREDIT GRADE CATEGORY           LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

A.........................      1,776     $   392,642,197      73.45%    $ 221,082        7.483%     357.29      621        78.3%
A-........................        128          26,596,927       4.98       207,788        7.905      350.56      573        74.9
B.........................        186          37,322,468       6.98       200,658        7.856      357.45      574        71.9
C.........................        221          44,133,510       8.26       199,699        8.131      354.37      578        73.2
C-........................        158          29,647,583       5.55       187,643        7.806      359.06      589        76.7
D.........................         23           4,252,405       0.80       184,887        7.820      358.90      570        70.7
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,492     $   534,595,090     100.00%
                               ========   ===============  ===========


            PREPAYMENT PENALTY PERIOD FOR THE GROUP 2 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
PREPAYMENT PENALTY PERIOD      MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
(MONTHS)                        LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

0.........................        367     $    75,670,357      14.15%    $ 206,186        8.233%     357.95      607        79.4%
12........................         84          22,465,268       4.20       267,444        7.837      358.61      607        75.7
13........................          1             280,000       0.05       280,000        8.125      358.00      612        70.0
24........................        991         223,724,975      41.85       225,757        7.560      358.81      612        78.2
36........................        496         103,078,644      19.28       207,820        7.568      357.68      611        77.7
42........................          2             383,619       0.07       191,809        8.280      342.26      606        65.1
60........................        551         108,992,227      20.39       197,808        7.241      350.92      603        73.1
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,492     $   534,595,090     100.00%
                               ========   ===============  ===========


             RANGE OF MONTHS TO NEXT ADJUSTMENT DATE FOR THE GROUP 2
       ADJUSTABLE RATE MORTGAGE LOANS IN THE STATISTICAL CALCULATION POOL



                             WEIGHTED                                                                       WEIGHTED
                             AVERAGE                            PERCENT OF                         WEIGHTE  AVERAGE   WEIGHTED
                            MONTHS TO   NUMBER    AGGREGATE      AGGREGATE    AVERAGE   WEIGHTED   AVERAGE   CREDIT   AVERAGE
RANGE OF MONTHS TO             NEXT       OF      PRINCIPAL      PRINCIPAL    CURRENT   AVERAGE   REMAININ   BUREAU   LOAN-TO-
NEXT ADJUSTMENT             ADJUSTMENT MORTGAGE    BALANCE        BALANCE    PRINCIPAL  MORTGAGE     TERM     RISK     VALUE
DATE                           DATE     LOANS    OUTSTANDING    OUTSTANDING   BALANCE     RATE     (MONTHS   SCORE     RATIO
--------------------------  ---------- --------  -------------  -----------  ---------  --------  --------  --------  --------

 0 - 6....................       5           67  $  10,131,150       2.43%   $ 151,211     8.562%   334.12    576       85.2%
 7 - 12...................      12            2        199,573       0.05       99,786     6.677    288.00    611       70.2
13 - 18...................      17           40      8,496,608       2.04      212,415     7.590    353.43    555       87.9
19 - 24...................      23        1,065    243,263,059      58.33      228,416     7.644    359.30    613       78.0
25 - 31...................      30          101     14,899,554       3.57      147,520     8.003    354.21    588       85.6
32 - 37...................      35          638    139,469,686      33.45      218,605     7.778    359.31    613       76.7
38 or Greater.............      58            2        552,360       0.13      276,180     6.579    358.00    701       98.4
                                       --------  -------------  -----------
    Total/Avg./Wtd. Avg...                1,915  $ 417,011,989     100.00%
                                       ========  =============  ===========



                                      A-17



          GROSS MARGINS FOR THE GROUP 2 ADJUSTABLE RATE MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF GROSS                 MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
MARGINS (%)                     LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

2.001 - 3.000.............          4     $       747,900       0.18%    $ 186,975        6.840%     349.29      611        70.5%
3.001 - 4.000.............          6           1,082,001       0.26       180,334        7.893      358.85      604        82.4
4.001 - 5.000.............         60          14,149,258       3.39       235,821        6.900      357.42      610        71.2
5.001 - 6.000.............        438         106,020,494      25.42       242,056        6.974      358.45      616        75.4
6.001 - 7.000.............        642         147,265,341      35.31       229,385        7.498      358.25      620        78.9
7.001 - 8.000.............        467          96,212,982      23.07       206,024        8.273      358.52      601        79.1
8.001 - 9.000.............        258          46,165,009      11.07       178,934        9.022      358.64      587        81.6
9.001 - 10.000............         34           4,587,000       1.10       134,912        9.716      357.90      602        91.0
10.001 - 11.000...........          6             782,005       0.19       130,334        9.882      356.13      545        80.3
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,915     $   417,011,989     100.00%
                               ========   ===============  ===========


_______________
(1)   The weighted average Gross Margin for the Group 2 Adjustable Rate Mortgage
      Loans in the Statistical Calculation Pool as of the Cut-off Date was
      approximately 6.734%.

      MAXIMUM MORTGAGE RATES FOR THE GROUP 2 ADJUSTABLE RATE MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF MAXIMUM               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
MORTGAGE RATES (%)              LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

11.001 - 11.500...........          2     $       352,260       0.08%    $ 176,130        6.296%     357.55      689        74.8%
11.501 - 12.000...........          6           1,626,869       0.39       271,145        5.841      358.83      635        76.2
12.001 - 12.500...........         44          10,828,615       2.60       246,105        6.017      358.06      638        76.4
12.501 - 13.000...........        106          27,659,778       6.63       260,941        6.467      358.84      634        76.5
13.001 - 13.500...........        195          51,661,607      12.39       264,931        6.668      358.72      624        76.5
13.501 - 14.000...........        306          76,673,868      18.39       250,568        7.062      359.09      626        75.5
14.001 - 14.500...........        298          67,867,482      16.27       227,743        7.550      359.07      611        77.1
14.501 - 15.000...........        323          69,814,454      16.74       216,144        7.990      358.89      606        78.4
15.001 - 15.500...........        194          39,582,005       9.49       204,031        8.461      358.80      596        81.8
15.501 - 16.000...........        166          29,014,682       6.96       174,787        8.898      358.52      582        80.7
16.001 - 16.500...........        108          17,362,417       4.16       160,763        9.361      355.38      579        81.0
16.501 - 17.000...........         78          14,571,266       3.49       186,811        9.788      357.17      583        84.2
17.001 - 17.500...........         27           3,271,181       0.78       121,155       10.336      352.29      602        87.2
17.501 - 18.000...........         27           3,776,417       0.91       139,867       10.809      343.69      566        82.3
18.001 - 18.500...........         17           1,423,170       0.34        83,716       11.295      346.14      568        88.6
18.501 - 19.000...........         12             916,959       0.22        76,413       11.831      334.44      599        91.1
19.001 - 19.500...........          1             379,460       0.09       379,460       12.125      355.00      584       100.0
Greater than 19.500.......          5             229,500       0.06        45,900       14.631      313.89      536        88.3
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,915     $   417,011,989     100.00%
                               ========   ===============  ===========


______________
(1)   The weighted average Maximum Mortgage Rate for the Group 2 Adjustable Rate
      Mortgage Loans in the Statistical Calculation Pool as of the Cut-off Date
      was approximately 14.475%.


                                      A-18



    INITIAL PERIODIC RATE CAP FOR THE GROUP 2 ADJUSTABLE RATE MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
INITIAL PERIODIC RATE  CAP     MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
(%)                             LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

1.000.....................         28     $     7,045,665       1.69%    $ 251,631        7.530%     356.74      595        84.5%
1.500.....................      1,293         281,156,944      67.42       217,445        7.707      358.63      609        78.6
2.000.....................         49           9,036,927       2.17       184,427        7.695      356.73      622        78.5
3.000.....................        542         118,803,295      28.49       219,194        7.779      357.93      612        76.9
5.000.....................          1             172,760       0.04       172,760        6.500      355.00      712        80.0
6.000.....................          1             455,598       0.11       455,598        6.625      359.00      640        80.0
7.000.....................          1             340,800       0.08       340,800        5.850      358.00      627        80.0
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,915     $   417,011,989     100.00%
                               ========   ===============  ===========


______________
(1)   The weighted average Initial Periodic Rate Cap for the Group 2 Adjustable
      Rate Mortgage Loans in the Statistical Calculation Pool as of the Cut-off
      Date was approximately 1.941%.

   SUBSEQUENT PERIODIC RATE CAP FOR THE GROUP 2 ADJUSTABLE RATE MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
SUBSEQUENT PERIODIC RATE       MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
CAP (%)                         LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

0.750.....................          1     $       496,000       0.12%    $ 496,000        6.990%     359.00      748        80.0%
1.000.....................        544         117,804,845      28.25       216,553        7.839      357.70      611        77.8
1.500.....................      1,362         297,111,263      71.25       218,143        7.677      358.66      610        78.4
2.000.....................          7           1,144,283       0.27       163,469        7.762      345.36      593        72.6
3.000.....................          1             455,598       0.11       455,598        6.625      359.00      640        80.0
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,915     $   417,011,989     100.00%
                               ========   ===============  ===========


______________
(1)   The weighted average Subsequent Periodic Rate Cap for the Group 2
      Adjustable Rate Mortgage Loans in the Statistical Calculation Pool as of
      the Cut-off Date was approximately 1.361%.


                                      A-19



      MINIMUM MORTGAGE RATES FOR THE GROUP 2 ADJUSTABLE RATE MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF MINIMUM               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
MORTGAGE RATES (%)              LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

1.001 - 2.000.............          1     $       149,823       0.04%    $ 149,823        8.650%     358.00      531        39.2%
2.001 - 3.000.............          1             105,100       0.03       105,100        5.375      288.00      707        61.9
4.001 - 5.000.............          8           1,841,607       0.44       230,201        6.573      352.71      641        79.0
5.001 - 6.000.............         71          18,227,342       4.37       256,723        5.991      357.89      614        75.4
6.001 - 7.000.............        449         118,222,956      28.35       263,303        6.702      358.82      632        76.1
7.001 - 8.000.............        653         146,636,659      35.16       224,558        7.614      358.76      613        77.5
8.001 - 9.000.............        418          83,083,762      19.92       198,765        8.547      358.70      590        80.2
9.001 - 10.000............        223          38,233,126       9.17       171,449        9.496      357.55      582        83.0
Greater than 10.000.......         91          10,511,615       2.52       115,512       10.897      350.16      577        84.1
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,915     $   417,011,989     100.00%
                               ========   ===============  ===========


______________
(1)   The weighted average Minimum Mortgage Rate for the Group 2 Adjustable Rate
      Mortgage Loans in the Statistical Calculation Pool as of the Cut-off Date
      was approximately 7.661%.

       NEXT ADJUSTMENT DATE FOR THE GROUP 2 ADJUSTABLE RATE MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
NEXT ADJUSTMENT DATE            LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

March 2006................         11     $       827,982       0.20%    $  75,271        9.356%     313.70      549        87.3%
April 2006................          7             584,882       0.14        83,555       10.481      296.85      559        89.6
May 2006..................         12           1,220,149       0.29       101,679       10.051      287.61      563        81.6
June 2006.................          5             286,217       0.07        57,243       12.370      299.22      520        84.4
July 2006.................         12           2,971,391       0.71       247,616        8.315      341.35      607        81.8
August 2006...............         20           4,240,530       1.02       212,026        7.631      353.92      569        87.7
February 2007.............          2             199,573       0.05        99,786        6.677      288.00      611        70.2
June 2007.................          4           1,303,599       0.31       325,900        7.301      352.00      504        88.9
July 2007.................         12           2,249,721       0.54       187,477        7.031      353.00      517        85.2
August 2007...............         24           4,943,288       1.19       205,970        7.921      354.00      585        88.8
September 2007............         30           6,560,557       1.57       218,685        7.360      355.00      612        84.2
October 2007..............          8           1,900,377       0.46       237,547        8.121      356.09      627        87.8
November 2007.............         13           2,768,226       0.66       212,940        7.978      357.08      591        82.2
December 2007.............         95          20,933,080       5.02       220,348        7.274      358.13      625        77.1
January 2008..............        376          84,243,810      20.20       224,053        7.638      359.02      620        76.8
February 2008.............        543         126,857,009      30.42       233,622        7.709      360.00      607        78.3
June 2008.................          1              56,769       0.01        56,769        9.500      352.00      487        95.0
July 2008.................         21           2,921,484       0.70       139,118        8.182      353.00      537        88.4
August 2008...............         39           5,766,778       1.38       147,866        7.726      354.00      602        84.3
September 2008............         40           6,154,522       1.48       153,863        8.164      355.00      601        85.3
October 2008..............         15           3,082,484       0.74       205,499        7.636      356.00      596        81.7
November 2008.............         12           2,897,302       0.69       241,442        7.474      357.00      644        87.8
December 2008.............         47           9,632,892       2.31       204,955        7.696      358.11      615        75.7
January 2009..............        266          58,037,804      13.92       218,187        7.825      359.01      619        77.3
February 2009.............        298          65,819,204      15.78       220,870        7.768      360.00      608        75.7
December 2010.............          2             552,360       0.13       276,180        6.579      358.00      701        98.4
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      1,915     $   417,011,989     100.00%
                               ========   ===============  ===========


______________
(1)   The weighted average Next Adjustment Date for the Group 2 Adjustable Rate
      Mortgage Loans in the Statistical Calculation Pool as of the Cut-off Date
      is May 2008.


                                      A-20



               INTEREST ONLY PERIOD FOR THE GROUP 2 MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                 WEIGHTED     WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     AVERAGE      AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     CURRENT     REMAINING    BUREAU    LOAN-TO-
INTEREST ONLY PERIOD           MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
(MONTHS)                        LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

0.........................      1,737     $   336,871,939      63.01%    $ 193,939        7.800%     355.44      596        76.3%
24........................        203          54,206,744      10.14       267,028        7.293      359.28      633        80.0
36........................        132          35,078,286       6.56       265,745        7.239      358.91      626        78.3
60........................        420         108,438,120      20.28       258,186        7.269      359.29      633        77.9
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,492     $   534,595,090     100.00%
                               ========   ===============  ===========



                                      A-21



                               THE MORTGAGE LOANS

                  MORTGAGE LOAN PROGRAMS FOR THE MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
MORTGAGE LOAN PROGRAM           LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

30-Year 6-month LIBOR.....         56     $    13,046,001       1.74%    $ 232,964        7.329%     358.24      590        82.5%
30 Year One-Year CMT......          2             199,573       0.03        99,786        6.677      288.00      611        70.2
2/28 6-month LIBOR........      1,214         238,060,900      31.75       196,096        7.937      358.69      589        76.6
2/28 6-month LIBOR -
  24-month Interest Only..        258          67,224,820       8.97       260,561        7.295      359.39      642        80.1
2/28 6-month LIBOR -
  60-month Interest Only..        287          73,742,384       9.84       256,942        7.302      359.34      637        79.1
2/28 6-month LIBOR -
  40/30 Balloon...........          8           2,269,324       0.30       283,666        7.059      359.00      615        72.1
3/27 6-month LIBOR........        695         125,457,948      16.73       180,515        8.041      358.48      598        77.1
3/27 6-month LIBOR -
  36-month Interest Only..        146          38,172,706       5.09       261,457        7.258      358.97      630        78.1
3/27 6-month LIBOR -
  60-month Interest Only..        100          25,847,183       3.45       258,472        7.629      359.09      639        77.0
3/27 6-month LIBOR -
  40/30 Balloon...........          1             179,931       0.02       179,931        6.990      359.00      593        64.3
5/25 6-month LIBOR........          3             610,652       0.08       203,551        6.977      352.65      676        96.6
15-Year Fixed.............         27           2,874,511       0.38       106,463        7.845      166.36      598        72.0
15-Year Fixed -
  Credit Comeback.........          9           1,077,881       0.14       119,765        8.127      176.92      589        75.5
30-Year Fixed.............        605         121,783,228      16.24       201,295        7.364      355.76      599        72.8
30-Year Fixed -
  Credit Comeback.........        103          17,669,642       2.36       171,550        8.417      354.36      581        76.6
30-Year Fixed -
  60-month Interest Only..         76          20,540,630       2.74       270,271        6.670      359.78      632        75.0
30/15 Fixed Balloon.......         12             957,861       0.13        79,822        9.976      120.42      549        80.1
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      3,602     $   749,715,176     100.00%
                               ========   ===============  ===========


             ORIGINAL TERM TO STATED MATURITY FOR THE MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
ORIGINAL TERM (MONTHS)          LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

ARM 360...................      2,770     $   584,811,423      78.00%    $ 211,123        7.729%     358.80      608        77.6%
Fixed 180.................         48           4,910,253       0.65       102,297        8.323      159.72      586        74.3
Fixed 360.................        784         159,993,500      21.34       204,073        7.391      356.12      601        73.5
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      3,602     $   749,715,176     100.00%
                               ========   ===============  ===========



                                      A-22



             MORTGAGE LOAN PRINCIPAL BALANCES FOR THE MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF MORTGAGE LOAN         MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
PRINCIPAL BALANCES              LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

$0.01 - $25,000.00........         11     $       205,990       0.03%    $  18,726       11.410%     256.84      552        78.3%
$25,000.01 - $50,000.00...         46           1,762,895       0.24        38,324       10.952      255.71      556        80.2
$50,000.01 - $75,000.00...        209          13,162,879       1.76        62,980        9.262      346.25      590        87.0
$75,000.01 - $100,000.00..        270          23,472,502       3.13        86,935        8.325      349.50      597        82.7
$100,000.01 - $150,000.00.        617          78,602,814      10.48       127,395        7.946      354.42      600        80.6
$150,000.01 - $200,000.00.        799         140,042,550      18.68       175,272        7.983      357.71      595        75.6
$200,000.01 - $250,000.00.        607         136,328,991      18.18       224,595        7.703      357.72      602        75.8
$250,000.01 - $300,000.00.        460         125,749,600      16.77       273,369        7.596      357.89      609        76.1
$300,000.01 - $350,000.00.        244          79,231,782      10.57       324,720        7.337      358.20      610        75.3
$350,000.01 - $400,000.00.        146          54,382,968       7.25       372,486        7.153      359.13      613        75.9
$400,000.01 - $450,000.00.         72          30,565,188       4.08       424,517        7.063      359.40      632        75.2
$450,000.01 - $500,000.00.         48          22,965,856       3.06       478,455        6.843      359.51      631        75.0
$500,000.01 - $550,000.00.         31          16,166,008       2.16       521,484        7.364      359.38      631        78.2
$550,000.01 - $600,000.00.         21          12,007,088       1.60       571,766        7.238      358.86      629        77.0
$600,000.01 - $650,000.00.          7           4,386,000       0.59       626,571        7.617      360.00      618        80.9
$650,000.01 - $700,000.00.          6           4,034,151       0.54       672,359        6.937      357.99      645        80.4
$700,000.01 - $750,000.00.          4           2,957,627       0.39       739,407        7.584      359.75      665        82.1
$800,000.01 - $850,000.00.          1             823,494       0.11       823,494        5.750      360.00      621        69.5
$850,000.01 - $900,000.00.          1             862,100       0.11       862,100        6.250      360.00      629        69.2
Greater than $900,000.00..          2           2,004,691       0.27     1,002,346        6.606      319.09      570        67.4
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      3,602     $   749,715,176     100.00%
                               ========   ===============  ===========



                                      A-23



      STATE DISTRIBUTION OF THE MORTGAGED PROPERTIES FOR THE MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
STATE                           LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

Alabama...................         21     $     2,443,108       0.33%    $ 116,338        8.423%     337.13      585        88.6%
Alaska....................          1             145,600       0.02       145,600        7.700      360.00      585        80.0
Arizona...................        265          52,442,481       6.99       197,896        7.766      358.81      594        76.5
Arkansas..................         13           1,710,887       0.23       131,607        8.614      359.36      634        93.4
California................        717         217,094,260      28.96       302,781        7.061      358.46      621        71.5
Colorado..................         62          11,129,310       1.48       179,505        7.654      357.81      620        82.9
Connecticut...............         32           7,030,551       0.94       219,705        7.753      359.58      586        71.1
Delaware..................         26           5,257,227       0.70       202,201        7.999      359.47      596        83.8
District of Columbia......         17           3,515,931       0.47       206,819        7.313      354.80      613        70.6
Florida...................        616         120,957,971      16.13       196,360        7.793      358.34      601        77.6
Georgia...................         69          10,954,242       1.46       158,757        8.462      351.99      597        83.2
Hawaii....................         29           9,306,989       1.24       320,931        7.073      359.69      609        70.9
Idaho.....................         17           2,508,607       0.33       147,565        7.742      358.32      604        79.4
Illinois..................        129          26,513,995       3.54       205,535        8.201      357.88      606        82.5
Indiana...................         47           5,258,987       0.70       111,893        8.124      352.58      590        84.9
Iowa......................         11           1,412,245       0.19       128,386        8.857      359.39      588        80.4
Kansas....................         20           2,434,297       0.32       121,715        8.908      358.69      590        85.8
Kentucky..................         30           3,077,165       0.41       102,572        9.341      335.10      568        85.9
Louisiana.................         10             976,041       0.13        97,604        9.071      359.05      601        89.5
Maine.....................         11           1,718,376       0.23       156,216        7.379      359.83      596        80.3
Maryland..................         74          16,930,591       2.26       228,792        7.718      359.15      596        76.0
Massachusetts.............         58          12,514,276       1.67       215,763        8.008      358.90      574        68.5
Michigan..................        152          20,884,324       2.79       137,397        8.464      351.24      601        83.5
Minnesota.................         40           8,464,820       1.13       211,621        8.092      358.20      600        80.4
Mississippi...............         19           2,293,496       0.31       120,710        8.097      359.08      591        86.3
Missouri..................         81           9,367,717       1.25       115,651        8.763      355.06      594        85.3
Montana...................         10           1,510,025       0.20       151,003        7.846      358.80      600        81.3
Nebraska..................         11             898,543       0.12        81,686        8.328      354.85      645        86.9
Nevada....................        116          27,560,889       3.68       237,594        7.252      356.75      617        75.9
New Hampshire.............         23           4,450,591       0.59       193,504        7.370      359.43      591        76.9
New Jersey................         45           9,831,697       1.31       218,482        8.002      358.80      604        78.1
New Mexico................          6           1,447,831       0.19       241,305        8.594      351.05      618        83.5
New York..................        109          27,249,195       3.63       249,993        7.863      354.64      600        72.7
North Carolina............         29           4,883,876       0.65       168,410        8.273      355.08      587        80.6
North Dakota..............          4             428,379       0.06       107,095        7.620      359.34      619        76.7
Ohio......................         40           4,519,536       0.60       112,988        8.959      332.42      600        90.6
Oklahoma..................         23           2,291,331       0.31        99,623        9.034      334.97      601        88.9
Oregon....................         25           4,999,654       0.67       199,986        7.766      352.35      588        79.9
Pennsylvania..............         74          11,990,800       1.60       162,038        8.120      355.92      590        78.9
Rhode Island..............          9           1,880,331       0.25       208,926        8.686      359.67      572        77.7
South Carolina............         11           1,950,815       0.26       177,347        8.994      356.21      623        88.0
South Dakota..............          5             374,150       0.05        74,830        9.657      360.00      622        93.1
Tennessee.................         63           8,079,084       1.08       128,239        8.066      356.13      622        89.7
Texas.....................        127          16,434,177       2.19       129,403        8.168      347.54      614        85.7
Utah......................         28           5,010,055       0.67       178,931        7.914      339.72      621        78.8
Vermont...................          6             955,600       0.13       159,267        7.187      360.00      573        80.5
Virginia..................        176          39,353,486       5.25       223,599        7.607      359.28      596        78.5
Washington................         54          11,815,130       1.58       218,799        7.414      354.34      620        79.0
West Virginia.............          5             387,525       0.05        77,505        8.740      320.15      592        72.6
Wisconsin.................         29           4,024,262       0.54       138,768        9.060      351.22      606        86.3
Wyoming...................          7           1,044,722       0.14       149,246        8.140      359.36      616        83.4
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      3,602     $   749,715,176     100.00%
                               ========   ===============  ===========


                                      A-24



                   LOAN-TO-VALUE RATIOS FOR THE MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF LOAN-TO-VALUE         MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
RATIOS (%)                      LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

50.00 or Less.............        107     $    21,523,654       2.87%    $ 201,156        7.498%     357.55      585        42.3%
50.01 - 55.00.............         99          21,116,797       2.82       213,301        7.368      359.14      585        52.9
55.01 - 60.00.............        164          36,925,022       4.93       225,153        7.293      357.73      579        57.9
60.01 - 65.00.............        251          60,619,749       8.09       241,513        7.376      355.97      577        63.3
65.01 - 70.00.............        319          72,534,363       9.67       227,380        7.498      356.33      580        68.5
70.01 - 75.00.............        311          68,613,055       9.15       220,621        7.568      356.70      588        73.7
75.01 - 80.00.............      1,155         254,035,727      33.88       219,944        7.474      357.31      631        79.6
80.01 - 85.00.............        308          62,903,705       8.39       204,233        7.930      356.96      597        84.3
85.01 - 90.00.............        494          95,076,690      12.68       192,463        7.985      357.01      611        89.5
90.01 - 95.00.............        173          29,051,334       3.87       167,927        8.549      356.19      611        94.6
95.01 - 100.00............        221          27,315,080       3.64       123,598        8.849      354.80      635        99.8
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      3,602     $   749,715,176     100.00%
                               ========   ===============  ===========


                  CURRENT MORTGAGE RATES FOR THE MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF CURRENT MORTGAGE      MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
RATES (%)                       LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

4.501 - 5.000                       3     $       530,000       0.07%    $ 176,667       5.000%      360.00      605        74.7%
5.001 - 5.500                      22           5,545,873       0.74       252,085       5.453       358.52      616        72.9
5.501 - 6.000                      95          26,363,608       3.52       277,512       5.905       358.29      623        72.1
6.001 - 6.500                     353          91,118,839      12.15       258,127       6.352       358.85      625        71.2
6.501 - 7.000                     609         148,721,295      19.84       244,206       6.827       357.63      623        74.7
7.001 - 7.500                     496         113,292,768      15.11       228,413       7.321       358.26      611        77.1
7.501 - 8.000                     636         132,196,475      17.63       207,856       7.793       357.63      608        77.1
8.001 - 8.500                     393          75,529,451      10.07       192,187       8.311       357.28      592        79.1
8.501 - 9.000                     393          69,190,894       9.23       176,058       8.799       356.90      590        80.7
9.001 - 9.500                     203          33,423,330       4.46       164,647       9.297       355.41      583        81.7
9.501 - 10.000                    176          28,457,479       3.80       161,690       9.765       354.17      570        81.6
10.001 - 10.500                    75          10,159,434       1.36       135,459      10.315       343.62      558        78.4
10.501 - 11.000                    65           7,557,431       1.01       116,268      10.796       337.90      551        78.7
11.001 - 11.500                    42           4,009,892       0.53        95,474      11.327       335.07      556        86.4
11.501 - 12.000                    24           2,491,959       0.33       103,832      11.785       342.42      554        81.6
12.001 - 12.500                     6             629,506       0.08       104,918      12.212       330.07      588        95.0
12.501 - 13.000                     1              18,174       0.00        18,174      13.000        91.00      546        62.5
13.001 - 13.500                     5             238,891       0.03        47,778      13.285       258.53      549        82.7
13.501 - 14.000                     2              71,550       0.01        35,775      13.844       197.68      501        68.4
Greater than 14.000                 3             168,326       0.02        56,109      15.046       318.77      547        93.1
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      3,602     $   749,715,176     100.00%
                               ========   ===============  ===========



                                      A-25



              TYPES OF MORTGAGED PROPERTIES FOR THE MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
MORTGAGED PROPERTY TYPE         LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

Single Family Residence...      2,599     $   529,103,078      70.57%    $ 203,579        7.622%     356.69      604        76.4%
Planned Unit Development..        569         134,964,517      18.00       237,196        7.631      357.82      611        78.3
Low-Rise Condominium......        229          40,857,719       5.45       178,418        7.808      358.40      616        79.1
Two Family Home...........        137          27,608,663       3.68       201,523        8.052      356.20      604        73.0
Three Family Home.........         24           6,493,348       0.87       270,556        8.252      356.99      610        72.2
High-Rise Condominium.....         20           5,028,337       0.67       251,417        7.791      359.09      648        78.9
Four Family Home..........         18           4,881,118       0.65       271,173        8.189      355.54      618        72.6
Manufactured Housing(1)...          6             778,397       0.10       129,733        8.476      304.86      588        75.7
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      3,602     $   749,715,176     100.00%
                               ========   ===============  ===========


______________
(1)   Treated as real property.

                      LOAN PURPOSES FOR THE MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
LOAN PURPOSE                    LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

Refinance - Cash Out......      2,536     $   542,307,105      72.34%    $ 213,843        7.629%     357.04      593        74.7%
Purchase..................        950         187,685,840      25.03       197,564        7.742      357.08      645        82.6
Refinance - Rate/Term.....        116          19,722,231       2.63       170,019        7.741      352.45      611        77.8
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      3,602     $   749,715,176     100.00%
                               ========   ===============  ===========


                     OCCUPANCY TYPES FOR THE MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
OCCUPANCY TYPE                  LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

Owner Occupied............      3,405     $   715,390,520      95.42%    $ 210,100        7.625%     357.07      606        76.6%
Investment Property.......        150          24,684,701       3.29       164,565        8.524      355.22      627        81.3
Second Home...............         47           9,639,955       1.29       205,105        8.074      350.93      609        77.7
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      3,602     $   749,715,176     100.00%
                               ========   ===============  ===========


______________
(1)   Based on representations by the Mortgagors at the time of origination of
      the related Mortgage Loans.


                                      A-26



            REMAINING TERMS TO STATED MATURITY FOR THE MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF REMAINING TERMS       MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
(MONTHS)                        LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

1 - 120...................         20     $     1,260,640       0.17%    $  63,032       10.154%     113.87      589        71.5%
121 - 180.................         30           3,765,322       0.50       125,511        7.784      174.72      582        75.7
181 - 300.................         84           8,974,951       1.20       106,845        9.673      286.38      559        78.4
301 - 360.................      3,468         735,714,263      98.13       212,144        7.631      359.14      607        76.7
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      3,602     $   749,715,176     100.00%
                               ========   ===============  ===========


                 LOAN DOCUMENTATION TYPE FOR THE MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
LOAN DOCUMENTATION TYPE         LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

Full Documentation........      2,439     $   477,483,985      63.69%    $ 195,770        7.516%     356.29      599        77.7%
Stated Income.............      1,162         272,165,491      36.30       234,222        7.913      358.05      619        75.1
Streamlined...............          1              65,700       0.01        65,700       11.750      360.00      540        90.0
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      3,602     $   749,715,176     100.00%
                               ========   ===============  ===========


               CREDIT BUREAU RISK SCORES(1) FOR THE MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF CREDIT BUREAU        MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
RISK SCORES                     LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

781 - 800.................         10     $     2,763,346       0.37%    $ 276,335        7.304%     359.24      792        78.0%
761 - 780.................         22           4,675,267       0.62       212,512        7.363      354.96      769        81.2
741 - 760.................         42          10,240,099       1.37       243,812        7.506      359.60      751        80.8
721 - 740.................         62          13,740,790       1.83       221,626        7.243      358.37      729        81.8
701 - 720.................         96          24,730,229       3.30       257,607        7.108      356.04      710        81.2
681 - 700.................        124          31,400,584       4.19       253,231        7.191      359.02      688        80.5
661 - 680.................        168          36,683,313       4.89       218,353        7.113      357.02      670        79.6
641 - 660.................        272          61,303,724       8.18       225,381        7.388      357.52      650        80.2
621 - 640.................        434          94,487,068      12.60       217,712        7.502      358.63      630        78.7
601 - 620.................        530         111,829,959      14.92       211,000        7.512      358.30      610        79.1
581 - 600.................        526         106,209,688      14.17       201,920        7.520      357.47      590        75.9
561 - 580.................        450          90,011,390      12.01       200,025        7.876      356.84      570        74.0
541 - 560.................        328          62,149,166       8.29       189,479        8.069      354.58      551        72.5
521 - 540.................        243          49,562,516       6.61       203,961        8.233      356.51      531        71.6
501 - 520.................        237          41,691,072       5.56       175,912        8.584      354.30      511        69.7
500 or Less...............         58           8,236,968       1.10       142,017        8.843      330.58      488        78.6
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      3,602     $   749,715,176     100.00%
                               ========   ===============  ===========


______________
(1)   The Credit Bureau Risk Scores referenced in this table with respect to
      substantially all of the Mortgage Loans were obtained by the respective
      originators from one or more credit reporting agencies, and were
      determined at the time of origination.


                                      A-27



                 CREDIT GRADE CATEGORIES FOR THE MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
CREDIT GRADE CATEGORY           LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

A.........................      2,468     $   533,700,183      71.19%    $ 216,248        7.520%     357.08      619        78.0%
A-........................        171          35,053,958       4.68       204,994        7.894      351.38      570        75.1
B.........................        275          54,634,408       7.29       198,671        7.886      357.86      573        71.8
C.........................        369          68,988,900       9.20       186,962        8.190      355.80      573        73.0
C-........................        273          48,750,831       6.50       178,574        7.917      359.39      587        76.3
D.........................         46           8,586,896       1.15       186,672        8.276      359.38      562        68.3
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      3,602     $   749,715,176     100.00%
                               ========   ===============  ===========


                PREPAYMENT PENALTY PERIOD FOR THE MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
PREPAYMENT PENALTY PERIOD      MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
(MONTHS)                        LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

0.........................        571     $   111,418,505      14.86%    $ 195,129        8.264%     357.03      602        78.7%
12........................        169          42,430,896       5.66       251,070        7.963      356.45      595        74.7
13........................          1             280,000       0.04       280,000        8.125      358.00      612        70.0
24........................      1,564         338,225,552      45.11       216,257        7.605      358.61      609        77.4
36........................        744         147,984,377      19.74       198,904        7.553      357.59      610        77.0
42........................          2             383,619       0.05       191,809        8.280      342.26      606        65.1
60........................        551         108,992,227      14.54       197,808        7.241      350.92      603        73.1
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      3,602     $   749,715,176     100.00%
                               ========   ===============  ===========


 RANGE OF MONTHS TO NEXT ADJUSTMENT DATE FOR THE ADJUSTABLE RATE MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                         WEIGHTED                                                                             WEIGHTED
                         AVERAGE                                PERCENT OF                         WEIGHTED    AVERAGE    WEIGHTED
                        MONTHS TO     NUMBER      AGGREGATE      AGGREGATE    AVERAGE   WEIGHTED    AVERAGE    CREDIT     AVERAGE
RANGE OF MONTHS TO         NEXT         OF        PRINCIPAL      PRINCIPAL    CURRENT   AVERAGE    REMAINING   BUREAU     LOAN-TO-
NEXT ADJUSTMENT         ADJUSTMENT   MORTGAGE      BALANCE        BALANCE    PRINCIPAL  MORTGAGE     TERM       RISK       VALUE
DATE                       DATE       LOANS      OUTSTANDING    OUTSTANDING   BALANCE     RATE     (MONTHS)     SCORE      RATIO
--------------------   -----------  ---------  ---------------  -----------  ---------  --------- ---------    ------     --------

0 -6..............            5           98   $    16,675,847       2.85%   $ 170,162     8.036%   344.26      581         83.1%
7 - 12.............          12            2           199,573       0.03       99,786     6.677    288.00      611         70.2
13 - 18............          17           40         8,496,608       1.45      212,415     7.590    353.43      555         87.9
19 - 24............          24        1,699       370,135,143      63.29      217,855     7.677    359.52      609         77.4
25 - 31............          30          101        14,899,554       2.55      147,520     8.003    354.21      588         85.6
32 - 37............          35          828       173,852,339      29.73      209,967     7.797    359.42      612         76.5
38 or Greater......          58            2           552,360       0.09      276,180     6.579    358.00      701         98.4
                                     --------  ---------------  -----------
    Total/Avg./Wtd. Avg.........       2,770   $   584,811,423     100.00%
                                     ========  ===============  ===========



                                      A-28



              GROSS MARGINS FOR THE ADJUSTABLE RATE MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF GROSS                 MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
MARGINS (%)                     LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

2.001 - 3.000.............          6     $     1,079,400       0.18%    $ 179,900        6.800%     352.58      597        61.1%
3.001 - 4.000.............         11           2,113,001       0.36       192,091        7.706      359.41      571        73.8
4.001 - 5.000.............        103          23,120,422       3.95       224,470        6.968      358.41      599        69.2
5.001 - 6.000.............        739         169,782,843      29.03       229,747        7.120      358.99      610        75.0
6.001 - 7.000.............        943         206,862,580      35.37       219,366        7.572      358.73      617        78.5
7.001 - 8.000.............        670         130,319,163      22.28       194,506        8.373      358.88      602        79.5
8.001 - 9.000.............        258          46,165,009       7.89       178,934        9.022      358.64      587        81.6
9.001 - 10.000............         34           4,587,000       0.78       134,912        9.716      357.90      602        91.0
10.001 - 11.000...........          6             782,005       0.13       130,334        9.882      356.13      545        80.3
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,770     $   584,811,423     100.00%
                               ========   ===============  ===========


________________
(1)   The weighted average Gross Margin for the Adjustable Rate Mortgage Loans
      in the Statistical Calculation Pool as of the Cut-off Date was
      approximately 6.607%.

          MAXIMUM MORTGAGE RATES FOR THE ADJUSTABLE RATE MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF MAXIMUM               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
MORTGAGE RATES (%)              LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

11.001 - 11.500...........          2     $       352,260       0.06%    $ 176,130        6.296%     357.55      689        74.8%
11.501 - 12.000...........          7           1,906,869       0.33       272,410        5.718      359.00      634        74.6
12.001 - 12.500...........         51          12,483,323       2.13       244,771        5.949      358.32      635        75.5
12.501 - 13.000...........        127          31,987,421       5.47       251,869        6.386      358.99      628        75.2
13.001 - 13.500...........        251          64,873,302      11.09       258,459        6.610      358.97      621        75.0
13.501 - 14.000...........        442         107,255,050      18.34       242,658        7.001      359.32      623        75.2
14.001 - 14.500...........        417          92,973,387      15.90       222,958        7.484      359.31      610        76.7
14.501 - 15.000...........        505         107,211,643      18.33       212,300        7.921      359.24      610        77.9
15.001 - 15.500...........        298          58,165,000       9.95       195,185        8.410      359.17      595        80.4
15.501 - 16.000...........        278          47,970,877       8.20       172,557        8.855      359.08      587        80.6
16.001 - 16.500...........        146          23,861,916       4.08       163,438        9.351      356.62      581        81.9
16.501 - 17.000...........        120          21,242,072       3.63       177,017        9.783      358.04      572        82.2
17.001 - 17.500...........         40           5,116,810       0.87       127,920       10.347      355.06      577        84.3
17.501 - 18.000...........         40           5,250,292       0.90       131,257       10.808      348.25      560        81.7
18.001 - 18.500...........         24           2,180,971       0.37        90,874       11.305      350.88      559        90.3
18.501 - 19.000...........         15           1,256,069       0.21        83,738       11.825      341.34      584        87.7
19.001 - 19.500...........          2             494,660       0.08       247,330       12.183      356.16      588        97.7
Greater than 19.500.......          5             229,500       0.04        45,900       14.631      313.89      536        88.3
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,770     $   584,811,423     100.00%
                               ========   ===============  ===========


________________
(1)   The weighted average Maximum Mortgage Rate for the Adjustable Rate
      Mortgage Loans in the Statistical Calculation Pool as of the Cut-off Date
      was approximately 14.553%.


                                      A-29



        INITIAL PERIODIC RATE CAP FOR THE ADJUSTABLE RATE MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
INITIAL PERIODIC RATE          MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
CAP (%)                         LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

1.000.....................         66     $    14,772,738       2.53%    $ 223,829        7.366%     358.40      594        82.2%
1.500.....................      2,110         441,229,305      75.45       209,113        7.731      359.10      607        77.7
2.000.....................         49           9,036,927       1.55       184,427        7.695      356.73      622        78.5
3.000.....................        542         118,803,295      20.31       219,194        7.779      357.93      612        76.9
5.000.....................          1             172,760       0.03       172,760        6.500      355.00      712        80.0
6.000.....................          1             455,598       0.08       455,598        6.625      359.00      640        80.0
7.000.....................          1             340,800       0.06       340,800        5.850      358.00      627        80.0
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,770     $   584,811,423     100.00%
                               ========   ===============  ===========


________________
(1)   The weighted average Initial Periodic Rate Cap for the Adjustable Rate
      Mortgage Loans in the Statistical Calculation Pool as of the Cut-off Date
      was approximately 1.808%.

       SUBSEQUENT PERIODIC RATE CAP FOR THE ADJUSTABLE RATE MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
SUBSEQUENT PERIODIC RATE       MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
CAP (%)                         LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

0.750.....................          1     $       496,000       0.08%    $ 496,000        6.990%     359.00      748        80.0%
1.000.....................        582         125,531,917      21.47       215,691        7.801      357.83      610        78.0
1.500.....................      2,179         457,183,624      78.18       209,814        7.711      359.10      608        77.6
2.000.....................          7           1,144,283       0.20       163,469        7.762      345.36      593        72.6
3.000.....................          1             455,598       0.08       455,598        6.625      359.00      640        80.0
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,770     $   584,811,423     100.00%
                               ========   ===============  ===========


_______________
(1)   The weighted average Subsequent Periodic Rate Cap for the Adjustable Rate
      Mortgage Loans in the Statistical Calculation Pool as of the Cut-off Date
      was approximately 1.394%.

          MINIMUM MORTGAGE RATES FOR THE ADJUSTABLE RATE MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
RANGE OF MINIMUM               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
MORTGAGE RATES (%)              LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

1.001 - 2.000.............          1     $       149,823       0.03%    $ 149,823        8.650%     358.00      531        39.2%
2.001 - 3.000.............          1             105,100       0.02       105,100        5.375      288.00      707        61.9
4.001 - 5.000.............          9           2,121,607       0.36       235,734        6.365      353.67      639        77.3
5.001 - 6.000.............         99          24,209,693       4.14       244,542        5.936      358.39      609        73.5
6.001 - 7.000.............        641         162,015,834      27.70       252,755        6.704      359.11      627        75.2
7.001 - 8.000.............        954         209,139,753      35.76       219,224        7.609      359.10      613        77.2
8.001 - 9.000.............        634         120,622,952      20.63       190,257        8.547      359.09      592        79.9
9.001 - 10.000............        303          51,403,431       8.79       169,648        9.510      358.17      578        82.5
Greater than 10.000.......        128          15,043,230       2.57       117,525       10.876      353.10      566        83.5
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,770     $   584,811,423     100.00%
                               ========   ===============  ===========


_______________
(1)   The weighted average Minimum Mortgage Rate for the Adjustable Rate
      Mortgage Loans in the Statistical Calculation Pool as of the Cut-off Date
      was approximately 7.686%.


                                      A-30



           NEXT ADJUSTMENT DATE FOR THE ADJUSTABLE RATE MORTGAGE LOANS
                     IN THE STATISTICAL CALCULATION POOL(1)



                                                                                                               WEIGHTED
                                                            PERCENT OF                              WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     WEIGHTED     AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     AVERAGE     REMAINING    BUREAU    LOAN-TO-
                               MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
NEXT ADJUSTMENT DATE            LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

March 2006................         11     $       827,982       0.14%    $  75,271        9.356%     313.70      549        87.3%
April 2006................          7             584,882       0.10        83,555       10.481      296.85      559        89.6
May 2006..................         12           1,220,149       0.21       101,679       10.051      287.61      563        81.6
June 2006.................          5             286,217       0.05        57,243       12.370      299.22      520        84.4
July 2006.................         13           3,287,162       0.56       252,859        8.249      343.04      601        81.6
August 2006...............         50          10,469,455       1.79       209,389        7.374      357.54      583        83.0
February 2007.............          2             199,573       0.03        99,786        6.677      288.00      611        70.2
June 2007.................          4           1,303,599       0.22       325,900        7.301      352.00      504        88.9
July 2007.................         12           2,249,721       0.38       187,477        7.031      353.00      517        85.2
August 2007...............         24           4,943,288       0.85       205,970        7.921      354.00      585        88.8
September 2007............         30           6,560,557       1.12       218,685        7.360      355.00      612        84.2
October 2007..............          8           1,900,377       0.32       237,547        8.121      356.09      627        87.8
November 2007.............         13           2,768,226       0.47       212,940        7.978      357.08      591        82.2
December 2007.............         95          20,933,080       3.58       220,348        7.274      358.13      625        77.1
January 2008..............        413          92,180,401      15.76       223,197        7.642      359.02      619        77.1
February 2008.............      1,138         245,574,101      41.99       215,794        7.725      360.00      604        77.2
March 2008................          2             218,400       0.04       109,200        9.906      360.00      606        85.3
June 2008.................          1              56,769       0.01        56,769        9.500      352.00      487        95.0
July 2008.................         21           2,921,484       0.50       139,118        8.182      353.00      537        88.4
August 2008...............         39           5,766,778       0.99       147,866        7.726      354.00      602        84.3
September 2008............         40           6,154,522       1.05       153,863        8.164      355.00      601        85.3
October 2008..............         15           3,082,484       0.53       205,499        7.636      356.00      596        81.7
November 2008.............         12           2,897,302       0.50       241,442        7.474      357.00      644        87.8
December 2008.............         47           9,632,892       1.65       204,955        7.696      358.11      615        75.7
January 2009..............        295          62,792,564      10.74       212,856        7.801      359.01      619        77.5
February 2009.............        459          95,447,097      16.32       207,946        7.819      360.00      607        75.5
December 2010.............          2             552,360       0.09       276,180        6.579      358.00      701        98.4
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      2,770     $   584,811,423     100.00%
                               ========   ===============  ===========


_____________
(1)   The weighted average Next Adjustment Date for the Adjustable Rate Mortgage
      Loans in the Statistical Calculation Pool as of the Cut-off Date is April
      2008.

                   INTEREST ONLY PERIOD FOR THE MORTGAGE LOANS
                       IN THE STATISTICAL CALCULATION POOL



                                                                                                               WEIGHTED
                                                            PERCENT OF                 WEIGHTED     WEIGHTED   AVERAGE    WEIGHTED
                                NUMBER       AGGREGATE      AGGREGATE      AVERAGE     AVERAGE      AVERAGE     CREDIT    AVERAGE
                                  OF         PRINCIPAL      PRINCIPAL      CURRENT     CURRENT     REMAINING    BUREAU    LOAN-TO-
INTEREST ONLY PERIOD           MORTGAGE       BALANCE        BALANCE      PRINCIPAL    MORTGAGE       TERM       RISK      VALUE
(MONTHS)                        LOANS       OUTSTANDING    OUTSTANDING     BALANCE       RATE       (MONTHS)    SCORE      RATIO
--------------------------     --------   ---------------  -----------   ----------    ---------   ---------   --------   --------

0.........................      2,735     $   524,187,453      69.92%    $ 191,659        7.828%     355.91      593        75.9%
24........................        258          67,224,820       8.97       260,561        7.295      359.39      642        80.1
36........................        146          38,172,706       5.09       261,457        7.258      358.97      630        78.1
60........................        463         120,130,196      16.02       259,460        7.264      359.36      637        77.9
                               --------   ---------------  -----------
    Total/Avg./Wtd. Avg...      3,602     $   749,715,176     100.00%
                               ========   ===============  ===========




                                       A-31



                                                                         ANNEX I

                      GLOBAL CLEARANCE, SETTLEMENT AND TAX
                            DOCUMENTATION PROCEDURES

      Except in certain limited circumstances, the globally offered CWABS, Inc.
Asset-Backed Certificates, Series 2006-4, (the "GLOBAL SECURITIES") will be
available only in book-entry form. Investors in the Global Securities may hold
the Global Securities through any of DTC, Clearstream, Luxembourg 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, Luxembourg 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 and prior mortgage pass-through certificate
issues.

      Secondary cross-market trading between Clearstream, Luxembourg or
Euroclear and DTC Participants holding Certificates will be effected on a
delivery-against-payment basis through the respective Depositaries of
Clearstream, Luxembourg 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 the 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, Luxembourg
and Euroclear will hold positions on behalf of their participants through their
respective Depositaries, which in turn will hold the positions in accounts as
DTC Participants.

      Investors electing to hold their Global Securities through DTC will follow
the settlement practices applicable to prior mortgage pass-through certificate
issues. 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,
Luxembourg 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
pass-through certificate issues in same-day funds.


                                       I-1



      Trading between Clearstream, Luxembourg and/or Euroclear Participants.
Secondary market trading between Clearstream, Luxembourg Participants or
Euroclear Participants will be settled using the procedures applicable to
conventional Eurobonds in same-day funds.

      Trading between DTC Seller and Clearstream, Luxembourg or Euroclear
Purchaser. When Global Securities are to be transferred from the account of a
DTC Participant to the account of a Clearstream, Luxembourg Participant or a
Euroclear Participant, the purchaser will send instructions to Clearstream,
Luxembourg or Euroclear through a Clearstream, Luxembourg Participant or
Euroclear Participant at least one Business Day prior to settlement.
Clearstream, Luxembourg or Euroclear will instruct the respective Depositary, as
the case may be, to receive the Global Securities against payment. Payment will
include interest accrued on the Global Securities from and including the last
coupon payment date to and excluding the settlement date, on the basis of a
360-day year and the actual number of days in the related accrual period. For
transactions settling on the 31st of the month, payment will include interest
accrued to and excluding the first day of the following month. Payment will then
be made by the respective Depositary of the DTC Participant's account against
delivery of the Global Securities. After settlement has been completed, the
Global Securities will be credited to the respective clearing system and by the
clearing system, in accordance with its usual procedures, to the Clearstream,
Luxembourg 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, Luxembourg or Euroclear cash debt will be valued
instead as of the actual settlement date.

      Clearstream, Luxembourg 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,
Luxembourg or Euroclear. Under this approach, they may take on credit exposure
to Clearstream, Luxembourg or Euroclear until the Global Securities are credited
to their accounts one day later.

      As an alternative, if Clearstream, Luxembourg or Euroclear has extended a
line of credit to them, Clearstream, Luxembourg 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, Luxembourg
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 the overdraft charges, although
this result will depend on each Clearstream, Luxembourg 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, Luxembourg
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, Luxembourg or Euroclear Seller and DTC
Purchaser. Due to time zone differences in their favor, Clearstream, Luxembourg
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, Luxembourg or
Euroclear through a Clearstream, Luxembourg Participant or Euroclear Participant
at least one Business Day prior to settlement. In these cases Clearstream,
Luxembourg or Euroclear will instruct the respective Depositary, as appropriate,
to deliver the Global Securities to the DTC Participant's account against
payment. Payment will include interest accrued on the Global Securities from and
including the last coupon payment to and excluding the settlement date on the
basis of a 360-day year and the actual number of days in the related accrual
period. 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, Luxembourg


                                       I-2



Participant or Euroclear Participant the following day, and receipt of the cash
proceeds in the Clearstream, Luxembourg 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, Luxembourg
Participant or Euroclear Participant have a line of credit with its respective
clearing system and elect to be in debt in anticipation of receipt of the sale
proceeds in its account, the back-valuation will extinguish any overdraft
incurred over that one-day period. If settlement is not completed on the
intended value date (i.e., the trade fails), receipt of the cash proceeds in the
Clearstream, Luxembourg Participant's or Euroclear Participant's account would
instead be valued as of the actual settlement date.

      Finally, day traders that use Clearstream, Luxembourg or Euroclear and
that purchase Global Securities from DTC Participants for delivery to
Clearstream, Luxembourg 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:

            (a)   borrowing through Clearstream, Luxembourg or Euroclear for one
      day (until the purchase side of the day trade is reflected in their
      Clearstream, Luxembourg or Euroclear accounts) in accordance with the
      clearing system's customary procedures;

            (b)   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, Luxembourg or Euroclear account in order to settle the sale
      side of the trade; or

            (c)   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,
      Luxembourg Participant or Euroclear Participant.

CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS

      A beneficial owner of Global Securities holding securities through
Clearstream, Luxembourg 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 the
beneficial owner and the U.S. entity required to withhold tax complies with
applicable certification requirements and (ii) the beneficial owner takes one of
the following steps to obtain an exemption or reduced tax rate:

      Exemption for non-U.S. Persons or Reduced Rate for non-U.S. Persons
Resident in Treaty Countries (Form W-8BEN). In general, 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 Owners for United States Tax Withholding. Non-U.S. Persons that
are Certificate Owners residing in a country that has a tax treaty with the
United States also can obtain an exemption or reduced tax rate (depending on the
treaty terms) by filing Form W-8BEN (Certificate of Foreign Status of Beneficial
Owners 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 the change.
More complex rules apply if Global Securities are held through a non-U.S.
intermediary (which includes an agent, nominee, custodian, or other person who
holds a Global Security for the account of another) or a non-U.S. flow-through
entity (which includes a partnership, trust, and certain fiscally transparent
entities).

      Exemption for non-U.S. Persons with Effectively Connected Income (Form
W-8ECI). In general, a non-U.S. Person, including a non-U.S. corporation or bank
with a U.S. branch, for which the interest income is effectively connected with
its conduct of a trade or business in the United States, can obtain an exemption
from the withholding tax by filing Form W-8ECI (Certificate of Foreign Person's
Claim for Exemption from Withholding On Income Effectively Connected with the
Conduct of a Trade or Business in the United States). More complex rules apply
where Global Securities are held through a Non-U.S. intermediary or Non-U.S.
flow through entity.


                                       I-3



      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, 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). Generally, a Form W-8BEN and a Form W-8ECI
will remain in effect for a period starting on the date the form is signed and
ending on the last day of the third succeeding calendar year unless a change in
circumstances makes any information of the form incorrect. In addition, a Form
W-8BEN furnished with a U.S. taxpayer identification number will remain in
effect until a change in circumstances makes any information of the form
incorrect, provided that the withholding agent reports on Form 1042 at least one
payment annually to the beneficial owner who provided the form.

      The term "U.S. PERSON" means:

            (1)   a citizen or resident of the United States,

            (2)   a corporation or partnership (including an entity treated as a
      corporation or partnership for U.S. federal income tax purposes) organized
      in or under the laws of the United States, any State thereof or the
      District of Columbia,

            (3)   an estate the income of which is includible in gross income
      for United States tax purposes, regardless of its source,

            (4)   a trust if a court within the United States is able to
      exercise primary supervision of the administration of the trust and one or
      more United States persons have the authority to control all substantial
      decisions of the trust. 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
      tax advisors for specific tax advice concerning their holding and
      disposing of the Global Securities, or

            (5)   certain eligible trusts that elect to be taxed as U.S.
      persons.


                                       I-4

PROSPECTUS

                                   CWABS, INC.
                                    DEPOSITOR

                             ASSET BACKED SECURITIES
                              (ISSUABLE IN SERIES)

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

PLEASE CAREFULLY CONSIDER OUR DISCUSSION OF SOME OF THE RISKS OF INVESTING IN
THE SECURITIES UNDER "RISK FACTORS" BEGINNING ON PAGE 2.

The securities will represent obligations of the related trust fund only and
will not represent an interest in or obligation of CWABS, Inc., any seller,
servicer, or any of their affiliates.

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

THE TRUSTS

Each trust will be established to hold assets in its trust fund transferred to
it by CWABS, Inc. The assets in each trust fund will be specified in the
prospectus supplement for the particular trust and will generally consist of:

o     first or subordinate lien mortgage loans secured by one- to four-family
      residential properties;

o     mortgage loans secured by first and/or subordinate liens on small
      multifamily residential properties, such as rental apartment buildings or
      projects containing five to fifty residential units;

o     closed-end and/or revolving home equity loans, secured in whole or in part
      by first and/or subordinate liens on one- to four-family residential
      properties;

o     home improvement loans, secured by first or subordinate liens on one- to
      four-family residential properties or by personal property security
      interests, and home improvement sales contracts, secured by personal
      property security interests;

o     collections arising from one or more types of the loans described above
      which are not used to make payments on securities issued by a trust fund,
      including excess servicing fees and prepayment charges;

o     mortgage pass-through securities issued or guaranteed by Ginnie Mae,
      Fannie Mae, or Freddie Mac; or

o     mortgage-backed securities evidencing an interest in, or secured by, loans
      of the type that would otherwise be eligible to be loans included in a
      trust fund and issued by entities other than Ginnie Mae, Fannie Mae or
      Freddie Mac.

THE SECURITIES

CWABS, Inc. will sell either certificates or notes pursuant to a prospectus
supplement. The securities will be grouped into one or more series, each having
its own distinct designation. Each series will be issued in one or more classes
and each class will evidence beneficial ownership of (in the case of
certificates) or a right to receive payments supported by (in the case of notes)
a specified portion of future payments on the assets in the trust fund that the
series relates to. A prospectus supplement for a series will specify all of the
terms of the series and of each of the classes in the series.

CREDIT ENHANCEMENT

If the securities have any type of credit enhancement, the prospectus supplement
for the related series will describe the credit enhancement. The types of credit
enhancement are generally described in this prospectus.

OFFERS OF SECURITIES

The securities may be offered through several different methods, including
offerings through underwriters.

                                 _______________

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

February 23, 2006




                      [THIS PAGE INTENTIONALLY LEFT BLANK.]




                                TABLE OF CONTENTS

Important Notice About Information in This
    Prospectus and Each Accompanying
    Prospectus Supplement............................................    1
Risk Factors.........................................................    2
    Limited Source Of Payments -- No
      Recourse To Sellers, Depositor Or
      Servicer.......................................................    2
    Credit Enhancement May Not Be
      Sufficient To Protect You From Losses..........................    3
    Nature Of Mortgages..............................................    3
    Your Risk Of Loss May Be Higher Than
      You Expect If Your Securities Are
      Backed By Multifamily Loans....................................    8
    Impact Of World Events...........................................    9
    Your Risk Of Loss May Be Higher Than
      You Expect If Your Securities Are
      Backed By Partially Unsecured
      Home Equity Loans..............................................   10
    You Could Be Adversely Affected By
      Violations Of Environmental Laws...............................   10
    Ratings Of The Securities Do Not
      Assure Their Payment...........................................   10
    Book-Entry Registration..........................................   11
    Secondary Market For The Securities
      May Not Exist..................................................   11
    Bankruptcy Or Insolvency May Affect
      The Timing And Amount Of
      Distributions On The Securities................................   12
    The Principal Amount Of Securities
      May Exceed The Market Value Of
      The Trust Fund Assets..........................................   13
The Trust Fund.......................................................   14
    General..........................................................   14
    The Loans........................................................   15
    Agency Securities................................................   19
    Non-Agency Mortgage-Backed Securities............................   23
    Substitution of Trust Fund Assets................................   25
    Available Information............................................   25
    Incorporation of Certain Documents by
      Reference; Reports Filed with the
      SEC............................................................   26
    Reports to Securityholders.......................................   27
Use of Proceeds......................................................   27
The Depositor........................................................   27
Loan Program.........................................................   27
    Underwriting Standards...........................................   27
    Qualifications of Sellers........................................   29
    Representations by Sellers; Repurchases..........................   29
Static Pool Data.....................................................   30
Description of the Securities........................................   31
    General..........................................................   31
    Distributions on Securities......................................   33
    Advances.........................................................   34
    Reports to Securityholders.......................................   35
    Categories of Classes of Securities..............................   36
    Indices Applicable to Floating Rate and
      Inverse Floating Rate Classes..................................   39
    Book-Entry Registration of Securities............................   42
Credit Enhancement...................................................   46
    General..........................................................   46
    Subordination....................................................   47
    Letter of Credit.................................................   48
    Insurance Policies, Surety Bonds and
      Guaranties.....................................................   48
    Overcollateralization and Excess Cash Flow.......................   48
    Reserve Accounts.................................................   48
    Pool Insurance Policies..........................................   49
    Financial Instruments............................................   50
    Cross Support....................................................   51
Yield, Maturity and Prepayment Considerations........................   51
    Prepayments on Loans.............................................   51
    Prepayment Effect on Interest....................................   52
    Delays in Realization on Property;
      Expenses of Realization........................................   53
    Optional Purchase................................................   53
    Prepayment Standards or Models...................................   54
    Yield............................................................   54
The Agreements.......................................................   54
    Assignment of the Trust Fund Assets..............................   54
    Payments On Loans; Deposits to
      Security Account...............................................   56
    Pre-Funding Account..............................................   59
    Investments in Amounts Held in Accounts..........................   59
    Sub-Servicing by Sellers.........................................   61
    Collection Procedures............................................   61
    Hazard Insurance.................................................   62
    Application of Liquidation Proceeds..............................   64
    Realization Upon Defaulted Loans.................................   64
    Servicing and Other Compensation and
      Payment of Expenses............................................   66
    Evidence as to Compliance........................................   67
    Certain Matters Regarding the Master
      Servicer and the Depositor.....................................   67
    Events of Default; Rights Upon Event of
      Default........................................................   68
    Amendment........................................................   71
    Termination; Optional Termination................................   72
    The Trustee......................................................   73
Certain Legal Aspects of the Loans...................................   73
    General..........................................................   73
    Foreclosure......................................................   74
    Environmental Risks..............................................   76
    Rights of Redemption.............................................   77


                                        i



    Anti-Deficiency Legislation and Other
      Limitations On Lenders.........................................   78
    Due-On-Sale Clauses..............................................   78
    Enforceability of Prepayment and Late
      Payment Fees...................................................   79
    Applicability of Usury Laws......................................   79
    Home Improvement Finance.........................................   79
    Servicemembers Civil Relief Act..................................   81
    Junior Mortgages and Rights of Senior
      Mortgagees.....................................................   81
    Other Loan Provisions and Lender
      Requirements...................................................   81
    Priority of Additional Advances..................................   82
    The Title I Program..............................................   82
    Consumer Protection Laws.........................................   85
Material Federal Income Tax Consequences.............................   86
    General..........................................................   86
    Taxation of Debt Securities......................................   87
    Taxation of the REMIC and Its Holders............................   91
    REMIC Expenses; Single Class REMICs..............................   91
    Taxation of the REMIC............................................   92
    Taxation of Holders of Residual Interests........................   93
    Administrative Matters...........................................   97
    Tax Status as a Grantor Trust....................................   97
    Sale or Exchange.................................................   99
    Miscellaneous Tax Aspects........................................   99
    Proposed Reporting Regulations................ ..................  100
    Tax Treatment of Foreign Investors............ ..................  100
    Tax Characterization of the Trust Fund
      as a Partnership............................ ..................  101
    Tax Consequences to Holders of the Notes...... ..................  101
    Tax Consequences to Holders of the
      Certificates................................ ..................  103
Other Tax Considerations.......................... ..................  107
ERISA Considerations.............................. ..................  107
Legal Investment.................................. ..................  110
Method of Distribution............................ ..................  111
Legal Matters..................................... ..................  112
Financial Information............................. ..................  112
Rating............................................ ..................  112
Index to Defined Terms............................ ..................  114


                                       ii



         IMPORTANT NOTICE ABOUT INFORMATION IN THIS PROSPECTUS AND EACH
                       ACCOMPANYING PROSPECTUS SUPPLEMENT

      Information about each series of securities is contained in two separate
documents:

o     this prospectus, which provides general information, some of which may not
      apply to a particular series; and

o     the accompanying prospectus supplement for a particular series, which
      describes the specific terms of the securities of that series.

      The prospectus supplement will contain information about a particular
series that supplements the information contained in this prospectus, and you
should rely on that supplementary information in the prospectus supplement.

      You should rely only on the information in this prospectus and the
accompanying prospectus supplement. We have not authorized anyone to provide you
with information that is different from that contained in this prospectus and
the accompanying prospectus supplement.

                                 _______________

      If you require additional information, the mailing address of our
principal executive offices is CWABS, Inc., 4500 Park Granada, Calabasas,
California 91302 and the telephone number is (818) 225-3000. For other means of
acquiring additional information about us or a series of securities, see "The
Trust Fund -- Available Information" and "-- Incorporation of Certain Documents
by Reference; Reports Filed with the SEC" beginning on page 26.


                                        1



                                  RISK FACTORS

      You should carefully consider the following information since it
identifies significant risks associated with an investment in the securities.



LIMITED SOURCE OF PAYMENTS -- NO RECOURSE   The applicable prospectus supplement may provide that securities will be
TO SELLERS, DEPOSITOR OR SERVICER           payable from other trust funds in addition to their associated trust
                                            fund, but if it does not, they will be payable solely from their
                                            associated trust fund.  If the trust fund does not have sufficient
                                            assets to distribute the full amount due to you as a securityholder,
                                            your yield will be impaired, and perhaps even the return of your
                                            principal may be impaired, without your having recourse to anyone else.
                                            Furthermore, at the times specified in the applicable prospectus
                                            supplement, certain assets of the trust fund may be released and paid
                                            out to other people, such as the depositor, a servicer, a credit
                                            enhancement provider, or any other person entitled to payments from the
                                            trust fund.  Those assets will no longer be available to make payments
                                            to you.  Those payments are generally made after other specified
                                            payments that may be set forth in the applicable prospectus supplement
                                            have been made.

                                            You will not have any recourse against the depositor or any servicer if
                                            you do not receive a required distribution on the securities.  Nor will
                                            you have recourse against the assets of the trust fund of any other
                                            series of securities.

                                            The securities will not represent an interest in the depositor, any
                                            servicer, any seller to the depositor, or anyone else except the trust
                                            fund.  The only obligation of the depositor to a trust fund comes from
                                            certain representations and warranties made by it about assets
                                            transferred to the trust fund.  If these representations and warranties
                                            turn out to be untrue, the depositor may be required to repurchase some
                                            of the transferred assets.  CWABS, Inc., which is the depositor, does
                                            not have significant assets and is unlikely to have significant assets
                                            in the future.  So if the depositor were required to repurchase a loan
                                            because of a breach of a representation, its only sources of funds for
                                            the repurchase would be:

                                            o     funds obtained from enforcing a corresponding obligation of a seller
                                                  or originator of the loan, or

                                            o     funds from a reserve fund or similar credit enhancement established
                                                  to pay for loan repurchases.

                                            The only obligations of the master servicer to a trust fund (other than
                                            its master servicing obligations) comes from certain representations and
                                            warranties made by it in connection with its loan servicing activities.
                                            If these representations and warranties turn out to be untrue, the
                                            master servicer may be required to repurchase or substitute for some of
                                            the loans.  However, the master servicer may not have the financial
                                            ability to make the required repurchase or substitution.

                                            The only obligations to a trust fund of a seller of loans to the
                                            depositor comes from certain representations and warranties made by it
                                            in connection with its sale of the loans and certain document delivery
                                            requirements.  If these representations and warranties turn out to be
                                            untrue, or the seller fails to deliver required documents, it may be



                                        2





                                            required to repurchase or substitute for some of the loans.  However,
                                            the seller may not have the financial ability to make the required
                                            repurchase or substitution.

CREDIT ENHANCEMENT MAY NOT BE SUFFICIENT    Credit enhancement is intended to reduce the effect of loan losses.  But
TO PROTECT YOU FROM LOSSES                  credit enhancements may benefit only some classes of a series of
                                            securities and the amount of any credit enhancement will be limited as
                                            described in the related prospectus supplement.  Furthermore, the amount
                                            of a credit enhancement may decline over time pursuant to a schedule or
                                            formula or otherwise, and could be depleted from payments or for other
                                            reasons before the securities covered by the credit enhancement are paid
                                            in full.  In addition, a credit enhancement may not cover all potential
                                            sources of loss.  For example, a credit enhancement may or may not cover
                                            fraud or negligence by a loan originator or other parties.  Also, all or
                                            a portion of the credit enhancement may be reduced, substituted for, or
                                            even eliminated so long as the rating agencies rating the securities
                                            indicate that the change in credit enhancement would not cause them to
                                            change adversely their rating of the securities. Consequently,
                                            securityholders may suffer losses even though a credit enhancement
                                            exists and its provider does not default.

NATURE OF MORTGAGES                         The mortgages and deeds of trust securing the home equity loans and home
    Junior Status of Liens Securing Home    improvement loans will be primarily junior liens subordinate to the
    Equity Loans and Home Improvement       rights of the mortgagee under the related senior mortgage(s) or deed(s)
    Loans Could Adversely Affect You        of trust.  Accordingly, the proceeds from any liquidation, insurance or
                                            condemnation proceeds will be available to satisfy the outstanding
                                            balance of the junior lien only to the extent that the claims of the
                                            related senior mortgagees have been satisfied in full, including any
                                            related foreclosure costs.  In addition, if a junior mortgagee
                                            forecloses on the property securing a junior mortgage, it forecloses
                                            subject to any senior mortgage and must take one of the following steps
                                            to protect its interest in the property:

                                            o     pay the senior mortgage in full at or prior to the foreclosure sale,
                                                  or

                                            o     assume the payments on the senior mortgage in the event the
                                                  mortgagor is in default under the senior mortgage.

                                            The trust fund may effectively be prevented from foreclosing on the
                                            related property since it will have no funds to satisfy any senior
                                            mortgages or make payments due to any senior mortgagees.
                                            Some states have imposed legal limits on the remedies of a secured
                                            lender in the event that the proceeds of any sale under a deed of trust
                                            or other foreclosure proceedings are insufficient to pay amounts owed to
                                            that secured lender.  In some states, including California, if a lender
                                            simultaneously originates a loan secured by a senior lien on a
                                            particular property and a loan secured by a junior lien on the same
                                            property, that lender as the holder of the junior lien may be precluded
                                            from obtaining a deficiency judgment with respect to the excess of:

                                            o     the aggregate amount owed under both the senior and junior loans
                                                  over



                                        3





                                            o     the proceeds of any sale under a deed of trust or other foreclosure
                                                  proceedings.

                                            See "Certain Legal Aspects of the Loans -- Anti-Deficiency Legislation;
                                            Bankruptcy Laws; Tax Liens."

    Cooperative Loans May Experience        Cooperative loans are evidenced by promissory notes secured by security
    Relatively Higher Losses                interests in shares issued by private corporations that are entitled to
                                            be treated as housing cooperatives under the Internal Revenue Code and
                                            in the related proprietary leases or occupancy agreements granting
                                            exclusive rights to occupy specific dwelling units in the corporations'
                                            buildings.

                                            If there is a blanket mortgage (or mortgages) on the cooperative
                                            apartment building and/or underlying land, as is generally the case, the
                                            cooperative, as property borrower, is responsible for meeting these
                                            mortgage or rental obligations.  If the cooperative is unable to meet
                                            the payment obligations 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.
                                            A foreclosure by the holder of a blanket mortgage could eliminate or
                                            significantly diminish the value of any collateral held by the lender
                                            who financed an individual tenant-stockholder of cooperative shares or,
                                            in the case of the mortgage loans, the collateral securing the
                                            cooperative loans.

                                            If there is an underlying lease of the land, as is the case in some
                                            instances, the cooperative is responsible for meeting the related rental
                                            obligations.  If the cooperative is unable to meet its obligations
                                            arising under its land lease, the holder of the land lease could
                                            terminate the land lease and all subordinate proprietary leases and
                                            occupancy agreements. The termination of the land lease by its holder
                                            could eliminate or significantly diminish the value of any collateral
                                            held by the lender who financed an individual tenant-stockholder of the
                                            cooperative shares or, in the case of the mortgage loans, the collateral
                                            securing the cooperative loans. A land lease also has an expiration date
                                            and the inability of the cooperative to extend its term or, in the
                                            alternative, to purchase the land could lead to termination of the
                                            cooperative's interest in the property and termination of all
                                            proprietary leases and occupancy agreements which could eliminate or
                                            significantly diminish the value of the related collateral.

                                            In addition, if the corporation issuing the shares related to the
                                            cooperative loans fails to qualify as a cooperative housing corporation
                                            under the Internal Revenue Code, the value of the collateral securing
                                            the cooperative loan could be significantly impaired because the
                                            tenant-stockholders would not be permitted to deduct its proportionate
                                            share of certain interest expenses and real estate taxes of the
                                            corporation.

                                            The cooperative shares and proprietary lease or occupancy agreement
                                            pledged to the lender are, in almost all cases, subject to restrictions
                                            on transfer, including obtaining the consent of the cooperative housing
                                            corporation prior to the transfer, which may impair the value of the
                                            collateral after a default by the borrower due to an inability to find a
                                            transferee acceptable to the related housing corporation.



                                        4





    Home Improvement Loans Secured by       A borrower's obligations under a home improvement loan may be secured by
    Personal Property May Experience        the personal property which was purchased with the proceeds of the home
    Relatively Higher Losses                improvement loan.  The liquidation value of the related personal
                                            property is likely to be significantly less than the original purchase
                                            price of that property.  In the event that the borrower on a home
                                            improvement loan defaults while a significant portion of the loan is
                                            outstanding, it is likely that the amount recovered from the sale of the
                                            related personal property will be insufficient to pay the related
                                            liquidation expenses and satisfy the remaining unpaid balance of the
                                            related loan.  In that case, one or more classes of securities will
                                            suffer a loss.  See "Certain Legal Aspects of the Loans -- Home
                                            Improvement Finance" for a description of certain legal issues related
                                            to home improvement loans.

    Declines in Property Values May         The value of the properties underlying the loans held in the trust fund
    Adversely Affect You                    may decline over time.  Among the factors that could adversely affect
                                            the value of the properties are:

                                            o     an overall decline in the residential real estate market in the
                                                  areas in which they are located,

                                            o     a decline in their general condition from the failure of borrowers
                                                  to maintain their property adequately, and

                                            o     natural disasters that are not covered by insurance, such as
                                                  earthquakes and floods.

                                            In the case of home equity loans, declining property values could
                                            diminish or extinguish the value of a junior mortgage before reducing
                                            the value of a senior mortgage on the same property.

                                            If property values decline, the actual rates of delinquencies,
                                            foreclosures, and losses on all underlying loans could be higher than
                                            those currently experienced in the mortgage lending industry in
                                            general.  These losses, to the extent not otherwise covered by a credit
                                            enhancement, will be borne by the holder of one or more classes of
                                            securities.

    Delays in Liquidation May Adversely     Even if the properties underlying the loans held in the trust fund
    Affect You                              provide adequate security for the loans, substantial delays could occur
                                            before defaulted loans are liquidated and their proceeds are forwarded
                                            to investors.  Property foreclosure actions are regulated by state
                                            statutes and rules and are subject to many of the delays and expenses of
                                            other lawsuits if defenses or counterclaims are made, sometimes
                                            requiring several years to complete.  Furthermore, an action to obtain a
                                            deficiency judgment is regulated by statutes and rules, and the amount
                                            or availability of a deficiency judgment may be limited by law. In the
                                            event of a default by a borrower, these restrictions may impede the
                                            ability of the servicer to foreclose on or to sell the mortgaged
                                            property or to obtain a deficiency judgment, to obtain sufficient
                                            proceeds to repay the loan in full.

                                            In addition, the servicer will be entitled to deduct from liquidation
                                            proceeds all expenses reasonably incurred in attempting to recover on
                                            the defaulted loan, including legal and appraisal fees and costs, real
                                            estate taxes, and property maintenance and preservation expenses.



                                        5





                                            In the event that:

                                                  o     the mortgaged properties fail to provide adequate security for
                                                        the related loans,

                                                  o     if applicable to a series as specified in the related
                                                        prospectus supplement, excess cashflow (if any) and
                                                        overcollateralization (if any) is insufficient to cover these
                                                        shortfalls,

                                                  o     if applicable to a series as specified in the related
                                                        prospectus supplement, the subordination of certain classes
                                                        are insufficient to cover these shortfalls, and

                                                  o     with respect to the securities with the benefit of an
                                                        insurance policy as specified in the related prospectus
                                                        supplement, the credit enhancement provider fails to make the
                                                        required payments under the related insurance policies,

                                            you could lose all or a portion of the money you paid for the securities
                                            and could also have a lower yield than anticipated at the time you
                                            purchased the securities.

    Disproportionate Effect of              Liquidation expenses of defaulted loans generally do not vary directly
    Liquidation Expenses May Adversely      with the outstanding principal balance of the loan at the time of
    Affect You                              default.  Therefore, if a servicer takes the same steps for a defaulted
                                            loan having a small remaining principal balance as it does for a
                                            defaulted loan having a large remaining principal balance, the amount
                                            realized after expenses is smaller as a percentage of the outstanding
                                            principal balance of the small loan than it is for the defaulted loan
                                            having a large remaining principal balance.

    Consumer Protection Laws May            Federal, state and local laws extensively regulate various aspects of
    Adversely Affect You                    brokering, originating, servicing and collecting loans secured by
                                            consumers' dwellings.  Among other things, these laws may regulate
                                            interest rates and other charges, require disclosures, impose financial
                                            privacy requirements, mandate specific business practices, and prohibit
                                            unfair and deceptive trade practices.  In addition, licensing
                                            requirements may be imposed on persons that broker, originate, service
                                            or collect loans secured by consumers' dwellings.

                                            Additional requirements may be imposed under federal, state or local
                                            laws on so-called "high cost mortgage loans," which typically are
                                            defined as loans secured by a consumer's dwelling that have interest
                                            rates or origination costs in excess of prescribed levels.  These laws
                                            may limit certain loan terms, such as prepayment charges, or the ability
                                            of a creditor to refinance a loan unless it is in the borrower's
                                            interest.  In addition, certain of these laws may allow claims against
                                            loan brokers or originators, including claims based on fraud or
                                            misrepresentations, to be asserted against persons acquiring the loans,
                                            such as the trust fund.



                                        6





                                            The federal laws that may apply to loans held in the trust fund include
                                            the following:

                                            o     the Truth in Lending Act and its regulations, which (among other
                                                  things) require disclosures to borrowers regarding the terms of
                                                  loans and provide consumers who pledged their principal dwelling as
                                                  collateral in a non-purchase money transaction with a right of
                                                  rescission that generally extends for three days after proper
                                                  disclosures are given;

                                            o     the Home Ownership and Equity Protection Act and its regulations,
                                                  which (among other things) imposes additional disclosure
                                                  requirements and limitations on loan terms with respect to
                                                  non-purchase money, installment loans secured by the consumer's
                                                  principal dwelling that have interest rates or origination costs in
                                                  excess of prescribed levels;

                                            o     the Home Equity Loan Consumer Protection Act and its regulations,
                                                  which (among other things) limit changes that may be made to
                                                  open-end loans secured by the consumer's dwelling, and restricts the
                                                  ability to accelerate balances or suspend credit privileges on these
                                                  loans;

                                            o     the Real Estate Settlement Procedures Act and its regulations, which
                                                  (among other things) prohibit the payment of referral fees for real
                                                  estate settlement services (including mortgage lending and brokerage
                                                  services) and regulate escrow accounts for taxes and insurance and
                                                  billing inquiries made by borrowers;

                                            o     the Equal Credit Opportunity Act and its regulations, which (among
                                                  other things) generally prohibit discrimination in any aspect of a
                                                  credit transaction on certain enumerated basis, such as age, race,
                                                  color, sex, religion, marital status, national origin or receipt of
                                                  public assistance;

                                            o     the Federal Trade Commission's Rule on Preservation of Consumer
                                                  Claims and Defenses, which generally provides that the rights of an
                                                  assignee of a conditional sales contract (or of certain lenders
                                                  making purchase money loans) to enforce a consumer credit obligation
                                                  are subject to the claims and defenses that the consumer could
                                                  assert against the seller of goods or services financed in the
                                                  credit transaction; and

                                            o     the Fair Credit Reporting Act, which (among other things) regulates
                                                  the use of consumer reports obtained from consumer reporting
                                                  agencies and the reporting of payment histories to consumer
                                                  reporting agencies.

                                            The penalties for violating these federal, state, or local laws vary
                                            depending on the applicable law and the particular facts of the
                                            situation.  However, private plaintiffs typically may assert claims for
                                            actual damages and, in some cases, also may recover civil money
                                            penalties or exercise a right to rescind the loan.  Violations of
                                            certain laws may limit the ability to collect all or part of the
                                            principal or interest on a loan and,



                                        7





                                            in some cases, borrowers even may be entitled to a refund of amounts
                                            previously paid. Federal, state and local administrative or law
                                            enforcement agencies also may be entitled to bring legal actions,
                                            including actions for civil money penalties or restitution, for
                                            violations of certain of these laws.

                                            Depending on the particular alleged misconduct, it is possible that
                                            claims may be asserted against various participants in secondary market
                                            transactions, including assignees that hold the loans, such as the trust
                                            fund.  Losses on loans from the application of these federal, state and
                                            local laws that are not otherwise covered by one or more forms of credit
                                            enhancement will be borne by the holders of one or more classes of
                                            securities.  Additionally, the trust may experience losses arising from
                                            lawsuits related to alleged violations of these laws, which, if not
                                            covered by one or more forms of credit enhancement or the related
                                            seller, will be borne by the holders of one or more classes of
                                            securities.

    Losses on Balloon Payment Mortgages     Some of the mortgage loans held in the trust fund may not be fully
    Are Borne by You                        amortizing over their terms to maturity and, thus, will require
                                            substantial principal payments (that is, balloon payments) at their
                                            stated maturity.  Loans with balloon payments involve a greater degree
                                            of risk than fully amortizing loans because typically the borrower must
                                            be able to refinance the loan or sell the property to make the balloon
                                            payment at maturity.  The ability of a borrower to do this will depend
                                            on factors such as mortgage rates at the time of sale or refinancing,
                                            the borrower's equity in the property, the relative strength of the
                                            local housing market, the financial condition of the borrower, and tax
                                            laws.  Losses on these loans that are not otherwise covered by a credit
                                            enhancement will be borne by the holders of one or more classes of
                                            securities.

YOUR RISK OF LOSS MAY BE HIGHER THAN YOU    Multifamily lending may expose the lender to a greater risk of loss than
EXPECT IF YOUR SECURITIES ARE BACKED BY     single family residential lending.  Owners of multifamily residential
MULTIFAMILY LOANS                           properties rely on monthly lease payments from tenants to

                                            o     pay for maintenance and other operating expenses of those
                                                  properties,

                                            o     fund capital improvements, and

                                            o     service any mortgage loan and any other debt that may be secured by
                                                  those properties.

                                            Various factors, many of which are beyond the control of the owner or
                                            operator of a multifamily property, may affect the economic viability of
                                            that property.

                                            Changes in payment patterns by tenants may result from a variety of
                                            social, legal and economic factors.  Economic factors include the rate
                                            of inflation, unemployment levels and relative rates offered for various
                                            types of housing.  Shifts in economic factors may trigger changes in
                                            payment patterns including increased risks of defaults by tenants and
                                            higher vacancy rates.  Adverse economic conditions, either local or
                                            national, may limit the amount of rent that can be charged and may
                                            result in a reduction in timely lease payments or a reduction in
                                            occupancy levels.  Occupancy and rent levels may also be affected by
                                            construction



                                        8





                                            of additional housing units, competition and local politics, including
                                            rent stabilization or rent control laws and policies. In addition, the
                                            level of mortgage interest rates may encourage tenants to purchase
                                            single family housing. We are unable to determine and have no basis to
                                            predict whether, or to what extent, economic, legal or social factors
                                            will affect future rental or payment patterns.

                                            The location and construction quality of a particular building may
                                            affect the occupancy level as well as the rents that may be charged for
                                            individual units.  The characteristics of a neighborhood may change over
                                            time or in relation to newer developments.  The effects of poor
                                            construction quality will increase over time in the form of increased
                                            maintenance and capital improvements.  Even good construction will
                                            deteriorate over time if adequate maintenance is not performed in a
                                            timely fashion.

IMPACT OF WORLD EVENTS                      The economic impact of the United States' military operations in Iraq
                                            and other parts of the world, as well as the possibility of any
                                            terrorist attacks domestically or abroad, is uncertain, but could have a
                                            material effect on general economic conditions, consumer confidence, and
                                            market liquidity. We can give no assurance as to the effect of these
                                            events on consumer confidence and the performance of the loans held by
                                            trust fund.  Any adverse impact resulting from these events would be
                                            borne by the holders of one or more classes of the securities.

                                            United States military operations also increase the likelihood of
                                            shortfalls under the Servicemembers Civil Relief Act or similar state
                                            laws (referred to as the "Relief Act" ).  The Relief Act provides relief
                                            to borrowers who enter active military service and to borrowers in
                                            reserve status who are called to active duty after the origination of
                                            their loan.  The Relief Act provides generally that these borrowers may
                                            not be charged interest on a loan in excess of 6% per annum during the
                                            period of the borrower's active duty.  These shortfalls are not required
                                            to be paid by the borrower at any future time and will not be advanced
                                            by the servicer, unless otherwise specified in the related prospectus
                                            supplement.  To the extent these shortfalls reduce the amount of
                                            interest paid to the holders of securities with the benefit of an
                                            insurance policy, unless otherwise specified in the related prospectus
                                            supplement, they will not be covered by the related insurance policy.
                                            In addition, the Relief Act imposes limitations that would impair the
                                            ability of the servicer to foreclose on an affected loan during the
                                            borrower's period of active duty status, and, under some circumstances,
                                            during an additional period thereafter.

                                            In addition, pursuant to the laws of various states, under certain
                                            circumstances, payments on mortgage loans by residents in such states
                                            who are called into active duty with the National Guard or the reserves
                                            will be deferred.  These state laws may also limit the ability of the
                                            servicer to foreclose on the related mortgaged property.  This could
                                            result in delays or reductions in payment and increased losses on the
                                            mortgage loans which would be borne by the securityholders.



                                        9





YOUR RISK OF LOSS MAY BE HIGHER THAN YOU    The trust fund may also include home equity loans that were originated
EXPECT IF YOUR SECURITIES ARE BACKED BY     with loan-to-value ratios or combined loan-to-value ratios in excess of
PARTIALLY UNSECURED HOME EQUITY LOANS       the value of the related mortgaged property.  Under these circumstances,
                                            the trust fund could be treated as a general unsecured creditor as to
                                            any unsecured portion of any related loan.  In the event of a default
                                            under a loan that is unsecured in part, the trust fund will have
                                            recourse only against the borrower's assets generally for the unsecured
                                            portion of the loan, along with all other general unsecured creditors of
                                            the borrower.

YOU COULD BE ADVERSELY AFFECTED BY          Federal, state, and local laws and regulations impose a wide range of
VIOLATIONS OF ENVIRONMENTAL LAWS            requirements on activities that may affect the environment, health, and
                                            safety.  In certain circumstances, these laws and regulations impose
                                            obligations on "owners" or "operators" of residential properties such as
                                            those that secure the loans held in the trust fund.  Failure to comply
                                            with these laws and regulations can result in fines and penalties that
                                            could be assessed against the trust if it were to be considered an
                                            "owner" or "operator" of the related property.  A property "owner" or
                                            "operator" can also be held liable for the cost of investigating and
                                            remediating contamination, regardless of fault, and for personal injury
                                            or property damage arising from exposure to contaminants.

                                            In some states, a lien on the property due to contamination has priority
                                            over the lien of an existing mortgage.  Also, a mortgage lender may be
                                            held liable as an "owner" or "operator" for costs associated with the
                                            release of hazardous substances from a site, or petroleum from an
                                            underground storage tank under certain circumstances.  If the trust were
                                            to be considered the "owner" or "operator" of a property, it will suffer
                                            losses as a result of any liability imposed for environmental hazards on
                                            the property.

RATINGS OF THE SECURITIES DO NOT ASSURE     Any class of securities issued under this prospectus and the
THEIR PAYMENT                               accompanying prospectus supplement will be rated in one of the rating
                                            categories which signifies investment grade by at least one nationally
                                            recognized rating agency.  A rating is based on the adequacy of the
                                            value of the trust assets and any credit enhancement for that class, and
                                            reflects the rating agency's assessment of how likely it is that holders
                                            of the class of securities will receive the payments to which they are
                                            entitled.  A rating does not constitute an assessment of how likely it
                                            is that principal prepayments on the underlying loans will be made, the
                                            degree to which the rate of prepayments might differ from that
                                            originally anticipated, or the likelihood that the securities will be
                                            redeemed early.  A rating is not a recommendation to purchase, hold, or
                                            sell securities because it does not address the market price of the
                                            securities or the suitability of the securities for any particular
                                            investor.

                                            A rating may not remain in effect for any given period of time and the
                                            rating agency could lower or withdraw the rating entirely in the
                                            future.  For example, the rating agency could lower or withdraw its
                                            rating due to:

                                            o     a decrease in the adequacy of the value of the trust assets or any
                                                  related credit enhancement,

                                            o     an adverse change in the financial or other condition of a credit
                                                  enhancement provider, or



                                       10





                                            o     a change in the rating of the credit enhancement provider's
                                                  long-term debt.

                                            The amount, type, and nature of credit enhancement established for a
                                            class of securities will be determined on the basis of criteria
                                            established by each rating agency rating classes of the securities.
                                            These criteria are sometimes based upon an actuarial analysis of the
                                            behavior of similar loans in a larger group.  That analysis is often the
                                            basis upon which each rating agency determines the amount of credit
                                            enhancement required for a class.  The historical data supporting any
                                            actuarial analysis may not accurately reflect future experience, and the
                                            data derived from a large pool of similar loans may not accurately
                                            predict the delinquency, foreclosure, or loss experience of any
                                            particular pool of mortgage loans.  Mortgaged properties may not retain
                                            their values.  If residential real estate markets experience an overall
                                            decline in property values such that the outstanding principal balances
                                            of the loans held in a particular trust fund and any secondary financing
                                            on the related mortgaged properties become equal to or greater than the
                                            value of the mortgaged properties, the rates of delinquencies,
                                            foreclosures, and losses could be higher than those now generally
                                            experienced in the mortgage lending industry.  In addition, adverse
                                            economic conditions may affect timely payment by mortgagors on their
                                            loans whether or not the conditions affect real property values and,
                                            accordingly, the rates of delinquencies, foreclosures, and losses in any
                                            trust fund.  Losses from this that are not covered by a credit
                                            enhancement will be borne, at least in part, by the holders of one or
                                            more classes of securities.

BOOK-ENTRY REGISTRATION                     Securities issued in book-entry form may have only limited liquidity in
    Limit on Liquidity                      the resale market, since investors may be unwilling to purchase
                                            securities for which they cannot obtain physical instruments.

    Limit on Ability to Transfer or Pledge  Transactions in book-entry securities can be effected only through The
                                            Depository Trust Company, its participating organizations, its indirect
                                            participants, and certain banks.  Therefore, your ability to transfer or
                                            pledge securities issued in book-entry form may be limited.

    Delays in Distributions                 You may experience some delay in the receipt of distributions on
                                            book-entry securities since the distributions will be forwarded by the
                                            trustee to The Depository Trust Company for it to credit the accounts of
                                            its participants.  In turn, these participants will then credit the
                                            distributions to your account either directly or indirectly through
                                            indirect participants.

SECONDARY MARKET FOR THE SECURITIES MAY     The related prospectus supplement for each series will specify the
NOT EXIST                                   classes in which the underwriter intends to make a secondary market, but
                                            no underwriter will have any obligation to do so. We can give no
                                            assurance that a secondary market for the securities will develop or, if
                                            it develops, that it will continue.  Consequently, you may not be able
                                            to sell your securities readily or at prices that will enable you to
                                            realize your desired yield.  The market values of the securities are
                                            likely to fluctuate. Fluctuations may be significant and could result in
                                            significant losses to you.

                                            The secondary markets for asset 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



                                       11





                                            especially sensitive to prepayment, credit or interest rate risk, or that
                                            have been structured to meet the investment requirements of limited
                                            categories of investors.

BANKRUPTCY OR INSOLVENCY MAY AFFECT THE     Each seller and the depositor will take steps to structure the transfer
TIMING AND AMOUNT OF DISTRIBUTIONS ON THE   of the loans held in the trust fund by the seller to the depositor as a
SECURITIES                                  sale.  The depositor and the trust fund will take steps to structure the
                                            transfer of the loans from the depositor to the trust fund as a sale.
                                            If these characterizations are correct, then if the seller were to
                                            become bankrupt, the loans would not be part of the seller's bankruptcy
                                            estate and would not be available to the seller's creditors.  On the
                                            other hand, if the seller becomes bankrupt, its bankruptcy trustee or
                                            one of its creditors may attempt to recharacterize the sale of the loans
                                            as a borrowing by the seller, secured by a pledge of the loans.
                                            Presenting this position to a bankruptcy court could prevent timely
                                            payments on the securities and even reduce the payments on the
                                            securities.  Additionally, if that argument is successful, the
                                            bankruptcy trustee could elect to sell the loans and pay down the
                                            securities early. Thus, you could lose the right to future payments of
                                            interest, and might suffer reinvestment losses in a lower interest rate
                                            environment.

                                            Similarly, if the characterizations of the transfers as sales are
                                            correct, then if the depositor were to become bankrupt, the loans would
                                            not be part of the depositor's bankruptcy estate and would not be
                                            available to the depositor's creditors.  On the other hand, if the
                                            depositor becomes bankrupt, its bankruptcy trustee or one of its
                                            creditors may attempt to recharacterize the sale of the loans as a
                                            borrowing by the depositor, secured by a pledge of the loans.
                                            Presenting this position to a bankruptcy court could prevent timely
                                            payments on the securities and even reduce the payments on the
                                            securities.

                                            If the master servicer becomes bankrupt, the bankruptcy trustee may have
                                            the power to prevent the appointment of a successor master servicer.
                                            Any related delays in servicing could result in increased delinquencies
                                            or losses on the loans.  The period during which cash collections may be
                                            commingled with the master servicer's own funds before each distribution
                                            date for securities will be specified in the applicable prospectus
                                            supplement.  If the master servicer becomes bankrupt and cash
                                            collections have been commingled with the master servicer's own funds,
                                            the trust fund will likely not have a perfected interest in those
                                            collections.  In this case the trust might be an unsecured creditor of
                                            the master servicer as to the commingled funds and could recover only
                                            its share as a general creditor, which might be nothing.  Collections
                                            that are not commingled but still in an account of the master servicer
                                            might also be included in the bankruptcy estate of the master servicer
                                            even though the trust may have a perfected security interest in them.
                                            Their inclusion in the bankruptcy estate of the master servicer may
                                            result in delays in payment and failure to pay amounts due on the
                                            securities.

                                            Federal and state statutory provisions affording protection or relief to
                                            distressed borrowers may affect the ability of the secured mortgage
                                            lender to realize upon its security in other situations as well.  For
                                            example, in a proceeding under the federal Bankruptcy Code, a lender may
                                            not foreclose on a mortgaged property without the permission of the
                                            bankruptcy court.  And in certain instances a bankruptcy court may allow
                                            a borrower to reduce the monthly payments, change the rate of interest,



                                       12





                                            and alter the mortgage loan repayment schedule for under-collateralized
                                            mortgage loans.  The effect of these types of proceedings can be to
                                            cause delays in receiving payments on the loans underlying securities
                                            and even to reduce the aggregate amount of payments on the loans
                                            underlying securities.

THE PRINCIPAL AMOUNT OF SECURITIES MAY      The market value of the assets relating to a series of securities at any
EXCEED THE MARKET VALUE OF THE TRUST FUND   time may be less than the principal amount of the securities of that
ASSETS                                      series then outstanding, plus accrued interest.  In the case of a series
                                            of notes, after an event of default and a sale of the assets relating to
                                            a series of securities, the trustee, the master servicer, the credit
                                            enhancer, if any, and any other service provider specified in the
                                            related prospectus supplement generally will be entitled to receive the
                                            proceeds of that sale to the extent of unpaid fees and other amounts
                                            owing to them under the related transaction document prior to
                                            distributions to securityholders.  Upon any sale of the assets in
                                            connection with an event of default, the proceeds may be insufficient to
                                            pay in full the principal of and interest on the securities of the
                                            related series.

                                            Certain capitalized terms are used in this prospectus to assist you in
                                            understanding the terms of the securities.  The capitalized terms used
                                            in this prospectus are defined on the pages indicated under the caption
                                            "Index to Defined Terms" beginning on page 114.



                                       13



                                 THE TRUST FUND

GENERAL

      The securities of each series will represent interests in the assets of
the related trust fund, and the notes of each series will be secured by the
pledge of the assets of the related trust fund. The trust fund for each series
will be held by the trustee for the benefit of the related securityholders. Each
trust fund will consist of the trust fund assets (the "Trust Fund Assets")
consisting of:

o     a pool comprised of loans as specified in the related prospectus
      supplement, together with payments relating to those loans as specified in
      the related prospectus supplement;

o     a pool comprised of collections arising from one or more types of loans
      that would otherwise be eligible to be loans included in a trust fund;

o     mortgage pass-through securities (the "Agency Securities") issued or
      guaranteed by Ginnie Mae, Fannie Mae or Freddie Mac or

o     other mortgage pass-through certificates or collateralized mortgage
      obligations (the "Non-Agency Mortgage-Backed Securities") evidencing an
      interest in, or secured by, loans of the type that would otherwise be
      eligible to be loans included in a trust fund.

      The pool will be created on the first day of the month of the issuance of
the related series of securities or on another date specified in the related
prospectus supplement. The securities will be entitled to payment from the
assets of the related trust fund or funds or other assets pledged for the
benefit of the securityholders, as specified in the related prospectus
supplement and will not be entitled to payments in respect of the assets of any
other trust fund established by the depositor.*

      The Trust Fund Assets will be acquired by the depositor, either directly
or through affiliates, from originators or sellers which may be affiliates of
the depositor (the "Sellers"), and conveyed without recourse by the depositor to
the related trust fund. Loans acquired by the depositor will have been
originated in accordance with the underwriting criteria specified below under
"Loan Program -- Underwriting Standards" or as otherwise described in the
related prospectus supplement. See "Loan Program -- Underwriting Standards."

      The depositor will cause the Trust Fund Assets to be assigned to the
trustee named in the related prospectus supplement for the benefit of the
holders of the securities of the related series. The master servicer named in
the related prospectus supplement will service the Trust Fund Assets, either
directly or through other servicing institutions called sub-servicers, pursuant
to a Pooling and Servicing Agreement (each, a "Pooling and Servicing Agreement"
among the depositor, the master servicer and the trustee with respect to a
series consisting of certificates, or a sale and servicing agreement (each, a
"Sale and Servicing Agreement") between the trustee and the master servicer with
respect to a series consisting of certificates and notes, and will receive a fee
for these services. The Pooling and Servicing Agreements and the Sale and
Servicing Agreements are also referred to as "Master Servicing Agreements") in
this prospectus. See "Loan Program" and "The Agreements." With respect to loans
serviced by the master servicer through a sub-servicer, the master servicer will
remain liable for its servicing obligations under the related Agreement as if
the master servicer alone were servicing those loans.

_________________________

*     Whenever the terms pool, certificates, notes and securities are used in
      this prospectus, those terms will be considered to apply, unless the
      context indicates otherwise, to one specific pool and the securities of
      one series including the certificates representing undivided interests in,
      and/or notes secured by the assets of, a single trust fund consisting
      primarily of the loans in that pool. Similarly, the term "Pass- Through
      Rate' will refer to the pass-through rate borne by the certificates and
      the term interest rate will refer to the interest rate borne by the notes
      of one specific series, as applicable, and the term trust fund will refer
      to one specific trust fund.


                                       14



      If so specified in the related prospectus supplement, a trust fund
relating to a series of securities may be a business trust or common law trust
formed under the laws of the state specified in the related prospectus
supplement pursuant to a trust agreement (each, a "Trust Agreement") between the
depositor and the trustee of the trust fund.

      As used herein, "Agreement" means, with respect to a series consisting of
certificates, the Pooling and Servicing Agreement, and with respect to a series
consisting of certificates and notes, the Trust Agreement, the Indenture and the
Sale and Servicing Agreement, as the context requires.

      With respect to each trust fund, prior to the initial offering of the
related series of securities, the trust fund will have no assets or liabilities.
No trust fund is expected to engage in any activities other than acquiring,
managing and holding of the related Trust Fund Assets and other assets
contemplated herein specified and in the related prospectus supplement and the
proceeds thereof, issuing securities and making payments and distributions
thereon and certain related activities. No trust fund is expected to have any
source of capital other than its assets and any related credit enhancement.

      The applicable prospectus supplement may provide for additional
obligations of the depositor, but if it does not, the only obligations of the
depositor with respect to a series of securities will be to obtain certain
representations and warranties from the sellers and to assign to the trustee for
that series of securities the depositor's rights with respect to the
representations and warranties. See "The Agreements -- Assignment of the Trust
Fund Assets." The obligations of the master servicer with respect to the loans
will consist principally of its contractual servicing obligations under the
related Agreement (including its obligation to enforce the obligations of the
sub-servicers or sellers, or both, as more fully described herein under "Loan
Program -- Representations by Sellers; Repurchases" and "The Agreements --
Sub-Servicing By Sellers" and "-- Assignment of the Trust Fund Assets") and its
obligation, if any, to make certain cash advances in the event of delinquencies
in payments on or with respect to the loans in the amounts described herein
under "Description of the Securities -- Advances." The obligations of the master
servicer to make advances may be subject to limitations, to the extent provided
herein and in the related prospectus supplement.

      The following is a brief description of the assets expected to be included
in the trust funds. If specific information respecting the Trust Fund Assets is
not known at the time the related series of securities initially is offered,
more general information of the nature described below will be provided in the
related prospectus supplement, and specific information will be set forth in a
report on Form 8-K to be filed with the Securities and Exchange Commission (the
"SEC") after the initial issuance of the related securities (the "Detailed
Description"). A copy of the Agreement with respect to each series of securities
will be filed on Form 8-K after the initial issuance of the related securities
and will be available for inspection at the corporate trust office of the
trustee specified in the related prospectus supplement. A schedule of the loans
relating to the series will be attached to the Agreement delivered to the
trustee upon delivery of the securities.

THE LOANS

      General. Loans will consist of single family loans, multifamily loans,
home equity loans or home improvement loan contracts. For purposes hereof, "home
equity loans" includes "closed-end loans" and "revolving credit line loans." If
so specified, the loans may include cooperative apartment loans ("cooperative
loans") secured by security interests in shares issued by private, non-profit,
cooperative housing corporations ("cooperatives") and in the related proprietary
leases or occupancy agreements granting exclusive rights to occupy specific
dwelling units in the cooperatives' buildings. As more fully described in the
related prospectus supplement, the loans may be "conventional" loans or loans
that are insured or guaranteed by a governmental agency such as the Federal
Housing Administration (the "FHA") or the Department of Veterans' Affairs (the
"VA").

      The applicable prospectus supplement may specify the day on which monthly
payments on the loans in a pool will be due, but if it does not, all of the
mortgage loans in a pool will have monthly payments due on the first day of each
month. The payment terms of the loans to be included in a trust fund will be
described in the related prospectus supplement and may include any of the
following features or combination thereof or other features described in the
related prospectus supplement:


                                       15



o     Interest may be payable at a fixed rate, a rate adjustable from time to
      time in relation to an index (which will be specified in the related
      prospectus supplement), a rate that is fixed for a period of time or under
      certain circumstances and is followed by an adjustable rate, a rate that
      otherwise varies from time to time, or a rate that is convertible from an
      adjustable rate to a fixed rate. Changes to an adjustable rate may be
      subject to periodic limitations, maximum rates, minimum rates or a
      combination of the limitations. Accrued interest may be deferred and added
      to the principal of a loan for the periods and under the circumstances as
      may be specified in the related prospectus supplement. Loans may provide
      for the payment of interest at a rate lower than the specified interest
      rate borne by the loan (the "Loan Rate") for a period of time or for the
      life of the loan, and the amount of any difference may be contributed from
      funds supplied by the seller of the Property or another source.

o     Principal may be payable on a level debt service basis to fully amortize
      the loan over its term, may be calculated on the basis of an assumed
      amortization schedule that is significantly longer than the original term
      to maturity or on an interest rate that is different from the Loan Rate or
      may not be amortized during all or a portion of the original term. Payment
      of all or a substantial portion of the principal may be due on maturity,
      called balloon payments. Principal may include interest that has been
      deferred and added to the principal balance of the loan.

o     Monthly payments of principal and interest may be fixed for the life of
      the loan, may increase over a specified period of time or may change from
      period to period. The terms of a loan may include limits on periodic
      increases or decreases in the amount of monthly payments and may include
      maximum or minimum amounts of monthly payments.

o     The loans generally may be prepaid at any time. Prepayments of principal
      may be subject to a prepayment fee, which may be fixed for the life of the
      loan or may decline over time, and may be prohibited for the life of the
      loan or for certain periods, which are called lockout periods. Certain
      loans may permit prepayments after expiration of the applicable lockout
      period and may require the payment of a prepayment fee in connection with
      any subsequent prepayment. Other loans may permit prepayments without
      payment of a fee unless the prepayment occurs during specified time
      periods. The loans may include "due-on-sale" clauses that permit the
      mortgagee to demand payment of the entire loan in connection with the sale
      or certain transfers of the related mortgaged property. Other loans may be
      assumable by persons meeting the then applicable underwriting standards of
      the seller.

      A trust fund may contain buydown loans that include provisions whereby a
third party partially subsidizes the monthly payments of the obligors on the
loans during the early years of the loans, the difference to be made up from a
buydown fund contributed by the third party at the time of origination of the
loan. A buydown fund will be in an amount equal either to the discounted value
or full aggregate amount of future payment subsidies. Thereafter, buydown funds
are applied to the applicable loan upon receipt by the master servicer of the
mortgagor's portion of the monthly payment on the loan. The master servicer
administers the buydown fund to ensure that the monthly allocation from the
buydown fund combined with the monthly payment received from the mortgagor
equals the scheduled monthly payment on the applicable loan. The underlying
assumption of buydown plans is that the income of the mortgagor will increase
during the buydown period as a result of normal increases in compensation and
inflation, so that the mortgagor will be able to meet the full mortgage payments
at the end of the buydown period. To the extent that this assumption as to
increased income is not fulfilled, the possibility of defaults on buydown loans
is increased. The related prospectus supplement will contain information with
respect to any Buydown Loan concerning limitations on the interest rate paid by
the mortgagor initially, on annual increases in the interest rate and on the
length of the buydown period.

      The real property which secures repayment of the loans is referred to as
the mortgaged properties. The loans will be secured by mortgages or deeds of
trust or other similar security instruments creating a lien on a mortgaged
property. In the case of home equity loans, those liens generally will be
subordinated to one or more senior liens on the related mortgaged properties as
described in the related prospectus supplement. In addition to being secured by
mortgages on real estate the home improvement loan contracts may also be secured
by purchase money security interests in the home improvements financed thereby.
If so specified in the related prospectus supplement, the home equity loans may
include loans (primarily for home improvement or debt consolidation


                                       16



purposes) that are in amounts in excess of the value of the related mortgaged
properties at the time of origination. The mortgaged properties and the home
improvements are collectively referred to herein as the "Properties." The
Properties may be located in any one of the fifty states, the District of
Columbia, Guam, Puerto Rico or any other territory of the United States.

      Loans with certain Loan-to-Value Ratios and/or certain principal balances
may be covered wholly or partially by primary mortgage guaranty insurance
policies (each, a "Primary Mortgage Insurance Policy"). The existence, extent
and duration of any coverage will be described in the applicable prospectus
supplement.

      The aggregate principal balance of loans secured by Properties that are
owner-occupied will be disclosed in the related prospectus supplement. The
applicable prospectus supplement may provide for the basis for representations
relating to Single Family Properties, but if it does not, the sole basis for a
representation that a given percentage of the loans is secured by Single Family
Properties that are owner-occupied will be either (i) the making of a
representation by the borrower at origination of the loan either that the
underlying Property will be used by the borrower for a period of at least six
months every year or that the borrower intends to use the Property as a primary
residence or (ii) a finding that the address of the underlying Property is the
borrower's mailing address.

      Single Family Loans. The mortgaged properties relating to single family
loans will consist of detached or semi-detached one- to four-family dwelling
units, townhouses, rowhouses, individual condominium units, individual units in
planned unit developments, manufactured housing that is permanently affixed and
treated as real property under local law, and certain other dwelling units
("Single Family Properties"). Single Family Properties may include vacation and
second homes, investment properties and leasehold interests. In the case of
leasehold interests, the applicable prospectus supplement may provide for the
leasehold term, but if it does not, the term of the leasehold will exceed the
scheduled maturity of the loan by at least five years.

      Multifamily Loans. Mortgaged properties which secure multifamily loans may
include small multifamily residential properties such as rental apartment
buildings or projects containing five to fifty residential units, including
mid-rise and garden apartments. Certain of the multifamily loans may be secured
by apartment buildings owned by cooperatives. In those cases, the cooperative
owns all the apartment units in the building and all common areas. The
cooperative is owned by tenant-stockholders who, through ownership of stock,
shares or membership certificates in the corporation, receive proprietary leases
or occupancy agreements which confer exclusive rights to occupy specific
apartments or units. Generally, a tenant-stockholder of a cooperative must make
a monthly payment to the cooperative representing the tenant-stockholder's pro
rata share of the cooperative's payments for its mortgage loan, real property
taxes, maintenance expenses and other capital or ordinary expenses. Those
payments are in addition to any payments of principal and interest the
tenant-stockholder must make on any loans to the tenant-stockholder secured by
its shares in the cooperative. The cooperative will be directly responsible for
building management and, in most cases, payment of real estate taxes and hazard
and liability insurance. A cooperative's ability to meet debt service
obligations on a multifamily loan, as well as all other operating expenses, will
be dependent in large part on the receipt of maintenance payments from the
tenant-stockholders, as well as any rental income from units the cooperative
might control. Unanticipated expenditures may in some cases have to be paid by
special assessments on the tenant-stockholders. No more than 5% of the aggregate
Trust Fund Assets for any series, as constituted at the time of the applicable
cut-off date (measured by principal balance), will be comprised of multifamily
loans.

      Home Equity Loans. The mortgaged properties relating to home equity loans
will consist of Single Family Properties. As more fully described in the related
prospectus supplement, interest on each revolving credit line loan, excluding
introductory rates offered from time to time during promotional periods, is
computed and payable monthly on the average daily outstanding principal balance
of the loan. Principal amounts on a revolving credit line loan may be drawn down
(up to a maximum amount as set forth in the related prospectus supplement) or
repaid under each revolving credit line loan from time to time, but may be
subject to a minimum periodic payment. Except to the extent provided in the
related prospectus supplement, the trust fund will not include any amounts
borrowed under a revolving credit line loan after the cut-off date. The full
amount of a closed-end loan is advanced at the inception of the loan and
generally is repayable in equal (or substantially equal) installments of an
amount to fully amortize the loan at its stated maturity. Except to the extent
provided in the related prospectus supplement, the original terms to stated
maturity of closed-end loans will not exceed 360 months. Under certain
circumstances, under either a revolving credit line loan or a closed-end loan, a
borrower may choose an interest only payment


                                       17



option and is obligated to pay only the amount of interest which accrues on the
loan during the billing cycle. An interest only payment option may be available
for a specified period before the borrower must begin paying at least the
minimum monthly payment of a specified percentage of the average outstanding
balance of the loan.

      Home Improvement Loan Contracts. The Trust Fund Assets for a series of
securities may consist, in whole or in part, of home improvement loan contracts
originated by a home improvement contractor, a thrift or a commercial mortgage
banker in the ordinary course of business. The home improvements securing the
home improvement loan contracts may include, but are not limited to, replacement
windows, house siding, new roofs, swimming pools, satellite dishes, kitchen and
bathroom remodeling goods and solar heating panels. The home improvement loan
contracts will be secured by mortgages on Single Family Properties which are
generally subordinate to other mortgages on the same Property. In general, the
home improvement loan contracts will be fully amortizing and may have fixed
interest rates or adjustable interest rates and may provide for other payment
characteristics as described below and in the related prospectus supplement. The
initial Loan-to-Value Ratio of a home improvement loan contract is computed in
the manner described in the related prospectus supplement.

      Additional Information. Each prospectus supplement will contain
information, as of the date of the prospectus supplement and to the extent then
specifically known to the depositor, with respect to the loans contained in the
related pool, including

o     the aggregate outstanding principal balance and the average outstanding
      principal balance of the loans as of the first day of the month of
      issuance of the related series of certificates or another date specified
      in the related prospectus supplement called a cut-off date,

o     the type of property securing the loans (e.g., single-family residences,
      individual units in condominium apartment buildings or in buildings owned
      by cooperatives, small multifamily properties, other real property or home
      improvements),

o     the original terms to maturity of the loans,

o     the ranges of the principal balances of the loans,

o     the earliest origination date and latest maturity date of any of the
      loans,

o     the ranges of the Loan-to-Value Ratios or Combined Loan-to-Value Ratios,
      as applicable, of the loans at origination,

o     the Loan Rates or annual percentage rates ("APR") or range of Loan Rates
      or APR's borne by the loans, and

o     the geographical distribution of the loans.

      If specific information respecting the loans is not known to the depositor
at the time the related securities are initially offered, more general
information of the nature described above will be provided in the detailed
description of Trust Fund Assets.

      The "Loan-to-Value Ratio" of a loan at any given time is the fraction,
expressed as a percentage, the numerator of which is the original principal
balance of the related loan and the denominator of which is the Collateral Value
of the related Property. The "Combined Loan-to-Value Ratio" of a loan at any
given time is the ratio, expressed as a percentage, of (i) the sum of (a) the
original principal balance of the loan (or, in the case of a revolving credit
line loan, the maximum amount thereof available) and (b) the outstanding
principal balance at the date of origination of the loan of any senior mortgage
loan(s) or, in the case of any open-ended senior mortgage loan, the maximum
available line of credit with respect to the mortgage loan, regardless of any
lesser amount actually outstanding at the date of origination of the loan, to
(ii) the Collateral Value of the related Property. The


                                       18



"Collateral Value" of the Property, other than with respect to certain loans the
proceeds of which were used to refinance an existing mortgage loan (each, a
"Refinance Loan"), will be calculated as described in the prospectus supplement,
but if there is no description in the prospectus supplement, it is the lesser of
(a) the appraised value determined in an appraisal obtained by the originator at
origination of the loan and (b) the sales price for the Property. In the case of
Refinance Loans, the "Collateral Value" of the related Property will be
calculated as described in the prospectus supplement, but if there is no
description in the prospectus supplement, it is generally the appraised value
thereof determined in an appraisal obtained at the time of refinancing.

      We can give no assurance that values of the Properties have remained or
will remain at their levels on the dates of origination of the related loans. If
the residential real estate market should experience an overall decline in
property values such that the outstanding principal balances of the loans, and
any secondary financing on the Properties, in a particular pool become equal to
or greater than the value of the Properties, the actual rates of delinquencies,
foreclosures and losses could be higher than those now generally experienced in
the mortgage lending industry. In addition, adverse economic conditions and
other factors (which may or may not affect real property values) may affect the
timely payment by borrowers of scheduled payments of principal and interest on
the loans and, accordingly, the actual rates of delinquencies, foreclosures and
losses with respect to any pool. To the extent that the losses are not covered
by subordination provisions or alternative arrangements, the losses will be
borne, at least in part, by the holders of the securities of the related series.

AGENCY SECURITIES

      Government National Mortgage Association. Ginnie Mae is a wholly-owned
corporate instrumentality of the United States with the United States Department
of Housing and Urban Development. Section 306(g) of Title II of the National
Housing Act of 1934, as amended, authorizes Ginnie Mae to guarantee the timely
payment of the principal of and interest on certificates that represent an
interest in a pool of mortgage loans insured by the FHA under the National
Housing Act of 1934 or Title V of the Housing Act of 1949, or partially
guaranteed by the VA under the Servicemen's Readjustment Act of 1944, as
amended, or Chapter 37 of Title 38, United States Code.

      Section 306(g) of the National Housing Act of 1934 provides that "the full
faith and credit of the United States is pledged to the payment of all amounts
which may be required to be paid under any guaranty under this subsection." In
order to meet its obligations under that guaranty, Ginnie Mae may, under Section
306(d) of the National Housing Act of 1934, borrow from the United States
Treasury in an unlimited amount which is at any time sufficient to enable Ginnie
Mae to perform its obligations under its guarantee.

      Ginnie Mae Certificates. Each Ginnie Mae certificate held in a trust fund
will be a "fully modified pass-through" mortgage backed certificate issued and
serviced by a Ginnie Mae issuer approved by Ginnie Mae or by Fannie Mae as a
seller-servicer of FHA loans or VA loans. The Ginnie Mae certificates may be
issued under either the Ginnie Mae I program or the Ginnie Mae II program. The
mortgage loans underlying the Ginnie Mae certificates will consist of FHA loans
or VA loans. Each mortgage loan is secured by a one-to four-family or
multifamily residential property. Ginnie Mae will approve the issuance of each
Ginnie Mae certificate in accordance with a guaranty agreement between Ginnie
Mae and the Ginnie Mae issuer. Pursuant to its guaranty agreement, a Ginnie Mae
issuer will be required to advance its own funds in order to make timely
payments of all amounts due on each Ginnie Mae certificate if the payments
received by the Ginnie Mae issuer on the FHA loans or VA loans underlying each
Ginnie Mae certificate are less than the amounts due on each Ginnie Mae
certificate.

      The full and timely payment of principal of and interest on each Ginnie
Mae certificate will be guaranteed by Ginnie Mae, which obligation is backed by
the full faith and credit of the United States. Each Ginnie Mae certificate will
have an original maturity of not more than 30 years (but may have original
maturities of substantially less than 30 years). Each Ginnie Mae certificate
will be based on and backed by a pool of FHA loans or VA loans secured by one to
four-family residential properties and will provide for the payment by or on
behalf of the Ginnie Mae issuer to the registered holder of the Ginnie Mae
certificate of scheduled monthly payments of principal and interest equal to the
registered holder's proportionate interest in the aggregate amount of the
monthly principal and interest payment on each FHA loan or VA loan underlying
the Ginnie Mae certificate, less the applicable servicing and guaranty fee,
which together equal the difference between the interest on the FHA loan or VA
loan and the pass-through rate on the Ginnie Mae certificate. In addition, each
payment will include proportionate pass-through


                                       19



payments of any prepayments of principal on the FHA loans or VA loans underlying
the Ginnie Mae certificate and liquidation proceeds upon a foreclosure or other
disposition of the FHA loans or VA loans.

      If a Ginnie Mae issuer is unable to make the payments on a Ginnie Mae
certificate as it becomes due, it must promptly notify Ginnie Mae and request
Ginnie Mae to make the payment. Upon notification and request, Ginnie Mae will
make the payments directly to the registered holder of the Ginnie Mae
certificate. If no payment is made by a Ginnie Mae issuer and the Ginnie Mae
issuer fails to notify and request Ginnie Mae to make the payment, the holder of
the Ginnie Mae certificate will have recourse only against Ginnie Mae to obtain
the payment. The trustee or its nominee, as registered holder of the Ginnie Mae
certificates held in a trust fund, will have the right to proceed directly
against Ginnie Mae under the terms of the guaranty agreements relating to the
Ginnie Mae certificates for any amounts that are not paid when due.

      All mortgage loans underlying a particular Ginnie Mae I certificate must
have the same interest rate over the term of the loan, except in pools of
mortgage loans secured by manufactured homes. The interest rate on the Ginnie
Mae I certificate will equal the interest rate on the mortgage loans included in
the pool of mortgage loans underlying the Ginnie Mae I certificate, less
one-half percentage point per annum of the unpaid principal balance of the
mortgage loans.

      Mortgage loans underlying a particular Ginnie Mae II certificate may have
per annum interest rates that vary from each other by up to one percentage
point. The interest rate on each Ginnie Mae II certificate will be between one
half percentage point and one and one-half percentage points lower than the
highest interest rate on the mortgage loans included in the pool of mortgage
loans underlying the Ginnie Mae II certificate, except for pools of mortgage
loans secured by manufactured homes.

      Regular monthly installment payments on each Ginnie Mae certificate held
in a trust fund will be comprised of interest due as specified on the Ginnie Mae
certificate plus the scheduled principal payments on the FHA loans or VA loans
underlying the Ginnie Mae certificate due on the first day of the month in which
the scheduled monthly installments on the Ginnie Mae certificate are due. The
regular monthly installments on each Ginnie Mae certificate are required to be
paid to the trustee as registered holder by the 15th day of each month in the
case of a Ginnie Mae I certificate and are required to be mailed to the trustee
by the 20th day of each month in the case of a Ginnie Mae II certificate. Any
principal prepayments on any FHA loans or VA loans underlying a Ginnie Mae
certificate held in a trust fund or any other early recovery of principal on the
loans will be passed through to the trustee as the registered holder of the
Ginnie Mae certificate.

      Ginnie Mae certificates may be backed by graduated payment mortgage loans
or by buydown loans for which funds will have been provided (and deposited into
escrow accounts) for application to the payment of a portion of the borrowers'
monthly payments during the early years of the mortgage loan. Payments due the
registered holders of Ginnie Mae certificates backed by pools containing buydown
loans will be computed in the same manner as payments derived from other Ginnie
Mae certificates and will include amounts to be collected from both the borrower
and the related escrow account. The graduated payment mortgage loans will
provide for graduated interest payments that, during the early years of the
mortgage loans, will be less than the amount of stated interest on the mortgage
loans. The interest not so paid will be added to the principal of the graduated
payment mortgage loans and, together with interest on them, will be paid in
subsequent years. The obligations of Ginnie Mae and of a Ginnie Mae issuer will
be the same irrespective of whether the Ginnie Mae certificates are backed by
graduated payment mortgage loans or buydown loans. No statistics comparable to
the FHA's prepayment experience on level payment, non-buydown mortgage loans are
available for graduated payment or buydown loans. Ginnie Mae certificates
related to a series of certificates may be held in book-entry form.

      The Ginnie Mae certificates included in a trust fund, and the related
underlying mortgage loans, may have characteristics and terms different from
those described above. Any different characteristics and terms will be described
in the related prospectus supplement.

      Federal Home Loan Mortgage Corporation. Freddie Mac is a corporate
instrumentality of the United States created pursuant to Title III of the
Emergency Home Finance Act of 1970, as amended. The common stock of Freddie Mac
is owned by the Federal Home Loan Banks and its preferred stock is owned by
stockholders of the Federal Home Loan Banks. Freddie Mac was established
primarily to increase the availability of mortgage credit to


                                       20



finance urgently needed housing. It seeks to provide an enhanced degree of
liquidity for residential mortgage investments primarily by assisting in the
development of secondary markets for conventional mortgages. The principal
activity of Freddie Mac currently consists of the purchase of first lien
conventional mortgage loans or participation interests in mortgage loans and the
sale of the mortgage loans or participations so purchased in the form of
mortgage securities, primarily mortgage participation certificates issued and
either guaranteed as to timely payment of interest or guaranteed as to timely
payment of interest and ultimate payment of principal by Freddie Mac. Freddie
Mac is confined to purchasing, so far as practicable, mortgage loans that it
deems to be of such quality, type and class as to meet generally the purchase
standards imposed by private institutional mortgage investors.

      Freddie Mac Certificates. Each Freddie Mac certificate represents an
undivided interest in a pool of mortgage loans that may consist of first lien
conventional loans, FHA loans or VA loans. Freddie Mac certificates are sold
under the terms of a Mortgage Participation Certificate Agreement. A Freddie Mac
certificate may be issued under either Freddie Mac's Cash Program or Guarantor
Program.

      Mortgage loans underlying the Freddie Mac certificates held by a trust
fund will consist of mortgage loans with original terms to maturity of between
10 and 40 years. Each mortgage loan must meet the applicable standards set forth
in the Emergency Home Finance Act of 1970. A Freddie Mac certificate group may
include whole loans, participation interests in whole loans and undivided
interests in whole loans and participations comprising another Freddie Mac
certificate group. Under the Guarantor Program, a Freddie Mac certificate group
may include only whole loans or participation interests in whole loans.

      Freddie Mac guarantees to each registered holder of a Freddie Mac
certificate the timely payment of interest on the underlying mortgage loans to
the extent of the applicable certificate interest rate on the registered
holder's pro rata share of the unpaid principal balance outstanding on the
underlying mortgage loans in the Freddie Mac certificate group represented by
the Freddie Mac certificate, whether or not received. Freddie Mac also
guarantees to each registered holder of a Freddie Mac certificate collection by
the holder of all principal on the underlying mortgage loans, without any offset
or deduction, to the extent of the holder's pro rata share of it, but does not,
except if and to the extent specified in the related prospectus supplement for a
series of certificates, guarantee the timely payment of scheduled principal.
Under Freddie Mac's Gold PC Program, Freddie Mac guarantees the timely payment
of principal based on the difference between the pool factor published in the
month preceding the month of distribution and the pool factor published in the
month of distribution. Pursuant to its guaranties, Freddie Mac indemnifies
holders of Freddie Mac certificates against any diminution in principal from
charges for property repairs, maintenance and foreclosure. Freddie Mac may remit
the amount due on account of its guaranty of collection of principal at any time
after default on an underlying mortgage loan, but not later than 30 days
following foreclosure sale, 30 days following payment of the claim by any
mortgage insurer or 30 days following the expiration of any right of redemption,
whichever occurs later, but in any event no later than one year after demand has
been made upon the mortgagor for accelerated payment of principal. In taking
actions regarding the collection of principal after default on the mortgage
loans underlying Freddie Mac certificates, including the timing of demand for
acceleration, Freddie Mac reserves the right to exercise its judgment with
respect to the mortgage loans in the same manner as for mortgage loans that it
has purchased but not sold. The length of time necessary for Freddie Mac to
determine that a mortgage loan should be accelerated varies with the particular
circumstances of each mortgagor, and Freddie Mac has not adopted standards which
require that the demand be made within any specified period.

      Freddie Mac certificates are not guaranteed by the United States or by any
Federal Home Loan Bank and do not constitute debts or obligations of the United
States or any Federal Home Loan Bank. The obligations of Freddie Mac under its
guaranty are obligations solely of Freddie Mac and are not backed by, or
entitled to, the full faith and credit of the United States. If Freddie Mac were
unable to satisfy its obligations, distributions to holders of Freddie Mac
certificates would consist solely of payments and other recoveries on the
underlying mortgage loans and, accordingly, monthly distributions to holders of
Freddie Mac certificates would be affected by delinquent payments and defaults
on the mortgage loans.

      Registered holders of Freddie Mac certificates are entitled to receive
their monthly pro rata share of all principal payments on the underlying
mortgage loans received by Freddie Mac, including any scheduled principal
payments, full and partial prepayments of principal and principal received by
Freddie Mac by virtue of condemnation, insurance, liquidation or foreclosure,
and repurchases of the mortgage loans by Freddie Mac or their


                                       21



seller. Freddie Mac is required to remit each registered Freddie Mac
certificateholder's pro rata share of principal payments on the underlying
mortgage loans, interest at the Freddie Mac pass-through rate and any other sums
such as prepayment fees, within 60 days of the date on which the payments are
deemed to have been received by Freddie Mac.

      Under Freddie Mac's Cash Program, there is no limitation on the amount by
which interest rates on the mortgage loans underlying a Freddie Mac certificate
may exceed the pass-through rate on the Freddie Mac certificate. Under that
program, Freddie Mac purchases groups of whole mortgage loans from sellers at
specified percentages of their unpaid principal balances, adjusted for accrued
or prepaid interest, which when applied to the interest rate of the mortgage
loans and participations purchased results in the yield required by Freddie Mac.
The required yield, which includes a minimum servicing fee retained by the
servicer, is calculated using the outstanding principal balance. The range of
interest rates on the mortgage loans and participations in a Freddie Mac
certificate group under the Cash Program will vary since mortgage loans and
participations are purchased and assigned to a Freddie Mac certificate group
based upon their yield to Freddie Mac rather than on the interest rate on the
underlying mortgage loans. Under Freddie Mac's Guarantor Program, the
pass-through rate on a Freddie Mac certificate is established based upon the
lowest interest rate on the underlying mortgage loans, minus a minimum servicing
fee and the amount of Freddie Mac's management and guaranty income as agreed
upon between the seller and Freddie Mac.

      Freddie Mac certificates duly presented for registration of ownership on
or before the last business day of a month are registered effective as of the
first day of the month. The first remittance to a registered holder of a Freddie
Mac certificate will be distributed so as to be received normally by the 15th
day of the second month following the month in which the purchaser became a
registered holder of the Freddie Mac certificate. Thereafter, the remittance
will be distributed monthly to the registered holder so as to be received
normally by the 15th day of each month. The Federal Reserve Bank of New York
maintains book-entry accounts for Freddie Mac certificates sold by Freddie Mac
on or after January 2, 1985, and makes payments of principal and interest each
month to their registered holders in accordance with the holders' instructions.

      Federal National Mortgage Association. Fannie Mae is a federally chartered
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act, as amended. Fannie Mae was originally
established in 1938 as a United States government agency to provide supplemental
liquidity to the mortgage market and was transformed into a stockholder owned
and privately-managed corporation by legislation enacted in 1968.

      Fannie Mae provides funds to the mortgage market primarily by purchasing
mortgage loans from lenders, thereby replenishing their funds for additional
lending. Fannie Mae acquires funds to purchase mortgage loans from many capital
market investors that may not ordinarily invest in mortgages, thereby expanding
the total amount of funds available for housing. Operating nationwide, Fannie
Mae helps to redistribute mortgage funds from capital-surplus to capital-short
areas.

      Fannie Mae Certificates. These are guaranteed mortgage pass-through
certificates issued and guaranteed as to timely payment of principal and
interest by Fannie Mae representing fractional undivided interests in a pool of
mortgage loans formed by Fannie Mae. Each mortgage loan must meet the applicable
standards of the Fannie Mae purchase program. Mortgage loans comprising a pool
are either provided by Fannie Mae from its own portfolio or purchased pursuant
to the criteria of the Fannie Mae purchase program.

      Mortgage loans underlying Fannie Mae certificates held by a trust fund
will consist of conventional mortgage loans, FHA loans or VA loans. Original
maturities of substantially all of the conventional, level payment mortgage
loans underlying a Fannie Mae certificate are expected to be between either 8 to
15 years or 20 to 40 years. The original maturities of substantially all of the
fixed rate, level payment FHA loans or VA loans are expected to be 30 years.
Mortgage loans underlying a Fannie Mae certificate may have annual interest
rates that vary by as much as two percentage points from each other. The rate of
interest payable on a Fannie Mae certificate is equal to the lowest interest
rate of any mortgage loan in the related pool, less a specified minimum annual
percentage representing servicing compensation and Fannie Mae's guaranty fee.
Under a regular servicing option, the annual interest rates on the mortgage
loans underlying a Fannie Mae certificate will be between 50 basis points and
250 basis points greater than is its annual pass through rate. Under this option
the mortgagee or each other


                                       22



servicer assumes the entire risk of foreclosure losses. Under a special
servicing option, the annual interest rates on the mortgage loans underlying a
Fannie Mae certificate will generally be between 55 basis points and 255 basis
points greater than the annual Fannie Mae certificate pass-through rate. Under
this option Fannie Mae assumes the entire risk for foreclosure losses. If
specified in the related prospectus supplement, Fannie Mae certificates may be
backed by adjustable rate mortgages.

      Fannie Mae guarantees to each registered holder of a Fannie Mae
certificate that it will distribute amounts representing the holder's
proportionate share of scheduled principal and interest payments at the
applicable pass through rate provided for by the Fannie Mae certificate on the
underlying mortgage loans, whether or not received, and the holder's
proportionate share of the full principal amount of any foreclosed or other
finally liquidated mortgage loan, whether or not the principal amount is
actually recovered. The obligations of Fannie Mae under its guaranties are
obligations solely of Fannie Mae and are not backed by, or entitled to, the full
faith and credit of the United States. Although the Secretary of the Treasury of
the United States has discretionary authority to lend Fannie Mae up to $2.25
billion outstanding at any time, neither the United States nor any of its
agencies is obligated to finance Fannie Mae's operations or to assist Fannie Mae
in any other manner. If Fannie Mae were unable to satisfy its obligations,
distributions to holders of Fannie Mae certificates would consist solely of
payments and other recoveries on the underlying mortgage loans and, accordingly,
monthly distributions to holders of Fannie Mae certificates would be affected by
delinquent payments and defaults on the mortgage loans.

      Except for Fannie Mae certificates backed by pools containing graduated
payment mortgage loans or mortgage loans secured by multifamily projects, Fannie
Mae certificates evidencing interests in pools of mortgage loans formed on or
after May 1, 1985 are available in book-entry form only. Distributions of
principal and interest on each Fannie Mae certificate will be made by Fannie Mae
on the 25th day of each month to the persons in whose name the Fannie Mae
certificate is entered in the books of the Federal Reserve Banks or registered
on the Fannie Mae certificate register as of the close of business on the last
day of the preceding month. Distributions on Fannie Mae certificates issued in
book-entry form will be made by wire. Distributions on fully registered Fannie
Mae certificates will be made by check.

      The Fannie Mae certificates included in a trust fund, and the related
underlying mortgage loans, may have characteristics and terms different from
those described above. Any different characteristics and terms will be described
in the related prospectus supplement.

      Stripped Mortgage-Backed Securities. Agency Securities may consist of one
or more stripped mortgage-backed securities, each as described in this
prospectus and in the related prospectus supplement. Each Agency Security will
represent an undivided interest in all or part of either the principal
distributions (but not the interest distributions) or the interest distributions
(but not the principal distributions), or in some specified portion of the
principal and interest distributions (but not all the distributions) on certain
Freddie Mac, Fannie Mae or Ginnie Mae certificates. The underlying securities
will be held under a trust agreement by Freddie Mac, Fannie Mae or Ginnie Mae,
each as trustee, or by another trustee named in the related prospectus
supplement. The applicable prospectus supplement may specify that Freddie Mac,
Fannie Mae or Ginnie Mae will not guarantee each stripped Agency Security to the
same extent it guarantees the underlying securities backing the stripped Agency
Security, but if it does not, then Freddie Mac, Fannie Mae or Ginnie Mae will
guarantee each stripped Agency Security to the same extent it guarantees the
underlying securities backing the stripped Agency Security.

      Other Agency Securities. If specified in the related prospectus
supplement, a trust fund may include other mortgage pass-through certificates
issued or guaranteed by Ginnie Mae, Fannie Mae or Freddie Mac. The
characteristics of those mortgage pass-through certificates will be described in
the prospectus supplement. If so specified, a combination of different types of
Agency Securities may be held in a trust fund.

NON-AGENCY MORTGAGE-BACKED SECURITIES

      Non-Agency Mortgage-Backed Securities may consist of mortgage pass-through
certificates or participation certificates evidencing an undivided interest in a
pool of mortgage loans or collateralized mortgage obligations secured by
mortgage loans. Non-Agency Mortgage-Backed Securities may include stripped
mortgage-backed securities representing an undivided interest in all or a part
of either the principal distributions (but not the interest distributions) or
the interest distributions (but not the principal distributions) or in some
specified portion of


                                       23



the principal and interest distributions (but not all the distributions) on
certain mortgage loans. Non-Agency Mortgage-Backed Securities will have been
issued pursuant to a pooling and servicing agreement, an indenture or similar
agreement. The applicable prospectus supplement may provide that the
seller/servicer of the underlying mortgage loans will not have entered into a
pooling and servicing agreement with a private trustee, but if it does not, the
seller/servicer of the underlying mortgage loans will have entered into the
pooling and servicing agreement with a private trustee. The private trustee or
its agent, or a custodian, will possess the mortgage loans underlying the
Non-Agency Mortgage-Backed Security. Mortgage loans underlying a Non-Agency
Mortgage-Backed Security will be serviced by a private servicer directly or by
one or more subservicers who may be subject to the supervision of the private
servicer.

      The issuer of the Non-Agency Mortgage-Backed Securities will be a
financial institution or other entity engaged generally in the business of
mortgage lending, a public agency or instrumentality of a state, local or
federal government, or a limited purpose corporation organized for the purpose
of, among other things, establishing trusts and acquiring and selling housing
loans to the trusts and selling beneficial interests in the trusts. If so
specified in the related prospectus supplement, the issuer of Non-Agency
Mortgage-Backed Securities may be an affiliate of the depositor. The obligations
of the issuer of Non-Agency Mortgage-Backed Securities will generally be limited
to certain representations and warranties with respect to the assets conveyed by
it to the related trust fund. The issuer of Non-Agency Mortgage-Backed
Securities will not have guaranteed any of the assets conveyed to the related
trust fund or any of the Non-Agency Mortgage-Backed Securities issued under the
pooling and servicing agreement. Additionally, although the mortgage loans
underlying the Non-Agency Mortgage-Backed Securities may be guaranteed by an
agency or instrumentality of the United States, the Non-Agency Mortgage-Backed
Securities themselves will not be so guaranteed.

      Distributions of principal and interest will be made on the Non-Agency
Mortgage-Backed Securities on the dates specified in the related prospectus
supplement. The Non-Agency Mortgage-Backed Securities may be entitled to receive
nominal or no principal distributions or nominal or no interest distributions.
Principal and interest distributions will be made on the Non-Agency
Mortgage-Backed Securities by the private trustee or the private servicer. The
issuer of Non-Agency Mortgage-Backed Securities or the private servicer may have
the right to repurchase assets underlying the Non-Agency Mortgage-Backed
Securities after a certain date or under other circumstances specified in the
related prospectus supplement.

      The mortgage loans underlying the Non-Agency Mortgage-Backed Securities
may consist of fixed rate, level payment, fully amortizing loans or graduated
payment mortgage loans, buydown loans, adjustable rate mortgage loans or loans
having balloon or other special payment features. The mortgage loans may be
secured by first and/or subordinate liens on single family residential
properties (or by an assignment of the proprietary lease or occupancy agreement
relating to a specific dwelling within a cooperative and the related shares
issued by the cooperative) or small multifamily residential properties, such as
rental apartment buildings or projects containing five to fifty residential
units, or by closed-end and/or revolving home equity loans, secured in whole or
in part by first and/or subordinate liens on one- to four-family residential
properties.

      The prospectus supplement for a series for which the trust fund includes
Non-Agency Mortgage-Backed Securities will specify

o     the aggregate approximate principal amount and type of the Non-Agency
      Mortgage-Backed Securities to be included in the trust fund;

o     certain characteristics of the mortgage loans that comprise the underlying
      assets for the Non-Agency Mortgage-Backed Securities including

      o   the payment features of the mortgage loans,

      o   the approximate aggregate principal balance, if known, of underlying
          mortgage loans insured or guaranteed by a governmental entity,

      o   the servicing fee or range of servicing fees with respect to the
          mortgage loans and


                                       24



      o   the minimum and maximum stated maturities of the underlying mortgage
          loans at origination;

o     the maximum original term-to-stated maturity of the Non-Agency
      Mortgage-Backed Securities;

o     the weighted average term-to stated maturity of the Non-Agency
      Mortgage-Backed Securities;

o     the pass-through or certificate rate of the Non-Agency Mortgage-Backed
      Securities;

o     the weighted average pass-through or certificate rate of the Non-Agency
      Mortgage-Backed Securities;

o     the issuer of Non-Agency Mortgage-Backed Securities, the private servicer
      (if other than the issuer of Non-Agency Mortgage-Backed Securities) and
      the private trustee for the Non-Agency Mortgage-Backed Securities;

o     certain characteristics of credit support, if any, such as reserve funds,
      insurance policies, surety bonds, letters of credit or guaranties relating
      to the mortgage loans underlying the Non-Agency Mortgage-Backed Securities
      or to the Non-Agency Mortgage-Backed Securities themselves;

o     the terms on which the underlying mortgage loans for the Non-Agency
      Mortgage-Backed Securities may, or are required to, be purchased before
      their stated maturity or the stated maturity of the Non-Agency
      Mortgage-Backed Securities;

o     the terms on which mortgage loans may be substituted for those originally
      underlying the Non-Agency Mortgage-Backed Securities; and

o     as appropriate, shall indicate whether the information required to be
      presented with respect to the Non-Agency Mortgage-Backed Securities as a
      "significant obligor" is either incorporated by reference, provided
      directly by the issuer or provided by reference to the Exchange Act
      filings of another entity.

      Non-Agency Mortgage-Backed Securities included in the trust fund for a
series of certificates that were issued by an issuer of Non-Agency
Mortgage-Backed Securities that is not affiliated with the depositor must be
acquired in bona fide secondary market transactions or either have been
previously registered under the Securities Act of 1933 or have been held for at
least the holding period required to be eligible for sale under Rule 144(k)
under the Securities Act of 1933.

SUBSTITUTION OF TRUST FUND ASSETS

      Substitution of Trust Fund Assets will be permitted in the event of
breaches of representations and warranties with respect to any original Trust
Fund Asset or in the event the documentation with respect to any Trust Fund
Asset is determined by the trustee to be incomplete. The period during which the
substitution will be permitted generally will be indicated in the related
prospectus supplement. The related prospectus supplement will describe any other
conditions upon which Trust Fund Assets may be substituted for Trust Fund Assets
initially included in the Trust Fund.

AVAILABLE INFORMATION

      The depositor has filed with the SEC a Registration Statement under the
Securities Act of 1933, as amended (the "Securities Act"), covering the
securities. This prospectus, which forms a part of the Registration Statement,
and the prospectus supplement relating to each series of securities contain
summaries of the material terms of the documents referred to in this prospectus
and in the prospectus supplement, but do not contain all of the information in
the Registration Statement pursuant to the rules and regulations of the SEC. For
further information, reference is made to the Registration Statement and its
exhibits. The Registration Statement and exhibits can be inspected and copied at
prescribed rates at the public reference facilities maintained by the SEC at its
Public


                                       25



Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC maintains an Internet Web site that contains reports,
information statements and other information regarding the registrants that file
electronically with the SEC, including the depositor. The address of that
Internet Web site is http://www.sec.gov. The depositor's SEC Securities Act file
number is 333-131591.

      This prospectus and any applicable prospectus supplement do not constitute
an offer to sell or a solicitation of an offer to buy any securities other than
the securities offered by this prospectus and the prospectus supplement nor an
offer of the securities to any person in any state or other jurisdiction in
which the offer would be unlawful.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE; REPORTS FILED WITH THE SEC

      All documents filed for the trust fund referred to in the accompanying
prospectus supplement after the date of this prospectus and before the end of
the related offering with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated by reference in this prospectus and are a part of this prospectus
from the date of their filing. Any statement contained in a document
incorporated by reference in this prospectus is modified or superseded for all
purposes of this prospectus to the extent that a statement contained in this
prospectus (or in the accompanying prospectus supplement) or in any other
subsequently filed document that also is incorporated by reference differs from
that statement. Any statement so modified or superseded shall not, except as so
modified or superseded, constitute a part of this prospectus.

      The depositor or master servicer on behalf of the trust fund of the
related series will file the reports required under the Securities Act and under
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act. These reports include
(but are not limited to):

o     Reports on Form 8-K (Current Report), following the issuance of the series
      of securities of the related trust fund, including as Exhibits to the Form
      8-K (1) the agreements or other documents specified in the related
      prospectus supplement, if applicable, (2) the Detailed Description, if
      applicable, regarding the related Trust Fund Assets and (3) the opinions
      related to the tax consequences and the legality of the series being
      issued required to be filed under applicable securities laws;

o     Reports on Form 8-K (Current Report), following the occurrence of events
      specified in Form 8-K requiring disclosure, which are required to be filed
      within the time-frame specified in Form 8-K related to the type of event;

o     Reports on Form 10-D (Asset-Backed Issuer Distribution Report), containing
      the distribution and pool performance information required on Form 10-D,
      which are required to be filed 15 days following the distribution date
      specified in the related prospectus supplement; and

o     Report on Form 10-K (Annual Report), containing the items specified in
      Form 10-K with respect to a fiscal year and filing or furnishing, as
      appropriate, the required exhibits.

      Neither the depositor nor the master servicer intends to file with the SEC
any reports required under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
with respect to a trust fund following completion of the reporting period
required by Rule 15d-1 or Regulation 15D under the Securities Exchange Act of
1934. Unless specifically stated in the report, the reports and any information
included in the report will neither be examined nor reported on by an
independent public accountant. Each trust fund formed by the depositor will have
a separate file number assigned by the SEC, which unless otherwise specified in
the related prospectus supplement is not available until filing of the final
prospectus supplement related to the series. Reports filed with respect to a
trust fund with the SEC after the final prospectus supplement is filed will be
available under trust fund's specific number, which will be a series number
assigned to the file number of the depositor shown above.

      The trustee on behalf of any trust fund will provide without charge to
each person to whom this prospectus is delivered, on the person's written
request, a copy of any or all of the documents referred to above that have been


                                       26



or may be incorporated by reference in this prospectus (not including exhibits
to the information that is incorporated by reference unless the exhibits are
specifically incorporated by reference into the information that this prospectus
incorporates) and any reports filed with the SEC. Requests should be directed to
the corporate trust office of the trustee specified in the accompanying
prospectus supplement.

REPORTS TO SECURITYHOLDERS

      The distribution and pool performance reports filed on Form 10-D will be
forwarded to each securityholder as specified in the related prospectus
supplement. See "Description of the Securities -- Reports to Securityholders."
All other reports filed with the SEC concerning the trust fund will be forwarded
to securityholders free of charge upon written request to the trustee on behalf
of any trust fund, but will not be made available through a Web site of the
depositor, the master servicer or any other party as these reports and exhibits
can be inspected and copied at prescribed rates at the public reference
facilities maintained by the SEC and can also be viewed electronically at the
Internet Web site of the SEC shown above under "-- Available Information."

                                 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 Trust Fund Assets or will be used by
the depositor for general corporate purposes. The depositor expects to sell
securities in series from time to time, but the timing and amount of offerings
of securities will depend on a number of factors, including the volume of Trust
Fund Assets acquired by the depositor, prevailing interest rates, availability
of funds and general market conditions.

                                  THE DEPOSITOR

      CWABS, Inc., a Delaware corporation (the "depositor"), was incorporated in
August 1996 for the limited purpose of acquiring, owning and transferring Trust
Fund Assets and selling interests in them or bonds secured by them. The
depositor is a limited purpose finance subsidiary of Countrywide Financial
Corporation, a Delaware corporation. The depositor maintains its principal
office at 4500 Park Granada, Calabasas, California 91302. Its telephone number
is (818) 225-3000.

      The depositor's obligations after issuance of the securities include
delivery of the Trust Fund Assets and certain related documents and instruments,
repurchasing Trust Fund Assets in the event of certain breaches of
representations or warranties made by the depositor, providing tax-related
information to the Trustee and maintaining the trustee's first priority
perfected security interest in the Trust Fund Assets.

      Neither the depositor nor any of the depositor's affiliates will insure or
guarantee distributions on the securities of any series.

                                  LOAN PROGRAM

      The loans will have been purchased by the depositor, either directly or
through affiliates, from sellers. The applicable prospectus supplement may
provide for the underwriting criteria used in originating the loans, but if it
does not, the loans so acquired by the depositor will have been originated in
accordance with the underwriting criteria specified below under "Underwriting
Standards."

UNDERWRITING STANDARDS

      The applicable prospectus supplement may provide for the seller's
representations and warranties relating to the loans, but if it does not, each
seller will represent and warrant that all loans originated and/or sold by it to
the depositor or one of its affiliates will have been underwritten in accordance
with standards consistent with those utilized by mortgage lenders generally
during the period of origination for similar types of loans. As to any loan
insured by the FHA or partially guaranteed by the VA, the seller will represent
that it has complied with underwriting policies of the FHA or the VA, as the
case may be.


                                       27



      Underwriting standards are applied by or on behalf of a lender to evaluate
the borrower's credit standing and repayment ability, and the value and adequacy
of the related Property as collateral. In general, a prospective borrower
applying for a loan is required to fill out a detailed application designed to
provide to the underwriting officer pertinent credit information, including the
principal balance and payment history with respect to any senior mortgage, if
any. The applicable prospectus supplement may specify whether that credit
information will be verified by the seller, but if it does not, the credit
information supplied by the borrower will be verified by the related seller. As
part of the description of the borrower's financial condition, the borrower
generally is required to provide a current list of assets and liabilities and a
statement of income and expenses, as well as an authorization to apply for a
credit report which summarizes the borrower's credit history with local
merchants and lenders and any record of bankruptcy. In most cases, an employment
verification is obtained from an independent source (typically the borrower's
employer) which verification reports, among other things, the length of
employment with that organization and the borrower's current salary. If a
prospective borrower is self-employed, the borrower may be required to submit
copies of signed tax returns. The borrower may also be required to authorize
verification of deposits at financial institutions where the borrower has demand
or savings accounts.

      In determining the adequacy of the property to be used as collateral, an
appraisal will generally be made of each property considered for financing.
Except as described in the prospectus supplement, an appraiser is generally
required to inspect the property, issue a report on its condition and, if
applicable, verify construction, if new, has been completed. The appraisal is
generally based on the market value of comparable homes, the estimated rental
income (if considered applicable by the appraiser) and the cost of replacing the
home. The value of the property being financed, as indicated by the appraisal,
must be such that it currently supports, and is anticipated to support in the
future, the outstanding loan balance.

      The maximum loan amount will vary depending upon a borrower's credit grade
and loan program but will not generally exceed $1,000,000. Variations in maximum
loan amount limits will be permitted based on compensating factors. Compensating
factors may generally include, to the extent specified in the related prospectus
supplement, low loan-to-value ratio, low debt-to-income ratio, stable
employment, favorable credit history and the nature of the underlying first
mortgage loan, if applicable.

      Each seller's underwriting standards will generally permit loans with
loan-to-value ratios at origination of up to 100% depending on the loan program,
type and use of the property, creditworthiness of the borrower and
debt-to-income ratio. If so specified in the related prospectus supplement, a
seller's underwriting criteria may permit loans with loan-to-value ratios at
origination in excess of 100%, such as for debt consolidation or home
improvement purposes. Loan-to-value ratios may not be evaluated in the case of
Title I loans.

      After obtaining all applicable employment, credit and property
information, the related seller will use a debt-to-income ratio to assist in
determining whether the prospective borrower has sufficient monthly income
available to support the payments of principal and interest on the mortgage loan
in addition to other monthly credit obligations. The "debt-to-income ratio" is
the ratio of the borrower's total monthly payments to the borrower's gross
monthly income. The maximum monthly debt-to-income ratio will vary depending
upon a borrower's credit grade and loan program but will not generally exceed
55%. Variations in the monthly debt-to-income ratio limit will be permitted
based on compensating factors to the extent specified in the related prospectus
supplement.

      In the case of a loan secured by a leasehold interest in real property,
the title to which is held by a third party lessor, the applicable prospectus
supplement may provide for the related representations and warranties of the
seller, but if it does not, the related seller will represent and warrant, among
other things, that the remaining term of the lease and any sublease is at least
five years longer than the remaining term on the loan.

      Certain of the types of loans that may be included in a trust fund are
recently developed and may involve additional uncertainties not present in
traditional types of loans. For example, certain of those loans may provide for
escalating or variable payments by the borrower. These types of loans are
underwritten on the basis of a judgment that the borrowers have the ability to
make the monthly payments required initially. In some instances, a borrower's
income may not be sufficient to permit continued loan payments as the payments
increase. These types of loans may also be underwritten primarily upon the basis
of Loan-to-Value Ratios or other favorable credit factors.


                                       28



QUALIFICATIONS OF SELLERS

      Each seller must be an institution experienced in originating and
servicing loans of the type contained in the related pool and must maintain
satisfactory facilities to originate and service (either directly or through
qualified subservicers) those loans. If a seller does not meet the foregoing
qualifications, the related originator must satisfy those qualifications.

REPRESENTATIONS BY SELLERS; REPURCHASES

      Each seller will have made representations and warranties in respect of
the loans sold by the seller and evidenced by all, or a part, of a series of
securities. The representations and warranties may include, among other things:

o     that a lender's policy of title insurance (or in the case of Properties
      located in areas where those policies are generally not available, an
      attorney's certificate of title) or a commitment to issue the policy was
      effective on the date of origination of each loan, other than cooperative
      loans and certain home equity loans, and that each policy (or certificate
      of title as applicable) remained in effect on the applicable cut-off date;

o     that the seller had good title to each loan and each loan was subject to
      no valid offsets, defenses or counterclaims except to the extent that any
      buydown agreement may forgive certain indebtedness of a borrower;

o     that each loan is secured by a valid lien on, or a perfected security
      interest with respect to, the Property (subject only to permissible liens
      disclosed, if applicable, title insurance exceptions, if applicable, and
      certain other exceptions described in the Agreement) and that, to the
      seller's knowledge, the Property was free of material damage;

o     that there were no delinquent tax or assessment liens against the
      Property;

o     that no payment of a principal and interest on a loan was delinquent more
      than the number of days specified in the related prospectus supplement;
      and

o     that each loan at the time it was originated and on the date of transfer
      by the seller to the depositor complied in all material respects with all
      applicable local, state and federal laws.

If so specified in the related prospectus supplement, the representations and
warranties of a seller in respect of a loan will be made not as of the cut-off
date but as of the date on which the seller sold the loan to the depositor or
one of its affiliates. Under those circumstances, a substantial period of time
may have elapsed between the sale date and the date of initial issuance of the
series of securities evidencing an interest in the loan. Since the
representations and warranties of a seller do not address events that may occur
following the sale of a loan by the seller, its repurchase obligation described
below will not arise if the relevant event that would otherwise have given rise
to the repurchase obligation with respect to a loan occurs after the date of
sale of the loan by the seller to the depositor or its affiliates. However, the
depositor will not include any loan in the trust fund for any series of
securities if anything has come to the depositor's attention that would cause it
to believe that the representations and warranties of a seller will not be
accurate and complete in all material respects in respect of the loan as of the
date of initial issuance of the related series of securities. If the master
servicer is also a seller of loans with respect to a particular series of
securities, those representations will be in addition to the representations and
warranties made by the master servicer in its capacity as a master servicer.

      The master servicer or the trustee, if the master servicer is the seller,
will promptly notify the relevant seller of any breach of any representation or
warranty made by it in respect of a loan which materially and adversely affects
the interests of the securityholders in the loan. If the seller cannot cure the
breach within 90 days following notice from the master servicer or the trustee,
as the case may be, the applicable prospectus supplement may provide for the
seller's obligations under those circumstances, but if it does not, then the
seller will be obligated either


                                       29



o     to repurchase the loan from the trust fund at a price (the "Purchase
      Price") equal to 100% of the unpaid principal balance thereof as of the
      date of the repurchase plus accrued interest thereon to the first day of
      the month following the month of repurchase at the Loan Rate (less any
      Advances or amount payable as related servicing compensation if the seller
      is the master servicer) or

o     substitute for the loan a replacement loan that satisfies the criteria
      specified in the related prospectus supplement.

If a REMIC election is to be made with respect to a trust fund, the applicable
prospectus supplement may provide for the obligations of the master servicer or
residual certificateholder, but if it does not, the master servicer or a holder
of the related residual certificate generally will be obligated to pay any
prohibited transaction tax which may arise in connection with any repurchase or
substitution and the trustee must have received a satisfactory opinion of
counsel that the repurchase or substitution will not cause the trust fund to
lose its status as a REMIC or otherwise subject the trust fund to a prohibited
transaction tax. The master servicer may be entitled to reimbursement for that
payment from the assets of the related trust fund or from any holder of the
related residual certificate. See "Description of the Securities -- General."
Except in those cases in which the master servicer is the seller, the master
servicer will be required under the applicable Agreement to enforce this
obligation for the benefit of the trustee and the holders of the securities,
following the practices it would employ in its good faith business judgment were
it the owner of the loan. This repurchase or substitution obligation will
constitute the sole remedy available to holders of securities or the trustee for
a breach of representation by a seller.

      Neither the depositor nor the master servicer (unless the master servicer
is the seller) will be obligated to purchase or substitute a loan if a seller
defaults on its obligation to do so, and we can give no assurance that sellers
will carry out their respective repurchase or substitution obligations with
respect to loans. However, to the extent that a breach of a representation and
warranty of a seller may also constitute a breach of a representation made by
the master servicer, the master servicer may have a repurchase or substitution
obligation as described below under "The Agreements -- Assignment of Trust Fund
Assets."

                                STATIC POOL DATA

      If specified in the related prospectus supplement, static pool data with
respect to the delinquency, cumulative loss and prepayment data for Countrywide
Home Loans, Inc. ("Countrywide Home Loans") or any other person specified in the
related prospectus supplement will be made available through a Web site. The
prospectus supplement related to each series for which the static pool data is
provided through a Web site will contain the Web site address to obtain this
information. Except as stated below, the static pool data provided through any
Web site will be deemed part of this prospectus and the registration statement
of which this prospectus is a part from the date of the related prospectus
supplement.

      Notwithstanding the foregoing, the following information shall not be
deemed part of the prospectus or the registration statement of which this
prospectus is a part:

o     with respect to information regarding prior securitized pools of
      Countrywide Home Loans (or the applicable person specified in the related
      prospectus supplement) that do not include the currently offered pool,
      information regarding prior securitized pools that were established before
      January 1, 2006; and

o     with respect to information regarding the pool described in the related
      prospectus supplement, information about the pool for periods before
      January 1, 2006.

      Static pool data may also be provided in the related prospectus supplement
or may be provided in the form of a CD-ROM accompanying the related prospectus
supplement. The related prospectus supplement will specify how the static pool
data will be presented.


                                       30



                          DESCRIPTION OF THE SECURITIES

      Each series of certificates will be issued pursuant to separate
Agreements. A form of Pooling and Servicing Agreement has been filed as an
exhibit to the Registration Statement of which this prospectus forms a part.
Each Pooling and Servicing Agreement will be dated as of the related cut-off
date, will be among the depositor, the master servicer and the trustee for the
benefit of the holders of the securities of the related series. Each series of
notes will be issued pursuant to an indenture (the "Indenture") between the
related trust fund and the entity named in the related prospectus supplement as
trustee with respect to the related series, and the related loans will be
serviced by the master servicer pursuant to a Sale and Servicing Agreement. Each
Indenture will be dated as of the cut-off date and the Trust Fund Assets will be
pledged to the related trustee for the benefit of the holders of the securities
of the related series.

      A form of Indenture and Sale and Servicing Agreement has been filed as an
exhibit to the Registration Statement of which this prospectus forms a part. A
series of securities may consist of both notes and certificates. 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. The following are
descriptions of the material provisions which may appear in each Agreement. The
descriptions are subject to, and are qualified in their entirety by reference
to, all of the provisions of the Agreement for each series of securities and the
applicable prospectus supplement. The depositor will provide a copy of the
Agreement (without exhibits) relating to any series without charge upon written
request of a holder of record of a security of that series addressed to CWABS,
Inc., 4500 Park Granada, Calabasas, California 91302, Attention: Secretary.

GENERAL

      The securities of each series will be issued in book-entry or fully
registered form, in the authorized denominations specified in the related
prospectus supplement, will, in the case of certificates, evidence specified
beneficial ownership interests in, and in the case of notes, be secured by, the
assets of the related trust fund created pursuant to the related Agreement and
will not be entitled to payments in respect of the assets included in any other
trust fund established by the depositor. The applicable prospectus supplement
may provide for guarantees or insurance obtained from a governmental entity or
other person, but if it does not, the Trust Fund Assets will not be guaranteed
or insured by any governmental entity or other person. Each trust fund will
consist of, to the extent provided in the related Agreement,

o     the Trust Fund Assets, as from time to time are subject to the related
      Agreement (exclusive of any amounts specified in the related prospectus
      supplement ("Retained Interest")), including all payments of interest and
      principal received with respect to the loans after the cut-off date (to
      the extent not applied in computing the principal balance of the loans as
      of the cut-off date (the "Cut-off Date Principal Balance"));

o     the assets required to be deposited in the related Security Account from
      time to time;

o     property which secured a loan and which is acquired on behalf of the
      securityholders by foreclosure or deed in lieu of foreclosure and

o     any insurance policies or other forms of credit enhancement required to be
      maintained pursuant to the related Agreement.

If so specified in the related prospectus supplement, a trust fund may also
include one or more of the following: reinvestment income on payments received
on the Trust Fund Assets, a reserve fund, a mortgage pool insurance policy, a
special hazard insurance policy, a bankruptcy bond, one or more letters of
credit, a surety bond, guaranties or similar instruments.

      Each series of securities will be issued in one or more classes. Each
class of certificates of a series will evidence beneficial ownership of a
specified percentage (which may be 0%) or portion of future interest payments
and a specified percentage (which may be 0%) or portion of future principal
payments on, and each class of notes of


                                       31



a series will be secured by, the related Trust Fund Assets. A series of
securities may include one or more classes that are senior in right to payment
to one or more other classes of securities of that series. Certain series or
classes of securities may be covered by insurance policies, surety bonds or
other forms of credit enhancement, in each case as described under "Credit
Enhancement" herein and in the related prospectus supplement. One or more
classes of securities of a series may be entitled to receive distributions of
principal, interest or any combination thereof. Distributions on one or more
classes of a series of securities may be made prior to one or more other
classes, after the occurrence of specified events, in accordance with a schedule
or formula or on the basis of collections from designated portions of the
related Trust Fund Assets, in each case as specified in the related prospectus
supplement. The timing and amounts of the distributions may vary among classes
or over time as specified in the related prospectus supplement.

      Distributions of principal and interest (or, where applicable, of
principal only or interest only) on the related securities will be made by the
trustee on each distribution date (i.e., monthly, quarterly, semi-annually or at
the other intervals and on the dates as are specified in the related prospectus
supplement) in proportion to the percentages specified in the related prospectus
supplement. Distributions will be made to the persons in whose names the
securities are registered at the close of business on the dates specified in the
related prospectus supplement (each, a "Record Date"). Distributions will be
made in the manner specified in the related prospectus supplement to the persons
entitled thereto at the address appearing in the register maintained for holders
of securities (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 office or agency of the trustee or other
person specified in the notice to securityholders of the final distribution.

      The securities will be freely transferable and exchangeable at the
Corporate Trust Office of the trustee as set forth in the related prospectus
supplement. No service charge will be made for any registration of exchange or
transfer of securities of any series, but the trustee may require payment of a
sum sufficient to cover any related tax or other governmental charge.

      Certain Issues Related to the Suitability of Investments in the Securities
for Holders. Under current law the purchase and holding by or on behalf of any
employee benefit plan or other retirement arrangement subject to provisions of
the Employee Retirement Income Security Act of 1974, as amended, or the Code of
certain classes of certificates may result in "prohibited transactions" within
the meaning of ERISA and the Code. See "ERISA Considerations." Retirement
arrangements subject to these provisions include individual retirement accounts
and annuities, Keogh plans and collective investment funds in which the plans,
accounts or arrangements are invested. The applicable prospectus supplement may
specify other conditions under which transfers of this type would be permitted,
but if it does not, transfer of the certificates will not be registered unless
the transferee represents that it is not, and is not purchasing on behalf of, a
plan, account or other retirement arrangement or provides an opinion of counsel
satisfactory to the trustee and the depositor that the purchase of the
certificates by or on behalf of a plan, account or other retirement arrangement
is permissible under applicable law and will not subject the trustee, the master
servicer or the depositor to any obligation or liability in addition to those
undertaken in the pooling and servicing agreement.

      As to each series, an election may be made to treat the related trust fund
or designated portions thereof as one or more "real estate mortgage investment
conduits" ("REMICs") as defined in the Code. The related prospectus supplement
will specify whether one or more REMIC elections are to be made. Alternatively,
the Agreement for a series may provide that one or more REMIC elections may be
made at the discretion of the depositor or the master servicer and may only be
made if certain conditions are satisfied. The terms and provisions applicable to
the making of a REMIC election for each related series, if applicable, will be
set forth in the related prospectus supplement. If one or more REMIC elections
are made with respect to a series, one of the classes will be designated as
evidencing the sole class of "residual interests" in the related REMIC, as
defined in the Code. All other classes of securities in the series will
constitute "regular interests" in the related REMIC or REMICs, as applicable, as
defined in the Code. As to each series with respect to which one or more REMIC
elections are to be made, the master servicer or a holder of the related
residual certificate will be obligated to take all actions required in order to
comply with applicable laws and regulations and will be obligated to pay any
prohibited transaction taxes. Unless otherwise provided in the related
prospectus supplement, the master servicer will be entitled to reimbursement if
it makes any prohibited transaction tax payment from the assets of the trust
fund or from any holder of the related residual certificate. Unless otherwise
specified in the related prospectus supplement, if the amounts distributable to
related residual


                                       32



certificates are insufficient to cover the amount of any prohibited transaction
taxes, the amount necessary to reimburse the master servicer may be deducted
from the amounts otherwise payable to the other classes of certificates of the
series.

DISTRIBUTIONS ON SECURITIES

      General. In general, the method of determining the amount of distributions
on a particular series of securities will depend on the type of credit support,
if any, that is used with respect to the related series. See "Credit
Enhancement." Set forth below are descriptions of various methods that may be
used to determine the amount of distributions on the securities of a particular
series. The prospectus supplement for each series of securities will describe
the method to be used in determining the amount of distributions on the
securities of the related series.

      Distributions allocable to principal and interest on the securities will
be made by the trustee out of, and only to the extent of, funds in the related
Security Account, including any funds transferred from any reserve fund or the
pre-funding account. As between securities of different classes and as between
distributions of principal (and, if applicable, between distributions of
Principal Prepayments, as defined below, and scheduled payments of principal)
and interest, distributions made on any distribution date will be applied as
specified in the related prospectus supplement. The prospectus supplement will
also describe the method for allocating distributions among securities of a
particular class, but if the prospectus supplement does not, distributions to
any class of securities will be made pro rata to all securityholders of that
class.

      Available Funds. All distributions on the securities of each series on
each distribution date will be made from the Available Funds described below, in
accordance with the terms described in the related prospectus supplement and
specified in the Agreement. The applicable prospectus supplement may define
Available Funds with references to different accounts or different amounts, but
if it does not, "Available Funds" for each distribution date will generally
equal the amount on deposit in the related Security Account on that distribution
date (net of related fees and expenses payable by the related trust fund) other
than amounts to be held therein for distribution on future distribution dates.

      Distributions of Interest. Interest will accrue on the aggregate principal
balance of the securities (or, in the case of securities entitled only to
distributions allocable to interest, the aggregate notional amount) of each
class of securities (the "Class Security Balance") entitled to interest from the
date, at the Pass-Through Rate or interest rate, as applicable (which in either
case may be a fixed rate or rate adjustable as specified in the related
prospectus supplement), and for the periods specified in the related prospectus
supplement. To the extent funds are available therefor, interest accrued during
each specified period on each class of securities entitled to interest (other
than a class of securities that provides for interest that accrues, but is not
currently payable) will be distributable on the distribution dates specified in
the related prospectus supplement until the aggregate Class Security Balance of
the securities of that class has been distributed in full or, in the case of
securities entitled only to distributions allocable to interest, until the
aggregate notional amount of those securities is reduced to zero or for the
period of time designated in the related prospectus supplement. The original
Class Security Balance of each security will equal the aggregate distributions
allocable to principal to which the security is entitled. The applicable
prospectus supplement may specify some other basis for these distributions, but
if it does not, distributions allocable to interest on each security that is not
entitled to distributions allocable to principal will be calculated based on the
notional amount of the security. The notional amount of a security will not
evidence an interest in or entitlement to distributions allocable to principal
but will be used solely for convenience in expressing the calculation of
interest and for certain other purposes.

      Interest payable on the securities of a series on a distribution date will
include all interest accrued during the period specified in the related
prospectus supplement. In the event interest accrues over a period ending two or
more days prior to a distribution date, the effective yield to securityholders
will be reduced from the yield that would otherwise be obtainable if interest
payable on the security were to accrue through the day immediately preceding
that distribution date, and the effective yield (at par) to securityholders will
be less than the indicated coupon rate.

      With respect to any class of accrual securities, if specified in the
related prospectus supplement, any interest that has accrued but is not paid on
a given distribution date will be added to the aggregate Class Security Balance
of that class of securities on that distribution date. The applicable prospectus
supplement may specify some


                                       33



other basis for these distributions, but if it does not, distributions of
interest on any class of accrual securities will commence only after the
occurrence of the events specified in the related prospectus supplement. Prior
to that time, in the aggregate Class Security Balance of the class of accrual
securities will increase on each distribution date by the amount of interest
that accrued during the preceding interest accrual period but that was not
required to be distributed to the class on that distribution date. Thereafter
the class of accrual securities accrue interest on its outstanding Class
Security Balance as so adjusted.

      Distributions of Principal. The related prospectus supplement will specify
the method by which the amount of principal to be distributed on the securities
on each distribution date will be calculated and the manner in which the amount
will be allocated among the classes of securities entitled to distributions of
principal. The aggregate Class Security Balance of any class of securities
entitled to distributions of principal generally will be the aggregate original
Class Security Balance of the class of securities specified in the prospectus
supplement,

o     reduced by all distributions reported to the holders of the class of
      securities as allocable to principal,

o     in the case of accrual securities, in general, increased by all interest
      accrued but not then distributable on the accrual securities;

o     in the case of adjustable rate securities, subject to the effect of
      negative amortization, if applicable; and

o     if specified in the related prospectus supplement, reduced by the amount
      of any losses allocated to the Class Security Balance of the class of
      securities.

      If so provided in the related prospectus supplement, one or more classes
of securities will be entitled to receive all or a disproportionate percentage
of the payments of principal which are received from borrowers in advance of
their scheduled due dates and are not accompanied by amounts representing
scheduled interest due after the month in which the payment is made ("Principal
Prepayments") in the percentages and under the circumstances or for the periods
specified in the prospectus supplement. The effect of this allocation of
Principal Prepayments to the class or classes of securities will be to
accelerate the amortization of those securities while increasing the interests
evidenced by one or more other classes of securities in the trust fund.
Increasing the interests of the other classes of securities relative to that of
certain securities is intended to preserve the availability of the subordination
provided by the securities for which the interests have been increased. See
"Credit Enhancement -- Subordination."

      Unscheduled Distributions. If specified in the related prospectus
supplement, the securities will be subject to receipt of distributions before
the next scheduled distribution date under the circumstances and in the manner
described below and in the prospectus supplement. If applicable, the trustee
will be required to make unscheduled distributions on the day and in the amount
specified in the related prospectus supplement if, due to substantial payments
of principal (including Principal Prepayments) on the Trust Fund Assets, the
trustee or the master servicer determines that the funds available or
anticipated to be available from the Security Account and, if applicable, any
reserve fund, may be insufficient to make required distributions on the
securities on that distribution date. The applicable prospectus supplement may
provide for limits on the amount of an unscheduled distribution, but if it does
not, the amount of any unscheduled distribution that is allocable to principal
will not exceed the amount that would otherwise have been required to be
distributed as principal on the securities on the next distribution date. The
applicable prospectus supplement may specify whether the unscheduled
distribution will include interest, but if it does not, the unscheduled
distributions will include interest at the applicable Pass-Through Rate (if any)
or interest rate (if any) on the amount of the unscheduled distribution
allocable to principal for the period and to the date specified in the
prospectus supplement.

ADVANCES

      To the extent provided in the related prospectus supplement, the master
servicer will be required to advance on or before each distribution date (from
its own funds, funds advanced by sub-servicers or funds held in the Security
Account for future distributions to the holders of securities of the related
series), an amount equal to the aggregate of payments of interest and/or
principal that were delinquent on the related Determination Date (as the term is
defined in the related prospectus supplement) and were not advanced by any
sub-servicer, subject to the


                                       34



master servicer's determination that the advances may be recoverable out of late
payments by borrowers, Liquidation Proceeds, Insurance Proceeds or otherwise. In
the case of cooperative loans, the master servicer also may be required to
advance any unpaid maintenance fees and other charges under the related
proprietary leases as specified in the related prospectus supplement.

      In making advances, the master servicer will endeavor to maintain a
regular flow of scheduled interest and principal payments to holders of the
securities, rather than to guarantee or insure against losses. If advances are
made by the master servicer from cash being held for future distribution to
securityholders, the master servicer will replace those funds on or before any
future distribution date to the extent that funds in the applicable Security
Account on the future distribution date would be less than the amount required
to be available for distributions to securityholders on that distribution date.
Any master servicer funds advanced will be reimbursable to the master servicer
out of recoveries on the specific loans with respect to which the advances were
made (e.g., late payments made by the related borrower, any related Insurance
Proceeds, Liquidation Proceeds or proceeds of any loan purchased by the
depositor, a sub-servicer or a seller pursuant to the related Agreement).
Advances by the master servicer (and any advances by a sub-servicer) also will
be reimbursable to the master servicer (or sub-servicer) from cash otherwise
distributable to securityholders (including the holders of Senior securities) to
the extent that the master servicer determines that the advance or advances
previously made are not ultimately recoverable as described above. To the extent
provided in the related prospectus supplement, the master servicer also will be
obligated to make advances, to the extent recoverable out of Insurance Proceeds,
Liquidation Proceeds or otherwise, in respect of certain taxes and insurance
premiums not paid by borrowers on a timely basis. Funds so advanced are
reimbursable to the master servicer to the extent permitted by the related
Agreement. The obligations of the master servicer to make advances may be
supported by a cash advance reserve fund, a surety bond or other arrangement of
the type described herein under "Credit Enhancement," in each case as described
in the related prospectus supplement.

      In the event the master servicer or a sub-servicer fails to make a
required advance, the applicable prospectus supplement may specify whether
another party will have advancing obligations, but if it does not, the trustee
will be obligated to make the advance in its capacity as successor servicer. If
the trustee makes an advance, it will be entitled to be reimbursed for the
advance to the same extent and degree as the master servicer or a sub-servicer
is entitled to be reimbursed for advances. See "Description of the Securities --
Distributions on Securities."

REPORTS TO SECURITYHOLDERS

      Prior to or concurrently with each distribution on a distribution date the
master servicer or the trustee will furnish to each securityholder of record of
the related series a statement setting forth, to the extent applicable to the
related series of securities, among other things:

o     the amount of the distribution allocable to principal, separately
      identifying the aggregate amount of any Principal Prepayments and if so
      specified in the related prospectus supplement, any applicable prepayment
      charges included therein;

o     the amount of the distribution allocable to interest;

o     the amount of any advance;

o     the aggregate amount (a) otherwise allocable to the holders of Subordinate
      Securities on the distribution date, and (b) withdrawn from the reserve
      fund or the pre-funding account, if any, that is included in the amounts
      distributed to the Senior Securityholders;

o     the outstanding principal balance or notional amount of each class of the
      related series after giving effect to the distribution of principal on the
      distribution date;

o     the percentage of principal payments on the loans (excluding prepayments),
      if any, which each class of the related securities will be entitled to
      receive on the following distribution date;


                                       35



o     the percentage of Principal Prepayments on the loans, if any, which each
      class of the related securities will be entitled to receive on the
      following distribution date;

o     the related amount of the servicing compensation retained or withdrawn
      from the Security Account by the master servicer, and the amount of
      additional servicing compensation received by the master servicer
      attributable to penalties, fees, excess Liquidation Proceeds and other
      similar charges and items;

o     the number and aggregate principal balances of loans (A) delinquent
      (exclusive of loans in foreclosure) 1 to 30 days, 31 to 60 days, 61 to 90
      days and 91 or more days and (B) in foreclosure and delinquent 1 to 30
      days, 31 to 60 days, 61 to 90 days and 91 or more days, as of the close of
      business on the last day of the calendar month preceding the distribution
      date;

o     the book value of any real estate acquired through foreclosure or grant of
      a deed in lieu of foreclosure;

o     the Pass-Through Rate or interest rate, as applicable, if adjusted from
      the date of the last statement, of each class of the related series
      expected to be applicable to the next distribution to the class;

o     if applicable, the amount remaining in any reserve fund or the pre-funding
      account at the close of business on the distribution date;

o     the Pass-Through Rate or interest rate, as applicable, as of the day prior
      to the immediately preceding distribution date; and

o     any amounts remaining under letters of credit, pool policies or other
      forms of credit enhancement.

      Where applicable, any amount set forth above may be expressed as a dollar
amount per single security of the relevant class having the percentage interest
specified in the related prospectus supplement. The report to securityholders
for any series of securities may include additional or other information of a
similar nature to that specified above.

      In addition, within a reasonable period of time after the end of each
calendar year, the master servicer or the trustee will mail to each
securityholder of record at any time during the related calendar year a report
(a) as to the aggregate of amounts reported pursuant to the first two items
above for the related calendar year or, in the event the person was a
securityholder of record during a portion of that calendar year, for the
applicable portion of the year and (b) other customary information as may be
deemed necessary or desirable for securityholders to prepare their tax returns.

CATEGORIES OF CLASSES OF SECURITIES

      The securities of any series may be comprised of one or more classes.
These 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 the related series by reference to the following categories.


                                       36





          CATEGORIES OF CLASSES                                            DEFINITIONS
-----------------------------------------   ---------------------------------------------------------------------------
                                                                         PRINCIPAL TYPES

Accretion Directed......................    A class that receives principal payments from the accreted interest from
                                            specified Accrual classes.  An accretion directed class also may receive
                                            principal payments from principal paid on the underlying Trust Fund
                                            Assets for the related series.

Companion Class.........................    A class that receives principal payments on any distribution date only
                                            if scheduled payments have been made on specified planned principal
                                            classes, targeted principal classes or scheduled principal classes.

Component Securities....................    A class consisting of "components." The components of a class of
                                            component securities may have different principal and/or interest
                                            payment characteristics but together constitute a single class.  Each
                                            component of a class of component securities may be identified as
                                            falling into one or more of the categories in this chart.

Non-Accelerated Senior or NAS...........    A class that, for the period of time specified in the related prospectus
                                            supplement, generally will not receive (in other words, is locked out
                                            of) (1) principal prepayments on the underlying Trust Fund Assets that
                                            are allocated disproportionately to the senior securities because of the
                                            shifting interest structure of the securities in the trust and/or (2)
                                            scheduled principal payments on the underlying Trust Fund Assets, as
                                            specified in the related prospectus supplement.  During the lock-out
                                            period, the portion of the principal distributions on the underlying
                                            Trust Fund Assets that the NAS class is locked out of will be
                                            distributed to the other classes of senior securities.

Notional Amount Securities..............    A class having no principal balance and bearing interest on the related
                                            notional amount.  The notional amount is used for purposes of the
                                            determination of interest distributions.

Planned Principal Class or PACs.........    A class that is designed to receive principal payments using a
                                            predetermined principal balance schedule derived by assuming two
                                            constant prepayment rates for the underlying Trust Fund Assets.  These
                                            two rates are the endpoints for the "structuring range" for the planned
                                            principal class.  The planned principal classes in any series of
                                            certificates may be subdivided into different categories (e.g., primary
                                            planned principal classes, secondary planned principal classes and so
                                            forth) having different effective structuring ranges and different
                                            principal payment priorities.  The structuring range for the secondary
                                            planned principal class of a series of certificates will be narrower
                                            than that for the primary planned principal class of the series.

Scheduled Principal Class...............    A class that is designed to receive principal payments using a
                                            predetermined principal balance schedule but is not designated as a
                                            Planned Principal Class or Targeted Principal Class.  In many cases, the
                                            schedule is derived by assuming two constant prepayment rates for the
                                            underlying Trust Fund Assets.  These two rates are the endpoints for the
                                            "structuring range" for the scheduled principal class.



                                       37





          CATEGORIES OF CLASSES                                            DEFINITIONS
-----------------------------------------   ---------------------------------------------------------------------------

Sequential Pay..........................    Classes that receive principal payments in a prescribed sequence, that
                                            do not have predetermined principal balance schedules and that under all
                                            circumstances receive payments of principal continuously from the first
                                            distribution date on which they receive principal until they are
                                            retired.  A single class that receives principal payments before or
                                            after all other classes in the same series of securities may be
                                            identified as a sequential pay class.

Strip...................................    A class that receives a constant proportion, or "strip," of the
                                            principal payments on the underlying Trust Fund Assets.

Super Senior............................    A class that will not bear its proportionate share of realized losses
                                            (other than excess losses) as its share is directed to another class,
                                            referred to as the "support class" until the class principal balance of
                                            the support class is reduced to zero.

Support Class...........................    A class that absorbs the realized losses other than excess losses that
                                            would otherwise be allocated to a Super Senior Class (or would not
                                            otherwise be allocated to the Senior Class) after the related Classes of
                                            subordinate securities are no longer outstanding.

Targeted Principal Class or TACs........    A class that is designed to receive principal payments using a
                                            predetermined principal balance schedule derived by assuming a single
                                            constant prepayment rate for the underlying Trust Fund Assets.

                                                                         INTEREST TYPES

Fixed Rate..............................    A class with an interest rate that is fixed throughout the life of the
                                            class.

Floating Rate or Adjustable Rate .......    A class with an interest rate that resets periodically based upon a
                                            designated index and that varies directly with changes in the index.

Inverse Floating Rate...................    A class with an interest rate that resets periodically based upon a
                                            designated index and that varies inversely with changes in the index.

Variable Rate...........................    A class with an interest rate that resets periodically and is calculated
                                            by reference to the rate or rates of interest applicable to specified
                                            assets or instruments (e.g., the Loan Rates borne by the underlying
                                            loans).

Interest Only...........................    A class that receives some or all of the interest payments made on the
                                            underlying Trust Fund Assets and little or no principal.  Interest Only
                                            classes have either a nominal principal balance or a notional amount.  A
                                            nominal principal balance represents actual principal that will be paid
                                            on the class.  It is referred to as nominal since it is extremely small
                                            compared to other classes.  A notional amount is the amount used as a
                                            reference to calculate the amount of interest due on an Interest Only
                                            class that is not entitled to any distributions in respect of principal.

Principal Only..........................    A class that does not bear interest and is entitled to receive only
                                            distributions in respect of principal.



                                       38





          CATEGORIES OF CLASSES                                            DEFINITIONS
-----------------------------------------   ---------------------------------------------------------------------------

Partial Accrual.........................    A class that accretes a portion of the amount of accrued interest
                                            thereon, which amount will be added to the principal balance of the
                                            class on each applicable distribution date, with the remainder of the
                                            accrued interest to be distributed currently as interest on the Partial
                                            Accrual class.  This accretion may continue until a specified event has
                                            occurred or until the Partial Accrual class is retired.

Accrual.................................    A class that accretes the amount of accrued interest otherwise
                                            distributable on the Accrual class, which amount will be added as
                                            principal to the principal balance of the Accrual class on each
                                            applicable distribution date.  This accretion may continue until some
                                            specified event has occurred or until the Accrual class is retired.

Callable................................    A class that is redeemable or terminable when 25% or more of the
                                            original principal balance of the mortgage loans held in the trust fund
                                            is outstanding.


      Other types of securities that may be issued include classes that are
entitled to receive only designated portions of the collections on the Trust
Fund Assets (i.e. prepayment charges) or excess cashflow from all or designated
portions of the Trust Fund Assets (sometimes referred to as "residual classes").

INDICES APPLICABLE TO FLOATING RATE AND INVERSE FLOATING RATE CLASSES

LIBOR

      The applicable prospectus supplement may specify some other basis for
determining LIBOR, but if it does not, on the LIBOR determination date (as
defined in the related prospectus supplement) for each class of certificates of
a series for which the applicable interest rate is determined by reference to an
index denominated as LIBOR, the person designated in the related pooling and
servicing agreement as the calculation agent will determine LIBOR in accordance
with one of the two methods described below (which method will be specified in
the related prospectus supplement):

LIBO Method

      Unless otherwise specified in the related prospectus supplement, if using
this method to calculate LIBOR, the calculation agent will determine LIBOR on
the basis of the rate for U.S. dollar deposits for the period specified in the
prospectus supplement that appears on Telerate Screen Page 3750 as of 11:00 a.m.
(London time) on the interest determination date (as defined in the related
prospectus supplement). If the rate does not appear on the Telerate Screen Page
3750 (or any page that may replace the page on that service, or if this service
is no longer offered, another service for displaying LIBOR or comparable rates
as may be reasonably selected by the calculation agent), LIBOR for the
applicable accrual period will be the Reference Bank Rate.

      "Reference Bank Rate" with respect to any accrual period, means

      (a)      the arithmetic mean (rounded upwards, if necessary, to the
nearest whole multiple of 0.03125%) of the offered rates for United States
dollar deposits for one month that are quoted by the reference banks as of 11:00
a.m., New York City time, on the related interest determination date to prime
banks in the London interbank market, provided that at least two reference banks
provide the rate; and

      (b)      If fewer than two offered rates appear, the Reference Bank Rate
will be the arithmetic mean (rounded upwards, if necessary, to the nearest whole
multiple of 0.03125%) of the rates quoted by one or more major banks in New York
City, selected by the calculation agent, as of 11:00 a.m., New York City time,
on the related interest determination date for loans in U.S. dollars to leading
European banks.


                                       39



      Each reference bank will be a leading bank engaged in transactions in
Eurodollar deposits in the international Eurocurrency market; will not control,
be controlled by, or be under common control with the depositor, Countrywide
Home Loans or the master servicer; and will have an established place of
business in London. If a reference bank should be unwilling or unable to act as
a reference bank or if appointment of a reference bank is terminated, another
leading bank meeting the criteria specified above will be appointed.

      If these quotations cannot be obtained by the calculation agent and no
Reference Bank Rate is available, LIBOR will be LIBOR applicable to the
preceding interest accrual period.

BBA Method

      If using this method of determining LIBOR, the calculation agent will
determine LIBOR on the basis of the British Bankers' Association "Interest
Settlement Rate" for one-month deposits in United States dollars as found on
Telerate page 3750 as of 11:00 a.m. London time on each LIBOR determination
date. Interest Settlement Rates currently are based on rates quoted by eight
British Bankers' Association designated banks as being, in the view of the
banks, the offered rate at which deposits are being quoted to prime banks in the
London interbank market. The Interest Settlement Rates are calculated by
eliminating the two highest rates and the two lowest rates, averaging the four
remaining rates, carrying the result (expressed as a percentage) out to six
decimal places, and rounding to five decimal places.

      If on any LIBOR determination date, the calculation agent is unable to
calculate LIBOR in accordance with the method set forth in the immediately
preceding paragraph, LIBOR for the next interest accrual period shall be
calculated in accordance with the LIBOR method described under "LIBO Method."

      The establishment of LIBOR on each LIBOR determination date by the
calculation agent and its calculation of the rate of interest for the applicable
classes for the related interest accrual period shall (in the absence of
manifest error) be final and binding.

COFI

      The Eleventh District Cost of Funds Index is designed to represent the
monthly weighted average cost of funds for savings institutions in Arizona,
California and Nevada that are member institutions of the Eleventh Federal Home
Loan Bank District (the "Eleventh District"). The Eleventh District Cost of
Funds Index for a particular month reflects the interest costs paid on all types
of funds held by Eleventh District member institutions and is calculated by
dividing the cost of funds by the average of the total amount of those funds
outstanding at the end of that month and of the prior month and annualizing and
adjusting the result to reflect the actual number of days in the particular
month. If necessary, before these calculations are made, the component figures
are adjusted by the Federal Home Loan Bank of San Francisco ("FHLBSF") to
neutralize the effect of events such as member institutions leaving the Eleventh
District or acquiring institutions outside the Eleventh District. The Eleventh
District Cost of Funds Index is weighted to reflect the relative amount of each
type of funds held at the end of the relevant month. The major components of
funds of Eleventh District member institutions are: savings deposits, time
deposits, FHLBSF advances, repurchase agreements and all other borrowings.
Because the component funds represent a variety of maturities whose costs may
react in different ways to changing conditions, the Eleventh District Cost of
Funds Index does not necessarily reflect current market rates.

      A number of factors affect the performance of the Eleventh District Cost
of Funds Index, which may cause it to move in a manner different from indices
tied to specific interest rates, such as United States Treasury bills or LIBOR.
Because the liabilities upon which the Eleventh District Cost of Funds Index is
based were issued at various times under various market conditions and with
various maturities, the Eleventh District Cost of Funds Index may not
necessarily reflect the prevailing market interest rates on new liabilities of
similar maturities. Moreover, as stated above, the Eleventh District Cost of
Funds Index is designed to represent the average cost of funds for Eleventh
District savings institutions for the month prior to the month in which it is
due to be published. Additionally, the Eleventh District Cost of Funds Index may
not necessarily move in the same direction as market interest rates at all
times, since as longer term deposits or borrowings mature and are renewed at
prevailing market interest rates, the Eleventh District Cost of Funds Index is
influenced by the differential between the prior and the new rates on those
deposits or borrowings. In addition, movements of the Eleventh District Cost of
Funds Index, as


                                       40



compared to other indices tied to specific interest rates, may be affected by
changes instituted by the FHLBSF in the method used to calculate the Eleventh
District Cost of Funds Index.

      The FHLBSF publishes the Eleventh District Cost of Funds Index in its
monthly Information Bulletin. Any individual may request regular receipt by mail
of Information Bulletins by writing the Federal Home Loan Bank of San Francisco,
P.O. Box 7948, 600 California Street, San Francisco, California 94120, or by
calling (415) 616-1000. The Eleventh District Cost of Funds Index may also be
obtained by calling the FHLBSF at (415) 616-2600.

      The FHLBSF has stated in its Information Bulletin that the Eleventh
District Cost of Funds Index for a month "will be announced on or near the last
working day" of the following month and also has stated that it "cannot
guarantee the announcement" of the index on an exact date. So long as the
Eleventh District Cost of Funds Index for a month is announced on or before the
tenth day of the second following month, the interest rate for each class of
securities of a series as to which the applicable interest rate is determined by
reference to an index denominated as COFI (each, a class of "COFI securities")
for the Interest Accrual Period commencing in the second following month will be
based on the Eleventh District Cost of Funds Index for the second preceding
month. If publication is delayed beyond the tenth day, the interest rate will be
based on the Eleventh District Cost of Funds Index for the third preceding
month.

      The applicable prospectus supplement may specify some other basis for
determining COFI, but if it does not, then if on the tenth day of the month in
which any interest accrual period commences for a class of COFI securities the
most recently published Eleventh District Cost of Funds Index relates to a month
before the third preceding month, the index for the current interest accrual
period and for each succeeding interest accrual period will, except as described
in the next to last sentence of this paragraph, be based on the National Monthly
Median Cost of Funds Ratio to SAIF-Insured Institutions (the "National Cost of
Funds Index") published by the Office of Thrift Supervision (the "OTS") for the
third preceding month (or the fourth preceding month if the National Cost of
Funds Index for the third preceding month has not been published on the tenth
day of an interest accrual period). Information on the National Cost of Funds
Index may be obtained by writing the OTS at 1700 G Street, N.W., Washington,
D.C. 20552 or calling (202) 906-6677, and the current National Cost of Funds
Index may be obtained by calling (202) 906-6988. If on the tenth day of the
month in which an interest accrual period commences the most recently published
National Cost of Funds Index relates to a month before the fourth preceding
month, the applicable index for the interest accrual period and each succeeding
interest accrual period will be based on LIBOR, as determined by the calculation
agent in accordance with the Agreement relating to the series of certificates. A
change of index from the Eleventh District Cost of Funds Index to an alternative
index will result in a change in the index level and could increase its
volatility, particularly if LIBOR is the alternative index.

      The establishment of COFI by the calculation agent and its calculation of
the rates of interest for the applicable classes for the related interest
accrual period shall (in the absence of manifest error) be final and binding.

Treasury Index

      The applicable prospectus supplement may specify some other basis for
determining and defining the Treasury index, but if it does not, on the Treasury
index determination date for each class of securities of a series for which the
applicable interest rate is determined by reference to an index denominated as a
Treasury index, the calculation agent will ascertain the Treasury index for
Treasury securities of the maturity and for the period (or, if applicable, date)
specified in the related prospectus supplement. The Treasury index for any
period means the average of the yield for each business day during the specified
period (and for any date means the yield for the date), expressed as a per annum
percentage rate, on U.S. Treasury securities adjusted to the "constant maturity"
specified in the prospectus supplement or if no "constant maturity" is so
specified, U.S. Treasury securities trading on the secondary market having the
maturity specified in the prospectus supplement, in each case as published by
the Federal Reserve Board in its Statistical Release No. H.15 (519). Statistical
Release No. H.15 (519) is published on Monday or Tuesday of each week and may be
obtained by writing or calling the Publications Department at the Board of
Governors of the Federal Reserve System, 21st and C Streets, Washington, D.C.
20551 (202) 452-3244. If the calculation agent has not yet received Statistical
Release No. H.15 (519) for a week, then it will use the Statistical Release from
the preceding week.


                                       41



      Yields on U.S. Treasury securities at "constant maturity" are derived from
the U.S. Treasury's daily yield curve. This curve, which relates the yield on a
security to its time to maturity, is based on the closing market bid yields on
actively traded Treasury securities in the over-the-counter market. These market
yields are calculated from composites of quotations reported by five leading
U.S. Government securities dealers to the Federal Reserve Bank of New York. This
method provides a yield for a given maturity even if no security with that exact
maturity is outstanding. In the event that the Treasury Index is no longer
published, a new index based upon comparable data and methodology will be
designated in accordance with the Agreement relating to the particular series of
securities. The Calculation Agent's determination of the Treasury Index, and its
calculation of the rates of interest for the applicable classes for the related
Interest Accrual Period shall (in the absence of manifest error) be final and
binding.

Prime Rate

      The applicable prospectus supplement may specify the party responsible for
determining the Prime Rate, but if it does not, on the Prime Rate Determination
Date (as the term is defined in the related prospectus supplement) for each
class of securities of a series as to which the applicable interest rate is
determined by reference to an index denominated as the Prime Rate, the
calculation agent will ascertain the Prime Rate for the related interest accrual
period. The applicable prospectus supplement may provide for the means of
determining the Prime Rate, but if it does not, the Prime Rate for an interest
accrual period will be the "Prime Rate" as published in the "Money Rates"
section of The Wall Street Journal (or if not so published, the "Prime Rate" as
published in a newspaper of general circulation selected by the calculation
agent in its sole discretion) on the related Prime Rate Determination Date. If a
prime rate range is given, then the average of that range will be used. In the
event that the Prime Rate is no longer published, a new index based upon
comparable data and methodology will be designated in accordance with the
Agreement relating to the particular series of securities. The calculation
agent's determination of the Prime Rate and its calculation of the rates of
interest for the related interest accrual period shall (in the absence of
manifest error) be final and binding.

BOOK-ENTRY REGISTRATION OF SECURITIES

      As described in the related prospectus supplement, if not issued in fully
registered certificated form, each class of securities will be registered as
book-entry certificates (the "Book-Entry Securities"). Persons acquiring
beneficial ownership interests in the Book-Entry Securities ("Security Owners")
may elect to hold their Book-Entry Securities through the Depository Trust
Company ("DTC") in the United States, or Clearstream, Luxembourg or the
Euroclear System ("Euroclear"), in Europe, if they are participants of those
systems, or indirectly through organizations which are participants in those
systems. Each class of the Book-Entry Securities will be issued in one or more
certificates which equal the aggregate principal balance of the applicable class
of the Book-Entry Securities and will initially be registered in the name of
Cede & Co., the nominee of DTC. Clearstream, Luxembourg and Euroclear will hold
omnibus positions on behalf of their participants through customers' securities
accounts in Clearstream, Luxembourg and Euroclear's names on the books of their
respective depositaries which in turn will hold the positions in customers'
securities accounts in the depositaries' names on the books of DTC. Citibank, NA
will act as depositary for Clearstream, Luxembourg and JPMorgan Chase will act
as depositary for Euroclear (in those capacities, individually the "Relevant
Depositary" and collectively the "European Depositaries"). Unless otherwise
described in the related prospectus supplement, beneficial interests in the
Book-Entry Securities may be held in minimum denominations representing
Certificate Principal Balances of $20,000 and integral multiples of $1,000 in
excess thereof, except that one investor of each class of Book-Entry Securities
may hold a beneficial interest therein that is not an integral multiple of
$1,000. Except as described below, no person acquiring a beneficial ownership
interest in a Book-Entry Security (each, a "beneficial owner") will be entitled
to receive a physical certificate representing the person's beneficial ownership
interest in the Book-Entry Security (a "Definitive Security"). Unless and until
Definitive Securities are issued, it is anticipated that the only
securityholders of the Book-Entry Securities will be Cede & Co., as nominee of
DTC. Security Owners will not be Certificateholders as that term is used in the
applicable Agreement. Security Owners are only permitted to exercise their
rights indirectly through the participating organizations that utilize the
services of DTC, including securities brokers and dealers, banks and trust
companies and clearing corporations and certain other organizations
("Participants") and DTC.

      The beneficial owner's ownership of a Book-Entry Security 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 that purpose. In turn, the Financial
Intermediary's ownership of the


                                       42



Book-Entry Security will be recorded on the records of DTC (or of a
participating firm that acts as agent for the Financial Intermediary, whose
interest will in turn be recorded on the records of DTC, if the beneficial
owner's Financial Intermediary is not a DTC Participant and on the records of
Clearstream, Luxembourg or Euroclear, as appropriate).

      Security Owners will receive all distributions of principal of, and
interest on, the Book-Entry Securities from the trustee through DTC and DTC
Participants. While the Book-Entry Securities 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 Securities and is required to receive and transmit
distributions of principal of, and interest on, the Book-Entry Securities.
Participants and organizations which have indirect access to the DTC system,
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants"), with whom Security Owners have accounts
with respect to the Book-Entry Securities are similarly required to make
book-entry transfers and receive and transmit the distributions on behalf of
their respective Security Owners. Accordingly, although Security Owners will not
possess certificates, the Rules provide a mechanism by which Security Owners
will receive distributions and will be able to transfer their interest.

      Security Owners will not receive or be entitled to receive certificates
representing their respective interests in the Book-Entry Securities, except
under the limited circumstances described below. Unless and until Definitive
Securities are issued, Security Owners who are not Participants may transfer
ownership of the Book-Entry Securities only through Participants and Indirect
Participants by instructing the Participants and Indirect Participants to
transfer Book-Entry Securities, by book-entry transfer, through DTC for the
account of the purchasers of the Book-Entry Securities, 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 Securities
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 Security Owners.

      Because of time zone differences, credits of securities received in
Clearstream, Luxembourg or Euroclear as a result of a transaction with a
Participant will be made during, subsequent securities settlement processing and
dated the business day following, the DTC settlement date. These credits or any
transactions in the securities received in Clearstream, Luxembourg or Euroclear
as a result of a transaction with a Participant, settled during the processing
will be reported to the relevant Euroclear or Clearstream, Luxembourg
Participants on that following business day. Cash received in Clearstream,
Luxembourg or Euroclear, as a result of sales of securities by or through a
Clearstream, Luxembourg Participant or Euroclear Participant to a DTC
Participant, will be received with value on the DTC settlement date but will be
available in the relevant Clearstream, Luxembourg or Euroclear cash account only
as of the business day following settlement in DTC.

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

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


                                       43



      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 Securities, whether
held for its own account or as a nominee for another person. In general,
beneficial ownership of Book-Entry Securities will be subject to the rules,
regulations and procedures governing DTC and DTC participants as in effect from
time to time.

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

      Further to the merger, the Board of Directors of New CI decided to re-name
the companies in the group in order to give them a cohesive brand name. The new
brand name that was chosen is "Clearstream" effective as of January 14, 2000.
New CI has been renamed "Clearstream International, societe anonyme." On January
18, 2000, Cedelbank was renamed "Clearstream Banking, societe anonyme" and
Clearstream, Luxembourg Global Services was renamed "Clearstream Services,
societe anonyme."

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

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

      Euroclear was created in 1968 to hold securities for participants of
Euroclear ("Euroclear Participants") and to clear and settle transactions
between Euroclear Participants through simultaneous electronic book-entry
delivery against payment, thereby eliminating the need for physical movement of
certificates and any risk from lack of simultaneous transfers of securities and
cash. Transactions may now be settled in any of 32 currencies, including United
States dollars. Euroclear includes various other services, including securities
lending and borrowing and interfaces with domestic markets in several countries
generally similar to the arrangements for cross-market transfers with DTC
described above. Euroclear is operated by the Brussels, Belgium office of the
Euroclear Operator, under contract with Euroclear Clearance Systems S.C., a
Belgian cooperative corporation (the "Cooperative"). All operations are
conducted by the Euroclear Operator, and all Euroclear securities clearance


                                       44



accounts and Euroclear cash accounts are accounts with the Euroclear Operator,
not the Cooperative. The Cooperative establishes policy for Euroclear on behalf
of Euroclear Participants. Euroclear Participants include banks (including
central banks), securities brokers and dealers and other professional financial
intermediaries. Indirect access to Euroclear is also available to other firms
that clear through or maintain a custodial relationship with a Euroclear
Participant, either directly or indirectly.

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

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

      Distributions on the Book-Entry Securities will be made on each
Distribution Date by the trustee to DTC. DTC will be responsible for crediting
the amount of payments on Book-Entry Securities to the accounts of the
applicable DTC participants in accordance with DTC's normal procedures. Each DTC
participant will be responsible for disbursing the payments to the beneficial
owners of the Book-Entry Securities that it represents and to each Financial
Intermediary for which it acts as agent. Each Financial Intermediary will be
responsible for disbursing funds to the beneficial owners of the Book-Entry
Securities that it represents.

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

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

      DTC has advised the trustee that, unless and until Definitive Securities
are issued, DTC will take any action permitted to be taken by the holders of the
Book-Entry Securities under the applicable Agreement only at the direction of
one or more Financial Intermediaries to whose DTC accounts the Book-Entry
Securities are credited, to the extent that those actions are taken on behalf of
Financial Intermediaries whose holdings include those Book-Entry Securities.
Clearstream, Luxembourg or the Euroclear Operator, as the case may be, will take
any other action permitted to be taken by a holder of a Book-Entry Security
under the applicable Agreement on behalf of a Clearstream, Luxembourg
Participant or Euroclear Participant only in accordance with its relevant rules
and procedures and subject to the ability of the Relevant Depositary to effect
the actions on its behalf through DTC. 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.


                                       45



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

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

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

      None of the master servicer, the depositor 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 Securities held by
Cede & Co., as nominee of DTC, or for maintaining, supervising or reviewing any
records relating to the beneficial ownership interests.

                               CREDIT ENHANCEMENT

GENERAL

      Credit enhancement may be provided with respect to one or more classes of
a series of securities or with respect to the related Trust Fund Assets. Credit
enhancement may be in the form of:

      o   the subordination of one or more classes of the securities of the
          series,

      o   letter of credit,

      o   a limited financial guaranty policy issued by an entity named in the
          related prospectus supplement,

      o   surety bond,

      o   bankruptcy bond,

      o   special hazard insurance policy,

      o   guaranteed investment contract,

      o   overcollateralization,

      o   one or more reserve funds,

      o   a mortgage pool insurance policy,

      o   FHA Insurance,


                                       46



      o   a VA Guarantee,

      o   cross-collateralization feature, or

      o   any combination of the foregoing.

      The applicable prospectus supplement may provide for credit enhancement
which covers all the classes of securities, but if it does not, credit
enhancement will not provide protection against all risks of loss and will not
guarantee repayment of the entire principal balance of the securities and
interest thereon. If losses occur which exceed the amount covered by credit
enhancement or which are not covered by the credit enhancement, securityholders
will bear their allocable share of any deficiencies.

SUBORDINATION

      If so specified in the related prospectus supplement, protection afforded
to holders of one or more classes of securities of a series by means of the
subordination feature may be accomplished by the preferential right of holders
of one or more other classes of the series (the "Senior Securities") to
distributions in respect of scheduled principal, Principal Prepayments, interest
or any combination thereof that otherwise would have been payable to holders of
subordinate securities (the "Subordinate Securities") under the circumstances
and to the extent specified in the related prospectus supplement. Protection may
also be afforded to the holders of Senior Securities of a series by: (i)
reducing the principal or notional balance (if applicable) of the related
subordinate securities; (ii) a combination of the immediately preceding sentence
and clause (i) above; or (iii) as otherwise described in the related prospectus
supplement. If so specified in the related prospectus supplement, delays in
receipt of scheduled payments on the loans and losses on defaulted loans may be
borne first by the various classes of subordinate securities and thereafter by
the various classes of Senior Securities, in each case under the circumstances
and subject to the limitations specified in the related prospectus supplement.
The aggregate distributions in respect of delinquent payments on the loans over
the lives of the securities or at any time, the aggregate losses in respect of
defaulted loans which must be borne by the Subordinate Securities by virtue of
subordination and the amount of the distributions otherwise distributable to the
holders of Subordinate Securities that will be distributable to Senior
Securityholders on any distribution date may be limited as specified in the
related prospectus supplement. If aggregate distributions in respect of
delinquent payments on the loans or aggregate losses in respect of the loans
were to exceed an amount specified in the related prospectus supplement, holders
of Senior Securities would experience losses on the securities.

      In addition to or in lieu of the foregoing, if so specified in the related
prospectus supplement, all or any portion of distributions otherwise payable to
holders of Subordinate Securities on any distribution date may instead be
deposited into one or more reserve funds established with the trustee or
distributed to holders of Senior Securities. The deposits to a reserve fund may
be made on each distribution date, for specified periods or until the balance in
the reserve fund has reached a specified amount and, following payments from the
reserve fund to holders of Senior Securities or otherwise, thereafter to the
extent necessary to restore the balance in the reserve fund to required levels,
in each case as specified in the related prospectus supplement. Amounts on
deposit in the reserve fund may be released to the holders of certain classes of
securities at the times and under the circumstances specified in the related
prospectus supplement.

      If specified in the related prospectus supplement, various classes of
Senior Securities and Subordinate Securities may themselves be subordinate in
their right to receive certain distributions to other classes of Senior and
Subordinate Securities, respectively, through preferential rights of those
classes of securities to distributions in respect to the other classes of Senior
Securities and Subordinate Securities, a cross-collateralization mechanism or
otherwise.

      As between classes of Senior Securities and as between classes of
Subordinate Securities, distributions may be allocated among those classes (i)
in the order of their scheduled final distribution dates, (ii) in accordance
with a schedule or formula, (iii) in relation to the occurrence of events, or
(iv) otherwise, in each case as specified in the related prospectus supplement.
As between classes of Subordinate Securities, payments to holders of Senior


                                       47



Securities on account of delinquencies or losses and payments to any reserve
fund will be allocated as specified in the related prospectus supplement.

LETTER OF CREDIT

      The letter of credit, if any, with respect to a series of securities will
be issued by the bank or financial institution specified in the related
prospectus supplement (the "L/C Bank"). Under the letter of credit, the L/C Bank
will be obligated to honor drawings thereunder in an aggregate fixed dollar
amount, net of unreimbursed payments thereunder, equal to the percentage
specified in the related prospectus supplement of the aggregate principal
balance of the loans on the related cut-off date or of one or more classes of
securities (the "L/C Percentage"). If so specified in the related prospectus
supplement, the letter of credit may permit drawings in the event of losses not
covered by insurance policies or other credit support, such as losses arising
from damage not covered by standard hazard insurance policies, losses resulting
from the bankruptcy of a borrower and the application of certain provisions of
the federal Bankruptcy Code, or losses resulting from denial of insurance
coverage due to misrepresentations in connection with the origination of a loan.
The amount available under the letter of credit will, in all cases, be reduced
to the extent of the unreimbursed payments thereunder. The obligations of the
L/C Bank under the letter of credit for each series of securities will expire at
the earlier of the date specified in the related prospectus supplement or the
termination of the trust fund. See "The Agreements -- Termination: Optional
Termination." A copy of the letter of credit for a series, if any, will be filed
with the SEC as an exhibit to a Current Report on Form 8-K after the issuance of
the securities of the related series.

INSURANCE POLICIES, SURETY BONDS AND GUARANTIES

      If so provided in the prospectus supplement for a series of securities,
deficiencies in amounts otherwise payable on the securities or certain classes
thereof will be covered by insurance policies and/or surety bonds provided by
one or more insurance companies or sureties. These instruments may cover, with
respect to one or more classes of securities of the related series, timely
distributions of interest and/or full distributions of principal on the basis of
a schedule of principal distributions set forth in or determined in the manner
specified in the related prospectus supplement. In addition, if specified in the
related prospectus supplement, a trust fund may also include bankruptcy bonds,
special hazard insurance policies, other insurance or guaranties for the purpose
of (i) maintaining timely payments or providing additional protection against
losses on the assets included in the trust fund, (ii) paying administrative
expenses or (iii) establishing a minimum reinvestment rate on the payments made
in respect of the assets or principal payment rate on the assets. If specified
in the related prospectus supplement, the trust fund may include a guaranteed
investment contact pursuant to which the trust fund is entitled to receive
specified payments for a period of time. These arrangements may include
agreements under which securityholders are entitled to receive amounts deposited
in various accounts held by the trustee upon the terms specified in the related
prospectus supplement. If applicable, a copy of any instrument for a series will
be filed with the SEC as an exhibit to a Current Report on Form 8-K after the
issuance of the securities of the related series.

OVERCOLLATERALIZATION AND EXCESS CASH FLOW

      If so provided in the prospectus supplement for a series of securities,
the aggregate principal balance of the underlying Trust Fund Assets as of the
cut-off date may exceed the principal balance of the securities being issued,
thereby resulting in overcollateralization. In addition, if so provided in the
prospectus supplement, a portion of the interest payment on each loan may be
applied as an additional distribution in respect of principal to reduce the
principal balance of a certain class or classes of securities and, thus,
accelerate the rate of payment of principal on that class or classes of
securities. Reducing the principal balance of the securities without a
corresponding reduction in the principal balance of the underlying Trust Fund
Assets will result in overcollateralization or increase the level of
overcollateralization. Additionally, some of the excess cash flow may be applied
to make distributions to holders of securities to which losses have been
allocated up to the amount of the losses that were allocated.

RESERVE ACCOUNTS

      If specified in the related prospectus supplement, credit support with
respect to a series of securities will be provided by the establishment and
maintenance with the trustee for the series of securities, in trust, of one or
more


                                       48



reserve funds for the series. The related prospectus supplement will specify
whether or not any reserve fund will be included in the trust fund for the
related series.

      The reserve fund for a series will be funded (i) by the deposit therein of
cash, United States Treasury securities, instruments evidencing ownership of
principal or interest payments thereon, letters of credit, demand notes,
certificates of deposit or a combination thereof in the aggregate amount
specified in the related prospectus supplement, (ii) by the deposit therein from
time to time of certain amounts, as specified in the related prospectus
supplement to which the holders of Subordinate Securities, if any, would
otherwise be entitled or (iii) or as otherwise may be specified in the related
prospectus supplement.

      Any amounts on deposit in the reserve fund and the proceeds of any other
instrument upon maturity will be held in cash or will be invested in Permitted
Investments. Any amounts so deposited and payments on instruments so deposited
will be available for withdrawal from the reserve fund for distribution to the
holders of securities of the related series for the purposes, in the manner and
at the times specified in the related prospectus supplement.

POOL INSURANCE POLICIES

      If specified in the related prospectus supplement, a separate pool
insurance policy ("Pool Insurance Policy") will be obtained for the pool and
issued by the insurer (the "Pool Insurer") named in the related prospectus
supplement. Each Pool Insurance Policy will, subject to the limitations
described below, cover loss by reason of default in payment on loans in the pool
in an amount equal to a percentage specified in the related prospectus
supplement of the aggregate principal balance of the loans on the cut-off date
which are not covered as to their entire outstanding principal balances by
Primary Mortgage Insurance Policies. As more fully described below, the master
servicer will present claims thereunder to the Pool Insurer on behalf of itself,
the trustee and the holders of the securities of the related series. The Pool
Insurance Policies, however, are not blanket policies against loss, since claims
thereunder may only be made respecting particular defaulted loans and only upon
satisfaction of certain conditions precedent described below. The applicable
prospectus supplement may provide for the extent of coverage provided by the
related Pool Insurance Policy, but if it does not, the Pool Insurance Policies
will not cover losses due to a failure to pay or denial of a claim under a
Primary Mortgage Insurance Policy.

      The applicable prospectus supplement may provide for the conditions for
the presentation of claims under a Pool Insurance Policy, but if it does not,
the Pool Insurance Policy will provide that no claims may be validly presented
unless (i) any required Primary Mortgage Insurance Policy is in effect for the
defaulted loan and a claim thereunder has been submitted and settled; (ii)
hazard insurance on the related Property has been kept in force and real estate
taxes and other protection and preservation expenses have been paid; (iii) if
there has been physical loss or damage to the Property, it has been restored to
its physical condition (reasonable wear and tear excepted) at the time of
issuance of the policy; and (iv) the insured has acquired good and merchantable
title to the Property free and clear of liens except certain permitted
encumbrances. Upon satisfaction of these conditions, the Pool Insurer will have
the option either (a) to purchase the property securing the defaulted loan at a
price equal to the principal balance thereof plus accrued and unpaid interest at
the Loan Rate to the date of the purchase and certain expenses incurred by the
master servicer on behalf of the trustee and securityholders, or (b) to pay the
amount by which the sum of the principal balance of the defaulted loan plus
accrued and unpaid interest at the Loan Rate to the date of payment of the claim
and the aforementioned expenses exceeds the proceeds received from an approved
sale of the Property, in either case net of certain amounts paid or assumed to
have been paid under the related Primary Mortgage Insurance Policy. If any
Property securing a defaulted loan is damaged and proceeds, if any, from the
related hazard insurance policy or the applicable special hazard insurance
policy are insufficient to restore the damaged Property to a condition
sufficient to permit recovery under the Pool Insurance Policy, the master
servicer will not be required to expend its own funds to restore the damaged
Property unless it determines that (i) the restoration will increase the
proceeds to securityholders on liquidation of the loan after reimbursement of
the master servicer for its expenses and (ii) the expenses will be recoverable
by it through proceeds of the sale of the Property or proceeds of the related
Pool Insurance Policy or any related Primary Mortgage Insurance Policy.

      The applicable prospectus supplement may provide for a Pool Insurance
Policy covering losses resulting from defaults, but if it does not, the Pool
Insurance Policy will not insure (and many Primary Mortgage Insurance Policies
do not insure) against loss sustained by reason of a default arising from, among
other things,


                                       49



o     fraud or negligence in the origination or servicing of a loan, including
      misrepresentation by the borrower, the originator or persons involved in
      the origination thereof, or

o     failure to construct a Property in accordance with plans and
      specifications.

A failure of coverage attributable to one of the foregoing events might result
in a breach of the related seller's representations described above, and, might
give rise to an obligation on the part of the related seller to repurchase the
defaulted loan if the breach cannot be cured by the related seller. No Pool
Insurance Policy will cover (and many Primary Mortgage Insurance Policies do not
cover) a claim in respect of a defaulted loan occurring when the servicer of the
loan, at the time of default or thereafter, was not approved by the applicable
insurer.

      The applicable prospectus supplement may provide for a Pool Insurance
Policy featuring a fixed amount of coverage over the life of the policy, but if
it does not, the original amount of coverage under each Pool Insurance Policy
will be reduced over the life of the related securities by the aggregate dollar
amount of claims paid less the aggregate of the net amounts realized by the Pool
Insurer upon disposition of all foreclosed properties. The applicable prospectus
supplement may provide for the exclusion of specified expenses from the coverage
of the Pool Insurance Policy, but if it does not, the amount of claims paid will
include certain expenses incurred by the master servicer as well as accrued
interest on delinquent loans to the date of payment of the claim. Accordingly,
if aggregate net claims paid under any Pool Insurance Policy reach the original
policy limit, coverage under that Pool Insurance Policy will be exhausted and
any further losses will be borne by the related securityholders.

      Additionally, if specified in the related prospectus supplement, the
master servicer will maintain or cause to be maintained, as the case may be, in
full force and effect, a Primary Mortgage Insurance Policy with regard to each
loan for which coverage is required and loans designated in the related
prospectus supplement as insured by the FHA will be insured by the FHA as
authorized under the United States Housing Act of 1937, as amended. See "The
Agreements - Realization Upon Defaulted Loans" for a discussion of these types
of insurance.

      In general, the master servicer will require the mortgagor or obligor on
each loan to maintain a hazard insurance policy providing for no less than the
coverage of the standard form of fire insurance policy with extended coverage
customary for the type of Property in the state in which the Property is
located. See "The Agreements - Hazard Insurance" for a description of the
coverage with respect to these policies.

FINANCIAL INSTRUMENTS

      If specified in the related prospectus supplement, the trust fund may
include one or more interest rate or currency swap arrangements or similar
financial instruments that are used to alter the payment characteristics of the
mortgage loans or the securities issued by the trust fund and whose primary
purpose is not to provide credit enhancement related to the assets in the trust
fund or the securities issued by the trust fund. The primary purpose of a
currency swap arrangement will be to convert payments to be made on the mortgage
loans or the securities issued by the trust fund from one currency into another
currency, and the primary purpose of an interest rate swap arrangement or other
financial instrument will be one or more of the following:

o     convert the payments on some or all of the mortgage loans from fixed to
      floating payments, or from floating to fixed, or from floating based on a
      particular interest rate index to floating based on another interest rate
      index;

o     provide payments in the event that any interest rate index related to the
      mortgage loans or the securities issued by the trust rises above or falls
      below specified levels; or

o     provide protection against interest rate changes.

      If a trust fund includes financial instruments of this type, the
instruments may be structured to be exempt from the registration requirements of
the Securities Act. If applicable, a copy of any instrument for a series will be


                                       50



filed with the SEC as an exhibit to a Current Report on Form 8-K to be filed
with the SEC after the issuance of the securities of the related series.

CROSS SUPPORT

      If specified in the related prospectus supplement, the beneficial
ownership of separate groups of assets included in a trust fund may be evidenced
by separate classes of the related series of securities. Similarly, if specified
in the related prospectus supplement, certain classes of notes may be supported
by cash flow and related assets of separate group of assets from other classes
of notes. In that case, credit support may be provided by a cross support
feature that requires that distributions be made on securities evidencing a
beneficial ownership interest in, or notes supported by, other asset groups
within the same trust fund. The related prospectus supplement for a series that
includes a cross support feature will describe the manner and conditions for
applying the cross support feature.

      If specified in the related prospectus supplement, the coverage provided
by one or more forms of credit support may apply concurrently to two or more
related groups of assets included in a trust fund. If applicable, the related
prospectus supplement will identify the groups of assets in the trust fund to
which the credit support relates and the manner of determining the amount of the
coverage provided by it and of the application of the coverage to the identified
groups of assets included in the trust fund.

                  YIELD, MATURITY AND PREPAYMENT CONSIDERATIONS

      The yields to maturity and weighted average lives of the securities will
be affected primarily by the amount and timing of principal payments received on
or in respect of the Trust Fund Assets included in the related trust fund. The
original terms to maturity of the loans in a given pool will vary depending upon
the type of loans included therein. Each prospectus supplement will contain
information with respect to the type and maturities of the loans in the related
pool. The related prospectus supplement will specify the circumstances, if any,
under which the related loans will be subject to prepayment charges. The
prepayment experience on the loans in a pool will affect the weighted average
life of the related series of securities.

PREPAYMENTS ON LOANS

      The rate of prepayment on the loans cannot be predicted. Home equity loans
and home improvement loan contracts have been originated in significant volume
only during the past few years and the depositor is not aware of any publicly
available studies or statistics on the rate of prepayment of the loans.
Generally, home equity loans and home improvement loan contracts are not viewed
by borrowers as permanent financing. Accordingly, the loans may experience a
higher rate of prepayment than traditional first mortgage loans. On the other
hand, because home equity loans such as the revolving credit line loans
generally are not fully amortizing, the absence of voluntary borrower
prepayments could cause rates of principal payments lower than, or similar to,
those of traditional fully-amortizing first mortgage loans.

      The prepayment experience of the related trust fund consisting of a pool
of a pool of home equity mortgage loans or home improvement loan contracts may
be affected by a wide variety of factors, including:

o     general economic conditions,

o     prevailing interest rate levels,

o     the availability of alternative financing,

o     homeowner mobility,

o     the amounts of, and interest rates on, the underlying senior mortgage
      loans, and


                                       51



o     the use of first mortgage loans as long-term financing for home purchase
      and subordinate mortgage loans as shorter-term financing for a variety of
      purposes, including home improvement, education expenses and purchases of
      consumer durables such as automobiles.

      Accordingly, the loans may experience a higher rate of prepayment than
traditional fixed-rate mortgage loans. In addition, any future limitations on
the right of borrowers to deduct interest payments on home equity loans for
federal income tax purposes may further increase the rate of prepayments of the
loans. The enforcement of a "due-on-sale" provision (as described below) will
have the same effect as a prepayment of the related loan. See "Certain Legal
Aspects of the Loans -- Due-on-Sale Clauses."

      Collections on revolving credit line loans may vary because, among other
things, borrowers may (i) make payments during any month as low as the minimum
monthly payment for that month or, during the interest-only period for certain
revolving credit line loans and, in more limited circumstances, closed- end
loans, with respect to which an interest-only payment option has been selected,
the interest and the fees and charges for that month or (ii) make payments as
high as the entire outstanding principal balance plus accrued interest and the
fees and charges thereon. It is possible that borrowers may fail to make the
required periodic payments. In addition, collections on the loans may vary due
to seasonal purchasing and the payment habits of borrowers.

      Generally, all conventional loans will contain due-on-sale provisions
permitting the mortgagee to accelerate the maturity of the loan upon sale or
certain transfers by the borrower of the related Property. Loans insured by the
FHA, and single family loans partially guaranteed by the VA, are assumable with
the consent of the FHA and the VA, respectively. Thus, the rate of prepayments
on the loans may be lower than that of conventional loans bearing comparable
interest rates. The master servicer generally will enforce any due-on-sale or
due-on-encumbrance clause, to the extent it has knowledge of the conveyance or
further encumbrance or the proposed conveyance or proposed further encumbrance
of the Property and reasonably believes that it is entitled to do so under
applicable law; provided, however, that the master servicer will not take any
enforcement action that would impair or threaten to impair any recovery under
any related insurance policy. See "The Agreements -- Collection Procedures" and
"Certain Legal Aspects of the Loans" for a description of certain provisions of
each Agreement and certain legal developments that may affect the prepayment
experience on the loans.

      The rate of prepayments with respect to conventional mortgage loans has
fluctuated significantly in recent years. In general, with respect to fixed rate
loans, if prevailing rates fall significantly below the Loan Rates borne by the
loans, the loans are more likely to be subject to higher prepayment rates than
if prevailing interest rates remain at or above the Loan Rates. Conversely, if
prevailing interest rates rise appreciably above the Loan Rates borne by the
fixed rate loans, the loans are more likely to experience a lower prepayment
rate than if prevailing rates remain at or below the Loan Rates. However, we can
give no assurance that either will occur. As is the case with fixed rate loans,
adjustable rate loans may be subject to a greater rate of principal prepayments
in a declining interest rate environment. For example, if prevailing interest
rates fall significantly, adjustable rate loans could be subject to higher
prepayment rates than if prevailing interest rates remain constant because the
availability of fixed rate loans at lower interest rates may encourage
mortgagors to refinance their adjustable rate loans to a lower fixed interest
rate. Prepayments on the hybrid loans (loans which are fixed for a period and
then convert to adjustable rate loans) may differ as they approach their
respective initial adjustment dates, particularly those that require payments of
interest only prior to their initial adjustment date. However, we can give no
assurance that will occur. The actual rate of principal prepayments on the
mortgage loans is influenced by a variety of economic, tax, geographic,
demographic, social, legal and other factors and has fluctuated considerably in
recent years. In addition, the rate of principal prepayments may differ among
pools of mortgage loans at any time because of specific factors relating to the
mortgage loans in the particular pool, including, among other things, the age of
the mortgage loans, the geographic locations of the properties securing the
loans, the extent of the mortgagor's equity in the properties, and changes in
the mortgagors' housing needs, job transfers and employment status.

PREPAYMENT EFFECT ON INTEREST

      When a full prepayment is made on a loan, the borrower is charged interest
on the principal amount of the loan so prepaid only for the number of days in
the month actually elapsed up to the date of the prepayment, rather than for a
full month. The effect of prepayments in full will be to reduce the amount of
interest passed through or


                                       52



paid in the following month to holders of securities because interest on the
principal amount of any loan so prepaid will generally be paid only to the date
of prepayment. Partial prepayments in a given month may be applied to the
outstanding principal balances of the loans so prepaid on the first day of the
month of receipt or the month following receipt. In the latter case, partial
prepayments will not reduce the amount of interest passed through or paid in
that month. The applicable prospectus supplement may specify when prepayments
are passed through to securityholders, but if it does not, neither full nor
partial prepayments will be passed through or paid until the month following
receipt.

      If the rate at which interest is passed through or paid to the holders of
securities of a series is calculated on a loan-by-loan basis, disproportionate
principal prepayments among loans with different Loan Rates will affect the
yield on the securities. In most cases, the effective yield to securityholders
will be lower than the yield otherwise produced by the applicable Pass-Through
Rate or interest rate and purchase price, because while interest will generally
accrue on each loan from the first day of the month, the distribution of
interest will not be made earlier than the month following the month of accrual.

DELAYS IN REALIZATION ON PROPERTY; EXPENSES OF REALIZATION

      Even assuming that the Properties provide adequate security for the loans,
substantial delays could be encountered in connection with the liquidation of
defaulted loans and corresponding delays in the receipt of related proceeds by
securityholders could occur. An action to foreclose on a Property securing a
loan is regulated by state statutes and rules and is subject to many of the
delays and expenses of other lawsuits if defenses or counterclaims are
interposed, sometimes requiring several years to complete. Furthermore, in some
states an action to obtain a deficiency judgment is not permitted following a
nonjudicial sale of a property. In the event of a default by a borrower, these
restrictions among other things, may impede the ability of the master servicer
to foreclose on or sell the Property or to obtain liquidation proceeds
sufficient to repay all amounts due on the related loan. In addition, the master
servicer will be entitled to deduct from related liquidation proceeds all
expenses reasonably incurred in attempting to recover amounts due on defaulted
loans and not yet repaid, including payments to senior lienholders, legal fees
and costs of legal action, real estate taxes and maintenance and preservation
expenses.

      Liquidation expenses with respect to defaulted mortgage loans generally do
not vary directly with the outstanding principal balance of the loan at the time
of default. Therefore, assuming that a servicer took the same steps in realizing
upon a defaulted mortgage loan having a small remaining principal balance as it
would in the case of a defaulted mortgage loan having a large remaining
principal balance, the amount realized after expenses of liquidation would be
smaller as a percentage of the remaining principal balance of the small mortgage
loan than would be the case with the other defaulted mortgage loan having a
large remaining principal balance.

      Applicable state laws generally regulate interest rates and other charges,
require certain disclosures, and require licensing of certain originators and
servicers of loans. In addition, most have other laws, public policy and general
principles of equity relating to the protection of consumers, unfair and
deceptive practices and practices which may apply to the origination, servicing
and collection of the loans. Depending on the provisions of the applicable law
and the specific facts and circumstances involved, violations of these laws,
policies and principles may limit the ability of the master servicer to collect
all or part of the principal of or interest on the loans, may entitle the
borrower to a refund of amounts previously paid and, in addition, could subject
the master servicer to damages and administrative sanctions.

OPTIONAL PURCHASE

      Under certain circumstances, the master servicer, the holders of the
residual interests in a REMIC or another person specified in the related
prospectus supplement may have the option to purchase the assets of a trust fund
thereby effecting earlier retirement of the related series of securities. See
"The Agreements -- Termination; Optional Termination".

      The relative contribution of the various factors affecting prepayment may
vary from time to time. We can give no assurance as to the rate of payment of
principal of the Trust Fund Assets at any time or over the lives of the
securities.


                                       53



PREPAYMENT STANDARDS OR MODELS

      Prepayments on loans can be measured relative to a prepayment standard or
model. The prospectus supplement for a series of securities will describe the
prepayment standard or model, if any, used and may contain tables setting forth
the projected weighted average life of each class of securities of that series
and the percentage of the original principal amount of each class of securities
of that series that would be outstanding on specified distribution dates for
that series based on the assumptions stated in the prospectus supplement,
including assumptions that prepayments on the loans or underlying loans, as
applicable, included in the related trust fund are made at rates corresponding
to various percentages of the prepayment standard or model specified in the
prospectus supplement.

      We can give no assurance that prepayment of the loans or underlying loans,
as applicable, included in the related trust fund will conform to any level of
any prepayment standard or model specified in the related prospectus supplement.
The rate of principal prepayments on pools of loans is influenced by a variety
of economic, demographic, geographic, legal, tax, social and other factors.

YIELD

      The yield to an investor who purchases securities in the secondary market
at a price other than par will vary from the anticipated yield if the rate of
prepayment on the loans is actually different than the rate anticipated by the
investor at the time the securities were purchased.

      The prospectus supplement relating to a series of securities will discuss
in greater detail the effect of the rate and timing of principal payments
(including prepayments), delinquencies and losses on the yield, weighted average
lives and maturities of the securities.

                                 THE AGREEMENTS

      Set forth below is a description of the material provisions of each
Agreement which are not described elsewhere in this prospectus. The description
is subject to, and qualified in its entirety by reference to, the provisions of
each Agreement. Where particular provisions or terms used in the Agreements are
referred to, those provisions or terms are as specified in the Agreements.

ASSIGNMENT OF THE TRUST FUND ASSETS

      Assignment of the Loans. At the time of issuance of the securities of a
series, the depositor will cause the loans comprising the related trust fund to
be assigned to the trustee (or trust, in the case of a series with both notes
and certificates), without recourse, together with all principal and interest
received by or on behalf of the depositor on or with respect to the loans after
the cut-off date, other than principal and interest due on or before the cut-off
date and other than any Retained Interest specified in the related prospectus
supplement. In the case of a series with both notes and certificates, the trust
will pledge these assets to the trustee for the benefit of the holders of the
notes. The trustee (or trust, in the case of a series with both notes and
certificates) will, concurrently with the assignment, deliver the related
securities to the depositor in exchange for the loans. Each loan will be
identified in a schedule appearing as an exhibit to the related Pooling and
Servicing Agreement or Sale and Servicing Agreement, as applicable. The schedule
will include information as to the outstanding principal balance of each loan
after application of payments due on or before the cut-off date, as well as
information regarding the Loan Rate or APR, the maturity of the loan, the
Loan-to-Value Ratios or Combined Loan-to-Value Ratios, as applicable, at
origination and certain other information.

      In addition, the depositor will also deliver or cause to be delivered to
the trustee (or to the custodian) for each single family loan, multifamily loan
or home equity loan,

o     the mortgage note or contract endorsed without recourse in blank or to the
      order of the trustee, except that the depositor may deliver or cause to be
      delivered a lost note affidavit together with a copy of the original note
      in lieu of any original mortgage note that has been lost,


                                       54



o     the mortgage, deed of trust or similar instrument (a "Mortgage") with
      evidence of recording indicated thereon (except for any Mortgage not
      returned from the public recording office, in which case the depositor
      will deliver or cause to be delivered a copy of the Mortgage together with
      a certificate that the original of the Mortgage was delivered to the
      recording office),

o     an assignment of the Mortgage to the trustee, which assignment will be in
      recordable form in the case of a Mortgage assignment, and

o     any other security documents, including those relating to any senior
      interests in the Property, as may be specified in the related prospectus
      supplement or the related Pooling and Servicing Agreement or Sale and
      Servicing Agreement.

The applicable prospectus supplement may provide other arrangements for assuring
the priority of assignments, but if it does not, the seller, the depositor or
the trustee, as specified in the related Pooling and Servicing Agreement or Sale
and Servicing Agreement, will promptly cause the assignments of the related
loans to be recorded in the appropriate public office for real property records,
except in states in which, in the opinion of counsel acceptable to the trustee,
the recording is not required to protect the trustee's or the
certificateholder's interest.

      With respect to any loans that are cooperative loans, the depositor will
cause to be delivered to the trustee the related original cooperative shares
endorsed without recourse in blank or to the order of the trustee, the original
security agreement, the proprietary lease or occupancy agreement, the
recognition agreement, the relevant financing statements and any other document
specified in the related prospectus supplement. The depositor will cause to be
filed in the appropriate office an assignment and a financing statement
evidencing the trustee's security interest in each cooperative loan.

      The applicable prospectus supplement may provide for the depositor's
delivery obligations in connection with home improvement loan contracts, but if
it does not, the depositor will as to each home improvement loan contract,
deliver or cause to be delivered to the trustee the original home improvement
loan contract and copies of documents and instruments related to each home
improvement contract and the security interest in the Property securing the home
improvement loan contract. In general, it is expected that the home improvement
loan contracts will not be stamped or otherwise marked to reflect their
assignment to the trustee. Therefore, if, through negligence, fraud or
otherwise, a subsequent purchaser were able to take physical possession of the
home improvement loan contracts without notice of the assignment by the
depositor, the interest of securityholders in the home improvement loan
contracts could be defeated. See "Certain Legal Aspects of the Loans -- The Home
Improvement Loan Contracts."

      The trustee (or the custodian) will review the loan documents within the
time period specified in the related prospectus supplement after receipt
thereof, and the trustee will hold the documents in trust for the benefit of the
related securityholders. Generally, if the document is found to be missing or
defective in any material respect, the trustee (or the custodian) will notify
the master servicer, the depositor, and the related seller. If the seller cannot
cure the omission or defect within the time period specified in the related
prospectus supplement after receipt of the notice, the seller will be obligated
to either purchase the related loan from the trust fund at the Purchase Price or
if so specified in the related prospectus supplement, remove the loan from the
trust fund and substitute in its place one or more other loans that meet certain
requirements set forth therein. We can give no assurance that a seller will
fulfill this purchase or substitution obligation. Although the master servicer
may be obligated to enforce the obligation to purchase the related loan to the
extent described above under "Loan Program -- Representations by Sellers;
Repurchases," neither the master servicer nor the depositor will be obligated to
purchase or replace the loan if the seller defaults on its obligation, unless
the breach also constitutes a breach of the representations or warranties of the
master servicer or the depositor, as the case may be. The applicable prospectus
supplement may provide other remedies, but if it does not, this obligation to
cure, purchase or substitute constitutes the sole remedy available to the
securityholders or the trustee for omission of, or a material defect in, a
constituent document.

      The trustee may be authorized to appoint a custodian pursuant to a
custodial agreement to maintain possession of and, if applicable, to review the
documents relating to the loans as agent of the trustee.


                                       55



      Notwithstanding the foregoing provisions, with respect to a trust fund for
which one or more REMIC elections are to be made, no purchase or substitution of
a loan will be made if the purchase or substitution would result in a prohibited
transaction tax under the Code.

      Although the depositor has expressed in the Agreement its intent to treat
the conveyance of the loans as a sale, the depositor will also grant to the
trustee (or trust, in the case of a series with both notes and certificates) a
security interest in the loans. This security interest is intended to protect
the interests of the securityholders if a bankruptcy court were to characterize
the depositor's transfer of the loans as a borrowing by the depositor secured by
a pledge of the loans as described under "Risk Factors - Bankruptcy or
Insolvency May Affect The Timing And Amount Of Distributions On The Securities".
In the event that a bankruptcy court did characterize the transaction as a
borrowing by the depositor, that borrowing would be secured by the loans in
which the depositor granted a security interest to the trustee (or trust, in the
case of a series with both notes and certificates). The depositor has agreed to
take those actions that are necessary to maintain the security interest granted
to the trustee as a first priority, perfected security interest in the loans,
including the filing of Uniform Commercial Code financing statements, if
necessary.

      Assignment of Agency Securities. The depositor will cause the Agency
Securities to be registered in the name of the trustee or its nominee, and the
trustee concurrently will execute, countersign and deliver the certificates.
Each Agency Security will be identified in a schedule appearing as an exhibit to
the pooling and servicing agreement, which will specify as to each Agency
Security the original principal amount and outstanding principal balance as of
the cut-off date, the annual pass-through rate and the maturity date.

      Assignment of Non-Agency Mortgage-Backed Securities. The depositor will
cause the Non-Agency Mortgage-Backed Securities to be registered in the name of
the trustee. The trustee (or the custodian) will have possession of any
certificated Non-Agency Mortgage-Backed Securities. Generally, the trustee will
not be in possession of or be assignee of record of any underlying assets for a
Non-Agency Mortgage-Backed Security. See "The Trust Fund - Non-Agency
Mortgage-Backed Securities." Each Non-Agency Mortgage-Backed Security will be
identified in a schedule appearing as an exhibit to the related pooling and
servicing agreement which will specify the original principal amount,
outstanding principal balance as of the cut-off date, annual pass-through rate
or interest rate and maturity date and other specified pertinent information for
each Non-Agency Mortgage-Backed Security conveyed to the trustee.

PAYMENTS ON LOANS; DEPOSITS TO SECURITY ACCOUNT

      The master servicer will establish and maintain or cause to be established
and maintained with respect to the related trust fund a separate account or
accounts for the collection of payments on the related Trust Fund Assets in the
trust fund (the "Security Account"). The applicable prospectus supplement may
provide for other requirements for the Security Account, but if it does not, the
Security Account must be either:

o     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 debt
      obligations of such holding company) have the highest short-term ratings
      of Moody's or Fitch and one of the two highest short-term ratings of S&P,
      if S&P is a Rating Agency, at the time any amounts are held on deposit
      therein;

o     an account or accounts in a depository institution or trust company the
      deposits in which are insured by the FDIC (to the limits established by
      the FDIC), and the uninsured deposits in which are otherwise secured such
      that, as evidenced by an opinion of counsel, the securityholders have a
      claim with respect to the funds in the security account or a perfected
      first priority security interest against any collateral securing the funds
      that is superior to the claims of any other depositors or general
      creditors of the depository institution with which the Security Account is
      maintained;

o     a trust account or accounts maintained with the corporate trust department
      of a federal or state chartered depository institution or trust company
      having capital and surplus of not less than $50,000,000, acting in its
      fiduciary capacity; or


                                       56



o     an account or accounts otherwise acceptable to each Rating Agency.

      The collateral eligible to secure amounts in the Security Account is
limited to Permitted Investments. A Security Account may be maintained as an
interest bearing account or the funds held therein may be invested pending each
succeeding distribution date in Permitted Investments. To the extent provided in
the related prospectus supplement, the master servicer or its designee will be
entitled to direct the investment of the funds held in the Security Account and
to receive any interest or other income earned on funds in the Security Account
as additional compensation, and will be obligated to deposit in the Security
Account the amount of any loss immediately as realized. The Security Account may
be maintained with the master servicer or with a depository institution that is
an affiliate of the master servicer, provided it meets the standards set forth
above.

      The master servicer will deposit or cause to be deposited in the Security
Account for each trust fund, to the extent applicable and unless otherwise
specified in the related Pooling and Servicing Agreement or Sale and Servicing
Agreement, and the related prospectus supplement, the following payments and
collections received or advances made by or on behalf of it subsequent to the
cut-off date (other than payments due on or before the cut-off date and
exclusive of any amounts representing any Retained Interest):

o     all payments on account of principal, including Principal Prepayments and,
      if specified in the related prospectus supplement, any applicable
      prepayment charges, on the loans;

o     all payments on account of interest on the loans, net of applicable
      servicing compensation;

o     all proceeds (net of unreimbursed payments of property taxes, insurance
      premiums and similar items ("Insured Expenses") incurred, and unreimbursed
      advances made, by the master servicer, if any) of the hazard insurance
      policies and any Primary Mortgage Insurance Policies, to the extent the
      proceeds are not applied to the restoration of the property or released to
      the mortgagor in accordance with the master servicer's normal servicing
      procedures (collectively, "Insurance Proceeds") and all other cash amounts
      (net of unreimbursed expenses incurred in connection with liquidation or
      foreclosure ("Liquidation Expenses") and unreimbursed advances made, by
      the master servicer, if any) received and retained in connection with the
      liquidation of defaulted loans, by foreclosure or otherwise, together with
      any net proceeds received on a monthly basis with respect to any
      properties acquired on behalf of the securityholders by foreclosure or
      deed in lieu of foreclosure ("Liquidation Proceeds") and any Subsequent
      Recoveries;

o     all proceeds of any loan or property in respect thereof purchased by the
      master servicer, the depositor or any seller as described under "Loan
      Program -- Representations by Sellers; Repurchases" or "-- Assignment of
      Trust Fund Assets" above and all proceeds of any loan purchased as
      described under "-- Termination; Optional Termination" below;

o     all payments required to be deposited in the Security Account with respect
      to any deductible clause in any blanket insurance policy described under
      "-- Hazard Insurance" below;

o     any amount required to be deposited by the master servicer in connection
      with losses realized on investments for the benefit of the master servicer
      of funds held in the Security Account and, to the extent specified in the
      related prospectus supplement, any advances required to be made by the
      master servicer and any payments required to be made by the master
      servicer in connection with prepayment interest shortfalls; and

o     all other amounts required to be deposited in the Security Account
      pursuant to the Agreement.

      Unless otherwise specified in the related prospectus supplement the master
servicer will make these deposits within two business days of receipt of the
amounts.


                                       57



      Unless otherwise specified in the related prospectus supplement, the
master servicer (or the depositor, as applicable) may from time to time direct
the institution that maintains the Security Account to withdraw funds from the
Security Account for the following purposes:

o     to pay to the master servicer the master servicing fees (subject to
      reduction) described in the related prospectus supplement, and, as
      additional servicing compensation, earnings on or investment income with
      respect to funds in the amounts in the Security Account credited thereto,
      as well as any other additional servicing compensation specified in the
      related prospectus supplement;

o     to reimburse the master servicer and the trustee for advances, which right
      of reimbursement with respect to any loan is limited to amounts received
      that represent late recoveries of payments of principal and/or interest on
      the loan (or Insurance Proceeds or Liquidation Proceeds with respect
      thereto) with respect to which the advance was made;

o     to reimburse the master servicer and the trustee for any advances
      previously made which the master servicer has determined to be
      nonrecoverable;

o     to reimburse the master servicer from Insurance Proceeds for expenses
      incurred by the master servicer and covered by the related insurance
      policies;

o     to reimburse the master servicer for unpaid master servicing fees and
      unreimbursed out-of-pocket costs and expenses incurred by the master
      servicer in the performance of its servicing obligations, which right of
      reimbursement is limited to amounts received representing late recoveries
      of the payments for which the advances were made;

o     to pay to the master servicer, the depositor or the applicable seller,
      with respect to each loan or property acquired in respect thereof that has
      been purchased by the master servicer or seller pursuant to the related
      Agreement, all amounts received after the purchase and not taken into
      account in determining the purchase price of the repurchased loan;

o     to reimburse the master servicer, the depositor or other party specified
      in the related prospectus supplement for expenses incurred and
      reimbursable pursuant to the Agreement;

o     to pay any lender-paid primary mortgage insurance premium;

o     to withdraw any amount deposited in the Security Account and not required
      to be deposited therein; and

o     to clear and terminate the Security Account upon termination of the
      Agreement.

      In addition, the Agreement will generally provide that, on or prior to the
business day immediately preceding each distribution date, the master servicer
shall withdraw from the Security Account the amount of Available Funds and the
trustee fee for the distribution date, to the extent on deposit, for deposit in
an account maintained by the trustee for the related series of securities.

      Unless otherwise specified in the related prospectus supplement, aside
from the annual compliance review and servicing criteria assessment and
accompanying accountants' attestation, there is no independent verification of
the transaction accounts or the transaction activity. The master servicer is
required to provide an annual certification to the effect that the master
servicer has fulfilled its obligations under the related Pooling and Servicing
Agreement or Sale and Servicing Agreement throughout the preceding year, as well
as an annual assessment and an accompanying accountants' attestation as to its
compliance with applicable servicing criteria. See " - Evidence as to
Compliance."


                                       58



PRE-FUNDING ACCOUNT

      If so provided in the related prospectus supplement, the trustee will
establish and maintain an account (the "Pre-Funding Account"), in the name of
the related trustee on behalf of the related securityholders, into which the
seller or the depositor will deposit cash in an amount specified in the
prospectus supplement (the "Pre-Funded Amount") on the related closing date. The
Pre-Funding Account will be maintained with the trustee for the related series
of securities or with another eligible institution, and is designed solely to
hold funds to be applied during the period from the closing date to a date not
more than a year after the closing date (the "Funding Period") to pay to the
depositor the purchase price for loans purchased during the Funding Period (the
"Subsequent Loans"). Monies on deposit in the Pre-Funding Account will not be
available to cover losses on or in respect of the related loans. The Pre-Funded
Amount will not exceed 50% of the initial aggregate principal amount of the
certificates and notes of the related series. The Pre-Funded Amount will be used
by the related trustee to purchase Subsequent Loans from the depositor from time
to time during the Funding Period. The Funding Period, if any, for a trust fund
will begin on the related closing date and will end on the date specified in the
related prospectus supplement, which in no event will be later than the date
that is one year after the related closing date. Monies on deposit in the
Pre-Funding Account may be invested in Permitted Investments under the
circumstances and in the manner described in the related prospectus supplement.
Unless otherwise specified in the related prospectus supplement, earnings on
investment of funds in the Pre-Funding Account will be deposited into the
related Security Account or the other trust account as is specified in the
related prospectus supplement and losses will be charged against the funds on
deposit in the Pre-Funding Account. Any amounts remaining in the Pre-Funding
Account at the end of the Funding Period will be distributed in the manner and
priority specified in the related prospectus supplement.

      In addition, if so provided in the related prospectus supplement, on the
related closing date the depositor or the seller will deposit in an account (the
"Capitalized Interest Account") cash in the amount necessary to cover shortfalls
in interest on the related series of securities that may arise as a result of
utilization of the Pre-Funding Account as described above, or with respect to
the related distributions dates, Countrywide Home Loans may deposit the amount
of these shortfalls specified in the related prospectus supplement in to the
related Security Account. The Capitalized Interest Account shall be maintained
with the trustee for the related series of securities and is designed solely to
cover the above-mentioned interest shortfalls. Neither the monies on deposit in
the Capitalized Interest Account nor any amounts paid by Countrywide Home Loans
will be available to cover losses on or in respect of the related loans. To the
extent that the entire amount on deposit in the Capitalized Interest Account has
not been applied to cover shortfalls in interest on the related series of
securities by the end of the Funding Period, any amounts remaining in the
Capitalized Interest Account will be paid to the depositor.

INVESTMENTS IN AMOUNTS HELD IN ACCOUNTS

      Unless otherwise specified in the related prospectus supplement, funds
held in a Security Account, any Pre-Funding Account, any Capitalized Interest
Account, any reserve fund or any other accounts that are part of the Trust Fund
Assets, may be invested in "Permitted Investments" which may include one or more
of the following:

      (i)      obligations of the United States or any agency thereof, provided
the obligations are backed by the full faith and credit of the United States;

      (ii)     general obligations of or obligations guaranteed by any state of
the United States or the District of Columbia receiving the highest long-term
debt rating of each Rating Agency rating the related series of securities, or a
lower rating that each Rating Agency has confirmed in writing is sufficient for
the ratings originally assigned to the securities by each Rating Agency;

      (iii)    commercial paper issued by Countrywide Home Loans or any of its
affiliates; provided that the commercial paper is rated no lower than the rating
specified in the related prospectus supplement;

      (iv)     commercial or finance company paper which is then receiving the
highest commercial or finance company paper rating of each Rating Agency, or
such lower rating as each Rating Agency has confirmed in writing is sufficient
for the ratings originally assigned to the related securities by each Rating
Agency;


                                       59



      (v)      certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company incorporated
under the laws of the United States or of any state thereof and subject to
supervision and examination by federal and/or state banking authorities,
provided that the commercial paper and/or long term unsecured debt obligations
of the depository institution or trust company (or in the case of the principal
depository institution in a holding company system, the commercial paper or
long-term unsecured debt obligations of the holding company, but only if Moody's
Investors Service, Inc. ("Moody's") is not a Rating Agency) are then rated one
of the two highest long-term and the highest short-term ratings of each Rating
Agency for the securities, or such lower ratings as each Rating Agency has
confirmed in writing is sufficient for the ratings originally assigned to the
related securities by any Rating Agency;

      (vi)     demand or time deposits or certificates of deposit issued by any
bank or trust company or savings institution to the extent that the deposits are
fully insured by the FDIC;

      (vii)    guaranteed reinvestment agreements issued by any bank, insurance
company or other corporation containing, at the time of the issuance of the
agreements, the terms and conditions as each Rating Agency has confirmed in
writing is sufficient for the ratings originally assigned to the related
securities by any Rating Agency;

      (viii)   repurchase obligations with respect to any security described in
clauses (i) and (ii) above, in either case entered into with a depository
institution or trust company (acting as principal) described in clause (v)
above;

      (ix)     securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of 115% of the face amount
thereof) bearing interest or sold at a discount issued by any corporation
incorporated under the laws of the United States or any state thereof which, at
the time of the investment, have one of the two highest ratings of each Rating
Agency (except if the Rating Agency is Moody's, the rating shall be the highest
commercial paper rating of Moody's for any of those securities), or such lower
rating as each Rating Agency has confirmed in writing is sufficient for the
ratings originally assigned to the related securities by any Rating Agency, as
evidenced by a signed writing delivered by each Rating Agency;

      (x)      interests in any money market fund which at the date of
acquisition of the interests in the fund and throughout the time the interests
are held in the fund has the highest applicable rating by each Rating Agency or
such lower rating as each Rating Agency has confirmed in writing is sufficient
for the ratings originally assigned to the related securities by each Rating
Agency;

      (xi)     short term investment funds sponsored by any trust company or
national banking association incorporated under the laws of the United States or
any state thereof which on the date of acquisition has been rated by each Rating
Agency in their respective highest applicable rating category or a lower rating
that each Rating Agency has confirmed in writing is sufficient for the ratings
originally assigned to those securities by each Rating Agency; and

      (xii)    other investments that have a specified stated maturity and
bearing interest or sold at a discount acceptable to each Rating Agency as will
not result in the downgrading or withdrawal of the rating then assigned to the
related securities by any Rating Agency, as evidenced by a signed writing
delivered by each Rating Agency; provided that none of those investments shall
be a Permitted Investment if the investments evidences the right to receive
interest only payments with respect to the obligations underlying the
investment; and provided, further, that no investment specified in clause (x) or
clause (xi) above shall be a Permitted Investment for any pre-funding account or
any related Capitalized Interest Account.

If a letter of credit is deposited with the trustee, that letter of credit will
be irrevocable and will name the trustee, in its capacity as trustee for the
holders of the securities, as beneficiary and will be issued by an entity
acceptable to each Rating Agency that rates the securities of the related
series. Additional information with respect to the instruments deposited in the
accounts will be set forth in the related prospectus supplement.


                                       60



Unless otherwise specified in the related prospectus supplement, the Permitted
Investments will be held in the name of the trustee for the benefit of the
securityholders and may not mature later than:

o     in the case of a Security Account, the second business day next preceding
      the date on which funds must be transferred to the trustee in each month
      (except that if the Permitted Investment is an obligation of the
      institution that maintains the Security Account, then the Permitted
      Investment may not mature later than the business day next preceding that
      date) and may not be sold or disposed of prior to its maturity; and

o     in the case of the any other account, the business day immediately
      preceding the first distribution date that follows the date of the
      investment (except that if the Permitted Investment is an obligation of
      the institution that maintains the account, then the Permitted Investment
      may mature not later than the related distribution date) and may not be
      sold or disposed of prior to its maturity.

SUB-SERVICING BY SELLERS

      Each seller of a loan or any other servicing entity may act as the
sub-servicer for the loan pursuant to a sub-servicing agreement, which will not
contain any terms inconsistent with the related Agreement. Notwithstanding any
subservicing arrangement, unless otherwise provided in the related prospectus
supplement, the master servicer will remain liable for its servicing duties and
obligations under the related Agreement as if the master servicer alone were
servicing the loans.

COLLECTION PROCEDURES

      The master servicer, directly or through one or more sub-servicers, will
make reasonable efforts to collect all payments called for under the loans and
will, consistent with each Agreement and any mortgage insurance policy required
to be maintained under the related Agreement, follow collection procedures that
are customary with respect to loans that are comparable to the loans. Consistent
with the above, the master servicer may, in its discretion, waive any assumption
fee, late payment or other charge in connection with a loan and to the extent
not inconsistent with the coverage of the loan by a any mortgage insurance
policy required to be maintained under the related Agreement, if applicable,
arrange with a borrower a schedule for the liquidation of delinquencies running
for no more than 270 days after the applicable due date for each payment. To the
extent the master servicer is obligated to make or cause to be made advances,
the obligation will remain during any period of that arrangement.

      The applicable prospectus supplement may provide for other alternatives
regarding due-on-sale clause, but if it does not, in any case in which property
securing a loan has been, or is about to be, conveyed by the mortgagor or
obligor, the master servicer will, to the extent it has knowledge of the
conveyance or proposed conveyance, exercise or cause to be exercised its rights
to accelerate the maturity of the loan under any due-on-sale clause applicable
thereto, but only if the exercise of the rights is permitted by applicable law
and will not impair or threaten to impair any recovery under any mortgage
insurance policy required to be maintained under the related Agreement. If these
conditions are not met or if the master servicer reasonably believes it is
unable under applicable law to enforce the due-on-sale clause or if coverage
under any required mortgage insurance policy would be adversely affected, the
master servicer will enter into or cause to be entered into an assumption and
modification agreement with the person to whom the property has been or is about
to be conveyed, pursuant to which the person becomes liable for repayment of the
loan and, to the extent permitted by applicable law, the mortgagor remains
liable thereon. Any fee collected by or on behalf of the master servicer for
entering into an assumption agreement will be retained by or on behalf of the
master servicer as additional servicing compensation. See "Certain Legal Aspects
of the Loans -- Due-on-Sale Clauses". In connection with any assumption, the
terms of the related loan may not be changed.

      With respect to cooperative loans, any prospective purchaser will
generally have to obtain the approval of the board of directors of the relevant
cooperative before purchasing the shares and acquiring rights under the related
proprietary lease or occupancy agreement. See "Certain Legal Aspects of the
Loans". This approval is usually based on the purchaser's income and net worth
and numerous other factors. Although the cooperative's approval is unlikely to
be unreasonably withheld or delayed, the necessity of acquiring approval could
limit the number of


                                       61



potential purchasers for those shares and otherwise limit the trust fund's
ability to sell and realize the value of those shares.

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

HAZARD INSURANCE

      In general, the master servicer will require the mortgagor or obligor on
each loan to maintain a hazard insurance policy providing coverage in an amount
that is at least equal to the lesser of:

o     the maximum insurable value of the improvements securing the loan or

o     the greater of

            (1) the outstanding principal balance of the loan; and

            (2) an amount such that the proceeds of the policy shall be
      sufficient to prevent the mortgagor and/or the mortgagee from becoming a
      co-insurer.

All amounts collected by the master servicer under any hazard policy (except for
amounts to be applied to the restoration or repair of the Property or released
to the mortgagor or obligor in accordance with the master servicer's normal
servicing procedures) will be deposited in the related Security Account. In the
event that the master servicer maintains a blanket policy insuring against
hazard losses on all the loans comprising part of a trust fund, it will
conclusively be deemed to have satisfied its obligation relating to the
maintenance of hazard insurance. The blanket policy may contain a deductible
clause, in which case the master servicer will be required to deposit from its
own funds into the related Security Account the amounts which would have been
deposited therein but for that clause.

      In general, the standard form of fire and extended coverage policy covers
physical damage to or destruction of the improvements securing a loan by fire,
lightning, explosion, smoke, windstorm and hail, riot, strike and civil
commotion, subject to the conditions and exclusions particularized in each
policy. Although the policies relating to the loans may have been underwritten
by different insurers under different state laws in accordance with different
applicable forms and therefore may not contain identical terms and conditions,
the basic terms thereof are dictated by respective state laws, and most policies
typically do not cover any physical damage resulting from the following: war,
revolution, governmental actions, floods and other water-related causes, earth
movement (including earthquakes, landslides and mud flows), nuclear reactions,
wet or dry rot, vermin, rodents, insects or domestic animals, theft and, in
certain cases, vandalism and hurricanes. The foregoing list is merely indicative
of certain kinds of uninsured risks and is not intended to be all inclusive. If
the Property securing a loan is located in a federally designated special flood
area at the time of origination, the master servicer will require the mortgagor
or obligor to obtain and maintain flood insurance.


                                       62



      The hazard insurance policies covering properties securing the loans
typically contain a clause which in effect requires the insured at all time to
carry insurance of a specified percentage (generally 80% to 90%) of the full
replacement value of the insured property in order to recover the full amount of
any partial loss. If the insured's coverage falls below this specified
percentage, then the insurer's liability in the event of partial loss will not
exceed the larger of

o     the actual cash value (generally defined as replacement cost at the time
      and place of loss, less physical depreciation) of the improvements damaged
      or destroyed and

o     the proportion of the loss as the amount of insurance carried bears to the
      specified percentage of the full replacement cost of the improvements.

Since the amount of hazard insurance the master servicer may cause to be
maintained on the improvements securing the loans declines as the principal
balances owing thereon decrease, and since improved real estate generally has
appreciated in value over time in the past, the effect of this requirement in
the event of partial loss may be that hazard insurance proceeds will be
insufficient to restore fully the damaged property. If specified in the related
prospectus supplement, a special hazard insurance policy will be obtained to
insure against certain of the uninsured risks described above. See "Credit
Enhancement".

      The master servicer will not require that a standard hazard or flood
insurance policy be maintained on the cooperative dwelling relating to any
cooperative loan. Generally, the cooperative itself is responsible for
maintenance of hazard insurance for the property owned by the cooperative and
the tenant-stockholders of that cooperative do not maintain individual hazard
insurance policies. To the extent, however, that a cooperative and the related
borrower on a cooperative loan do not maintain that insurance or do not maintain
adequate coverage or any insurance proceeds are not applied to the restoration
of damaged property, any damage to the borrower's cooperative dwelling or the
cooperative's building could significantly reduce the value of the collateral
securing the cooperative loan to the extent not covered by other credit support.

      If the Property securing a defaulted loan is damaged and proceeds, if any,
from the related hazard insurance policy are insufficient to restore the damaged
Property, the master servicer is not required to expend its own funds to restore
the damaged Property unless it determines (i) that the restoration will increase
the proceeds to securityholders on liquidation of the loan after reimbursement
of the master servicer for its expenses and (ii) that the expenses will be
recoverable by it from related Insurance Proceeds, Liquidation Proceeds or
Subsequent Recoveries.

      If recovery on a defaulted loan under any related Insurance Policy is not
available for the reasons set forth in the preceding paragraph, or if the
defaulted loan is not covered by an Insurance Policy, the master servicer will
be obligated to follow or cause to be followed those normal practices and
procedures as it deems necessary or advisable to realize upon the defaulted
loan. If the proceeds of any liquidation of the Property securing the defaulted
loan are less than the principal balance of the loan plus interest accrued
thereon that is payable to securityholders, the trust fund will realize a loss
in the amount of the difference plus the aggregate of expenses incurred by the
master servicer in connection with the proceedings and which are reimbursable
under the Agreement. In the unlikely event that those proceedings result in a
total recovery which is, after reimbursement to the master servicer of its
expenses, in excess of the principal balance of the loan plus interest accrued
thereon that is payable to securityholders, the master servicer will be entitled
to withdraw or retain from the Security Account amounts representing its normal
servicing compensation with respect to the loan and amounts representing the
balance of the excess, exclusive of any amount required by law to be forwarded
to the related borrower, as additional servicing compensation.

      If the master servicer or its designee recovers Insurance Proceeds which,
when added to any related Liquidation Proceeds and after deduction of certain
expenses reimbursable to the master servicer, exceed the principal balance of
the loan plus interest accrued thereon that is payable to securityholders, the
master servicer will be entitled to withdraw or retain from the Security Account
amounts representing its normal servicing compensation with respect to the loan.
In the event that the master servicer has expended its own funds to restore the
damaged Property and the funds have not been reimbursed under the related hazard
insurance policy, it will be entitled to withdraw from the Security Account out
of related Liquidation Proceeds or Insurance Proceeds an amount equal to the
expenses incurred by it, in which event the trust fund may realize a loss up to
the amount so charged. Since


                                       63



Insurance Proceeds cannot exceed deficiency claims and certain expenses incurred
by the master servicer, that payment or recovery will not result in a recovery
to the trust fund which exceeds the principal balance of the defaulted loan
together with accrued interest thereon. See "Credit Enhancement".

APPLICATION OF LIQUIDATION PROCEEDS

      The proceeds from any liquidation of a loan will be applied in the
following order of priority:

          o     to reimburse the master servicer for any unreimbursed expenses
                incurred by it to restore the related Property and any
                unreimbursed servicing compensation payable to the master
                servicer with respect to the loan;

          o     to reimburse the master servicer and trustee for any
                unreimbursed advances with respect to the loan;

          o     to accrued and unpaid interest (to the extent no advance has
                been made for that amount or the advance has been reimbursed) on
                the loan; and

          o     as a recovery of principal of the loan.

Unless otherwise specified in the related prospectus supplement, excess proceeds
from the liquidation of a loan will be retained by the master servicer as
additional servicing compensation.

      If specified in the related prospectus supplement, if, after final
liquidation of a mortgage loan, the master servicer receives a recovery
specifically related to that mortgage loan, the recovery (net of any
reimbursable expenses) will be distributed to the securityholders in the manner
specified in the related prospectus supplement. In addition, the principal
balance of each class of securities to which realized losses have been
allocated, will be increased, sequentially in the order of payment priority, to
the extent that such subsequent recoveries are distributed as principal to any
class of securities. However, the principal balance of the class of securities
will not be increased by more than the amount of realized losses previously
applied to reduce the principal balance of each the class of securities. Holders
of securities whose class principal balance is increased in this manner will not
be entitled to interest on the increased balance for any interest accrual period
preceding the Distribution Date on which the increase occurs.

REALIZATION UPON DEFAULTED LOANS

      Primary Mortgage Insurance Policies. If so specified in the related
prospectus supplement, the master servicer will maintain or cause to be
maintained, as the case may be, in full force and effect, a Primary Mortgage
Insurance Policy with regard to each loan for which the coverage is required.
Primary Mortgage Insurance Policies reimburse certain losses sustained by reason
of defaults in payments by borrowers. The master servicer will not cancel or
refuse to renew any Primary Mortgage Insurance Policy in effect at the time of
the initial issuance of a series of securities that is required to be kept in
force under the applicable Agreement unless the replacement Primary Mortgage
Insurance Policy for the cancelled or nonrenewed policy is maintained with an
insurer whose claims-paying ability is sufficient to maintain the current rating
of the classes of securities of the series that have been rated.

      Although the terms of primary mortgage insurance vary, the amount of a
claim for benefits under a Primary Mortgage Insurance Policy covering a loan
will consist of the insured percentage of the unpaid principal amount of the
covered loan and accrued and unpaid interest on it and reimbursement of certain
expenses, less all rents or other payments collected or received by the insured
(other than the proceeds of hazard insurance) that are derived from or in any
way related to the Property, hazard insurance proceeds in excess of the amount
required to restore the Property and which have not been applied to the payment
of the mortgage loan, amounts expended but not approved by the issuer of the
related Primary Mortgage Insurance Policy, claim payments previously made by the
primary insurer and unpaid premiums.


                                       64



      Primary Mortgage Insurance Policies reimburse certain losses sustained
from defaults in payments by borrowers. Primary Mortgage Insurance Policies will
not insure against, and exclude from coverage, a loss sustained from a default
arising from or involving certain matters, including fraud or negligence in
origination or servicing of the loans, including misrepresentation by the
originator, mortgagor, obligor or other persons involved in the origination of
the loan; failure to construct the Property subject to the mortgage loan in
accordance with specified plans; physical damage to the Property; and the
related sub-servicer not being approved as a servicer by the primary insurer.

      As conditions precedent to the filing of or payment of a claim under a
Primary Mortgage Insurance Policy covering a loan, the insured will generally be
required to

o     advance or discharge all hazard insurance policy premiums and as necessary
      and approved in advance by the primary insurer, real estate property
      taxes, all expenses required to maintain the related Property in at least
      as good a condition as existed at the effective date of the Primary
      Mortgage Insurance Policy, ordinary wear and tear excepted, Property sales
      expenses, any specified outstanding liens on the Property and foreclosure
      costs, including court costs and reasonable attorneys' fees;

o     upon any physical loss or damage to the Property, have the Property
      restored and repaired to at least as good a condition as existed at the
      effective date of the Primary Mortgage Insurance Policy, ordinary wear and
      tear excepted; and

o     tender to the primary insurer good and merchantable title to and
      possession of the Property.

      The master servicer, on behalf of itself, the trustee and the
certificateholders, will present claims to the insurer under each primary
mortgage insurance policy, and will take any reasonable steps consistent with
its practices regarding comparable mortgage loans and necessary to receive
payment or to permit recovery under the policy with respect to defaulted
mortgage loans.

      FHA Insurance; VA Guaranties. Loans designated in the related prospectus
supplement as insured by the FHA will be insured by the FHA as authorized under
the United States Housing Act of 1937, as amended. In addition to the Title I
Program of the FHA, see "Certain Legal Aspects of the Loans -- Title I Program",
certain loans will be insured under various FHA programs including the standard
FHA 203 (b) program to finance the acquisition of one- to four-family housing
units and the FHA 245 graduated payment mortgage program. These programs
generally limit the principal amount and interest rates of the mortgage loans
insured. Loans insured by FHA generally require a minimum down payment of
approximately 5% of the original principal amount of the loan. No FHA-insured
loans relating to a series may have an interest rate or original principal
amount exceeding the applicable FHA limits at the time of origination of the
loan.

      The insurance premiums for loans insured by the FHA are collected by
lenders approved by the HUD or by the master servicer or any sub-servicers and
are paid to the FHA. The regulations governing FHA single-family mortgage
insurance programs provide that insurance benefits are payable either upon
foreclosure (or other acquisition of possession) and conveyance of the mortgaged
premises to HUD or upon assignment of the defaulted loan to HUD. With respect to
a defaulted FHA-insured loan, the master servicer or any sub-servicer is limited
in its ability to initiate foreclosure proceedings. When it is determined,
either by the master servicer or any sub-servicer or HUD, that default was
caused by circumstances beyond the mortgagor's control, the master servicer or
any sub-servicer is expected to make an effort to avoid foreclosure by entering,
if feasible, into one of a number of available forms of forbearance plans with
the mortgagor. These plans may involve the reduction or suspension of regular
loan payments for a specified period, with the payments to be made up on or
before the maturity date of the loan, or the recasting of payments due under the
loan up to or beyond the maturity date. In addition, when a default caused by
circumstances beyond the mortgagor's control is accompanied by certain other
criteria, HUD may provide relief by making payments to the master servicer or
any sub-servicer in partial or full satisfaction of amounts due under the loan
(which payments are to be repaid by the mortgagor to HUD) or by accepting
assignment of the loan from the master servicer or any sub-servicer. With
certain exceptions, at least three full monthly installments must be due and
unpaid under the loan and HUD must have rejected any request for relief from the
mortgagor before the master servicer or any sub-servicer may initiate
foreclosure proceedings.


                                       65



      HUD has the option, in most cases, to pay insurance claims in cash or in
debentures issued by HUD. Currently, claims are being paid in cash, and claims
have not been paid in debentures since 1965. HUD debentures issued in
satisfaction of FHA insurance claims bear interest at the applicable HUD
debentures interest rate. The master servicer of any sub-servicer of each
FHA-insured mortgage loan will be obligated to purchase the debenture issued in
satisfaction of the loan upon default for an amount equal to the principal
amount of the debenture.

      The amount of insurance benefits generally paid by the FHA is equal to the
entire unpaid principal amount of the defaulted loan adjusted to reimburse the
master servicer or sub-servicer for certain costs and expenses and to deduct
certain amounts received or retained by the master servicer or sub-servicer
after default. When entitlement to insurance benefits results from foreclosure
(or other acquisition of possession) and conveyance to HUD, the master servicer
or sub-servicer is compensated for no more than two-thirds of its foreclosure
costs, and is compensated for accrued and unpaid interest but in general only to
the extent it was allowed pursuant to a forbearance plan approved by HUD. When
entitlement to insurance benefits results from assignment of the loan to HUD,
the insurance payment includes full compensation for interest accrued and unpaid
to the assignment date. The insurance payment itself, upon foreclosure of an
FHA-insured mortgage loan, bears interest from a date 30 days after the
mortgagor's first uncorrected failure to perform any obligation to make any
payment due under the loan and, upon assignment, from the date of assignment to
the date of payment of the claim, in each case at the same interest rate as the
applicable HUD debenture interest rate as described above.

      Loans designated in the related prospectus supplement as guaranteed by the
VA will be partially guaranteed by the VA under the Serviceman's Readjustment
Act of 1944, as amended (a "VA Guaranty"). The Serviceman's Readjustment Act of
1944, as amended, permits a veteran (or in certain instances the spouse of a
veteran) to obtain a mortgage loan guaranty by the VA covering mortgage
financing of the purchase of a one- to four-family dwelling unit at interest
rates permitted by the VA. The program has no mortgage loan limits, requires no
down payment from the purchaser and permits the guaranty of mortgage loans of up
to 30 years' duration. However, no loan guaranteed by the VA will have an
original principal amount greater than five times the partial VA guaranty for
the loan. The maximum guaranty that may be issued by the VA under a VA
guaranteed mortgage loan depends upon the original principal amount of the
mortgage loan, as further described in 38 United States Code Section 1803(a), as
amended.

      The liability on the guaranty may be reduced or increased pro rata with
any reduction or increase in the amount of indebtedness, but in no event will
the amount payable on the guaranty exceed the amount of the original guaranty.
The VA, at its option and without regard to the guaranty, may make full payment
to a mortgage holder of unsatisfied indebtedness on a loan upon its assignment
to the VA.

      With respect to a defaulted VA guaranteed loan, the master servicer or
sub-servicer is, absent exceptional circumstances, authorized to announce its
intention to foreclose only when the default has continued for three months.
Generally, a claim for the guaranty is submitted after liquidation of the
mortgaged property.

      The amount payable under the guaranty will be the percentage of the
VA-insured loan originally guaranteed applied to indebtedness outstanding as of
the applicable date of computation specified in the VA regulations. Payments
under the guaranty will be equal to the unpaid principal amount of the loan,
interest accrued on the unpaid balance of the loan to the appropriate date of
computation and limited expenses of the mortgagee, but in each case only to the
extent that the amounts have not been recovered through liquidation of the
mortgaged property.

SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES

      The principal servicing compensation to be paid to the master servicer in
respect of its master servicing activities for each series of securities will be
equal to the percentage per annum described in the related prospectus supplement
(which may vary under certain circumstances) of the outstanding principal
balance of each loan, and that compensation will be retained by it from
collections of interest on the loan in the related trust fund (the "Master
Servicing Fee"). As compensation for its servicing duties, a sub-servicer or, if
there is no sub-servicer, the master servicer will be entitled to a monthly
servicing fee as described in the related prospectus supplement. In addition,
generally, the master servicer or sub-servicer will retain all prepayment
charges, assumption fees and late payment


                                       66



charges, to the extent collected from borrowers, and any benefit that may accrue
as a result of the investment of funds in the applicable Security Account.

      The master servicer will, to the extent permitted in the related Pooling
and Servicing Agreement or Sale and Servicing Agreement, pay or cause to be paid
certain ongoing expenses associated with each trust fund and incurred by it in
connection with its responsibilities under the related Agreement, including,
without limitation, payment of any fee or other amount payable in respect of any
credit enhancement arrangements, payment of the fees and disbursements of the
trustee, unless otherwise specified in the related prospectus supplement, any
custodian appointed by the trustee, the certificate registrar and any paying
agent, and payment of expenses incurred in enforcing the obligations of
sub-servicers and sellers. The master servicer will be entitled to reimbursement
of expenses incurred in enforcing the obligations of sub-servicers and sellers
under certain limited circumstances. In addition, as indicated in the preceding
section, the master servicer will be entitled to reimbursement for certain
expenses incurred by it in connection with any defaulted loan as to which it has
determined that all recoverable Liquidation Proceeds and Insurance Proceeds have
been received and in connection with the restoration of Properties, the right of
reimbursement being before the rights of holders of the securities to receive
any related Liquidation Proceeds (including Insurance Proceeds).

EVIDENCE AS TO COMPLIANCE

      Each Agreement will provide for delivery to the depositor and the trustee,
on or before a specified date in each year, of an annual statement signed by an
authorized officer of the master servicer to the effect that the master servicer
has fulfilled its obligations under the Agreement throughout the preceding year.

      Each Agreement will also provide for delivery to the depositor, the master
servicer and the trustee, on or before a specified date in each year, of an
annual servicing assessment report from each party performing servicing
functions with respect to the related series, including any servicer that
services 5% or more of the Trust Fund Assets. In each assessment report, the
party providing the report must include an assessment of its compliance with the
servicing criteria during the previous fiscal year, and disclose any material
noncompliance with the applicable servicing criteria. The servicing criteria are
divided generally into four categories:

            o   general servicing considerations;

            o   cash collection and administration;

            o   investor remittances and reporting; and

            o   pool asset administration.

      Each servicing assessment report is required to be accompanied by
attestation report provided by a public registered accounting firm. The
attestation report must contain an opinion of the registered public accounting
firm as to whether the related servicing criteria assessment was fairly stated
in all material respects, or a statement that the firm cannot express that
opinion. The attestation examination the must be made in accordance with the
attestation engagement standards issued or adopted by the Public Company
Accounting Oversight Board.

      Copies of the annual servicing compliance statement, the servicing
criteria assessment report and related accountants attestations and the annual
accountants' statement (if any) may be obtained by securityholders of the
related series without charge upon written request to the master servicer at the
address set forth in the related prospectus supplement.

CERTAIN MATTERS REGARDING THE MASTER SERVICER AND THE DEPOSITOR

      The master servicer under each Pooling and Servicing Agreement or Sale and
Servicing Agreement, as applicable, will be named in the related prospectus
supplement. The entity serving as master servicer may have normal business
relationships with the depositor or the depositor's affiliates.


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      Each Agreement will provide that the master servicer may not resign from
its obligations and duties under the Agreement except upon a determination that
its duties thereunder are no longer permissible under applicable law or upon
appointment of a successor servicer acceptable to the trustee and with written
confirmation from each Ratings Agency that such resignation and appointment
would not result in a downgrade or withdrawal of the ratings of any of the
securities. The master servicer may, however, be removed from its obligations
and duties as set forth in the Agreement. No resignation will become effective
until the trustee or a successor servicer has assumed the master servicer's
obligations and duties under the Agreement.

      Each Agreement will further provide that neither the master servicer, the
depositor nor any director, officer, employee, or agent of the master servicer
or the depositor will be under any liability to the trustee, 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 Agreement, or for errors in
judgment; provided, however, that neither the master servicer, the depositor nor
any person will be protected against any breach of a representation and
warranty, any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties
thereunder or by reason of reckless disregard of obligations and duties
thereunder. Each Agreement will further provide that the master servicer, the
depositor and any director, officer, employee or agent of the master servicer or
the depositor will be entitled to indemnification by the related trust fund and
will be held harmless against any loss, liability or expense incurred in
connection with any audit, controversy or judicial proceeding relating to a
governmental taxing authority or any legal action relating to the Agreement or
the securities, other than any loss, liability or expense related to any
specific loan or loans (except any loss, liability or expense otherwise
reimbursable pursuant to the Agreement) and any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties thereunder or by reason of reckless disregard of
obligations and duties thereunder. In addition, each Agreement will provide that
neither the master servicer nor the depositor will be under any obligation to
appear in, prosecute or defend any legal action which is not incidental to its
respective responsibilities under the Agreement and which in its opinion may
involve it in any expense or liability. The master servicer or the depositor
may, however, in its discretion undertake any action which it may deem necessary
or desirable with respect to the Agreement and the rights and duties of the
parties thereto and the interests of the trustee and the securityholders
thereunder. In that event, the legal expenses and costs of the action and any
liability resulting therefrom will be expenses, costs and liabilities of the
trust fund and the master servicer or the depositor, as the case may be, will be
entitled to be reimbursed therefor out of funds otherwise distributable to
securityholders.

      In general, any person into which the master servicer may be merged or
consolidated, or any person resulting from any merger or consolidation to which
the master servicer is a party, or any person succeeding to the business of the
master servicer, will be the successor of the master servicer under each
Agreement, provided that that person is qualified to sell mortgage loans to, and
service mortgage loans on behalf of, Fannie Mae or Freddie Mac.

EVENTS OF DEFAULT; RIGHTS UPON EVENT OF DEFAULT

      Pooling and Servicing Agreement; Sale and Servicing Agreement. The
applicable prospectus supplement may provide for other Events of Default under
any Pooling and Servicing Agreement or Sale and Servicing Agreement, but if it
does not, the Events of Default will consist of

o     any failure by the master servicer to deposit in a Security Account or
      remit to the trustee any payment which continues unremedied for five days
      after the giving of written notice of the failure to the master servicer
      by the trustee or the depositor, or to the master servicer, the depositor
      and the trustee by the holders of securities of that class evidencing not
      less than 25% of the total distributions allocated to the class
      ("percentage interests");

o     any failure by the master servicer to observe or perform in any material
      respect any of its other covenants or agreements in the Agreement which
      continues unremedied for sixty days after the giving of written notice of
      the failure to the master servicer by the trustee or the depositor, or to
      the master servicer, the depositor and the trustee by the holders of
      securities of any class evidencing not less than 25% of the aggregate
      percentage interests constituting that class; and


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o     certain events of insolvency, readjustment of debt, marshalling of assets
      and liabilities or similar proceeding and certain actions by or on behalf
      of the master servicer indicating its insolvency, reorganization or
      inability to pay its obligations.

      If specified in the related prospectus supplement, the Agreement will
permit the trustee to sell the Trust Fund Assets and the other assets of the
trust fund described under "Credit Enhancement" herein in the event that
payments on them are insufficient to make payments required in the Agreement.
The assets of the trust fund will be sold only under the circumstances and in
the manner specified in the related prospectus supplement.

      The applicable prospectus supplement may provide for steps required to be
taken if an Event of Default remains unremedied, but if it does not, so long as
an Event of Default under an Agreement remains unremedied, the trustee may, and
at the direction of holders of securities of any class evidencing not less than
25% of the aggregate percentage interests constituting that class and under
those circumstances as may be specified in the Agreement, the trustee shall
terminate all of the rights and obligations of the master servicer under the
Agreement relating to the trust fund and in and to the related Trust Fund
Assets, whereupon the trustee will succeed to all of the responsibilities,
duties and liabilities of the master servicer under the Agreement, including, if
specified in the related prospectus supplement, the obligation to make advances,
and will be entitled to similar compensation arrangements. After the master
servicer has received notice of termination, the trustee may execute and
deliver, on behalf of the master servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments, and do or accomplish all other acts or
things necessary or appropriate to effect the termination of the master
servicer, including the transfer and endorsement or assignment of the loans and
related documents. The master servicer has agreed to cooperate with the trustee
in effecting the termination of the master servicer, including the transfer to
the trustee of all cash amounts which shall at the time be credited to the
Security Account, or thereafter be received with respect to the loans. Upon
request of the trustee, the master servicer has also agreed, at its expense, to
deliver to the assuming party all documents and records relating to each
subservicing agreement and the loans then being serviced thereunder and an
accounting of amounts collected held by it and otherwise use its best efforts to
effect the orderly and efficient transfer of the subservicing agreement to the
assuming party. No additional funds have been reserved to pay for any expenses
not paid by the master servicer in connection with a servicing transfer.

      In the event that the trustee is unwilling or unable to act as the
successor to the master servicer, it may appoint, or petition a court of
competent jurisdiction for the appointment of, a mortgage loan servicing
institution with a net worth of at least $15,000,000 to act as successor to the
master servicer under the Agreement. Pending that appointment, the trustee is
obligated to act in that capacity. The trustee and any successor may agree upon
the servicing compensation to be paid, which in no event may be greater than the
compensation payable to the master servicer under the Agreement.

      Unless otherwise provided in the related prospectus supplement, no
securityholder, solely by virtue of the holder's status as a securityholder,
will have any right under any Agreement to institute any proceeding with respect
to the Agreement, unless the holder previously has given to the trustee written
notice of default and unless the holders of securities of any class of that
series evidencing not less than 25% of the aggregate percentage interests
constituting the class have made written request upon the trustee to institute
the proceeding in its own name as trustee thereunder and have offered to the
trustee reasonable indemnity, and the trustee for 60 days has neglected or
refused to institute that proceeding.

      Indenture. The applicable prospectus supplement may provide for other
Events of Default, but if it does not, the Events of Default under each
Indenture will consist of:

o     a default by the issuer in the payment of any principal of or interest on
      any note of that series which continues unremedied for five days after the
      giving of written notice of the default is given as specified in the
      related prospectus supplement;

o     failure to perform in any material respect any other obligation or observe
      any representation or warranty of the issuer in the Indenture which
      continues for a period of thirty (30) days after notice thereof is given
      in accordance with the procedures described in the related prospectus
      supplement;


                                       69



o     certain events of insolvency with respect to the issuer; or

o     any other Event of Default provided with respect to notes of that series
      including but not limited to certain defaults on the part of the issuer,
      if any, of a credit enhancement instrument supporting the notes.

      Unless otherwise provided in the related prospectus supplement, if an
Event of Default with respect to the notes of any series at the time outstanding
occurs and is continuing, either the trustee or the holders of not less than 51%
of the then aggregate outstanding amount of the notes of that series may declare
the principal amount (or, if the notes of that series have an interest rate of
0%, the 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
that series to be due and payable immediately. That declaration may, under
certain circumstances, be rescinded and annulled by the holders of not less than
51% of the percentage interests of the notes of the series.

      Unless otherwise provided in the related prospectus supplement, if,
following an Event of Default with respect to any series of notes, the notes of
the series have been declared to be due and payable, the trustee may,
notwithstanding that acceleration, elect to maintain possession of the
collateral securing the notes of the series and to continue to apply
distributions on the collateral as if there had been no declaration of
acceleration if the collateral continues to provide sufficient funds for the
payment of principal of and interest on the notes of the series as they would
have become due if there had not been a declaration. In addition, unless
otherwise specified in the related prospectus supplement, the 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 the series for five days or more, unless

o     the holders of 100% of the percentage interests of the notes of the series
      consent to the sale,

o     the proceeds of the sale or liquidation are sufficient to pay in full the
      principal of and accrued interest, due and unpaid, on the outstanding
      notes of the series at the date of the sale or

o     the trustee determines that the collateral would not be sufficient on an
      ongoing basis to make all payments on the notes as the payments would have
      become due if the notes had not been declared due and payable, and the
      trustee obtains the consent of the holders of a majority of the percentage
      interests of the notes of the series.

      If specified in the related prospectus supplement, other parties, such as
a credit enhancement provider, may have certain rights with respect to remedies
upon an Event of Default that may limit the rights of the related noteholders.

      In the event that the trustee liquidates the collateral in connection with
an Event of Default involving a default for five days or more in the payment of
principal of or interest on the notes of a series, the Indenture may provide
that the trustee will have a prior lien on the proceeds of that liquidation for
unpaid fees and expenses. As a result, upon the occurrence of that Event of
Default, the amount available for distribution to the noteholders would be less
than would otherwise be the case. However, the 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 noteholders after the occurrence of that Event of Default.

      In the event the principal of the notes of a series is declared due and
payable, as described above, the holders of the 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 the discount which is unamortized.

      Subject to the provisions of the Indenture relating to the duties of the
trustee, in case an Event of Default shall occur and be continuing with respect
to a series of notes, the 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 holders of notes of the series, unless the holders offered to the trustee
security or indemnity satisfactory to it against the costs, expenses and
liabilities which might be incurred by it in complying with the request or
direction. Subject to the provisions for


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indemnification and certain limitations contained in the Indenture, the holders
of not less than 51% of the then aggregate outstanding amount of the notes of
the series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the trustee or exercising
any trust or power conferred on the trustee with respect to the notes of the
series, and the holders of not less than 51% of the then aggregate outstanding
amount of the notes of the 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 holders of the outstanding
notes of the series affected thereby. If provided in the related prospectus
supplement, the priority of payments payable on the notes may change following
an Event of Default.

AMENDMENT

      The applicable prospectus supplement may specify other amendment
provisions, but if it does not, each Agreement may be amended by the parties to
the Agreement, without the consent of any of the securityholders,

            (a) to cure any ambiguity;

            (b) to correct any defective provision in the Agreement or to
      supplement any provision in the Agreement that may be inconsistent with
      any other provision in it;

            (c) to conform the Agreement to the related prospectus supplement or
      the prospectus;

            (d) to modify, alter, amend, add or to rescind any of the terms or
      provisions contained in the Agreement to comply with any rules or
      regulations promulgated by the SEC from time to time; or

            (e) to make any other revisions with respect to matters or questions
      arising under the Agreement which are not inconsistent with the provisions
      in it,

provided that the action will not adversely affect in any material respect the
interests of any securityholder. Any amendment made solely to conform the
Agreement to the final prospectus supplement provided to investors in connection
with the initial offering of the securities by the depositor will be deemed not
to materially and adversely affect the interests of securityholders. In
addition, an amendment will be deemed not to adversely affect in any material
respect the interests of the securityholders if the person requesting the
amendment obtains a letter from each Rating Agency requested to rate the class
or classes of securities of the related series stating that the amendment will
not result in the downgrading or withdrawal of the respective ratings then
assigned to the related securities.

      In addition, to the extent provided in the related Agreement, an Agreement
may be amended without the consent of any of the securityholders, to change the
manner in which the Security Account is maintained, provided that the change
does not adversely affect the then current rating on the class or classes of
securities of the related series that have been rated at the request of the
depositor. Moreover, the related Agreement may be amended to modify, eliminate
or add to any of its provisions to the extent necessary to modify the terms or
provisions related to any lower-tier REMIC, to maintain the qualification of the
related trust fund as a REMIC or to avoid or minimize the risk of imposition of
any tax on the REMIC, if a REMIC election is made with respect to the trust
fund, or to comply with any other requirements of the Code, if the trustee has
received an opinion of counsel to the effect that the action is necessary or
helpful to ensure the proper operation of the master REMIC, maintain the
qualification, avoid or minimize that risk or comply with those requirements, as
applicable.

      The applicable prospectus supplement may specify other amendment
provisions, but if it does not, each Agreement may also be amended by the
parties to the related Agreement with consent of holders of securities of the
related series evidencing not less than 51% of the aggregate percentage
interests of each class affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Agreement or of modifying in any manner the rights of the holders of the
related securities; provided, however, that the amendment may not


                                       71



o     reduce in any manner the amount of or delay the timing of, payments
      received on Trust Fund Assets which are required to be distributed on any
      security without the consent of the holder of the related security,

o     adversely affect in any material respect the interests of the holders of
      any class of securities in a manner other than as described in the
      preceding bullet point, without the consent of the holders of securities
      of the class evidencing, as to the class, percentage interests aggregating
      66%, or

o     reduce the aforesaid percentage of securities of any class the holders of
      which are required to consent to the amendment without the consent of the
      holders of all securities of that class covered by the Agreement then
      outstanding.

If a REMIC election is made with respect to a trust fund, the trustee will not
be entitled to consent to an amendment to the related Agreement without having
first received an opinion of counsel to the effect that the amendment will not
cause the related trust fund to fail to qualify as a REMIC. If so described in
the related prospectus supplement, an amendment of an Agreement may require the
consent of persons that are not party to the agreement, such as a credit
enhancement provider.

TERMINATION; OPTIONAL TERMINATION

      Pooling and Servicing Agreement; Sale and Servicing Agreement. The
applicable prospectus supplement may provide for the timing by which the
Agreement terminates, but if it does not, the obligations created by each
Pooling and Servicing Agreement and Sale and Servicing Agreement for each series
of securities will terminate upon the payment to the related securityholders of
all amounts held in the Security Account or by the master servicer and required
to be paid to them pursuant to the related Agreement following the earlier of:

            (i)   the final payment of or other liquidation of the last of the
      Trust Fund Assets subject thereto or the disposition of all property
      acquired upon foreclosure of any Trust Fund Assets remaining in the trust
      fund; and

            (ii)  the purchase by the master servicer, the party specified in
      the related prospectus supplement or, if REMIC treatment has been elected
      and if specified in the related prospectus supplement, by the holder of
      the residual interest in the REMIC (see "Federal Income Tax Consequences"
      below), from the related trust fund of all of the remaining Trust Fund
      Assets and all property acquired in respect of the Trust Fund Assets.

      Any purchase of Trust Fund Assets and property acquired in respect of
Trust Fund Assets evidenced by a series of securities will be made at the option
of the master servicer, or the party specified in the related prospectus
supplement, including the holder of the REMIC residual interest, at a price
specified in the related prospectus supplement. The exercise of this right will
effect early retirement of the securities of that series, but the right of the
master servicer, or the other party or, if applicable, the holder of the REMIC
residual interest, to so purchase is subject to the principal balance of the
related Trust Fund Assets being less than the percentage specified in the
related prospectus supplement of the aggregate principal balance of the Trust
Fund Assets at the cut-off date for the series. The foregoing is subject to the
provision that if a REMIC election is made with respect to a trust fund, any
repurchase pursuant to clause (ii) above will not be made if the repurchase
would result in a "prohibited transaction tax" within the meaning of Section
860F(a)(1) of the Code being imposed on any REMIC.

      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 trustee for cancellation of all the notes of
the related series or, with certain limitations, upon deposit with the trustee
of funds sufficient for the payment in full of all of the notes of the related
series.

      In addition, 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 the series (except for certain
obligations relating to temporary notes and exchange of notes, to register the
transfer of or exchange notes of the series, to replace stolen, lost or
mutilated notes of the series, to maintain paying agencies and to hold monies
for


                                       72



payment in trust) upon the deposit with the 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 the series on
the last scheduled distribution date for the notes and any installment of
interest on the notes in accordance with the terms of the Indenture and the
notes of the series. In the event of a defeasance and discharge of notes of a
series as described above, holders of notes of the related series would be able
to look only to that money and/or direct obligations for payment of principal
and interest, if any, on their notes until maturity.

THE TRUSTEE

      The trustee under each Agreement will be named in the applicable
prospectus supplement. The commercial bank or trust company serving as trustee
may have normal banking relationships with the depositor, the master servicer
and any of their respective affiliates.

                       CERTAIN LEGAL ASPECTS OF THE LOANS

      The following discussion contains summaries, which are general in nature,
of certain legal matters relating to the loans. Because those legal aspects are
governed primarily by applicable state law (which laws may differ
substantially), the descriptions do not, except as expressly provided below,
reflect the laws of any particular state, nor encompass the laws of all states
in which the security for the loans is situated. The descriptions are qualified
in their entirety by reference to the applicable federal laws and the
appropriate laws of the states in which loans may be originated.

GENERAL

      The loans for a series may be secured by deeds of trust, mortgages,
security deeds or deeds to secure debt, depending upon the prevailing practice
in the state in which the property subject to the loan is located. Deeds of
trust are used almost exclusively in California instead of mortgages. A mortgage
creates a lien upon the real property encumbered by the mortgage, which lien is
generally not prior to the lien for real estate taxes and assessments. Priority
between mortgages depends on their terms and generally on the order of recording
with a state or county office. There are two parties to a mortgage: the
mortgagor, who is the borrower and owner of the mortgaged property, and the
mortgagee, who is the lender. Under the mortgage instrument, the mortgagor
delivers to the mortgagee a note or bond and the mortgage. Although a deed of
trust is similar to a mortgage, a deed of trust formally has three parties, the
borrower-property owner called the trustor (similar to a mortgagor), a lender
(similar to a mortgagee) called the beneficiary, and a third-party grantee
called the trustee. Under a deed of trust, the borrower grants the property,
irrevocably until the debt is paid, in trust, generally with a power of sale, to
the trustee to secure payment of the obligation. A security deed and a deed to
secure debt are special types of deeds which indicate on their face that they
are granted to secure an underlying debt. By executing a security deed or deed
to secure debt, the grantor conveys title to, as opposed to merely creating a
lien upon, the subject property to the grantee until the underlying debt is
repaid. The trustee's authority under a deed of trust, the mortgagee's authority
under a mortgage and the grantee's authority under a security deed or deed to
secure debt are governed by law and, with respect to some deeds of trust, the
directions of the beneficiary.

      In this prospectus, we generally use the term "mortgage" to generically
describe real-estate security instruments, however, if certain information
relates to a particular security instrument, we will refer to that security
instrument.

      Cooperatives. Certain of the loans may be cooperative loans. The
cooperative owns all the real property that comprises the project, including the
land, separate dwelling units and all common areas. The cooperative is directly
responsible for project management and, in most cases, payment of real estate
taxes and hazard and liability insurance. If there is a blanket mortgage on the
cooperative and/or underlying land, as is generally the case, the cooperative,
as project mortgagor, is also responsible for meeting these mortgage
obligations. A blanket mortgage is ordinarily incurred by the cooperative in
connection with the construction or purchase of the cooperative's apartment
building. The interest of the occupant under proprietary leases or occupancy
agreements to which that cooperative is a party are generally subordinate to the
interest of the holder of the blanket mortgage in that building.


                                       73



If the cooperative is unable to meet the payment obligations arising under its
blanket mortgage, the mortgagee holding the blanket mortgage could foreclose on
that mortgage and terminate all subordinate proprietary leases and occupancy
agreements. In addition, the blanket mortgage on a cooperative may provide
financing in the form of a mortgage that does not fully amortize with a
significant portion of principal being due in one lump sum at final maturity.
The inability of the cooperative to refinance this mortgage and its consequent
inability to make the final payment could lead to foreclosure by the mortgagee
providing the financing. A foreclosure in either event by the holder of the
blanket mortgage could eliminate or significantly diminish the value of any
collateral held by the lender who financed the purchase by an individual
tenant-stockholder of cooperative shares or, in the case of a trust fund
including cooperative loans, the collateral securing the cooperative loans.

      The cooperative is owned by tenant-stockholders who, through ownership of
stock, shares or membership certificates in the corporation, receive proprietary
leases or occupancy agreements which confer exclusive rights to occupy specific
units. Generally, a tenant-stockholder of a cooperative must make a monthly
payment to the cooperative representing the tenant-stockholder's pro rata share
of the cooperative's payments for its blanket mortgage, real property taxes,
maintenance expenses and other capital or ordinary expenses. An ownership
interest in a cooperative and accompanying rights is financed through a
cooperative share loan evidenced by a promissory note and secured by a security
interest in the occupancy agreement or proprietary lease and in the related
cooperative shares. The lender takes possession of the share certificate and a
counterpart of the proprietary lease or occupancy agreement, and a financing
statement covering the proprietary lease or occupancy agreement and the
cooperative shares is filed in the appropriate state and local offices to
perfect the lender's interest in its collateral. Subject to the limitations
discussed below, upon default of the tenant-stockholder, the lender may sue for
judgment on the promissory note, dispose of the collateral at a public or
private sale or otherwise proceed against the collateral or tenant-stockholder
as an individual as provided in the security agreement covering the assignment
of the proprietary lease or occupancy agreement and the pledge of cooperative
shares.

FORECLOSURE

      Deed of Trust. Foreclosure of a deed of trust is generally accomplished by
a non-judicial sale under a specific provision in the deed of trust which
authorizes the trustee to sell the property at public auction upon any material
default by the borrower under the terms of the note or deed of trust. In certain
states, foreclosure also may be accomplished by judicial action in the manner
provided for foreclosure of mortgages. In addition to any notice requirements
contained in a deed of trust, in some states (such as California), the trustee
must record a notice of default and send a copy to the borrower-trustor, to any
person who has recorded a request for a copy of any notice of default and notice
of sale, to any successor in interest to the borrower-trustor, to the
beneficiary of any junior deed of trust and to certain other persons. In some
states (including California), the borrower-trustor has the right to reinstate
the loan at any time following default until shortly before the trustee's sale.
In general, the borrower, or any other person having a junior encumbrance on the
real estate, may, during a statutorily prescribed reinstatement period, cure a
monetary default by paying the entire amount in arrears plus other designated
costs and expenses incurred in enforcing the obligation. Generally, state law
controls the amount of foreclosure expenses and costs, including attorney's
fees, which may be recovered by a lender. After the reinstatement period has
expired without the default having been cured, the borrower or junior lienholder
no longer has the right to reinstate the loan and must pay the loan in full to
prevent the scheduled foreclosure sale. If the deed of trust is not reinstated
within any applicable cure period, a notice of sale must be posted in a public
place and, in most states (including California), published for a specific
period of time in one or more newspapers. In addition, some state laws require
that a copy of the notice of sale be posted on the property and sent to all
parties having an interest of record in the real property. In California, the
entire process from recording a notice of default to a non-judicial sale usually
takes four to five months.

      Mortgages. Foreclosure of a mortgage is generally accomplished by judicial
action. The action is initiated by the service of legal pleadings upon all
parties having an interest in the real property. Delays in completion of the
foreclosure may occasionally result from difficulties in locating necessary
parties. Judicial foreclosure proceedings are often not contested by any of the
parties. When the mortgagee's right to foreclosure is contested, the legal
proceedings necessary to resolve the issue can be time consuming. After the
completion of a judicial foreclosure proceeding, the court generally issues a
judgment of foreclosure and appoints a referee or other court officer to conduct
the sale of the property. In some states, mortgages may also be foreclosed by
advertisement, pursuant to a power of sale provided in the mortgage.


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      Although foreclosure sales are typically public sales, frequently no third
party purchaser bids in excess of the lender's lien because of the difficulty of
determining the exact status of title to the property, the possible
deterioration of the property during the foreclosure proceedings and a
requirement that the purchaser pay for the property in cash or by cashier's
check. Thus the foreclosing lender often purchases the property from the trustee
or referee for an amount equal to the principal amount outstanding under the
loan, accrued and unpaid interest and the expenses of foreclosure in which event
the mortgagor's debt will be extinguished or the lender may purchase for a
lesser amount in order to preserve its right against a borrower to seek a
deficiency judgment in states where the judgment is available. Thereafter,
subject to the right of the borrower in some states to remain in possession
during the redemption period, the lender will assume the burden of ownership,
including obtaining hazard insurance and making the 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. Any loss may be reduced by the receipt of
any mortgage guaranty insurance proceeds.

      Courts have imposed general equitable principles upon foreclosure, which
are generally designed to mitigate the legal consequences to the borrower of the
borrower's defaults under the loan documents. Some courts have been faced with
the issue of whether federal or state constitutional provisions reflecting due
process concerns for fair notice require that borrowers under deeds of trust
receive notice longer than that prescribed by statute. For the most part, these
cases have upheld the notice provisions as being reasonable or have found that
the sale by a trustee under a deed of trust does not involve sufficient state
action to afford constitutional protection to the borrower.

      When the beneficiary under a junior mortgage or deed of trust cures the
default and reinstates or redeems by paying the full amount of the senior
mortgage or deed of trust, the amount paid by the beneficiary so to cure or
redeem becomes a part of the indebtedness secured by the junior mortgage or deed
of trust. See "Junior Mortgages; Rights of Senior Mortgagees" below.

      Cooperative Loans. The cooperative shares owned by the tenant-stockholder
and pledged to the lender are, in almost all cases, subject to restrictions on
transfer as set forth in the cooperative's certificate of incorporation and
bylaws, as well as the proprietary lease or occupancy agreement, and may be
cancelled by the cooperative for failure by the tenant-stockholder to pay rent
or other obligations or charges owed by the tenant-stockholder, including
mechanics' liens against the cooperative apartment building incurred by the
tenant-stockholder. The proprietary lease or occupancy agreement generally
permits the cooperative to terminate the lease or agreement 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 on its obligations
under the proprietary lease or occupancy agreement. A default by the
tenant-stockholder under the proprietary lease or occupancy agreement will
usually constitute a default under the security agreement between the lender and
the tenant-stockholder.

      The recognition agreement generally provides that, in the event that the
tenant-stockholder has defaulted under the proprietary lease or occupancy
agreement, the cooperative will take no action to terminate the lease or
agreement until the lender has been provided with an opportunity to cure the
default. The recognition agreement typically provides that if the proprietary
lease or occupancy agreement is terminated, the cooperative will recognize the
lender's lien against proceeds from the sale of the cooperative apartment,
subject, however, to the cooperative's right to sums due under the proprietary
lease or occupancy agreement. The total amount owed to the cooperative by the
tenant-stockholder, which the lender generally cannot restrict and does not
monitor, could reduce the value of the collateral below the outstanding
principal balance of the cooperative loan and accrued and unpaid interest
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 Uniform Commercial
Code (the "UCC") and the security agreement relating to those


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shares. Article 9 of the UCC requires that a sale be conducted in a
"commercially reasonable" manner. Whether a foreclosure sale has been conducted
in a "commercially reasonable" manner will depend on the facts in each case. In
determining commercial reasonableness, a court will look to the notice given the
debtor and the method, manner, time, place and terms of the foreclosure.
Generally, a sale conducted according to the usual practice of banks selling
similar collateral will be considered reasonably conducted.

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

      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 the building but who did not purchase shares in the
cooperative when the building was so converted.

ENVIRONMENTAL RISKS

      Real property pledged as security to a lender may be subject to unforeseen
environmental risks. Environmental remedial costs can be substantial and can
potentially exceed the value of the property. Under the laws of certain states,
contamination of a property may give rise to a lien on the property to assure
the payment of the costs of clean-up. In several states that lien has priority
over the lien of an existing mortgage against the property. In addition, under
the federal Comprehensive Environmental Response, Compensation and Liability Act
of 1980 ("CERCLA"), the EPA may impose a lien on property where EPA has incurred
clean-up costs. However, a CERCLA lien is subordinate to pre-existing, perfected
security interests.

      Under the laws of some states, and under CERCLA, it is conceivable that a
secured lender may be held liable as an "owner" or "operator" for the costs of
addressing releases or threatened releases of hazardous substances at a
Property, even though the environmental damage or threat was caused by a prior
or current owner or operator. CERCLA imposes liability for the costs on any and
all "potentially responsible parties," including "owners" or "operators".
However, CERCLA excludes from the definition of "owner or operator" a secured
creditor who holds indicia of ownership primarily to protect its security
interest (the "secured creditor exemption") but without "participating in the
management" of the property. Thus, if a lender's activities encroach on the
actual management of a contaminated facility or property, the lender may incur
liability as an "owner or operator" under CERCLA. Similarly, if a lender
forecloses and takes title to a contaminated facility or property, the lender
may incur CERCLA liability in various circumstances, including, but not limited
to, when it fails to market the property in a timely fashion.

      Whether actions taken by a lender would constitute participation in the
management of a mortgaged property so as to render the secured creditor
exemption unavailable to a lender, was historically a matter of judicial
interpretation of the statutory language. Court decisions were inconsistent and,
in fact, in 1990, the Court of Appeals for the Eleventh Circuit suggested that
the mere capacity of the lender to influence a borrower's decisions regarding
disposal of hazardous substances was sufficient participation in the management
of a borrower's business to deny the protection of the secured creditor
exemption to the lender. In 1996, Congress enacted the Asset Conservation,
Lender Liability and Deposit Insurance Protection Act ("Asset Conservation
Act"), which provides that, in order to be deemed to have participated in the
management of a mortgaged property, a lender must actually participate in the
operational affairs of the property. The Asset Conservation Act also provides
that participation in the management of the property does not include "merely
having the capacity to influence, or unexercised right to control" operations.
Rather, a lender will lose the protection of the secured creditor exemption only
if it (a) exercises decision making control over the borrower's environmental
compliance and hazardous substance handling and disposal practices at the
property, or (b) exercises control comparable to the manager of the property, so
that the lender has assumed responsibility for (i) "the overall management of
the facility encompassing day-to-day decision


                                       76



making with respect to environmental compliance" or (ii) "over all or
substantially all of the operational functions" of the property other than
environmental compliance.

      If a lender is or becomes liable, it may be able to bring an action for
contribution under CERCLA or other statutory or common laws against any other
"potentially responsible parties," including a previous owner or operator, who
created the environmental hazard, but those persons or entities may be bankrupt
or otherwise judgment proof. The costs associated with environmental cleanup may
be substantial. It is conceivable that the costs arising from the circumstances
set forth above would result in a loss to certificateholders.

      CERCLA does not apply to petroleum products, and the secured creditor
exemption does not govern liability for cleanup costs under state laws or under
federal laws other than CERCLA, including Subtitle I of the federal Resource
Conservation and Recovery Act ("RCRA"), which regulates underground petroleum
storage tanks (except heating oil tanks). The EPA has adopted a lender liability
rule for underground storage tanks under Subtitle I of RCRA. Under that rule, a
holder of a security interest in an underground storage tank or real property
containing an underground storage tank is not considered an operator of the
underground storage tank as long as petroleum is not added to, stored in or
dispensed from the tank. Moreover, under the Asset Conservation Act, the
protections accorded to lenders under CERCLA are also accorded to holders of
security interests in underground petroleum storage tanks or the properties on
which they are located. A lender will lose the protections accorded to secured
creditors under federal law for petroleum underground storage tanks by
"participating in the management" of the tank or tank system if the lender
either: (a) "exercises decisionmaking control over the operational" aspects of
the tank or tank system; or (b) exercises control comparable to a manager of the
property, so that the lender has assumed responsibility for overall management
of the property including day-to-day decision making with regard to all, or
substantially all, operational aspects. It should be noted, however, that
liability for cleanup of petroleum contamination may be governed by state law,
which may not provide for any specific protection for secured creditors.

      While the "owner" or "operator" of contaminated property may face
liability for investigating and cleaning up the property, regardless of fault,
it may also be required to comply with environmental regulatory requirements,
such as those governing asbestos. In addition, the presence of asbestos, mold,
lead-based paint, lead in drinking water, and/or radon at a real property may
lead to the incurrence of costs for remediation, mitigation or the
implementation of an operations and maintenance plan. Furthermore, the presence
of asbestos, mold, lead-based paint, lead in drinking water, radon and/or
contamination at a property may present a risk that third parties will seek
recovery from "owners" or "operators" of that property for personal injury or
property damage. Environmental regulatory requirements for property "owners" or
"operators," or law that is the basis for claims of personal injury or property
damage, may not have exemptions for secured creditors.

      In general, at the time the loans were originated no environmental
assessment, or a very limited environmental assessment, of the Properties was
conducted.

RIGHTS OF REDEMPTION

      In some states, after sale pursuant to a deed of trust or foreclosure of a
mortgage, the borrower and foreclosed junior lienors are given a statutory
period in which to redeem the property from the foreclosure sale. In certain
other states (including California), this right of redemption applies only to
sales following judicial foreclosure, and not to sales pursuant to a
non-judicial power of sale. In most states where the right of redemption is
available, statutory redemption may occur upon payment of the foreclosure
purchase price, accrued interest and taxes. In other states, redemption may be
authorized if the former borrower 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 the lender subsequent to
foreclosure or sale under a deed of trust. Consequently, the practical effect of
the redemption right is to force the lender to retain the property and pay the
expenses of ownership until the redemption period has run. In some states, there
is no right to redeem property after a trustee's sale under a deed of trust.


                                       77



ANTI-DEFICIENCY LEGISLATION AND OTHER LIMITATIONS ON LENDERS

      Certain states have imposed statutory and judicial restrictions that limit
the remedies of a beneficiary under a deed of trust or a mortgagee under a
mortgage. In some states, including California, statutes and case law limit the
right of the beneficiary or mortgagee to obtain a deficiency judgment against
borrowers financing the purchase of their residence or following sale under a
deed of trust or certain other foreclosure proceedings. A deficiency judgment is
a personal judgment against the borrower equal in most cases to the difference
between the amount due to the lender and the fair market value of the real
property at the time of the foreclosure sale. In certain states, including
California, if a lender simultaneously originates a loan secured by a senior
lien on a particular property and a loan secured by a junior lien on the same
property, that lender as the holder of the junior lien may be precluded from
obtaining a deficiency judgment with respect to the excess of the aggregate
amount owed under both loans over the proceeds of any sale under a deed of trust
or other foreclosure proceedings. As a result of these prohibitions, it is
anticipated that in most instances the master servicer will utilize the
non-judicial foreclosure remedy and will not seek deficiency judgments against
defaulting borrowers.

      Some state 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.
In certain other states, the lender has the option of bringing a personal action
against the borrower on the debt without first exhausting that security;
however, in some of these states, the lender, following judgment on that
personal action, may be deemed to have elected a remedy and may be precluded
from exercising remedies with respect to the security. Consequently, the
practical effect of the election requirement, when applicable, is that lenders
will usually proceed first against the security rather than bringing a personal
action against the borrower. In some states, exceptions to the anti-deficiency
statutes are provided for in certain instances where the value of the lender's
security has been impaired by acts or omissions of the borrower, for example, in
the event of waste of the property. Finally, other statutory provisions limit
any deficiency judgment against the former borrower following a foreclosure 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 foreclosure
sale.

      Generally, Article 9 of the UCC governs foreclosure on cooperative shares
and the related proprietary lease or occupancy agreement. Some courts have
interpreted section 9-504 of the UCC to prohibit a deficiency award unless the
creditor establishes that the sale of the collateral (which, in the case of a
cooperative loan, would be the shares of the cooperative and the related
proprietary lease or occupancy agreement) was conducted in a commercially
reasonable manner.

      In addition to anti-deficiency and related legislation, numerous other
federal and state statutory provisions, including the federal bankruptcy laws,
and state laws affording relief to debtors, may interfere with or affect the
ability of the secured mortgage lender to realize upon its security. For
example, in a proceeding under the federal Bankruptcy Code, a lender may not
foreclose on a mortgaged property without the permission of the bankruptcy
court. The rehabilitation plan proposed by the debtor may provide, if the
mortgaged property is not the debtor's principal residence and the court
determines that the value of the mortgaged property is less than the principal
balance of the mortgage loan, for the reduction of the secured indebtedness to
the value of the mortgaged property as of the date of the commencement of the
bankruptcy, rendering the lender a general unsecured creditor for the
difference, and also may reduce the monthly payments due under the mortgage
loan, change the rate of interest and alter the mortgage loan repayment
schedule. The effect of any proceedings under the federal Bankruptcy Code,
including but not limited to any automatic stay, could result in delays in
receiving payments on the loans underlying a series of securities and possible
reductions in the aggregate amount of the payments.

      The federal tax laws provide priority to certain tax liens over the lien
of a mortgage or secured party.

DUE-ON-SALE CLAUSES

      Generally, each conventional loan will contain a due-on-sale clause which
will generally provide that if the mortgagor or obligor sells, transfers or
conveys the Property, the loan or contract may be accelerated by the mortgagee
or secured party. Court decisions and legislative actions have placed
substantial restriction on the right of lenders to enforce the clauses in many
states. For instance, the California Supreme Court in August 1978 held


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that due-on-sale clauses were generally unenforceable. However, the Garn-St
Germain Depository Institutions Act of 1982 (the "Garn-St Germain Act"), subject
to certain exceptions, preempts state constitutional, statutory and case law
prohibiting the enforcement of due-on-sale clauses. As a result, due-on-sale
clauses have become generally enforceable except in those states whose
legislatures exercised their authority to regulate the enforceability of the
clauses with respect to mortgage loans that were (i) originated or assumed
during the "window period" under the Garn-St Germain Act which ended in all
cases not later than October 15, 1982, and (ii) originated by lenders other than
national banks, federal savings institutions and federal credit unions. FHLMC
has taken the position in its published mortgage servicing standards that, out
of a total of eleven "window period states," five states (Arizona, Michigan,
Minnesota, New Mexico and Utah) have enacted statutes extending, on various
terms and for varying periods, the prohibition on enforcement of due-on-sale
clauses with respect to certain categories of window period loans. Also, the
Garn-St Germain Act does "encourage" lenders to permit assumption of loans at
the original rate of interest or at some other rate less than the average of the
original rate and the market rate.

      As to loans secured by an owner-occupied residence, the Garn-St Germain
Act sets forth nine specific instances in which a mortgagee covered by the Act
may not exercise its rights under a due-on-sale clause, notwithstanding the fact
that a transfer of the property may have occurred. The inability to enforce a
due-on-sale clause may result in transfer of the related Property to an
uncreditworthy person, which could increase the likelihood of default or may
result in a mortgage bearing an interest rate below the current market rate
being assumed by a new home buyer, which may affect the average life of the
loans and the number of loans which may extend to maturity.

      In addition, under federal bankruptcy law, due-on-sale clauses may not be
enforceable in bankruptcy proceedings and may, under certain circumstances, be
eliminated in any modified mortgage resulting from the bankruptcy proceeding.

ENFORCEABILITY OF PREPAYMENT AND LATE PAYMENT FEES

      Forms of notes, mortgages and deeds of trust used by lenders may 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
charges if the obligation is paid prior to maturity. In certain states, there
are or may be specific limitations upon the 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. Under certain state laws, prepayment charges may not be imposed
after a certain period of time following the origination of mortgage loans with
respect to prepayments on loans secured by liens encumbering owner-occupied
residential properties. Since many of the Properties will be owner-occupied, it
is anticipated that prepayment charges may not be imposed with respect to many
of the loans. The absence of that restraint on prepayment, particularly with
respect to fixed rate loans having higher Loan Rates, may increase the
likelihood of refinancing or other early retirement of the loans or contracts.
Late charges and prepayment fees are typically retained by servicers as
additional servicing compensation.

APPLICABILITY OF USURY LAWS

      Title V of the Depository Institutions Deregulation and Monetary Control
Act of 1980, enacted in March 1980 ("Title V") provides that state usury
limitations shall not apply to certain types of residential first mortgage loans
originated by certain lenders after March 31, 1980. The Office of Thrift
Supervision, as successor to the Federal Home Loan Bank Board, is authorized to
issue rules and regulations and to publish interpretations governing
implementation of Title V. The statute authorized the states to reimpose
interest rate limits by adopting, before April 1, 1983, a law or constitutional
provision which expressly rejects an application of the federal law. Fifteen
states adopted a law prior to the April 1, 1983 deadline. 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.

HOME IMPROVEMENT FINANCE

      General. The trust fund may own home improvement loans ("HI Loans") or
home improvement sales contracts ("HI Contracts"). HI Loans are loans that are
made by lenders to finance the purchase of home


                                       79



improvements from third party sellers, and may be secured by real estate or
personal property. HI Contracts involve sales agreements under which sellers of
home improvements extend credit to the purchasers and retain personal property
security interests in the home improvements as collateral for repayment of the
credits.

      Real Estate Collateral. HI Loans secured by real estate generally are
subject to many of the same laws that apply to other types of mortgage loans,
especially laws applicable to home equity or junior lien mortgages. In addition,
some laws may provide particular consumer protections in connection with
mortgage loans that are used to finance home improvements, such as special
disclosures or limits on creditor remedies.

      Sale of Chattel Paper. The credit agreements evidencing HI Loans secured
by personal property and HI Contracts generally are "chattel paper" as defined
in the UCC. 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
related agreement, the depositor will transfer physical possession of the
chattel paper to the trustee or a designated custodian or may retain possession
of the chattel paper as custodian for the trustee. In addition, the depositor
will make an appropriate filing of a UCC-1 financing statement in the
appropriate states to, among other things, give notice of the trust's ownership
of the chattel paper. In general, the chattel paper will not be stamped or
otherwise marked to reflect assignment of the chattel paper from the depositor
to the trustee. Therefore, if through negligence, fraud or otherwise, a
subsequent purchaser were able to take physical possession of the chattel paper
without notice of the assignment, the trust's interest in the chattel paper
could be defeated.

      Perfection of Personal Property Security Interests. The HI Loans secured
by personal property and the HI Contracts generally include a "purchase money
security interest," as defined in the UCC, in the home improvements being
financed. A financing statement generally is not required to be filed to perfect
a purchase money security interest in consumer goods. Purchase money security
interests are assignable. In general, a purchase money security interest grants
to the holder a security interest that has priority over a conflicting security
interest in the same collateral and the proceeds of the collateral. However, to
the extent that the collateral subject to a purchase money security interest
becomes a fixture, in order for the related purchase money security interest to
take priority over a conflicting interest in the fixture, the holder's interest
in the home improvement must generally be perfected by a timely fixture filing.
In general, a security interest does not exist under the UCC in ordinary
building materials incorporated into an improvement on land. A security interest
in lumber, bricks, other types of ordinary building materials or other goods
that are deemed to lose that characterization upon incorporation of the
materials into the related property, will not be secured by a purchase money
security interest in the home improvement being financed.

      Enforcement of Security Interest in Home Improvements. So long as the home
improvement remains personal property and has not become subject to the real
estate law, a creditor with a security interest in the property can repossess
the home improvement 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 security interest must give the debtor a number of
days' notice, which generally 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 that sale.

      Under the laws applicable in many states, a creditor is entitled to obtain
a deficiency judgment from a debtor for any deficiency on repossession and
resale of the personal property securing the 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. Also,
certain other statutory provisions, including federal and state bankruptcy and
insolvency laws and general equitable principles, may limit or delay the ability
of a creditor to repossess and resell personal property collateral or enforce a
deficiency judgment.

      Consumer Claims and Defenses. The Federal Trade Commission's Consumer
Claims and Defenses Rule ("FTC Rule") provides that a seller financing the sale
of consumer goods or services must include in the consumer credit contract a
notice that the purchaser of the contract will take the contract subject to the
claims and defenses that the consumer could assert against the seller. The FTC
Rule also provides that, if a seller of consumer goods or services refers a
purchaser to a lender, or is affiliated with the lender by common control,
contract or business arrangement, the seller may not accept the proceeds of a
purchase money loan made by the lender unless the consumer credit contract
contains a notice that the holder of the contract is subject to the claims and
defenses that


                                       80



the consumer could assert against the seller. Thus, holders of HI Contracts and
certain HI Loans may be subject to claims and defenses that could be asserted
against the seller of home improvements. Liability under the FTC Rule generally
is limited to amounts received by the holder of the consumer credit obligation;
however, the consumer may be able to assert the FTC Rule as a defense to a claim
brought by the trustee against the consumer.

SERVICEMEMBERS CIVIL RELIEF ACT

      Generally, under the terms of the Servicemembers Civil Relief Act (the
"Relief Act"), a borrower who enters military service after the origination of
the borrower's loan (including a borrower who is a member of the National Guard
or is in reserve status at the time of the origination of the loan and is later
called to active duty) may not be charged interest above an annual rate of 6%
during the period of the borrower's active duty status, unless a court orders
otherwise upon application of the lender. It is possible that the interest rate
limitation could have an effect, for an indeterminate period of time, on the
ability of the master servicer to collect full amounts of interest on certain of
the loans. Unless otherwise provided in the related prospectus supplement, any
shortfall in interest collections resulting from the application of the Relief
Act could result in losses to securityholders. The Relief Act also imposes
limitations which would impair the ability of the master servicer to foreclose
on an affected loan during the borrower's period of active duty status.
Moreover, the Relief Act permits the extension of a loan's maturity and the re-
adjustment of its payment schedule beyond the completion of military service.
Thus, in the event that the loan goes into default, there may be delays and
losses occasioned by the inability to realize upon the Property in a timely
fashion.

JUNIOR MORTGAGES AND RIGHTS OF SENIOR MORTGAGEES

      To the extent that the loans comprising the trust fund for a series are
secured by mortgages which are junior to other mortgages held by other lenders
or institutional investors, the rights of the trust fund (and therefore the
securityholders), as mortgagee under a junior mortgage, are subordinate to those
of any mortgagee under any senior mortgage. The senior mortgagee has the right
to receive hazard insurance and condemnation proceeds and to cause the property
securing the loan to be sold upon default of the mortgagor, thereby
extinguishing the junior mortgagee's lien unless the junior mortgagee asserts
its subordinate interest in the property in foreclosure litigation and,
possibly, satisfies the defaulted senior mortgage. A junior mortgagee may
satisfy a defaulted senior loan in full and, in some states, may cure a default
and bring the senior loan current, in either event adding the amounts expended
to the balance due on the junior loan. In many states, absent a provision in the
mortgage or deed of trust, no notice of default is required to be given to a
junior mortgagee.

OTHER LOAN PROVISIONS AND LENDER REQUIREMENTS

      The standard form of the mortgage used by most institutional lenders
confers on the mortgagee the right both to receive all proceeds collected under
any hazard insurance policy and all awards made in connection with condemnation
proceedings, and to apply those proceeds and awards to any indebtedness secured
by the mortgage, in the order as the mortgagee may determine. Thus, in the event
improvements on the property are damaged or destroyed by fire or other casualty,
or in the event the property is taken by condemnation, the mortgagee or
beneficiary under senior mortgages will have the prior right to collect any
insurance proceeds payable under a hazard insurance policy and any award of
damages in connection with the condemnation and to apply the same to the
indebtedness secured by the senior mortgages. Proceeds in excess of the amount
of senior mortgage indebtedness, in most cases, may be applied to the
indebtedness of a junior mortgage. Lenders in California may not require a
borrower to provide property insurance for more than the replacement cost of the
improvements, even if the loan balance exceeds this amount. In the event of a
casualty, lenders may be required to make the insurance proceeds available to
the borrower for repair and restoration, rather than applying the proceeds to
outstanding indebtedness.

      Another provision sometimes found in the form of the mortgage or deed of
trust used by institutional lenders obligates the mortgagor to pay before
delinquency all taxes and assessments on the property and, when due, all
encumbrances, charges and liens on the property which appear prior to the
mortgage or deed of trust, to provide and maintain fire insurance on the
property, to maintain and repair the property and not to commit or permit any
waste thereof, and to appear in and defend any action or proceeding purporting
to affect the property or the rights of the mortgagee under the mortgage. Upon a
failure of the mortgagor to perform any of these obligations, the


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mortgagee is given the right under certain mortgages to perform the obligation
itself, at its election, with the mortgagor agreeing to reimburse the mortgagee
for any sums expended by the mortgagee on behalf of the mortgagor. All sums so
expended by the mortgagee become part of the indebtedness secured by the
mortgage. In some cases lenders require borrowers to make monthly deposits for
estimated real estate taxes and property insurance premiums. Certain states,
including California, impose limitations on both the amount of tax and insurance
impounds that may be collected from a borrower, and upon the application of the
impounded funds.

      Generally lenders begin charging interest from the date the loan is
disbursed. In California regulations may prohibit mortgage lenders financing
residential purchases from charging interest on loan amounts outstanding for
periods more than one day prior to the recording of the deed to the residence,
even though the loan proceeds have been disbursed into escrow.

PRIORITY OF ADDITIONAL ADVANCES

      The form of credit line trust deed or mortgage generally used by most
institutional lenders which make revolving credit line loans typically contains
a "future advance" clause, which provides, in essence, that additional amounts
advanced to or on behalf of the borrower by the beneficiary or lender are to be
secured by the deed of trust or mortgage. The priority of the lien securing any
advance made under the clause may depend in most states on whether the deed of
trust or mortgage is called and recorded as a credit line deed of trust or
mortgage. If the beneficiary or lender advances additional amounts, the advance
is entitled to receive the same priority as amounts initially advanced under the
trust deed or mortgage, notwithstanding the fact that there may be junior trust
deeds or mortgages and other liens which intervene between the date of recording
of the trust deed or mortgage and the date of the future advance, and
notwithstanding that the beneficiary or lender had actual knowledge of the
intervening junior trust deeds or mortgages and other liens at the time of the
advance. In most states, the trust deed or mortgage lien securing mortgage loans
of the type which includes home equity credit lines applies retroactively to the
date of the original recording of the trust deed or mortgage, provided that the
total amount of advances under the home equity credit line does not exceed the
maximum specified principal amount of the recorded trust deed or mortgage,
except as to advances made after receipt by the lender of a written notice of
lien from a judgment lien creditor of the trustor. In California priority will
be lost with respect to advances made under subsequently recorded deeds of trust
or mortgages, if the prior credit line lender has knowledge of the advances
unless the advances under the secured credit line are determined to be
"obligatory" rather than "discretionary."

THE TITLE I PROGRAM

      General. Certain of the loans contained in a trust fund may be loans
insured under the FHA Title I Credit Insurance program created pursuant to
Sections 1 and 2(a) of the National Housing Act of 1934 (the "Title I Program").
Under the Title I Program, the FHA is authorized and empowered to insure
qualified lending institutions against losses on eligible loans. The Title I
Program operates as a coinsurance program in which the FHA insures up to 90% of
certain losses incurred on an individual insured loan, including the unpaid
principal balance of the loan, but only to the extent of the insurance coverage
available in the lender's FHA insurance coverage reserve account. The owner of
the loan bears the uninsured loss on each loan.

      The types of loans which are eligible for insurance by the FHA under the
Title I Program include property improvement loans ("Property Improvement Loans"
or "Title I Loans"). A Property Improvement Loan or Title I Loan means a loan
made to finance actions or items that substantially protect or improve the basic
livability or utility of a property and includes single family improvement
loans.

      There are two basic methods of lending or originating those loans which
include a "direct loan" or a "dealer loan". With respect to a direct loan, the
borrower makes application directly to a lender without any assistance from a
dealer, which application may be filled out by the borrower or by a person
acting at the direction of the borrower who does not have a financial interest
in the loan transaction, and the lender may disburse the loan proceeds solely to
the borrower or jointly to the borrower and other parties to the transaction.
With respect to a dealer loan, the dealer, who has a direct or indirect
financial interest in the loan transaction, assists the borrower in preparing
the loan application or otherwise assists the borrower in obtaining the loan
from lender and the lender may distribute proceeds solely to the dealer or the
borrower or jointly to the borrower and the dealer or other parties. With
respect to a dealer Title I Loan, a dealer may include a seller, a contractor or
supplier of goods or services.


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      Loans insured under the Title I Program are required to have fixed
interest rates and, generally, provide for equal installment payments due
weekly, biweekly, semi-monthly or monthly, except that a loan may be payable
quarterly or semi-annually in order to correspond with the borrower's irregular
flow of income. The first or last payments (or both) may vary in amount but may
not exceed 150% of the regular installment payment, and the first scheduled
payment may be due no later than two months from the date of the loan. The note
must contain a provision permitting full or partial prepayment of the loan. The
interest rate may be established by the lender and must be fixed for the term of
the loan and recited in the note. Interest on an insured loan must accrue from
the date of the loan and be calculated on a simple interest basis. The lender
must assure that the note and all other documents evidencing the loan are in
compliance with applicable federal, state and local laws.

      Each insured lender is required to use prudent lending standards in
underwriting individual loans and to satisfy the applicable loan underwriting
requirements under the Title I Program prior to its approval of the loan and
disbursement of loan proceeds. Generally, the lender must exercise prudence and
diligence to determine whether the borrower and any co-maker is solvent and an
acceptable credit risk, with a reasonable ability to make payments on the loan
obligation. The lender's credit application and review must determine whether
the borrower's income will be adequate to meet the periodic payments required by
the loan, as well as the borrower's other housing and recurring expenses, which
determination must be made in accordance with the expense-to-income ratios
published by the Secretary of HUD.

      Under the Title I Program, the FHA does not review or approve for
qualification for insurance the individual loans insured thereunder at the time
of approval by the lending institution (as is typically the case with other
federal loan programs). If, after a loan has been made and reported for
insurance under the Title I Program, the lender discovers any material
misstatement of fact or that the loan proceeds have been misused by the
borrower, dealer or any other party, it shall promptly report this to the FHA.
In that case, provided that the validity of any lien on the property has not
been impaired, the insurance of the loan under the Title I Program will not be
affected unless the material misstatements of fact or misuse of loan proceeds
was caused by (or was knowingly sanctioned by) the lender or its employees.

      Requirements for Title I Loans. The maximum principal amount for Title I
Loans must not exceed the actual cost of the project plus any applicable fees
and charges allowed under the Title I Program; provided that the maximum amount
does not exceed $25,000 (or the current applicable amount) for a single family
property improvement loan. Generally, the term of a Title I Loan may not be less
than six months nor greater than 20 years and 32 days. A borrower may obtain
multiple Title I Loans with respect to multiple properties, and a borrower may
obtain more than one Title I Loan with respect to a single property, in each
case as long as the total outstanding balance of all Title I Loans in the same
property does not exceed the maximum loan amount for the type of Title I Loan
thereon having the highest permissible loan amount.

      Borrower eligibility for a Title I Loan requires that the borrower have at
least a one-half interest in either fee simple title to the real property, a
lease thereof for a term expiring at least six months after the final maturity
of the Title I Loan or a recorded land installment contract for the purchase of
the real property, and that the borrower have equity in the property being
improved at least equal to the amount of the Title I Loan if the loan amount
exceeds $15,000. Any Title I Loan in excess of $7,500 must be secured by a
recorded lien on the improved property which is evidenced by a mortgage or deed
of trust executed by the borrower and all other owners in fee simple.

      The proceeds from a Title I Loan may be used only to finance property
improvements which substantially protect or improve the basic livability or
utility of the property as disclosed in the loan application. The Secretary of
HUD has published a list of items and activities which cannot be financed with
proceeds from any Title I Loan and from time to time the Secretary of HUD may
amend the list of items and activities. With respect to any dealer Title I Loan,
before the lender may disburse funds, the lender must have in its possession a
completion certificate on a HUD approved form, signed by the borrower and the
dealer. With respect to any direct Title I Loan, the borrower is required to
submit to the lender, promptly upon completion of the improvements but not later
than six months after disbursement of the loan proceeds with one six month
extension if necessary, a completion certificate, signed by the borrower. The
lender or its agent is required to conduct an on-site inspection on any Title I
Loan where the principal obligation is $7,500 or more, and on any direct Title I
Loan where the borrower fails to submit a completion certificate.


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      FHA Insurance Coverage. Under the Title I Program the FHA establishes an
insurance coverage reserve account for each lender which has been granted a
Title I insurance contract. The amount of insurance coverage in this account is
10% of the amount disbursed, advanced or expended by the lender in originating
or purchasing eligible loans registered with FHA for Title I insurance, with
certain adjustments. The balance in the insurance coverage reserve account is
the maximum amount of insurance claims the FHA is required to pay. Loans to be
insured under the Title I Program will be registered for insurance by the FHA
and the insurance coverage attributable to the loans will be included in the
insurance coverage reserve account for the originating or purchasing lender
following the receipt and acknowledgment by the FHA of a loan report on the
prescribed form pursuant to the Title I regulations. The FHA charges a fee of
0.50% per annum of the net proceeds (the original balance) of any eligible loan
so reported and acknowledged for insurance by the originating lender. The FHA
bills the lender for the insurance premium on each insured loan annually, on
approximately the anniversary date of the loan's origination. If an insured loan
is prepaid during the year, FHA will not refund the insurance premium, but will
abate any insurance charges falling due after the prepayment.

      Under the Title I Program the FHA will reduce the insurance coverage
available in the lender's FHA insurance coverage reserve account with respect to
loans insured under the lender's contract of insurance by (i) the amount of the
FHA insurance claims approved for payment relating to the insured loans and (ii)
the amount of insurance coverage attributable to insured loans sold by the
lender. The balance of the lender's FHA insurance coverage reserve account will
be further adjusted as required under Title I or by the FHA, and the insurance
coverage therein may be earmarked with respect to each or any eligible loans
insured thereunder, if a determination is made by the Secretary of HUD that it
is in its interest to do so. Originations and acquisitions of new eligible loans
will continue to increase a lender's insurance coverage reserve account balance
by 10% of the amount disbursed, advanced or expended in originating or acquiring
the eligible loans registered with the FHA for insurance under the Title I
Program. The Secretary of HUD may transfer insurance coverage between insurance
coverage reserve accounts with earmarking with respect to a particular insured
loan or group of insured loans when a determination is made that it is in the
Secretary's interest to do so.

      The lender may transfer (except as collateral in a bona fide loan
transaction) insured loans and loans reported for insurance only to another
qualified lender under a valid Title I contract of insurance. Unless an insured
loan is transferred with recourse or with a guaranty or repurchase agreement,
the FHA, upon receipt of written notification of the transfer of the loan in
accordance with the Title I regulations, will transfer from the transferor's
insurance coverage reserve account to the transferee's insurance coverage
reserve account an amount, if available, equal to 10% of the actual purchase
price or the net unpaid principal balance of the loan (whichever is less).
However, under the Title I Program not more than $5,000 in insurance coverage
shall be transferred to or from a lender's insurance coverage reserve account
during any October 1 to September 30 period without the prior approval of the
Secretary of HUD.

      Claims Procedures Under Title I. Under the Title I Program the lender may
accelerate an insured loan following a default on the loan only after the lender
or its agent has contacted the borrower in a face-to-face meeting or by
telephone to discuss the reasons for the default and to seek its cure. If the
borrower does not cure the default or agree to a modification agreement or
repayment plan, the lender will notify the borrower in writing that, unless
within 30 days the default is cured or the borrower enters into a modification
agreement or repayment plan, the loan will be accelerated and that, if the
default persists, the lender will report the default to an appropriate credit
agency. The lender may rescind the acceleration of maturity after full payment
is due and reinstate the loan only if the borrower brings the loan current,
executes a modification agreement or agrees to an acceptable repayment plan.

      Following acceleration of maturity upon a secured Title I Loan, the lender
may either (a) proceed against the property under any security instrument, or
(b) make a claim under the lender's contract of insurance. If the lender chooses
to proceed against the property under a security instrument (or if it accepts a
voluntary conveyance or surrender of the property), the lender may file an
insurance claim only with the prior approval of the Secretary of HUD.

      When a lender files an insurance claim with the FHA under the Title I
Program, the FHA reviews the claim, the complete loan file and documentation of
the lender's efforts to obtain recourse against any dealer who has agreed
thereto, certification of compliance with applicable state and local laws in
carrying out any foreclosure or repossession, and evidence that the lender has
properly filed proofs of claims, where the borrower is bankrupt or


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deceased. Generally, a claim for reimbursement for loss on any Title I Loan must
be filed with the FHA no later than nine months after the date of default of the
loan. Concurrently with filing the insurance claim, the lender shall assign to
the United States of America the lender's entire interest in the loan note (or a
judgment in lieu of the note), in any security held and in any claim filed in
any legal proceedings. If, at the time the note is assigned to the United
States, the Secretary has reason to believe that the note is not valid or
enforceable against the borrower, the FHA may deny the claim and reassign the
note to the lender. If either defect is discovered after the FHA has paid a
claim, the FHA may require the lender to repurchase the paid claim and to accept
a reassignment of the loan note. If the lender subsequently obtains a valid and
enforceable judgment against the borrower, the lender may resubmit a new
insurance claim with an assignment of the judgment. The FHA may contest any
insurance claim and make a demand for repurchase of the loan at any time up to
two years from the date the claim was certified for payment and may do so
thereafter in the event of fraud or misrepresentation on the part of the lender.

      Under the Title I Program the amount of an FHA insurance claim payment,
when made, is equal to the Claimable Amount, up to the amount of insurance
coverage in the lender's insurance coverage reserve account. For the purposes
hereof, the "Claimable Amount" means an amount equal to 90% of the sum of: (a)
the unpaid loan obligation (net unpaid principal and the uncollected interest
earned to the date of default) with adjustments thereto if the lender has
proceeded against property securing the loan; (b) the interest on the unpaid
amount of the loan obligation from the date of default to the date of the
claim's initial submission for payment plus 15 calendar days (but not to exceed
9 months from the date of default), calculated at the rate of 7% per annum; (c)
the uncollected court costs; (d) the attorney's fees not to exceed $500; and (e)
the expenses for recording the assignment of the security to the United States.

CONSUMER PROTECTION LAWS

      Federal, state and local laws extensively regulate various aspects of
brokering, originating, servicing and collecting loans secured by consumers'
dwellings. Among other things, these laws may regulate interest rates and other
charges, require disclosures, impose financial privacy requirements, mandate
specific business practices, and prohibit unfair and deceptive trade practices.
In addition, licensing requirements may be imposed on persons that broker,
originate, service or collect the loans.

      Additional requirements may be imposed under federal, state or local laws
on so-called "high cost mortgage loans," which typically are defined as loans
secured by a consumer's dwelling that have interest rates or origination costs
in excess of prescribed levels. These laws may limit certain loan terms, such as
prepayment charges, or the ability of a creditor to refinance a loan unless it
is in the borrower's interest. In addition, certain of these laws may allow
claims against loan brokers or originators, including claims based on fraud or
misrepresentations, to be asserted against persons acquiring the loans, such as
the trust fund.

      The federal laws that may apply to loans held in the trust fund include
the following:

o     the Truth in Lending Act and its regulations, which (among other things)
      require disclosures to borrowers regarding the terms of loans and provide
      consumers who pledged their principal dwelling as collateral in a
      non-purchase money transaction with a right of rescission that generally
      extends for three days after proper disclosures are given;

o     the Home Ownership and Equity Protection Act and its regulations, which
      (among other things) imposes additional disclosure requirements and
      limitations on loan terms with respect to non- purchase money, installment
      loans secured by the consumer's principal dwelling that have interest
      rates or origination costs in excess of prescribed levels;

o     the Home Equity Loan Consumer Protection Act and its regulations, which
      (among other things) limits changes that may be made to open-end loans
      secured by the consumer's dwelling, and restricts the ability to
      accelerate balances or suspend credit privileges on the loans;


                                       85



o     the Real Estate Settlement Procedures Act and its regulations, which
      (among other things) prohibit the payment of referral fees for real estate
      settlement services (including mortgage lending and brokerage services)
      and regulate escrow accounts for taxes and insurance and billing inquiries
      made by borrowers;

o     the Equal Credit Opportunity Act and its regulations, which (among other
      things) generally prohibits discrimination in any aspect of a credit
      transaction on certain enumerated basis, such as age, race, color, sex,
      religion, marital status, national origin or receipt of public assistance;

o     the Fair Credit Reporting Act, which (among other things) regulates the
      use of consumer reports obtained from consumer reporting agencies and the
      reporting of payment histories to consumer reporting agencies; and

o     the Federal Trade Commission's Rule on Preservation of Consumer Claims and
      Defenses, which generally provides that the rights of an assignee of a
      conditional sales contract (or of certain lenders making purchase money
      loans) to enforce a consumer credit obligation are subject to the claims
      and defenses that the consumer could assert against the seller of goods or
      services financed in the credit transaction.

      The penalties for violating these federal, state, or local laws vary
depending on the applicable law and the particular facts of the situation.
However, private plaintiffs typically may assert claims for actual damages and,
in some cases, also may recover civil money penalties or exercise a right to
rescind the loan. Violations of certain laws may limit the ability to collect
all or part of the principal or interest on a loan and, in some cases, borrowers
even may be entitled to a refund of amounts previously paid. Federal, state and
local administrative or law enforcement agencies also may be entitled to bring
legal actions, including actions for civil money penalties or restitution, for
violations of certain of these laws.

      Depending on the particular alleged misconduct, it is possible that claims
may be asserted against various participants in secondary market transactions,
including assignees that hold the loans, such as the trust fund. Losses on loans
from the application of these federal, state and local laws that are not
otherwise covered by a credit enhancement will be borne by the holders of one or
more classes of securities.

                    MATERIAL FEDERAL INCOME TAX CONSEQUENCES

GENERAL

      The following is a discussion of the anticipated material federal income
tax consequences of the purchase, ownership, and disposition of the securities
and is based on advice of special counsel to the depositor ("Tax Counsel"),
named in the prospectus supplement. The discussion is based upon the provisions
and interpretations of the Code, the regulations promulgated thereunder,
including, where applicable, proposed regulations, and the judicial and
administrative rulings and decisions now in effect, all of which are subject to
change, which change could apply retroactively.

      The discussion does not purport to deal with all aspects of federal income
taxation that may affect particular investors in light of their individual
circumstances, nor with certain types of investors subject to special treatment
under the federal income tax laws. This discussion focuses primarily upon
investors who will hold securities as "capital assets" (generally, property held
for investment) within the meaning of Section 1221 of the Code, but much of the
discussion is applicable to other investors as well. Prospective Investors are
encouraged to consult their own tax advisers concerning the federal, state,
local and any other tax consequences to them of the purchase, ownership and
disposition of the securities.

      The federal income tax consequences to Holders will vary depending on
whether

o     the securities of a series are classified as indebtedness;


                                       86



o     an election is made to treat the trust fund relating to a particular
      series of securities as a real estate mortgage investment conduit
      ("REMIC") under the Internal Revenue Code of 1986, as amended (the
      "Code");

o     the securities represent an ownership interest in some or all of the
      assets included in the trust fund for a series; or

o     an election is made to treat the trust fund relating to a particular
      series of certificates as a partnership.

      The prospectus supplement for each series of securities will specify how
the securities will be treated for federal income tax purposes and will discuss
whether a REMIC election, if any, will be made with respect to the series. The
depositor will file with the SEC a Form 8-K on behalf of the related trust fund
containing an opinion of Tax Counsel with respect to the validity of the
information set forth under "Material Federal Income Tax Consequences" herein
and in the related prospectus supplement.

TAXATION OF DEBT SECURITIES

      Interest and Acquisition Discount. The income on securities representing
regular interests in a REMIC ("Regular Interest Securities") are generally
taxable to holders in the same manner as the income on evidences of
indebtedness. Stated interest on the Regular Interest Securities will be taxable
as ordinary income and taken into account using the accrual method of
accounting, regardless of the Holder's normal accounting method. Interest (other
than original issue discount) on securities (other than Regular Interest
Securities) that are characterized as indebtedness for federal income tax
purposes will be includible in income by holders thereof in accordance with
their usual methods of accounting. Securities characterized as debt for federal
income tax purposes and Regular Interest Securities will be referred to
hereinafter collectively as "Debt securities."

      Debt securities that are Compound Interest securities will, and certain of
the other Debt securities may, be issued with "original issue discount" ("OID").
The following discussion is based in part on the rules governing OID which are
set forth in Sections 1271 through 1275 of the Code and the Treasury regulations
issued thereunder (the "OID Regulations"). A Holder should be aware, however,
that the OID Regulations do not adequately address certain issues relevant to
prepayable securities, such as the Debt securities.

      In general, OID, if any, will equal the difference between the stated
redemption price at maturity of a Debt security and its issue price. A holder of
a Debt security must include OID in gross income as ordinary interest income as
it accrues under a method taking into account an economic accrual of the
discount. In general, OID must be included in income in advance of the receipt
of the cash representing that income. The amount of OID on a Debt security will
be considered to be zero, however if the interest is less than a de minimis
amount as determined under the Code.

      The issue price of a Debt security is the first price at which a
substantial amount of Debt securities of that class are sold to the public
(excluding bond houses, brokers, underwriters or wholesalers). If less than a
substantial amount of a particular class of Debt securities is sold for cash on
or prior to the related closing date, the issue price for the class will be
treated as the fair market value of the class on the closing date. The issue
price of a Debt security also includes the amount paid by an initial Debt
security holder for accrued interest that relates to a period prior to the issue
date of the Debt security. The stated redemption price at maturity of a Debt
security includes the original principal amount of the Debt security, but
generally will not include distributions of interest if the distributions
constitute "qualified stated interest."

      Under the OID Regulations, qualified stated interest generally means
interest payable at a single fixed rate or qualified variable rate (as described
below) provided that the interest payments are unconditionally payable at
intervals of one year or less during the entire term of the Debt security. The
OID Regulations state that interest payments are unconditionally payable only if
a late payment or nonpayment is expected to be penalized or reasonable remedies
exist to compel payment. Certain Debt securities may provide for default
remedies in the event of late payment or nonpayment of interest. The interest on
those Debt securities will be unconditionally payable and constitute qualified
stated interest, not OID. However, absent clarification of the OID Regulations,
where Debt securities do not provide for default remedies, the interest payments
will be included in the Debt security's stated


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redemption price at maturity and taxed as OID. Interest is payable at a single
fixed rate only if the rate appropriately takes into account the length of the
interval between payments. Distributions of interest on Debt securities with
respect to which deferred interest will accrue, will not constitute qualified
stated interest payments, in which case the stated redemption price at maturity
of those Debt securities includes all distributions of interest as well as
principal thereon. If the interval between the issue date and the first
distribution date on a Debt security is longer than the interval between
subsequent distribution dates, but the amount of the distribution is not
adjusted to reflect the longer interval, then for purposes of determining
whether the Debt security has de minimis OID, the stated redemption price of the
Debt security is treated as the issue price (determined as described above) plus
the greater of (i) the amount of the distribution foregone or (ii) the excess
(if any) of the Debt security's stated principal over its issue price. If the
interval between the issue date and the first distribution date on a Debt
security is shorter than the interval between subsequent distribution dates, but
the amount of the distribution is not adjusted to reflect the shorter interval,
then for the purposes of determining the OID, if any, on the Debt security, the
excess amount of the distribution would be added to the Debt security's stated
redemption price.

      Under the de minimis rule, OID on a Debt security will be considered to be
zero if the OID is less than 0.25% of the stated redemption price at maturity of
the Debt security multiplied by the weighted average maturity of the Debt
security. The weighted average maturity of a Debt security is the sum of the
weighted maturity of each payment of the Debt security's stated redemption
price. The weighted maturity of each stated redemption price payment is (i) the
number of complete years from the issue date until the payment is made,
multiplied by (ii) a fraction, the numerator of which is the amount of the
payment and the denominator of which is the Debt security's total stated
redemption price.

      Although currently unclear, it appears that the projected payments of
stated redemption price should be based on a schedule that is determined in
accordance with the Prepayment Assumption. The Prepayment Assumption with
respect to a series of Regular Certificates will be set forth in the related
prospectus supplement. Holders generally must report de minimis OID pro rata as
principal payments are received, and that income will be capital gain if the
Debt security is held as a capital asset. However, holders may elect to accrue
all de minimis OID as well as market discount under a constant interest method.

      Debt securities may provide for interest based on a qualified variable
rate. Under the OID Regulations, interest is treated as payable at a qualified
variable rate and not as contingent interest if, generally,

o     the interest is unconditionally payable at least annually,

o     the issue price of the debt instrument does not exceed the total
      noncontingent principal payments and

o     interest is based on a "qualified floating rate," an "objective rate," or
      a combination of "qualified floating rates" that do not operate in a
      manner that significantly accelerates or defers interest payments on the
      Debt security.

      In the case of Compound Interest securities, certain Interest Weighted
Securities (as defined herein), and certain of the other Debt securities, none
of the payments under the instrument will be considered qualified stated
interest, and thus the aggregate amount of all payments will be included in the
stated redemption price.

      The Internal Revenue Service (the "IRS") issued final regulations in June
1996 (the "Contingent Regulations") governing the calculation of OID on
instruments having contingent interest payments. The Contingent Regulations
specifically do not apply for purposes of calculating OID on debt instruments
subject to Code Section 1272(a)(6), such as the Debt securities. Additionally,
the OID Regulations do not contain provisions specifically interpreting Code
Section 1272(a)(6). Until the Treasury issues guidance to the contrary, the
trustee intends to base its computation on Code Section 1272(a)(6) and the OID
Regulations as described in this prospectus. However, because no regulatory
guidance currently exists under Code Section 1272(a)(6), we can give no
assurance that the methodology represents the correct manner of calculating OID.

      The holder of a Debt security issued with OID must include in gross
income, for all days during its taxable year on which it holds the Debt
security, the sum of the "daily portions" of the original issue discount. The
amount


                                       88



of OID includible in income by a holder will be computed by allocating to each
day during a taxable year a pro rata portion of the original issue discount that
accrued during the relevant accrual period. In the case of a Debt security that
is not a Regular Interest Security and the principal payments on which are not
subject to acceleration resulting from prepayments on the loans, the amount of
OID includible in income of a Holder for an accrual period (generally the period
over which interest accrues on the debt instrument) will equal the product of
the yield to maturity of the Debt security and the adjusted issue price of the
Debt security, reduced by any payments of qualified stated interest. The
adjusted issue price of a Debt security is the sum of its issue price plus prior
accruals of OID, reduced by the total payments other than qualified stated
interest payments made with respect to the Debt security in all prior periods.

      The amount of OID to be included in income by a holder of a debt
instrument, such as certain Classes of the Debt securities, that is subject to
acceleration due to prepayments on other debt obligations securing the
instruments (a "Pay-Through Security"), is computed by taking into account the
anticipated rate of prepayments assumed in pricing the debt instrument (the
"Prepayment Assumption"). The amount of OID that will accrue during an accrual
period on a Pay-Through Security is the excess (if any) of (i) the sum of (a)
the present value of all payments remaining to be made on the Pay-Through
Security as of the close of the accrual period and (b) the payments during the
accrual period of amounts included in the stated redemption price of the
Pay-Through Security, over (ii) the adjusted issue price of the Pay-Through
Security at the beginning of the accrual period. The present value of the
remaining payments is to be determined on the basis of three factors: (i) the
original yield to maturity of the Pay-Through Security (determined on the basis
of compounding at the end of each accrual period and properly adjusted for the
length of the accrual period), (ii) events which have occurred before the end of
the accrual period and (iii) the assumption that the remaining payments will be
made in accordance with the original Prepayment Assumption. The effect of this
method is to increase the portions of OID required to be included in income by a
Holder to take into account prepayments with respect to the loans at a rate that
exceeds the Prepayment Assumption, and to decrease (but not below zero for any
period) the portions of original issue discount required to be included in
income by a Holder of a Pay-Through Security to take into account prepayments
with respect to the loans at a rate that is slower than the Prepayment
Assumption. Although original issue discount will be reported to Holders of
Pay-Through Securities based on the Prepayment Assumption, no representation is
made to Holders that loans will be prepaid at that rate or at any other rate.

      The depositor may adjust the accrual of OID on a Class of Regular Interest
Securities (or other regular interests in a REMIC) in a manner that it believes
to be appropriate, to take account of realized losses on the loans, although the
OID Regulations do not provide for those adjustments. If the IRS were to require
that OID be accrued without the adjustments, the rate of accrual of OID for a
Class of Regular Interest Securities could increase.

      Certain classes of Regular Interest Securities may represent more than one
class of REMIC regular interests. Unless otherwise provided in the related
prospectus supplement, the trustee intends, based on the OID Regulations, to
calculate OID on those securities as if, solely for the purposes of computing
OID, the separate regular interests were a single debt instrument.

      A subsequent holder of a Debt security will also be required to include
OID in gross income, but such a holder who purchases the Debt security for an
amount that exceeds its adjusted issue price will be entitled (as will an
initial holder who pays more than a Debt security's issue price) to offset the
OID by comparable economic accruals of portions of the excess.

      Effects of Defaults and Delinquencies. Holders will be required to report
income with respect to the related securities under an accrual method without
giving effect to delays and reductions in distributions attributable to a
default or delinquency on the loans, except possibly to the extent that it can
be established that the amounts are uncollectible. As a result, the amount of
income (including OID) reported by a holder of such a security in any period
could significantly exceed the amount of cash distributed to the holder in that
period. The holder will eventually be allowed a loss (or will be allowed to
report a lesser amount of income) to the extent that the aggregate amount of
distributions on the securities is reduced as a result of a loan default.
However, the timing and character of the losses or reductions in income are
uncertain and, accordingly, holders of securities are encouraged to consult
their tax advisors on this point.


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      Interest Weighted Securities. It is not clear how income should be accrued
with respect to Regular Interest Securities or Stripped Securities (as defined
under "-- Tax Status as a Grantor Trust; General" herein) the payments on which
consist solely or primarily of a specified portion of the interest payments on
qualified mortgages held by the REMIC or on loans underlying Pass-Through
Securities ("Interest Weighted Securities"). The Issuer intends to take the
position that all of the income derived from an Interest Weighted Security
should be treated as OID and that the amount and rate of accrual of the OID
should be calculated by treating the Interest Weighted Security as a Compound
Interest security. However, in the case of Interest Weighted Securities that are
entitled to some payments of principal and that are Regular Interest Securities
the IRS could assert that income derived from an Interest Weighted Security
should be calculated as if the security were a security purchased at a premium
equal to the excess of the price paid by the holder for the security over its
stated principal amount, if any. Under this approach, a holder would be entitled
to amortize the premium only if it has in effect an election under Section 171
of the Code with respect to all taxable debt instruments held by the holder, as
described below. Alternatively, the IRS could assert that an Interest Weighted
Security should be taxable under the rules governing bonds issued with
contingent payments. That treatment may be more likely in the case of Interest
Weighted Securities that are Stripped Securities as described below. See "-- Tax
Status as a Grantor Trust -- Discount or Premium on Pass-Through Securities."

      Variable Rate Debt Securities. In the case of Debt securities bearing
interest at a rate that varies directly, or according to a fixed formula, with
an objective index, it appears that (i) the yield to maturity of the Debt
securities and (ii) in the case of Pay-Through Securities, the present value of
all payments remaining to be made on the Debt securities, should be calculated
as if the interest index remained at its value as of the issue date of the
securities. Because the proper method of adjusting accruals of OID on a variable
rate Debt security is uncertain, holders of variable rate Debt securities are
encouraged to consult their tax advisers regarding the appropriate treatment of
the securities for federal income tax purposes.

      Market Discount. A purchaser of a security may be subject to the market
discount rules of Sections 1276 through 1278 of the Code. A Holder that acquires
a Debt security with more than a prescribed de minimis amount of "market
discount" (generally, the excess of the principal amount of the Debt security
over the purchaser's purchase price) will be required to include accrued market
discount in income as ordinary income in each month, but limited to an amount
not exceeding the principal payments on the Debt security received in that month
and, if the securities are sold, the gain realized. That market discount would
accrue in a manner to be provided in Treasury regulations but, until the
regulations are issued, the market discount would in general accrue either (i)
on the basis of a constant yield (in the case of a Pay-Through Security, taking
into account a prepayment assumption) or (ii) (a) in the case of securities (or
in the case of a Pass-Through Security (as defined herein), as set forth below,
the loans underlying the security) not originally issued with original issue
discount, on the basis of the rates of the stated interest payable in the
relevant period to total stated interest remaining to be paid at the beginning
of the period or (b) in the case of securities (or, in the case of a
Pass-Through Security, as described below, the loans underlying the security)
originally issued at a discount, on the basis of the rates of the OID in the
relevant period to total OID remaining to be paid.

      Section 1277 of the Code provides that, regardless of the origination date
of the Debt security (or, in the case of a Pass-Through Security, the underlying
loans), the excess of interest paid or accrued to purchase or carry a security
(or, in the case of a Pass-Through Security, as described below, the underlying
loans) with market discount over interest received on the security is allowed as
a current deduction only to the extent the excess is greater than the market
discount that accrued during the taxable year in which the interest expense was
incurred. In general, the deferred portion of any interest expense will be
deductible when the market discount is included in income, including upon the
sale, disposition, or repayment of the security (or in the case of a
Pass-Through Security, an underlying loan). A holder may elect to include market
discount in income currently as it accrues, on all market discount obligations
acquired by the holder during the taxable year the election is made and
thereafter, in which case the interest deferral rule will not apply.

      Premium. A holder who purchases a Debt security (other than an Interest
Weighted Security to the extent described above) at a cost greater than its
stated redemption price at maturity, generally will be considered to have
purchased the security at a premium, which it may elect to amortize as an offset
to interest income on the security (and not as a separate deduction item) on a
constant yield method. Although no regulations addressing the computation of
premium accrual on securities similar to the securities have been issued, the
legislative history of the


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1986 Act indicates that premium is to be accrued in the same manner as market
discount. Accordingly, it appears that the accrual of premium on a Class of
Pay-Through Securities will be calculated using the prepayment assumption used
in pricing the Class. If a holder makes an election to amortize premium on a
Debt security, the election will apply to all taxable debt instruments
(including all REMIC regular interests and all pass-through certificates
representing ownership interests in a trust holding debt obligations) held by
the holder at the beginning of the taxable year in which the election is made,
and to all taxable debt instruments acquired thereafter by the holder, and will
be irrevocable without the consent of the IRS. Purchasers who pay a premium for
the securities are encouraged to consult their tax advisers regarding the
election to amortize premium and the method to be employed.

      The Treasury has issued regulations (the "Final Bond Premium Regulations")
dealing with amortizable bond premium. These regulations specifically do not
apply to prepayable debt instruments subject to Code Section 1272(a)(6) such as
the securities. Absent further guidance from the IRS, the trustee intends to
account for amortizable bond premium in the manner described above. Prospective
purchasers of the securities are encouraged to consult their tax advisors
regarding the possible application of the Final Bond Premium Regulations.

      Election to Treat All Interest as Original Issue Discount. The OID
Regulations permit a holder of a Debt security to elect to accrue all interest,
discount (including de minimis market or original issue discount) and premium in
income as interest, based on a constant yield method for Debt securities
acquired on or after April 4, 1994. If such an election were to be made with
respect to a Debt security with market discount, the holder of the Debt security
would be deemed to have made an election to include in income currently market
discount with respect to all other debt instruments having market discount that
the holder of the Debt security acquires during the year of the election or
thereafter. Similarly, a holder of a Debt security that makes this election for
a Debt security that is acquired at a premium will be deemed to have made an
election to amortize bond premium with respect to all debt instruments having
amortizable bond premium that the holder owns or acquires. The election to
accrue interest, discount and premium on a constant yield method with respect to
a Debt security is irrevocable.

TAXATION OF THE REMIC AND ITS HOLDERS

      General. In the opinion of Tax Counsel, if one or more REMIC elections are
made with respect to a series of securities, then the arrangement by which the
securities of that series are issued will be treated as one or more REMICs as
long as all of the provisions of the applicable Agreement are complied with and
the statutory and regulatory requirements are satisfied. Securities will be
designated as "Regular Interests" or "Residual Interests" in a REMIC, as
specified in the related prospectus supplement.

      Except to the extent specified otherwise in a prospectus supplement, if
one or more REMIC elections are made with respect to a series of securities, (i)
securities held by a domestic building and loan association will constitute "a
regular or a residual interest in a REMIC" within the meaning of Code Section
7701(a)(19)(C)(xi) (assuming that at least 95% of the REMIC's assets consist of
cash, government securities, "loans secured by an interest in real property,"
and other types of assets described in Code Section 7701(a)(19)(C)); and (ii)
securities held by a real estate investment trust will constitute "real estate
assets" within the meaning of Code Section 856(c)(5)(B), and income with respect
to the securities will be considered "interest on obligations secured by
mortgages on real property or on interests in real property" within the meaning
of Code Section 856(c)(3)(B) (assuming, for both purposes, that at least 95% of
the REMIC's assets are qualifying assets). If less than 95% of the REMIC's
assets consist of assets described in (i) or (ii) above, then a security will
qualify for the tax treatment described in (i), (ii) or (iii) in the proportion
that those REMIC assets (and income in the case of (ii)) are qualifying assets
(and income).

REMIC EXPENSES; SINGLE CLASS REMICS

      As a general rule, all of the expenses of a REMIC will be taken into
account by holders of the Residual Interests. In the case of a "single class
REMIC," however, the expenses will be allocated, under Treasury regulations,
among the holders of the Regular Interest Securities and the holders of the
Residual Interests (as defined herein) on a daily basis in proportion to the
relative amounts of income accruing to each Holder on that day. In the case of a
holder of a Regular Interest Security who is an individual or a "pass-through
interest holder" (including certain pass-through entities but not including real
estate investment trusts), the expenses will be deductible only to the extent
that the expenses, plus other "miscellaneous itemized deductions" of the Holder,
exceed 2% of the


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Holder's adjusted gross income. In addition, the amount of itemized deductions
otherwise allowable for the taxable year for an individual whose adjusted gross
income exceeds the applicable amount (which amount will be adjusted for
inflation) will be reduced by the lesser of

o     3% of the excess of adjusted gross income over the applicable amount, or

o     80% of the amount of itemized deductions otherwise allowable for the
      taxable year.

      These percentages are scheduled to be reduced starting in 2006 and return
to current levels in 2010. The reduction or disallowance of this deduction may
have a significant impact on the yield of the Regular Interest Security to such
a Holder. In general terms, a single class REMIC is one that either

o     would qualify, under existing Treasury regulations, as a grantor trust if
      it were not a REMIC (treating all interests as ownership interests, even
      if they would be classified as debt for federal income tax purposes) or

o     is similar to such a trust and which is structured with the principal
      purpose of avoiding the single class REMIC rules.

The applicable prospectus supplement may provide for the allocation of REMIC
expenses, but if it does not, the expenses of the REMIC will be allocated to
holders of the related Residual Interests.

TAXATION OF THE REMIC

      General. Although a REMIC is a separate entity for federal income tax
purposes, a REMIC is not generally subject to entity-level tax. Rather, the
taxable income or net loss of a REMIC is taken into account by the holders of
Residual Interests. As described above, the regular interests are generally
taxable as debt of the REMIC.

      Calculation of REMIC Income. The taxable income or net loss of a REMIC is
determined under an accrual method of accounting and in the same manner as in
the case of an individual, with certain adjustments. In general, the taxable
income or net loss will be the difference between

o     the gross income produced by the REMIC's assets, including stated interest
      and any original issue discount or market discount on loans and other
      assets, and

o     deductions, including stated interest and original issue discount accrued
      on Regular Interest Securities, amortization of any premium with respect
      to loans, and servicing fees and other expenses of the REMIC.

A holder of a Residual Interest that is an individual or a "pass-through
interest holder" (including certain pass-through entities, but not including
real estate investment trusts) will be unable to deduct servicing fees payable
on the loans or other administrative expenses of the REMIC for a given taxable
year, to the extent that the expenses, when aggregated with the holder's other
miscellaneous itemized deductions for that year, do not exceed two percent of
the holder's adjusted gross income.

      For purposes of computing its taxable income or net loss, the REMIC should
have an initial aggregate tax basis in its assets equal to the aggregate fair
market value of the regular interests and the Residual Interests on the Startup
Day (generally, the day that the interests are issued). That aggregate basis
will be allocated among the assets of the REMIC in proportion to their
respective fair market values.

      Subject to possible application of the de minimis rules, the method of
accrual by the REMIC of OID income on mortgage loans will be equivalent to the
method under which holders of Pay-Through Securities accrue original issue
discount (that is, under the constant yield method taking into account the
Prepayment Assumption). The REMIC will deduct OID on the Regular Interest
Securities in the same manner that the holders of the Regular Interest
Securities include the discount in income, but without regard to the de minimis
rules. See "Taxation of Debt


                                       92



Securities" above. However, a REMIC that acquires loans at a market discount
must include that market discount in income currently, as it accrues, on a
constant yield basis.

      To the extent that the REMIC's basis allocable to loans that it holds
exceeds their principal amounts, the resulting premium will be amortized over
the life of the loans (taking into account the Prepayment Assumption) on a
constant yield method. Although the law is somewhat unclear regarding recovery
of premium attributable to loans originated on or before that date, it is
possible that the premium may be recovered in proportion to payments of loan
principal.

      Prohibited Transactions and Contributions Tax. The REMIC will be subject
to a 100% tax on any net income derived from a "prohibited transaction." For
this purpose, net income will be calculated without taking into account any
losses from prohibited transactions or any deductions attributable to any
prohibited transaction that resulted in a loss. In general, prohibited
transactions include:

o     subject to limited exceptions, the sale or other disposition of any
      qualified mortgage transferred to the REMIC;

o     subject to a limited exception, the sale or other disposition of a cash
      flow investment;

o     the receipt of any income from assets not permitted to be held by the
      REMIC pursuant to the Code; or

o     the receipt of any fees or other compensation for services rendered by the
      REMIC.

It is anticipated that a REMIC will not engage in any prohibited transactions in
which it would recognize a material amount of net income. In addition, subject
to a number of exceptions, a tax is imposed at the rate of 100% on amounts
contributed to a REMIC after the close of the three-month period beginning on
the Startup Day. The holders of Residual Interests will generally be responsible
for the payment of any such taxes imposed on the REMIC. To the extent not paid
by the holders or otherwise, however, the taxes will be paid out of the trust
fund and will be allocated pro rata to all outstanding classes of securities of
the REMIC.

TAXATION OF HOLDERS OF RESIDUAL INTERESTS

      The holder of a security representing a residual interest (a "Residual
Interest") will take into account the "daily portion" of the taxable income or
net loss of the REMIC for each day during the taxable year on which the holder
held the Residual Interest. The daily portion is determined by allocating to
each day in any calendar quarter its ratable portion of the taxable income or
net loss of the REMIC for the quarter, and by allocating that amount among the
holders (on that day) of the Residual Interests in proportion to their
respective holdings on that day.

      The holder of a Residual Interest must report its proportionate share of
the taxable income of the REMIC whether or not it receives cash distributions
from the REMIC attributable to the income or loss. The reporting of taxable
income without corresponding distributions could occur, for example, in certain
REMIC issues in which the loans held by the REMIC were issued or acquired at a
discount, since mortgage prepayments cause recognition of discount income, while
the corresponding portion of the prepayment could be used in whole or in part to
make principal payments on REMIC Regular Interests issued without any discount
or at an insubstantial discount (if this occurs, it is likely that cash
distributions will exceed taxable income in later years). Taxable income may
also be greater in earlier years of certain REMIC issues as a result of the fact
that interest expense deductions, as a percentage of outstanding principal on
REMIC Regular Interest Securities, will typically increase over time as lower
yielding securities are paid, whereas interest income with respect to loans will
generally remain constant over time as a percentage of loan principal.

      In any event, because the holder of a Residual Interest is taxed on the
net income of the REMIC, the taxable income derived from a Residual Interest in
a given taxable year will not be equal to the taxable income associated with
investment in a corporate bond or stripped instrument having similar cash flow
characteristics and


                                       93



pretax yield. Therefore, the after-tax yield on the Residual Interest may be
less than that of such a bond or instrument.

      Limitation on Losses. The amount of the REMIC's net loss that a holder may
take into account currently is limited to the holder's adjusted basis in the
Residual Interest at the end of the calendar quarter in which the loss arises. A
holder's basis in a Residual Interest will initially equal the holder's purchase
price, and will subsequently be increased by the amount of the REMIC's taxable
income allocated to the holder, and decreased (but not below zero) by the amount
of distributions made and the amount of the REMIC's net loss allocated to the
holder. Any disallowed loss may be carried forward indefinitely, but may be used
only to offset income of the REMIC generated by the same REMIC. The ability of
holders of Residual Interests to deduct net losses may be subject to additional
limitations under the Code, as to which the holders are encouraged to consult
their tax advisers.

      Distributions. Distributions on a Residual Interest (whether at their
scheduled times or as a result of prepayments) will generally not result in any
additional taxable income or loss to a holder of a Residual Interest. If the
amount of the payment exceeds a holder's adjusted basis in the Residual
Interest, however, the holder will recognize gain (treated as gain from the sale
of the Residual Interest) to the extent of the excess.

      Sale or Exchange. A holder of a Residual Interest will recognize gain or
loss on the sale or exchange of a Residual Interest equal to the difference, if
any, between the amount realized and the holder's adjusted basis in the Residual
Interest at the time of the sale or exchange. Any loss from the sale of a
Residual Interest will be subject to the "wash sale" rules of Code Section 1091
if, during the period beginning six months before and ending six months after
the sale of the Residual Interest, the seller reacquires the Residual Interest,
or acquires (i) a Residual Interest in any other REMIC, (ii) a similar interest
in a "taxable mortgage pool" (as defined in Code Section 7701(i)) or (iii) an
ownership interest in a FASIT (as defined in Code Section 860L). In general,
under the wash sale rules, loss from the Residual Interest will be disallowed
and the Residual Interest Holder's basis in the replacement interest will be the
basis in the Residual Interest that was sold, decreased or increased, as the
case may be, by the difference between the selling price of the Residual
Interest and the purchase price of the replacement interest.

      Excess Inclusions. The portion of the REMIC taxable income of a holder of
a Residual Interest consisting of "excess inclusion" income may not be offset by
other deductions or losses, including net operating losses, on the holder's
federal income tax return. Further, if the holder of a Residual Interest is an
organization subject to the tax on unrelated business income imposed by Code
Section 511, the holder's excess inclusion income will be treated as unrelated
business taxable income of the holder. In addition, under Treasury regulations
yet to be issued, if a real estate investment trust, a regulated investment
company, a common trust fund, or certain cooperatives were to own a Residual
Interest, a portion of dividends (or other distributions) paid by the real
estate investment trust (or other entity) would be treated as excess inclusion
income. If a Residual Interest is owned by a foreign person, excess inclusion
income is subject to tax at a rate of 30%, which may not be reduced by treaty,
is not eligible for treatment as "portfolio interest" and is subject to certain
additional limitations. See "Tax Treatment of Foreign Investors."

      Three special rules apply for determining the effect of excess inclusions
on the alternative minimum taxable income of a residual holder. First,
alternative minimum taxable income for the residual holder is determined without
regard to the rule that taxable income cannot be less than excess inclusions.
Second, a residual holder's alternative minimum taxable income for a tax year
cannot be less than excess inclusions for the year. Third, the amount of any
alternative minimum tax net operating loss deductions must be computed without
regard to any excess inclusions.

      In the case of a Residual Interest that has no significant value, the
excess inclusion portion of a REMIC's income is generally equal to all of the
REMIC taxable income allocable to the residual holder. In other cases, the
excess inclusion portion of a REMIC's income is generally equal to the excess,
if any, of REMIC taxable income for the quarterly period allocable to a Residual
Interest, over the daily accruals for the quarterly period of (i) 120% of the
long term applicable federal rate on the Startup Day multiplied by (ii) the
adjusted issue price of the Residual Interest at the beginning of the quarterly
period. The adjusted issue price of a Residual Interest at the beginning of each
calendar quarter will equal its issue price (calculated in a manner analogous to
the determination of the issue price of a Regular Interest), increased by the
aggregate of the daily accruals for prior calendar quarters, and decreased (but
not below zero) by the amount of loss allocated to a holder and the amount of
distributions made on the Residual Interest before the beginning of the quarter.
The long-term federal rate, which is announced monthly


                                       94



by the Treasury Department, is an interest rate that is based on the average
market yield of outstanding marketable obligations of the United States
government having remaining maturities in excess of nine years.

      Under the REMIC Regulations, in certain circumstances, transfers of
Residual Interests may be disregarded. See "-- Restrictions on Ownership and
Transfer of Residual Interests" and "-- Tax Treatment of Foreign Investors"
below.

      Restrictions on Ownership and Transfer of Residual Interests. As a
condition to qualification as a REMIC, reasonable arrangements must be made to
prevent the ownership of a Residual Interest by any "Disqualified Organization."
Disqualified Organizations include the United States, any State or political
subdivision thereof, any foreign government, any international organization, or
any agency or instrumentality of any of the foregoing, a rural electric or
telephone cooperative described in Section 1381(a)(2)(C) of the Code, or any
entity exempt from the tax imposed by Sections 1 through 1399 of the Code, if
the entity is not subject to tax on its unrelated business income. Accordingly,
the applicable Pooling and Servicing Agreement will prohibit Disqualified
Organizations from owning a Residual Interest. In addition, no transfer of a
Residual Interest will be permitted unless the proposed transferee shall have
furnished to the trustee an affidavit representing and warranting that it is
neither a Disqualified Organization nor an agent or nominee acting on behalf of
a Disqualified Organization.

      If a Residual Interest is transferred to a Disqualified Organization in
violation of the restrictions set forth above, a substantial tax can be imposed
on the transferor of the Residual Interest at the time of the transfer. In
addition, if a Disqualified Organization holds an interest in a pass-through
entity (including, among others, a partnership, trust, real estate investment
trust, regulated investment company, or any person holding as nominee), that
owns a Residual Interest, the pass-through entity will be required to pay an
annual tax on the Disqualified Organization's pass-through share of the excess
inclusion income of the REMIC. If an "electing large partnership" holds a
Residual Interest, 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 under section 860E(e) of the Code. An exception to this tax,
otherwise available to a pass-through entity that is furnished certain
affidavits by record holders of interests in the entity and that does not know
the affidavits are false, is not available to an electing large partnership.

      Noneconomic Residual Interests. The REMIC Regulations disregard, for
federal income tax purposes, any transfer of a Noneconomic Residual Interest to
a "U.S. Transferee" unless no significant purpose of the transfer is to enable
the transferor to impede the assessment or collection of tax. For this purpose,
a U.S. Transferee means a U.S. Person as defined under "Certain Federal Income
Tax Consequences -- Non-REMIC Certificates -- Non-U.S. Persons." A U.S.
Transferee also includes foreign entities and individuals (Non-U.S. Persons) but
only if their income from the Residual Interest is subject to tax under Code
Section 871(b) or Code Section 882 (income effectively connected with a U.S.
trade or business). If the transfer of a Noneconomic Residual Interest is
disregarded, the transferor continues to be treated as the owner of the Residual
Interest and continues to be subject to tax on its allocable portion of the net
income of the REMIC.

      A Residual Interest (including a Residual Interest with a positive value
at issuance) is a "Noneconomic Residual Interest" at the time of transfer
unless, (i) taking into account the Prepayment Assumption and any required or
permitted clean up calls or required liquidation provided for in the REMIC's
organizational documents, the present value of the expected future distributions
on the Residual Interest at least equals the product of (A) the present value of
the anticipated excess inclusions and (B) the highest corporate income tax rate
in effect for the year in which the transfer occurs, and (ii) the transferor
reasonably expects that the transferee will receive distributions from the REMIC
at or after the time at which taxes accrue on the anticipated excess inclusions
in an amount sufficient to satisfy the accrued taxes. A transfer of a
Noneconomic Residual Interest has a "significant purpose to impede the
assessment or collection of tax" if, at the time of transfer, the transferor
either knew or should have known (had "Improper Knowledge") that the transferee
would be unwilling or unable to pay taxes due on its share of the taxable income
of the REMIC.

      The REMIC Regulations also provide a safe harbor under which the
transferor of a Noneconomic Residual Interest is presumed not to have Improper
Knowledge at the time of transfer if the following conditions are met: (i) the
transferor conducts a reasonable investigation of the financial condition of the
transferee, finds that the transferee has historically paid its debts as they
came due, and finds no significant evidence to indicate that the transferee will


                                       95



not continue to pay its debts as they come due; (ii) the transferee represents
that it understands that as a result of holding the Noneconomic Residual
Interest, it may incur tax liabilities in excess of any cash flows generated by
the Noneconomic Residual Interest and intends to pay taxes associated with
holding the Noneconomic Residual Interest as they become due; (iii) the
transferee represents that it will not cause income from the Noneconomic
Residual Interest to be attributable to a foreign permanent establishment or
fixed base (within the meaning of an applicable income tax treaty) ("Offshore
Location") of the transferee or another U.S. taxpayer; (iv) the transferee is
not located in an Offshore Location; and (v) the transferee meets either the
Formula Test or the Asset Test.

      A transfer of a Noneconomic Residual Interest meets the Formula Test if
the present value of the anticipated tax liabilities associated with holding the
Residual Interest does not exceed the sum of, (i) the present value of any
consideration given to the transferee to acquire the interest; (ii) the present
value of the expected future distributions on the interest; and (iii) the
present value of the anticipated tax savings associated with holding the
interest as the REMIC generates losses. For purposes of the Formula Test the
transferee is assumed to pay tax at a rate equal to the highest corporate rate
of tax specified in Code Section 11(b)(1). If, however, the transferee has been
subject to the alternative minimum tax ("AMT") under Code Section 55 in the
preceding two years and will compute its taxable income in the current taxable
year using the AMT rate, then the transferee can assume that it pays tax at the
AMT rate specified in Code Section 55(b)(1)(B). Present values are computed
using a discount rate equal to the Federal short-term rate prescribed by Code
Section 1274(d) for the month of the transfer and the compounding period used by
the transferee.

      The Asset Test only applies in cases where the transferee is an Eligible
Corporation. To be an Eligible Corporation, the transferee must be a taxable
domestic C corporation other than a regulated investment company, a real estate
investment trust, a REMIC or a cooperative. In addition, regardless of who the
transferee may be, the transfer of a Residual Interest to an Offshore Location
does not qualify as a transfer to an Eligible Corporation even if the Offshore
Location is only a branch of an Eligible Corporation and not a separate legal
entity. A transfer of a Noneconomic Residual Interest meets the Asset Test if at
the time of the transfer, and at the close of each of the transferee's two
fiscal years preceding the year of transfer, the transferee's gross assets for
financial reporting purposes exceed $100 million and its net assets for
financial reporting purposes exceed $10 million. The gross assets and net assets
of a transferee do not include any obligation of any person related to the
transferee (such as a shareholder, partner, affiliate or sister corporation) or
any asset acquired for a principal purpose of satisfying the Asset Test. In
addition, the transferee must make a written agreement that any subsequent
transfer of the interest will be to another Eligible Corporation in a
transaction that satisfies the Asset Test. A transfer fails to meet this
requirement if the transferor knows, or has reason to know, that the transferee
will not honor the restrictions on subsequent transfers. Finally, the facts and
circumstances known to the transferor on or before the date of the transfer must
not reasonably indicate that the taxes associated with the Residual Interest
will not be paid. The consideration given to the transferee to acquire the
non-economic Residual Interest in the REMIC is only one factor to be considered.
However, if the amount of consideration is so low that under any set of
reasonable assumptions a reasonable person would conclude that the taxes
associated with holding the Residual Interest will not be paid, then the
transferor is deemed to know that the transferee cannot or will not pay. In
determining whether the amount is too low, the specific terms of the Formula
Test need not be used.

      Treatment of Inducement Fees. The Treasury Department has issued final
regulations, effective May 11, 2004, which address the federal income tax
treatment of "inducement fees" received by transferees of Noneconomic Residual
Interests. The final regulations require inducement fees to be included in
income over a period reasonably related to the period in which the related
Residual Interest is expected to generate taxable income or net loss allocable
to the holder. The final regulations provide two safe harbor methods, which
permit transferees to include inducement fees in income either (i) in the same
amounts and over the same periods that the taxpayer uses for financial reporting
purposes, provided that the period is not shorter than the period the REMIC is
expected to generate taxable income or (ii) ratably over the remaining
anticipated weighted average life of all the Regular and Residual Interests
issued by the REMIC, determined based on actual distributions projected as
remaining to be made on the interests under the prepayment assumption. If the
holder of a Residual Interest sells or otherwise disposes of the Residual
Interest, any unrecognized portion of the inducement fee must be taken into
account at the time of the sale or disposition. The final regulations also
provide that an inducement fee shall be treated as income from sources within
the United States. In addition, the IRS has issued administrative guidance
addressing the procedures by which transferees of Noneconomic Residual Interests
may obtain automatic consent from the IRS to change the method of accounting for
REMIC inducement fee income to one of the safe harbor methods provided in these
final


                                       96



regulations (including a change from one safe harbor method to the other safe
harbor method). Prospective purchasers of the Residual Interests are encouraged
to consult with their tax advisors regarding the effect of these final
regulations and the related guidance regarding the procedures for obtaining
automatic consent to change the method of accounting.

      Mark to Market Rules. Prospective purchasers of a Residual Interest should
be aware that a Residual Interest acquired after January 3, 1995 cannot be
marked-to-market.

ADMINISTRATIVE MATTERS

      A REMIC's books must be maintained on a calendar year basis and a REMIC
must file an annual federal income tax return. Ordinarily, a REMIC will also be
subject to the procedural and administrative rules of the Code applicable to
partnerships, including the determination of any adjustments to, among other
things, items of REMIC income, gain, loss, deduction, or credit, by the IRS in a
unified administrative proceeding.

TAX STATUS AS A GRANTOR TRUST

      General. As specified in the related prospectus supplement if REMIC or
partnership elections are not made, in the opinion of Tax Counsel, the trust
fund relating to a series of securities will be classified for federal income
tax purposes as a grantor trust under Subpart E, Part I of Subchapter J of the
Code and not as a corporation (the securities of that series, "Pass-Through
Securities"). In some series there will be no separation of the principal and
interest payments on the loans. In those circumstances, a Holder will be
considered to have purchased a pro rata undivided interest in each of the loans.
In other cases ("Stripped Securities"), sale of the securities will produce a
separation in the ownership of all or a portion of the principal payments from
all or a portion of the interest payments on the loans.

      Each Holder must report on its federal income tax return its share of the
gross income derived from the loans (not reduced by the amount payable as fees
to the trustee and the servicer and similar fees (collectively, the "Servicing
Fee")), at the same time and in the same manner as those items would have been
reported under the Holder's tax accounting method had it held its interest in
the loans directly, received directly its share of the amounts received with
respect to the loans, and paid directly its share of the Servicing Fees. In the
case of Pass-Through Securities other than Stripped Securities, that income will
consist of a pro rata share of all of the income derived from all of the loans
and, in the case of Stripped Securities, that income will consist of a pro rata
share of the income derived from each stripped bond or stripped coupon in which
the Holder owns an interest. The holder of a security will generally be entitled
to deduct the Servicing Fees under Section 162 or Section 212 of the Code to the
extent that the Servicing Fees represent "reasonable" compensation for the
services rendered by the trustee and the servicer (or third parties that are
compensated for the performance of services). In the case of a noncorporate
holder, however, Servicing Fees (to the extent not otherwise disallowed, e.g.,
because they exceed reasonable compensation) will be deductible in computing the
holder's regular tax liability only to the extent that the fees, when added to
other miscellaneous itemized deductions, exceed 2% of adjusted gross income and
may not be deductible to any extent in computing the holder's alternative
minimum tax liability. In addition, the amount of itemized deductions otherwise
allowable for the taxable year for an individual whose adjusted gross income
exceeds the applicable amount (which amount will be adjusted for inflation) will
be reduced by the lesser of (i) 3% of the excess of adjusted gross income over
the applicable amount or (ii) 80% of the amount of itemized deductions otherwise
allowable for the taxable year. (These percentages are scheduled to be reduced
in 2006 and return to current levels in 2010).

      Discount or Premium on Pass-Through Securities. The holder's purchase
price of a Pass-Through Security is to be allocated among the underlying loans
in proportion to their fair market values, determined as of the time of purchase
of the securities. In the typical case, the trustee (to the extent necessary to
fulfill its reporting obligations) will treat each loan as having a fair market
value proportional to the share of the aggregate principal balances of all of
the loans that it represents, since the securities, generally, will have a
relatively uniform interest rate and other common characteristics. To the extent
that the portion of the purchase price of a Pass-Through Security allocated to a
loan (other than to a right to receive any accrued interest thereon and any
undistributed principal payments) is less than or greater than the portion of
the principal balance of the loan allocable to the security, the interest in the
loan allocable to the Pass-Through Security will be deemed to have been acquired
at a discount or premium, respectively.


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      The treatment of any discount will depend on whether the discount
represents OID or market discount. In the case of a loan with OID in excess of a
prescribed de minimis amount or a Stripped Security, a holder of a security will
be required to report as interest income in each taxable year its share of the
amount of OID that accrues during that year in the manner described above. OID
with respect to a loan could arise, for example, by virtue of the financing of
points by the originator of the loan, or by virtue of the charging of points by
the originator of the loan in an amount greater than a statutory de minimis
exception. Any market discount or premium on a loan will be includible in
income, generally in the manner described above, except that in the case of
Pass-Through Securities, market discount is calculated with respect to the loans
underlying the security, rather than with respect to the security. A Holder that
acquires an interest in a loan with more than a de minimis amount of market
discount (generally, the excess of the principal amount of the loan over the
purchaser's allocable purchase price) will be required to include accrued market
discount in income in the manner set forth above. See "-- Taxation of Debt
Securities; Market Discount" and "-- Premium" above.

      The holder generally will be required to allocate the portion of market
discount that is allocable to a loan among the principal payments on the loan
and to include the discount allocable to each principal payment in ordinary
income at the time the principal payment is made. That treatment would generally
result in discount being included in income at a slower rate than discount would
be required to be included in income using the method described in the preceding
paragraph.

      Stripped Securities. A Stripped Security may represent a right to receive
only a portion of the interest payments on the loans, a right to receive only
principal payments on the loans, or a right to receive certain payments of both
interest and principal. Certain Stripped Securities ("Ratio Strip Securities")
may represent a right to receive differing percentages of both the interest and
principal on each loan. Pursuant to Section 1286 of the Code, the separation of
ownership of the right to receive some or all of the interest payments on an
obligation from ownership of the right to receive some or all of the principal
payments results in the creation of "stripped bonds" with respect to principal
payments and "stripped coupons" with respect to interest payments. Section 1286
of the Code applies the OID rules to stripped bonds and stripped coupons. For
purposes of computing original issue discount, a stripped bond or a stripped
coupon is treated as a debt instrument issued on the date that the stripped
interest is purchased with an issue price equal to its purchase price or, if
more than one stripped interest is purchased, the ratable share of the purchase
price allocable to the stripped interest.

      Servicing fees in excess of reasonable servicing fees ("excess servicing")
will be treated under the stripped bond rules. If the excess servicing fee is
less than 100 basis points (that is, 1% interest on the loan principal balance)
or the securities are initially sold with a de minimis discount (assuming no
prepayment assumption is required), any non-de minimis discount arising from a
subsequent transfer of the securities should be treated as market discount. The
IRS appears to require that reasonable servicing fees be calculated on a loan by
loan basis, which could result in some loans being treated as having more than
100 basis points of interest stripped off.

      The Code. OID Regulations and judicial decisions provide no direct
guidance on how the interest and original issue discount rules apply to Stripped
Securities and other Pass-Through Securities. Under the method described above
for Pay-Through Securities (the "Cash Flow Bond Method"), a prepayment
assumption is used and periodic recalculations are made which take into account
with respect to each accrual period the effect of prepayments during the period.
However, the 1986 Act does not, absent Treasury regulations, appear specifically
to cover instruments such as the Stripped Securities, which technically
represent ownership interests in the underlying loans, rather than being debt
instruments "secured by" those loans. The Taxpayer Relief Act of 1997 may allow
use of the Cash Flow Bond Method with respect to Stripped Securities and other
Pass-Through Securities because it provides that the method applies to any pool
of debt instruments the yield on which may be affected by prepayments.
Nevertheless, it is believed that the Cash Flow Bond Method is a reasonable
method of reporting income for the securities, and it is expected that OID will
be reported on that basis; provided that the applicable prospectus supplement
may provide for the reporting of OID on an alternative basis. In applying the
calculation to Pass-Through Securities, the trustee will treat all payments to
be received by a holder with respect to the underlying loans as payments on a
single installment obligation. The IRS could, however, assert that original
issue discount must be calculated separately for each loan underlying a
security.

      Under certain circumstances, if the loans prepay at a rate faster than the
Prepayment Assumption, the use of the Cash Flow Bond Method may accelerate a
Holder's recognition of income. If, however, the loans prepay at a


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rate slower than the Prepayment Assumption, in some circumstances the use of
this method may delay a Holder's recognition of income.

      In the case of a Stripped Security that is an Interest Weighted Security,
the trustee intends, absent contrary authority, to report income to security
holders as OID, in the manner described above for Interest Weighted Securities.

      Possible Alternative Characterizations. The characterizations of the
Stripped Securities described above are not the only possible interpretations of
the applicable Code provisions. Among other possibilities, the IRS could contend
that

o     in certain series, each non-Interest Weighted Security is composed of an
      unstripped undivided ownership interest in loans and an installment
      obligation consisting of stripped principal payments;

o     the non-Interest Weighted Securities are subject to the contingent payment
      provisions of the Contingent Regulations; or

o     each Interest Weighted Stripped Security is composed of an unstripped
      undivided ownership interest in loans and an installment obligation
      consisting of stripped interest payments.

      Given the variety of alternatives for treatment of the Stripped Securities
and the different federal income tax consequences that result from each
alternative, potential purchasers are urged to consult their tax advisers
regarding the proper treatment of the securities for federal income tax
purposes.

      Character as Qualifying Loans. In the case of Stripped Securities, there
is no specific legal authority existing regarding whether the character of the
securities, for federal income tax purposes, will be the same as the loans. The
IRS could take the position that the loans' character is not carried over to the
securities in those circumstances. Pass-Through Securities will be, and,
although the matter is not free from doubt, Stripped Securities should be
considered to represent "real estate assets" within the meaning of Section
856(c)(5)(B) of the Code and "loans secured by an interest in real property"
within the meaning of Section 7701(a)(19)(C)(v) of the Code; and interest income
attributable to the securities should be considered to represent "interest on
obligations secured by mortgages on real property or on interests in real
property" within the meaning of Section 856(c)(3)(B) of the Code. Reserves or
funds underlying the securities may cause a proportionate reduction in the
above-described qualifying status categories of securities.

SALE OR EXCHANGE

      Subject to the discussion below with respect to trust funds for which a
partnership election is made, a Holder's tax basis in its security is the price
the holder pays for the security, plus amounts of original issue or market
discount included in income and reduced by any payments received (other than
qualified stated interest payments) and any amortized premium. Gain or loss
recognized on a sale, exchange, or redemption of a security, measured by the
difference between the amount realized and the security's basis as so adjusted,
will generally be capital gain or loss, assuming that the security is held as a
capital asset. In the case of a security held by a bank, thrift, or similar
institution described in Section 582 of the Code, however, gain or loss realized
on the sale or exchange of a Regular Interest Security will be taxable as
ordinary income or loss. In addition, gain from the disposition of a Regular
Interest Security that might otherwise be capital gain will be treated as
ordinary income to the extent of the excess, if any, of (i) the amount that
would have been includible in the holder's income if the yield on the Regular
Interest Security had equaled 110% of the applicable federal rate as of the
beginning of the holder's holding period, over (ii) the amount of ordinary
income actually recognized by the holder with respect to the Regular Interest
Security.

MISCELLANEOUS TAX ASPECTS

      Backup Withholding. Subject to the discussion below with respect to trust
funds for which a partnership election is made, a Holder, other than a holder of
a Residual Interest, may, under certain circumstances, be subject to "backup
withholding" with respect to distributions or the proceeds of a sale of
securities to or through brokers that


                                       99



represent interest or original issue discount on the securities. This
withholding generally applies if the holder of a security

o     fails to furnish the trustee with its taxpayer identification number
      ("TIN");

o     furnishes the trustee an incorrect TIN;

o     fails to report properly interest, dividends or other "reportable
      payments" as defined in the Code; or

o     under certain circumstances, fails to provide the trustee or the holder's
      securities broker with a certified statement, signed under penalty of
      perjury, that the TIN provided is its correct number and that the holder
      is not subject to backup withholding.

      Backup withholding will not apply, however, with respect to certain
payments made to Holders, including payments to certain exempt recipients (such
as exempt organizations) and to certain Nonresidents (as defined below). Holders
are encouraged to consult their tax advisers as to their qualification for
exemption from backup withholding and the procedure for obtaining the exemption.

      The trustee will report to the Holders and to the servicer for each
calendar year the amount of any "reportable payments" during the year and the
amount of tax withheld, if any, with respect to payments on the securities.

PROPOSED REPORTING REGULATIONS

      In June 2002 the IRS and Treasury Department proposed new rules concerning
the reporting of tax information with respect to "Widely Held Mortgage Trusts."
If these rules are finalized, the trustee may be compelled, or have an
opportunity, to adopt new ways of calculating and reporting tax items (such as
OID, market discount, sale proceeds and premium) to the Holders of Pass-Through
Securities, which changes may affect the timing of when a Holder reports those
items.

TAX TREATMENT OF FOREIGN INVESTORS

      Subject to the discussion below with respect to trust funds for which a
partnership election is made, under the Code, unless interest (including OID)
paid on a security (other than a Residual Interest) is considered to be
"effectively connected" with a trade or business conducted in the United States
by a nonresident alien individual, foreign partnership or foreign corporation
("Nonresidents"), the interest will normally qualify as portfolio interest
(except where the recipient is a holder, directly or by attribution, of 10% or
more of the capital or profits interest in the issuer, or the recipient is a
controlled foreign corporation to which the issuer is a related person) and will
be exempt from federal income tax. Upon receipt of appropriate ownership
statements, the issuer normally will be relieved of obligations to withhold tax
from the interest payments. These provisions supersede the generally applicable
provisions of United States law that would otherwise require the issuer to
withhold at a 30% rate (unless the rate were reduced or eliminated by an
applicable income tax treaty) on, among other things, interest and other fixed
or determinable, annual or periodic income paid to Nonresidents.

      Interest and OID of Holders who are foreign persons are not subject to
withholding if they are effectively connected with a United States business
conducted by the Holder. They will, however, generally be subject to the regular
United States income tax.

      Payments to holders of Residual Interests who are foreign persons will
generally be treated as interest for purposes of the 30% (or lower treaty rate)
United States withholding tax. Holders should assume that the income does not
qualify for exemption from United States withholding tax as "portfolio
interest." It is clear that, to the extent that a payment represents a portion
of REMIC taxable income that constitutes excess inclusion income, a holder of a
Residual Interest will not be entitled to an exemption from or reduction of the
30% (or lower treaty rate) withholding tax rule. If the payments are subject to
United States withholding tax, they generally will be taken into


                                       100



account for withholding tax purposes only when paid or distributed (or when the
Residual Interest is disposed of). The Treasury has statutory authority,
however, to promulgate regulations which would require the amounts to be taken
into account at an earlier time in order to prevent the avoidance of tax. The
regulations could, for example, require withholding prior to the distribution of
cash in the case of Residual Interests that do not have significant value. Under
the REMIC Regulations, if a Residual Interest has tax avoidance potential, a
transfer of a Residual Interest to a Nonresident will be disregarded for all
federal tax purposes. A Residual Interest has tax avoidance potential unless, at
the time of the transfer the transferor reasonably expects that the REMIC will
distribute to the transferee of the Residual Interest amounts that will equal at
least 30% of each excess inclusion, and that the amounts will be distributed at
or after the time at which the excess inclusions accrue and not later than the
calendar year following the calendar year of accrual. If a Nonresident transfers
a Residual Interest to a United States person, and if the transfer has the
effect of allowing the transferor to avoid tax on accrued excess inclusions,
then the transfer is disregarded and the transferor continues to be treated as
the owner of the Residual Interest for purposes of the withholding tax
provisions of the Code. See "-- Excess Inclusions."

TAX CHARACTERIZATION OF THE TRUST FUND AS A PARTNERSHIP

      Tax Counsel will deliver its opinion that a trust fund for which a
partnership election is made will not be a corporation 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 Trust Agreement
and related documents will be complied with, and on counsel's conclusions 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 or the issuance
of the securities has been structured as a private placement under an IRS safe
harbor, so that the trust fund will not be characterized as a publicly traded
partnership taxable as a corporation.

      If the trust fund were taxable as a corporation for federal income tax
purposes, the trust fund would be subject to corporate income tax on its taxable
income. The trust fund's taxable income would include all its income, possibly
reduced by its interest expense on the notes. That corporate income tax could
materially reduce cash available to make payments on the notes and distributions
on the certificates, and certificateholders could be liable for that tax that is
unpaid by the trust fund.

TAX CONSEQUENCES TO HOLDERS OF THE NOTES

      Treatment of the Notes as Indebtedness. The trust fund will agree, and the
noteholders will agree by their purchase of notes, to treat the notes as debt
for federal income tax purposes. Unless otherwise specified in the related
prospectus supplement, in the opinion of Tax Counsel, the notes will be
classified as debt for federal income tax purposes. The discussion below assumes
this characterization of the notes is correct.

      OID, Indexed Securities, etc. The discussion below assumes that all
payments on the notes are denominated in U.S. dollars, and that the notes are
not Indexed securities or Strip notes. Moreover, the discussion assumes that the
interest formula for the notes meets the requirements for "qualified stated
interest" under the OID regulations, and that any OID on the notes (that is, any
excess of the principal amount of the notes over their issue price) does not
exceed a de minimis amount (that is, 0.25% of their principal amount multiplied
by the number of full years included in their term), all within the meaning of
the OID regulations. If these conditions are not satisfied with respect to any
given series of notes, additional tax considerations with respect to the notes
will be disclosed in the applicable prospectus supplement.

      Interest Income on the Notes. Based on the above assumptions, except as
discussed in the following paragraph, the notes will not be considered issued
with OID. The stated interest thereon will be taxable to a noteholder as
ordinary interest income when received or accrued in accordance with the
noteholder's method of tax accounting. Under the OID regulations, a holder of a
note issued with a de minimis amount of OID must include the OID in income, on a
pro rata basis, as principal payments are made on the note. It is believed that
any prepayment premium paid as a result of a mandatory redemption will be
taxable as contingent interest when it becomes fixed and unconditionally
payable. A purchaser who buys a note for more or less than its principal amount
will generally be subject, respectively, to the premium amortization or market
discount rules of the Code.


                                       101



      A holder of a note that has a fixed maturity date of not more than one
year from the issue date of the note (a "Short-Term Note") may be subject to
special rules. An accrual basis holder of a Short-Term Note (and certain cash
method holders, including regulated investment companies, as set forth in
Section 1281 of the Code) generally would be required to report interest income
as interest accrues on a straight-line basis over the term of each interest
period. Other cash basis holders of a Short-Term Note would, in general, be
required to report interest income as interest is paid (or, if earlier, upon the
taxable disposition of the Short-Term Note). However, a cash basis holder of a
Short-Term Note reporting interest income as it is paid may be required to defer
a portion of any interest expense otherwise deductible on indebtedness incurred
to purchase or carry the Short-Term Note until the taxable disposition of the
Short-Term Note. A cash basis taxpayer may elect under Section 1281 of the Code
to accrue interest income on all nongovernment debt obligations with a term of
one year or less, in which case the taxpayer would include interest on the
Short-Term Note in income as it accrues, but would not be subject to the
interest expense deferral rule referred to in the preceding sentence. Certain
special rules apply if a Short-Term Note is purchased for more or less than its
principal amount.

      Sale or Other Disposition. If a noteholder sells a note, the holder will
recognize gain or loss in an amount equal to the difference between the amount
realized on the sale and the holder's adjusted tax basis in the note. The
adjusted tax basis of a note to a particular noteholder will equal the holder's
cost for the note, increased by any market discount, acquisition discount, OID
and gain previously included by the noteholder in income with respect to the
note and decreased by the amount of bond premium (if any) previously amortized
and by the amount of principal payments previously received by the noteholder
with respect to the note. That gain or loss will be capital gain or loss if the
note was held as a capital asset, except for gain representing accrued interest
and accrued market discount not previously included in income. Capital losses
generally may be used only to offset capital gains.

      Foreign Holders. Interest payments made (or accrued) to a noteholder who
is a nonresident alien, foreign corporation or other non-United States person (a
"foreign person") generally will be considered "portfolio interest," and
generally will not be subject to United States federal income tax and
withholding tax, if the interest is not effectively connected with the conduct
of a trade or business within the United States by the foreign person and the
foreign person

o     is not actually or constructively a "10 percent shareholder" of the trust
      fund or the seller (including a holder of 10% of the outstanding
      securities) or a "controlled foreign corporation" with respect to which
      the trust fund or the seller is a "related person" within the meaning of
      the Code and

o     provides the owner trustee or other person who is otherwise required to
      withhold U.S. tax with respect to the notes (the "Withholding Agent") with
      an appropriate statement, signed under penalties of perjury, certifying
      that the beneficial owner who is an individual or corporation for federal
      income tax purposes of the note is a foreign person and providing the
      foreign person's name and address.

Generally, this statement is made on an IRS Form W-8BEN ("W-8BEN"), which is
effective for the remainder of the year of signature plus three full calendar
years unless a change in circumstances makes any information on the form
incorrect. Notwithstanding the preceding sentence, a W-8BEN with a U.S. taxpayer
identification number will remain effective until a change in circumstances
makes any information on the form incorrect, provided that the Withholding Agent
reports at least one payment annually to the beneficial owner on IRS Form
1042-S. The beneficial owner must inform the Withholding Agent within 30 days of
any change and furnish a new W-8BEN. A noteholder who is not an individual or
corporation (or an entity treated as a corporation for federal income tax
purposes) holding the Notes on its own behalf may have substantially increased
reporting requirements. In particular, in the case of notes held by a foreign
partnership (or foreign trust), the partners (or beneficiaries) rather than the
partnership (or trust) will be required to provide the certification discussed
above, and the partnership (or trust) will be required to provide certain
additional information.

      If a note is held through a securities clearing organization or certain
other financial institutions, the organization or institution may provide the
relevant signed statement to the withholding agent; in that case, however, the
signed statement must be accompanied by a Form W-8BEN or substitute form
provided by the foreign person that owns the note. If the interest is not
portfolio interest, then it will be subject to United States federal income and
withholding tax at a rate of 30 percent, unless reduced or eliminated pursuant
to an applicable tax treaty.


                                       102



      Any capital gain realized on the sale, redemption, retirement or other
taxable disposition of a note by a foreign person will be exempt from United
States federal income and withholding tax, provided that the gain is not
effectively connected with the conduct of a trade or business in the United
States by the foreign person and in the case of an individual foreign person,
the foreign person is not present in the United States for 183 days or more in
the taxable year.

      Backup Withholding. Each holder of a note (other than an exempt holder
such as a corporation, tax-exempt organization, qualified pension and
profit-sharing trust, individual retirement account or nonresident alien who
provides certification as to status as a nonresident) will be required to
provide, under penalties of perjury, a certificate containing the holder's name,
address, correct federal taxpayer identification number and a statement that the
holder is not subject to backup withholding. Should a nonexempt noteholder fail
to provide the required certification, the trust fund will be required to
withhold on the amount otherwise payable to the holder, and remit the withheld
amount to the IRS as a credit against the holder's federal income tax liability.

      Possible Alternative Treatments of the Notes. If, contrary to the opinion
of Tax Counsel, the IRS successfully asserted that one or more of the notes did
not represent debt for federal income tax purposes, the notes might be treated
as equity interests in the trust fund. If so treated, the trust fund might be
taxable as a corporation with the adverse consequences described above (and the
taxable corporation would not be able to reduce its taxable income by deductions
for interest expense on notes recharacterized as equity). Alternatively, and
most likely in the view of special counsel to the depositor, the trust fund
might be treated as a publicly traded partnership that would not be taxable as a
corporation because it would meet certain qualifying income tests. Nonetheless,
treatment of the notes as equity interests in that publicly traded partnership
could have adverse tax consequences to certain holders. For example, income to
certain tax-exempt entities (including pension funds) would be "unrelated
business taxable income," income to foreign holders generally would be subject
to U.S. tax and U.S. tax return filing and withholding requirements, and
individual holders might be subject to certain limitations on their ability to
deduct their share of the trust fund's expenses.

TAX CONSEQUENCES TO HOLDERS OF THE CERTIFICATES

      Treatment of the Trust Fund as a Partnership. The trust fund and the
master servicer will agree, and the certificateholders will agree by their
purchase of certificates, to treat the 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 trust fund, the partners of the partnership being the
certificateholders, and the notes being debt of the partnership. However, the
proper characterization of the arrangement involving the trust fund, the
certificates, the notes, the trust fund and the servicer 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 the certificates have certain features characteristic of debt, the
certificates might be considered debt of the trust fund. That characterization
would not result in materially adverse tax consequences to certificateholders as
compared to the consequences from treatment of the certificates as equity in a
partnership, described below. The following discussion assumes that the
certificates represent equity interests in a partnership.

      Indexed Securities, etc. The following discussion assumes that all
payments on the certificates are denominated in U.S. dollars, none of the
certificates are Indexed securities or Strip certificates, and that a series of
securities includes a single class of certificates. If these conditions are not
satisfied with respect to any given series of certificates, additional tax
considerations with respect to the certificates will be disclosed in the
applicable prospectus supplement.

      Partnership Taxation. As a partnership, the trust fund will not be subject
to federal income tax. Rather, each certificateholder will be required to
separately take into account the holder's distributive share of income, gains,
losses, deductions and credits of the trust fund. The trust fund's income will
consist primarily of interest and finance charges earned on the loans (including
appropriate adjustments for market discount, OID and bond premium) and any gain
upon collection or disposition of loans. The trust fund's deductions will
consist primarily of interest accruing with respect to the notes, servicing and
other fees, and losses or deductions upon collection or disposition of loans.


                                       103



      The tax items of a partnership are allocable to the partners in accordance
with the Code, Treasury regulations and the partnership agreement (here, the
Trust Agreement and related documents). The Trust Agreement will provide, in
general, that the certificateholders will be allocated taxable income of the
trust fund for each month equal to the sum of (i) the interest that accrues on
the certificates in accordance with their terms for that month, including
interest accruing at the Pass-Through Rate for the month and interest on amounts
previously due on the certificates but not yet distributed; (ii) any trust fund
income attributable to discount on the Loans that corresponds to any excess of
the principal amount of the certificates over their initial issue price; (iii)
prepayment premium payable to the certificateholders for the month; and (iv) any
other amounts of income payable to the certificateholders for the month. That
allocation will be reduced by any amortization by the trust fund of premium on
loans that corresponds to any excess of the issue price of certificates over
their principal amount. All remaining taxable income of the trust fund will be
allocated to the depositor. Based on the economic arrangement of the parties,
this approach for allocating trust fund income should be permissible under
applicable Treasury regulations, although we can give no assurance that the IRS
would not require a greater amount of income to be allocated to
certificateholders. Moreover, even under the foregoing method of allocation,
certificateholders 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 that amount. Thus, cash
basis holders will in effect be required to report income from the certificates
on the accrual basis and certificateholders may become liable for taxes on trust
fund income even if they have not received cash from the trust fund to pay those
taxes. In addition, because tax allocations and tax reporting will be done on a
uniform basis for all certificateholders but certificateholders may be
purchasing certificates at different times and at different prices,
certificateholders may be required to report on their tax returns taxable income
that is greater or less than the amount reported to them by the trust fund.

      All of the taxable income allocated to a certificateholder that is a
pension, profit sharing or employee benefit plan or other tax-exempt entity
(including an individual retirement account) will constitute "unrelated business
taxable income" generally taxable to that holder under the Code.

      An individual taxpayer's share of expenses of the trust fund (including
fees to the servicer but not interest expense) would be miscellaneous itemized
deductions. Those deductions might be disallowed to the individual in whole or
in part and might result in the holder being taxed on an amount of income that
exceeds the amount of cash actually distributed to the holder over the life of
the trust fund.

      The trust fund intends to make all tax calculations relating to income and
allocations to certificateholders on an aggregate basis. If the IRS were to
require that those calculations be made separately for each loan, the trust fund
might be required to incur additional expense but it is believed that there
would not be a material adverse effect on certificateholders.

      Discount and Premium. It is believed that the loans were not issued with
OID, and, therefore, the trust fund should not have OID income. However, the
purchase price paid by the trust fund for the loans may be greater or less than
the remaining principal balance of the loans at the time of purchase. If so, the
loan will have been acquired at a premium or discount, as the case may be. (As
indicated above, the trust fund will make this calculation on an aggregate
basis, but might be required to recompute it on a loan by loan basis.)

      If the trust fund acquires the loans at a market discount or premium, the
trust fund will elect to include that discount in income currently as it accrues
over the life of the loans or to offset that premium against interest income on
the loans. As indicated above, a portion of the market discount income or
premium deduction may be allocated to certificateholders.

      Section 708 Termination. Pursuant to Code Section 708, a sale or exchange
of 50% or more of the capital and profits in a partnership would cause a deemed
contribution of assets of the partnership (the "old partnership") to a new
partnership (the "new partnership") in exchange for interests in the new
partnership. Those interests would be deemed distributed to the partners of the
old partnership in liquidation thereof, which would not constitute a sale or
exchange. Accordingly, if the trust fund were characterized as a partnership,
then even if a sale of certificates terminated the partnership under Code
Section 708, the holder's basis in its certificates would remain the same.


                                       104



      Disposition of Certificates. Generally, capital gain or loss will be
recognized on a sale of certificates in an amount equal to the difference
between the amount realized and the seller's tax basis in the certificates sold.
A certificateholder's tax basis in a certificate will generally equal the
holder's cost increased by the holder's share of trust fund income (includible
in income) and decreased by any distributions received with respect to that
certificate. In addition, both the tax basis in the certificates and the amount
realized on a sale of a certificate would include the holder's share of the
notes and other liabilities of the trust fund. A holder acquiring certificates
at different prices may be required to maintain a single aggregate adjusted tax
basis in the certificates, and, upon sale or other disposition of some of the
certificates, allocate a portion of that aggregate tax basis to the certificates
sold (rather than maintaining a separate tax basis in each certificate for
purposes of computing gain or loss on a sale of that certificate).

      Any gain on the sale of a certificate attributable to the holder's share
of unrecognized accrued market discount on the loans would generally be treated
as ordinary income to the holder and would give rise to special tax reporting
requirements. The trust fund does not expect to have any other assets that would
give rise to those special reporting requirements. Thus, to avoid those special
reporting requirements, the trust fund will elect to include market discount in
income as it accrues.

      If a certificateholder is required to recognize an aggregate amount of
income (not including income attributable to disallowed itemized deductions
described above) over the life of the certificates that exceeds the aggregate
cash distributions with respect thereto, that excess will generally give rise to
a capital loss upon the retirement of the certificates.

      Allocations Among Transferors and Transferees. In general, the trust
fund's taxable income and losses will be determined monthly and the tax items
for a particular calendar month will be apportioned among the certificateholders
in proportion to the principal amount of certificates owned by them as of the
close of the last day of that month. As a result, a holder purchasing
certificates may be allocated tax items (which will affect its tax liability and
tax basis) attributable to periods before the actual transaction.

      The use of a monthly convention may not be permitted by existing
regulations. If a monthly convention is not allowed (or only applies to
transfers of less than all of the partner's interest), taxable income or losses
of the trust fund might be reallocated among the certificateholders. The trust
fund's method of allocation between transferors and transferees may be revised
to conform to a method permitted by future regulations.

      Section 754 Election. In the event that a certificateholder sells its
certificates at a profit (loss), the purchasing certificateholder will have a
higher (lower) basis in the certificates than the selling certificateholder had.
The tax basis of the trust fund's assets will not be adjusted to reflect that
higher (or lower) basis unless the 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
onerous information reporting requirements, the trust fund will not make that
election. As a result, certificateholders might be allocated a greater or lesser
amount of trust fund income than would be appropriate based on their own
purchase price for certificates.

      Administrative Matters. The owner trustee is required to keep or have kept
complete and accurate books of the trust fund. Those books will be maintained
for financial reporting and tax purposes on an accrual basis and the fiscal year
of the 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
trust fund and will report each certificateholder's allocable share of items of
trust fund income and expense to holders and the IRS on Schedule K-1. The trust
fund will provide the Schedule K-l information to nominees that fail to provide
the trust fund with the information statement described below and those nominees
will be required to forward that information to the beneficial owners of the
certificates. Generally, holders must file tax returns that are consistent with
the information return filed by the trust fund or be subject to penalties unless
the holder notifies the IRS of all those inconsistencies.

      Under Section 6031 of the Code, any person that holds certificates as a
nominee at any time during a calendar year is required to furnish the trust fund
with a statement containing certain information on the nominee, the beneficial
owners and the certificates so held. That 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 the person,
(y) whether the person is a United States person, a tax-exempt entity or a
foreign government,


                                       105



an international organization, or any wholly owned agency or instrumentality of
either of the foregoing, and (z) certain information on certificates that were
held, bought or sold on behalf of the person throughout the year. In addition,
brokers and financial institutions that hold certificates through a nominee are
required to furnish directly to the trust fund information as to themselves and
their ownership of certificates. A clearing agency registered under Section 17A
of the Securities Exchange Act of 1934, as amended is not required to furnish
that information statement to the trust fund. The information referred to above
for any calendar year must be furnished to the trust fund on or before the
following January 31. Nominees, brokers and financial institutions that fail to
provide the trust fund with the information described above may be subject to
penalties.

      The depositor will be designated as the tax matters partner in the related
Trust Agreement and, as such, will be responsible for representing the
certificateholders 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 before three years after the date on which the
partnership information return is filed. Any adverse determination following an
audit of the return of the trust fund by the appropriate taxing authorities
could result in an adjustment of the returns of the certificateholders, and,
under certain circumstances, a certificateholder may be precluded from
separately litigating a proposed adjustment to the items of the trust fund. An
adjustment could also result in an audit of a certificateholder's returns and
adjustments of items not related to the income and losses of the trust fund.

      Tax Consequences to Foreign Certificateholders. It is not clear whether
the 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 trust fund would be engaged in a trade or business in the United States
for those purposes, the trust fund will withhold as if it were so engaged in
order to protect the trust fund from possible adverse consequences of a failure
to withhold. The trust fund expects to withhold on the portion of its taxable
income, as calculated for this purpose which may exceed the distributions to
certificateholders, that is allocable to foreign certificateholders pursuant to
Section 1446 of the Code, as if the income were effectively connected to a U.S.
trade or business. Subsequent adoption of Treasury regulations or the issuance
of other administrative pronouncements may require the trust fund to change its
withholding procedures. In determining a holder's withholding status, the trust
fund may rely on IRS Form W-8BEN, IRS Form W-9 or the holder's certification of
nonforeign status signed under penalties of perjury. A holder who is not an
individual or corporation (or an entity treated as a corporation for federal
income tax purposes) holding the Notes on its own behalf may have substantially
increased reporting requirements. In particular, if the holder is a foreign
partnership (or foreign trust), the partners (or beneficiaries) rather than the
partnership (or trust) will be required to provide the certification discussed
above, and the partnership (or trust) will be required to provide certain
additional information.

      Each foreign 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 trust fund's income. Each foreign holder must
obtain a taxpayer identification number from the IRS and submit that number in
order to assure appropriate crediting of the taxes withheld. A foreign holder
generally would be entitled to file with the IRS a claim for refund with respect
to taxes withheld by the trust fund taking the position that no taxes were due
because the trust fund was not engaged in a U.S. trade or business. However,
interest payments made (or accrued) to a certificateholder who is a foreign
person generally will be considered guaranteed payments to the extent the
payments are determined without regard to the income of the trust fund. If these
interest payments are properly characterized as guaranteed payments, then the
interest will not be considered "portfolio interest." As a result,
certificateholders will 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 that case, a foreign 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 certificates and proceeds
from the sale of the certificates will be subject to a "backup" withholding tax
if, in general, the certificateholder fails to comply with certain
identification procedures, unless the holder is an exempt recipient under
applicable provisions of the Code.


                                       106



                            OTHER TAX CONSIDERATIONS

      In addition to the federal income tax consequences described in "Federal
Income Tax Consequences," potential investors should consider the state, local
and foreign tax consequences of the acquisition, ownership, and disposition of
the securities. State and local tax law may differ substantially from the
corresponding federal law, and this discussion does not purport to describe any
aspect of the tax laws of any state or locality. Therefore, potential investors
are encouraged to consult their own tax advisors with respect to the various
state, local and foreign tax consequences of an investment in the securities.

                              ERISA CONSIDERATIONS

      The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and Section 4975 of the Code impose requirements on employee benefit plans (and
on certain other retirement plans and arrangements, including individual
retirement accounts and annuities and Keogh plans as well as collective
investment funds and separate accounts in which those plans, accounts or
arrangements are invested) (collectively, "Plans") subject to ERISA or to
Section 4975 of the Code and on persons who bear specified relationships to
Plans ("Parties in Interest") or are fiduciaries with respect to those Plans.
Generally, ERISA applies to investments made by Plans. Among other things, ERISA
requires that the assets of Plans be held in trust and that the trustee, or
other duly authorized fiduciary, have exclusive authority and discretion to
manage and control the assets of Plans. ERISA also imposes certain duties on
persons who are fiduciaries of Plans. Under ERISA, any person who exercises any
authority or control respecting the management or disposition of the assets of a
Plan is considered to be a fiduciary of the Plan (subject to certain exceptions
not here relevant). Certain employee benefit plans, such as governmental plans
(as defined in ERISA Section 3(32)) and, if no election has been made under
Section 410(d) of the Code, church plans (as defined in ERISA Section 3(33)),
are not subject to requirements imposed by ERISA and Section 4975 of the Code.
Accordingly, assets of those plans may be invested in securities without regard
to the considerations described above and below, subject to the provisions of
other applicable law. Any plan which is qualified and exempt from taxation under
Code Sections 401(a) and 501(a) is subject to the prohibited transaction rules
set forth in Code Section 503.

      On November 13, 1986, the United States Department of Labor (the "DOL")
issued final regulations concerning the definition of what constitutes the
assets of a Plan. (Labor Reg. Section 2510.3-101 (the "Plan Assets
Regulation")). Under this regulation, the underlying assets and properties of
corporations, partnerships and certain other entities in which a Plan makes an
"equity" investment could be deemed for purposes of ERISA to be assets of the
investing Plan in certain circumstances. Under the Plan Assets Regulation, the
term "equity interest" is defined as any interest in an entity other than an
instrument that is treated as indebtedness under applicable local law and has no
"substantial equity features." If securities are not treated as equity interests
in the issuer for purposes of the Plan Assets Regulation, a Plan's investment in
the securities would not cause the assets of the issuer to be deemed plan
assets. If the securities are deemed to be equity interests in the issuer, the
issuer could be considered to hold plan assets because of a Plan's investment in
those securities. In that event, the master servicer and other persons
exercising management or discretionary control over the assets of the issuer or
providing services with respect to those assets could be deemed to be
fiduciaries or other parties in interest with respect to investing Plans and
thus subject to the prohibited transaction provisions of Section 406 of ERISA
and Section 4975 of the Code and, in the case of fiduciaries, to the fiduciary
responsibility provisions of Title I of ERISA, with respect to transactions
involving the issuer's assets. Trust certificates are "equity interests" for
purposes of the Plan Asset Regulation.

      In addition to the imposition of general fiduciary standards of investment
prudence and diversification, ERISA and Section 4975 of the Code prohibit a
broad range of transactions involving assets of a Plan and persons ("Parties in
Interest") having certain specified relationships to a Plan and impose
additional prohibitions where Parties in Interest are fiduciaries with respect
to that Plan. Because the loans may be deemed assets of each Plan that purchases
equity securities, an investment in equity securities by a Plan might be a
prohibited transaction under ERISA Sections 406 and 407 and subject to an excise
tax under Code Section 4975 unless a statutory, regulatory or administrative
exemption applies.

      Without regard to whether securities are considered to be equity interest
in the issuer, certain affiliates of the issuer might be considered or might
become Parties in Interest with respect to a Plan. In this case, the acquisition
or holding of the securities by or on behalf of the Plan could constitute or
give rise to a prohibited


                                       107



transaction, within the meaning of ERISA and Section 4975 of the Code, unless
they were subject to one or more exemptions. Depending on the relevant facts and
circumstances, certain prohibited transaction exemptions may apply to the
purchase or holding of the securities -- for example, Prohibited Transaction
Class Exemption ("PTCE") 96-23, which exempts certain transactions effected on
behalf of a Plan by an "in-house asset manager"; PTCE 95-60, which exempts
certain transactions by insurance company general accounts; PTCE 91-38, which
exempts certain transactions by bank collective investment funds; PTCE 90-1,
which exempts certain transactions by insurance company pooled separate
accounts; or PTCE 84-14, which exempts certain transactions effected on behalf
of a Plan by a "qualified professional asset manager". We can give no assurance
that any of these exemptions will apply with respect to any Plan's investment in
securities, or that such an exemption, if it did apply, would apply to all
prohibited transactions that may occur in connection with the investment.
Furthermore, these exemptions would not apply to transactions involved in
operation of the trust if, as described above, the assets of the trust were
considered to include plan assets.

      The DOL has granted to certain underwriters individual administrative
exemptions (the "Underwriter Exemptions") from certain of the prohibited
transaction rules of ERISA and the related excise tax provisions of Section 4975
of the Code with respect to the initial purchase, the holding and the subsequent
resale by Plans of securities, including certificates, underwritten or privately
placed by that underwriter or its affiliate or by a syndicate managed by that
underwriter or its affiliate and issued by entities that hold investment pools
consisting of certain secured receivables, loans and other obligations and the
servicing, operation and management of the investment pools, provided the
conditions and requirements of the Underwriter Exemptions are met. The Exemption
also permits the entity to hold an interest-rate swap or yield supplement
agreement if it meets requirements set forth in the Exemption.

      While each Underwriter Exemption is an individual exemption separately
granted to a specific underwriter, the terms and conditions which generally
apply to the Underwriter Exemptions are substantially identical, and include the
following:

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

            (2) the securities acquired by the Plan have received a rating at
      the time of the acquisition that is one of the four highest generic rating
      categories from Standard & Poor's Ratings Services, a division of The
      McGraw-Hill Companies, Inc. ("S&P"), Moody's Investors Service, Inc.
      ("Moody's"), or Fitch Ratings, Inc. ("Fitch") (each, a "Rating Agency");

            (3) the trustee is not 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 securities represents not more
      than reasonable compensation for underwriting the securities; the sum of
      all payments made to and retained by the seller pursuant to the assignment
      of the loans to the issuer represents not more than the fair market value
      of the loans; the sum of all payments made to and retained by the servicer
      and any sub-servicer represents not more than reasonable compensation for
      the person's services under the agreement pursuant to which the loans are
      pooled and reimbursements of the 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 SEC under
      the Securities Act.

      The issuer must also meet the following requirements:

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


                                       108



            (ii)securities in those other investment pools must have been rated
      in one of the four highest rating categories of S&P, Moody's, or Fitch for
      at least one year prior to the Plan's acquisition of securities; and

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

      Moreover, the Underwriter Exemptions generally provide relief from certain
self-dealing/conflict of interest prohibited transactions that may occur when a
Plan fiduciary causes a Plan to acquire securities of an issuer holding
receivables as to which the fiduciary (or its affiliate) is an obligor, provided
that, among other requirements:

o     in the case of an acquisition in connection with the initial issuance of
      certificates, at least fifty percent (50%) of each class of certificates
      in which Plans have invested, and at least fifty percent (50%) of
      aggregate interests in the issuer are acquired by persons independent of
      the Restricted Group;

o     the fiduciary (or its affiliate) is an obligor with respect to not more
      than five percent (5%) of the fair market value of the obligations
      contained in the investment pool;

o     the Plan's investment in securities of any class does not exceed
      twenty-five percent (25%) of all of the securities of that class
      outstanding at the time of the acquisition;

o     immediately after the acquisition, no more than twenty-five percent (25%)
      of the assets of any Plan with respect to which the person is a fiduciary
      is invested in securities representing an interest in one or more issuers
      containing assets sold or serviced by the same entity; and

o     the Plan is not sponsored by a member of the Restricted Group, as defined
      below.

      The Underwriter Exemptions provide only limited relief to Plans sponsored
by the seller, an underwriter, the trustee, the master servicer, any provider of
credit support to the trust, any counterparty to a swap contained in the trust,
any obligor with respect to loans included in the investment pool constituting
more than five percent (5%) of the aggregate unamortized principal balance of
the assets in the trust fund, or any affiliate of those parties (the "Restricted
Group").

      The Underwriter Exemptions provide exemptive relief to certain
mortgage-backed and asset-backed securities transactions using pre-funding
accounts. Mortgage loans or other secured receivables (the "obligations")
supporting payments to securityholders, and having a value equal to no more than
twenty-five percent (25%) of the total principal amount of the securities being
offered by the issuer, may be transferred to the issuer within a 90-day or
three-month period following the closing date, instead of being required to be
either identified or transferred on or before the closing date. The relief is
available when the prefunding account satisfies certain conditions.

      The rating of a security may change. If a class of securities no longer
has a required rating from at least one Rating Agency, the security will no
longer be eligible for relief under the Underwriter Exemption (although a Plan
that had purchased the security when it had a permitted rating would not be
required by the Underwriter Exemption to dispose of it.) A certificate that
satisfies the requirements of the Underwriter Exemptions other than the rating
requirement may be eligible for purchase by an insurance company investing
assets of its general account that include plan assets when the requirements of
Sections I and III of Prohibited Transaction Class Exemption 95-60 are met.

      The prospectus supplement for each series of securities will indicate the
classes of securities, if any, offered thereby as to which it is expected that
an Underwriter Exemption will apply.

      Any Plan fiduciary which proposes to cause a Plan to purchase securities
are encouraged to consult with its counsel concerning the impact of ERISA and
the Code, the applicability of the Underwriter Exemptions, the effect of the
Plan Assets Regulation, and the potential consequences in their specific
circumstances, prior to making that


                                       109



investment. Moreover, each Plan fiduciary should determine whether under the
general fiduciary standards of investment prudence and diversification an
investment in the securities is appropriate for the Plan, taking into account
the overall investment policy of the Plan and the composition of the Plan's
investment portfolio.

      The sale of certificates to a Plan is in no respect a representation by
the issuer or any underwriter of the Certificates that this investment meets all
relevant legal requirements with respect to investments by Plans generally or
any particular Plan, or that this investment is appropriate for Plans generally
or any particular Plan.

                                LEGAL INVESTMENT

      The prospectus supplement for each series of securities will specify
which, if any, of the classes of securities offered thereby constitute "mortgage
related securities" for purposes of the Secondary Mortgage Market Enhancement
Act of 1984 ("SMMEA"). Classes of securities that qualify as "mortgage related
securities" will be legal investments for persons, trusts, corporations,
partnerships, associations, business trusts, and business entities (including
depository institutions, life insurance companies and pension funds) created
pursuant to or existing under the laws of the United States or of any state
(including the District of Columbia and Puerto Rico) whose authorized
investments are subject to state regulations to the same extent as, under
applicable law, obligations issued by or guaranteed as to principal and interest
by the United States or those entities. Under SMMEA, if a state enacts
legislation prior to October 4, 1991 specifically limiting the legal investment
authority of those entities with respect to "mortgage related securities",
securities will constitute legal investments for entities subject to the
legislation only to the extent provided therein. Approximately twenty-one states
adopted the legislation prior to the October 4, 1991 deadline. SMMEA provides,
however, that in no event will the enactment of that legislation affect the
validity of any contractual commitment to purchase, hold or invest in
securities, or require the sale or other disposition of securities, so long as
the contractual commitment was made or the securities were acquired prior to the
enactment of the 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 securities
without limitations as to the percentage of their assets represented thereby,
federal credit unions may invest in mortgage related securities, and national
banks may purchase securities for their own account without regard to the
limitations generally applicable to investment securities set forth in 12 U.S.C.
24 (Seventh), subject in each case to that regulations that the applicable
federal authority may prescribe. In this connection, federal credit unions
should review the National Credit Union Administration ("NCUA") Letter to Credit
Unions No. 96, as modified by Letter to Credit Unions No. 108, which includes
guidelines to assist federal credit unions in making investment decisions for
mortgage related securities and the NCUA's regulation "Investment and Deposit
Activities" (12 C.F.R. Part 703), which sets forth certain restrictions on
investment by federal credit unions in mortgage related securities (in each case
whether or not the class of securities under consideration for purchase
constituted a "mortgage related security"). The NCUA issued final regulations
effective December 2, 1991 that restrict and in some instances prohibit the
investment by Federal Credit Unions in certain types of mortgage related
securities.

      All depository institutions considering an investment in the securities
(whether or not the class of securities under consideration for purchase
constitutes a "mortgage related security") should review the Federal Financial
Institutions Examination Council's Supervisory Policy Statement on the
Securities Activities (to the extent adopted by their respective regulators)
(the "Policy Statement") setting forth, in relevant part, certain securities
trading and sales practices deemed unsuitable for an institution's investment
portfolio, and guidelines for (and restrictions on) investing in mortgage
derivative products, including "mortgage related securities", which are
"high-risk mortgage securities" as defined in the Policy Statement. According to
the Policy Statement, those "high-risk mortgage securities" include securities
not entitled to distributions allocated to principal or interest, or Subordinate
Securities. Under the Policy Statement, it is the responsibility of each
depository institution to determine, prior to purchase (and at stated intervals
thereafter), whether a particular mortgage derivative product is a "high-risk
mortgage security", and whether the purchase (or retention) of that product
would be consistent with the Policy Statement.

      The foregoing does not take into consideration the applicability of
statutes, rules, regulations, orders guidelines or agreements generally
governing investments made by a particular investor, including, but not limited
to "prudent investor" provisions, percentage-of-assets limits and provisions
which may restrict or prohibit


                                       110



investment in securities which are not "interest bearing" or "income paying," or
in securities which are issued in book-entry form.

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

                             METHOD OF DISTRIBUTION

         Securities are being offered hereby in series from time to time (each
series evidencing or relating to a separate trust fund) through any of the
following methods:

o     by negotiated firm commitment or best efforts underwriting and public
      reoffering by underwriters, including in a resecuritization of any
      securities of any series by the depositor or any of its affiliates;

o     by agency placements through one or more placement agents primarily with
      institutional investors and dealers; and

o     by placement directly by the depositor with institutional investors.

      A prospectus supplement will be prepared for each series which will
describe the method of offering being used for that series and will set forth
the identity of any underwriters thereof and either the price at which the
series is being offered, the nature and amount of any underwriting discounts or
additional compensation to those underwriters and the proceeds of the offering
to the depositor, or the method by which the price at which the underwriters
will sell the securities will be determined. Each prospectus supplement for an
underwritten offering will also contain information regarding the nature of the
underwriters' obligations, any material relationship between the depositor and
any underwriter and, where appropriate, information regarding any discounts or
concessions to be allowed or reallowed to dealers or others and any arrangements
to stabilize the market for the securities so offered. In firm commitment
underwritten offerings, the underwriters will be obligated to purchase all of
the securities of the series if any of those securities are purchased.
Securities may be acquired by the underwriters for their own accounts and may be
resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale.

      Underwriters and agents may be entitled under agreements entered into with
the depositor to indemnification by the depositor against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments which the underwriters or agents may be required to
make in respect thereof.

      In relation to each Member State of the European Economic Area which has
implemented the Prospectus Directive (each, a "Relevant Member State"), each
underwriter will be required to represent and agree with the depositor that with
effect from and including the date on which the Prospectus Directive is
implemented in that Relevant Member State (the "Relevant Implementation Date")
and with respect to any class of securities with a minimum denomination of less
than $100,000, it has not made and will not make an offer of securities to the
public in that Relevant Member State prior to the publication of a prospectus in
relation to the securities which has been approved by the competent authority in
that Relevant Member State or, where appropriate, approved in another Relevant
Member State and notified to the competent authority in that Relevant Member
State, all in accordance with the Prospectus Directive, except that it may, with
effect from and including the Relevant Implementation Date, make an offer of
securities to the public in that Relevant Member State at any time:

      (a)   to legal entities which are authorized or regulated to operate in
the financial markets or, if not so authorized or regulated, whose corporate
purpose is solely to invest in securities;

      (b)   to any legal entity which has two or more of (1) an average of at
least 250 employees during the last financial year; (2) a total balance sheet of
more than (euro)43,000,000 and (3) an annual net turnover of more than
(euro)50,000,000, as shown in its last annual or consolidated accounts; or


                                       111



      (c)   in any other circumstances which do not require the publication by
the depositor of a prospectus pursuant to Article 3 of the Prospectus Directive.

      For the purposes of this provision, the expression an "offer of securities
to the public" in relation to any class of securities of a series, which class
has a minimum denomination of less than $100,000, in any Relevant Member State
means the communication in any form and by any means of sufficient information
on the terms of the offer and the securities to be offered so as to enable an
investor to decide to purchase or subscribe the securities, as the same may be
varied in that Member State by any measure implementing the Prospectus Directive
in that Member State, and the expression "Prospectus Directive" means Directive
2003/71/EC and includes any relevant implementing measure in each Relevant
Member State.

      If a series is offered other than through underwriters, the prospectus
supplement relating thereto will contain information regarding the nature of the
offering and any agreements to be entered into between the depositor and
purchasers of securities of the series.

                                  LEGAL MATTERS

      The validity of the securities of each series, including certain federal
income tax consequences with respect thereto, will be passed upon for the
depositor by Sidley Austin LLP, 787 Seventh Avenue, New York, New York 10019, or
by Thacher Proffitt & Wood LLP, Two World Financial Center, New York, New York
10281, as specified in the prospectus supplement.

                              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.

                                     RATING

      It is a condition to the issuance of the securities of each series offered
hereby and by the prospectus supplement that they shall have been rated in one
of the four highest rating categories by the nationally recognized statistical
rating agency or agencies (each, a "Rating Agency") specified in the related
prospectus supplement.

      The rating would be based on, among other things, the adequacy of the
value of the Trust Fund Assets and any credit enhancement with respect to the
class and will reflect the Rating Agency's assessment solely of the likelihood
that holders of a class of securities of the class will receive payments to
which the securityholders are entitled under the related Agreement. The rating
will not constitute an assessment of the likelihood that principal prepayments
on the related loans will be made, the degree to which the rate of the
prepayments might differ from that originally anticipated or the likelihood of
early optional termination of the series of securities. The rating should not be
deemed a recommendation to purchase, hold or sell securities, inasmuch as it
does not address market price or suitability for a particular investor. Each
security rating should be evaluated independently of any other security rating.
The rating will not address the possibility that prepayment at higher or lower
rates than anticipated by an investor may cause the 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.

      We can give no assurance that any the rating will remain in effect for any
given period of time or that it may not be lowered or withdrawn entirely by the
Rating Agency in the future if in its judgment circumstances in the future so
warrant. In addition to being lowered or withdrawn due to any erosion in the
adequacy of the value of the Trust Fund Assets or any credit enhancement with
respect to a series, the rating might also be lowered or withdrawn among other
reasons, because of an adverse change in the financial or other condition of a
credit enhancement provider or a change in the rating of the credit enhancement
provider's long term debt.


                                       112



      The amount, type and nature of credit enhancement, if any, established
with respect to a series of securities will be determined on the basis of
criteria established by each Rating Agency rating classes of the series. The
criteria are sometimes based upon an actuarial analysis of the behavior of
mortgage loans in a larger group. The analysis is often the basis upon which
each Rating Agency determines the amount of credit enhancement required with
respect to each the class. We can give no assurance that the historical data
supporting the actuarial analysis will accurately reflect future experience nor
assurance that the data derived from a large pool of mortgage loans accurately
predicts the delinquency, foreclosure or loss experience of any particular pool
of loans. We can give no assurance that values of any Properties have remained
or will remain at their levels on the respective dates of origination of the
related loans. If the residential real estate markets should experience an
overall decline in property values such that the outstanding principal balances
of the loans in a particular trust fund and any secondary financing on the
related Properties become equal to or greater than the value of the Properties,
the rates of delinquencies, foreclosures and losses could be higher than those
now generally experienced in the mortgage lending industry. In addition, adverse
economic conditions (which may or may not affect real property values) may
affect the timely payment by mortgagors of scheduled payments of principal and
interest on the loans and, accordingly, the rates of delinquencies, foreclosures
and losses with respect to any trust fund. To the extent that those losses are
not covered by credit enhancement, the losses will be borne, at least in part,
by the holders of one or more classes of the securities of the related series.


                                       113



                             INDEX TO DEFINED TERMS

Accretion Directed............................................................37
Accrual.......................................................................39
Adjustable Rate...............................................................38
Agency Securities.............................................................14
Agreement.....................................................................15
AMT...........................................................................96
APR...........................................................................18
Asset Conservation Act........................................................76
Available Funds...............................................................33
beneficial owner..............................................................42
Book-Entry Securities.........................................................42
Callable......................................................................39
Capitalized Interest Account..................................................59
Cash Flow Bond Method.........................................................98
CERCLA........................................................................76
CI............................................................................44
Claimable Amount..............................................................85
Class Security Balance........................................................33
Clearstream, Luxembourg.......................................................44
Code..........................................................................87
COFI securities...............................................................41
Collateral Value..............................................................19
Combined Loan-to-Value Ratio..................................................18
Companion Class...............................................................37
Component Securities..........................................................37
Contingent Regulations........................................................88
Cooperative...................................................................44
cooperative loans.............................................................15
cooperatives..................................................................15
Cut-off Date Principal Balance................................................31
DBC...........................................................................44
Debt securities...............................................................87
debt-to-income ratio..........................................................28
Definitive Security...........................................................42
depositor.....................................................................27
Detailed Description..........................................................15
Disqualified Organization.....................................................95
DOL..........................................................................107
DTC...........................................................................42
Eleventh District.............................................................40
ERISA........................................................................107
Euroclear.....................................................................42
Euroclear Operator............................................................44
Euroclear Participants........................................................44
European Depositaries.........................................................42
excess servicing..............................................................98
Exchange Act..................................................................26
FHA...........................................................................15
FHLBSF........................................................................40
Final Bond Premium Regulations................................................91
Financial Intermediary........................................................42
Fitch........................................................................108
Fixed Rate....................................................................38
Floating Rate.................................................................38
foreign person...............................................................102
FTC Rule......................................................................80
Funding Period................................................................59
Garn-St Germain Act...........................................................79
HI Contracts..................................................................79
HI Loans......................................................................79
Improper Knowledge............................................................95
Indenture.....................................................................31
Indirect Participants.........................................................43
Insurance Proceeds............................................................57
Insured Expenses..............................................................57
Interest Only.................................................................38
Interest Weighted Securities..................................................90
Inverse Floating Rate.........................................................38
IRS...........................................................................88
L/C Bank......................................................................48
L/C Percentage................................................................48
Liquidation Expenses..........................................................57
Liquidation Proceeds..........................................................57
Loan Rate.....................................................................16
Loan-to-Value Ratio...........................................................18
Master Servicing Agreement....................................................14
Master Servicing Fee..........................................................66
Moody's..................................................................60, 108
Mortgage......................................................................55
mortgage related security....................................................110
NAS...........................................................................37
National Cost of Funds Index..................................................41
NCUA.........................................................................110
New CI........................................................................44
new partnership..............................................................104
Non-Accelerated Senior........................................................37
Non-Agency Mortgage-Backed Securities.........................................14
Noneconomic Residual Interest.................................................95
Nonresidents.................................................................100
Notional Amount Securities....................................................37
obligations..................................................................109
Offshore Location.............................................................96
OID...........................................................................87
OID Regulations...............................................................87
old partnership..............................................................104
OTS...........................................................................41
PACs..........................................................................37
Partial Accrual...............................................................39
Participants..................................................................42
Parties in Interest..........................................................107
Pass-Through Securities.......................................................97
Pay-Through Security..........................................................89
percentage interests..........................................................68
Permitted Investments.........................................................59
Plan Assets Regulation.......................................................107
Planned Principal Class.......................................................37


                                       114



Plans........................................................................107
Policy Statement.............................................................110
Pool Insurance Policy.........................................................49
Pool Insurer..................................................................49
Pre-Funded Amount.............................................................59
Pre-Funding Account...........................................................59
Prepayment Assumption.........................................................89
Primary Mortgage Insurance Policy.............................................17
Prime Rate....................................................................42
Principal Only................................................................38
Principal Prepayments.........................................................34
Properties....................................................................17
Property Improvement Loans....................................................82
PTCE.........................................................................108
Purchase Price................................................................30
Rating Agency...........................................................108, 112
Ratio Strip Securities........................................................98
RCRA..........................................................................77
Record Date...................................................................32
Reference Bank Rate...........................................................39
Refinance Loan................................................................19
Regular Interest Securities...................................................87
Relevant Depositary...........................................................42
Relevant Implementation Date.................................................111
Relevant Member State........................................................111
Relief Act.................................................................9, 81
REMIC.....................................................................32, 87
Residual Interest.............................................................93
Restricted Group.............................................................109
Retained Interest.............................................................31
Rules.........................................................................43
S&P..........................................................................108
Scheduled Principal Class.....................................................37
SEC...........................................................................15
secured creditor exemption....................................................76
Securities Act................................................................25
Security Account..............................................................56
Security Owners...............................................................42
Security Register.............................................................32
Sellers.......................................................................14
Senior Securities.............................................................47
Sequential Pay................................................................38
Servicing Fee.................................................................97
Short-Term Note..............................................................102
Single Family Properties......................................................17
SMMEA........................................................................110
Strip.........................................................................38
Stripped Securities...........................................................97
Subordinate Securities........................................................47
Subsequent Loans..............................................................59
Super Senior..................................................................38
Support Class.................................................................38
TACs..........................................................................38
Targeted Principal Class......................................................38
Tax Counsel...................................................................86
Terms and Conditions..........................................................45
Title I Loans.................................................................82
Title I Program...............................................................82
Title V.......................................................................79
Trust Agreement...............................................................15
Trust Fund Assets.............................................................14
UCC...........................................................................75
Underwriter Exemptions.......................................................108
VA ...........................................................................15
VA Guaranty...................................................................66
Variable Rate.................................................................38
W-8BEN.......................................................................102
Withholding Agent............................................................102


                                       115



                                  $606,775,100
                                  (APPROXIMATE)

                    ASSET-BACKED CERTIFICATES, SERIES 2006-4

                  CWABS ASSET-BACKED CERTIFICATES TRUST 2006-4
                                 ISSUING ENTITY


                                   CWABS, INC.
                                    DEPOSITOR


                   [COUNTRYWIDE HOME LOANS, INC. LOGO OMITTED]
                               SPONSOR AND SELLER

                       COUNTRYWIDE HOME LOANS SERVICING LP
                                 MASTER SERVICER

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

                              PROSPECTUS SUPPLEMENT

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


COUNTRYWIDE SECURITIES CORPORATION
                                    JPMORGAN
                                                                 LEHMAN BROTHERS

      You should rely only on the information contained or incorporated by
reference in this prospectus supplement and the accompanying prospectus. We have
not authorized anyone to provide you with different information.

      We are not offering the Series 2006-4 Asset-Backed Certificates in any
state where the offer is not permitted.

      Dealers will deliver a prospectus supplement and prospectus when acting as
underwriters of the Series 2006-4 Asset-Backed Certificates and with respect to
their unsold allotments or subscriptions. In addition, all dealers selling the
Series 2006-4 Asset-Backed Certificates will be required to deliver a prospectus
supplement and prospectus for 90 days after the date of the prospectus
supplement.

                                 March 15, 2006