<TEXT>

                                                    Filed Pursuant to Rule 424B5
                                                Registration File No. 333-121914

PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED MAY 10, 2005)

                                 $1,428,473,000
              MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-HE5
                MORGAN STANLEY ABS CAPITAL I INC. TRUST 2005-HE5
                                    ISSUER


                       MORGAN STANLEY ABS CAPITAL I INC.
                                   DEPOSITOR


                      COUNTRYWIDE HOME LOANS SERVICING LP
                                    SERVICER


                          HOMEQ SERVICING CORPORATION
                                   SERVICER


                   JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
                                   SERVICER

     THE FOLLOWING CLASSES OF CERTIFICATES ARE BEING OFFERED PURSUANT TO THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS:



                     ORIGINAL CLASS
     CLASS        CERTIFICATE BALANCE     PASS-THROUGH RATE
--------------   ---------------------   ------------------
  CLASS A-1           $441,470,000       VARIABLE
  CLASS A-2A          $462,278,000       VARIABLE
  CLASS A-2B          $145,000,000       VARIABLE
  CLASS A-2C          $115,000,000       VARIABLE
  CLASS M-1           $ 53,540,000       VARIABLE
  CLASS M-2           $ 49,822,000       VARIABLE
  CLASS M-3           $ 31,232,000       VARIABLE
  CLASS M-4           $ 26,770,000       VARIABLE
  CLASS M-5           $ 24,539,000       VARIABLE
  CLASS M-6           $ 23,052,000       VARIABLE
  CLASS B-1           $ 20,821,000       VARIABLE
  CLASS B-2           $ 19,333,000       VARIABLE
  CLASS B-3           $ 15,616,000       VARIABLE

--------------------------------------------------------------------------------
YOU SHOULD READ THE SECTION ENTITLED "RISK FACTORS" STARTING ON PAGE S-8 OF THIS
PROSPECTUS SUPPLEMENT AND PAGE 7 OF THE ACCOMPANYING PROSPECTUS AND CONSIDER
THESE FACTORS BEFORE MAKING A DECISION TO INVEST IN THE CERTIFICATES.

THE CERTIFICATES REPRESENT INTERESTS IN THE TRUST FUND ONLY AND ARE NOT
INTERESTS OR OBLIGATIONS OF ANY OTHER PERSON.

NEITHER THE CERTIFICATES NOR THE UNDERLYING MORTGAGE LOANS WILL BE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
--------------------------------------------------------------------------------

THE TRUST FUND --

o    THE TRUST FUND CONSISTS PRIMARILY OF TWO GROUPS OF FIXED AND ADJUSTABLE
     RATE, FIRST-LIEN AND SECOND-LIEN MORTGAGE LOANS SECURED BY RESIDENTIAL REAL
     PROPERTIES.

THE CERTIFICATES --

o    THE CERTIFICATES REPRESENT BENEFICIAL INTERESTS IN THE ASSETS OF THE TRUST
     FUND, AS DESCRIBED IN THIS PROSPECTUS SUPPLEMENT; AND

o    THE CERTIFICATES WILL ACCRUE INTEREST AT A RATE EQUAL TO ONE-MONTH LIBOR
     PLUS A RELATED FIXED MARGIN, SUBJECT TO CERTAIN CAPS, AS DESCRIBED IN THIS
     PROSPECTUS SUPPLEMENT.

CREDIT ENHANCEMENT --

o    SUBORDINATION AS DESCRIBED IN THIS PROSPECTUS SUPPLEMENT UNDER "DESCRIPTION
     OF THE IN CERTIFICATES--PRIORITY OF DISTRIBUTIONS AMONG CERTIFICATES";

o    OVERCOLLATERALIZATION AS DESCRIBED IN THIS PROSPECTUS SUPPLEMENT UNDER
     "DESCRIPTION OF THE CERTIFICATES--OVERCOLLATERALIZATION PROVISIONS"; AND

o    EXCESS INTEREST AS DESCRIBED IN THIS PROSPECTUS SUPPLEMENT UNDER
     "DESCRIPTION OF THE CERTIFICATES--OVERCOLLATERALIZATION PROVISIONS".

THE SECURITIES AND EXCHANGE COMMISSION AND STATE SECURITIES REGULATORS HAVE NOT
APPROVED OR DISAPPROVED OF THE OFFERED CERTIFICATES OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS ARE TRUTHFUL OR COMPLETE.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

     MORGAN STANLEY ABS CAPITAL I INC. WILL NOT LIST THE CERTIFICATES ON ANY
SECURITIES EXCHANGES OR ON ANY AUTOMATED QUOTATION SYSTEM OF ANY SECURITIES
ASSOCIATION.

     THE CERTIFICATES OFFERED BY THIS PROSPECTUS SUPPLEMENT WILL BE PURCHASED
BY MORGAN STANLEY & CO. INCORPORATED, COUNTRYWIDE SECURITIES CORPORATION AND
UTENDAHL CAPITAL PARTNERS, L.P. AND OFFERED FROM TIME TO TIME TO THE PUBLIC IN
NEGOTIATED TRANSACTIONS OR OTHERWISE AT VARYING PRICES TO BE DETERMINED AT THE
TIME OF SALE. PROCEEDS TO THE DEPOSITOR FROM THE SALE OF THE OFFERED
CERTIFICATES ARE ANTICIPATED TO BE APPROXIMATELY $1,424,187,581 BEFORE THE
DEDUCTION OF EXPENSES PAYABLE BY THE DEPOSITOR, ESTIMATED TO BE APPROXIMATELY
$800,000. THE OFFERED CERTIFICATES WILL BE AVAILABLE FOR DELIVERY TO INVESTORS
IN BOOK ENTRY FORM THROUGH THE FACILITIES OF THE DEPOSITORY TRUST COMPANY,
CLEARSTREAM BANKING, SOCIeTe ANONYME AND EUROCLEAR BANK, AS OPERATOR OF THE
EUROCLEAR SYSTEM, ON OR ABOUT OCTOBER 28, 2005.


MORGAN STANLEY
                      COUNTRYWIDE SECURITIES CORPORATION
                                                 UTENDAHL CAPITAL PARTNERS, L.P.

OCTOBER 26, 2005


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


     We provide information to you about the certificates in two separate
documents that provide more detail in progression: (1) the accompanying
prospectus, which provides general information, some of which may not apply to
your series of certificates, and (2) this prospectus supplement, which
describes the specific terms of your series of certificates. IF THE
ACCOMPANYING PROSPECTUS CONTEMPLATES MULTIPLE OPTIONS, YOU SHOULD RELY ON THE
INFORMATION IN THIS PROSPECTUS SUPPLEMENT AS TO THE APPLICABLE OPTION.


     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 Mortgage Pass-Through Certificates, Series
2005-HE5 in any state where the offer is not permitted.


     FOR 90 DAYS FOLLOWING THE DATE OF THIS PROSPECTUS SUPPLEMENT, ALL DEALERS
SELLING CERTIFICATES WILL DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS. THIS
REQUIREMENT IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS
WHEN ACTING AS UNDERWRITERS OF THE CERTIFICATES WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.


     We cannot sell the certificates to you unless you have received both this
prospectus supplement and the accompanying prospectus.


     We include cross-references in this prospectus supplement and the
accompanying prospectus to captions in these materials where you can find
further information concerning a particular topic. The table of contents in
this prospectus supplement and the table of contents in the prospectus provide
the pages on which these captions are located.


     Some of the terms used in this prospectus supplement are capitalized.
These capitalized terms have specified definitions, which are included at the
end of this prospectus supplement under the heading "Glossary."


     Morgan Stanley ABS Capital I Inc.'s principal offices are located at 1585
Broadway, New York, New York 10036, and its phone number is (212) 761-4000.


                                      S-2

                                TABLE OF CONTENTS

PROSPECTUS SUPPLEMENT                                                       PAGE
---------------------                                                       ----
SUMMARY......................................................................S-4
RISK FACTORS.................................................................S-8
TRANSACTION OVERVIEW........................................................S-19
   Parties..................................................................S-19
   The Transaction..........................................................S-20
THE MORTGAGE LOAN POOL......................................................S-20
   General..................................................................S-20
   Prepayment Premiums......................................................S-21
   Adjustable Rate Mortgage Loans...........................................S-22
   The Index................................................................S-22
   Underwriting Guidelines..................................................S-22
   The Group I Mortgage Loans...............................................S-41
   The Group II Mortgage Loans..............................................S-59
   Credit Scores............................................................S-77
THE SERVICERS...............................................................S-80
   General..................................................................S-80
   Countrywide Home Loans Servicing LP......................................S-80
   HomEq Servicing Corporation..............................................S-83
   JPMorgan Chase Bank, National Association................................S-84
THE TRUSTEE.................................................................S-87
DESCRIPTION OF THE CERTIFICATES.............................................S-87
   General..................................................................S-87
   Book-Entry Registration..................................................S-88
   Definitive Certificates..................................................S-91
   Assignment of the Mortgage Loans.........................................S-91
   Delivery of Mortgage Loan Documents......................................S-91
   Representations and Warranties Relating to the Mortgage Loans............S-93
   Payments on the Mortgage Loans...........................................S-96
   Distributions............................................................S-98
   Priority of Distributions Among Certificates.............................S-98
   Distributions of Interest and Principal..................................S-98
   Allocation of Principal Payments to Class A Certificates................S-103
   Swap Account............................................................S-104
   Calculation of One-Month LIBOR..........................................S-105
   Excess Reserve Fund Account.............................................S-105
   Interest Rate Swap Agreement............................................S-105
   Overcollateralization Provisions........................................S-108
   Reports to Certificateholders...........................................S-109
THE POOLING AND SERVICING AGREEMENT........................................S-109
   Servicing and Trustee Fees and Other Compensation and Payment of
      Expenses.............................................................S-109
   P&I Advances and Servicing Advances.....................................S-110
   Prepayment Interest Shortfalls..........................................S-110
   Servicer Reports........................................................S-111
   Collection and Other Servicing Procedures...............................S-111
   Hazard Insurance........................................................S-112
   Realization Upon Defaulted Mortgage Loans...............................S-112
   Removal and Resignation of a Servicer...................................S-113
   Termination; Optional Clean-up Call.....................................S-114
   Certain Matters Regarding the Depositor, the Servicers, the Custodians
      and the Trustee......................................................S-115
   Amendment...............................................................S-115
PREPAYMENT AND YIELD CONSIDERATIONS........................................S-116
   Structuring Assumptions.................................................S-116
   Defaults................................................................S-125
   Prepayment Considerations and Risks.....................................S-125
   Overcollateralization Provisions........................................S-126
   Subordinated Certificates...............................................S-127
   Effect on Yields Due to Rapid Prepayments...............................S-127
   Weighted Average Lives of the Offered Certificates......................S-128
   Decrement Tables........................................................S-128
   Hypothetical Available Funds and Supplemental Interest Rate Cap
      Table................................................................S-136
   Final Scheduled Distribution Date.......................................S-142
FEDERAL INCOME TAX CONSIDERATIONS..........................................S-142
   General.................................................................S-142
   Taxation of Regular Interests...........................................S-142
   Status of the Offered Certificates......................................S-143
   The Basis Risk Contract Component.......................................S-143
   Other Matters...........................................................S-145
STATE AND LOCAL TAXES......................................................S-145
ERISA CONSIDERATIONS.......................................................S-145
LEGAL INVESTMENT...........................................................S-147
PLAN OF DISTRIBUTION.......................................................S-148
LEGAL MATTERS..............................................................S-148
RATINGS....................................................................S-149
GLOSSARY...................................................................S-150
ANNEX I - CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS.........I-1
ANNEX II - INTEREST RATE SWAP SCHEDULE......................................II-1


                                       S-3



                                     SUMMARY

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

THE OFFERED CERTIFICATES

     The Morgan Stanley ABS Capital I Inc. Trust 2005-HE5 will issue the
Mortgage Pass-Through Certificates, Series 2005-HE5. Thirteen classes of the
certificates - the Class A-1, Class A-2a, Class A-2b, Class A-2c, Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 and
Class B-3 certificates - are being offered to you by this prospectus supplement.
The Class A-1 certificates generally represent interests in the group I mortgage
loans. The Class A-2a, Class A-2b and Class A-2c certificates generally
represent interests in the group II mortgage loans. The Class M and Class B
certificates represent interests in all of the mortgage loans.

THE OTHER CERTIFICATES

     The trust will also issue three other classes of certificates - the Class
X, Class P and Class R certificates - which will not be offered under this
prospectus supplement.

     The Class X certificates will have an initial aggregate principal balance
of approximately $58,745,857, which is approximately equal to the initial
overcollateralization required by the pooling and servicing agreement. The Class
X certificates initially evidence an interest of approximately 3.95% of the
aggregate scheduled principal balance of the mortgage loans in the trust.

     The Class P certificates will not have an aggregate principal balance and
will not be entitled to distributions in respect of principal or interest. The
Class P certificates will be entitled to all prepayment premiums or charges
received in respect of the mortgage loans.

     The certificates will represent fractional undivided interests in the
assets of the trust, which will consist primarily of the mortgage loans.

CLOSING DATE

     On or about October 28, 2005.

CUT-OFF DATE

     October 1, 2005.

DISTRIBUTIONS

     Distributions on the certificates will be made on the 25th day of each
month, or, if the 25th day is not a business day, on the next business day,
beginning in November 2005, to the holders of record on the preceding record
date.

     The record date for the offered certificates will be the business day
preceding the related distribution date, unless the offered certificates are
issued in definitive form, in which case the record date will be the last
business day of the month preceding the month in which the related distribution
date occurs.

PAYMENTS OF INTEREST

     The pass-through rates for each class of offered certificates will be equal
to the sum of one-month LIBOR plus a fixed margin, subject to caps on those
pass-through rates. Interest will accrue on the offered certificates on the
basis of a 360-day year and the actual number of days elapsed in the applicable
interest accrual period, which, for any distribution date, will be the period
from and including the preceding distribution date (or, in the case of the first
distribution date, from and including the closing date) through the day before
the current distribution date.

PAYMENTS OF PRINCIPAL

     Principal will be paid on the certificates on each distribution date as
described under "Description of the Certificates--Distributions of Interest and
Principal" and "--Swap Account" in this prospectus supplement.


                                       S-4



CREDIT ENHANCEMENT

     The credit enhancement provided for the benefit of the holders of the
certificates consists solely of:

     o    the use of excess interest, after taking into account certain payments
          received or paid by the trust pursuant to the interest rate swap
          agreement described below, to cover losses on the mortgage loans and
          as a distribution of principal to maintain overcollateralization;

     o    the subordination of distributions on the more subordinate classes of
          certificates to the required distributions on the more senior classes
          of certificates; and

     o    the allocation of losses on the mortgage loans to the most subordinate
          classes of certificates.

INTEREST RATE SWAP AGREEMENT

     On the closing date, the trust will enter into an interest rate swap
agreement with Morgan Stanley Capital Services Inc., the swap provider, whose
obligations are 100% guaranteed by Morgan Stanley. Morgan Stanley is rated "Aa3"
by Moody's Investors Service, Inc., "A+" by Standard & Poor's Ratings Services,
a division of The McGraw-Hill Companies, Inc., and "AA-" by Fitch, Inc. Under
the interest rate swap agreement, with respect to the first 53 distribution
dates, the trust will pay to the swap provider a fixed payment at a rate of
4.63% per annum, determined on a "30/360" basis (or, in the case of the first
distribution date, the number of days in the period from the closing date to the
day immediately preceding the first distribution date, determined on a "30/360"
basis), and the swap provider will pay to the trust a floating payment at a rate
of one-month LIBOR (as determined pursuant to the interest rate swap agreement),
determined on an "actual/360" basis, in each case calculated on the product of
the scheduled notional amount and the multiplier set forth on the schedule
attached as Annex II to this prospectus supplement for that distribution date.
To the extent that the fixed payment exceeds the floating payment payable with
respect to any of the first 53 distribution dates, amounts otherwise available
for payments on the certificates will be applied on that distribution date to
make a net payment to the swap provider, and to the extent that the floating
payment exceeds the fixed payment payable with respect to any of the first 53
distribution dates, the swap provider will make a net payment to the trust on
the business day preceding that distribution date. Any net amounts received by
or paid out from the trust under the interest rate swap agreement will either
increase or reduce the amount available to make payments on the certificates, as
described under "Description of the Certificates--Swap Account" in this
prospectus supplement. The interest rate swap agreement is scheduled to
terminate following the distribution date in March 2010.

     For further information regarding the interest rate swap agreement, see
"Description of the Certificates--Interest Rate Swap Agreement" in this
prospectus supplement.

THE MORTGAGE LOANS

     The mortgage loans to be included in the trust will be primarily fixed and
adjustable rate subprime mortgage loans secured by first-lien and second-lien
mortgages or deeds of trust on residential real properties. All of the mortgage
loans were purchased by an affiliate of the depositor from WMC Mortgage Corp.
(which in turn acquired them from brokers and correspondent lenders), Decision
One Mortgage Company, LLC, NC Capital Corporation (which in turn acquired them
from New Century Mortgage Corporation) and two other original loan sellers
(Accredited Home Lenders, Inc. and Fremont Investment & Loan) that each
individually sold mortgage loans comprising in the aggregate less than 0.25% of
the total mortgage loans in the trust. WMC Mortgage Corp., Decision One Mortgage
Company, LLC and NC Capital Corporation have each made or will make certain
representations and warranties relating to the mortgage loans.

     On the closing date, the trust will acquire the mortgage loans. The
aggregate scheduled principal balance of the mortgage loans as of the cut-off
date will be approximately $1,487,218,857. Approximately 12.09% of the mortgage
loans are fixed rate and approximately 87.91% of the mortgage loans are
adjustable rate. Approximately 94.35% of the mortgage loans are first-lien
mortgage loans, and approximately 5.65% of the mortgage loans are second-lien
mortgage loans.

     The information regarding the mortgage loans set forth below that is based
on the principal balance of the mortgage loans as of the cut-off date assumes
the timely receipt of principal scheduled to be paid on the mortgage loans on or
prior to the cut-off date and no delinquencies, defaults or prepayments from
September 1, 2005 through the cut-off date.


                                       S-5



     The mortgage loans have original terms to maturity of not greater than 360
months, have a weighted average remaining term to scheduled maturity of 348
months and have the following approximate characteristics as of the cut-off
date:

Range of interest rates:...................................  4.500% to 13.000%
Weighted average interest rate:............................  7.130%
Range of gross margins of adjustable rate mortgage loans:..  1.000% to 9.790%
Weighted average gross margin of adjustable rate mortgage
   loans:..................................................  6.108%
Range of minimum interest rates of adjustable rate
   mortgage loans:.........................................  4.500% to 12.025%
Weighted average minimum interest rate of adjustable
   rate mortgage loans:....................................  6.935%
Range of maximum interest rates of adjustable rate
   mortgage loans:.........................................  8.750% to 19.025%
Weighted average maximum interest rate of adjustable rate
   mortgage loans:.........................................  13.394%
Range of principal balances:...............................  $14,044 to $951,861
Average principal balance:.................................  $167,009
Range of combined original loan-to-value ratios:...........  11.71% to 100.00%
Weighted average combined original loan-to-value ratio:....  82.34%
Weighted average next adjustment date of adjustable rate
   mortgage loans:.........................................  July 2007

     For purposes of calculating principal distributions on the Class A
certificates and for purposes of calculating the allocation of certain interest
shortfalls to the offered certificates, in each case as described in detail in
this prospectus supplement, the mortgage loans will be divided into two
subpools, designated as "group I mortgage loans" and "group II mortgage loans."
The group I mortgage loans will consist only of those mortgage loans with
principal balances that conform to Fannie Mae and Freddie Mac guidelines. The
group II mortgage loans will consist of all other remaining mortgage loans.
Information about the characteristics of the mortgage loans in each group is
described under "The Mortgage Loan Pool" in this prospectus supplement.

     After an initial fixed rate period, the interest rate on all of the
adjustable rate mortgage loans will adjust semi-annually on each adjustment date
to equal the sum of six-month LIBOR and the gross margin for that mortgage loan
subject to periodic and lifetime limitations. See "The Mortgage Loan Pool--The
Index" in this prospectus supplement.

     For the adjustable-rate mortgage loans, the first adjustment date will
occur only after initial periods of approximately six months, two years, three
years or five years, as more fully described under "The Mortgage Loan Pool" in
this prospectus supplement. For additional information regarding the mortgage
loans, see "The Mortgage Loan Pool" in this prospectus supplement.

SERVICING OF THE MORTGAGE LOANS

     Countrywide Home Loans Servicing LP will act as servicer with respect to
approximately 36.86% of the mortgage loans. HomEq Servicing Corporation will act
as servicer with respect to approximately 36.24% of the mortgage loans. JPMorgan
Chase Bank, National Association will act as servicer with respect to
approximately 26.90% of the mortgage loans. Each servicer will be obligated to
service and administer the applicable mortgage loans on behalf of the trust, for
the benefit of the holders of the certificates.

OPTIONAL TERMINATION OF THE TRUST

     Subject to the satisfaction of the conditions described under "The Pooling
and Servicing Agreement--Termination; Optional Clean-up Call" in this prospectus
supplement, any servicer individually, or all of the servicers together may, at
their option, purchase the mortgage loans and terminate the trust on any
distribution date when the aggregate stated principal balance, as further
described in this prospectus supplement, of the mortgage loans as of the last
day of the related due period is equal to or less than 10% of the aggregate
stated principal balance of the mortgage loans as of the cut-off date. That
purchase of the mortgage loans would result in the payment on that distribution
date of the final distribution on the certificates and a termination of the
trust.


                                       S-6



ADVANCES

     Each servicer will be required to make cash advances with respect to
delinquent payments of principal and interest on the mortgage loans serviced by
it, unless the applicable servicer reasonably believes that the cash advances
cannot be repaid from future payments on the applicable 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.

ERISA CONSIDERATIONS

     Subject to the conditions described under "ERISA Considerations" in this
prospectus supplement, the offered certificates may be purchased by an employee
benefit plan or other retirement arrangement subject to Title I of ERISA or
Section 4975 of the Internal Revenue Code.

     In making a decision regarding investing in any class of offered
certificates, fiduciaries of such plans or arrangements should consider the
additional requirements resulting from the interest rate swap agreement as
discussed under "ERISA Considerations" in this prospectus supplement.

FEDERAL TAX ASPECTS

     Cadwalader, Wickersham & Taft LLP is acting as tax counsel to Morgan
Stanley ABS Capital I Inc. and is of the opinion that:

     o    portions of the trust will be treated as multiple real estate mortgage
          investment conduits, or REMICs, for federal income tax purposes; and

     o    the offered certificates will represent regular interests in a REMIC,
          which will be treated as debt instruments of a REMIC, and interests in
          certain basis risk interest carry forward payments, pursuant to the
          payment priorities in the transaction. Each interest in basis risk
          interest carry forward payments will be treated as an interest rate
          cap contract for federal income tax purposes.

LEGAL INVESTMENT

     None of the classes of offered certificates will constitute "mortgage
related securities" for purposes of the Secondary Mortgage Market Enhancement
Act of 1984, as amended. If your investment activities are subject to legal
investment laws and regulations, regulatory capital requirements, or review by
regulatory authorities, then you may be subject to restrictions on investment in
the offered certificates. You should consult your own legal advisors for
assistance in determining the suitability of and consequences to you of the
purchase, ownership, and sale of the offered certificates. See "Legal
Investment" in this prospectus supplement and in the prospectus.

RATINGS

     In order to be issued, the offered certificates must be assigned ratings
not lower than the following by Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies, Inc., Fitch, Inc., and Moody's Investors Service,
Inc.:

CLASS    S&P   FITCH   MOODY'S
-----   ----   -----   -------
 A-1     AAA    AAA      Aaa
 A-2a    AAA    AAA      Aaa
 A-2b    AAA    AAA      Aaa
 A-2c    AAA    AAA      Aaa
 M-1     AA+    AA+      Aa1
 M-2     AA+    AA+      Aa2
 M-3     AA      AA      Aa3
 M-4     AA-    AA-       A1
 M-5     A+      A+       A2
 M-6      A      A        A3
 B-1     A-      A-      Baa1
 B-2    BBB+    BBB+     Baa2
 B-3    BBB     BBB      Baa3

     A security rating is not a recommendation to buy, sell or hold securities.
These ratings may be lowered or withdrawn at any time by any of the rating
agencies.


                                       S-7



                                  RISK FACTORS

     In addition to the risk factors discussed in the prospectus, prospective
certificateholders should consider, among other things, the following additional
factors in connection with the purchase of the certificates. Unless otherwise
noted, all percentages are based upon the scheduled principal balances of the
mortgage loans as of the cut-off date, which is October 1, 2005. Unless
otherwise indicated in this prospectus supplement, the information regarding the
mortgage loans set forth in this prospectus supplement that is based on the
principal balance of the mortgage loans as of the cut-off date assumes the
timely receipt of principal scheduled to be paid on the mortgage loans on or
prior to the cut-off date and no delinquencies, defaults or prepayments from
September 1, 2005 through the cut-off date.

LESS STRINGENT UNDERWRITING STANDARDS AND THE RESULTANT POTENTIAL FOR
DELINQUENCIES ON THE MORTGAGE LOANS COULD LEAD TO LOSSES ON YOUR SECURITIES.

     The mortgage loans were made, in part, to borrowers who, for one reason or
another, are not able, or do not wish, to obtain financing from traditional
sources. These mortgage loans may be considered to be of a riskier nature than
mortgage loans made by traditional sources of financing, so that the holders of
the certificates may be deemed to be at greater risk than if the mortgage loans
were made to other types of borrowers. The underwriting standards used in the
origination of the mortgage loans held by the trust are generally less stringent
than those of Fannie Mae or Freddie Mac with respect to a borrower's credit
history and in certain other respects. Borrowers on the mortgage loans may have
an impaired or unsubstantiated credit history. As a result of this less
stringent approach to underwriting, the mortgage loans purchased by the trust
may experience higher rates of delinquencies, defaults and foreclosures than
mortgage loans underwritten in a manner which is more similar to the Fannie Mae
and Freddie Mac guidelines.

GEOGRAPHIC CONCENTRATION OF THE MORTGAGE LOANS IN PARTICULAR JURISDICTIONS MAY
RESULT IN GREATER LOSSES IF THOSE JURISDICTIONS EXPERIENCE ECONOMIC DOWNTURNS.

     Different geographic regions of the United States from time to time will
experience weaker regional economic conditions and housing markets, and,
consequently, may experience higher rates of loss and delinquency on mortgage
loans generally. Any concentration of the mortgage loans in a region may present
risk considerations in addition to those generally present for similar
mortgage-backed securities without that concentration. This may subject the
mortgage loans held by the trust to the risk that a downturn in the economy in
this region of the country would more greatly affect the pool than if the pool
were more diversified.

     In particular, the following approximate percentages of mortgage loans were
secured by mortgaged properties located in the following states:

Group I mortgage loans

CALIFORNIA   FLORIDA   MASSACHUSETTS
----------   -------   -------------
  22.94%      8.26%        6.23%

Group II mortgage loans

CALIFORNIA   FLORIDA
----------   -------
  45.12%      6.11%

     Because of the relative geographic concentration of the mortgaged
properties within these states, losses on the mortgage loans may be higher than
would be the case if the mortgaged properties were more geographically
diversified. For example, some of the mortgaged properties may be more
susceptible to certain types of special hazards, such as earthquakes,
hurricanes, wildfires, floods, and other natural disasters and major civil
disturbances, than residential properties located in other parts of the country.

     In addition, the economies of the states with high concentrations of
mortgaged properties may be adversely affected to a greater degree than the
economies of other areas of the country by certain regional developments. If the
residential real estate markets in an area of concentration experience an
overall decline in property values after


                                       S-8



the dates of origination of the respective mortgage loans, then the rates of
delinquencies, foreclosures and losses on the mortgage loans may increase and
the increase may be substantial.

EFFECT ON YIELDS CAUSED BY PREPAYMENTS, DEFAULTS AND LOSSES.

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

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

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

     o    The rate of prepayments on the mortgage loans will be sensitive to
          prevailing interest rates. Generally, for fixed rate mortgage loans,
          if prevailing interest rates decline significantly below the interest
          rates on the fixed rate mortgage loans, the fixed rate mortgage loans
          are more likely to prepay than if prevailing rates remain above the
          interest rates on the fixed rate mortgage loans. Conversely, if
          prevailing interest rates rise significantly, prepayments on the fixed
          rate mortgage loans may decrease.

     o    The prepayment behavior of the adjustable rate mortgage loans and of
          the fixed rate mortgage loans may respond to different factors, or may
          respond differently to the same factors. If, at the time of their
          first adjustment, the interest rates on any of the adjustable rate
          mortgage loans would be subject to adjustment to a rate higher than
          the then prevailing mortgage interest rates available to borrowers,
          the borrowers may prepay their adjustable rate mortgage loans. The
          adjustable rate mortgage loans may also suffer an increase in defaults
          and liquidations following upward adjustments of their interest rates,
          especially following their initial adjustments.

     o    Approximately 74.70% of the group I mortgage loans and approximately
          77.37% of the group II mortgage loans require the mortgagor to pay a
          prepayment charge in certain instances if the mortgagor prepays the
          mortgage loan during a stated period, which may be from one year to
          three years after the mortgage loan was originated. A prepayment
          charge may or may not discourage a mortgagor from prepaying the
          related mortgage loan during the applicable period.

     o    WMC Mortgage Corp., Decision One Mortgage Company, LLC or NC Capital
          Corporation, as the case may be, may be required to purchase mortgage
          loans from the trust in the event certain breaches of its
          representations and warranties occur and have not been cured. These
          purchases will have the same effect on the holders of the offered
          certificates as a prepayment of those mortgage loans.

     o    Any servicer individually, or all of the servicers together, may
          purchase all of the mortgage loans when the aggregate stated principal
          balance of the mortgage loans as of the last day of the related due
          period is equal to or less than 10% of the aggregate stated principal
          balance of the mortgage loans as of the cut-off date.

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

     o    As a result of the absorption of realized losses on the mortgage loans
          by excess interest, after taking into account certain payments
          received or paid by the trust pursuant to the interest rate swap
          agreement, and overcollateralization as described in this prospectus
          supplement, liquidations of defaulted mortgage loans, whether or not
          realized losses are incurred upon the liquidations, are likely to
          result in an earlier return of principal to the offered certificates
          and are likely to influence the yield on the offered certificates in a
          manner similar to the manner in which principal prepayments on the
          mortgage loans would influence the yield on the offered certificates.

     o    The overcollateralization provisions are intended to result in an
          accelerated rate of principal distributions to holders of the offered
          certificates then entitled to principal distributions at any time that
          the


                                       S-9



          overcollateralization provided by the mortgage loan pool falls below
          the required level. An earlier return of principal to the holders of
          the offered certificates as a result of the overcollateralization
          provisions will influence the yield on the offered certificates in a
          manner similar to the manner in which principal prepayments on the
          mortgage loans will influence the yield on the offered certificates.

     o    The multiple class structure of the offered certificates causes the
          yield of certain classes of the offered certificates to be
          particularly sensitive to changes in the rates of prepayments of
          mortgage loans. Because distributions of principal will be made to the
          classes of offered certificates according to the priorities described
          in this prospectus supplement, the yield to maturity on those classes
          of offered certificates will be sensitive to the rates of prepayment
          on the mortgage loans experienced both before and after the
          commencement of principal distributions on those classes. In
          particular, the Class M and Class B certificates generally are not
          entitled to receive (unless the aggregate principal balance of the
          Class A certificates has been reduced to zero) any portion of the
          amount of principal payable to the offered certificates prior to the
          distribution date in November 2008. Thereafter, subject to the loss
          and delinquency performance of the mortgage loan pool, the Class M and
          Class B certificates may continue (unless the aggregate principal
          balance of the Class A certificates has been reduced to zero) to
          receive no portion of the amount of principal then payable to the
          offered certificates. After taking into account certain payments by
          the trust pursuant to the interest rate swap agreement, the weighted
          average lives of the Class M and Class B certificates will therefore
          be longer than would otherwise be the case. The effect on the market
          value of the Class M and Class B certificates of changes in market
          interest rates or market yields for similar securities may be greater
          than for the Class A certificates.

The value of your certificates may be reduced if the rate of default or the
amount of losses is higher than expected.

     o    If the performance of the mortgage loans is substantially worse than
          assumed by the rating agencies, the ratings of any class of the
          certificates may be lowered or withdrawn in the future. This may
          reduce the value of those certificates. No one will be required to
          supplement any credit enhancement or to take any other action to
          maintain any rating of the certificates.

Newly originated mortgage loans may be more likely to default, which may cause
losses on the offered certificates.

     o    Defaults on mortgage loans tend to occur at higher rates during the
          early years of the mortgage loans. Substantially all of the mortgage
          loans have been originated within the 12 months prior to their sale to
          the trust. As a result, the trust may experience higher rates of
          default than if the mortgage loans had been outstanding for a longer
          period of time.

The credit enhancement features may be inadequate to provide protection for the
offered certificates.

     o    The credit enhancement features described in this prospectus
          supplement are intended to enhance the likelihood that holders of the
          Class A certificates, and to a limited extent, the holders of the
          Class M certificates and, to a lesser degree, the holders of the Class
          B certificates, will receive regular payments of interest and
          principal. However, we cannot assure you that the applicable credit
          enhancement will adequately cover any shortfalls in cash available to
          pay your certificates as a result of delinquencies or defaults on the
          mortgage loans. If delinquencies or defaults occur on the mortgage
          loans, none of the servicers nor any other entity will advance
          scheduled monthly payments of interest and principal on delinquent or
          defaulted mortgage loans if the advances are not likely to be
          recovered.

     o    If substantial losses occur as a result of defaults and delinquent
          payments on the mortgage loans, you may suffer losses.

INTEREST GENERATED BY THE MORTGAGE LOANS MAY BE INSUFFICIENT TO MAINTAIN THE
REQUIRED LEVEL OF OVERCOLLATERALIZATION.

     The weighted average of the net interest rates on the mortgage loans is
expected to be higher than the weighted average of the pass-through rates on the
offered certificates. Interest on the mortgage loans, after taking into account
certain payments received or paid by the trust pursuant to the interest rate
swap agreement, is expected to generate more interest than is needed to pay
interest owed on the offered certificates and to pay certain fees and


                                      S-10



expenses of the trust. Any remaining interest generated by the mortgage loans
will then be used to absorb losses that occur on the mortgage loans. After these
financial obligations of the trust are covered, the available excess interest
generated by the mortgage loans will be used to maintain overcollateralization
at the required level determined as provided in the pooling and servicing
agreement. We cannot assure you, however, that enough excess interest will be
generated to absorb losses or to maintain the required level of
overcollateralization. The factors described below, as well as the factors
described in the next Risk Factor, will affect the amount of excess interest
that the mortgage loans will generate:

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

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

     o    If the rates of delinquencies, defaults or losses on the mortgage
          loans turn out to be higher than expected, excess interest will be
          reduced by the amount necessary to compensate for any shortfalls in
          cash available to make required distributions on the offered
          certificates.

     o    All of the adjustable rate mortgage loans have interest rates that
          adjust based on an index that is different from the index used to
          determine the pass-through rates on the offered certificates, and the
          fixed rate mortgage loans have interest rates that do not adjust. In
          addition, the first adjustment of the interest rates for approximately
          0.01% of the adjustable rate mortgage loans will not occur until six
          months after the date of origination, the first adjustment of the
          interest rates for approximately 93.28% of the adjustable rate
          mortgage loans will not occur until two years after the date of
          origination, the first adjustment of the interest rates for
          approximately 4.52% of the adjustable rate mortgage loans will not
          occur until three years after the date of origination and the first
          adjustment of the interest rates for approximately 2.19% of the
          adjustable rate mortgage loans will not occur until five years after
          the date of origination. As a result, the pass-through rates on the
          offered certificates may increase relative to the weighted average of
          the interest rates on the mortgage loans, or the pass-through rate on
          the offered certificates may remain constant as the weighted average
          of the interest rates on the mortgage loans declines. In either case,
          this would require that more of the interest generated by the mortgage
          loans be applied to cover interest on the offered certificates. The
          pass-through rates on the Class A-1, Class A-2a, Class A-2b and Class
          A-2c certificates cannot exceed the lesser of the weighted average
          interest rate of the mortgage loans, reduced for net payments to the
          swap provider, in the applicable mortgage loan group or in the
          mortgage loan pool, in either case less certain fees and expenses
          payable by the trust, and the pass-through rates on the Class M and
          Class B certificates cannot exceed the weighted average interest rate
          of the mortgage loans, reduced for net payments to the swap provider,
          in the mortgage loan pool less certain fees and expenses payable by
          the trust.

     o    If prepayments, defaults and liquidations occur more rapidly on the
          mortgage loans with relatively higher interest rates than on the
          mortgage loans with relatively lower interest rates, the amount of
          excess interest generated by the mortgage loans will be less than
          would otherwise be the case.

     o    Investors in the offered certificates, and particularly the Class B
          certificates, should consider the risk that the overcollateralization
          may not be sufficient to protect your certificates from losses.

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

     The offered certificates accrue interest at pass-through rates based on the
one-month LIBOR index plus specified margins, but are subject to certain
limitations. Those limitations on the pass-through rates for the offered
certificates are, in part, based on the weighted average of the interest rates
on the mortgage loans reduced for net payments to the swap provider and net of
certain fees and expenses of the trust.


                                      S-11



     A variety of factors, in addition to those described in the previous Risk
Factor, could limit the pass-through rates and adversely affect the yield to
maturity on the offered certificates. Some of these factors are described below:

     o    The interest rates on the fixed rate mortgage loans will not adjust,
          and the interest rates on the adjustable rate mortgage loans are based
          on a six-month LIBOR index. All of the adjustable rate mortgage loans
          have periodic, minimum and maximum limitations on adjustments to their
          interest rates, and, as discussed in the previous Risk Factor, all of
          the adjustable rate mortgage loans will not have the first adjustment
          to their interest rates until six months, two years, three years or
          five years after the origination of those mortgage loans. As a result
          of the limit on the pass-through rates for the offered certificates,
          those certificates may accrue less interest than they would accrue if
          their pass-through rates were based solely on the one-month LIBOR
          index plus the specified margins.

     o    The six-month LIBOR index may change at different times and in
          different amounts than one-month LIBOR. As a result, it is possible
          that interest rates on certain of the adjustable rate mortgage loans
          may decline while the pass-through rates on the offered certificates
          are stable or rising. It is also possible that the interest rates on
          certain of the adjustable rate mortgage loans and the pass-through
          rates for the offered certificates may decline or increase during the
          same period, but that the pass-through rates on these certificates may
          decline more slowly or increase more rapidly.

     o    The pass-through rates for the offered certificates adjust monthly and
          are subject to maximum interest rate caps while the interest rates on
          the adjustable rate mortgage loans adjust less frequently and the
          interest rates on the fixed rate mortgage loans do not adjust.
          Consequently, the limit on the pass-through rates for the offered
          certificates may limit increases in the pass-through rates for those
          classes for extended periods in a rising interest rate environment.

     o    If prepayments, defaults and liquidations occur more rapidly on the
          mortgage loans with relatively higher interest rates than on the
          mortgage loans with relatively lower interest rates, the pass-through
          rates on the offered certificates are more likely to be limited.

     o    If the pass-through rates on the offered certificates are limited for
          any distribution date due to a cap based on the weighted average net
          interest rates of the mortgage loans and, in the case of the Class A
          certificates also, on the weighted average net interest rates of the
          related loan group (in each case, reduced by certain fees and expenses
          and net payments to the swap provider), the resulting interest
          shortfalls may be recovered by the holders of these certificates on
          the same distribution date or on future distribution dates on a
          subordinated basis to the extent that on that distribution date or
          future distribution dates there are available funds remaining after
          certain other distributions on the offered certificates and the
          payment of certain fees and expenses of the trust. In addition, these
          shortfalls may be recovered from net payments, if any, from the swap
          provider. However, we cannot assure you that these funds, if
          available, will be sufficient to fully cover these shortfalls.

EFFECT ON YIELDS DUE TO RAPID PREPAYMENTS; NO ASSURANCE OF AMOUNTS RECEIVED
UNDER THE INTEREST RATE SWAP AGREEMENT.

     Any net payment payable to the swap provider under the terms of the
interest rate swap agreement will reduce amounts available for distribution to
certificateholders, and may reduce the pass-through rates on the offered
certificates. If the rate of prepayments on the mortgage loans is faster than
anticipated, the amount on which payments due under the interest rate swap
agreement are calculated (namely, the product of the scheduled notional amount
and the multiplier) may exceed the aggregate scheduled principal balance of the
mortgage loans in the pool, thereby increasing the relative proportion of
interest collections on the mortgage loans that must be applied to make net
payments to the swap provider. The combination of a rapid rate of prepayment and
low prevailing interest rates could adversely affect the yields on the offered
certificates.

     In addition, certain swap termination payments arising under the interest
rate swap agreement are payable to the swap provider on a senior basis and such
payments may reduce amounts available for distribution to certificateholders.


                                      S-12



     Any amounts received under the interest rate swap agreement will be applied
as described in this prospectus supplement to pay interest shortfalls, maintain
overcollateralization and cover losses. However, no amounts will be payable to
the trust by the swap provider unless the floating payment owed by the swap
provider for a distribution date exceeds the fixed payment owed to the swap
provider for that distribution date. This will not occur except in a period
where one-month LIBOR (as determined pursuant to the interest rate swap
agreement) exceeds 4.63% per annum. We cannot assure you that any amounts will
be received under the interest rate swap agreement, or that any such amounts
that are received will be sufficient to cover interest shortfalls or losses on
the mortgage loans, or to maintain required overcollateralization.

     See "Description of the Certificates--Distributions of Interest and
Principal," "--Swap Account" and "--Interest Rate Swap Agreement" in this
prospectus supplement.

PREPAYMENTS ON THE MORTGAGE LOANS COULD LEAD TO SHORTFALLS IN THE DISTRIBUTION
OF INTEREST ON YOUR CERTIFICATES.

     When a voluntary principal prepayment is made by the mortgagor on a
mortgage loan (excluding any payments made upon liquidation of any mortgage
loan), the mortgagor is charged interest only up to the date of the prepayment,
instead of for a full month. However, principal prepayments will only be passed
through to the holders of the certificates once a month on the distribution date
that follows the prepayment period in which the prepayment was received by the
applicable servicer. In the event the timing of any voluntary prepayments in
full would cause there to be less than one full month's interest, at the
applicable interest rates, available to be distributed to certificateholders
with respect to the prepaid mortgage loans, the applicable servicer is obligated
to pay an amount, without any right of reimbursement, for the amount of
shortfalls in interest collections payable on the certificates that are
attributable to the difference between the interest paid by a mortgagor in
connection with those principal prepayments in full and thirty days' interest on
the prepaid mortgage loans, but only to the extent those shortfalls do not
exceed the servicing fee for that distribution date payable to that servicer.

     If the applicable servicer fails to make such payments or the shortfall
exceeds the servicing fee payable to that servicer for the month, there will be
fewer funds available for the distribution of interest on the certificates. In
addition, no such payments from any servicer will be available to cover
prepayment interest shortfalls resulting from partial prepayments or involuntary
prepayments such as liquidation of a defaulted mortgage loan. Such shortfalls of
interest, if they result in the inability of the trust to pay the full amount of
the current interest on the certificates, will result in a reduction of the
yield on your certificates.

ADDITIONAL RISKS ASSOCIATED WITH THE CLASS M AND CLASS B CERTIFICATES.

     The weighted average lives of, and the yields to maturity on, the Class
M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2
and Class B-3 certificates will be progressively more sensitive, in that order,
to the rate and timing of mortgagor defaults and the severity of ensuing losses
on the mortgage loans. If the actual rate and severity of losses on the mortgage
loans is higher than those assumed by an investor in such certificates, the
actual yield to maturity of such certificates may be lower than the yield
anticipated by such holder based on such assumption. The timing of losses on the
mortgage loans will also affect an investor's actual yield to maturity, even if
the rate of defaults and severity of losses over the life of the mortgage loans
are consistent with an investor's expectations. In general, the earlier a loss
occurs, the greater the effect on an investor's yield to maturity. Realized
losses on the mortgage loans, to the extent they exceed the amount of excess
interest, after taking into account certain payments received or paid by the
trust pursuant to the interest rate swap agreement, and the amount of
overcollateralization following distributions of principal on the related
distribution date, will reduce the aggregate principal balance of the Class B-3,
Class B-2, Class B-1, Class M-6, Class M-5, Class M-4, Class M-3, Class M-2 and
Class M-1 certificates, in that order. As a result of this reduction, less
interest will accrue on such class of certificates than would otherwise be the
case. Once a realized loss is allocated to a certificate, no principal or
interest will be distributable with respect to such written down amount, except
to the extent of any subsequent recoveries received on liquidated mortgage loans
after they are liquidated. However, the amount of any realized losses allocated
to the Class M or Class B certificates may be paid to the holders of those
certificates according to the priorities set forth under "Description of the
Certificates--Overcollateralization Provisions" in this prospectus supplement.


                                      S-13



     Unless the aggregate principal balances of the Class A certificates have
been reduced to zero, the Class M and Class B certificates will not be entitled
to any principal distributions until at least November 2008 or a later date as
provided in this prospectus supplement, or during any period in which
delinquencies or cumulative losses on the mortgage loans exceed certain levels.
As a result, the weighted average lives of the Class M and Class B certificates
will be longer than would otherwise be the case if distributions of principal
were allocated among all of the certificates at the same time. As a result of
the longer weighted average lives of the Class M and Class B certificates, the
holders of such certificates have a greater risk of suffering a loss on their
investments. Further, because such certificates might not receive any principal
if certain delinquency levels occur, it is possible for such certificates to
receive no principal distributions even if no losses have occurred on the
mortgage loan pool.

     In addition, the multiple class structure of the Class M and Class B
certificates causes the yield of such classes to be particularly sensitive to
changes in the rates of prepayment of the mortgage loans. Because distributions
of principal will be made to the holders of such certificates according to the
priorities described in this prospectus supplement, the yield to maturity on
such classes of certificates will be sensitive to the rates of prepayment on the
mortgage loans experienced both before and after the commencement of principal
distributions on such classes. The yield to maturity on such classes of
certificates will also be extremely sensitive to losses due to defaults on the
mortgage loans (and the timing of those losses), to the extent such losses are
not covered by excess interest, after taking into account certain payments
received or paid by the trust pursuant to the interest rate swap agreement, the
Class X certificates or a class of Class M and Class B certificates with a lower
payment priority. Furthermore, as described in this prospectus supplement, the
timing of receipt of principal and interest by the Class M and Class B
certificates may be adversely affected by losses even if such classes of
certificates do not ultimately bear such loss.

DELAY IN RECEIPT OF LIQUIDATION PROCEEDS; LIQUIDATION PROCEEDS MAY BE LESS THAN
THE MORTGAGE LOAN BALANCE.

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

A PORTION OF THE MORTGAGE LOANS ARE SECURED BY SUBORDINATE MORTGAGES; IN THE
EVENT OF A DEFAULT, THESE MORTGAGE LOANS ARE MORE LIKELY TO EXPERIENCE LOSSES.

     Approximately 3.87% of the group I mortgage loans and approximately 6.74%
of the group II mortgage loans are secured by second-lien mortgages, which are
subordinate to the rights of the holder of the related senior mortgages. As a
result, the proceeds from any liquidation, insurance or condemnation proceedings
will be available to satisfy the principal balance of the mortgage loan only to
the extent that the claims, if any, of each related senior mortgagee are
satisfied in full, including any related foreclosure costs. In addition, a
holder of a subordinate or junior mortgage may not foreclose on the mortgaged
property securing such mortgage unless it either pays the entire amount of the
senior mortgages to the senior mortgagees at or prior to the foreclosure sale or
undertakes the obligation to make payments on each senior mortgage in the event
of a default under any senior mortgage. The trust will have no source of funds
to satisfy any senior mortgage or make payments due to any senior mortgagee.

     An overall decline in the residential real estate markets could adversely
affect the values of the mortgaged properties and cause the outstanding
principal balances of the second-lien mortgage loans, together with the senior
mortgage loans secured by the same mortgaged properties, to equal or exceed the
value of the mortgaged properties. This type of a decline would adversely affect
the position of a second mortgagee before having the same effect on the related
first mortgagee. A rise in interest rates over a period of time and the general
condition of a mortgaged property as well as other factors may have the effect
of reducing the value of the mortgaged property from the appraised value at the
time the mortgage loan was originated. If there is a reduction in value of the
mortgaged property, the ratio of the amount of the mortgage loan to the value of
the mortgaged property may increase over what it was at the time the mortgage
loan was originated. This type of increase may reduce the likelihood of
liquidation or other proceeds being sufficient to satisfy the second-lien
mortgage loan after satisfaction of any senior liens.


                                      S-14



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

     Mortgage loans with higher loan-to-value ratios may present a greater risk
of loss than mortgage loans with loan-to-value ratios of 80% or below.
Approximately 40.58% and approximately 34.86% of the group I mortgage loans and
group II mortgage loans, respectively, had loan-to-value ratios at origination,
or with respect to second-lien mortgage loans, combined loan-to-value ratios at
origination, in excess of 80% but not more than 100% at origination.
Additionally, the determination of the value of a mortgaged property used in the
calculation of the loan-to-value ratios or combined loan-to-value ratios of the
mortgage loans may differ from the appraised value of such mortgaged properties
or the actual value of such mortgaged properties.

SOME OF THE MORTGAGE LOANS HAVE AN INITIAL INTEREST-ONLY PERIOD, WHICH MAY
RESULT IN INCREASED DELINQUENCIES AND LOSSES.

     Approximately 19.67% of the group I mortgage loans and approximately 28.27%
of the group II mortgage loans have an initial interest-only period of up to ten
years after the date of origination. During this period, the payment made by the
related mortgagor will be less than it would be if the principal of the mortgage
loan was required to amortize. In addition, the mortgage loan principal balance
will not be reduced because there will be no scheduled monthly payments of
principal during this period. As a result, no principal payments will be made on
the offered certificates with respect to these mortgage loans during their
interest-only period unless there is a principal prepayment.

     After the initial interest-only period, the scheduled monthly payment on
these mortgage loans will increase, which may result in increased delinquencies
by the related mortgagors. In addition, losses may be greater on these mortgage
loans as a result of there being no principal amortization during the early
years of these mortgage loans. Although the amount of principal included in each
scheduled monthly payment for a traditional mortgage loan is relatively small
during the first few years after the origination of a mortgage loan, in the
aggregate, the amount can be significant. Any resulting delinquencies and
losses, to the extent not covered by excess interest, after taking into account
certain payments received or paid by the trust pursuant to the interest rate
swap agreement, or overcollateralization, will be allocated to the offered
certificates in reverse order of seniority.

     Mortgage loans with an initial interest-only period are relatively new in
the mortgage marketplace. The performance of these mortgage loans may be
significantly different from mortgage loans that amortize from origination. In
particular, the failure by the related mortgagor to build equity in the property
may affect the delinquency, loss and prepayment experience with respect to these
mortgage loans.

PAYMENTS IN FULL OF A BALLOON LOAN DEPEND ON THE BORROWER'S ABILITY TO REFINANCE
THE BALLOON LOAN OR SELL THE MORTGAGED PROPERTY.

     Approximately 4.89% of the group I mortgage loans and approximately 9.08%
of the group II mortgage loans will not be fully amortizing over their terms to
maturity and, thus, will require substantial principal payments, i.e., balloon
payments, at their stated maturity. Mortgage loans with balloon payments involve
a greater degree of risk because the ability of a borrower to make a balloon
payment typically will depend upon the borrower's ability either to timely
refinance the loan or to timely sell the related mortgaged property. The ability
of a borrower to accomplish either of these goals will be affected by a number
of factors, including:

     o    the level of available interest rates at the time of sale or
          refinancing;

     o    the borrower's equity in the related mortgaged property;

     o    the financial condition of the mortgagor;

     o    tax laws;

     o    prevailing general economic conditions; and

     o    the availability of credit for single family real properties
          generally.


                                      S-15



VIOLATION OF VARIOUS FEDERAL, STATE AND LOCAL LAWS MAY RESULT IN LOSSES ON THE
MORTGAGE LOANS.

     There has been an increased focus by state and federal banking regulatory
agencies, state attorneys general offices, the Federal Trade Commission, the
U.S. Department of Justice, the U.S. Department of Housing and Urban Development
and state and local governmental authorities on certain lending practices by
some companies in the subprime industry, sometimes referred to as "predatory
lending" practices. Sanctions have been imposed by state, local and federal
governmental agencies for practices including, but not limited to, charging
borrowers excessive fees, imposing higher interest rates than the borrower's
credit risk warrants and failing to adequately disclose the material terms of
loans to the borrowers.

     Applicable state and local laws generally regulate interest rates and other
charges, require certain disclosure, and require licensing of the originators.
In addition, other state and local laws, public policy and general principles of
equity relating to the protection of consumers, unfair and deceptive practices
and debt collection practices may apply to the origination, servicing and
collection of the mortgage loans.

     The mortgage loans are also subject to federal laws, including:

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

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

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

     Violations of certain provisions of these federal, state and local laws may
limit the ability of the servicers to collect all or part of the principal of,
or interest on, the mortgage loans and in addition could subject the trust to
damages and administrative enforcement (including disgorgement of prior interest
and fees paid). In particular, an originator's failure to comply with certain
requirements of these federal and state laws could subject the trust (and other
assignees of the mortgage loans) to monetary penalties, and result in the
obligors' rescinding the mortgage loans against either the trust or subsequent
holders of the mortgage loans.

     Each of WMC Mortgage Corp., Decision One Mortgage Company, LLC and NC
Capital Corporation has represented or will represent that each mortgage loan
sold by it is in compliance with applicable federal, state and local laws and
regulations. In addition, each of WMC Mortgage Corp., Decision One Mortgage
Company, LLC and NC Capital Corporation has also represented or will represent
that none of the mortgage loans sold by it is covered by the Home Ownership and
Equity Protection Act of 1994 or is classified as a "high cost home,"
"threshold," "covered," "high risk home" or "predatory" loan under any other
applicable federal, state or local law. In the event of a breach of any of such
representations, the related selling party or the depositor, as applicable, will
be obligated to cure such breach or repurchase or replace the affected mortgage
loan, in the manner and to the extent described in this prospectus supplement.

WMC MORTGAGE CORP., DECISION ONE MORTGAGE COMPANY, LLC OR NC CAPITAL CORPORATION
MAY NOT BE ABLE TO REPURCHASE DEFECTIVE MORTGAGE LOANS.

     WMC Mortgage Corp., Decision One Mortgage Company, LLC and NC Capital
Corporation have made or will make various representations and warranties
related to the mortgage loans. Those representations are summarized in
"Description of the Certificates--Representations and Warranties Relating to the
Mortgage Loans" in this prospectus supplement.

     If WMC Mortgage Corp., Decision One Mortgage Company, LLC or NC Capital
Corporation fails to cure a material breach of its representations and
warranties with respect to any mortgage loan sold by it in a timely manner, then
WMC Mortgage Corp., Decision One Mortgage Company, LLC or NC Capital
Corporation, as applicable, would be required to repurchase or substitute for
the defective mortgage loan. It is possible that WMC Mortgage


                                      S-16



Corp., Decision One Mortgage Company, LLC or NC Capital Corporation may not be
capable of repurchasing or substituting for any defective mortgage loans, for
financial or other reasons. The inability of WMC Mortgage Corp., Decision One
Mortgage Company, LLC or NC Capital Corporation to repurchase or substitute for
defective mortgage loans would likely cause the mortgage loans to experience
higher rates of delinquencies, defaults and losses. As a result, shortfalls in
the distributions due on the certificates could occur.

THE INTEREST RATE SWAP AGREEMENT IS SUBJECT TO COUNTERPARTY RISK.

     The assets of the trust include an interest rate swap agreement that will
require the swap provider to make certain payments for the benefit of the
holders of the offered certificates. To the extent that payments on the offered
certificates depend in part on payments to be received by the trustee under the
interest rate swap agreement, the ability of the trustee to make such payments
on such classes of certificates will be subject to the credit risk of the swap
provider.

THE CREDIT RATING OF THE SWAP PROVIDER COULD AFFECT THE RATING OF THE OFFERED
CERTIFICATES.

     Morgan Stanley Capital Services Inc., the swap provider under the interest
rate swap agreement, is rated "AA-" by Fitch, Inc., "A+" by Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc., and "Aa3" by
Moody's Investors Service, Inc. The ratings on the offered certificates are
dependent in part upon the credit ratings of the swap provider. If a credit
rating of the swap provider is qualified, reduced or withdrawn and a substitute
counterparty is not obtained in accordance with the terms of the interest rate
swap agreement, the ratings of the offered certificates may be qualified,
reduced or withdrawn. As a result, the value and marketability of the offered
certificates may be adversely affected. See "Description of the
Certificates--Interest Rate Swap Agreement" in this prospectus supplement.

EXTERNAL EVENTS MAY INCREASE THE RISK OF LOSS ON THE MORTGAGE LOANS.

     In response to previously executed and threatened terrorist attacks in the
United States and foreign countries, the United States has initiated military
operations and has placed a substantial number of armed forces reservists and
members of the National Guard on active duty status. It is possible that the
number of reservists and members of the National Guard placed on active duty
status in the near future may increase. To the extent that a member of the
military, or a member of the armed forces reserves or National Guard who is
called to active duty is a mortgagor of a mortgage loan in the trust, the
interest rate limitation of the Servicemembers Civil Relief Act, and any
comparable state law, will apply. Substantially all of the mortgage loans have
mortgage interest rates which exceed such limitation, if applicable. This may
result in interest shortfalls on the mortgage loans, which may result in
shortfalls of interest on your certificates. None of the original loan sellers,
the depositor, any underwriter, the trustee, the servicers or any other party
has taken any action to determine whether any of the mortgage loans would be
affected by such interest rate limitation. See "Description of the
Certificates--Distributions of Interest and Principal" in this prospectus
supplement and "Material Legal Aspects of the Loans--Servicemembers Civil Relief
Act and the California Military and Veterans Code" in the prospectus.

DRUG, RICO AND MONEY LAUNDERING VIOLATIONS COULD LEAD TO PROPERTY FORFEITURES.

     Federal law provides that property purchased or improved with assets
derived from criminal activity or otherwise tainted, or used in the commission
of certain offenses, can be seized and ordered forfeited to the United States of
America. The offenses which can trigger such a seizure and forfeiture include,
among others, violations of the Racketeer Influenced and Corrupt Organizations
Act, the Bank Secrecy Act, the anti-money laundering laws and regulations,
including the USA Patriot Act of 2001 and the regulations issued pursuant to
that Act, as well as the narcotic drug laws. In many instances, the United
States may seize the property even before a conviction occurs.

     In the event of a forfeiture proceeding, a lender may be able to establish
its interest in the property by proving that (1) its mortgage was executed and
recorded before the commission of the illegal conduct from which the assets used
to purchase or improve the property were derived or before the commission of any
other crime upon which the forfeiture is based, or (2) the lender, at the time
of the execution of the mortgage, did not know or was reasonably without cause
to believe that the property was subject to forfeiture. However, there is no
assurance that such a defense would be successful.


                                      S-17



THE CERTIFICATES ARE OBLIGATIONS OF THE TRUST ONLY.

     The certificates will not represent an interest in or obligation of the
depositor, the servicers, WMC Mortgage Corp., Decision One Mortgage Company,
LLC, NC Capital Corporation, the trustee or any of their respective affiliates.
Neither the certificates nor the underlying mortgage loans will be guaranteed or
insured by any governmental agency or instrumentality or by the depositor, the
servicers, the trustee or any of their respective affiliates. Proceeds of the
assets included in the trust (including the interest rate swap agreement for the
benefit of the offered certificates) will be the sole source of payments on the
certificates, and there will be no recourse to the depositor, the servicers, WMC
Mortgage Corp., Decision One Mortgage Company, LLC, NC Capital Corporation, the
trustee or any other entity in the event that such proceeds are insufficient or
otherwise unavailable to make all payments provided for under the certificates.

YOUR INVESTMENT MAY NOT BE LIQUID.

     The underwriters intend to make a secondary market in the offered
certificates, but they will have no obligation to do so. There is no assurance
that such a secondary market will develop or, if it develops, that it will
continue. Consequently, you may not be able to sell your certificates readily or
at prices that will enable you to realize your desired yield. The market values
of the certificates are likely to fluctuate; these fluctuations may be
significant and could result in significant losses to you.

     The secondary markets for 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 especially
sensitive to prepayment, credit, or interest rate risk, or that have been
structured to meet the investment requirements of limited categories of
investors.

     None of the offered certificates will constitute "mortgage related
securities" for purposes of the Secondary Mortgage Market Enhancement Act of
1984, as amended. Accordingly, many institutions that lack the legal authority
to invest in securities that do not constitute "mortgage related securities"
will not be able to invest in the offered certificates, thereby limiting the
market for those certificates. If your investment activities are subject to
legal investment laws and regulations, regulatory capital requirements, or
review by regulatory authorities, then you may be subject to restrictions on
investment in the offered certificates. You should consult your own legal
advisors for assistance in determining the suitability of and consequence to you
of the purchase, ownership, and sale of the offered certificates. See "Legal
Investment" in this prospectus supplement and in the prospectus.

THE RATINGS ON YOUR CERTIFICATES COULD BE REDUCED OR WITHDRAWN.

     Each rating agency rating the offered certificates may change or withdraw
its initial ratings at any time in the future if, in its judgment, circumstances
warrant a change. No person is obligated to maintain the ratings at their
initial levels. If a rating agency qualifies, reduces or withdraws its rating on
one or more classes of the offered certificates, the liquidity and market value
of the affected certificates is likely to be reduced.

THE OFFERED CERTIFICATES MAY NOT BE SUITABLE INVESTMENTS.

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


                                      S-18



                              TRANSACTION OVERVIEW

PARTIES

     The Depositor. Morgan Stanley ABS Capital I Inc., a Delaware corporation.
The principal executive office of the depositor is located at 1585 Broadway, New
York, New York 10036, and its telephone number is (212) 761-4000.

     The Original Loan Sellers.

     o    WMC Mortgage Corp., a California corporation. The principal executive
          office of WMC Mortgage Corp. is located at 3100 Thornton Avenue,
          Burbank, California 91504, and its telephone number is (800) 736-5000.

     o    Decision One Mortgage Company, LLC, a North Carolina limited liability
          company. The principal executive office of Decision One Mortgage
          Company, LLC is located at 6060 J.A. Jones Boulevard, Suite 1000,
          Charlotte, North Carolina, and its telephone number is (704) 887-2664.

     o    NC Capital Corporation, a California corporation. The principal
          executive office of NC Capital Corporation is located at 18400 Von
          Karman, Suite 1000, Irvine, California 92612, and its telephone number
          is (949) 440-7030.

     See "The Mortgage Loan Pool--Underwriting Guidelines" in this prospectus
supplement.

     The Servicers.

     o    Countrywide Home Loans Servicing LP, a Texas limited partnership. The
          principal executive office of Countrywide Home Loans Servicing LP is
          located at 7105 Corporate Drive, Plano, Texas 75024 and its telephone
          number is (972) 526-6285.

     o    HomEq Servicing Corporation, a New Jersey corporation. The principal
          executive office of HomEq Servicing Corporation is located at 1620
          East Roseville Parkway, Suite 210, Second Floor, Roseville, California
          95661, and its telephone number is (916) 339-6267.

     o    JPMorgan Chase Bank, National Association, a national banking
          association. The principal executive office of JPMorgan Chase Bank,
          National Association is located at 1111 Polaris Parkway, Columbus,
          Ohio 43240 and its telephone number is (614) 213-1000.

     For a description of the servicers, see "The Servicers" in this prospectus
supplement.

     The Trustee. Wells Fargo Bank, National Association, a national banking
association. For correspondence with Wells Fargo Bank, National Association in
its capacity as trustee only (and not as custodian), the corporate trust office
of the trustee is located (i) for purposes of certificate transfers, at Wells
Fargo Center, Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479
and (ii) for all other purposes, at 9062 Old Annapolis Road, Columbia, Maryland
21045, Re: MSAC 2005-HE5, and its telephone number is (410) 884-2000. For a
description of the trustee, see "The Trustee" in this prospectus supplement.

     The Custodians.

     o    Wells Fargo Bank, National Association, a national banking
          association. The principal executive office of Wells Fargo Bank,
          National Association in its capacity as custodian (but not as trustee)
          is located at 24 Executive Park, Suite 100, Irvine, California 92614,
          and its telephone number is (949) 757-5100.

     o    LaSalle Bank National Association, a national banking association. The
          principal executive office of LaSalle Bank National Association is
          located at 2571 Busse Road, Suite 200, Elkgrove Village, Illinois
          60007, and its telephone number is (847) 766-6429.


                                      S-19



     o    Deutsche Bank National Trust Company, a national banking association.
          The office of Deutsche Bank National Trust Company is located at 1761
          East St. Andrew Place, Santa Ana, California 92705, and its telephone
          number is (714) 247 6000.

     The Swap Provider. Morgan Stanley Capital Services Inc., a Delaware
corporation. The principal executive office of the swap provider is located at
1585 Broadway, New York, New York 10036, and its telephone number is (212)
761-4000. See "Description of the Certificates--Interest Rate Swap Agreement" in
this prospectus supplement.

     The Rating Agencies. Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. ("S&P"), Fitch, Inc. ("FITCH") and Moody's Investors
Service, Inc. ("MOODY'S") will issue ratings with respect to the certificates.

THE TRANSACTION

     Issuance of the Certificates. Morgan Stanley ABS Capital I Inc. Trust
2005-HE5 will be formed and the certificates will be issued pursuant to the
terms of a pooling and servicing agreement, dated as of October 1, 2005 by and
among the depositor, the servicers, WMC Mortgage Corp., NC Capital Corporation,
Decision One Mortgage Company, LLC, the custodians and the trustee.

                             THE MORTGAGE LOAN POOL

     The statistical information presented in this prospectus supplement
concerning the mortgage loans is based on the pool of mortgage loans as of the
cut-off date, which is October 1, 2005. Unless otherwise indicated in this
prospectus supplement, the information regarding the mortgage loans set forth in
this prospectus supplement that is based on the principal balance of the
mortgage loans as of the cut-off date assumes the timely receipt of principal
scheduled to be paid on the mortgage loans on or prior to the cut-off date and
no delinquencies, defaults or prepayments from September 1, 2005 through the
cut-off date. With respect to the mortgage loan pool as of the cut-off date,
some amortization will occur prior to the closing date. Moreover, certain
mortgage loans included in the mortgage loan pool as of the cut-off date may
prepay in full, or may be determined not to meet the eligibility requirements
for the final mortgage loan pool, and may not be included in the final mortgage
loan pool, and certain other mortgage loans may be included in the final
mortgage loan pool. As a result of the foregoing, the statistical distribution
of characteristics as of the closing date for the final mortgage loan pool may
vary somewhat from the statistical distribution of such characteristics as of
the cut-off date as presented in this prospectus supplement, although such
variance should not be material.

GENERAL

     The trust will primarily consist of approximately 8,905 conventional,
subprime, adjustable and fixed rate, first-lien and second-lien residential
mortgage loans with original terms to maturity from the first scheduled payment
due date of not more than 30 years, having an aggregate cut-off date balance
(after giving effect to scheduled payments due on such date) of approximately
$1,487,218,857. The mortgage loans in the trust were acquired by Morgan Stanley
Mortgage Capital Inc., an affiliate of the depositor, from WMC Mortgage Corp.,
Decision One Mortgage Company, LLC and NC Capital Corporation, each of whom
originated or acquired the mortgage loans.

     The mortgage loans were originated or acquired generally in accordance with
the underwriting guidelines described in this prospectus supplement. See
"--Underwriting Guidelines" below. Because, in general, such underwriting
guidelines do not conform to Fannie Mae or Freddie Mac guidelines, the mortgage
loans are likely to experience higher rates of delinquency, foreclosure and
bankruptcy than if they had been underwritten to a higher standard.

     Approximately 2,121 (or approximately 12.09%) of the mortgage loans in the
trust are fixed rate mortgage loans and approximately 6,784 (or approximately
87.91%) are adjustable rate mortgage loans, as described in more detail under
"--Adjustable Rate Mortgage Loans" below. Substantially all of the mortgage
loans have scheduled monthly payment due dates on the first day of the month.
Interest on substantially all of the mortgage loans accrues on the basis of a
360-day year consisting of twelve 30-day months.


                                      S-20



     Approximately 19.67% of the group I mortgage loans and approximately 28.27%
of the group II mortgage loans are interest-only until ten years after the date
of origination.

     All of the mortgage loans are secured by first or second mortgages, deeds
of trust or similar security instruments creating first-liens or second-liens on
residential properties consisting of manufactured housing, one- to four-family
dwelling units, individual condominium units or individual units in planned unit
developments.

     Pursuant to its terms, each mortgage loan, other than a loan secured by a
condominium unit, is required to be covered by a standard hazard insurance
policy in an amount equal to the lower of the unpaid principal amount of that
mortgage loan or the replacement value of the improvements on the related
mortgaged property.

     Generally, a condominium association is responsible for maintaining hazard
insurance covering the entire building.

     Approximately 37.03% of the mortgage loans have loan-to-value ratios at
origination, or with respect to second-lien mortgage loans, combined
loan-to-value ratios at origination, in excess of 80%. None of the mortgage
loans have loan-to-value ratios at origination, or with respect to second-lien
mortgage loans, combined loan-to-value ratios at origination, in excess of 100%.
The "LOAN-TO-VALUE RATIO" of a mortgage loan at any time is the ratio of the
principal balance of such mortgage loan at the date of determination to (a) in
the case of a purchase, the lesser of the sale price of the mortgaged property
and its appraised value at the time of sale or (b) in the case of a refinancing
or modification, the appraised value of the mortgaged property at the time of
the refinancing or modification. The "COMBINED LOAN-TO-VALUE RATIO" of a
mortgage loan at any time is the ratio of the principal balance of the
second-lien mortgage loan, together with the outstanding balance of the related
first-lien mortgage loan, at the date of determination to (a) in the case of a
purchase, the lesser of the sale price of the mortgaged property and its
appraised value at the time of sale or (b) in the case of a refinancing or
modification, the appraised value of the mortgaged property at the time of the
refinancing or modification.

     Approximately 0.90% of the mortgage loans in the final mortgage loan pool
were more than 30 days but less than 60 days Delinquent with respect to their
scheduled monthly payments.

     Approximately 92.51% of the mortgage loans are fully amortizing, and
approximately 7.49% of the mortgage loans are balloon mortgage loans that have
substantial principal payments due on their stated maturity dates. Approximately
25.01% of the mortgage loans are interest-only for a period of time.

PREPAYMENT PREMIUMS

     Approximately 76.36% of the mortgage loans provide for payment by the
borrower of a prepayment premium (each, a "PREPAYMENT PREMIUM") in connection
with certain full or partial prepayments of principal. Generally, each such
mortgage loan provides for payment of a Prepayment Premium in connection with
certain voluntary, full or partial prepayments made within the period of time
specified in the related mortgage note, ranging from one year to three years
from the date of origination of such mortgage loan, or the penalty period, as
described in this prospectus supplement. The amount of the applicable Prepayment
Premium, to the extent permitted under applicable federal or state law, is as
provided in the related mortgage note. Generally, this amount is equal to six
months interest on any amounts prepaid in excess of 20% of the original
principal balance of the related mortgage loan during any 12-month period during
the applicable penalty period. No mortgage loan imposes a Prepayment Premium for
a term in excess of three years. Prepayment Premiums collected from borrowers
will be paid to the holders of the Class P certificates and will not be
available for payment to the offered certificates.

     The applicable servicer may waive (or permit a subservicer to waive) a
Prepayment Premium in accordance with the pooling and servicing agreement if (i)
such waiver relates to a default or reasonably foreseeable default and would, in
the applicable servicer's reasonable judgment, maximize recoveries on the
related mortgage loan, (ii) the Prepayment Premium may not be collected under
applicable federal, state or local law or regulation, or (iii) the collection of
the Prepayment Premium would be considered "predatory" pursuant to written
guidance published or issued by any applicable federal, state or local
regulatory authority acting in its official capacity and having jurisdiction
over such matters.


                                      S-21



ADJUSTABLE RATE MORTGAGE LOANS

     All of the adjustable rate mortgage loans provide for semi-annual
adjustment of the related interest rate based on the Loan Index (as described
below under "--The Index") as specified in the related mortgage note, and for
corresponding adjustments to the monthly payment amount, in each case on each
applicable adjustment date (each such date, an "ADJUSTMENT DATE").

     The first adjustment of the interest rates for approximately 0.01% of the
adjustable rate mortgage loans will occur after an initial period of
approximately six months following origination, in the case of approximately
93.28% of the adjustable rate mortgage loans, approximately two years following
origination (the "2/28 ADJUSTABLE RATE MORTGAGE LOANS"), in the case of
approximately 4.52% of the adjustable rate mortgage loans, approximately three
years following origination (the "3/27 ADJUSTABLE RATE MORTGAGE LOANS") or in
the case of approximately 2.19% of the adjustable rate mortgage loans,
approximately five years following origination (the "5/25 ADJUSTABLE RATE
MORTGAGE LOANS").

     On each Adjustment Date for an adjustable rate mortgage loan, the interest
rate will be adjusted to equal the sum, rounded generally to the nearest
multiple of 1/8% of the Loan Index and a fixed percentage amount (the "GROSS
MARGIN"), provided, that, in the substantial majority of cases, the interest
rate on each such adjustable rate mortgage loan will not increase or decrease by
more than a fixed percentage (ranging from 1.000% to 2.000%) specified in the
related mortgage note (the "PERIODIC CAP") on any related Adjustment Date,
except in the case of the first such Adjustment Date, and will not exceed a
specified maximum interest rate over the life of such mortgage loan (the
"MAXIMUM RATE") or be less than a specified minimum interest rate over the life
of such mortgage loan (the "MINIMUM RATE"). The interest rate generally will not
increase or decrease on the first Adjustment Date by more than a fixed
percentage specified in the related mortgage note (the "INITIAL CAP"); the
Initial Caps range from 1.000% to 5.000% for the adjustable rate mortgage loans.
Effective with the first monthly payment due on each adjustable rate mortgage
loan after each related Adjustment Date or, with respect to the adjustable rate,
interest-only mortgage loans - which have initial periods in which payments of
only interest are required to be made - following the interest-only period, the
monthly payment amount will be adjusted to an amount that will amortize fully
the outstanding principal balance of the related mortgage loan over its
remaining term, and pay interest at the interest rate as so adjusted. Due to the
application of the Initial Caps, Periodic Caps, and Maximum Rates, the interest
rate on each such adjustable rate mortgage loan, as adjusted on any related
Adjustment Date, may be less than the sum of the Loan Index and the related
Gross Margin, rounded as described in this prospectus supplement. See "--The
Index" below. The adjustable rate mortgage loans generally do not permit the
related borrowers to convert their adjustable interest rate to a fixed interest
rate.

THE INDEX

     The index used in determining the interest rates of the adjustable rate
mortgage loans is the average of the interbank offered rates for six-month
United States dollar deposits in the London market, calculated as provided in
the related mortgage note (the "LOAN INDEX"), as most recently available either
as of (1) the first business day occurring in a specified period of time prior
to such Adjustment Date, (2) the first business day of the month preceding the
month of such Adjustment Date or (3) the last business day of the second month
preceding the month in which such Adjustment Date occurs, as specified in the
related mortgage note. In the event that the Loan Index becomes unavailable or
otherwise unpublished, the servicer will select a comparable alternative index
over which it has no direct control and which is readily verifiable.

UNDERWRITING GUIDELINES

     WMC Mortgage Corp.

     Approximately 36.78% of the mortgage loans were acquired from WMC Mortgage
Corp. ("WMC") (which in turn acquired them from brokers and correspondent
lenders) under the following guidelines.

     General. The information set forth in the following paragraphs has been
provided by WMC and relates solely to the mortgage loans acquired from WMC. None
of the depositor, the underwriters, the servicers, the custodians, the trustee,
or any other person makes any representation as to the accuracy or completeness
of such information.


                                      S-22



     WMC is a mortgage banking company incorporated in the State of California.
Established in 1955, WMC has developed a national mortgage origination
franchise, with special emphasis on originating single-family, alternative
non-prime mortgage loans in each of the regions in which it competes. WMC
historically originated both prime-quality mortgage loans and non-prime-quality
mortgage loans. WMC sold its prime mortgage loan origination business in 1998
and originates prime mortgage loans only on a very limited basis. WMC was owned
by a subsidiary of Weyerhaeuser Company until May 1997 when it was sold to WMC
Finance Co., a company owned principally by affiliates of a private investment
firm. On June 14, 2004, GE Consumer Finance acquired WMC Finance Co.

     Until March 2000, WMC originated mortgage loans through both wholesale and
retail channels, with wholesale originations accounting for approximately 85% of
total origination volume prior to March 2000. As of March 2000, WMC changed its
business model to underwrite and process 100% of its loans on the Internet via
"WMC Direct" resulting in a substantial reduction in employees, underwriting
centers and closing centers, and the elimination of all retail branches. In
April 2005, WMC's headquarters relocated to Burbank, California from Woodland
Hills, California. A majority of its business operations are presently conducted
at Burbank. WMC also has nine (9) regional offices in Dallas, Texas, Orangeburg,
New York, Costa Mesa, California, San Ramon, California, Woodland Hills,
California, Jacksonville, Florida, Woburn Massachusetts, Schaumburg, Illinois,
and Bellevue, Washington. WMC's originations come primarily through its broker
relationships. As of October 15, 2005, WMC had approximately 2532 employees,
including approximately 665 business development representatives and associates
who are responsible for recruiting and managing the independent broker network.

     Underwriting Standards. The mortgage loans have been either (i) originated
generally in accordance with the underwriting guidelines established by it
(collectively, the "WMC UNDERWRITING GUIDELINES") or (ii) purchased by WMC after
re-underwriting the mortgage loans generally in accordance with the WMC
Underwriting Guidelines. WMC also originates certain other mortgage loans that
are underwritten to the guidelines of specific investors, which mortgage loans
are not included among those sold to the trust as described herein. The WMC
Underwriting Guidelines are primarily intended to (a) determine that the
borrower has the ability to repay the mortgage loan in accordance with its terms
and (b) determine that the related mortgaged property will provide sufficient
value to recover the investment if the borrower defaults. On a case-by-case
basis WMC may determine that, based upon compensating factors, a prospective
mortgagor not strictly qualifying under the underwriting risk category or other
guidelines described below warrants an underwriting exception. Compensating
factors may include, but are not limited to, low debt-to-income ratio ("DEBT
RATIO"), good mortgage payment history, an abundance of cash reserves, excess
disposable income, stable employment and time in residence at the applicant's
current address. It is expected that a substantial number of the mortgage loans
to be included in the trust will represent such underwriting exceptions.

     On July 15, 2005 WMC launched a program called "WMC Select." Using new
credit matrices, WMC Select allows a borrower to choose loan features (such as
rate, term, prepayment options, and other important features) based on the
borrower's mortgage/housing history, credit depth, loan-to-value ratio ("LTV")
and Debt Ratio. WMC Select allows WMC greater flexibility in qualifying the
borrower for a loan since the borrower selects the loan features most important
to him.

     The mortgage loans in the trust will fall within the following
documentation categories established by WMC: Full Documentation,
Full-Alternative Documentation, Limited Documentation, Lite Documentation,
Stated Income Documentation and Stated Income/Verified Assets (Streamlined)
Documentation. In addition to single-family residences, certain of the mortgage
loans will have been underwritten (in many cases, as described above, subject to
exceptions for compensating factors) in accordance with programs established by
WMC for the origination of mortgage loans secured by mortgages on condominiums,
vacation and second homes, manufactured housing, two- to four-family properties
and other property types. In addition, WMC has established specific parameters
for jumbo loans, which are designated in the WMC Underwriting Guidelines as
mortgage loans with original principal balances in excess of $650,000 ($850,000
under WMC Select). However, WMC sometimes increases the original principal
balance limits if borrowers meet other compensating credit factors.

     Under the WMC Underwriting Guidelines, WMC verifies the loan applicant's
eligible sources of income for all products, calculates the amount of income
from eligible sources indicated on the loan application, reviews the credit and
mortgage payment history of the applicant and calculates the Debt Ratio to
determine the applicant's ability to repay the loan, and reviews the mortgaged
property for compliance with the WMC Underwriting Guidelines. The


                                      S-23



WMC Underwriting Guidelines are applied in accordance with a procedure which
complies with applicable federal and state laws and regulations and require,
among other things, (1) an appraisal of the mortgaged property which conforms to
Uniform Standards of Professional Appraisal Practice and (2) an audit of such
appraisal by a WMC-approved appraiser or by WMC's in-house collateral auditors
(who may be licensed appraisers), which audit may in certain circumstances
consist of a second appraisal, a field review, a desk review or an automated
valuation model.

     The WMC Underwriting Guidelines permit mortgage loans with LTVs and CLTVs
(in the case of mortgaged properties which secure more than one mortgage loan)
of up to 100% (which is subject to reduction depending upon credit-grade, loan
amount and property type). In general, loans with greater documentation
standards are eligible for higher LTV and CLTV limits across all risk
categories. Under the WMC Underwriting Guidelines, cash out on refinance
mortgage loans is generally available, but the amount is restricted for C grade
loans.

     All mortgage loans originated or purchased under the WMC Underwriting
Guidelines are based on loan application packages submitted through mortgage
brokerage companies or on loan files (which include loan application
documentation) submitted by correspondents. Loan application packages submitted
through mortgage brokerage companies, containing in each case relevant credit,
property and underwriting information on the loan request, are compiled by the
applicable mortgage brokerage company and submitted to WMC for approval and
funding. The mortgage brokerage companies receive a portion of the loan
origination fee charged to the mortgagor at the time the loan is made and/or a
yield-spread premium for services provided to the borrower. No single mortgage
brokerage company accounts for more than 3%, measured by outstanding principal
balance, of the mortgage loans originated by WMC.

     The WMC Underwriting Guidelines require that the documentation accompanying
each mortgage loan application include, among other things, a tri-merge credit
report on the related applicant from a credit reporting company aggregator. The
report typically contains information relating to such matters as credit history
with local and national merchants and lenders, installment debt payments and any
record of defaults, bankruptcy, repossession, suits or judgments. In most
instances, WMC obtains a tri-merge credit score independent from the mortgage
loan application from a credit reporting company aggregator. In the case of
purchase money mortgage loans, WMC generally validates the source of funds for
the down payment. In the case of mortgage loans originated under the Full
Documentation category, the WMC Underwriting Guidelines require documentation of
income (which may consist of (1) a verification of employment form covering a
specified time period which varies with LTV, (2) two most recent pay stubs and
one or two years of tax returns or W-2s, (3) verification of deposits and/or (4)
bank statements) and telephonic verification. Under the Full-Alternative
Documentation category, only two years of bank statements are required
(depending upon the LTV) and telephonic verification of employment, under the
Limited Documentation category only 12 months of bank statements (or a W-2 for
the most current year and a current pay stub) are required, and under the Lite
Documentation category only six months of bank statements (or a current pay stub
covering the six month period) are required. For mortgage loans originated under
the Stated Income/Verified Assets (Streamlined) Documentation category, WMC
requires verification of funds equal to two months of principal, interest, taxes
and insurance, sourced and seasoned for at least sixty days. In the case of
mortgage loans originated under the Stated Income Documentation and Stated
Income/Verified Assets (Streamlined) Documentation categories, the WMC
Underwriting Guidelines require (1) that income be stated on the application,
accompanied by proof of self employment in the case of self-employed
individuals, (2) that a WMC pre-funding auditor conduct telephonic verification
of employment, or in the case of self-employed individuals, telephonic
verification of business line and (3) that stated income be consistent with type
of work listed on the application.

     The general collateral requirements in the WMC Underwriting Guidelines
specify that a mortgaged property not have a condition rating of lower than
"average." Deferred maintenance costs may generally not exceed $1,500. Each
appraisal includes a market data analysis based on recent sales of comparable
homes in the area. The general collateral requirements in the WMC Underwriting
Guidelines specify conditions and parameters relating to zoning,
land-to-improvement ratio, special hazard zones, neighborhood property value
trends, whether the property site is too isolated, whether the property site is
too close to commercial businesses, whether the property site is rural, city or
suburban, whether the property site is typical for the neighborhood in which it
is located and whether the property site is sufficient in size and shape to
support all improvements.

     The WMC Underwriting Guidelines are less stringent than the standards
generally acceptable to Fannie Mae and Freddie Mac with regard to the
mortgagor's credit standing, Debt Ratios, documentation programs, and in certain
other respects. Mortgagors who qualify under the WMC Underwriting Guidelines may
have payment


                                      S-24



histories and Debt Ratios that would not satisfy Fannie Mae and Freddie Mac
underwriting guidelines and may have a record of major derogatory credit items
such as outstanding judgments or prior bankruptcies. The WMC Underwriting
Guidelines establish the maximum permitted LTV for each loan type based upon
these and other risk factors.

     WMC requires that mortgage loans have title insurance (which can be a short
form title insurance policy for some piggyback second lien mortgage loans
acquired from correspondent lenders) and be secured by liens on real property.
Some second lien mortgage loans purchased from correspondent lenders and which
have an original principal balance of $50,000 or less do not have title
insurance. WMC also requires that fire and extended coverage casualty insurance
be maintained on the mortgaged property in an amount equal to the greater of
full replacement or the amount of all mortgage liens on such mortgaged property.
In addition, flood insurance is obtained where applicable and a tax service is
used to monitor the payment of property taxes on all loans.

     Risk Categories. Under the WMC Underwriting Guidelines, various risk
categories are used to grade the likelihood that the mortgagor will satisfy the
repayment conditions of the mortgage loan. These risk categories establish the
maximum permitted LTV, maximum loan amount and the allowed use of loan proceeds
given the borrower's mortgage payment history, the borrower's consumer credit
history, the borrower's liens/charge-offs/bankruptcy history, the borrower's
Debt Ratio, the borrower's use of proceeds (purchase or refinance), the
documentation type and other factors. In general, higher credit risk mortgage
loans are graded in categories that require lower Debt Ratios and permit more
(or more recent) major derogatory credit items such as outstanding judgments or
prior bankruptcies. Tax liens are not considered in determining risk category
(but must be paid off or subordinated by the taxing authority in all
circumstances); and derogatory medical collections are not considered in
determining risk category and are not required to be paid off. The WMC
Underwriting Guidelines specify the following risk categories and associated
criteria for grading the potential likelihood that an applicant will satisfy the
repayment obligations of a mortgage loan. However, as described above, the
following are guidelines only, and exceptions are made on a case-specific basis.
In addition, variations of the following criteria are applicable under the
programs established by WMC for the origination of jumbo loans in excess of
$650,000 ($850,000 under WMC Select) and for the origination of mortgage loans
secured by mortgages on condominiums, vacation and second homes, manufactured
housing and two- to four-family properties. Jumbo loans are originated under all
documentation programs to borrowers with minimum Credit Scores of 620 (600 under
WMC Select), a maximum Debt Ratio of 50% and who satisfy other requirements as
set forth in the WMC Underwriting Guidelines. WMC sometimes has special loan
programs which increase the maximum principal balance limit for jumbo loans
provided the borrowers meet other credit criteria.

     Risk Category "AA".

     Maximum loan amount:

     o    $650,000 ($850,000 under WMC Select) for Full Documentation,
          Full-Alternative Documentation, and Limited Documentation
          (owner-occupied mortgaged property);

     o    $550,000 ($850,000 under WMC Select) for Lite Documentation
          (owner-occupied mortgaged property);

     o    $500,000 ($850,000 under WMC Select) for Stated Income Documentation
          (Self-Employed) and Stated Income Documentation (Wage Earner)
          (owner-occupied mortgaged property);

     o    $550,000 ($700,000 under WMC Select) for Full Documentation and
          Full-Alternative Documentation (non-owner-occupied mortgaged
          property);

     o    $500,000 ($650,000 under WMC Select) for Limited Documentation
          (non-owner-occupied mortgaged property);

     o    $450,000 ($650,000 under WMC Select) for Lite Documentation
          (non-owner-occupied mortgaged property); and

     o    $400,000 for Stated Income Documentation (Self-Employed) and Stated
          Income (Wage Earner) Documentation (non-owner-occupied mortgaged
          property).


                                      S-25



     o    WMC Select is not available for non-owner-occupied mortgaged
          properties under the Stated Income Documentation program.

     Mortgage payment history: No delinquency during the preceding 12 months.

     Consumer credit history: Minimum Credit Score of 640 (500 for WMC Select),
minimum 2 year credit history with activity on at least one trade account in the
last 12 months.

     Liens/charge-offs: If any individual derogatory credit item, judgment, or
state and federal lien is over $5,000, including collections and charge-offs,
and is dated within the 24 months prior to the date that the credit report is
pulled, such item, judgment or lien must be paid (or $10,000 with a Credit Score
of 660 or above). All adverse items on title must be paid at or prior to
closing.

     Bankruptcy: Permitted if discharged two years or more prior to loan
application (for borrowers with a Credit Score above 660, a shorter bankruptcy
seasoning period is allowed). Under WMC Select, a prior bankruptcy is permitted
if it was discharged 12 months or more prior to loan application and the LTV of
the mortgage loan will be 85% or less. Under WMC Select, a prior bankruptcy is
permitted if it was discharged 18 months or more prior to loan application and
the LTV of the mortgage loan will be more than 85%.

     Notice of default ("NOD")/foreclosures: Permitted if discharged or cured
two years or more prior to loan application. Under WMC Select, a prior NOD or
foreclosure is permitted if it was discharged 12 months or more prior to loan
application and the LTV of the mortgage loan will be 85% or less. Under WMC
Select, a prior NOD or foreclosure is permitted if it was discharged 18 months
or more prior to loan application and the LTV of the mortgage loan will be more
than 85%.

     Maximum LTV:

     o    100% for Full Documentation and Full-Alternative Documentation with a
          maximum loan amount of $500,000 and a Credit Score of 620 and above
          (owner-occupied mortgaged property);

     o    100% for Limited Documentation, Lite Documentation and Express
          Documentation with a maximum loan amount of $333,700 ($337,000 for WMC
          Select) and a Credit Score of 640 (500 and above for WMC Select) and
          above (owner-occupied mortgaged property);

     o    100% for Stated Income Documentation (Self-Employed) and Stated Income
          Documentation (Wage Earner) with a maximum loan amount of $333,700
          ($337,000 for WMC Select) and a Credit Score of 660 and above
          (owner-occupied mortgaged property);

     o    95% for Full Documentation, Full-Alternative Documentation, Limited
          Documentation and Lite Documentation with a maximum loan amount of
          $650,000 ($700,000 for WMC Select) and a minimum Credit Score of 640
          (owner-occupied mortgaged property);

     o    95% for Stated Income Documentation (Self-Employed) and 80% for Stated
          Income Documentation (Wage Earner) with a maximum loan amount of
          $500,000 ($700,000 for WMC Select) and a minimum Credit Score of 640
          (500 and above for WMC Select) (owner-occupied mortgaged property);

     o    90% for Full Documentation and Full-Alternative Documentation
          (non-owner-occupied mortgaged property);

     o    85% for Limited Documentation (non-owner-occupied mortgaged property);
          and

     o    80% (85% for WMC Select for Lite Documentation) for Lite Documentation
          and Stated Income Documentation (Self-Employed).

     o    Stated Income Documentation (Wage Earner) is not available on
          non-owner-occupied mortgaged property.


                                      S-26



     o    WMC Select is not available for non-owner-occupied mortgaged
          properties under the Stated Income Documentation program.

     Maximum debt ratio: Limited to 55% for all documentation types except
Stated Income Documentation, which is limited to 50%.

     Risk Category "A".

     Maximum loan amount:

     o    $650,000 ($850,000 for WMC Select) for Full Documentation and
          Full-Alternative Documentation (owner-occupied mortgaged property);

     o    $550,000 ($850,00 for WMC Select) for Limited Documentation
          (owner-occupied mortgaged property);

     o    $500,000 ($850,000 for WMC Select) for Lite Documentation
          (owner-occupied mortgaged property);

     o    $450,000 ($850,000 for WMC Select) for Stated Income Documentation
          (Self-Employed) and Stated Income Documentation (Wage Earner)
          (owner-occupied mortgaged property);

     o    $375,000 ($650,000 for WMC Select) for Full Documentation and
          Full-Alternative Documentation (non-owner-occupied mortgaged
          property);

     o    $325,000 ($600,000 for WMC Select) for Limited Documentation
          (non-owner-occupied mortgaged property);

     o    $300,000 ($600,000 for WMC Select) for Lite Documentation,
          non-owner-occupied mortgaged property (non-owner-occupied mortgaged
          property); and

     o    $200,000 for Stated Income Documentation (Self-Employed)
          (non-owner-occupied mortgaged property).

     o    Stated Income (Wage Earner) Documentation is not permitted for
          non-owner-occupied mortgaged property.

     Mortgage payment history: Not more than one 30-day delinquency during the
preceding 12 months, and no 60-day delinquencies during the preceding 12 months
(no 30-day delinquencies during preceding 12 months permitted for LTV of 95% or
greater). For WMC Select, not more than one 30-day delinquency during the
preceding 12 months, and no 60-day delinquencies during the preceding 12 months
(no 30-day delinquencies during preceding 12 months permitted for a LTV of 90%
or greater).

     Consumer credit history: Minimum Credit Score of 600 (500 for WMC Select),
minimum 2 year credit history with activity on at least one trade account in the
last 12 months. For loans with a LTV over 90%, at least three reported
tradelines with one open account must be active in the last 12 months.

     Liens/charge-offs: If any individual derogatory credit item, judgment, or
state and federal lien is over $5,000, including collections and charge-offs,
and is dated within the 24 months prior to the date that the credit report is
pulled, such item, judgment or lien must be paid (or $10,000 with a Credit Score
of 660 or above). All adverse items on title must be paid at or prior to
closing.

     Bankruptcy: Permitted if discharged two years or more prior to loan
application (for borrowers with a Credit Score above 660, a shorter bankruptcy
seasoning period is permitted). Under WMC Select, a prior bankruptcy is
permitted if it was discharged 12 months or more prior to loan application and
the LTV of the mortgage loan will be 85% or less. Under WMC Select, a prior
bankruptcy is permitted if it was discharged 18 months or more prior to loan
application and the LTV of the mortgage loan will be more than 85%.

     NODs/foreclosures: Permitted if discharged or cured two years or more prior
to loan application. Under WMC Select, a prior NOD or foreclosure is permitted
if it was discharged 12 months or more prior to loan application and


                                      S-27



the LTV of the mortgage loan will be 85% or less. Under WMC Select, a prior NOD
or foreclosure is permitted if it was discharged 18 months or more prior to loan
application and the LTV of the mortgage loan will be more than 85%.

     Maximum LTV:

     o    95% (90% for WMC Select) for Full Documentation, Full-Alternative
          Documentation and Limited Documentation, (owner-occupied mortgaged
          property);

     o    90% for Lite Documentation, Stated Income Documentation
          (Self-Employed) (owner-occupied mortgaged property);

     o    80% (75% for WMC Select) Stated Income Documentation (Wage Earner)
          (owner-occupied mortgaged property);

     o    85% for Full Documentation, Express Documentation, Full-Alternative
          Documentation and Limited Documentation (non-owner-occupied mortgaged
          property);

     o    80% for Lite Documentation (non-owner-occupied mortgaged property);
          and

     o    75% for Stated Income Documentation (Self-Employed)
          (non-owner-occupied mortgaged property).

     o    Stated Income Documentation (Wage Earner) is not permitted on
          non-owner-occupied mortgaged property.

     o    WMC Select is not available for non-owner-occupied mortgaged
          properties under the Stated Income Documentation program.

     Maximum debt ratio: Limited to 55% (50% for Stated Income Documentation).

     Risk Category "A-".

     Maximum loan amount:

     o    $650,000 ($550,000 for WMC Select) for Full Documentation,
          Full-Alternative Documentation (owner-occupied mortgaged property);

     o    $475,000 ($550,000 for WMC Select) for Limited Documentation
          (owner-occupied mortgaged property);

     o    $450,000 ($550,000 for WMC Select) for Lite Documentation
          (owner-occupied mortgaged property);

     o    $400,000 for Stated Income Documentation (Self-Employed) and Stated
          Income Documentation (Wage Earner) (owner-occupied mortgaged
          property);

     o    $350,000 ($475,000 for WMC Select) for Full Documentation and
          Full-Alternative Documentation (non-owner-occupied mortgaged
          property);

     o    $325,000 ($425,000 for WMC Select) for Limited Documentation
          (non-owner-occupied mortgaged property);

     o    $300,000 ($425,000 for WMC Select) for Lite Documentation
          (non-owner-occupied mortgaged property); and

     o    $200,000 for Stated Income Documentation (Self-Employed)
          (non-owner-occupied mortgaged property).

     o    WMC Select is not available for non-owner-occupied mortgaged
          properties under the Stated Income Documentation program.


                                      S-28



     Mortgage payment history: Not more than two 30-day delinquencies during the
preceding 12 months (a rolling 30-day delinquency counts as only one such
delinquency). No 30-day delinquencies permitted for LTVs of 90% or higher. For
WMC Select, not more than two 30-day delinquencies during the preceding 12
months, and no 60-day delinquencies during the preceding 12 months for a
mortgage loan with a LTV of 90% or greater.

     Consumer credit history: Minimum Credit Score of 580 (500 for WMC Select);
minimum 2 year credit history with activity on at least one trade account in the
last 12 months.

     Liens/charge-offs: If any individual derogatory credit item, judgment, or
state and federal lien is over $5,000, including collections and charge-offs,
and is dated within the 12 months prior to the date that the credit report is
pulled, such item, judgment or lien must be paid (or $10,000 with a Credit Score
of 660 or above). All adverse items on title must be paid at or prior to
closing.

     Bankruptcy: Permitted if discharged two years or more prior to loan
application (for borrowers with a Credit Score above 660, a shorter bankruptcy
seasoning period is allowed).

     NODs/foreclosures: Permitted if discharged or cured two years or more prior
to application.

     Maximum LTV:

     o    95% (90% for WMC Select) for Full Documentation and Full-Alternative
          Documentation (owner-occupied mortgaged property);

     o    95% (90% for WMC Select) for Limited Documentation (owner-occupied
          mortgaged property);

     o    90% (90% for WMC Select also) for Lite Documentation (owner-occupied
          mortgaged property);

     o    80% (80% for WMC Select also) for Stated Income Documentation
          (Self-Employed) (owner-occupied mortgaged property);

     o    70% (70% for WMC Select also) for Stated Income Documentation (Wage
          Earner) (owner-occupied mortgaged property);

     o    80% (80% for WMC Select also) for Full Documentation, Full-Alternative
          Documentation and Limited Documentation (non-owner-occupied mortgaged
          property);

     o    80% (80% for WMC Select also) for Lite Documentation
          (non-owner-occupied mortgaged property); and

     o    75% for Stated Income Documentation (Self-Employed)
          (non-owner-occupied mortgaged property).

     o    Stated Income Documentation (Wage Earner) is not permitted for
          non-owner-occupied mortgaged property.

     o    WMC Select is not available for non-owner-occupied mortgaged
          properties under the Stated Income Documentation program.

     Maximum debt ratio: Limited to 50%.

     Risk Category "B+".

     Maximum loan amount:

     o    $650,000 ($525,000 for WMC Select) for Full Documentation, Express
          Documentation, and Full-Alternative Documentation (owner-occupied
          mortgaged property);

     o    $425,000 ($525,000 for WMC Select) for Limited Documentation
          (owner-occupied mortgaged property);

     o    $375,000 ($525,000 for WMC Select) for Lite Documentation
          (owner-occupied mortgaged property);


                                      S-29



     o    $350,000 ($525,000 for WMC Select) for Stated Income Documentation
          (Self Employed) and Stated Income Documentation (Wage Earner)
          (owner-occupied mortgaged property);

     o    $300,000 ($525,000 for WMC Select) for Full Documentation and
          Full-Alternative Documentation (non-owner-occupied mortgaged
          property);

     o    $250,000 ($525,000 for WMC Select) for Limited Documentation
          (non-owner-occupied mortgaged property);

     o    $225,000 ($525,000 for WMC Select) for Lite Documentation
          (non-owner-occupied mortgaged property); and

     o    $200,000 for Stated Income Documentation (Self-Employed)
          (non-owner-occupied mortgaged property).

     o    Stated Income Documentation (Wage Earner) is not permitted for
          non-owner-occupied mortgaged property.

     o    WMC Select is not available for non-owner-occupied mortgaged
          properties under the Stated Income Documentation program.

     Mortgage payment history: Not more than three 30-day delinquencies during
the preceding 12 months (a rolling 30-day delinquency counts as only one such
delinquency). For any loan with an LTV of 85% or greater, no 30-day
delinquencies during the preceding 12 months is permitted. For WMC Select, not
more than three 30-day delinquencies during the preceding 12 months, and no
60-day delinquencies during the preceding 12 months for a mortgage loan with a
LTV of 85% or greater.

     Consumer credit history: Minimum Credit Score of 550 (500 for WMC Select),
minimum 2 year credit history with activity on at least one trade account in the
last 12 months.

     Liens/charge-offs: If any individual derogatory credit item, judgment, or
state and federal lien is over $5,000, including collections and charge-offs,
and is dated within the 12 months prior to the date that the credit report is
pulled, such item, judgment or lien must be paid (or $10,000 with a Credit Score
of 660 or above). All adverse items on title must be paid at or prior to
closing.

     Bankruptcy: Permitted if discharged 18 months or more prior to loan
application.

     NODs/foreclosures: Permitted if cured or discharged 18 months or more prior
to application.

     Maximum LTV:

     o    90% (85% for WMC Select) for Full Documentation, Full-Alternative
          Documentation, and Limited Documentation (owner-occupied mortgaged
          property);

     o    80% (85% for WMC Select) for Lite Documentation (owner-occupied
          mortgaged property);

     o    75% (75% for WMC Select also) for Stated Income Documentation
          (Self-Employed) (owner-occupied mortgaged property);

     o    70% (70% for WMC Select also) Stated Income Documentation (Wage
          Earner) (owner-occupied mortgaged property);

     o    75% (75% for WMC Select also) for Full Documentation, Full-Alternative
          Documentation and Limited Documentation (non-owner-occupied mortgaged
          property);

     o    70% (75% for WMC Select) for Lite Documentation (non-owner-occupied
          mortgaged property); and


                                      S-30



     o    65% for Stated Income Documentation and Stated Income/Verified Assets
          (Streamlined) Documentation (non-owner-occupied mortgaged property).

     o    WMC Select is not available for non-owner-occupied mortgaged
          properties under the Stated Income Documentation program.

     Maximum debt ratio: Limited to 50%.

     Risk Category "B".

     Maximum loan amount:

     o    $500,000 for Full Documentation and Full-Alternative Documentation
          (owner-occupied mortgaged property);

     o    $375,000 ($500,000 for WMC Select) for Limited Documentation
          (owner-occupied mortgaged property);

     o    $350,000 ($500,000 for WMC Select) for Lite Documentation
          (owner-occupied mortgaged property);

     o    $335,000 ($500,000 for WMC Select) for Stated Income Documentation
          (Self-Employed) (owner-occupied mortgaged property);

     o    $275,000 for Full Documentation and Full-Alternative Documentation
          (non-owner-occupied mortgaged property);

     o    $225,000 for Limited Documentation (non-owner-occupied mortgaged
          property); and

     o    $200,000 for Lite Documentation and Stated Income Documentation
          (Self-Employed) (non-owner-occupied mortgaged property).

     o    Stated Income Documentation (Wage Earner) is not permitted for owner
          or non-owner-occupied mortgaged property.

     o    WMC Select is not available for non-owner-occupied mortgaged
          properties under any documentation program.

     Mortgage payment history: One 60-day delinquency during the preceding 12
months. For WMC Select, not more than four 30-day delinquencies during the
preceding 12 months, and one 60-day delinquency during the preceding 12 months.

     Consumer credit history: Minimum Credit Score of 500 with a minimum credit
history of 2 years and minimum of one reported trade account with activity in
last 12 months (minimum score of 520 required for LTVs of 85%). For WMC Select,
the borrower must have a minimum Credit Score of 520 with a minimum credit
history of 2 years and a minimum of one reported trade account with activity in
last 12 months .

     Liens/charge-offs: If any individual derogatory credit item, judgment, or
state and federal lien is over $5,000, including collections and charge-offs,
and is dated within the 12 months prior to the date that the credit report is
pulled, such item, judgment or lien must be paid (or $10,000 with a Credit Score
of 660 or above). All adverse items on title must be paid at or prior to
closing.

     Bankruptcy: Permitted if discharged 12 months or more prior to loan
application.

     NODs/foreclosures: Permitted if cured or discharged 12 months or more prior
to loan application.

     Maximum LTV:


                                      S-31



     o    80% (80% for WMC Select also) for Full Documentation, Full-Alternative
          Documentation and Limited Documentation (85% maximum LTV if the
          borrower has no 60-day late payments on a mortgage loan in the
          preceding 12 months and a minimum Credit Score of 520) (owner-occupied
          mortgaged property);

     o    80% (80% for WMC Select also) for Lite Documentation (owner-occupied
          mortgaged property);

     o    75% for Stated Income Documentation (Self-Employed) only
          (owner-occupied mortgaged property);

     o    70% for Full Documentation, Full-Alternative Documentation and Limited
          Documentation (non-owner-occupied mortgaged property); and

     o    65% for Lite Documentation (non-owner-occupied mortgaged property).

     o    Stated Income Documentation (Self-Employed) and Stated Income
          Documentation (Wage Earner) are not available on non-owner-occupied
          mortgaged property.

     o    WMC Select is not available for non-owner-occupied mortgaged
          properties under any documentation program.

     Maximum debt ratio: Limited to 50%.

     Risk Category "C".

     Maximum Loan Amount:

     o    $500,000 ($350,000 for WMC Select) for Full Documentation and
          Full-Alternative Documentation (owner-occupied mortgaged property);

     o    $335,000 ($350,000 for WMC Select) for Limited Documentation, Lite
          Documentation and Stated Income Documentation (Self-Employed)
          (owner-occupied mortgaged property);

     o    $250,000 for Full Documentation and Full-Alternative Documentation
          (non-owner-occupied mortgaged property); and

     o    $200,000 for Limited Documentation and Lite Documentation
          (non-owner-occupied mortgaged property).

     o    No Stated Income Documentation (Wage Earner) or Stated Income/Verified
          Assets (Streamlined) Documentation program is available for
          non-owner-occupied mortgaged property.

     Mortgage payment history: No more than two 60-day delinquencies and one
90-day delinquency are allowed in the preceding 12 months (rolling 30-day lates
are accepted). For WMC Select, not more than two 60-day delinquencies during the
preceding 12 months or one 90-day delinquency are allowed in the preceding 12
months.

     Consumer credit history: Minimum Credit Score of 500 with 2 year credit
history and one reported trade account with activity in the last 12 months.

     Liens/charge-offs: If any individual derogatory credit item, judgment, or
state and federal lien is over $5,000, including collections and charge-offs,
and is dated within the 12 months prior to the date that the credit report is
pulled, such item, judgment or lien must be paid (or $10,000 with a Credit Score
of 660 or above). All adverse items on title must be paid at or prior to
closing.

     Bankruptcy: Permitted if discharged 12 months or more prior to loan
application.

     NODs/foreclosures: Permitted if discharged or cured 12 months or more prior
to loan application.

     Maximum LTV:


                                      S-32



     o    85% (80% for WMC Select) for Full Documentation, Full-Alternative
          Documentation and Limited Documentation (80% maximum LTV if the
          borrower has no 90-day late payments and no more than two 60-day late
          payments on a mortgage loan in the preceding 12 months)
          (owner-occupied mortgaged property);

     o    80% (80% for WMC Select also) for Lite Documentation (owner-occupied
          mortgaged property),

     o    75% for Stated Income Documentation (Self-Employed) (owner-occupied
          mortgaged property);

     o    70% for Full Documentation, Full-Alternative Documentation and Limited
          Documentation (non-owner-occupied mortgaged property); and

     o    60% for Lite Documentation (non-owner-occupied mortgaged property).

     o    No Stated Income Documentation (Wage Earner) or Stated Income/Verified
          Assets (Streamlined) Documentation program is available for
          non-owner-occupied mortgaged property.

     o    WMC Select is not available for non-owner-occupied mortgaged
          properties under any documentation program.

     Maximum debt ratio: Limited to 50%.

     The WMC Underwriting Guidelines described above are a general summary of
the WMC Underwriting Guidelines and do not purport to be a complete description
of the underwriting standards of WMC.

     Decision One Mortgage Company, LLC

     Approximately 36.13% of the mortgage loans were originated by Decision One
Mortgage Company, LLC under the following guidelines.

     General. The information set forth in the following paragraphs has been
provided by Decision One Mortgage Company, LLC ("DECISION ONE MORTGAGE") and
relates solely to the mortgage loans acquired from Decision One Mortgage. None
of the depositor, the underwriters, the servicers, the custodians, the trustee,
or any other person makes any representation as to the accuracy or completeness
of such information.

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

     Decision One Mortgage originates and purchases loans through its wholesale
network of 19,000 independent mortgage brokers and through its network of 22
branch offices located in 18 states. Loans are processed, underwritten and
closed through the branch network. For the twelve months ending December 31,
2004, Decision One Mortgage's wholesale division originated $12.6 billion in
mortgages, and 2005 through 2nd quarter was $9.898 billion. As of December 31,
2004, Decision One Mortgage employed 1,390 associates nationwide, and currently
employs 1,537.

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

     The Decision One Underwriting Guidelines are primarily intended to assess
the borrower's ability to repay the mortgage loan, to assess the value of the
mortgaged property and to evaluate the adequacy of the property as collateral
for the mortgage loan. All of the mortgage loans in the mortgage loan pool were
also underwritten with a


                                      S-33



view toward the resale of the mortgage loans in the secondary mortgage market.
While Decision One Mortgage's primary consideration in underwriting a mortgage
loan is the value of the mortgaged property, Decision One Mortgage also
considers, among other things, a mortgagor's credit history, repayment ability
and debt service to income ratio, as well as the type and use of the mortgaged
property.

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

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

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

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

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

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

Core


                                      S-34



     Our Core product is Decision One's all inclusive Alt-A offering and
traditional Sub Prime lending options.

          o    A+ grade offers Alt A product offerings and competitive pricing
               for high FICO borrowers.

          o    A through C grades provide lending options for the Sub Prime
               borrower with reductions in LTVs to offset FICO scores.

Portfolio Plus

     Portfolio Plus combines the best features Decision One offers with high LTV
and niche features.

          o    All credit grades targeted for the borrower with proven payment
               ability by requiring credit depth and limited slow pay mortgage.

          o    Matrix provides High LTV and Niche product solutions for
               borrowers.

General underwriting procedures and credit risk management

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

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

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

     o    Automated valuation tools to ensure collateral and integrity of the
          appraisal.

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

     Exceptions. As described above, the foregoing categories and criteria are
guidelines only. On a case by case basis, it may be determined that an applicant
warrants a debt service to income ratio exception, a pricing exception, a
loan-to-value ratio exception, an exception from certain requirements of a
particular risk category, etc. An exception may be allowed if the application
reflects compensating factors, such as: low loan-to-value ratio, pride of
ownership, a maximum of one 30-day late payment on all mortgage loans during the
last 12 months, stable employment, and longevity of current residence ownership.

     NC Capital Corporation

     Approximately 26.90% of the mortgage loans were originated by New Century
Mortgage Corporation, an affiliate of NC Capital Corporation ("NC CAPITAL"),
under the following underwriting guidelines.

     General. The information set forth in the following paragraphs has been
provided by NC Capital Corporation, and relates solely to the mortgage loans
acquired from NC Capital. None of the depositor, the underwriters, the
servicers, the master servicer, the securities administrator, the custodians,
the trustee, or any other person makes any representation as to the accuracy or
completeness of such information.

     New Century Mortgage Corporation transferred the mortgage loans to its
affiliate, NC Capital Corporation, which, in turn, sold the mortgage loans to an
affiliate of the depositor. New Century Mortgage Corporation is a wholly-owned
subsidiary of New Century Financial Corporation, a publicly traded company. New
Century Mortgage Corporation is a consumer finance and mortgage banking company
that originates, purchases, sells and services first-lien and second-lien
mortgage loans and other consumer loans. New Century Mortgage Corporation
emphasizes the origination of mortgage loans that are commonly referred to as
non-conforming "B&C" loans or subprime loans. New Century Mortgage Corporation
commenced lending operations on June 26, 1996. It is headquartered in Irvine,
California.


                                      S-35



     New Century Mortgage Corporation originates and purchases loans through its
wholesale network of approximately 40,000 independent mortgage brokers and
through its retail network of 73 sales offices operating in 29 states and 27
regional processing centers operating in 17 states. For the year ending March
31, 2005, New Century Mortgage Corporation's wholesale division originated $9.1
billion in mortgage loans and its retail division originated $1.2 billion in
mortgage loans. As of March 31, 2005, New Century Mortgage Corporation and its
affiliates employed 5,267 associates nationwide.

     Underwriting Standards. The mortgage loans originated or acquired by New
Century Mortgage Corporation, referred to in this section as the originator,
were done so in accordance with the underwriting guidelines established by it
(collectively, the "NEW CENTURY UNDERWRITING GUIDELINES"). The following is a
general summary of the New Century Underwriting Guidelines believed by the
depositor to have been generally applied, with some variation, by the
originator. This summary does not purport to be a complete description of the
underwriting standards of the New Century Mortgage Corporation.

     The New Century Underwriting Guidelines are primarily intended to assess
the borrower's ability to repay the mortgage loan, to assess the value of the
mortgaged property and to evaluate the adequacy of the property as collateral
for the mortgage loan. All of the mortgage loans in the mortgage pool were also
underwritten with a view toward the resale of the mortgage loans in the
secondary mortgage market. While the New Century Mortgage Corporation's primary
consideration in underwriting a mortgage loan is the value of the mortgaged
property, the New Century Mortgage Corporation also considers, among other
things, a mortgagor's credit history, repayment ability and debt
service-to-income ratio, as well as the type and use of the mortgaged property.
The mortgage loans, in most cases, bear higher rates of interest than mortgage
loans that are originated in accordance with Fannie Mae and Freddie Mac
standards, which is likely to result in rates of delinquencies and foreclosures
that are higher, and that may be substantially higher, than those experienced by
portfolios of mortgage loans underwritten in a more traditional manner. As a
result of the New Century Mortgage Corporation's underwriting criteria, changes
in the values of mortgaged properties may have a greater effect on the
delinquency, foreclosure and loss experience on the mortgage loans than these
changes would be expected to have on mortgage loans that are originated in a
more traditional manner. No assurance can be given that the values of the
related mortgaged properties have remained or will remain at the levels in
effect on the dates of origination of the related mortgage loans. In addition,
there can be no assurance that the value of a mortgaged property estimated in
any appraisal or review is equal to the actual value of that mortgaged property
at the time of that appraisal or review.

     The mortgage loans will have been originated in accordance with the New
Century Underwriting Guidelines. On a case by case basis, exceptions to the New
Century Underwriting Guidelines are made where compensating factors exist. It is
expected that a substantial portion of the mortgage loans in the mortgage pool
will represent these exceptions.

     Each applicant completes an application which includes information with
respect to the applicant's liabilities, income, credit history, employment
history and personal information. The New Century Underwriting Guidelines
require a credit report on each applicant from a credit reporting company. The
report typically contains information relating to matters such as credit history
with local and national merchants and lenders, installment debt payments and any
record of defaults, bankruptcies, repossessions or judgments. Mortgaged
properties that are to secure mortgage loans are appraised by qualified
independent appraisers. These appraisers inspect and appraise the subject
property and verify that the property is in acceptable condition. Following each
appraisal, the appraiser prepares a report which includes a market value
analysis based on recent sales of comparable homes in the area and, when deemed
appropriate, replacement cost analysis based on the current cost of constructing
a similar home. All appraisals are required to conform to the Uniform Standards
of Professional Appraisal Practice adopted by the Appraisal Standards Board of
the Appraisal Foundation and are on forms acceptable to Fannie Mae and Freddie
Mac. The New Century Underwriting Guidelines require a review of the appraisal
by a qualified employee of the New Century Mortgage Corporation or by an
appraiser retained by the New Century Mortgage Corporation. If the appraised
value of a mortgaged property as determined by a review is more than 7% but less
than 25% lower than the value as determined by the appraisal, then the New
Century Mortgage Corporation uses the value as determined by the review in
computing the loan-to-value ratio of the related mortgage loan. If the appraised
value of a mortgaged property as determined by a review is 25% or more lower
than the value as determined by the appraisal, then the New Century Mortgage
Corporation obtains a new appraisal from a different appraiser and repeats the
review process.


                                      S-36



     The mortgage loans were originated consistent with and generally conform to
the New Century Underwriting Guidelines' full documentation, limited
documentation and stated income documentation residential loan programs. Under
each of the programs, the New Century Mortgage Corporation reviews the
applicant's source of income, calculates the amount of income from sources
indicated on the loan application or similar documentation, reviews the credit
history of the applicant, calculates the debt service-to-income ratio to
determine the applicant's ability to repay the loan, reviews the type and use of
the property being financed, and reviews the property. In determining the
ability of the applicant to repay the loan, a qualifying rate has been created
under the New Century Underwriting Guidelines that generally is equal to the
interest rate on that loan. The New Century Underwriting Guidelines require that
mortgage loans be underwritten in a standardized procedure which complies with
applicable federal and state laws and regulations and requires the New Century
Mortgage Corporation's underwriters to be satisfied that the value of the
property being financed, as indicated by an appraisal and a review of the
appraisal, currently supports the outstanding loan balance. In general, the
maximum loan amount for mortgage loans originated under the programs is $500,000
(additional requirements may be imposed in connection with loans in excess of
$500,000). The New Century Underwriting Guidelines generally permit loans on one
to four family residential properties to have a loan-to-value ratio at
origination of up to 95% with respect to first liens loans. The maximum
loan-to-value ratio depends on, among other things, the purpose of the mortgage
loan, a borrower's credit history, home ownership history, mortgage payment
history or rental payment history, repayment ability and debt service-to-income
ratio, as well as the type and use of the property. With respect to mortgage
loans secured by mortgaged properties acquired by a mortgagor under a "lease
option purchase," the loan-to-value ratio of the related mortgage loan is based
on the lower of the appraised value at the time of origination of the mortgage
loan or the sale price of the related mortgaged property if the "lease option
purchase price" was set less than 12 months prior to origination and is based on
the appraised value at the time of origination if the "lease option purchase
price" was set 12 months or more prior to origination.

     The New Century Underwriting Guidelines require that the income of each
applicant for a mortgage loan under the full and limited documentation programs
be verified. The specific income documentation required for the New Century
Mortgage Corporation's various programs is as follows: under the full
documentation program, applicants usually are required to submit one written
form of verification from the employer of stable income for at least 12 months
for salaried employees and 24 months for self-employed applicants or for any
special program applicant with a credit score of less than 580; under the
limited documentation program, applicants usually are required to submit
verification of stable income for at least 6 months, such as 6 consecutive
months of complete personal checking account bank statements. Under the stated
income program, an applicant may be qualified based upon monthly income as
stated on the mortgage loan application if the applicant meets certain criteria.
All the foregoing programs require that, with respect to salaried employees,
there be a telephone verification of the applicant's employment. Verification of
the source of funds, if any, required to be deposited by the applicant into
escrow in the case of a purchase money loan is required.

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

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

     "AA" Risk. Under the "AA" risk category, the applicant must have a credit
score of 500, or greater, based on loan-to-value ratio and loan amount. Two or
more tradelines (one of which with 24 months history and no late payments), are
required for loan-to-value ratios above 90%. The borrower must have no late
mortgage payments within the last 12 months on an existing mortgage loan. No
bankruptcy may have occurred during the preceding two years for borrowers with a
credit score of less than 620; provided, however, that a Chapter 7 bankruptcy
for a borrower with a credit score in excess of 550 (or 580 under the stated
income documentation program) may have occurred as long as such bankruptcy is
discharged at least one day prior to funding of the loan. A maximum
loan-to-value ratio of 90% is permitted with respect to borrowers with Chapter 7
bankruptcy, which Chapter 7 bankruptcy is discharged at least one day prior to
loan funding. A borrower in Chapter 13 bankruptcy may discharge such bankruptcy
with the proceeds of the borrower's loan (any such loan may not exceed a 90%
loan-to-value ratio), provided that such borrower has a credit score of at least
550 (or 580 with respect to stated income documentation programs). No notice of
default filings or foreclosures (or submission of deeds in lieu of foreclosures)
may have


                                      S-37



occurred during the preceding two years. The mortgaged property must be in at
least average condition. A maximum loan-to-value ratio of 95%, is permitted for
a mortgage loan on a single family owner occupied or two unit property. A
maximum loan-to-value ratio of 90% is permitted for a mortgage loan on a
non-owner occupied property, an owner occupied high-rise condominium or a three
to four family residential property. The maximum loan-to-value ratio for rural,
remote or unique properties is 85%. The maximum combined loan-to-value ratio,
including any related subordinate lien, is 100%, for either a refinance loan or
a purchase money loan. The maximum debt service-to-income ratio is usually 50%
unless the loan-to-value ratio is reduced.

     "A+" Risk. Under the "A+" risk category, the applicant must have a credit
score of 500, or greater, based on loan-to-value ratio and loan amount. Two or
more tradelines (one of which with 24 months history and no late payments), are
required for loan-to-value ratios above 90%. A maximum of one 30 day late
payment within the last 12 months is acceptable on an existing mortgage loan. No
bankruptcy may have occurred during the preceding two years for borrowers with
credit scores of less than 640; provided, however, that a Chapter 7 bankruptcy
for a borrower with a credit score in excess of 550 (or 580 under the stated
income documentation program) may have occurred as long as such bankruptcy is
discharged at least one day prior to funding of the loan. A maximum
loan-to-value ratio of 90% is permitted with respect to borrowers with Chapter 7
bankruptcy, which Chapter 7 bankruptcy is discharged at least one day prior to
loan funding. A borrower in Chapter 13 bankruptcy may discharge such bankruptcy
with the proceeds of the borrower's loan (any such loan may not exceed a 90%
loan-to-value ratio), provided that such borrower has a credit score of at least
550 (or 580 with respect to stated income documentation programs). No notice of
default filings or foreclosures (or submission of deeds in lieu of foreclosures)
may have occurred during the preceding two years. The mortgaged property must be
in at least average condition. A maximum loan-to-value ratio of 95% (or 90% for
mortgage loans originated under the stated income documentation program), is
permitted for a mortgage loan on a single family owner occupied or two unit
property. A maximum loan-to-value ratio of 90% is permitted for a mortgage loan
on a non owner occupied property, an owner occupied high-rise condominium or a
three to four family residential property. The maximum loan-to-value ratio for
rural, remote or unique properties is 85%. The maximum combined loan-to-value
ratio, including any related subordinate lien, is 100%, for either a refinance
loan or a purchase money loan. The maximum debt service-to-income ratio is
usually 50% unless the loan-to-value ratio is reduced.

     "A-" Risk. Under the "A-" risk category, an applicant must have a credit
score of 500, or greater, based on loan-to-value ratio and loan amount. A
maximum of three 30 day late payment and no 60 day late payments within the last
12 months is acceptable on an existing mortgage loan. No bankruptcy may have
occurred during the preceding two years for borrowers with credit scores of less
than 660; provided, however, that a Chapter 7 bankruptcy for a borrower with a
credit score in excess of 550 (or 580 under the stated income documentation
program) may have occurred as long as such bankruptcy is discharged at least one
day prior to funding of the loan. A maximum loan-to-value ratio of 90% is
permitted with respect to borrowers with Chapter 7 bankruptcy, which Chapter 7
bankruptcy is discharged at least one day prior to loan funding. A borrower in
Chapter 13 bankruptcy may discharge such bankruptcy with the proceeds of the
borrower's loan (any such loan may not exceed a 90% loan-to-value ratio),
provided that such borrower has a credit score of at least 550 (or 580 with
respect to stated income documentation programs). The mortgaged property must be
in at least average condition. A maximum loan-to-value ratio of 90% (or 80% for
mortgage loans originated under the stated income documentation program), is
permitted for a mortgage loan on a single family owner occupied or two unit
property. A maximum loan-to-value ratio of 85% (or 75% for mortgage loans
originated under the stated income documentation program), is permitted for a
mortgage loan on a non-owner occupied property. A maximum loan-to-value ratio of
85% (or 75% for mortgage loans originated under the stated income documentation
program), is permitted for a mortgage loan on an owner occupied high-rise
condominium or a three to four family residential property. The maximum
loan-to-value ratio for rural, remote, or unique properties is 80%. The maximum
combined loan-to-value ratio, including any related subordinate lien, is 100%,
for a refinance loan and 100%, for a purchase money loan. The maximum debt
service-to-income ratio is usually 50% unless the loan-to-value ratio is
reduced.

     "B" Risk. Under the "B" risk category, an applicant must have a credit
score of 500, or greater, based on loan-to-value ratio and loan amount.
Unlimited 30 day late payments and a maximum of one 60 day late payment within
the last 12 months is acceptable on an existing mortgage loan. An existing
mortgage loan must be less than 90 days late at the time of funding of the loan.
No bankruptcy filings within the past 18 months or notice of default filings
within the last 18 months by the applicant may have occurred; provided, however,
that Chapter 7 bankruptcy for a borrower with a credit score in excess of 550
(or 580 under the stated income documentation program) may have


                                      S-38



occurred as long as such bankruptcy has been discharged at least one day prior
to funding of the loan. A maximum loan-to-value ratio of 85% is permitted with
respect to borrowers with a Chapter 7 bankruptcy, which Chapter 7 bankruptcy was
discharged at least one day prior to loan funding. A borrower in Chapter 13
bankruptcy may discharge such bankruptcy with the loan proceeds (such loans may
not exceed a 85% loan-to-value ratio), provided that such borrower has a credit
score of at least 550 (or 580 with respect to stated income documentation
programs). The mortgaged property must be in at least average condition. A
maximum loan-to-value ratio of 85% (or 75% for mortgage loans originated under
the stated income documentation program), is permitted for a mortgage loan on an
owner occupied detached property originated under the full documentation
program. A maximum loan-to-value ratio of 80% is permitted for a mortgage loan
on a non-owner occupied property, an owner occupied high-rise condominium or a
three to four family residential property (70% for a mortgage loan on a non
owner occupied property and 70% for a mortgage loan on an owner occupied
high-rise condominium or a three to four family residential property originated
under the stated income documentation program). The maximum loan-to-value ratio
for rural, remote or unique properties is 75%. The maximum combined
loan-to-value ratio, including any related subordinate lien, is 100%, for a
refinance loan and for a purchase money loan. The maximum debt service-to-income
ratio is usually 50%, unless the loan-to-value ratio is reduced.

     "C" Risk. Under the "C" risk category, an applicant must have a credit
score of 500, or greater, based on loan-to-value ratio and loan amount.
Unlimited 30 day and 60 day late payments and a maximum of one 90 day late
payment within the last 12 months is acceptable on an existing mortgage loan. An
existing mortgage loan must be less than 120 days late at the time of funding of
the loan. All bankruptcies must be discharged at least one day prior to funding
of the loan; provided, however, that Chapter 13 bankruptcies may be discharged
with loan proceeds.. The mortgaged property must be in average condition. In
most cases, a maximum loan-to-value ratio of 80% for a mortgage loan on a single
family, owner occupied or two unit property for a full documentation program
(70% for mortgage loans originated under the stated income documentation
program), is permitted. A maximum loan-to-value ratio of 75% is permitted for a
mortgage loan on a non-owner occupied property, an owner occupied high-rise
condominium or a three to four family residential property (65% for a mortgage
loan on a non owner occupied property, an owner occupied high-rise condominium
or a three to four family residential property originated under the stated
income documentation program). The maximum loan-to-value ratio for rural, remote
or unique properties is 65%. The maximum combined loan-to-value ratio, including
any related subordinate lien, is 85% for a refinance loan and for a purchase
money loan. The maximum debt service-to-income ratio is usually 50% unless the
loan-to-value ratio is reduced.

     "C-" Risk. Under the "C-" risk category, an applicant must have a credit
score of 500, or greater. A maximum of two 90 day late payments or one 120 day
late payment is acceptable on an existing mortgage loan. An existing mortgage
loan must be less than 150 days late at the time of funding of the loan. There
may be no current notice of default and all bankruptcies must be discharged at
least one day prior to funding of the loan; provided, however, that Chapter 13
bankruptcies may be discharged with loan proceeds. A maximum loan-to-value ratio
of 70% (55% for mortgage loans originated under the stated income documentation
program), is permitted for a mortgage loan on a single family owner occupied or
two unit property. A maximum loan-to-value ratio of 65% is permitted for a
mortgage loan on a non-owner occupied property, an owner occupied high-rise
condominium or a three to four family residential property (50% for a mortgage
loan on a non owner occupied property, an owner occupied high-rise condominium
or a three to four family residential property originated under the stated
income documentation program). Rural, remote or unique properties are not
allowed. The maximum combined loan-to-value ratio, including any related
subordinate lien, is 80% for a refinance loan and 80% for a purchase money loan.
The maximum debt service-to-income ratio is usually 55%.

     Special Programs. The New Century Mortgage Corporation originates loans
which it calls "special programs" to enable borrowers with higher credit scores
and good mortgage histories, the ability to obtain larger loan amounts or higher
loan-to-value ratios. Special programs extend loan-to-value ratios to a maximum
of 100%, and combined 80/20 (first/second) loan combinations to 100% CLTV and
loan amounts to $1,000,000 with higher minimum credit scores and paid-as-agreed
minimum tradeline requirements. No bankruptcy filing may have occurred during
the preceding two years for borrowers with credit scores less than 580 under the
full income documentation program, 600 under the limited documentation program,
or 620 under the stated income documentation program (Chapter 13 bankruptcies
may not be paid off with loan proceeds). No notice of default filings or
foreclosures (or submission of deeds in lieu of foreclosures) may have occurred
during the preceding two years. The mortgaged property must be in at least
average condition. The maximum combined loan-to-value ratio, including any
related subordinate lien, is


                                      S-39



100%, for either a refinance loan or a purchase money loan. The maximum debt
service-to-income ratio is usually 50%.

     Exceptions. As described above, the foregoing categories and criteria are
guidelines only. On a case by case basis, it may be determined that an applicant
warrants a debt service-to-income ratio exception, a pricing exception, a
loan-to-value ratio exception, an exception from certain requirements of a
particular risk category, etc. An exception may be allowed if the application
reflects compensating factors, such as: low loan-to-value ratio; pride of
ownership; a maximum of one 30 day late payment on all mortgage loans during the
last 12 months; and stable employment or ownership of current residence of four
or more years. An exception may also be allowed if the applicant places a down
payment through escrow of at least 20% of the purchase price of the mortgaged
property or if the new loan reduces the applicant's monthly aggregate mortgage
payment by 25% or more. Accordingly, a mortgagor may qualify in a more favorable
risk category than, in the absence of compensating factors, would satisfy only
the criteria of a less favorable risk category. It is expected that a
substantial portion of the mortgage loans will represent these kinds of
exceptions.


                                      S-40



THE GROUP I MORTGAGE LOANS

     The group I mortgage loans are expected to have the following approximate
aggregate characteristics as of the cut-off date:



Cut-off date principal balance of group I mortgage loans..................       $564,179,853
Cut-off date principal balance of group I fixed rate mortgage loans.......        $67,566,606
Cut-off date principal balance of group I adjustable rate mortgage loans..       $496,613,247
Interest Rates:
   Weighted Average.......................................................              7.215%
   Range..................................................................   4.990% to 13.000%
Weighted average stated remaining term to maturity (in months)............                350


     The scheduled principal balances of the group I mortgage loans range from
approximately $14,497 to approximately $533,169. The group I mortgage loans had
an average scheduled principal balance of approximately $137,103.

     The weighted average loan-to-value ratio (or, with respect to second-lien
mortgage loans, combined loan-to-value ratio) at origination of the group I
mortgage loans is approximately 81.91% and approximately 40.58% of the group I
mortgage loans have loan-to-value ratios (or, with respect to second-lien
mortgage loans, combined loan-to-value ratios) at origination exceeding 80%.

     Approximately 96.13% of the group I mortgage loans are secured by first
liens. Approximately 3.87% of the group I mortgage loans are secured by second
liens.

     No more than approximately 0.39% of the group I mortgage loans are secured
by mortgaged properties located in any one zip code area.

     Each of WMC Mortgage Corp., Decision One Mortgage Company, LLC and NC
Capital Corporation has represented or will represent with respect to each
mortgage loan sold by it that

     o    none of the group I mortgage loans sold by it is (a) covered by the
          Home Ownership and Equity Protection Act of 1994 or (b) classified as
          a "high cost home," "threshold," "covered," "high risk home" or
          "predatory" loan under any other applicable federal, state or local
          law;

     o    none of the group I mortgage loans has a Prepayment Premium period at
          origination in excess of three years;

     o    none of the group I mortgage loans originated on or after October 1,
          2002 and on or before March 6, 2003 is secured by property located in
          the State of Georgia; and

     o    in connection with the origination of the group I mortgage loans, no
          proceeds from a group I mortgage loan were used to finance a
          single-premium credit life insurance policy.

     See "Description of the Certificates--Representations and Warranties
Relating to the Mortgage Loans" in this prospectus supplement.

     The following tables set forth certain statistical information with respect
to the group I mortgage loans. Due to rounding, the percentages shown may not
precisely total 100.00%.


                                      S-41



                             GROUP I MORTGAGE LOANS

                                  PRODUCT TYPES



                                                                % OF
                                                              MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE     AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST     TERM      ORIGINAL
          PRODUCT TYPES               LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Fixed - 10 Year..................         6    $    323,500      0.06%      7.458%      114       78.85%
Fixed - 15 Year..................        54       4,001,645      0.71       7.361       174       70.31
Fixed - 20 Year..................        29       2,124,075      0.38       7.907       235       85.12
Fixed - 25 Year..................         1         229,641      0.04       6.500       293       90.00
Fixed - 30 Year..................       438      44,348,305      7.86       7.734       356       82.31
Balloon - 15/30..................       395      13,594,495      2.41      10.211       175       99.50
Balloon - 30/40..................        16       2,944,946      0.52       7.085       355       81.71
ARM - 2 Year/6 Month Balloon
   30/40.........................        57      10,380,006      1.84       7.119       355       80.90
ARM - 3 Year/6 Month Balloon
   30/40.........................         2         686,292      0.12       6.247       355       80.00
ARM - 6 Month....................         2         117,246      0.02       8.199       354       84.67
ARM - 2 Year/6 Month.............     2,465     354,275,118     62.79       7.238       356       81.47
ARM - 3 Year/6 Month.............       127      20,167,304      3.57       6.809       356       81.23
Interest Only ARM - 2 Year/6
   Month - 24 mo. IO term........       297      65,388,281     11.59       6.760       356       80.76
Interest Only ARM - 3 Year/6
   Month - 36 mo. IO term........        14       2,467,174      0.44       6.856       357       85.36
Interest Only ARM - 2 Year/6
   Month - 60 mo. IO term........       204      41,596,034      7.37       6.450       355       82.74
Interest Only ARM - 3 Year/6
   Month - 60 mo. IO term........         7       1,383,792      0.25       6.628       357       81.75
Interest Only ARM - 2 Year/6
   Month - 120 mo. IO term.......         1         152,000      0.03       5.500       354       74.15
                                      -----    ------------    ------      ------       ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853    100.00%      7.215%      350       81.91%
                                      =====    ============    ======      ======       ===       =====



                                      S-42



                             GROUP I MORTGAGE LOANS

                          RANGE OF GROSS INTEREST RATES



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE     AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST     TERM      ORIGINAL
RANGE OF GROSS INTEREST RATES (%)     LOANS     BALANCE ($)    BALANCE    RATE (%)   (MONTHS)     LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

4.000 - 4.999....................         3    $    691,962       0.12%     4.990%      354       76.11%
5.000 - 5.999....................       320      60,122,380      10.66      5.755       354       78.23
6.000 - 6.999....................     1,354     231,499,242      41.03      6.579       355       80.73
7.000 - 7.999....................     1,133     167,015,576      29.60      7.505       354       81.99
8.000 - 8.999....................       611      70,097,356      12.42      8.479       350       84.39
9.000 - 9.999....................       334      21,155,620       3.75      9.507       315       86.94
10.000 - 10.999..................       206       8,432,764       1.49     10.562       245       96.72
11.000 - 11.999..................       127       4,271,652       0.76     11.445       264       97.82
12.000 - 12.999..................        26         854,837       0.15     12.391       288       99.83
13.000 - 13.999..................         1          38,463       0.01     13.000       228       95.00
                                      -----    ------------     ------     ------       ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853     100.00%     7.215%      350       81.91%
                                      =====    ============     ======     ======       ===       =====


Minimum: 4.990%
Maximum: 13.000%
Weighted Average: 7.215%


                                      S-43



                             GROUP I MORTGAGE LOANS

                    RANGE OF CUT-OFF DATE PRINCIPAL BALANCES



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE     AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
RANGE OF CUT-OFF DATE PRINCIPAL     MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
           BALANCES ($)               LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

1 - 25,000.......................       173    $  3,500,914       0.62%    10.297%      213       99.47%
25,001 - 50,000..................       404      14,406,725       2.55     10.080       260       96.21
50,001 - 75,000..................       492      31,102,162       5.51      8.233       324       84.82
75,001 - 100,000.................       543      47,809,617       8.47      7.382       353       81.06
100,001 - 125,000................       557      62,945,426      11.16      7.299       354       81.52
125,001 - 150,000................       436      59,942,244      10.62      7.152       354       80.65
150,001 - 175,000................       360      58,530,425      10.37      7.096       355       81.05
175,001 - 200,000................       292      54,560,361       9.67      7.088       355       80.01
200,001 - 225,000................       193      41,221,113       7.31      6.938       354       80.52
225,001 - 250,000................       159      37,808,655       6.70      6.993       354       82.33
250,001 - 275,000................       162      42,697,305       7.57      6.914       356       81.99
275,001 - 300,000................       128      36,826,707       6.53      6.782       355       80.08
300,001 - 325,000................        89      28,013,153       4.97      6.828       356       82.40
325,001 - 350,000................        91      30,699,177       5.44      6.817       356       81.87
350,001 - 375,000................        19       6,740,150       1.19      6.674       356       81.75
375,001 - 400,000................         4       1,570,367       0.28      6.116       354       85.35
400,001 - 425,000................         6       2,502,030       0.44      7.078       355       85.76
425,001 - 450,000................         4       1,780,008       0.32      6.935       355       88.78
450,001 - 475,000................         1         465,735       0.08      6.200       355       80.00
500,001 - 750,000................         2       1,057,581       0.19      6.440       355       87.52
                                      -----    ------------     ------     ------       ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853     100.00%     7.215%      350       81.91%
                                      =====    ============     ======     ======       ===       =====


Minimum: $14,497
Maximum: $533,169
Average: $137,103


                                      S-44



                             GROUP I MORTGAGE LOANS

                              STATED ORIGINAL TERM



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE     AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
  STATED ORIGINAL TERM (MONTHS)       LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

120..............................         6    $    323,500      0.06%     7.458%       114       78.85%
180..............................       449      17,596,140      3.12      9.563        175       92.86
240..............................        29       2,124,075      0.38      7.907        235       85.12
300..............................         1         229,641      0.04      6.500        293       90.00
360..............................     3,630     543,906,498     96.41      7.137        356       81.55
                                      -----    ------------    ------      -----        ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853    100.00%     7.215%       350       81.91%
                                      =====    ============    ======      =====        ===       =====


Minimum: 120 months
Maximum: 360 months
Weighted Average: 354 months


                                      S-45



                             GROUP I MORTGAGE LOANS

                         RANGE OF STATED REMAINING TERMS



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE     AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
    RANGE OF STATED REMAINING       MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
          TERMS (MONTHS)              LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

109 - 120........................         6    $    323,500      0.06%      7.458%      114       78.85%
169 - 180........................       449      17,596,140      3.12       9.563       175       92.86
217 - 228........................         1          38,463      0.01      13.000       228       95.00
229 - 240........................        28       2,085,612      0.37       7.813       235       84.93
289 - 300........................         1         229,641      0.04       6.500       293       90.00
349 - 360........................     3,630     543,906,498     96.41       7.137       356       81.55
                                      -----    ------------    ------      ------       ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853    100.00%      7.215%      350       81.91%
                                      =====    ============    ======      ======       ===       =====


Minimum: 113 months
Maximum: 358 months
Weighted Average: 350 months


                                      S-46



                             GROUP I MORTGAGE LOANS

                      RANGE OF COMBINED ORIGINAL LTV RATIOS



                                                                 % OF
                                                              MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE     AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
  RANGE OF COMBINED ORIGINAL LTV    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST     TERM      ORIGINAL
            RATIOS (%)                LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)     LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

10.01 - 15.00....................         1    $     49,655      0.01%     5.290%       354       11.71%
15.01 - 20.00....................         2         144,651      0.03      6.939        355       19.01
20.01 - 25.00....................         8         709,840      0.13      7.352        321       22.97
25.01 - 30.00....................        14       1,571,780      0.28      7.349        345       28.54
30.01 - 35.00....................         8       1,125,041      0.20      7.053        355       33.37
35.01 - 40.00....................        17       1,973,314      0.35      6.951        339       38.17
40.01 - 45.00....................         9         950,305      0.17      7.151        320       42.72
45.01 - 50.00....................        23       3,499,781      0.62      7.072        344       48.04
50.01 - 55.00....................        37       6,667,281      1.18      7.042        346       53.14
55.01 - 60.00....................        51       9,033,802      1.60      6.994        351       58.20
60.01 - 65.00....................        75      13,527,728      2.40      7.148        352       63.02
65.01 - 70.00....................       101      16,873,321      2.99      7.361        352       68.49
70.01 - 75.00....................       161      27,992,952      4.96      7.312        355       74.01
75.01 - 80.00....................     1,739     251,133,708     44.51      6.822        355       79.80
80.01 - 85.00....................       305      53,712,890      9.52      7.310        354       84.41
85.01 - 90.00....................       595     102,409,296     18.15      7.335        355       89.62
90.01 - 95.00....................       174      28,551,482      5.06      7.229        347       94.46
95.01 - 100.00...................       795      44,253,026      7.84      9.044        301       99.88
                                      -----    ------------    ------      -----        ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853    100.00%     7.215%       350       81.91%
                                      =====    ============    ======      =====        ===       =====


Minimum: 11.71%
Maximum: 100.00%
Weighted Average: 81.91%


                                      S-47



                             GROUP I MORTGAGE LOANS

                             RANGE OF GROSS MARGINS



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF    AVERAGE     AVERAGE    AVERAGE
                                       OF           DATE         DATE      GROSS     REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
    RANGE OF GROSS MARGINS (%)        LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Fixed Rate Loans.................       939    $ 67,566,606     11.98%      8.182%      303       85.13%
3.500 or less....................         3         888,977      0.16       6.629       356       75.35
3.501 - 4.000....................         3         722,805      0.13       6.279       356       78.84
4.001 - 4.500....................        35       6,047,215      1.07       6.159       356       75.80
4.501 - 5.000....................       153      24,835,148      4.40       6.012       356       79.27
5.001 - 5.500....................       356      54,741,438      9.70       6.309       356       79.94
5.501 - 6.000....................       851     155,174,279     27.50       6.715       356       80.96
6.001 - 6.500....................       560      88,299,117     15.65       7.017       356       81.07
6.501 - 7.000....................       521      77,440,263     13.73       7.512       356       82.95
7.001 - 7.500....................       319      45,304,806      8.03       7.848       356       84.38
7.501 - 8.000....................       229      27,438,054      4.86       8.547       356       82.38
8.001 - 8.500....................        84       9,435,985      1.67       8.907       356       80.96
8.501 - 9.000....................        43       4,411,578      0.78       9.160       356       86.28
9.001 - 9.500....................        15       1,535,913      0.27       9.281       356       87.61
9.501 - 10.000...................         4         337,669      0.06      10.004       356       82.60
                                      -----    ------------    ------      ------       ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853    100.00%      7.215%      350       81.91%
                                      =====    ============    ======      ======       ===       =====


Non-Zero Minimum: 1.000%
Maximum: 9.790%
Non-Zero Weighted Average: 6.229%


                                      S-48



                             GROUP I MORTGAGE LOANS

                         RANGE OF MINIMUM MORTGAGE RATES



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF    AVERAGE     AVERAGE    AVERAGE
                                       OF           DATE         DATE      GROSS     REMAINING   COMBINED
    RANGE OF MINIMUM MORTGAGE       MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
            RATES (%)                 LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Fixed Rate Loans.................       939    $ 67,566,606     11.98%      8.182%      303       85.13%
5.000 or less....................         5       1,076,510      0.19       4.994       354       77.50
5.001 - 5.500....................        47      10,475,374      1.86       5.376       355       77.14
5.501 - 6.000....................       273      51,276,113      9.09       5.860       356       78.91
6.001 - 6.500....................       519      89,581,894     15.88       6.313       356       80.41
6.501 - 7.000....................       723     120,910,859     21.43       6.805       356       81.37
7.001 - 7.500....................       519      77,768,036     13.78       7.294       356       81.66
7.501 - 8.000....................       479      69,385,251     12.30       7.784       356       83.51
8.001 - 8.500....................       268      35,758,921      6.34       8.267       356       84.94
8.501 - 9.000....................       214      26,318,823      4.66       8.768       356       82.04
9.001 - 9.500....................        84       9,232,972      1.64       9.274       356       80.26
9.501 - 10.000...................        36       3,681,964      0.65       9.732       356       85.55
10.001 -10.500...................         7         775,689      0.14      10.230       356       74.74
10.501 - 11.000..................         1          59,909      0.01      10.790       356       75.00
11.001 - 11.500..................         1         310,932      0.06      11.250       357       75.00
                                      -----    ------------    ------      ------       ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853    100.00%      7.215%      350       81.91%
                                      =====    ============    ======      ======       ===       =====


Non-Zero Minimum: 4.990%
Maximum: 11.250%
Non-Zero Weighted Average: 7.084%


                                      S-49



                             GROUP I MORTGAGE LOANS

                         RANGE OF MAXIMUM MORTGAGE RATES



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF    AVERAGE     AVERAGE    AVERAGE
                                       OF           DATE         DATE      GROSS     REMAINING   COMBINED
    RANGE OF MAXIMUM MORTGAGE       MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
            RATES (%)                 LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Fixed Rate Loans.................       939    $ 67,566,606     11.98%      8.182%      303       85.13%
12.500 or less...................       565      92,496,901     16.39       6.005       356       79.93
12.501 - 13.000..................       618     104,902,893     18.59       6.539       356       81.10
13.001 - 13.500..................       612      97,501,634     17.28       6.955       356       81.14
13.501 - 14.000..................       571      89,044,423     15.78       7.426       356       82.66
14.001 - 14.500..................       362      54,478,124      9.66       7.888       356       82.67
14.501 - 15.000..................       247      33,483,083      5.93       8.429       356       83.43
15.001 - 15.500..................       130      15,917,257      2.82       8.883       356       79.98
15.501 - 16.000..................        48       5,637,039      1.00       9.341       356       84.37
16.001 - 16.500..................        16       2,118,004      0.38       9.574       356       79.70
16.501 - 17.000..................         5         545,425      0.10      10.024       355       70.87
17.001 - 17.500..................         1         177,534      0.03      10.450       357       75.00
18.001 - 18.500..................         1         310,932      0.06      11.250       357       75.00
                                      -----    ------------    ------      ------       ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853    100.00%      7.215%      350       81.91%
                                      =====    ============    ======      ======       ===       =====


Non-Zero Minimum: 10.990%
Maximum: 18.250%
Non-Zero Weighted Average: 13.392%


                                      S-50



                             GROUP I MORTGAGE LOANS

                              INITIAL PERIODIC CAP



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE     AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
     INITIAL PERIODIC CAP (%)         LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Fixed Rate Loans.................       939    $ 67,566,606     11.98%     8.182%       303       85.13%
1.000............................         9       1,625,588      0.29      7.334        354       84.70
1.500............................       483      97,125,613     17.22      6.971        356       79.24
1.560............................         1          49,688      0.01      6.660        353       20.41
2.000............................         2         356,296      0.06      6.730        353       80.00
3.000............................     2,681     397,456,063     70.45      7.110        356       82.02
                                      -----    ------------    ------      -----        ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853    100.00%     7.215%       350       81.91%
                                      =====    ============    ======      =====        ===       =====


Non-Zero Minimum: 1.000%
Maximum: 3.000%
Non-Zero Weighted Average: 2.699%


                                      S-51



                             GROUP I MORTGAGE LOANS

                             SUBSEQUENT PERIODIC CAP



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE     AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
   SUBSEQUENT PERIODIC CAP (%)        LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Fixed Rate Loans.................       939    $ 67,566,606     11.98%     8.182%       303       85.13%
1.000............................     2,788     412,131,364     73.05      7.127        356       81.96
1.500............................       387      84,382,423     14.96      6.871        356       79.12
2.000............................         1          99,460      0.02      8.075        354       86.96
                                      -----    ------------    ------      -----        ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853    100.00%     7.215%       350       81.91%
                                      =====    ============    ======      =====        ===       =====


Non-Zero Minimum: 1.000%
Maximum: 2.000%
Non-Zero Weighted Average: 1.085%


                                      S-52



                             GROUP I MORTGAGE LOANS

                           NEXT RATE ADJUSTMENT DATES



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE     AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
    NEXT RATE ADJUSTMENT DATES        LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Fixed Rate Loans.................       939    $ 67,566,606     11.98%      8.182%      303        85.13%
November 2005....................         1          54,769      0.01       9.750       355        90.00
April 2006.......................         1          62,477      0.01       6.840       354        80.00
October 2006.....................         1         116,307      0.02       8.440       349        85.00
November 2006....................         2         181,943      0.03       9.375       349        68.24
December 2006....................         3         531,570      0.09       6.448       350        59.77
January 2007.....................         7       1,198,576      0.21       7.417       351        83.27
February 2007....................        15       2,879,659      0.51       6.523       352        86.17
March 2007.......................        45       8,456,574      1.50       7.231       353        81.90
April 2007.......................       255      39,968,828      7.08       6.892       354        80.87
May 2007.........................       662     111,551,601     19.77       6.917       355        81.43
June 2007........................     1,096     151,661,215     26.88       7.243       357        81.73
July 2007........................       927     153,396,760     27.19       7.142       357        81.30
August 2007......................        11       1,848,406      0.33       7.086       358        85.79
November 2007....................         1          55,723      0.01      10.125       349        58.33
February 2008....................         1         240,706      0.04       8.040       352       100.00
March 2008.......................         3         554,448      0.10       8.279       353        90.99
April 2008.......................         8       1,274,283      0.23       6.860       354        81.74
May 2008.........................        23       4,609,508      0.82       6.733       355        79.51
June 2008........................        56       8,565,954      1.52       6.713       357        80.45
July 2008........................        56       9,079,948      1.61       6.701       357        82.97
August 2008......................         2         323,992      0.06       7.638       358        80.00
                                      -----    ------------    ------      ------       ---       ------
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853    100.00%      7.215%      350        81.91%
                                      =====    ============    ======      ======       ===       ======



                                      S-53



                             GROUP I MORTGAGE LOANS

                 GEOGRAPHIC DISTRIBUTION OF MORTGAGED PROPERTIES



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE    AVERAGE
                                       OF           DATE         DATE      GROSS     REMAINING   COMBINED
   GEOGRAPHIC DISTRIBUTION OF       MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
      MORTGAGED PROPERTIES           LOANS      BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

California.......................       621    $129,421,010     22.94%     6.896%       352        78.50%
Florida..........................       352      46,583,410      8.26      7.387        351        80.87
Massachusetts....................       170      35,136,543      6.23      6.840        348        81.57
Maryland.........................       159      26,168,201      4.64      7.193        345        83.68
Illinois.........................       191      24,332,701      4.31      7.325        347        84.18
Arizona..........................       169      22,481,154      3.98      7.366        352        83.00
Virginia.........................       142      20,658,251      3.66      7.435        349        82.26
New Jersey.......................       110      20,513,577      3.64      7.380        353        81.42
Minnesota........................       126      18,400,458      3.26      7.035        356        82.76
Texas............................       227      17,843,357      3.16      7.573        337        82.43
Michigan.........................       149      16,327,270      2.89      7.456        354        85.04
Ohio.............................       148      14,472,322      2.57      7.399        346        85.43
Washington.......................       113      14,469,173      2.56      6.894        348        83.18
Georgia..........................       118      12,792,391      2.27      7.509        350        85.04
Wisconsin........................       108      12,634,603      2.24      7.323        353        83.17
Other............................     1,212     131,945,432     23.39      7.389        349        83.27
                                      -----    ------------    ------      -----        ---        -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853    100.00%     7.215%       350        81.91%
                                      =====    ============    ======      =====        ===        =====


Number of States/District of Columbia Represented: 51


                                      S-54



                             GROUP I MORTGAGE LOANS

                                    OCCUPANCY



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF    AVERAGE     AVERAGE    AVERAGE
                                       OF           DATE         DATE      GROSS     REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
             OCCUPANCY                LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Primary..........................     3,874    $532,124,898     94.32%      7.204%      350        81.77%
Investment.......................       135      18,818,354      3.34       7.544       353        85.02
Second Home......................       106      13,236,601      2.35       7.193       338        83.13
                                      -----    ------------    ------       -----       ---        -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853    100.00%      7.215%      350        81.91%
                                      =====    ============    ======       =====       ===        =====


                                  PROPERTY TYPE



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF    AVERAGE     AVERAGE    AVERAGE
                                       OF           DATE         DATE      GROSS     REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
            PROPERTY TYPE             LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Single Family Residence..........     3,315    $447,684,348     79.35%      7.248%      350        81.89%
Condominium......................       339      41,302,378      7.32       7.081       345        82.78
Planned Unit Development.........       294      39,186,144      6.95       7.265       344        83.06
2-4 Family.......................       166      35,846,346      6.35       6.911       352        80.16
Manufactured Housing.............         1         160,637      0.03       5.800       352        35.22
                                      -----    ------------    ------       -----       ---        -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853    100.00%      7.215%      350        81.91%
                                      =====    ============    ======       =====       ===        =====



                                      S-55



                             GROUP I MORTGAGE LOANS

                                  LOAN PURPOSE



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF    AVERAGE     AVERAGE    AVERAGE
                                       OF           DATE         DATE      GROSS     REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
           LOAN PURPOSE               LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Refinance - Cashout..............     1,896    $319,464,777     56.62%      7.230%      351        80.78%
Purchase.........................     1,849     189,334,887     33.56       7.271       347        84.04
Refinance - Rate Term............       370      55,380,190      9.82       6.938       354        81.22
                                      -----    ------------    ------       -----       ---        -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853    100.00%      7.215%      350        81.91%
                                      =====    ============    ======       =====       ===        =====


                               DOCUMENTATION LEVEL



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE    AVERAGE
                                       OF           DATE         DATE      GROSS     REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
         DOCUMENTATION LEVEL          LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Full Documentation...............     2,614    $330,033,622     58.50%      7.165%      350        83.25%
Stated Documentation.............     1,310     203,896,715     36.14       7.341       351        79.86
Limited Documentation............       191      30,249,517      5.36       6.912       344        81.21
                                      -----    ------------    ------       -----       ---        -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853    100.00%      7.215%      350        81.91%
                                      =====    ============    ======       =====       ===        =====



                                      S-56



                             GROUP I MORTGAGE LOANS

                        ORIGINAL PREPAYMENT PENALTY TERM



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF    AVERAGE     AVERAGE    AVERAGE
                                       OF          DATE          DATE      GROSS     REMAINING   COMBINED
ORIGINAL PREPAYMENT PENALTY TERM    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
             (MONTHS)                 LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

0................................     1,124    $142,744,265     25.30%     7.429%       344       82.69%
12...............................        80      13,384,567      2.37      7.056        352       80.84
24...............................     2,449     351,406,163     62.29      7.114        353       81.68
36...............................       462      56,644,859     10.04      7.340        344       81.68
                                      -----    ------------    ------      -----        ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853    100.00%     7.215%       350       81.91%
                                      =====    ============    ======      =====        ===       =====


Non-Zero Minimum: 12 months
Maximum: 36 months
Non-Zero Weighted Average: 25 months


                                  LIEN POSITION



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF    AVERAGE      AVERAGE    AVERAGE
                                       OF          DATE         DATE       GROSS     REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
          LIEN POSITION               LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

1st Lien.........................     3,484    $542,333,748     96.13%      7.091%      354       81.20%
2nd Lien.........................       631      21,846,105      3.87      10.294       237       99.66
                                      -----    ------------    ------      ------       ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853    100.00%      7.215%      350       81.91%
                                      =====    ============    ======      ======       ===       =====



                                      S-57



                             GROUP I MORTGAGE LOANS

                           ORIGINAL INTEREST ONLY TERM



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE     AVERAGE
                                       OF          DATE          DATE      GROSS     REMAINING   COMBINED
ORIGINAL INTEREST ONLY TERM         MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
             (MONTHS)                 LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

0................................     3,592    $453,192,572     80.33%     7.355%       348       81.99%
24...............................       297      65,388,281     11.59      6.760        356       80.76
36...............................        14       2,467,174      0.44      6.856        357       85.36
60...............................       211      42,979,826      7.62      6.456        355       82.71
120..............................         1         152,000      0.03      5.500        354       74.15
                                      -----    ------------    ------      -----        ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,115    $564,179,853    100.00%     7.215%       350       81.91%
                                      =====    ============    ======      =====        ===       =====



                                      S-58



THE GROUP II MORTGAGE LOANS

     The group II mortgage loans are expected to have the following approximate
aggregate characteristics as of the cut-off date:

Cut-off date principal balance of group II mortgage loans...       $923,039,003
Cut-off date principal balance of group II fixed rate
   mortgage loans...........................................       $112,221,825
Cut-off date principal balance of group II adjustable
   rate mortgage loans......................................       $810,817,178
Interest Rates:
   Weighted Average.........................................              7.078%
   Range....................................................   4.500% to 12.875%
Weighted average stated remaining term to maturity
   (in months)..............................................                346

     The scheduled principal balances of the group II mortgage loans range from
approximately $14,044 to approximately $951,861. The group II mortgage loans had
an average scheduled principal balance of approximately $192,701.

     The weighted average loan-to-value ratio (or, with respect to second-lien
mortgage loans, combined loan-to-value ratio) at origination of the group II
mortgage loans is approximately 82.60% and approximately 34.86% of the group II
mortgage loans have loan-to-value ratios (or, with respect to second-lien
mortgage loans, combined loan-to-value ratios) at origination exceeding 80%.

     Approximately 93.26% of the group II mortgage loans are secured by first
liens. Approximately 6.74% of the group II mortgage loans are secured by second
liens.

     No more than approximately 0.48% of the group II mortgage loans are secured
by mortgaged properties located in any one zip code area.

     Each of WMC Mortgage Corp., Decision One Mortgage Company, LLC and NC
Capital Corporation has represented or will represent with respect to each
mortgage loan sold by it that

     o    none of the group II mortgage loans sold by it is (a) covered by the
          Home Ownership and Equity Protection Act of 1994 or (b) classified as
          a "high cost home," "threshold," "covered," "high risk home" or
          "predatory" loan under any other applicable federal, state or local
          law;

     o    None of the group II mortgage loans has a Prepayment Premium period at
          origination in excess of three years;

     o    none of the group II mortgage loans originated on or after October 1,
          2002 and on or before March 6, 2003 is secured by property located in
          the State of Georgia; and

     o    in connection with the origination of the group II mortgage loans, no
          proceeds from a group II mortgage loan were used to finance a
          single-premium credit life insurance policy.

     See "Description of the Certificates--Representations and Warranties
Relating to the Mortgage Loans" in this prospectus supplement.

     The following tables set forth certain statistical information with respect
to the group II mortgage loans. Due to rounding, the percentages shown may not
precisely total 100.00%.


                                      S-59



                             GROUP II MORTGAGE LOANS

                                  PRODUCT TYPES



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE     AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
          PRODUCT TYPES               LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Fixed - 10 Year..................         1    $    222,213       0.02%    8.840%       116       73.23%
Fixed - 15 Year..................        18       1,742,700       0.19     8.055        176       81.65
Fixed - 20 Year..................        10         892,472       0.10     8.242        236       90.10
Fixed - 25 Year..................         1         111,843       0.01     7.990        297       85.00
Fixed - 30 Year..................       549      63,305,855       6.86     7.976        356       86.73
Balloon - 15/30..................       600      45,580,462       4.94     9.928        174       99.40
Balloon - 30/40..................         2         236,280       0.03     6.529        355       80.00
ARM - 2 Year/6 Month
   Balloon 30/40.................        87      34,436,326       3.73     6.505        355       80.74
ARM - 3 Year/6 Month
   Balloon 30/40.................         7       2,502,718       0.27     6.348        355       81.07
ARM - 5 Year/6 Month
   Balloon 30/40.................         4       1,050,540       0.11     5.670        355       80.00
ARM - 2 Year/6 Month.............     2,566     475,968,754      51.57     7.108        356       81.26
ARM - 3 Year/6 Month.............       157      26,531,770       2.87     6.932        357       81.20
ARM - 5 Year/6 Month.............        40       9,509,541       1.03     6.171        355       78.66
Interest Only ARM - 2 Year/6
   Month - 24 mo. IO term........       312     107,563,380      11.65     6.643        356       82.27
Interest Only ARM - 3 Year/6
   Month - 36 mo. IO term........        11       3,770,497       0.41     6.369        356       83.79
Interest Only Fixed - 30 Year
   - 60 mo. IO term..............         1         130,000       0.01     6.815        358       50.58
Interest Only ARM - 2 Year/6
   Month - 60 mo. IO term........       356     129,486,725      14.03     6.313        355       81.22
Interest Only ARM - 3 Year/6
   Month - 60 mo. IO term........         6       1,545,570       0.17     6.832        356       80.26
Interest Only ARM - 5 Year/6
   Month - 60 mo. IO term........        61      18,123,355       1.96     6.020        354       80.78
Interest Only ARM - 2 Year/6
   Month - 120 mo. IO term.......         1         328,000       0.04     6.225        355       80.00
                                      -----    ------------     ------     -----        ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003     100.00%    7.078%       346       82.60%
                                      =====    ============     ======     =====        ===       =====



                                      S-60



                             GROUP II MORTGAGE LOANS

                          RANGE OF GROSS INTEREST RATES



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE     AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
RANGE OF GROSS INTEREST RATES (%)     LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

4.000 - 4.999....................         6    $  2,693,530      0.29%      4.845%      353       72.44%
5.000 - 5.999....................       506     154,488,943     16.74       5.702       355       79.41
6.000 - 6.999....................     1,547     387,344,650     41.96       6.572       355       80.98
7.000 - 7.999....................     1,231     227,717,877     24.67       7.483       355       82.19
8.000 - 8.999....................       611      82,053,940      8.89       8.484       340       87.10
9.000 - 9.999....................       485      39,977,555      4.33       9.585       269       93.47
10.000 - 10.999..................       311      23,082,326      2.50      10.602       230       97.35
11.000 - 11.999..................        80       4,865,899      0.53      11.433       264       99.59
12.000 - 12.999..................        13         814,285      0.09      12.301       289       97.09
                                      -----    ------------    ------      ------       ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003    100.00%      7.078%      346       82.60%
                                      =====    ============    ======      ======       ===       =====


Minimum: 4.500%
Maximum: 12.875%
Weighted Average: 7.078%


                                      S-61



                             GROUP II MORTGAGE LOANS

                    RANGE OF CUT-OFF DATE PRINCIPAL BALANCES



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF    AVERAGE     AVERAGE    AVERAGE
                                       OF          DATE          DATE      GROSS     REMAINING   COMBINED
 RANGE OF CUT-OFF DATE PRINCIPAL    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
           BALANCES ($)               LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

1 - 25,000.......................        41    $    847,162      0.09%     10.301%      221       99.26%
25,001 - 50,000..................       240       9,446,594      1.02       9.801       264       93.17
50,001 - 75,000..................       610      38,537,828      4.18       8.693       308       89.03
75,001 - 100,000.................       697      61,016,358      6.61       8.329       312       87.86
100,001 - 125,000................       559      62,619,454      6.78       7.711       338       84.57
125,001 - 150,000................       400      54,885,991      5.95       7.427       341       82.89
150,001 - 175,000................       319      51,731,289      5.60       7.287       345       83.12
175,001 - 200,000................       269      50,540,388      5.48       7.160       348       81.75
200,001 - 225,000................       194      41,282,201      4.47       6.957       355       81.98
225,001 - 250,000................       141      33,532,452      3.63       6.895       355       79.68
250,001 - 275,000................       166      43,492,252      4.71       6.839       356       80.40
275,001 - 300,000................       153      44,050,914      4.77       6.743       356       79.89
300,001 - 325,000................       136      42,484,975      4.60       6.517       356       81.47
325,001 - 350,000................       104      34,970,951      3.79       6.658       356       81.90
350,001 - 375,000................       132      47,908,123      5.19       6.620       354       81.28
375,001 - 400,000................       140      54,263,189      5.88       6.719       356       81.98
400,001 - 425,000................        86      35,596,897      3.86       6.589       356       82.24
425,001 - 450,000................        75      32,801,183      3.55       6.526       355       81.04
450,001 - 475,000................        62      28,717,048      3.11       6.616       355       80.60
475,001 - 500,000................        54      26,490,169      2.87       6.760       356       80.38
500,001 - 750,000................       194     112,431,010     12.18       6.594       355       82.55
750,001 - 1,000,000..............        18      15,392,574      1.67       6.250       355       74.98
                                      -----    ------------    ------      ------       ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003    100.00%      7.078%      346       82.60%
                                      =====    ============    ======      ======       ===       =====


Minimum: $14,044
Maximum: $951,861
Average: $192,701


                                     S-62



                             GROUP II MORTGAGE LOANS

                              STATED ORIGINAL TERM



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE    AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
  STATED ORIGINAL TERM (MONTHS)       LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

120..............................         1    $    222,213      0.02%     8.840%       116       73.23%
180..............................       618      47,323,162      5.13      9.859        175       98.74
240..............................        10         892,472      0.10      8.242        236       90.10
300..............................         1         111,843      0.01      7.990        297       85.00
360..............................     4,160     874,489,313     94.74      6.926        356       81.72
                                      -----    ------------    ------      -----        ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003    100.00%     7.078%       346       82.60%
                                      =====    ============    ======      =====        ===       =====


Minimum: 120 months
Maximum: 360 months
Weighted Average: 351 months


                                      S-63



                             GROUP II MORTGAGE LOANS

                         RANGE OF STATED REMAINING TERMS



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE     AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
 RANGE OF STATED REMAINING TERMS    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
             (MONTHS)                 LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

109 - 120........................         1    $    222,213      0.02%     8.840%       116        73.23%
157 - 168........................         1          66,786      0.01      9.500        168       100.00
169 - 180........................       617      47,256,377      5.12      9.859        175        98.74
229 - 240........................        10         892,472      0.10      8.242        236        90.10
289 - 300........................         1         111,843      0.01      7.990        297        85.00
349 - 360........................     4,160     874,489,313     94.74      6.926        356        81.72
                                      -----    ------------    ------      -----        ---       ------
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003    100.00%     7.078%       346        82.60%
                                      =====    ============    ======      =====        ===       ======


Minimum: 116 months
Maximum: 359 months
Weighted Average: 346 months


                                      S-64



                             GROUP II MORTGAGE LOANS

                      RANGE OF COMBINED ORIGINAL LTV RATIOS



                                                                 % OF
                                                              MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE     AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
    RANGE OF COMBINED ORIGINAL      MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST     TERM      ORIGINAL
            LTV RATIOS (%)            LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

10.01 - 15.00....................         2    $    304,203      0.03%     7.453%       357       14.59%
15.01 - 20.00....................         1          49,947      0.01      9.140        358       17.79
20.01 - 25.00....................         3         239,250      0.03      6.857        357       23.49
25.01 - 30.00....................         6         528,436      0.06      6.665        355       28.39
30.01 - 35.00....................         8         814,561      0.09      6.379        357       32.98
35.01 - 40.00....................        10         932,496      0.10      7.575        357       37.47
40.01 - 45.00....................        11       1,491,137      0.16      6.905        356       43.59
45.01 - 50.00....................        23       3,812,064      0.41      7.373        356       47.25
50.01 - 55.00....................        27       6,348,546      0.69      7.003        357       52.57
55.01 - 60.00....................        41       8,665,676      0.94      6.765        349       57.56
60.01 - 65.00....................        63      14,370,675      1.56      6.870        355       63.43
65.01 - 70.00....................        93      20,618,480      2.23      6.822        356       68.45
70.01 - 75.00....................       176      40,114,396      4.35      7.019        355       73.91
75.01 - 80.00....................     2,224     502,987,127     54.49      6.638        356       79.87
80.01 - 85.00....................       320      69,905,880      7.57      7.254        354       84.44
85.01 - 90.00....................       544     117,009,888     12.68      7.199        355       89.68
90.01 - 95.00....................       208      49,094,073      5.32      7.330        348       94.64
95.01 - 100.00...................     1,030      85,752,169      9.29      9.360        265       99.92
                                      -----    ------------    ------      -----        ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003    100.00%     7.078%       346       82.60%
                                      =====    ============    ======      =====        ===       =====


Minimum: 13.10%
Maximum: 100.00%
Weighted Average: 82.60%


                                      S-65



                             GROUP II MORTGAGE LOANS

                             RANGE OF GROSS MARGINS



                                                                % OF
                                                              MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE     AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
    RANGE OF GROSS MARGINS (%)        LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Fixed Rate Loans.................     1,182    $112,221,825     12.16%      8.770%      278       91.74%
3.500 or less....................         1         496,075      0.05       6.800       351       72.99
3.501 - 4.000....................         1         383,828      0.04       5.925       357       70.00
4.001 - 4.500....................        24       6,101,116      0.66       5.575       355       77.56
4.501 - 5.000....................       224      50,301,329      5.45       6.197       356       81.10
5.001 - 5.500....................       343      85,239,286      9.23       6.132       355       80.20
5.501 - 6.000....................     1,499     351,591,813     38.09       6.755       356       81.10
6.001 - 6.500....................       596     135,806,255     14.71       6.911       356       81.33
6.501 - 7.000....................       491     103,490,792     11.21       7.215       355       81.73
7.001 - 7.500....................       209      41,174,104      4.46       7.587       356       81.80
7.501 - 8.000....................       160      29,110,092      3.15       8.163       356       85.86
8.001 - 8.500....................        33       4,391,926      0.48       8.957       356       86.70
8.501 - 9.000....................        22       2,203,176      0.24       9.511       357       82.96
9.001 - 9.500....................         4         464,462      0.05       8.425       356       81.48
9.501 - 10.000...................         1          62,926      0.01      10.590       357       79.75
                                      -----    ------------    ------      ------       ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003    100.00%      7.078%      346       82.60%
                                      =====    ============    ======      ======       ===       =====


Non-Zero Minimum: 1.700%
Maximum: 9.590%
Non-Zero Weighted Average: 6.034%


                                      S-66



                             GROUP II MORTGAGE LOANS

                         RANGE OF MINIMUM MORTGAGE RATES



                                                                % OF
                                                              MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE     AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
    RANGE OF MINIMUM MORTGAGE       MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
              RATES (%)               LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Fixed Rate Loans.................     1,182    $112,221,825     12.16%      8.770%      278        91.74%
5.000 or less....................        11       5,058,451      0.55       4.918       353        75.78
5.001 - 5.500....................       108      35,224,814      3.82       5.326       355        78.65
5.501 - 6.000....................       424     124,012,945     13.44       5.843       356        79.73
6.001 - 6.500....................       597     155,325,699     16.83       6.304       356        80.54
6.501 - 7.000....................       836     208,916,377     22.63       6.805       356        81.47
7.001 - 7.500....................       570     113,161,853     12.26       7.281       356        81.35
7.501 - 8.000....................       487      88,103,259      9.54       7.782       356        82.95
8.001 - 8.500....................       231      36,867,145      3.99       8.259       357        84.93
8.501 - 9.000....................       215      29,916,898      3.24       8.759       357        85.95
9.001 - 9.500....................        76       8,888,272      0.96       9.256       357        84.14
9.501 - 10.000...................        38       3,861,988      0.42       9.719       357        79.92
10.001 -10.500...................         7         770,413      0.08      10.263       357        66.09
10.501 - 11.000..................         6         577,768      0.06      10.641       357        66.91
11.001 - 11.500..................         1          78,390      0.01      11.150       356       100.00
12.001 - 12.500..................         1          52,907      0.01      12.025       357        55.21
                                      -----    ------------    ------      ------       ---       ------
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003    100.00%      7.078%      346        82.60%
                                      =====    ============    ======      ======       ===       ======


Non-Zero Minimum: 4.500%
Maximum: 12.025%
Non-Zero Weighted Average: 6.844%


                                      S-67



                             GROUP II MORTGAGE LOANS

                         RANGE OF MAXIMUM MORTGAGE RATES



                                                                % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE     AVERAGE
                                       OF           DATE         DATE       GROSS    REMAINING   COMBINED
 RANGE OF MAXIMUM MORTGAGE RATES    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
               (%)                    LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Fixed Rate Loans.................     1,182    $112,221,825     12.16%      8.770%      278        91.74%
12.500 or less...................       620     162,202,454     17.57       5.792       355        79.87
12.501 - 13.000..................       642     159,414,328     17.27       6.358       356        80.58
13.001 - 13.500..................       651     160,044,024     17.34       6.753       356        81.56
13.501 - 14.000..................       646     146,699,397     15.89       7.143       356        81.71
14.001 - 14.500..................       387      79,941,348      8.66       7.568       356        82.07
14.501 - 15.000..................       317      54,231,343      5.88       8.082       357        83.53
15.001 - 15.500..................       150      24,559,265      2.66       8.448       356        84.44
15.501 - 16.000..................       115      15,125,201      1.64       8.889       357        84.20
16.001 - 16.500..................        45       5,230,765      0.57       9.280       357        80.69
16.501 - 17.000..................        23       2,141,416      0.23       9.755       357        77.11
17.001 - 17.500..................         5         581,500      0.06      10.309       357        62.97
17.501 - 18.000..................         5         514,842      0.06      10.648       357        65.34
18.001 - 18.500..................         1          78,390      0.01      11.150       356       100.00
19.001 - 19.500..................         1          52,907      0.01      12.025       357        55.21
                                      -----    ------------    ------      ------       ---       ------
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003    100.00%      7.078%      346        82.60%
                                      =====    ============    ======      ======       ===       ======


Non-Zero Minimum: 8.750%
Maximum: 19.025%
Non-Zero Weighted Average: 13.395%


                                      S-68



                             GROUP II MORTGAGE LOANS

                              INITIAL PERIODIC CAP



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF    AVERAGE     AVERAGE     AVERAGE
                                       OF          DATE          DATE      GROSS     REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
     INITIAL PERIODIC CAP (%)         LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Fixed Rate Loans.................     1,182    $112,221,825     12.16%     8.770%       278       91.74%
1.000............................        15       3,112,350      0.34      7.156        356       75.78
1.500............................     1,388     318,561,510     34.51      7.007        356       80.75
2.000............................         2         665,103      0.07      5.610        355       75.43
2.973............................         1         408,000      0.04      6.825        355       80.00
3.000............................     2,146     471,652,610     51.10      6.763        356       81.78
5.000............................        56      16,417,605      1.78      6.006        354       81.02
                                      -----    ------------    ------      -----        ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003    100.00%     7.078%       346       82.60%
                                      =====    ============    ======      =====        ===       =====


Non-Zero Minimum: 1.000%
Maximum: 5.000%
Non-Zero Weighted Average: 2.443%


                                      S-69



                             GROUP II MORTGAGE LOANS

                             SUBSEQUENT PERIODIC CAP



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE     AVERAGE    AVERAGE
                                       OF          DATE          DATE      GROSS     REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
   SUBSEQUENT PERIODIC CAP (%)        LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Fixed Rate Loans.................     1,182    $112,221,825     12.16%     8.770%       278       91.74%
1.000............................     2,289     517,471,207     56.06      6.749        355       81.76
1.500............................     1,319     293,345,971     31.78      7.012        357       80.56
                                      -----    ------------    ------      -----        ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003    100.00%     7.078%       346       82.60%
                                      =====    ============    ======      =====        ===       =====


Non-Zero Minimum: 1.000%
Maximum: 1.500%
Non-Zero Weighted Average: 1.181%


                                      S-70



                             GROUP II MORTGAGE LOANS

                           NEXT RATE ADJUSTMENT DATES



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF    AVERAGE     AVERAGE     AVERAGE
                                       OF           DATE         DATE      GROSS     REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
    NEXT RATE ADJUSTMENT DATES        LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Fixed Rate Loans.................     1,182    $112,221,825     12.16%      8.770%      278        91.74%
November 2006....................         2         686,188      0.07       7.058       349        77.19
January 2007.....................         5       1,834,925      0.20       7.089       351        84.98
February 2007....................        12       4,997,061      0.54       6.424       352        85.70
March 2007.......................        36      13,315,725      1.44       6.704       353        85.25
April 2007.......................       280      89,677,328      9.72       6.563       354        80.31
May 2007.........................       591     189,276,692     20.51       6.567       355        81.10
June 2007........................       657     119,959,305     13.00       7.051       356        82.33
July 2007........................     1,701     321,865,498     34.87       7.082       357        81.22
August 2007......................        38       6,170,464      0.67       7.283       358        82.48
February 2008....................         2         381,984      0.04       7.147       352        91.78
March 2008.......................         1         379,589      0.04       7.250       353        80.00
April 2008.......................         5       1,009,136      0.11       6.604       354        80.00
May 2008.........................        24       7,354,639      0.80       6.531       355        82.22
June 2008........................        37       5,768,859      0.62       6.827       357        80.60
July 2008........................       111      19,269,588      2.09       6.916       357        81.09
August 2008......................         1         186,760      0.02       8.240       358       100.00
December 2009....................         1         741,750      0.08       5.500       350        75.00
January 2010.....................         1         438,000      0.05       4.990       351        80.00
February 2010....................         4         666,053      0.07       7.225       352        85.33
March 2010.......................        10       4,060,700      0.44       5.878       353        85.98
April 2010.......................        24       7,140,265      0.77       5.848       354        74.44
May 2010.........................        58      14,581,186      1.58       6.204       355        81.22
June 2010........................         3         517,516      0.06       6.411       356        82.69
July 2010........................         4         537,967      0.06       6.075       357        75.84
                                      -----    ------------    ------       -----       ---        -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003    100.00%      7.078%      346        82.60%
                                      =====    ============    ======       =====       ===        =====



                                      S-71



                             GROUP II MORTGAGE LOANS

                 GEOGRAPHIC DISTRIBUTION OF MORTGAGED PROPERTIES



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF    AVERAGE     AVERAGE    AVERAGE
                                       OF           DATE         DATE      GROSS     REMAINING   COMBINED
    GEOGRAPHIC DISTRIBUTION OF      MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
       MORTGAGED PROPERTIES           LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

California.......................     1,545    $416,441,443     45.12%      6.854%      343        82.40%
Florida..........................       350      56,413,624      6.11       7.298       352        80.77
New York.........................       165      40,229,679      4.36       7.232       341        83.16
Massachusetts....................       157      38,236,106      4.14       6.845       342        82.51
New Jersey.......................       118      28,183,826      3.05       7.172       349        82.36
Maryland.........................       119      27,622,932      2.99       7.122       349        81.31
Virginia.........................       139      27,406,714      2.97       7.480       344        83.15
Pennsylvania.....................       194      25,810,749      2.80       7.294       354        82.39
Illinois.........................       146      23,428,924      2.54       7.246       353        83.66
Texas............................       205      21,598,260      2.34       7.416       343        83.09
Arizona..........................       112      20,488,043      2.22       7.210       351        80.00
Ohio.............................       176      18,336,509      1.99       7.436       355        87.48
North Carolina...................       130      15,416,953      1.67       7.247       354        83.87
Tennessee........................       126      13,364,595      1.45       7.451       352        84.71
Washington.......................        78      13,306,571      1.44       6.786       347        82.96
Other............................     1,030     136,754,074     14.82       7.364       352        83.12
                                      -----    ------------    ------       -----       ---        -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003    100.00%      7.078%      346        82.60%
                                      =====    ============    ======       =====       ===        =====


Number of States/District of Columbia Represented: 50


                                      S-72



                             GROUP II MORTGAGE LOANS

                                    OCCUPANCY



                                                                % OF
                                                              MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF    AVERAGE     AVERAGE    AVERAGE
                                       OF           DATE         DATE      GROSS     REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
              OCCUPANCY               LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Primary..........................     4,631    $895,505,424     97.02%      7.063%      346        82.52%
Investment.......................       129      19,458,359      2.11       7.758       356        85.46
Second Home......................        30       8,075,220      0.87       7.103       337        83.77
                                      -----    ------------    ------       -----       ---        -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003    100.00%      7.078%      346        82.60%
                                      =====    ============    ======       =====       ===        =====


                                  PROPERTY TYPE



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF    AVERAGE     AVERAGE    AVERAGE
                                       OF           DATE         DATE      GROSS     REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
           PROPERTY TYPE              LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Single Family Residence..........     3,811    $718,241,552     77.81%      7.075%      348        82.54%
Planned Unit Development.........       421      88,623,144      9.60       7.163       344        82.27
Condominium......................       342      62,232,532      6.74       6.959       341        83.63
2-4 Family.......................       216      53,941,776      5.84       7.117       341        82.73
                                      -----    ------------    ------       -----       ---        -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003    100.00%      7.078%      346        82.60%
                                      =====    ============    ======       =====       ===        =====



                                      S-73



                             GROUP II MORTGAGE LOANS

                                  LOAN PURPOSE



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE    AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
           LOAN PURPOSE               LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Purchase.........................     3,222    $576,449,364     62.45%     7.082%       343       83.51%
Refinance - Cashout..............     1,316     297,772,627     32.26      7.081        351       80.95
Refinance - Rate Term............       252      48,817,012      5.29      7.013        354       81.88
                                      -----    ------------    ------      -----        ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003    100.00%     7.078%       346       82.60%
                                      =====    ============    ======      =====        ===       =====


                               DOCUMENTATION LEVEL



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE    AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
       DOCUMENTATION LEVEL            LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

Full Documentation...............     2,536    $421,279,249     45.64%     6.976%       349       82.66%
Stated Documentation.............     1,951     412,019,497     44.64      7.298        344       82.51
Limited Documentation............       303      89,740,257      9.72      6.546        344       82.70
                                      -----    ------------    ------      -----        ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003    100.00%     7.078%       346       82.60%
                                      =====    ============    ======      =====        ===       =====



                                      S-74



                             GROUP II MORTGAGE LOANS

                        ORIGINAL PREPAYMENT PENALTY TERM



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE    AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
 ORIGINAL PREPAYMENT PENALTY TERM   MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
             (MONTHS)                 LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

0................................     1,154    $208,888,814     22.63%     7.313%       341       83.12%
12...............................       146      35,315,105      3.83      7.292        342       81.91
24...............................     2,929     597,082,613     64.69      6.964        348       82.28
36...............................       561      81,752,471      8.86      7.222        348       83.88
                                      -----    ------------    ------      -----        ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003    100.00%     7.078%       346       82.60%
                                      =====    ============    ======      =====        ===       =====


Non-Zero Minimum: 12 months
Maximum: 36 months
Non-Zero Weighted Average: 25 months

                                  LIEN POSITION



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE    AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
          LIEN POSITION               LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

1st Lien.........................     3,930    $860,812,010     93.26%     6.868%       356       81.37%
2nd Lien.........................       860      62,226,993      6.74      9.986        221       99.53
                                      -----    ------------    ------      -----        ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003    100.00%     7.078%       346       82.60%
                                      =====    ============    ======      =====        ===       =====



                                      S-75



                             GROUP II MORTGAGE LOANS

                           ORIGINAL INTEREST ONLY TERM



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE    AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
   ORIGINAL INTEREST ONLY TERM      MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
             (MONTHS)                 LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

0................................     4,042    $662,091,476     71.73%     7.332%       343       82.97%
24...............................       312     107,563,380     11.65      6.643        356       82.27
36...............................        11       3,770,497      0.41      6.369        356       83.79
60...............................       424     149,285,650     16.17      6.284        355       81.13
120..............................         1         328,000      0.04      6.225        355       80.00
                                      -----    ------------    ------      -----        ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003    100.00%     7.078%       346       82.60%
                                      =====    ============    ======      =====        ===       =====



                                      S-76



CREDIT SCORES

     Credit scores are obtained by many lenders in connection with mortgage loan
applications to help them assess a borrower's creditworthiness (the "CREDIT
SCORES"). Credit Scores are generated by models developed by a third party which
analyzed data on consumers in order to establish patterns which are believed to
be indicative of the borrower's probability of default. The Credit Score is
based on a borrower's historical credit data, including, among other things,
payment history, delinquencies on accounts, levels of outstanding indebtedness,
length of credit history, types of credit, and bankruptcy experience. Credit
Scores range from approximately 250 to approximately 900, with higher scores
indicating an individual with a more favorable credit history compared to an
individual with a lower score. However, a Credit Score purports only to be a
measurement of the relative degree of risk a borrower represents to a lender,
i.e., a borrower with a higher score is statistically expected to be less likely
to default in payment than a borrower with a lower score. Lenders have varying
ways of determining Credit Scores and, as a result, the determination of Credit
Scores across the industry is not consistent. In addition, it should be noted
that Credit Scores were developed to indicate a level of default probability
over a two-year period, which does not correspond to the life of a mortgage
loan. Furthermore, Credit Scores were not developed specifically for use in
connection with mortgage loans, but for consumer loans in general, and assess
only the borrower's past credit history. Therefore, a Credit Score does not take
into consideration the effect of mortgage loan characteristics (which may differ
from consumer loan characteristics) on the probability of repayment by the
borrower. There can be no assurance that the Credit Scores of the mortgagors
will be an accurate predictor of the likelihood of repayment of the related
mortgage loans.

     The following table sets forth information as to the Credit Scores of the
related mortgagors obtained in connection with the origination of each mortgage
loan.


                                      S-77



                             GROUP I MORTGAGE LOANS

                             RANGE OF CREDIT SCORES



                                                                 % OF
                                                              MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE     AVERAGE
                                       OF          DATE          DATE       GROSS    REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
      RANGE OF CREDIT SCORES          LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

500 - 524........................        77    $ 12,599,548       2.23%     8.364%      354        72.57%
525 - 549........................       137      22,227,271       3.94      8.471       356        76.71
550 - 574........................       310      45,128,054       8.00      7.942       355        78.49
575 - 599........................       537      68,832,372      12.20      7.494       349        80.62
600 - 624........................       926     124,283,978      22.03      7.146       351        81.72
625 - 649........................       860     116,607,155      20.67      7.041       350        83.54
650 - 674........................       584      79,873,455      14.16      6.947       349        84.39
675 - 699........................       325      48,096,032       8.52      6.787       347        83.08
700 - 724........................       181      25,248,810       4.48      6.711       343        83.67
725 - 749........................        92      10,717,218       1.90      6.833       345        82.27
750 - 774........................        60       7,342,740       1.30      6.719       341        84.32
775 - 799........................        18       2,493,321       0.44      6.214       351        77.40
800+.............................         8         729,899       0.13      6.636       345        85.86
                                      -----    ------------     ------      -----       ---        -----
   Total/Weighted Average/
      % of Mortgage Loan Pool:...     4,115    $564,179,853     100.00%     7.215%      350        81.91%
                                      =====    ============     ======      =====       ===        =====


Non-Zero Minimum: 500
Maximum: 820
Non-Zero Weighted Average: 628


                                      S-78



                             GROUP II MORTGAGE LOANS

                             RANGE OF CREDIT SCORES



                                                                 % OF
                                                               MORTGAGE
                                                               POOL BY
                                                 AGGREGATE    AGGREGATE   WEIGHTED    WEIGHTED   WEIGHTED
                                     NUMBER       CUT-OFF      CUT-OFF     AVERAGE    AVERAGE     AVERAGE
                                       OF          DATE          DATE      GROSS     REMAINING   COMBINED
                                    MORTGAGE     PRINCIPAL    PRINCIPAL   INTEREST      TERM     ORIGINAL
      RANGE OF CREDIT SCORES          LOANS     BALANCE ($)    BALANCE    RATE (%)    (MONTHS)    LTV(%)
---------------------------------   --------   ------------   ---------   --------   ---------   --------

500 - 524........................       123    $ 20,063,348       2.17%     7.957%      356       73.39%
525 - 549........................       209      36,137,974       3.92      7.830       355       76.11
550 - 574........................       259      49,590,755       5.37      7.810       356       80.09
575 - 599........................       456      73,035,218       7.91      7.353       349       81.72
600 - 624........................       854     151,122,599      16.37      7.124       349       82.86
625 - 649........................       904     174,927,107      18.95      7.000       349       83.72
650 - 674........................       814     165,097,779      17.89      6.981       342       83.44
675 - 699........................       530     113,882,582      12.34      6.736       342       83.62
700 - 724........................       293      58,954,812       6.39      6.813       340       84.03
725 - 749........................       197      43,416,447       4.70      6.769       340       82.67
750 - 774........................        96      23,364,921       2.53      6.842       341       83.29
775 - 799........................        51      12,284,272       1.33      6.735       346       83.50
800+.............................         4       1,161,188       0.13      6.577       356       81.95
                                      -----    ------------     ------      -----       ---       -----
   TOTAL/WEIGHTED AVERAGE/
      % OF MORTGAGE LOAN POOL:...     4,790    $923,039,003     100.00%     7.078%      346       82.60%
                                      =====    ============     ======      =====       ===       =====


Non-Zero Minimum: 500
Maximum: 813
Non-Zero Weighted Average: 644


                                      S-79



                                  THE SERVICERS

GENERAL

     The mortgage loans will be serviced by Countrywide Home Loans Servicing LP
("COUNTRYWIDE"), HomEq Servicing Corporation ("HOMEQ") and JPMorgan Chase Bank,
National Association ("JPMORGAN"). Countrywide will act as servicer for
approximately 36.86% of the mortgage loans, HomEq will act as servicer for
approximately 36.24% of the mortgage loans and JPMorgan will act as servicer for
approximately 26.90% of the mortgage loans.

     The information contained in this prospectus supplement with regard to
Countrywide, HomEq and JPMorgan has been provided by the applicable servicer.
None of the depositor, the underwriters, the original loan sellers, the trustee
or any other servicer or any of their respective affiliates has made any
independent investigation of such information or has made or will make any
representation as to the accuracy or completeness of such information.

     Each servicer will service the mortgage loans in accordance with the
pooling and servicing agreement.

COUNTRYWIDE HOME LOANS SERVICING LP

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

     Countrywide Home Loans established Countrywide 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 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 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. 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 upon sale or securitization of the related mortgage loans.
Countrywide 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 will service mortgage
loans for non-Countrywide Home Loans affiliated parties as well as subservice
mortgage loans on behalf of other servicers.

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

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

     Countrywide Home Loans

     Countrywide Home Loans is engaged primarily in the mortgage banking
business, and as such, originates, purchases, sells and services (either
directly or through subsidiaries) mortgage loans. Countrywide Home Loans
originates mortgage loans through a retail branch system and through mortgage
loan brokers and correspondents nationwide. Loans originated, purchased, sold or
serviced by Countrywide Home Loans are principally first-lien, fixed or
adjustable rate mortgage loans secured by single-family residences. References
in the remainder of this


                                      S-80



section to "Countrywide Home Loans" should be read to include Countrywide Home
Loans and its consolidated subsidiaries, including Countrywide.

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

     Loan Servicing

          Countrywide 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
Countrywide. The statement details all debits and credits and specifies the
payment due. Notice of changes in the applicable loan rate is provided by
Countrywide to the mortgagor with such statements.

     Collection Procedures

     When a mortgagor fails to make a payment on a subprime mortgage loan,
Countrywide attempts to cause the deficiency to be cured by corresponding with
the mortgagor. In most cases, deficiencies are cured promptly. Pursuant to
Countrywide's subprime servicing procedures, Countrywide generally mails to the
mortgagor 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 such loans, including any deficiencies.

     Once foreclosure is initiated by Countrywide, 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, Countrywide 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, Countrywide
may liquidate the mortgaged property and charge off the loan balance which was
not recovered through liquidation proceeds.


                                      S-81



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

     Foreclosure and Delinquency Experience

     The following table summarizes the delinquency and foreclosure experience,
respectively, on the dates indicated, of subprime mortgage loans serviced by
Countrywide Home Loans (excluding subserviced mortgage loans). A subprime
mortgage loan is characterized as delinquent if the borrower has not paid the
monthly payment due within one month of the related due date. The delinquency
and foreclosure percentages may be affected by the size and relative lack of
seasoning of the servicing portfolio because many of such loans were not
outstanding long enough to give rise to some or all of the periods of
delinquency indicated in the chart below. Accordingly, the information should
not be considered as a basis for assessing the likelihood, amount, or severity
of delinquency or losses on the mortgage loans to be transferred to the trust,
and no assurances can be given that the delinquency or foreclosure experience
presented in the table below will be indicative of such experience on the
mortgage loans to be transferred to the trust. The sum of the columns below may
not equal the total indicated due to rounding.

     For purposes of the following tables:

     o    the period of delinquency is based on the number of days payments are
          contractually past due;

     o    certain total percentages and dollar amounts may not equal the sum of
          the percentages and dollar amounts indicated in the columns due to
          differences in rounding;

     o    the "FORECLOSURE RATE" is the dollar amount of mortgage loans in
          foreclosure as a percentage of the total principal balance of mortgage
          loans outstanding as of the date indicated; and

     o    the "BANKRUPTCY RATE" is the dollar amount of mortgage loans for which
          the related borrower has declared bankruptcy as a percentage of the
          total principal balance of mortgage loans outstanding as of the date
          indicated.



                                                  DELINQUENCY AND FORECLOSURE EXPERIENCE
                                    ------------------------------------------------------------------
                                           AS OF JUNE 30, 2005             AS OF DECEMBER 31, 2004
                                    --------------------------------   -------------------------------
                                     PRINCIPAL BALANCE    PERCENTAGE    PRINCIPAL BALANCE   PERCENTAGE
                                    -------------------   ----------   ------------------   ----------

Total Portfolio..................   $104,541,541,006.83     100.00%    $86,105,709,592.36     100.00%
Delinquency Percentage
   30-59 Days....................   $  6,215,070,853.72       5.95%    $ 5,511,694,342.31       6.40%
   60-89 Days....................   $  1,914,582,438.10       1.83%    $ 1,737,804,023.07       2.02%
   90+ Days......................   $    839,001,087.84       0.80%    $   652,867,195.37       0.76%
                                    -------------------     ------     ------------------     ------
Sub-Total........................   $  8,968,654,379.66       8.58%    $ 7,902,365,560.75       9.18%
                                    -------------------     ------     ------------------     ------
Foreclosure Rate.................   $  1,692,988,223.50       1.62%    $ 1,327,051,535.23       1.54%
Bankruptcy Rate..................   $    917,901,692.43       0.88%    $   781,916,352.86       0.91%



                                      S-82





                                                  DELINQUENCY AND FORECLOSURE EXPERIENCE
                                    -----------------------------------------------------------------
                                        AS OF DECEMBER 31, 2003           AS OF DECEMBER 31, 2002
                                    -------------------------------   -------------------------------
                                     PRINCIPAL BALANCE   PERCENTAGE    PRINCIPAL BALANCE   PERCENTAGE
                                    ------------------   ----------   ------------------   ----------

Total Portfolio..................   $39,058,523,423.20     100.00%    $22,769,082,711.09     100.00%
Delinquency Percentage
   30-59 Days....................   $ 2,409,274,879.48       6.17%    $ 1,591,562,076.96       6.99%
   60-89 Days....................   $   728,740,335.77       1.87%    $   541,119,231.96       2.38%
   90+ Days......................   $   210,424,049.89       0.54%    $   226,171,736.77       0.99%
                                    ------------------     ------     ------------------     ------
Sub-Total........................   $ 3,348,439,265.14       8.57%    $ 2,358,853,045.69      10.36%
                                    ------------------     ------     ------------------     ------
Foreclosure Rate.................   $   692,149,703.63       1.77%    $   633,348,957.76       2.78%
Bankruptcy Rate..................   $   609,395,518.03       1.56%    $   551,267,050.86       2.42%


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

HOMEQ SERVICING CORPORATION

     The information contained in this prospectus supplement with regard to
HomEq Servicing Corporation, a servicer, has been provided by HomEq. None of the
depositor, the underwriters, the other servicers, the trustee or any of their
respective affiliates has made any independent investigation of such information
or has made or will make any representation as to the accuracy or completeness
of such information.

     HomEq is a nationwide consumer loan servicing company, primarily involved
in mortgage loan servicing, with facilities in North Highlands, California,
Raleigh, North Carolina and Boone, North Carolina. HomEq is a subsidiary of
Wachovia Corporation, the fourth largest bank holding company in the United
States with assets of $532 billion as of September 30, 2005.

     As of September 30, 2005, HomEq serviced approximately 344,000 prime and
sub-prime home mortgage loans with a total principal balance of approximately
$47.1 billion.

     HomEq's residential sub-prime and alternative servicing operations are
currently rated as "Strong" by S&P. Fitch has rated HomEq "RPS1" as a primary
servicer of residential Alt-A and sub-prime products, and "RSS1" as a special
servicer. Moody's has rated HomEq "SQ1" as a primary servicer of residential
sub-prime mortgage loans. HomEq is an approved Fannie Mae and Freddie Mac
servicer.

     HomEq's Delinquency and Foreclosure Experience

     The following tables set forth the delinquency and foreclosure experience
of the mortgage loans serviced by HomEq at the end of the indicated periods. The
indicated periods of delinquency are based on the number of days past due on a
contractual basis. No mortgage loan is considered delinquent for these purposes
until it has not been paid by the next scheduled due date. HomEq's portfolio may
differ significantly from the mortgage loans in the mortgage loan pool in terms
of interest rates, principal balances, geographic distribution, types of
properties, lien priority, origination and underwriting criteria, prior servicer
performance and other possibly relevant characteristics. There can be no
assurance, and no representation is made, that the delinquency and foreclosure
experience with respect to the mortgage loans in the mortgage loan pool will be
similar to that reflected in the table below, nor is any representation made as
to the rate at which losses may be experienced on liquidation of defaulted
mortgage loans in the mortgage loan pool. The actual delinquency experience with
respect to the mortgage loans in the mortgage loan pool will depend, among other
things, upon the value of the real estate securing such mortgage loans in the
mortgage loan pool and the ability of the related borrower to make required
payments. It should be noted that if the residential real estate market should
experience an overall decline in property values, the actual rates of
delinquencies and foreclosures could be higher than those previously experienced
by HomEq. In addition, adverse economic


                                      S-83



conditions may affect the timely payment by borrowers of scheduled payments of
principal and interest on the mortgage loans in the mortgage loan pool and,
accordingly, the actual rates of delinquencies and foreclosures with respect to
the mortgage loan pool. Finally, the statistics shown below represent the
delinquency experience for HomEq's mortgage servicing portfolio only for the
periods presented, whereas the aggregate delinquency experience with respect to
the mortgage loans comprising the mortgage loan pool will depend on the results
obtained over the life of the mortgage loan pool.

                     HOMEQ MORTGAGE LOAN SERVICING PORTFOLIO
                         DELINQUENCIES AND FORECLOSURES

                          (DOLLAR AMOUNTS IN THOUSANDS)



                                             AS OF SEPTEMBER 30, 2005                     AS OF DECEMBER 31, 2004
                                    ------------------------------------------   ------------------------------------------
                                                                    PERCENT BY                                   PERCENT BY
                                    NUMBER OF                       PRINCIPAL    NUMBER OF                        PRINCIPAL
                                      LOANS     PRINCIPAL BALANCE    BALANCE       LOANS     PRINCIPAL BALANCE    BALANCE
                                    ---------   -----------------   ----------   ---------   -----------------   ----------

Current Loans....................    281,442       $39,785,747        84.41%      301,208       $37,671,124         88.00%
                                     -------       -----------       ------       -------       -----------        ------
Period of Delinquency
   30 to 59 days.................     25,388         3,381,994         7.18%       20,831         2,378,568          5.56%
   60 to 89 days.................      7,610         1,023,584         2.17%        6,575           761,639          1.78%
   90 days or more...............      4,051           462,895         0.98%        3,285           324,419          0.76%
                                     -------       -----------       ------       -------       -----------        ------
Total Delinquencies..............     37,049         4,868,473        10.33%       30,691         3,464,625          8.09%
                                     -------       -----------       ------       -------       -----------        ------
Foreclosures.....................      9,218         1,159,582         2.46%        7,006           703,929          1.64%
Bankruptcies.....................     12,792           970,358         2.06%       12,181           778,816          1.82%
                                     -------       -----------       ------       -------       -----------        ------
Total Foreclosures and
   Bankruptcies..................     22,010         2,129,939         4.52%       19,187         1,482,745          3.46%
                                     -------       -----------       ------       -------       -----------        ------
Real Estate Owned................      3,829           351,578         0.75%        2,528           190,081          0.44%
                                     =======       ===========       ======       =======       ===========        ======
Total Portfolio..................    344,330       $47,135,738       100.00%      353,614       $42,808,576        100.00%
                                     =======       ===========       ======       =======       ===========        ======




                                             AS OF DECEMBER 31, 2003                      AS OF DECEMBER 31, 2002
                                    ------------------------------------------   ------------------------------------------
                                                                    PERCENT BY                                   PERCENT BY
                                    NUMBER OF                        PRINCIPAL   NUMBER OF                        PRINCIPAL
                                      LOANS     PRINCIPAL BALANCE     BALANCE      LOANS     PRINCIPAL BALANCE     BALANCE
                                    ---------   -----------------   ----------   ---------   -----------------   ----------

Current Loans....................    234,635       $21,488,618         89.11%     255,443       $14,803,485         87.42%
                                     -------       -----------        ------      -------       -----------        ------
Period of Delinquency
   30 to 59 days.................     13,709         1,029,985          4.27%      13,387           658,621          3.89%
   60 to 89 days.................      3,838           276,720          1.15%       3,907           184,752          1.09%
   90 days or more...............      2,775           185,249          0.77%       3,610           183,220          1.08%
                                     -------       -----------        ------      -------       -----------        ------
Total Delinquencies..............     20,322         1,491,954          6.19%      20,904         1,026,593          6.06%
                                     -------       -----------        ------      -------       -----------        ------
Foreclosures.....................      5,101           363,205          1.51%       5,031           302,383          1.79%
Bankruptcies.....................     11,322           609,434          2.53%      12,424           616,366          3.64%
                                     -------       -----------        ------      -------       -----------        ------
Total Foreclosures and
   Bankruptcies..................     16,423           972,639          4.03%      17,455           918,749          5.43%
                                     -------       -----------        ------      -------       -----------        ------
Real Estate Owned................      2,597           160,334          0.66%       3,119           185,437          1.10%
                                     =======       ===========        ======      =======       ===========        ======
Total Portfolio..................    273,977       $24,113,545        100.00%     296,921       $16,934,264        100.00%
                                     =======       ===========        ======      =======       ===========        ======


JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

     General

     JPMorgan is a wholly-owned bank subsidiary of JPMorgan Chase & Co., a
Delaware corporation whose principal office is located in New York, New York.
JPMorgan is a commercial bank offering a wide range of banking services to its
customers both domestically and internationally. It is chartered, and its
business is subject to


                                      S-84



examination and regulation, by the Office of the Comptroller of the Currency.
JPMorgan's main office is located in Columbus, Ohio. It is a member of the
Federal Reserve System and its deposits are insured by the Federal Deposit
Insurance Corporation.

     Prior to January 1, 2005, JPMorgan formed Chase Home Finance LLC ("CHF"), a
wholly-owned, limited liability corporation. Prior to January 1, 2005, Chase
Manhattan Mortgage Corporation ("CMMC") was engaged in the mortgage origination
and servicing businesses. On January 1, 2005, CMMC merged with and into CHF with
CHF as the surviving entity. JPMorgan will be the servicer of all originations
and servicing rights purchases occurring on or after January 1, 2005 and will
engage CHF as its subservicer. CHF is engaged in the business of servicing
mortgage loans and will continue to directly service its servicing portfolio
existing prior to January 1, 2005.

     In its capacity as servicer, JPMorgan will be responsible for servicing
certain of the mortgage loans in accordance with the terms set forth in the
pooling and servicing agreement. JPMorgan may perform any or all of its
obligations under the pooling and servicing agreement through one or more
subservicers. JPMorgan has engaged CHF as its subservicer to perform loan
servicing activities for the mortgage loans on its behalf. JPMorgan will remain
liable for its servicing duties and obligations under the pooling and servicing
agreement as if JPMorgan alone were servicing those mortgage loans.

     Chase Home Finance LLC

     Due to the recent restructuring of its mortgage operations JPMorgan does
not have meaningful historical servicing data. As a result and due to JPMorgan's
engagement of CHF as its subservicer, CHF is providing below historical
delinquency, foreclosure and loan loss data for its portfolio of fixed rate and
adjustable rate subprime mortgage loans which were originated or purchased by
CHF and subsequently securitized in asset-backed transactions (the "CHF SUBPRIME
SECURITIZED SERVICING PORTFOLIO"). The CHF Subprime Securitized Servicing
Portfolio represents only a portion of the total servicing portfolio of CHF and
many of the mortgage loans in the CHF Subprime Securitized Servicing Portfolio
have not been outstanding long enough to experience the level of delinquencies,
foreclosures and loan losses which might be expected to occur on a larger, more
seasoned portfolio of mortgage loans which were underwritten, originated and
serviced in a manner similar to the mortgage loans in the CHF Subprime
Securitized Servicing Portfolio. Because of the relatively small size and
relative lack of seasoning of the CHF Subprime Securitized Servicing Portfolio,
there can be no assurance that the delinquency, foreclosure and loan loss
experience on the mortgage loans subserviced by CHF for JPMorgan in this
transaction will correspond to the delinquency, foreclosure and loan loss
experience shown in the tables below, and the actual delinquency, foreclosure
and loan loss experience on the mortgage loans subserviced by CHF for JPMorgan
in this transaction could be significantly worse. Moreover, the mortgage loans
subserviced by CHF for JPMorgan in this transaction were not originated by CHF
and as a result, the actual delinquency, loss and foreclosure experience on such
mortgage loans could be significantly worse than the delinquency, foreclosure
and loan loss experience shown in the tables below.

     CHF Subprime Securitized Servicing Portfolio

     The following tables contain information relating to the delinquency, loan
loss and foreclosure experience with respect to the CHF Subprime Securitized
Servicing Portfolio.


                                      S-85



                  DELINQUENCY AND FORECLOSURE EXPERIENCE OF THE
                  CHF SUBPRIME SECURITIZED SERVICING PORTFOLIO
                             (DOLLARS IN THOUSANDS)



                     AS OF JUNE 30, 2005  AS OF DECEMBER 31, 2004  AS OF DECEMBER 31, 2003  AS OF DECEMBER 31, 2002
                    --------------------  -----------------------  -----------------------  -----------------------
                     NUMBER     DOLLAR     NUMBER OF     DOLLAR     NUMBER OF     DOLLAR    NUMBER OF      DOLLAR
                    OF LOANS    AMOUNT       LOANS       AMOUNT       LOANS       AMOUNT      LOANS       AMOUNT
                    --------  ----------  ----------  -----------  ----------  -----------  ---------  ------------

Portfolio            60,264   $7,268,961     75,898   $9,388,238     90,370    $11,146,244     73,597   $8,326,818
Delinquency
   30-59 days          2.43%        1.98%      2.41%        1.83%      2.40%          1.83%      2.69%        2.28%
   60-89 days          0.67%        0.48%      0.70%        0.54%      0.84%          0.66%      0.86%        0.72%
   90 days or more     1.80%        1.26%      1.75%        1.31%      1.43%          1.15%      1.41%        1.21%
                     ------   ----------     ------   ----------     ------    -----------     ------   ----------
Total                  4.90%        3.72%      4.86%        3.68%      4.67%          3.64%      4.96%        4.21%
                     ======   ==========     ======   ==========     ======    ===========     ======   ==========
Foreclosure rate       2.64%        2.21%      2.72%        2.20%      2.47%          2.06%      2.65%        2.48%
REO properties          441         N/A         504          N/A        532            N/A        480          N/A


     The period of delinquency is based on the number of days payments are
contractually past due. The delinquency statistics for the period exclude loans
in foreclosure. The portfolio statistics set forth above exclude REO properties.

     The foreclosure rate reflects the number of mortgage loans in foreclosure
as a percentage of the total number of mortgage loans or the dollar amount of
mortgage loans in foreclosure as a percentage of the total dollar amount of
mortgage loans, as the case may be, as of the date indicated. REO properties are
real estate owned properties which relate to foreclosed mortgages or properties
for which deeds in lieu of foreclosure have been accepted, and held by CHF
pending disposition.

                         LOAN LOSS EXPERIENCE OF THE CHF
                    SUBPRIME SECURITIZED SERVICING PORTFOLIO
                             (DOLLARS IN THOUSANDS)



                                    SIX MONTHS ENDING      YEAR ENDING        YEAR ENDING         YEAR ENDING
                                      JUNE 30, 2005     DECEMBER 31, 2004   DECEMBER 31, 2003   DECEMBER 31, 2002
                                    -----------------   -----------------   -----------------   -----------------

Average amount outstanding.......       $8,178,647         $10,443,888          $9,642,035          $7,902,732
Net losses.......................       $   31,834         $    73,858          $   73,504          $   43,458
Net losses as a percentage of
average amount outstanding.......             0.39%               0.71%               0.76%               0.55%


     The average amount outstanding during the period is the arithmetic average
of the principal balances of the mortgage loans outstanding on the last business
day of each month during the period. Net losses are amounts relating to mortgage
loans which have been determined by CHF to be uncollectible, less amounts
received by CHF as recoveries from liquidation proceeds and deficiency
judgments.

     In general, during periods in which the residential real estate market is
experiencing an overall decline in property values such that the principal
balances of mortgage loans and any secondary financing on the related mortgaged
properties become equal to or greater than the value of the related mortgaged
properties, rates of delinquencies, foreclosure and losses could be
significantly higher than might otherwise be the case. In addition, adverse
economic conditions (which may affect real property values) may affect the
timely payment by mortgagors of scheduled payments, and accordingly, the actual
rates of delinquencies, foreclosures and losses with respect to the mortgage
pool.


                                      S-86



     Collection Procedures. CHF employs a variety of collection techniques
during the various stages of delinquency. The primary purpose of all collection
efforts performed by CHF is to bring a delinquent mortgage loan current in as
short a time as possible. Phone calls are used as the principal form of
contacting a mortgagor. CHF utilizes a combination of predictive and preview
dialer strategies to maximize the results of collection calling activity. Prior
to initiating foreclosure proceedings, CHF makes every reasonable effort to
determine the reason for the default; whether the delinquency is a temporary or
permanent condition; and the mortgagor's attitude toward the obligation. CHF
will take action to foreclose a mortgage only once every reasonable effort to
cure the default has been made and a projection of the ultimate gain or loss on
REO sale is determined. In accordance with accepted servicing practices,
foreclosures are processed within individual state guidelines and in accordance
with the provisions of the mortgage and applicable state law.

     THERE CAN BE NO ASSURANCE THAT THE DELINQUENCY, FORECLOSURE AND/OR LOAN
LOSS EXPERIENCE ON THE MORTGAGE LOANS SERVICED BY COUNTRYWIDE, HOMEQ OR JPMORGAN
IN THIS TRANSACTION WILL CORRESPOND TO THE DELINQUENCY, FORECLOSURE AND LOAN
LOSS EXPERIENCE SET FORTH IN THE TABLES ABOVE, IN PART BECAUSE THE PORTFOLIO OF
MORTGAGE LOANS REFLECTED IN THOSE TABLES IS RELATIVELY UNSEASONED, WHICH IS
LIKELY TO CAUSE THE DELINQUENCY, FORECLOSURE AND LOAN LOSS EXPERIENCE SHOWN TO
UNDERSTATE, PERHAPS SUBSTANTIALLY, THE ACTUAL DELINQUENCY, FORECLOSURE AND LOAN
LOSS EXPERIENCE THAT MIGHT OCCUR AS THE PORTFOLIO BECOMES MORE SEASONED.
THEREFORE, NEITHER WE, COUNTRYWIDE, HOMEQ NOR JPMORGAN CAN PREDICT TO WHAT
DEGREE THE ACTUAL DELINQUENCY, FORECLOSURE AND/OR LOAN LOSS EXPERIENCE ON THE
MORTGAGE LOANS SERVICED BY COUNTRYWIDE, HOMEQ OR JPMORGAN IN THIS TRANSACTION
WILL CORRESPOND TO THE STATISTICAL INFORMATION SET FORTH ABOVE IN THOSE TABLES.
CONSEQUENTLY, THE DELINQUENCY, FORECLOSURE AND/OR LOAN LOSS EXPERIENCE SET FORTH
IN THE TABLES ABOVE MAY NOT NECESSARILY BE MATERIAL TO A PROSPECTIVE INVESTOR'S
DECISION TO INVEST IN THE OFFERED CERTIFICATES.

                                   THE TRUSTEE

     Wells Fargo Bank, National Association, a national banking association, has
offices (i) for purposes of certificate transfers, at Wells Fargo Center, Sixth
Street and Marquette Avenue, Minneapolis, Minnesota 55479 and (ii) for all other
purposes, at 9062 Old Annapolis Road, Columbia, Maryland 21045, Attention:
Client Manager MSAC 2005-HE5. The trustee will perform administrative functions
on behalf of the trust fund and for the benefit of the certificateholders
pursuant to the terms of the pooling and servicing agreement. The trustee's
duties are limited solely to its express obligations under the pooling and
servicing agreement. See "The Pooling and Servicing Agreement" in this
prospectus supplement.

                         DESCRIPTION OF THE CERTIFICATES

GENERAL

     On the closing date, the trust will be created and the depositor will cause
the trust to issue the certificates. The certificates will be issued in sixteen
classes, the Class A-1, Class A-2a, Class A-2b, Class A-2c, Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class
B-3, Class P, Class X and Class R certificates. Only the Class A-1, Class A-2a,
Class A-2b, Class A-2c, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class B-1, Class B-2 and Class B-3 certificates, collectively, the
"OFFERED CERTIFICATES," will be offered under this prospectus supplement. The
certificates will collectively represent the entire undivided ownership interest
in the trust fund created and held under the pooling and servicing agreement,
subject to the limits and priority of distribution provided for in that
agreement.

     The trust fund will consist of:

     o    the mortgage loans, together with the related mortgage files and all
          related collections and proceeds due and collected after the cut-off
          date;

     o    such assets as from time to time are identified as REO property and
          related collections and proceeds;

     o    assets that are deposited in the accounts, and invested in accordance
          with the pooling and servicing agreement; and


                                      S-87



     o    an interest rate swap agreement.

     The Offered Certificates will be issued and available only in book-entry
form, in denominations of $25,000 initial principal balance and integral
multiples of $1 in excess of $25,000, except that one certificate of each class
may be issued in a different amount. Voting rights will be allocated among
holders of the Offered Certificates in proportion to the Class Certificate
Balances of their respective certificates on such date, except that the Class X
and Class P certificates will each be allocated 1% of the voting rights.

     The Class A-1 certificates generally represent interests in the group I
mortgage loans. The Class A-2a, Class A-2b and Class A-2c certificates generally
represent interests in the group II mortgage loans. The Class M and Class B
certificates represent interests in all of the mortgage loans.

BOOK-ENTRY REGISTRATION

     The Offered Certificates are sometimes referred to in this prospectus
supplement as "book-entry certificates." No person acquiring an interest in the
book-entry certificates will be entitled to receive a definitive certificate
representing an obligation of the trust, except under the limited circumstances
described in this prospectus supplement. Beneficial owners may elect to hold
their interests through DTC, in the United States, or Clearstream Banking,
societe anonyme or Euroclear Bank, as operator of the Euroclear System, in
Europe. Transfers within DTC, Clearstream or Euroclear, as the case may be, will
be in accordance with the usual rules and operating procedures of the relevant
system. So long as the Offered Certificates are book-entry certificates, such
certificates will be evidenced by one or more certificates registered in the
name of Cede & Co., which will be the "holder" of such certificates, as the
nominee of DTC or one of the relevant depositories. Cross-market transfers
between persons holding directly or indirectly through DTC, on the one hand, and
counterparties holding directly or indirectly through Clearstream or Euroclear,
on the other, will be effected in DTC through the relevant depositories of
Clearstream or Euroclear, respectively, and each a participating member of DTC.
The interests of the beneficial owners of interests in the Offered Certificates
will be represented by book-entries on the records of DTC and its participating
members. All references in this prospectus supplement to the Offered
Certificates reflect the rights of beneficial owners only as such rights may be
exercised through DTC and its participating organizations for so long as such
certificates are held by DTC.

     The beneficial owners of the Offered Certificates may elect to hold their
certificates through DTC in the United States, or Clearstream or Euroclear, if
they are participants in such systems, or indirectly through organizations which
are participants in such systems. The Offered Certificates will be issued in one
or more certificates which in the aggregate equal the outstanding principal of
the related class of certificates and will initially be registered in the name
of Cede & Co., the nominee of DTC. Clearstream and Euroclear will hold omnibus
positions on behalf of their participants through customers securities accounts
in Clearstream's and Euroclear's names on the books of their respective
depositories, which in turn will hold such positions in customers' securities
accounts in the depositories names on the books of DTC. Except as described
below, no beneficial owner will be entitled to receive a physical or definitive
certificates. Unless and until definitive certificates are issued, it is
anticipated that the only holder of the Offered Certificates will be Cede & Co.,
as nominee of DTC. Beneficial owners will not be holders or certificateholders
as those terms are used in the pooling and servicing agreement. Beneficial
owners are only permitted to exercise their rights indirectly through
participants and DTC.

     The beneficial owner's ownership of a book-entry certificate will be
recorded on the records of the brokerage firm, bank, thrift institution or other
financial intermediary that maintains the beneficial owner's account for such
purpose. In turn, the financial intermediary's ownership of such book-entry
certificate will be recorded on the records of DTC or on the records of a
participating firm that acts as agent for the financial intermediary, whose
interest will in turn be recorded on the records of DTC, if the beneficial
owner's financial intermediary is not a DTC participant and on the records of
Clearstream or Euroclear, as appropriate.

     DTC is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a clearing
corporation within the meaning of the New York UCC and a "clearing agency"
registered pursuant to Section 17A of the Exchange Act. DTC was created to hold
securities for its participants and to facilitate the clearance and settlement
of securities transactions between participants through electronic book-entries,
thus eliminating the need for physical movement of certificates. Participants
include securities brokers and dealers, including underwriters, banks, trust
companies and clearing corporations. Indirect access to the DTC


                                      S-88



system also is available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly through indirect participants.

     Under the rules, regulations and procedures creating and affecting DTC and
its operations, DTC is required to make book-entry transfers of book-entry
certificates, such as the Offered Certificates, among participants on whose
behalf it acts with respect to the book-entry certificates and to receive and
transmit distributions of principal of and interest on the book-entry
certificates. Participants and indirect participants with which beneficial
owners have accounts with respect to the book-entry certificates similarly are
required to make book-entry transfers and receive and transmit such
distributions on behalf of their respective beneficial owners.

     Beneficial owners that are not participants or indirect participants but
desire to purchase, sell or otherwise transfer ownership of, or other interests
in, book-entry certificates may do so only through participants and indirect
participants. In addition, beneficial owners will receive all distributions of
principal and interest from the trustee, or a paying agent on behalf of the
trustee, through DTC participants. DTC will forward such distributions to its
participants, which thereafter will forward them to indirect participants or
beneficial owners. Beneficial owners will not be recognized by the trustee or
any paying agent as holders of the Offered Certificates, and beneficial owners
will be permitted to exercise the rights of the holders of the Offered
Certificates only indirectly through DTC and its participants.

     Because of time zone differences, it is possible that credits of securities
received in Clearstream or Euroclear as a result of a transaction with a
participant will be made during subsequent securities settlement processing and
dated the business day following the DTC settlement date. Such credits or any
transactions in such securities settled during such processing will be reported
to the relevant Euroclear or Clearstream participants on such business day. Cash
received in Clearstream or Euroclear as a result of sales of securities by or
through a Clearstream participant or Euroclear participant to a DTC participant
will be received with value on the DTC settlement date but, due to time zone
differences, may be available in the relevant Clearstream 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 participants and Euroclear participants will occur
in accordance with their respective rules and operating procedures.

     Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Clearstream
participants or Euroclear participants, on the other, will be effected in DTC in
accordance with DTC rules on behalf of the relevant European international
clearing system by the relevant depositary, each of which is a participating
member of DTC. However, such cross-market transactions will require delivery of
instructions to the relevant European international clearing system by the
counterparty in such system in accordance with its rules and procedures and
within its established deadlines. The relevant European international clearing
system will, if the transaction meets its settlement requirements, deliver
instructions to the relevant depositary to take action to effect final
settlement on its behalf by delivering or receiving securities in DTC, and
making or receiving distribution in accordance with normal procedures for same
day funds settlement applicable to DTC. Clearstream participants and Euroclear
participants may not deliver instructions directly to the relevant depositories
for Clearstream or Euroclear.

     Clearstream holds securities for its participant organizations and
facilitates the clearance and settlement of securities transactions between
Clearstream participants through electronic book-entry changes in accounts of
Clearstream participants, thus eliminating the need for physical movement of
securities. Transactions may be settled through Clearstream in many currencies,
including United States dollars. Clearstream provides to its Clearstream
participants, among other things, services for safekeeping, administration,
clearance and settlement of internationally traded securities and securities
lending and borrowing. Clearstream interfaces with domestic markets in several
countries. Clearstream participants are recognized financial institutions around
the world, including underwriters, securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. Indirect
access to Clearstream is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a Clearstream participant, either directly or indirectly.

     Euroclear was created to hold securities for its participants and to clear
and settle transactions between its participants through simultaneous electronic
book-entry delivery against payment, thereby eliminating the need for


                                      S-89



physical movement of certificates and any risk from lack of simultaneous
transfers of securities and cash. The Euroclear System is owned by Euroclear plc
and operated through a license agreement by Euroclear Bank S.A./N.V., a bank
incorporated under the laws of the Kingdom of Belgium (the "EUROCLEAR
OPERATOR"). The Euroclear Operator holds securities and book-entry interests in
securities for participating organizations and facilitates the clearance and
settlement of securities transactions between Euroclear participants, and
between Euroclear participants and participants of certain other securities
intermediaries through electronic book-entry changes in accounts of such
participants or other securities intermediaries. Non-participants of Euroclear
may hold and transfer book-entry interests in the Offered Certificates through
accounts with a direct participant of Euroclear or any other securities
intermediary that holds a book-entry interest in the Offered Certificates
through one or more securities intermediaries standing between such other
securities intermediary and the Euroclear Operator. 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. All securities in Euroclear
are held on a fungible basis without attribution of specific certificates to
specific securities clearance accounts. The Euroclear Operator acts only on
behalf of Euroclear participants and has no record of or relationship with
persons holding through Euroclear participants.

     Distributions on the book-entry certificates will be made on each
distribution date by the trustee to Cede & Co., as nominee of DTC. DTC will be
responsible for crediting the amount of such distributions to the accounts of
the applicable DTC participants in accordance with DTC's normal procedures. Each
DTC participant will be responsible for disbursing such distribution to the
beneficial owners of the book-entry certificates that it represents and to each
financial intermediary for which it acts as agent. Each such financial
intermediary will be responsible for disbursing funds to the beneficial owners
of the book-entry certificates that it represents.

     Under a book-entry format, beneficial owners of the book-entry certificates
may experience some delay in their receipt of distributions, since such
distributions will be forwarded by the trustee to Cede & Co., as nominee of DTC.
Distributions with respect to certificates held through Clearstream or Euroclear
will be credited to the cash accounts of Clearstream participants or Euroclear
participants in accordance with the relevant system's rules and procedures, to
the extent received by the relevant depositary. Such distributions will be
subject to tax reporting in accordance with relevant United States tax laws and
regulations. Because DTC can only act on behalf of financial intermediaries, the
ability of a beneficial owner to pledge book-entry certificates to persons or
entities that do not participate in the DTC system, or otherwise take actions in
respect of such book-entry certificates, may be limited due to the lack of
physical certificates for such book-entry certificates. In addition, issuance of
the book-entry certificates in book-entry form may reduce the liquidity of such
certificates in the secondary market since certain potential investors may be
unwilling to purchase certificates for which they cannot obtain physical
certificates.

     Monthly and annual reports on the trust provided by the trustee 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, and to the financial intermediaries to whose DTC accounts the book-entry
certificates of such beneficial owners are credited.

     DTC has advised the depositor that it will take any action permitted to be
taken by a holder of the Offered Certificates under the pooling and servicing
agreement only at the direction of one or more participants to whose accounts
with DTC the book-entry certificates are credited. Additionally, DTC has advised
the depositor that it will take such actions with respect to specified
percentages of voting rights only at the direction of and on behalf of
participants whose holdings of book-entry certificates evidence such specified
percentages of voting rights. DTC may take conflicting actions with respect to
percentages of voting rights to the extent that participants whose holdings of
book-entry certificates evidence such percentages of voting rights authorize
divergent action.

     None of the trust, the depositor, the servicers, or the trustee will have
any responsibility for any aspect of the records relating to or distributions
made on account of beneficial ownership interests of the book-entry certificates
held by Cede & Co., as nominee for DTC, or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.

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


                                      S-90



     See also the attached Annex I for certain information regarding U.S.
federal income tax documentation requirements for investors holding certificates
through Clearstream or Euroclear (or through DTC if the holder has an address
outside the United States).

DEFINITIVE CERTIFICATES

     The Offered Certificates, which will be issued initially as book-entry
certificates, will be converted to definitive certificates and reissued to
beneficial owners or their nominees, rather than to DTC or its nominee, only if
(a) DTC or the depositor advises the trustee in writing that DTC is no longer
willing or able to properly discharge its responsibilities as depository with
respect to the book-entry certificates and the trustee or the depositor is
unable to locate a qualified successor or (b) the depositor, at its option (but
with the trustee's consent), notifies DTC of its intent to terminate the
book-entry system through DTC and, upon receipt of notice of such intent from
DTC, the participants holding beneficial interests in the certificates agree to
initiate such termination.

     Upon the occurrence of any event described in the immediately preceding
paragraph, the trustee will be required to notify all participants of the
availability through DTC of definitive certificates. Upon delivery of definitive
certificates, the trustee will reissue the book-entry certificates as definitive
certificates to beneficial owners. Distributions of principal of, and interest
on, the book-entry certificates will thereafter be made by the trustee, or a
paying agent on behalf of the trustee, directly to holders of definitive
certificates in accordance with the procedures set forth in the pooling and
servicing agreement.

     Definitive certificates will be transferable and exchangeable at the
offices of the trustee, its agent or the certificate registrar designated from
time to time for those purposes. As of the closing, the trustee designates its
office located at Wells Fargo Center, Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479 for those purposes. No service charge will be
imposed for any registration of transfer or exchange, but the trustee may
require distribution of a sum sufficient to cover any tax or other governmental
charge imposed in connection with the transfer or exchange.

ASSIGNMENT OF THE MORTGAGE LOANS

     Pursuant to mortgage loan purchase and warranties agreements, WMC Mortgage
Corp., Decision One Mortgage Company, LLC and NC Capital Corporation sold the
mortgage loans, without recourse, to Morgan Stanley Mortgage Capital Inc.
("MSMC"), an affiliate of the depositor, and MSMC will sell, transfer, assign,
set over and otherwise convey the mortgage loans, including all principal
outstanding as of, and interest due and accruing on or after, the close of
business on the cut-off date, without recourse, to the depositor on the closing
date. Pursuant to the pooling and servicing agreement, the depositor will sell,
without recourse, to the trust, all right, title and interest in and to each
mortgage loan, including all principal outstanding as of, and interest due on or
after, the close of business on the cut-off date. Each such transfer will convey
all right, title and interest in and to (a) principal outstanding as of the
close of business on the cut-off date (after giving effect to payments of
principal due on that date, whether or not received) and (b) interest due and
accrued on each such mortgage loan after the cut-off date. However, MSMC will
not convey to the depositor, and will retain all of its right, title and
interest in and to (x) principal due on each mortgage loan on or prior to the
cut-off date and principal prepayments in full and curtailments (i.e., partial
prepayments) received on each such mortgage loan prior to the cut-off date and
(y) interest due and accrued on each mortgage loan on or prior to the cut-off
date.

DELIVERY OF MORTGAGE LOAN DOCUMENTS

     In connection with the transfer and assignment of each mortgage loan to the
trust, the depositor will cause to be delivered to Wells Fargo Bank, National
Association, LaSalle Bank National Association or Deutsche Bank National Trust
Company, as the applicable custodian on behalf of the trustee with respect to
that mortgage loan, on or before the closing date, the following documents with
respect to each mortgage loan which constitute the mortgage file:

               (a) the original mortgage note, endorsed without recourse in
     blank by the last endorsee, including all intervening endorsements showing
     a complete chain of endorsement from the originator to the last endorsee;

               (b) the original of any guaranty executed in connection with the
     mortgage note;


                                      S-91



               (c) the related original mortgage and evidence of its recording
     or, in certain limited circumstances, a copy of the mortgage certified by
     the originator, escrow company, title company, or closing attorney;

               (d) the mortgage assignment(s), or copies of them certified by
     the applicable originator, escrow company, title company, or closing
     attorney, if any, showing a complete chain of assignment from the
     originator of the related mortgage loan to the last endorsee - which
     assignment may, at the originator's option, be combined with the assignment
     referred to in clause (e) below;

               (e) a mortgage assignment in recordable form, which, if
     acceptable for recording in the relevant jurisdiction, may be included in a
     blanket assignment or assignments, of each mortgage from the last endorsee
     in blank;

               (f) originals or certified copies of all assumption,
     modification, consolidation and extension agreements, with evidence of
     recording on them;

               (g) an original title insurance policy or, in the event the
     original policy is unavailable, a certified true copy of the related policy
     binder, preliminary report or commitment for title certified to be true and
     complete by the title insurance company; and

               (h) the original of any security agreement, chattel mortgage or
     equivalent document executed in connection with the mortgage (if provided).

     Pursuant to the pooling and servicing agreement, each of the custodians and
the trustee will agree to execute and deliver on or prior to the closing date an
acknowledgment of receipt of the original mortgage note, item (a) above, with
respect to each of the mortgage loans delivered to it, with any exceptions
noted. Each of the custodians and the trustee will agree, for the benefit of the
holders of the certificates, to review, or cause to be reviewed, each mortgage
file within ninety days after the closing date - or, with respect to any
Substitute Mortgage Loan delivered to the applicable custodian or the trustee,
as applicable, within thirty days after the receipt of the mortgage file by the
applicable custodian or the trustee, as applicable and to deliver a
certification generally to the effect that, as to each mortgage loan listed in
the schedule of mortgage loans,

     o    all documents required to be reviewed by it pursuant to the pooling
          and servicing agreement are in its possession;

     o    each such document has been reviewed by it and appears regular on its
          face and relates to such mortgage loan;

     o    based on its examination and only as to the foregoing documents,
          certain information set forth on the schedule of mortgage loans
          accurately reflects the information set forth in the mortgage file
          delivered on such date; and

     o    each mortgage note has been endorsed as provided in the pooling and
          servicing agreement.

     If the applicable custodian or the trustee, as applicable, during the
process of reviewing the mortgage files, finds any document constituting a part
of a mortgage file which is not executed, has not been received or is unrelated
to the mortgage loans, or that any mortgage loan does not conform to the
requirements above or to the description of the requirements as set forth in the
schedule of mortgage loans attached to the pooling and servicing agreement, the
trustee or the applicable custodian, as applicable, is required to promptly so
notify the applicable original loan seller, the applicable servicer and/or the
depositor in writing. The applicable original loan seller will be required to
use commercially reasonable efforts to cause to be remedied a material defect in
a document constituting part of a mortgage file of which it is so notified by
the trustee or the applicable custodian, as applicable. If, however, within the
time frame set forth in the applicable mortgage loan purchase and warranties
agreement, the original loan seller has not caused the defect to be remedied,
the applicable original loan seller will be required to either (a) substitute a
Substitute Mortgage Loan for the defective mortgage loan, if permitted under the
terms of the applicable mortgage loan purchase and warranties agreement, or (b)
repurchase the defective mortgage loan. The substitution or repurchase is
required to be effected in the same manner as a substitution or repurchase for a
material breach of a


                                      S-92



mortgage loan representation and warranty, as described below under
"--Representations and Warranties Relating to the Mortgage Loans." The
obligation of the applicable original loan seller to cure the defect or to
substitute or repurchase the defective mortgage loan will constitute the sole
remedies available to the holders of the certificates and the trustee relating
to the defect.

REPRESENTATIONS AND WARRANTIES RELATING TO THE MORTGAGE LOANS

     Pursuant to the pooling and servicing agreement, each of WMC Mortgage
Corp., Decision One Mortgage Company, LLC and NC Capital Corporation will make
or has made certain representations and warranties with respect to each mortgage
loan transferred by it to MSMC as of the closing date (or an earlier date
specified in the pooling and servicing agreement, which may be the cut-off date,
the date on which the servicing of the mortgage loan was transferred or the date
on which MSMC purchased the mortgage loan from the applicable original loan
seller). These representations and warranties include, among other things:

               (1) Except with respect to mortgage loans representing
          approximately 0.90% of the mortgage loans, no payment required under
          the mortgage loan is more than 30 days delinquent, nor has any payment
          under the mortgage loan been more than 30 days delinquent, exclusive
          of any period of grace, at any time since the origination of the
          mortgage loan;

               (2) Except as described in representation (1) above with respect
          to approximately 0.90% of the mortgage loans, to the best of the
          applicable original loan seller's knowledge, there are no defaults in
          complying with the terms of the mortgage, and all taxes, governmental
          assessments, insurance premiums, water, sewer and municipal charges,
          leasehold payments or ground rents which previously became due and
          owing have been paid, or an escrow of funds has been established in an
          amount sufficient to pay for every such item which remains unpaid and
          which has been assessed but is not yet due and payable;

               (3) The terms of the mortgage note and mortgage have not been
          impaired, waived, altered or modified in any respect from the date of
          origination, except by a written instrument which has been recorded,
          if necessary to protect the interests of the purchaser. No mortgagor
          has been released, in whole or in part, except in connection with an
          assumption agreement approved by the title insurer, to the extent
          required by the policy, and which assumption agreement is part of the
          mortgage loan file;

               (4) The mortgage loan is not subject to any right of rescission,
          set-off, counterclaim or defense, including, without limitation, the
          defense of usury, nor will the operation of any of the terms of the
          mortgage note or the mortgage, or the exercise of any right under the
          mortgage note or the mortgage, render either the mortgage note or the
          mortgage unenforceable (subject to bankruptcy, equitable principles
          and laws affecting creditor rights generally), in whole or in part;

               (5) Pursuant to the terms of the mortgage, all buildings or other
          improvements upon the mortgaged property are insured against loss by
          fire and hazards of extended coverage;

               (6) Any and all requirements of any federal, state or local law,
          including, without limitation, usury, truth-in-lending, real estate
          settlement procedures, consumer credit protection, equal credit
          opportunity and disclosure and all predatory and abusive lending laws
          applicable to the mortgage loan (including, without limitation, any
          provisions relating to Prepayment Premiums) have been complied with;

               (7) The mortgage has not been satisfied, cancelled, subordinated
          or rescinded, in whole or in part, and the mortgaged property has not
          been released from the lien of the mortgage, in whole or in part,
          except as approved by a title insurer, nor has any instrument been
          executed that would effect any such release, cancellation,
          subordination or rescission;

               (8) The mortgage is a valid, subsisting and enforceable
          first-lien or second-lien on the mortgaged property, including all
          buildings and improvements on the mortgaged property and all
          installations and mechanical, electrical, plumbing, heating and air
          conditioning systems located in or annexed to such buildings, and all
          additions, alterations and replacements made at any time with respect
          to the foregoing. The lien of the mortgage is subject only to:


                                      S-93



                    (i) with respect to any second-lien mortgage loan, the lien
               of the first mortgage on the related mortgaged property;

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

                    (iii) covenants, conditions and restrictions, rights of way,
               easements and other matters of the public record as of the date
               of recording acceptable to prudent mortgage lending institutions
               generally and specifically referred to in the lender's title
               insurance policy delivered to the originator of the mortgage loan
               and (a) specifically referred to or otherwise considered in the
               appraisal made for the originator of the mortgage loan or (b)
               which do not adversely affect the appraised value of the
               mortgaged property set forth in such appraisal; and

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

               (9) The mortgage note and the mortgage and any other agreement
          executed and delivered by a mortgagor in connection with a mortgage
          loan are genuine, and each is the legal, valid and binding obligation
          of the signatory enforceable in accordance with its terms (including,
          without limitation, any provisions relating to Prepayment Premiums),
          subject to bankruptcy, equitable principles and laws affecting
          creditor rights generally. All parties to the mortgage note, the
          mortgage and any other such related agreement had legal capacity to
          enter into the mortgage loan and to execute and deliver the mortgage
          note, the mortgage and any such agreement, and the mortgage note, the
          mortgage and any other such related agreement have been duly and
          properly executed by other such related parties. No fraud, error,
          omission, misrepresentation, negligence or similar occurrence with
          respect to a mortgage loan has taken place on the part of the
          responsible party, other than any error, omission or negligence in the
          origination of a mortgage loan that may have occurred despite the
          responsible party's conformance with the underwriting guidelines (as
          in effect at the time that mortgage loan was made). No fraud,
          misrepresentation or similar occurrence or, to the responsible party's
          knowledge, error, omission or negligence with respect to a mortgage
          loan has taken place on the part of any other person, including
          without limitation, the mortgagor, any appraiser, any builder or
          developer, or any other party involved in the origination of the
          mortgage loan;

               (10) The mortgage loan is covered by an American Land Title
          Association lender's title insurance policy, or with respect to any
          mortgage loan for which the related mortgaged property is located in
          California a California Land Title Association lender's title
          insurance policy, or other generally acceptable form of policy or
          insurance in conformity with the underwriting guidelines (as in effect
          on the date the mortgage loan was originated) of the applicable
          original loan seller and each such title insurance policy is issued by
          a title insurer that is qualified to do business in the jurisdiction
          where the mortgaged property is located, insuring the applicable
          original loan seller, its successors and assigns, as to the first
          priority lien or second priority lien, as applicable, of the mortgage
          in the original principal amount of the mortgage loan, subject only to
          the exceptions contained in clauses (i), (ii), (iii) and (iv) of
          representation (8) above;

               (11) Except as described in representation (1) above with respect
          to approximately 0.90% of the mortgage loans, other than payments due
          but not yet 30 or more days delinquent, there is no default, breach,
          violation or event which would permit acceleration existing under the
          mortgage or the mortgage note and no event which, with the passage of
          time or with notice and the expiration of any grace or cure period,
          would constitute a default, breach, violation or event which would
          permit acceleration;

               (12) The mortgage contains customary and enforceable provisions
          that render the rights and remedies of the holder of the mortgage
          adequate for the realization against the mortgaged property of the
          benefits of the security provided by the mortgaged property,
          including, (i) in the case of a mortgage designated as a deed of
          trust, by trustee's sale, and (ii) otherwise by judicial foreclosure.
          There is no homestead or other exemption available to a mortgagor
          which would interfere with the right to sell the mortgaged property at
          a trustee's sale or the right to foreclose the mortgage, subject to
          applicable federal and state laws and judicial precedent with respect
          to bankruptcy and right of redemption or similar law;


                                      S-94



               (13) The mortgaged property is capable of being lawfully occupied
          under applicable law. All inspections, licenses and certificates
          required to be made or issued with respect to all occupied portions of
          the mortgaged property and, with respect to the use and occupancy of
          the same, including, but not limited to, certificates of occupancy and
          fire underwriting certificates, have been made or obtained from the
          appropriate authorities;

               (14) There is no proceeding pending or, to the applicable
          original loan seller's knowledge, threatened for the total or partial
          condemnation of the mortgaged property. The mortgaged property is
          undamaged by waste, fire, earthquake or earth movement, windstorm,
          flood, tornado or other casualty so as to affect adversely the value
          of the mortgaged property as security for the mortgage loan or the use
          for which the premises were intended;

               (15) No action, inaction or event has occurred and no state of
          facts exists or has existed that has resulted or will result in the
          exclusion from, denial of, or defense to coverage under any insurance
          policy related to the mortgage loans;

               (16) The mortgage file contains an appraisal of the related
          mortgaged property signed by a qualified appraiser;

               (17) None of the mortgage loans is (a) covered by the Home
          Ownership and Equity Protection Act of 1994 or (b) classified as a
          "high cost home," "threshold," "covered," "high risk home" or
          "predatory" loan under any other applicable federal, state or local
          law (or a similarly classified loan using different terminology under
          a law imposing heightened regulatory scrutiny or additional legal
          liability for residential mortgage loans having high interest rates,
          points and/or fees); and

               (18) None of the mortgage loans originated on or after October 1,
          2002 and on or before March 6, 2003 is secured by property located in
          the State of Georgia.

               (19) None of the mortgage loans has a Prepayment Premium period
          at origination in excess of five years;

               (20) No proceeds from any mortgage loan were used to purchase
          single premium credit insurance policies;

               (21) The applicable interim servicer has fully and accurately
          furnished complete information on the related borrower credit files to
          Equifax, Experian and Trans Union Credit Information Company, in
          accordance with the Fair Credit Reporting Act and its implementing
          regulations, on a monthly basis;

               (22) No mortgagor was required to purchase any credit insurance
          product (e.g., life, mortgage, disability, accident, unemployment or
          health insurance product) as a condition of obtaining the extension of
          credit. No mortgagor obtained a prepaid single premium credit life,
          mortgage, disability, accident, unemployment or health insurance
          product in connection with the origination of the mortgage loan; and

               (23) No mortgagor was required to submit to arbitration to
          resolve any dispute arising out of or relating in any way to the
          mortgage loan transaction.

     Pursuant to the pooling and servicing agreement, upon the discovery by any
of a servicer, the depositor, the applicable loan seller, the applicable
custodian or the trustee that any of the representations and warranties
contained in the pooling and servicing agreement have been breached in any
material respect as of the date made, with the result that value of, or the
interests of the trustee or the holders of the certificates in the related
mortgage loan were materially and adversely affected, the party discovering such
breach is required to give prompt written notice to the other parties. Subject
to certain provisions of the pooling and servicing agreement, within sixty days
of the earlier to occur of the applicable original loan seller's discovery or
its receipt of notice of any such breach with respect to a mortgage loan
transferred by it, the applicable original loan seller will be required to,

     o    promptly cure such breach in all material respects,


                                      S-95



     o    if substitution is permitted pursuant to the terms of the applicable
          mortgage loan purchase and warranties agreement and the substitution
          occurs prior to the second anniversary of the closing date, remove
          each mortgage loan which has given rise to the requirement for action
          by the applicable original loan seller, substitute one or more
          Substitute Mortgage Loans and, if the outstanding principal balance of
          such Substitute Mortgage Loans as of the date of such substitution is
          less than the outstanding principal balance of the replaced mortgage
          loans as of the date of substitution, deliver to the trust as part of
          the amounts remitted by the applicable servicer with respect to the
          related distribution date the amount of such shortfall plus all
          accrued and unpaid interest on the replaced mortgage loans and all
          related unreimbursed servicing advances (a "SUBSTITUTION ADJUSTMENT
          AMOUNT"), or

     o    purchase such mortgage loan at a price equal to the unpaid principal
          balance of such mortgage loan as of the date of purchase, plus all
          related accrued and unpaid interest, plus the amount of any
          unreimbursed servicing advances made by the servicers or other
          expenses of the applicable servicer or trustee relating to the
          mortgage loan in breach.

     Notwithstanding the foregoing, pursuant to the terms of the pooling and
servicing agreement, in the event of discovery by any party to the pooling and
servicing agreement (i) that a mortgage loan does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code resulting from a
breach of any representation or warranty contained in the pooling and servicing
agreement or (ii) of a breach of the representations and warranties listed as
numbers (17), (18), (19), (20), (21), (22) or (23) in the second preceding full
paragraph, the applicable original loan seller will be required to repurchase
the related mortgage loan at the purchase price within the time frame set forth
in the pooling and servicing agreement. The purchase price with respect to such
mortgage loan will be deposited into the distribution account on the next
succeeding Servicer Remittance Date after deducting any amounts received in
respect of such repurchased mortgage loan or mortgage loans and being held in
the distribution account for future distribution to the extent such amounts have
not yet been applied to principal or interest on such mortgage loan.

     In addition, the original loan sellers are obligated to indemnify the
depositor, any of its affiliates, the servicers, the trustee, and the trust, for
any third-party claims arising out of a breach by the applicable original loan
seller of representations or warranties regarding the mortgage loans. The
obligations of the applicable original loan seller to cure such breach or to
substitute or purchase any mortgage loan and to indemnify constitute the sole
remedies respecting a material breach of any such representation or warranty to
the holders of the certificates, the servicers, the trustee, the depositor and
any of its affiliates.

     The depositor will also represent that the original principal balance of
each group I mortgage loan was within Freddie Mac's and Fannie Mae's dollar
amount limits for conforming one- to-four family mortgage loans. In the event of
a breach by the depositor of either of these representations and warranties, the
depositor will be obligated to cure, repurchase or substitute the applicable
mortgage loan in the same manner as is set forth above with respect to breaches
of its representations and warranties made by the applicable original loan
seller regarding the mortgage loans. The obligation of the depositor under the
pooling and servicing agreement to cure, repurchase or substitute any mortgage
loan as to which a breach of any of its representations and warranties has
occurred and is continuing will constitute the sole remedies against the
depositor respecting such breach available to the holders of the certificates or
the trustee.

PAYMENTS ON THE MORTGAGE LOANS

     The pooling and servicing agreement provides that each servicer is required
to establish and maintain a collection account. The pooling and servicing
agreement permits each servicer to direct any depository institution maintaining
its collection account to invest the funds in its collection account in one or
more eligible investments that mature, unless payable on demand, no later than
the business day preceding the Servicer Remittance Date, as described below.

     Each servicer is obligated to deposit or cause to be deposited in its
collection account, within two business days after receipt, amounts representing
the following payments and other collections received by it on or with respect
to the mortgage loans after the cut-off date, other than in respect of monthly
payments on the mortgage loans due and accrued on each mortgage loan up to and
including any due date occurring prior to the cut-off date:


                                      S-96



     o    all payments on account of principal, including prepayments of
          principal on the mortgage loans;

     o    all payments on account of interest, net of the servicing fee, on the
          mortgage loans;

     o    all Insurance Proceeds to the extent such Insurance Proceeds are not
          to be applied to the restoration of the related mortgaged property or
          released to the related borrower in accordance with the express
          requirements of law or in accordance with prudent and customary
          servicing practices, Condemnation Proceeds and Liquidation Proceeds;

     o    all other amounts required to be deposited in its collection account
          pursuant to the pooling and servicing agreement; and

     o    any amounts required to be deposited in connection with net losses
          realized on investments of funds in its collection account.

     The trustee will be obligated to set up a distribution account with respect
to the certificates into which the servicers will be required to deposit or
cause to be deposited the funds required to be remitted by the servicers on the
Servicer Remittance Date. The pooling and servicing agreement permits but does
not require the trustee to invest the funds in the distribution account in one
or more eligible investments that mature on or prior to the next distribution
date.

     The funds required to be remitted by each servicer for a Servicer
Remittance Date will be equal to the sum, without duplication, of:

     o    all collections of scheduled principal and interest on the mortgage
          loans received by the servicer on or prior to the related
          Determination Date;

     o    all principal prepayments, Insurance Proceeds, Condemnation Proceeds
          and Liquidation Proceeds, if any, collected by the servicer during the
          related Prepayment Period;

     o    all P&I Advances made by the servicer with respect to payments due to
          be received on the mortgage loans on the related due date but not
          received by the related Determination Date; and

     o    any other amounts required to be placed in its collection account by
          the servicer pursuant to the pooling and servicing agreement;

          but excluding the following:

                    (a) for any mortgage loan with respect to which the servicer
     has previously made an unreimbursed P&I Advance, amounts received on such
     mortgage loan that represent late payments of principal and interest,
     Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds, to the
     extent of such unreimbursed P&I Advance;

                    (b) amounts received on a particular mortgage loan with
     respect to which the servicer has previously made an unreimbursed servicing
     advance, to the extent of such unreimbursed servicing advance;

                    (c) for that Servicer Remittance Date, the aggregate
     servicing fee;

                    (d) all net income from eligible investments that are held
     in the collection account for the account of the servicer;

                    (e) all amounts actually recovered by the servicer in
     respect of late fees, assumption fees and similar fees;

                    (f) for all mortgage loans for which P&I Advances or
     servicing advances are determined to be non-recoverable, all amounts equal
     to unreimbursed P&I Advances and servicing advances for such mortgage
     loans;


                                      S-97



                    (g) certain other amounts which are reimbursable to the
     depositor or the servicer, as provided in the pooling and servicing
     agreement; and

                    (h) all collections of principal and interest not required
     to be remitted on that Servicer Remittance Date.

     The amounts described in clauses (a) through (h) above may be withdrawn by
the servicer from the applicable collection account on or prior to each Servicer
Remittance Date.

DISTRIBUTIONS

     Distributions on the certificates will be required to be made by the
trustee on the 25th day of each month, or, if that day is not a business day, on
the first business day thereafter, commencing in November 2005, to the persons
in whose names the certificates are registered on the related Record Date.

     Distributions on each distribution date will be made by check mailed to the
address of the person entitled to the distribution as it appears on the
applicable certificate register or, in the case of a certificateholder who has
so notified the trustee in writing in accordance with the pooling and servicing
agreement, by wire transfer in immediately available funds to the account of
that certificateholder at a bank or other depository institution having
appropriate wire transfer facilities. However, the final distribution in
retirement of the certificates will be made only upon presentment and surrender
of those certificates at the office of the trustee designated from time to time
for those purposes. Initially, the trustee designates its offices located at
Wells Fargo Center, Sixth Street and Marquette Avenue, Minneapolis, Minnesota
55479 for those purposes.

PRIORITY OF DISTRIBUTIONS AMONG CERTIFICATES

     As more fully described in this prospectus supplement, distributions on the
certificates will be made on each distribution date from Available Funds and
will be made to the classes of certificates in the following order of priority:

                    (i) to make certain payments to the Swap Account for the
          benefit of the Swap Provider, as further described below under
          "--Distributions of Interest and Principal";

                    (ii) to interest on each class of certificates, in the order
          and subject to the priorities set forth below under "--Distributions
          of Interest and Principal";

                    (iii) to principal on the classes of certificates then
          entitled to receive distributions of principal, in the order and
          subject to the priorities set forth below under "--Distributions of
          Interest and Principal";

                    (iv) to unpaid interest and Unpaid Realized Loss Amounts, in
          the order and subject to the priorities described below under
          "--Distributions of Interest and Principal"; and

                    (v) to deposit into the Excess Reserve Fund Account to cover
          any Basis Risk CarryForward Amount, and, after making certain
          termination payments, if any, to the Swap Account for the benefit of
          the Swap Provider, finally to be released to the Class X certificates,

in each case subject to certain limitations set forth below under
"--Distributions of Interest and Principal".

DISTRIBUTIONS OF INTEREST AND PRINCIPAL

     For any distribution date, the "PASS-THROUGH RATE" for each class of
Offered Certificates will be as set forth below:

               (a) for the Class A-1 certificates, a per annum rate equal to the
          least of (1) One-Month LIBOR plus the related fixed margin for the
          Class A-1 certificates and that distribution date, (2) the Group I
          Loan Cap (as defined below) and (3) the WAC Cap (as defined below);


                                      S-98



               (b) for the Class A-2a, Class A-2b and Class A-2c certificates, a
          per annum rate equal to the least of (1) One-Month LIBOR plus the
          related fixed margin for the applicable class and that distribution
          date, (2) the Group II Loan Cap (as defined below) and (3) the WAC
          Cap; and

               (c) for the Class M and Class B certificates, a per annum rate
          equal to the lesser of (1) One-Month LIBOR plus the related fixed
          margin for the applicable class and that distribution date and (2) the
          WAC Cap.

     The fixed margin for each class of Offered Certificates is as follows:
Class A-1, 0.2400%; Class A-2a, 0.1000%; Class A-2b, 0.2500%; Class A-2c,
0.3400%; Class M-1, 0.4200%; Class M-2, 0.4300%; Class M-3, 0.4500%; Class M-4,
0.5800%; Class M-5, 0.6200%; Class M-6, 0.6700%; Class B-1, 1.1000%; Class B-2,
1.3000%; and Class B-3, 1.7500%. On the distribution date immediately following
the distribution date on which a servicer has the right to purchase all of the
mortgage loans as described under "The Pooling and Servicing
Agreement--Termination; Optional Clean-up Call" in this prospectus supplement
and each distribution date thereafter, the fixed margin for each class of
Offered Certificates will increase to the following: Class A-1, 0.4800%; Class
A-2a, 0.2000%; Class A-2b, 0.5000%; Class A-2c, 0.6800%; Class M-1, 0.6300%;
Class M-2, 0.6450%; Class M-3, 0.6750%; Class M-4, 0.8700%; Class M-5, 0.9300%;
Class M-6, 1.0050%; Class B-1, 1.6500%; Class B-2, 1.9500%; and Class B-3,
2.6250%.

     The "GROUP I LOAN CAP" for any distribution date is the weighted average of
the interest rates for each group I mortgage loan (in each case, less the
applicable Expense Fee Rate) then in effect at the beginning of the related Due
Period less the Swap Payment Rate (as defined below), adjusted, in each case, to
accrue on the basis of a 360-day year and the actual number of days in the
related Interest Accrual Period.

     The "GROUP II LOAN CAP" for any distribution date is the weighted average
of the interest rates for each group II mortgage loan (in each case, less the
applicable Expense Fee Rate) then in effect at the beginning of the related Due
Period less the Swap Payment Rate, adjusted, in each case, to accrue on the
basis of a 360-day year and the actual number of days in the related Interest
Accrual Period.

     The "WAC CAP" for any distribution date is the weighted average of the
interest rates for each mortgage loan (in each case, less the applicable Expense
Fee Rate) then in effect at the beginning of the related Due Period less the
Swap Payment Rate, adjusted, in each case, to accrue on the basis of a 360-day
year and the actual number of days in the related Interest Accrual Period.

     The "SWAP PAYMENT RATE" for any distribution date is a fraction (expressed
as a percentage), the numerator of which is any Net Swap Payment or Swap
Termination Payment (other than a Defaulted Swap Termination Payment) owed to
the Swap Provider for such distribution date and the denominator of which is the
Stated Principal Balance of the mortgage loans at the beginning of the related
Due Period, multiplied by 12.

     On each distribution date, distributions in reduction of the Class
Certificate Balance of the certificates entitled to receive distributions of
principal are required to be made in an amount equal to the Principal
Distribution Amount. The "PRINCIPAL DISTRIBUTION AMOUNT" for each distribution
date will equal the sum of (i) the Basic Principal Distribution Amount for that
distribution date and (ii) the Extra Principal Distribution Amount for that
distribution date.

     On each distribution date, the trustee will be required to make the
distributions and transfers from the Available Funds then on deposit in the
distribution account specified below in the following order of priority:

          (i) to the holders of each class of Offered Certificates and to the
Swap Account in the following order of priority:

               (a) to the Swap Account, the sum of (x) all Net Swap Payments and
     (y) any Swap Termination Payment owed to the Swap Provider other than a
     Defaulted Swap Termination Payment owed to the Swap Provider, if any;

               (b) concurrently, (1) from the Interest Remittance Amount related
     to the group I mortgage loans, to the Class A-1 certificates, the related
     Accrued Certificate Interest and Unpaid Interest Amount for the


                                      S-99



     Class A-1 certificates, and (2) from the Interest Remittance Amount related
     to the group II mortgage loans, to the Class A-2a, Class A-2b and Class
     A-2c certificates, pro rata (based on the amounts distributable under this
     clause (i)(b)(2) to those classes of certificates), the related Accrued
     Certificate Interest and Unpaid Interest Amounts for those classes of
     certificates; provided, that, if the Interest Remittance Amount for any
     group is insufficient to make the related payments set forth in clauses
     (i)(b)(1) or (i)(b)(2) above, any Interest Remittance Amount relating to
     the other group remaining after payment of the related Accrued Certificate
     Interest and Unpaid Interest Amounts will be available to cover that
     shortfall;

               (c) from any remaining Interest Remittance Amounts, to the Class
     M-1 certificates, the Accrued Certificate Interest for that class;

               (d) from any remaining Interest Remittance Amounts, to the Class
     M-2 certificates, the Accrued Certificate Interest for that class;

               (e) from any remaining Interest Remittance Amounts, to the Class
     M-3 certificates, the Accrued Certificate Interest for that class;

               (f) from any remaining Interest Remittance Amounts, to the Class
     M-4 certificates, the Accrued Certificate Interest for that class;

               (g) from any remaining Interest Remittance Amounts, to the Class
     M-5 certificates, the Accrued Certificate Interest for that class;

               (h) from any remaining Interest Remittance Amounts, to the Class
     M-6 certificates, the Accrued Certificate Interest for that class;

               (i) from any remaining Interest Remittance Amounts, to the Class
     B-1 certificates, the Accrued Certificate Interest for that class;

               (j) from any remaining Interest Remittance Amounts, to the Class
     B-2 certificates, the Accrued Certificate Interest for that class; and

               (k) from any remaining Interest Remittance Amounts, to the Class
     B-3 certificates, the Accrued Certificate Interest for that class;

          (ii) (A) on each distribution date before the Stepdown Date or with
respect to which a Trigger Event is in effect, to the holders of the class or
classes of Offered Certificates then entitled to distributions of principal as
set forth below, an amount equal to the Principal Distribution Amount in the
following order of priority:

               (a) to the Class A certificates, allocated among those classes as
     described under "--Allocation of Principal Payments to Class A
     Certificates" below until their respective Class Certificate Balances are
     reduced to zero; and

               (b) sequentially to the Class M-1, Class M-2, Class M-3, Class
     M-4, Class M-5, Class M-6, Class B-1, Class B-2, and Class B-3
     certificates, in that order, until their respective Class Certificate
     Balances are reduced to zero;

               (B) on each distribution date on and after the Stepdown Date and
as long as a Trigger Event is not in effect, to the holders of the class or
classes of Offered Certificates then entitled to distribution of principal in an
amount equal to the Principal Distribution Amount in the following amounts and
order of priority:

               (a) to the Class A certificates, the lesser of (x) the Principal
     Distribution Amount and (y) the Class A Principal Distribution Amount,
     allocated among those classes as described under "--Allocation of Principal
     Payments to Class A Certificates" below until their respective Class
     Certificate Balances are reduced to zero;


                                      S-100



               (b) to the Class M-1 certificates, the lesser of (x) the excess
     of (i) the Principal Distribution Amount over (ii) the amounts distributed
     to the Class A certificateholders in clause (ii)(B)(a) above and (y) the
     Class M-1 Principal Distribution Amount, until their Class Certificate
     Balance is reduced to zero;

               (c) to the Class M-2 certificates, the lesser of (x) the excess
     of (i) the Principal Distribution Amount over (ii) the amounts distributed
     to the Class A certificateholders in clause (ii)(B)(a) above and to the
     Class M-1 certificateholders in clause (ii)(B)(b) above and (y) the Class
     M-2 Principal Distribution Amount, until their Class Certificate Balance is
     reduced to zero;

               (d) to the Class M-3 certificates, the lesser of (x) the excess
     of (i) the Principal Distribution Amount over (ii) the amounts distributed
     to the Class A certificateholders in clause (ii)(B)(a) above, to the Class
     M-1 certificateholders in clause (ii)(B)(b) above and to the Class M-2
     certificateholders in clause (ii)(B)(c) above and (y) the Class M-3
     Principal Distribution Amount, until their Class Certificate Balance is
     reduced to zero;

               (e) to the Class M-4 certificates, the lesser of (x) the excess
     of (i) the Principal Distribution Amount over (ii) the amounts distributed
     to the Class A certificateholders in clause (ii)(B)(a) above, to the Class
     M-1 certificateholders in clause (ii)(B)(b) above, to the Class M-2
     certificateholders in clause (ii)(B)(c) above and to the Class M-3
     certificateholders in clause (ii)(B)(d) above and (y) the Class M-4
     Principal Distribution Amount, until their Class Certificate Balance is
     reduced to zero;

               (f) to the Class M-5 certificates, the lesser of (x) the excess
     of (i) the Principal Distribution Amount over (ii) the amounts distributed
     to the Class A certificateholders in clause (ii)(B)(a) above, to the Class
     M-1 certificateholders in clause (ii)(B)(b) above, to the Class M-2
     certificateholders in clause (ii)(B)(c) above, to the Class M-3
     certificateholders in clause (ii)(B)(d) above and to the Class M-4
     certificateholders in clause (ii)(B)(e) above and (y) the Class M-5
     Principal Distribution Amount, until their Class Certificate Balance is
     reduced to zero;

               (g) to the Class M-6 certificates, the lesser of (x) the excess
     of (i) the Principal Distribution Amount over (ii) the amounts distributed
     to the Class A certificateholders in clause (ii)(B)(a) above, to the Class
     M-1 certificateholders in clause (ii)(B)(b) above, to the Class M-2
     certificateholders in clause (ii)(B)(c) above, to the Class M-3
     certificateholders in clause (ii)(B)(d) above, to the Class M-4
     certificateholders in clause (ii)(B)(e) above and to the Class M-5
     certificateholders in clause (ii)(B)(f) above and (y) the Class M-6
     Principal Distribution Amount, until their Class Certificate Balance is
     reduced to zero;

               (h) to the Class B-1 certificates, the lesser of (x) the excess
     of (i) the Principal Distribution Amount over (ii) the amounts distributed
     to the Class A certificateholders in clause (ii)(B)(a) above, to the Class
     M-1 certificateholders in clause (ii)(B)(b) above, to the Class M-2
     certificateholders in clause (ii)(B)(c) above, to the Class M-3
     certificateholders in clause (ii)(B)(d) above, to the Class M-4
     certificateholders in clause (ii)(B)(e) above, to the Class M-5
     certificateholders in clause (ii)(B)(f) above and to the Class M-6
     certificateholders in clause (ii)(B)(g) above and (y) the Class B-1
     Principal Distribution Amount, until their Class Certificate Balance is
     reduced to zero;

               (i) to the Class B-2 certificates, the lesser of (x) the excess
     of (i) the Principal Distribution Amount over (ii) the amounts distributed
     to the Class A certificateholders in clause (ii)(B)(a) above, to the Class
     M-1 certificateholders in clause (ii)(B)(b) above, to the Class M-2
     certificateholders in clause (ii)(B)(c) above, to the Class M-3
     certificateholders in clause (ii)(B)(d) above, to the Class M-4
     certificateholders in clause (ii)(B)(e) above, to the Class M-5
     certificateholders in clause (ii)(B)(f) above, to the Class M-6
     certificateholders in clause (ii)(B)(g) above and to the Class B-1
     certificateholders in clause (ii)(B)(h) above and (y) the Class B-2
     Principal Distribution Amount, until their Class Certificate Balance is
     reduced to zero; and

               (j) to the Class B-3 certificates, the lesser of (x) the excess
     of (i) the Principal Distribution Amount over (ii) the amounts distributed
     to the Class A certificateholders in clause (ii)(B)(a) above, to the Class
     M-1 certificateholders in clause (ii)(B)(b) above, to the Class M-2
     certificateholders in clause (ii)(B)(c) above, to the Class M-3
     certificateholders in clause (ii)(B)(d) above, to the Class M-4
     certificateholders in clause (ii)(B)(e) above, to the Class M-5
     certificateholders in clause (ii)(B)(f) above, to the Class M-6
     certificateholders in clause (ii)(B)(g) above, to the Class B-1
     certificateholders in clause (ii)(B)(h) above and to


                                      S-101



     the Class B-2 certificateholders in clause (ii)(B)(i) above and (y) the
     Class B-3 Principal Distribution Amount, until their Class Certificate
     Balance is reduced to zero; and

          (iii) any amount remaining after the distributions in clauses (i) and
(ii) above is required to be distributed in the following order of priority with
respect to the certificates:

               (a) to the holders of the Class M-1 certificates, any Unpaid
Interest Amount for that class;

               (b) to the holders of the Class M-1 certificates, any Unpaid
Realized Loss Amount for that class;

               (c) to the holders of the Class M-2 certificates, any Unpaid
Interest Amount for that class;

               (d) to the holders of the Class M-2 certificates, any Unpaid
Realized Loss Amount for that class;

               (e) to the holders of the Class M-3 certificates, any Unpaid
Interest Amount for that class;

               (f) to the holders of the Class M-3 certificates, any Unpaid
Realized Loss Amount for that class;

               (g) to the holders of the Class M-4 certificates, any Unpaid
Interest Amount for that class;

               (h) to the holders of the Class M-4 certificates, any Unpaid
Realized Loss Amount for that class;

               (i) to the holders of the Class M-5 certificates, any Unpaid
Interest Amount for that class;

               (j) to the holders of the Class M-5 certificates, any Unpaid
Realized Loss Amount for that class;

               (k) to the holders of the Class M-6 certificates, any Unpaid
Interest Amount for that class;

               (l) to the holders of the Class M-6 certificates, any Unpaid
Realized Loss Amount for that class;

               (m) to the holders of the Class B-1 certificates, any Unpaid
Interest Amount for that class;

               (n) to the holders of the Class B-1 certificates, any Unpaid
Realized Loss Amount for that class;

               (o) to the holders of the Class B-2 certificates, any Unpaid
Interest Amount for that class;

               (p) to the holders of the Class B-2 certificates, any Unpaid
Realized Loss Amount for that class;

               (q) to the holders of the Class B-3 certificates, any Unpaid
Interest Amount for that class;

               (r) to the holders of the Class B-3 certificates, any Unpaid
Realized Loss Amount for that class;

               (s) to the Excess Reserve Fund Account, the amount of any Basis
Risk Payment for that distribution date;


               (t) from funds on deposit in the Excess Reserve Fund Account, an
amount equal to any remaining unpaid Basis Risk CarryForward Amount with respect
to the Offered Certificates to the Offered Certificates in the same order and
priority in which Accrued Certificate Interest is allocated among those classes
of certificates, with the allocation to the Class A certificates being (a)
first, among those classes of certificates pro rata, based on their respective
Class Certificate Balances and (b) second, any remaining amounts to those
classes of certificates, pro rata, based on any Basis Risk CarryForward Amounts
remaining unpaid, in order to reimburse such unpaid amounts;

               (u) to the Swap Account, the amount of any Defaulted Swap
Termination Payment owed to the Swap Provider;

               (v) to the Class X certificates, those amounts as described in
the pooling and servicing agreement; and


                                      S-102



               (w) to the holders of the Class R certificates, any remaining
amount.

     On each distribution date, prior to the distribution on any other class of
certificates, the trustee is required to distribute to the holders of the Class
P certificates all amounts representing Prepayment Premiums in respect of the
mortgage loans received during the related Prepayment Period.

     If on any distribution date, after giving effect to all distributions of
principal as described above and allocations of payments from the Swap Account
to pay principal as described under "--Swap Account" below, the aggregate Class
Certificate Balances of the Offered Certificates exceeds the aggregate Stated
Principal Balance of the mortgage loans for that distribution date, the Class
Certificate Balance of the applicable Class M or Class B certificates will be
reduced, in inverse order of seniority (beginning with the Class B-3
certificates) by an amount equal to that excess, until that Class Certificate
Balance is reduced to zero. This reduction of a Class Certificate Balance for
Realized Losses is referred to as an "APPLIED REALIZED LOSS AMOUNT." In the
event Applied Realized Loss Amounts are allocated to any class of certificates,
its Class Certificate Balance will be reduced by the amount so allocated, and no
funds will be distributable with respect to interest or Basis Risk CarryForward
Amounts on the amounts written down on that distribution date or any future
distribution dates, even if funds are otherwise available for distribution.
Notwithstanding the foregoing, if after an Applied Realized Loss Amount is
allocated to reduce the Class Certificate Balance of any class of certificates,
amounts are received with respect to any mortgage loan or related mortgaged
property that had previously been liquidated or otherwise disposed of (any such
amount being referred to as a "SUBSEQUENT RECOVERY"), the Class Certificate
Balance of each class of certificates that has been previously reduced by
Applied Realized Loss Amounts will be increased, in order of seniority, by the
amount of the Subsequent Recoveries (but not in excess of the Unpaid Realized
Loss Amount for the applicable class of Subordinated Certificates for the
related distribution date). Any Subsequent Recovery that is received during a
Prepayment Period will be treated as Liquidation Proceeds and included as part
of the Principal Remittance Amount for the related distribution date.

     On any distribution date, any shortfalls resulting from the application of
the Relief Act and any prepayment interest shortfalls not covered by
Compensating Interest payments from the servicers (as further described in "The
Pooling and Servicing Agreement--Prepayment Interest Shortfalls" in this
prospectus supplement) will be allocated first to reduce the amounts otherwise
distributable on the Class X certificates, and thereafter as a reduction to the
Accrued Certificate Interest for the Offered Certificates on a pro rata basis
based on the respective amounts of interest accrued on those certificates for
that distribution date. THE HOLDERS OF THE OFFERED CERTIFICATES WILL NOT BE
ENTITLED TO REIMBURSEMENT FOR THE ALLOCATION OF ANY RELIEF ACT SHORTFALLS OR
PREPAYMENT INTEREST SHORTFALLS DESCRIBED IN THE PRECEDING SENTENCE.

ALLOCATION OF PRINCIPAL PAYMENTS TO CLASS A CERTIFICATES

     All principal allocated to the holders of the Class A certificates on any
distribution date will be allocated concurrently, between the Class A-1
certificates (collectively, the "GROUP I CLASS A CERTIFICATES"), on the one
hand, and the Class A-2a, Class A-2b and Class A-2c certificates (collectively,
the "GROUP II CLASS A CERTIFICATES"), on the other hand, based on the Class A
Principal Allocation Percentage for the Group I Class A Certificates and the
Group II Class A Certificates, as applicable, for that distribution date. The
Group I Class A Certificates and the Group II Class A Certificates are each a
"CLASS A CERTIFICATE GROUP." However, if the Class Certificate Balances of the
Class A certificates in either Class A Certificate Group are reduced to zero,
then the remaining amount of principal allocable to such Class A certificates on
that distribution date, and the amount of principal allocable to the Class A
certificates on all subsequent distribution dates, will be allocated to the
holders of the Class A certificates in the other Class A Certificate Group
remaining outstanding, in accordance with the principal allocations described in
this paragraph, until their respective Class Certificate Balances have been
reduced to zero. Any payments of principal to the Group I Class A Certificates
will be made first from payments relating to the group I mortgage loans, and any
payments of principal to the Group II Class A Certificates will be made first
from payments relating to the group II mortgage loans.

     Any principal distributions allocated to the Group II Class A Certificates
are required to be allocated sequentially, first to the Class A-2a certificates,
until their Class Certificate Balance has been reduced to zero, then to the
Class A-2b certificates, until their Class Certificate Balance has been reduced
to zero, and then to the Class A-2c certificates, until their Class Certificate
Balance has been reduced to zero. However, on and after the


                                      S-103



distribution date on which the aggregate Class Certificate Balances of the
Subordinated Certificates and the principal balance of the Class X certificates
have been reduced to zero, any principal distributions allocated to the Group II
Class A Certificates are required to be allocated pro rata among the classes of
Group II Class A Certificates, based on their respective Class Certificate
Balances, until their respective Class Certificate Balances have been reduced to
zero.

SWAP ACCOUNT

     On any distribution date, Swap Termination Payments, Net Swap Payments owed
to the Swap Provider and Net Swap Receipts for that distribution date will be
deposited into a trust account (the "SWAP ACCOUNT") established by the trustee
as part of the trust fund. Funds in the Swap Account will be distributed in the
following order of priority:

          (a) to the Swap Provider, all Net Swap Payments, if any, owed to the
     Swap Provider for that distribution date;

          (b) to the Swap Provider, any Swap Termination Payment, other than a
     Defaulted Swap Termination Payment, if any, owed to the Swap Provider for
     that distribution date;

          (c) to the Class A certificates, to pay Accrued Certificate Interest
     and, if applicable, any Unpaid Interest Amounts as described in clause (i)
     in the eighth full paragraph of "--Distributions of Interest and Principal"
     above, to the extent unpaid from Available Funds;

          (d) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4,
     Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 certificates, in
     that order, to pay Accrued Certificate Interest and, if applicable, Unpaid
     Interest Amounts as described in clauses (i) and (iii) in the eighth full
     paragraph of "--Distributions of Interest and Principal" above, to the
     extent unpaid from Available Funds;

          (e) to the Offered Certificates, to pay principal as described and, in
     the same manner and order of priority as set forth, in clause (ii)(A) or
     clause (ii)(B), as applicable, in the eighth full paragraph of
     "--Distributions of Interest and Principal" above, but only to the extent
     necessary to maintain the Subordinated Amount at the Specified Subordinated
     Amount, after giving effect to payments and distributions from Available
     Funds;

          (f) to the Class A certificates, to pay any Basis Risk CarryForward
     Amounts pro rata, based on their Class Certificate Balances for such
     distribution date, up to the Swap Payment Allocation for each class of
     Class A certificates and to the extent unpaid from Available Funds
     (including funds on deposit in the Excess Reserve Fund Account);

          (g) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4,
     Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 certificates, to
     pay any Basis Risk CarryForward Amounts, up to the Swap Payment Allocation
     for each class of Class M and Class B certificates and to the extent unpaid
     from Available Funds (including funds on deposit in the Excess Reserve Fund
     Account);

          (h) to the Offered Certificates, any remaining unpaid Basis Risk
     CarryForward Amount, pro rata, based on their respective remaining unpaid
     Basis Risk CarryForward Amount after the allocation of payments as set
     forth in clauses (f) and (g) above;

          (i) sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4,
     Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3 certificates, to
     pay any Unpaid Realized Loss Amounts, to the extent unpaid from Available
     Funds;

          (j) to the Swap Provider, any Defaulted Swap Termination Payment owed
     to the Swap Provider for that distribution date; and

          (k) to the holders of the Class X certificates, any remaining amounts.

     The "SWAP PAYMENT ALLOCATION" for any class of certificates and any
distribution date is that class's pro rata share of the Net Swap Receipts, if
any, for that distribution date, based on the Class Certificate Balances of the
classes of certificates.


                                      S-104



     The Swap Account will not be an asset of any REMIC.

CALCULATION OF ONE-MONTH LIBOR

     On each LIBOR Determination Date, the trustee will be required to determine
One-Month LIBOR for the next Interest Accrual Period for the Offered
Certificates.

EXCESS RESERVE FUND ACCOUNT

     The "BASIS RISK PAYMENT" for any distribution date will be the aggregate of
the Basis Risk CarryForward Amounts, for that date. However, the payment with
respect to any distribution date cannot exceed the amount otherwise
distributable on the Class X certificates or payable from the Swap Account.

     If on any distribution date, the Pass-Through Rate for any class of Offered
Certificates is based upon the Group I Loan Cap, the Group II Loan Cap or the
WAC Cap, as applicable, the sum of (x) the excess of (i) the amount of interest
that class of certificates would have been entitled to receive on that
distribution date had the Pass-Through Rate not been subject to the Group I Loan
Cap, the Group II Loan Cap or the WAC Cap, over (ii) the amount of interest that
class of certificates received on that distribution date, based on the lesser of
(1) the Group I Loan Cap or Group II Loan Cap, as applicable and (2) the WAC Cap
and (y) the unpaid portion of any such excess described in clause (x) from prior
distribution dates (and related accrued interest at the then applicable
Pass-Through Rate on that class of certificates, without giving effect to the
Group I Loan Cap, the Group II Loan Cap or the WAC Cap, as applicable) is the
"BASIS RISK CARRYFORWARD AMOUNT" on those classes of certificates. Any Basis
Risk CarryForward Amount on any class of certificates will be allocated on that
distribution date or future distribution dates from and to the extent of funds
available for distribution to that class of certificates in the Excess Reserve
Fund Account, with respect to that distribution date (each as described in this
prospectus supplement) and from Net Swap Receipts that are available for payment
of Basis Risk CarryForward Amounts from the Swap Account. The ratings on the
certificates do not address the likelihood of the payment of any Basis Risk
CarryForward Amount.

     Pursuant to the pooling and servicing agreement, an account (referred to as
the "EXCESS RESERVE FUND ACCOUNT") will be established, which is held in trust,
as part of the trust fund, by the trustee. Amounts on deposit in the Excess
Reserve Fund Account will not be invested. The Excess Reserve Fund Account will
not be an asset of any REMIC. Holders of each of the Offered Certificates will
be entitled to receive payments from the Excess Reserve Fund Account, in the
manner described in this prospectus supplement, in an amount equal to any Basis
Risk CarryForward Amount for that class of certificates. The Excess Reserve Fund
Account is required to be funded from amounts otherwise to be paid to the Class
X certificates. Any distribution by the trustee from amounts in the Excess
Reserve Fund Account is required to be made on the applicable distribution date.
Any Basis Risk CarryForward Amounts remaining after amounts in the Excess
Reserve Fund Account are used are payable from the Swap Account in the priority
specified in "--Swap Account" above.

INTEREST RATE SWAP AGREEMENT

     On the closing date, the trust will enter into an interest rate swap
agreement with Morgan Stanley Capital Services Inc., as swap provider (the "SWAP
PROVIDER"), whose obligations are 100% guaranteed by Morgan Stanley. As of the
date of this prospectus supplement, Morgan Stanley is rated "Aa3" by Moody's,
"A+" by S&P and "AA-" by Fitch. Under the interest rate swap agreement, with
respect to the first 53 distribution dates, the trust will pay to the Swap
Provider fixed payments at a rate of 4.63% per annum, determined on a "30/360"
basis (or, in the case of the first distribution date, the number of days in the
period from the closing date to the day immediately preceding the first
distribution date, determined on a "30/360" basis), and the Swap Provider will
pay to the trust, floating payments at a rate of one-month LIBOR (as determined
pursuant to the interest rate swap agreement), determined on an "actual/360"
basis, in each case calculated on the product of the scheduled notional amount
and the multiplier set forth on the schedule attached as Annex II to this
prospectus supplement for that distribution date. To the extent that a fixed
payment exceeds the floating payment payable with respect to any of the first 53
distribution dates, amounts otherwise available to certificateholders will be
applied on such distribution date to make a net payment to the Swap Provider
(each, a "NET SWAP PAYMENT"), and to the extent that the floating payment
exceeds the fixed payment payable with respect to any of the first 53
distribution dates, the Swap Provider will owe a net payment to the trust on the
business day preceding such distribution date (each, a "NET SWAP RECEIPT").


                                      S-105



     All payments due to the Swap Provider under the interest rate swap
agreement shall be paid from Available Funds on each applicable distribution
date in accordance with the priority of payments described under
"--Distributions of Interest and Principal" above. Any Swap Termination Payment
(as defined below) other than a Defaulted Swap Termination Payment (as defined
below) due to the Swap Provider shall be paid on a senior basis on each
applicable distribution date in accordance with the priority of payments and any
Defaulted Swap Termination Payment owed by the trust to the Swap Provider shall
be paid by the trust on a subordinated basis. However, to the extent any
payments are received by the trust as a result of entering into replacement
transaction(s) following a Downgrade Terminating Event (as defined below), the
Swap Provider that is being replaced shall have first priority to those payments
over certificateholders, the servicers and the trustee, and the trust shall pay
to the Swap Provider the lesser of (x) the amount so received and (y) any Swap
Termination Payment owed to the Swap Provider (to the extent not already paid by
the trust) that is being replaced immediately upon receipt.
See "--Distributions of Interest and Principal" above.

     A "SWAP TERMINATION PAYMENT" is a termination payment required to be made
by either the trust or the Swap Provider pursuant to the interest rate swap
agreement as a result of termination of the interest rate swap agreement.

     The interest rate swap agreement can be terminated upon an event of default
under that agreement or an early termination event under that agreement. Events
of default under the interest rate swap agreement include, among other things,
the following:

     o    failure to pay,

     o    bankruptcy and insolvency events, and

     o    a merger by the Swap Provider without an assumption of its obligations
          under the interest rate swap agreement.

     Early termination events under the interest rate swap agreement 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 interest rate swap agreement or
          guaranty, as applicable),

     o    a tax event (which generally relates to either party to the interest
          rate swap agreement receiving a payment under the interest rate swap
          agreement 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 interest rate swap agreement 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),

     o    upon the irrevocable direction to dissolve or otherwise terminate the
          trust following which all assets of the trust will be liquidated and
          the proceeds of such liquidation will be distributed to
          certificateholders,

     o    upon the exercise of the optional termination of the trust by a
          servicer as described under "The Pooling and Servicing
          Agreement--Termination; Optional Clean-up Call", and

     o    the pooling and servicing agreement is amended without the consent of
          the Swap Provider and such amendment materially and adversely affects
          the rights or interests of the Swap Provider.

     "DEFAULTED SWAP TERMINATION PAYMENT" means any termination payment required
to be made by the trust to the Swap Provider pursuant to the interest rate swap
agreement as a result of an event of default under the interest rate swap
agreement with respect to which the Swap Provider is the defaulting party or a
termination event under that agreement (other than illegality, a tax event or a
tax event upon merger of the Swap Provider) with respect to which the Swap
Provider is the sole affected party or with respect to a termination resulting
from a Substitution Event (as described below).


                                      S-106



     In addition to the termination events specified above, it shall be an
additional termination event under the interest rate swap agreement (such event,
a "DOWNGRADE TERMINATING EVENT") if (x) either of the rating agencies downgrades
the Swap Provider (or its guarantor) below the Required Swap Counterparty Rating
(but the Swap Provider (or its guarantor) has a rating of at least "BBB-" or
"A-3", if applicable, by S&P or a rating of at least "BBB-" or "F3", if
applicable, by Fitch (if rated by Fitch)) or, S&P or Fitch (if rated by Fitch)
withdraws its ratings of the Swap Provider and (y) at least one of the following
events has not occurred (except to the extent otherwise approved by the rating
agencies):

               (1) within the time period specified in the interest rate swap
          agreement with respect to such downgrade, the Swap Provider shall
          transfer the interest rate swap agreement, in whole, but not in part,
          to a counterparty that satisfies the Required Swap Counterparty
          Rating, subject to the satisfaction of the Rating Agency Condition;

               (2) within the time period specified in the interest rate swap
          agreement with respect to such downgrade, the Swap Provider shall
          collateralize its exposure to the trust pursuant to an ISDA Credit
          Support Annex, subject to the satisfaction of the Rating Agency
          Condition; provided that such ISDA Credit Support Annex shall be made
          a credit support document for the Swap Provider pursuant to an
          amendment to the interest rate swap agreement;

               (3) within the time period specified in the interest rate swap
          agreement with respect to such downgrade, the obligations of such Swap
          Provider under the interest rate swap agreement shall be guaranteed by
          a person or entity that satisfies the Required Swap Counterparty
          Rating, subject to the satisfaction of the Rating Agency Condition; or

               (4) within the time period specified in the interest rate swap
          agreement with respect to such downgrade, such Swap Provider shall
          take such other steps, if any, to enable the trust to satisfy the
          Rating Agency Condition.

     It shall also be an additional termination event under the interest rate
swap agreement if the Swap Provider (or its guarantor) has a rating of less than
"BBB-" or "A-3", if applicable, by S&P or a rating of less than "BBB-" or "F3",
if applicable, by Fitch (if rated by Fitch) and within the time period specified
in the interest rate swap agreement, such Swap Provider, while collateralizing
its exposure to the trust, fails to transfer the interest rate swap agreement at
its sole cost and expense, in whole, but not in part, to a counterparty that
satisfies the Required Swap Counterparty Rating, subject to satisfaction of the
Rating Agency Condition (a "SUBSTITUTION EVENT").

     If the trust is unable to or, if applicable, chooses not to obtain a
substitute interest rate swap agreement in the event that the interest rate swap
agreement is terminated, interest distributable on the certificates will be paid
from amounts received on the mortgage loans without the benefit of an interest
rate swap agreement or a substitute interest rate swap agreement.

     On or after the closing date and so long as the Rating Agency Condition has
been satisfied, (i) the trust may, with the consent of the Swap Provider, assign
or transfer all or a portion of the interest rate swap agreement, (ii) the Swap
Provider may assign its obligations under the interest rate swap agreement to
any institution, (iii) the interest rate swap agreement may be amended and/or
(iv) the interest rate swap agreement may be terminated or replaced.

     The interest rate swap agreement is scheduled to terminate by its terms on
the distribution date in January 2010 and upon termination of the interest rate
swap agreement no further amounts will be paid to the Swap Provider by the trust
and no further amounts will be paid to the trust by the Swap Provider.

     The Swap Provider is an affiliate of the depositor and Morgan Stanley & Co.
Incorporated, one of the underwriters, which arrangement may create certain
conflicts of interest.


                                      S-107



OVERCOLLATERALIZATION PROVISIONS

     The pooling and servicing agreement requires that the Total Monthly Excess
Spread, if any, on each distribution date be applied as an accelerated payment
of principal of the Offered Certificates, but only to the limited extent
described below.

     The application of Total Monthly Excess Spread to the payment of Extra
Principal Distribution Amount to the class or classes of certificates then
entitled to distributions of principal has the effect of accelerating the
amortization of those certificates relative to the amortization of the related
mortgage loans. The portion, if any, of the Available Funds not required to be
distributed to holders of the Offered Certificates or paid to the Swap Account
as described above on any distribution date will be paid to the holders of the
Class X certificates and will not be available on any future distribution date
to cover Extra Principal Distribution Amounts or Basis Risk CarryForward
Amounts, Unpaid Interest Amounts or Unpaid Realized Loss Amounts.

     With respect to any distribution date, the excess, if any, of (a) the
aggregate Stated Principal Balance of the mortgage loans for that distribution
date over (b) the aggregate Class Certificate Balance of the Offered
Certificates as of that date (after taking into account the distribution of the
Principal Remittance Amount on those certificates on that distribution date) is
the "SUBORDINATED AMOUNT" as of that distribution date. The pooling and
servicing agreement requires that the Total Monthly Excess Spread be applied as
an accelerated payment of principal on the certificates then entitled to receive
distributions of principal to the extent that the Specified Subordinated Amount
exceeds the Subordinated Amount as of that distribution date (the excess is
referred to as a "SUBORDINATION DEFICIENCY"). Any amount of Total Monthly Excess
Spread actually applied as an accelerated payment of principal is an "EXTRA
PRINCIPAL DISTRIBUTION AMOUNT." The required level of the Subordinated Amount
with respect to a distribution date is the "SPECIFIED SUBORDINATED AMOUNT" and
is set forth in the definition of Specified Subordinated Amount in the
"Glossary" in this prospectus supplement. As described above, the Specified
Subordinated Amount may, over time, decrease, subject to certain floors and
triggers. If a Trigger Event (as defined in the "Glossary" in this prospectus
supplement) exists, the Specified Subordinated Amount may not "step down." Total
Monthly Excess Spread (only to the extent needed to maintain the Specified
Subordinated Amount) will then be applied to the payment of principal of the
class or classes of certificates then entitled to distributions of principal
during the period that a Trigger Event exists.

     In the event that a Specified Subordinated Amount is permitted to decrease
or "step down" on a distribution date in the future, the pooling and servicing
agreement provides that some or all of the principal that would otherwise be
distributed to the holders of the Offered Certificates on that distribution date
will be distributed to the holders of the Class X certificates on that
distribution date (to the extent not required to pay Unpaid Interest Amounts,
Unpaid Realized Loss Amounts or Basis Risk CarryForward Amounts to the Offered
Certificates) until the Excess Subordinated Amount is reduced to zero. This has
the effect of decelerating the amortization of the Offered Certificates relative
to the amortization of the mortgage loans, and of reducing the related
Subordinated Amount. With respect to any distribution date, the excess, if any,
of (a) the Subordinated Amount on that distribution date over (b) the Specified
Subordinated Amount is the "EXCESS SUBORDINATED AMOUNT". If, on any distribution
date on or after the Stepdown Date on which a Trigger Event does not exist, the
Excess Subordinated Amount is, after taking into account all other distributions
and allocations to be made on that distribution date, greater than zero (i.e.,
the related Subordinated Amount is or would be greater than the related
Specified Subordinated Amount), then any amounts relating to principal which
would otherwise be distributed to the holders of the Offered Certificates on
that distribution date will instead be distributed to the holders of the Class X
certificates (to the extent not required to pay Unpaid Interest Amounts, Unpaid
Realized Loss Amounts or Basis Risk CarryForward Amounts to the Offered
Certificates) in an amount equal to the lesser of (x) the Excess Subordinated
Amount and (y) the Net Monthly Excess Cash Flow (referred to as the
"SUBORDINATION REDUCTION AMOUNT" for that distribution date). The "NET MONTHLY
EXCESS CASH FLOW" is the amount of Available Funds remaining on a distribution
date after the amount necessary to make all payments of interest and principal
to the Offered Certificates and amounts required to be paid to the Swap Provider
on that distribution date.


                                      S-108



REPORTS TO CERTIFICATEHOLDERS

     On each distribution date the trustee will make available to each holder of
an Offered Certificate a distribution report, based solely on information
provided to the trustee by the servicers, containing information, including,
without limitation, the amount of the distribution on such distribution date,
the amount of such distribution allocable to principal and allocable to
interest, the aggregate outstanding principal balance of each class as of such
distribution date and such other information as required by the pooling and
servicing agreement.

     The trustee will provide the monthly distribution report via the trustee's
internet website. The trustee's website will initially be located at
http:\\www.ctslink.com and assistance in using the website can be obtained by
calling the trustee's customer service desk at (301) 815-6600. Parties that are
unable to use the website are entitled to have a paper copy mailed to them via
first class mail by request to the customer service desk. The trustee will have
the right to change the way the monthly statements to certificateholders are
distributed in order to make such distribution more convenient and/or more
accessible to the above parties and the trustee will provide timely and adequate
notification to all above parties regarding any such changes. As a condition to
access the trustee's internet website, the trustee may require registration and
the acceptance of a disclaimer. The trustee will not be liable for the
dissemination of information in accordance with the pooling and servicing
agreement.

     The trustee will also be entitled to rely on, but will not be responsible
for, the content or accuracy of any information provided by third parties for
purposes of preparing the monthly distribution report and may affix to that
report any disclaimer it deems appropriate in its reasonable discretion (without
suggesting liability on the part of any other party to the pooling and servicing
agreement).

                       THE POOLING AND SERVICING AGREEMENT

     Each servicer will be required to use the same care as it customarily
employs in servicing and administering similar mortgage loans for its own
account, in accordance with customary and standard mortgage servicing practices
of mortgage lenders and loan servicers administering similar mortgage loans.

SERVICING AND TRUSTEE FEES AND OTHER COMPENSATION AND PAYMENT OF EXPENSES

     As compensation for their activities as servicers under the pooling and
servicing agreement, each servicer will be entitled, with respect to each
mortgage loan serviced by it, to the servicing fee, which will be retained by
that servicer or payable monthly from amounts on deposit in the applicable
collection account. The servicing fee for each distribution date will be an
amount equal to one-twelfth of the servicing fee rate for each mortgage loan
serviced by the applicable servicer multiplied by the Stated Principal Balance
of the mortgage loan as of the prior distribution date (or the cut-off date in
the case of the first distribution date). The servicing fee rate with respect to
each mortgage loan will be 0.50% per annum. In addition, each servicer will be
entitled to receive, as additional servicing compensation, to the extent
permitted by applicable law and the related mortgage notes, any late payment
charges, modification fees, assumption fees, non-sufficient fund fees or similar
items related to the mortgage loans serviced by such servicer. Each servicer
will also be entitled to withdraw from the applicable collection account any net
interest or other income earned on deposits in the applicable collection
account. In addition, HomEq will be entitled to retain any Prepayment Interest
Excesses related to the mortgage loans serviced by it for any distribution date
to the extent they are not required to offset prepayment interest shortfalls
resulting from principal prepayments in full that are received by HomEq during
the period from the 16th day through the last day of the month prior to that
distribution date (or the entire prior calendar month, in the case of the first
distribution date). See "--Prepayment Interest Shortfalls" below. Each servicer
will be responsible for any losses relating to the investment of funds in its
collection account. Each servicer will be required to pay all expenses incurred
by it in connection with its servicing activities under the pooling and
servicing agreement and is not entitled to reimbursement for such expenses
except as specifically provided in the pooling and servicing agreement.

     As compensation for its activities as trustee under the pooling and
servicing agreement, the trustee will be entitled with respect to each mortgage
loan to the trustee fee, which will be remitted to the trustee monthly by the
servicers from amounts on deposit in their collection accounts. The trustee fee
will be an amount equal to one-twelfth of the trustee fee rate for each mortgage
loan on the Stated Principal Balance of such mortgage loan. The trustee fee rate
with respect to each mortgage loan will be a rate per annum of 0.02% or less. In
addition to the


                                      S-109



trustee fee, the trustee and/or the servicers will be entitled to the benefit of
income earned on deposits in the distribution account.

P&I ADVANCES AND SERVICING ADVANCES

     P&I Advances. Each servicer is required to make P&I Advances on each
Servicer Remittance Date with respect to each mortgage loan it services (other
than with respect to the principal portion of any balloon payments), subject to
its determination in its good faith business judgment that such advance would be
recoverable. Such P&I Advances by a servicer are reimbursable to that servicer
subject to certain conditions and restrictions, and are intended to provide
sufficient funds for the payment of interest to the holders of the certificates.
Notwithstanding a servicer's determination in its good faith business judgment
that a P&I Advance was recoverable when made, if a P&I Advance becomes a
nonrecoverable advance, that servicer will be entitled to reimbursement for that
advance from the trust fund. See "Description of the Certificates--Payments on
the Mortgage Loans" in this prospectus supplement.

     Servicing Advances. Each servicer is required to advance amounts with
respect to the mortgage loans it services subject to its determination that such
advance would be recoverable, constituting "out-of-pocket" costs and expenses
relating to:

     o    the preservation, restoration, inspection and protection of the
          mortgaged property,

     o    enforcement or judicial proceedings, including foreclosures, and

     o    certain other customary amounts described in the pooling and servicing
          agreement.

     These servicing advances by a servicer are reimbursable to the related
servicer subject to certain conditions and restrictions. In the event that,
notwithstanding a servicer's good faith determination at the time the servicing
advance was made, that it would be recoverable, the servicing advance becomes a
nonrecoverable advance, the related servicer will be entitled to reimbursement
for that advance from the trust fund.

     Recovery of Advances. Each servicer may recover P&I Advances and servicing
advances to the extent permitted by the pooling and servicing agreement,
including from the collection of principal and interest on the mortgage loans
serviced by it that is not required to be remitted in the month of receipt on
the Servicer Remittance Date, or, if not recovered from such collections or from
the mortgagor on whose behalf such servicing advance or P&I Advance was made,
from late collections on the related mortgage loan, including Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds and such other amounts as
may be collected by the related servicer from the mortgagor or otherwise
relating to the mortgage loan. In the event a P&I Advance or a servicing advance
becomes a nonrecoverable advance, the applicable servicer may be reimbursed for
such advance from its collection account.

     None of the servicers will be required to make any P&I Advance or servicing
advance which it determines would be a nonrecoverable P&I Advance or
nonrecoverable servicing advance. A P&I Advance or servicing advance is
"nonrecoverable" if in the good faith business judgment of the applicable
servicer (as stated in an officer's certificate of the related servicer
delivered to the trustee), the P&I Advance or servicing advance would not
ultimately be recoverable from collections on or proceeds of the related
mortgage loan.

PREPAYMENT INTEREST SHORTFALLS

     In the event of any voluntary principal prepayments in full on any mortgage
loans during any Prepayment Period (excluding any payments made upon liquidation
of any mortgage loan), the applicable servicer will be obligated to pay, by no
later than the Servicer Remittance Date in the following month, compensating
interest, without any right of reimbursement, for the amount of shortfalls in
interest collections resulting from those full voluntary principal prepayments.
The amount of compensating interest payable by the applicable servicer will be
equal to the difference between the interest paid by the applicable mortgagors
for that month in connection with the prepayments in full and thirty days'
interest on the related mortgage loans, but only to the extent of the servicing
fee payable to that servicer for that distribution date ("COMPENSATING
INTEREST"). With respect to those mortgage loans serviced by HomEq, the amount
of those shortfalls (for those mortgage loans that prepay in full from the 16th
day of


                                      S-110



the month preceding the month in which the distribution date occurs, or from the
first day of the preceding calendar month in the case of the first distribution
date, through the end of that preceding month) will be first netted against the
amount of interest received on mortgage loans serviced by HomEq that prepay from
the 1st day of the month in which the distribution date occurs through the 15th
day of that month representing interest that accrued on those mortgage loans
during that period ("PREPAYMENT INTEREST EXCESSES").

SERVICER REPORTS

     Each servicer is required to deliver to the trustee and the depositor a
servicer remittance report setting forth the information necessary for the
trustee to make the distributions set forth under "Description of the
Certificates--Distributions of Interest and Principal" in this prospectus
supplement and containing the information to be included in the distribution
report for that distribution date delivered by the trustee.

     Each servicer is required to deliver to the depositor, the trustee and the
rating agencies by not later than March 15th of each year, starting in 2006, an
officer's certificate stating that:

     o    a review of the activities of the servicer during the preceding
          calendar year and of performance under the pooling and servicing
          agreement has been made under such officer's supervision; and

     o    to the best of such officer's knowledge, based on such review, the
          servicer has fulfilled all of its obligations under the pooling and
          servicing agreement for such year, or, if there has been a default in
          the fulfillment of any such obligation, specifying each such default
          known to such officer and the nature and status of such default,
          including the steps being taken by the servicer to remedy such
          default.

     Not later than March 15th of each year, starting in 2006, each servicer, at
its expense, is required to cause to be delivered to the depositor, the trustee
and the rating agencies from a firm of independent certified public accountants,
who may also render other services to such servicer, a statement to the effect
that such firm has examined certain documents and records relating to such
servicer's servicing of residential mortgage loans during the preceding calendar
year, or such longer period from the closing date to the end of the following
calendar year, and that, on the basis of such examination conducted
substantially in compliance with generally accepted auditing standards and the
requirements of the Uniform Single Attestation Program for Mortgage Bankers,
such servicing has been conducted in compliance with certain minimum residential
mortgage loan servicing standards.

COLLECTION AND OTHER SERVICING PROCEDURES

     Each servicer will be responsible for making reasonable efforts to collect
all payments called for under the mortgage loans and will, consistent with the
provisions of the pooling and servicing agreement, follow such collection
procedures as it follows with respect to loans held for its own account that are
comparable to the mortgage loans. Consistent with the above, each servicer may
(i) waive any late payment charge or, if applicable, any penalty interest or
(ii) extend the due dates for the monthly payments for a period of not more than
180 days, subject to the provisions of the pooling and servicing agreement.

     Each servicer will be required to accurately and fully report its borrower
payment histories to three national credit repositories in a timely manner with
respect to each mortgage loan serviced by it.

     If a mortgaged property has been or is about to be conveyed by the
mortgagor, the applicable servicer will be obligated to accelerate the maturity
of the mortgage loan, unless the applicable servicer, in its sole business
judgment, believes it is unable to enforce that mortgage loan's "due-on-sale"
clause under applicable law or that such enforcement is not in the best interest
of the trust fund. If it reasonably believes it may be restricted for any reason
from enforcing such a "due-on-sale" clause or that such enforcement is not in
the best interest of the trust fund, the applicable servicer may enter into an
assumption and modification agreement with the person to whom such property has
been or is about to be conveyed, pursuant to which such person becomes liable
under the mortgage note.

     Any fee collected by any servicer for entering into an assumption agreement
will be retained by that servicer as additional servicing compensation. In
connection with any such assumption, the mortgage interest rate borne by the
mortgage note relating to each mortgage loan may not be decreased. For a
description of circumstances in which a


                                      S-111



servicer may be unable to enforce "due-on-sale" clauses, see "Material Legal
Aspects of the Loans--Due-on-Sale Clauses" in the accompanying prospectus.

HAZARD INSURANCE

     Each servicer is required to cause to be maintained for each mortgaged
property securing any mortgage loan serviced by it a hazard insurance policy
with coverage which contains a standard mortgagee's clause in an amount equal to
the least of (a) the maximum insurable value of such mortgaged property, (b) the
amount necessary to fully compensate for any damage or loss to the improvements
that are a part of such property on a replacement cost basis or (c) the
outstanding principal balance of such mortgage loan, but in no event may such
amount be less than is necessary to prevent the borrower from becoming a
coinsurer under the policy. As set forth above, all amounts collected by a
servicer under any hazard policy, except for amounts to be applied to the
restoration or repair of the mortgaged property or released to the borrower in
accordance with the servicer's normal servicing procedures, to the extent they
constitute net Liquidation Proceeds, Condemnation Proceeds or Insurance
Proceeds, will ultimately be deposited in its collection account. The ability of
a servicer to assure that hazard insurance proceeds are appropriately applied
may be dependent on its being named as an additional insured under any hazard
insurance policy, or upon the extent to which information in this regard is
furnished to that servicer by a borrower. The pooling and servicing agreement
provides that a servicer may satisfy its obligation to cause hazard policies to
be maintained by maintaining a blanket policy issued by an insurer acceptable to
the rating agencies, insuring against losses on the mortgage loans serviced by
it. If such blanket policy contains a deductible clause, the applicable servicer
is obligated to deposit in its collection account the sums which would have been
deposited in the collection account but for such clause.

     In general, the standard form of fire and extended coverage policy covers
physical damage to or destruction of the improvements on the property by fire,
lightning, explosion, smoke, windstorm and hail, and riot, strike and civil
commotion, subject to the conditions and exclusions specified in each policy.
Although the policies relating to the mortgage loans will be underwritten by
different insurers under different state laws in accordance with different
applicable state forms and therefore will not contain identical terms and
conditions, the terms of the policies are dictated by respective state laws, and
most such policies typically do not cover any physical damage resulting from the
following: war, revolution, governmental actions, floods and other
weather-related causes, earth movement, including earthquakes, landslides and
mudflows, nuclear reactions, wet or dry rot, vermin, rodents, insects or
domestic animals, theft and, in certain cases, vandalism. The foregoing list is
merely indicative of certain kinds of uninsured risks and is not intended to be
all-inclusive.

     The hazard insurance policies covering the mortgaged properties typically
contain a co-insurance clause which in effect requires the insured at all times
to carry insurance of a specified percentage, generally 80% to 90%, of the full
replacement value of the improvements on the property in order to recover the
full amount of any partial loss. If the insured's coverage falls below this
specified percentage, such clause generally provides that the insurer's
liability in the event of partial loss does not exceed the greater of (x) the
replacement cost of the improvements less physical depreciation or (y) such
proportion of the loss as the amount of insurance carried bears to the specified
percentage of the full replacement cost of such improvements.

     Since residential properties, generally, have historically appreciated in
value over time, if the amount of hazard insurance maintained on the
improvements securing the mortgage loans were to decline as the principal
balances owing on the improvements decreased, hazard insurance proceeds could be
insufficient to restore fully the damaged property in the event of a partial
loss.

REALIZATION UPON DEFAULTED MORTGAGE LOANS

     The applicable servicer will be required to foreclose upon, or otherwise
comparably convert to ownership, mortgaged properties securing such of the
mortgage loans serviced by it as come into default when, in the opinion of the
applicable servicer, no satisfactory arrangements can be made for the collection
of delinquent payments. In connection with such foreclosure or other conversion,
the applicable servicer will follow such practices as it deems necessary or
advisable and as are in keeping with the servicer's general loan servicing
activities and the pooling and servicing agreement; provided, that the
applicable servicer will not be required to expend its own funds in connection
with foreclosure or other conversion, correction of a default on a senior
mortgage or restoration of any


                                      S-112



property unless the applicable servicer believes such foreclosure, correction or
restoration will increase net Liquidation Proceeds and that such expenses will
be recoverable by the applicable servicer.

     With respect to any second-lien mortgage loan for which the related
first-lien mortgage loan is not included in the mortgage loan pool, if, after
such mortgage loan becomes 180 days delinquent, the related servicer determines
that a significant net recovery is not possible through foreclosure, the
mortgage loan may be charged off and the mortgage loan will be treated as a
liquidated mortgage loan, giving rise to a Realized Loss.

REMOVAL AND RESIGNATION OF A SERVICER

     The trustee may, and, at the direction of the majority of voting rights in
the certificates, is required to, remove a servicer upon the occurrence and
continuation beyond the applicable cure period of an event described in clauses
(a), (b), (c), (d), (e), (f) and (g) below. Each of the following constitutes a
"servicer event of default":


          (a) any failure by a servicer to remit to the trustee any payment
     required to be made by a servicer under the terms of the pooling and
     servicing agreement, which continues unremedied for one business day after
     the date upon which written notice of such failure, requiring the same to
     be remedied, is given to a servicer by the depositor or trustee or to a
     servicer, the depositor and the trustee by the holders of certificates
     entitled to at least 25% of the voting rights in the certificates; or

          (b) any failure on the part of a servicer to duly observe or perform
     in any material respect any other of the covenants or agreements on the
     part of a servicer contained in the pooling and servicing agreement, which
     continues unremedied for a period of 60 days (or a shorter period
     applicable to certain provisions in the pooling and servicing agreement)
     after the earlier of (i) the date on which written notice of such failure
     requiring the same to be remedied, is given to a servicer by the depositor
     or trustee, or to a servicer, the depositor and the trustee by any holders
     of certificates entitled to at least 25% of the voting rights in the
     certificates and (ii) actual knowledge of such failure by a servicing
     officer of a servicer; or

          (c) a decree or order of a court or agency or supervisory authority
     having jurisdiction in an involuntary case under any present or future
     federal or state bankruptcy, insolvency or similar law or for the
     appointment of a conservator or 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, is
     entered against a servicer and such decree or order remains in force,
     undischarged or unstayed for a period of 60 days; or

          (d) a servicer consents to the appointment of a conservator or
     receiver or liquidator in any insolvency, readjustment of debt, marshalling
     of assets and liabilities or similar proceedings of or relating to a
     servicer or of or relating to all or substantially all of a servicer's
     property; or

          (e) a servicer admits in writing its inability generally to pay its
     debts as they become due, file a petition to take advantage of any
     applicable insolvency or reorganization statute, makes an assignment for
     the benefit of its creditors, or voluntarily suspends payment of its
     obligations; or

          (f) any breach of a representation and warranty of a servicer, which
     materially and adversely affects the interests of the certificateholders
     and which continues unremedied for a period of thirty days after the date
     upon which written notice of such breach is given to a servicer by the
     trustee or the depositor, or to a servicer, the trustee or the depositor by
     the holders of certificates entitled to at least 25% of the voting rights
     in the certificates; or

          (g) either (i) with respect to Countrywide or JPMorgan, any withdrawal
     or downgrade of two or more levels of that servicer's servicer rating by
     any rating agency that results in a downgrade, qualification or withdrawal
     of the rating assigned to any class of the certificates by any rating
     agency or (ii) with respect to HomEq, Fitch reduces its servicer rating of
     HomEq to "RPS2-" or lower, Moody's reduces its servicer rating of HomEq to
     "SQ3" or lower, or S&P reduces its servicer rating of HomEq to "Average" or
     lower.

     Except in the limited circumstances permitted under the pooling and
servicing agreement a servicer may not assign its obligations under the pooling
and servicing agreement or resign from the obligations and duties imposed on it
by the pooling and servicing agreement except by mutual consent of the
applicable servicer, the depositor and


                                      S-113



the trustee or upon the determination that a servicer's duties under the pooling
and servicing agreement are no longer permissible under applicable law and such
incapacity cannot be cured by a servicer without the incurrence of unreasonable
expense. No such resignation will become effective until a successor has assumed
a servicer's responsibilities and obligations in accordance with the pooling and
servicing agreement.

     Upon removal or resignation of a servicer in accordance with the pooling
and servicing agreement, the trustee will be the successor servicer to such
servicer. The trustee, as successor servicer, will be obligated to make P&I
Advances and servicing advances and certain other advances unless it determines
reasonably and in good faith that such advances would not be recoverable. If,
however, the trustee is unwilling or unable to act as successor servicer, or if
the holders of certificates entitled to at least a majority of the voting rights
in the certificates so request, the trustee is required to appoint, or petition
a court of competent jurisdiction to appoint, in accordance with the provisions
of the pooling and servicing agreement, any established mortgage loan servicing
institution acceptable to the rating agencies as such successor servicer in the
assumption of all or any part of the responsibilities, duties or liabilities of
the predecessor servicer.

     Each servicer and any successor servicer will at all times be required to
be a Fannie Mae-approved and Freddie Mac-approved seller/servicer in good
standing, maintain a net worth of at least $30,000,000 (as determined in
accordance with generally accepted accounting principles), and maintain its
license to do business or service residential mortgage loans in any
jurisdictions in which the mortgaged properties related to mortgage loans that
it is servicing are located and which require such licensing.

     The trustee and any other successor servicer in such capacity is entitled
to the same reimbursement for advances and no more than the same servicing
compensation (including income earned on the applicable collection account) as
the related servicer or such greater compensation if consented to by the rating
agencies rating the Offered Certificates and a majority of the
certificateholders. See "--Servicing and Trustee Fees and Other Compensation and
Payment of Expenses" above.

TERMINATION; OPTIONAL CLEAN-UP CALL

     Any servicer individually, or all of the servicers together, may, at its or
their option, purchase all of the mortgage loans and REO properties and
terminate the trust on any distribution date when the aggregate Stated Principal
Balance of the mortgage loans, as of the last day of the related Due Period, is
equal to or less than 10% of the aggregate Stated Principal Balance of the
mortgage loans as of the cut-off date. The purchase price for the mortgage loans
will be an amount equal to the sum of (i) 100% of the unpaid principal balance
of each mortgage loan (other than mortgage loans related to any REO property)
plus accrued and unpaid interest on those mortgage loans at the applicable
interest rate, (ii) the lesser of (x) the appraised value of any REO property,
as determined by the higher of two appraisals completed by two independent
appraisers selected by the applicable servicer or servicers at its or their
expense plus accrued and unpaid interest on the related mortgage loans at the
applicable interest rates and (y) the unpaid principal balance of each mortgage
loan related to any REO property plus accrued and unpaid interest on those
mortgage loans at the applicable interest rate and (iii) any Swap Termination
Payment owed to the Swap Provider other than a Defaulted Swap Termination
Payment. That purchase of the mortgage loans and REO properties would result in
the payment on that distribution date of the final distribution on the Offered
Certificates. Notwithstanding the foregoing, pursuant to the pooling and
servicing agreement any servicer individually, or all of the servicers together,
will be permitted to exercise the option to purchase the mortgage loans only if
one of the following conditions is met: (i) after distribution of the proceeds
of that purchase to the certificateholders (other than the holders of the Class
X, Class P and Class R certificates), the distribution of the remaining proceeds
to the Class X and Class P certificates will be sufficient to pay the
outstanding principal amount of and accrued and unpaid interest on any class of
debt securities then outstanding that is rated by one or more rating agencies
and backed by the Class X and Class P certificates ("NET INTEREST MARGIN
SECURITIES"), or (ii) (A) prior to that purchase, any servicer individually, or
all of the servicers together, remits to the trustee an amount that, together
with the purchase price specified in the second sentence of this paragraph, will
be sufficient to pay the outstanding principal amount of and accrued and unpaid
interest on the Net Interest Margin Securities, and (B) the trustee remits that
amount directly to the indenture trustee under the indenture creating the Net
Interest Margin Securities.

     The trust also is required to terminate upon notice to the trustee of
either the later of: (i) the distribution to certificateholders of the final
payment or collection with respect to the last mortgage loan, or (ii) the
disposition of


                                      S-114



all funds with respect to the last mortgage loan and the remittance of all funds
due under the pooling and servicing agreement; provided, however, that in no
event will the trust established by the pooling and servicing agreement
terminate later than twenty-one years after the death of the last surviving
lineal descendant of the person named in the pooling and servicing agreement.

CERTAIN MATTERS REGARDING THE DEPOSITOR, THE SERVICERS, THE CUSTODIANS AND THE
TRUSTEE

     The pooling and servicing agreement provides that none of the depositor,
the servicers, the trustee, the custodians or any of their respective directors,
officers, employees or agents will be under any liability to the
certificateholders for any action taken, or for refraining from the taking of
any action, in good faith pursuant to the pooling and servicing agreement, or
for errors in judgment. However, none of the depositor, the servicers, the
custodians or the trustee will be protected against liability arising from any
breach of representations or warranties made by it or from any liability which
may be imposed by reason of the depositor's, a servicer's, a custodian's or the
trustee's, as the case may be, willful misfeasance, bad faith or negligence (or
gross negligence in the case of the depositor) in the performance of its duties
or by reason of its reckless disregard of obligations and duties under the
pooling and servicing agreement.

     The depositor, the servicers, the trustee, the custodians and their
respective directors, officers, employees or agents will be indemnified by the
trust fund and held harmless against any loss, liability or expense incurred in
connection with (i) any audit, controversy or judicial proceeding relating to a
governmental taxing authority or any legal action relating to the pooling and
servicing agreement or (ii) incurred in connection with the performance of their
respective duties pursuant to the pooling and servicing agreement or the
certificates, other than any loss, liability or expense incurred by reason of
the depositor's, any servicer's, any custodian's or the trustee's, as the case
may be, willful misfeasance, bad faith or negligence (or gross negligence in the
case of the depositor) in the performance of its duties or by reason its
reckless disregard of obligations and duties under the pooling and servicing
agreement.

     None of the depositor, any servicer, any custodian or the trustee is
obligated under the pooling and servicing agreement to appear in, prosecute or
defend any legal action that is not incidental to its respective duties which in
its opinion may involve it in any expense or liability, provided that, in
accordance with the provisions of the pooling and servicing agreement, the
depositor, each servicer, each custodian and the trustee, as applicable, may
undertake any action any of them deem necessary or desirable in respect of (i)
the rights and duties of the parties to the pooling and servicing agreement and
(ii) with respect to actions taken by the depositor, the interests of the
trustee and the certificateholders. In the event the depositor, any servicer,
any custodian or the trustee undertakes any such action, the legal expenses and
costs of such action and any resulting liability will be expenses, costs and
liabilities of the trust fund, and the depositor, the servicers, the custodians
and the trustee will be entitled to be reimbursed for such expenses, costs and
liabilities out of the trust fund.

AMENDMENT

     The pooling and servicing agreement may be amended from time to time by the
depositor, the responsible parties, the servicers and the trustee by written
agreement, without notice to, or consent of, the holders of the Offered
Certificates, to cure any ambiguity or mistake, to correct any defective
provision or supplement any provision in the pooling and servicing agreement
which may be inconsistent with any other provision, to add to the duties of the
depositor or the servicers, or to comply with any requirements in the Code. The
pooling and servicing agreement may also be amended to add any other provisions
with respect to matters or questions arising under the pooling and servicing
agreement, or to modify, alter, amend, add to or rescind any of the terms or
provisions contained in the pooling and servicing agreement; provided, that such
amendment will not adversely affect in any material respect the interest of any
holder of the Offered Certificates, as evidenced by (i) an opinion of counsel
delivered to, but not obtained at the expense of, the trustee, confirming that
the amendment will not adversely affect in any material respect the interests of
any holder of the Offered Certificates or (ii) a letter from each rating agency
confirming that such amendment will not cause the reduction, qualification or
withdrawal of the then current ratings of the certificates.

     The pooling and servicing agreement may be amended from time to time by the
depositor, the responsible parties, the servicers and the trustee, with the
consent of holders of certificates evidencing percentage interests


                                      S-115



aggregating not less than 66-2/3% of each class of certificates affected by the
amendment for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the pooling and servicing agreement or
of modifying in any manner the rights of the holders of the certificates;
provided, however, that no such amendment will (i) 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 that certificate, (ii)
adversely affect in any material respect the interests of the holders of any
class of certificates in a manner other than as described in clause (i) above
without the consent of the holders of certificates of that class evidencing
percentage interests aggregating not less than 66-2/3% of that class, or (iii)
reduce the percentage of the certificates whose holders are required to consent
to any such amendment without the consent of the holders of 100% of the
certificates then outstanding.

                       PREPAYMENT AND YIELD CONSIDERATIONS

STRUCTURING ASSUMPTIONS

     The prepayment model used in this prospectus supplement 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 those mortgage loans. The
prepayment assumption does not purport to be a historical description of
prepayment experience or a prediction of the anticipated rate of prepayment of
any pool of mortgage loans, including the related mortgage loans. With respect
to the fixed rate mortgage loans, the prepayment assumption assumes a constant
prepayment rate of approximately 4% per annum of the then outstanding principal
balance of the mortgage loans in the first month of the life of the related
mortgage loans and an additional 1.2667% per annum (precisely 19%/15 expressed
as a percentage) in each month thereafter until the sixteenth month. Beginning
in the sixteenth month and in each month thereafter during the life of the
related mortgage loans, the prepayment assumption assumes a constant prepayment
rate of 23% per annum each month. The prepayment assumption with respect to the
adjustable rate mortgage loans assumes a constant prepayment rate of 28% per
annum each month.

     Since the tables were prepared on the basis of the assumptions in the
following paragraph, there are discrepancies between the characteristics of the
actual mortgage loans and the characteristics of the mortgage loans assumed in
preparing the tables. Any discrepancy may have an effect upon the percentages of
the Class Certificate Balances outstanding and weighted average lives of the
Offered Certificates set forth in the tables. In addition, since the actual
mortgage loans in the trust fund have characteristics which differ from those
assumed in preparing the tables set forth below, the distributions of principal
on the Offered Certificates may be made earlier or later than as indicated in
the tables.

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

     o    the closing date for the Offered Certificates occurs on October 28,
          2005;

     o    distributions on the certificates are made on the 25th day of each
          month, commencing in November 2005, in accordance with the priorities
          described in this prospectus supplement;

     o    the mortgage loan prepayment rates with respect to the assumed
          mortgage loans are a multiple of the applicable prepayment assumption
          as stated in the table under the heading "Prepayment Scenarios" under
          "--Decrement Tables" below;

     o    prepayments include 30 days' interest on the related mortgage loan;

     o    the optional termination is not exercised (except with respect to the
          weighted average life to call);

     o    the Specified Subordinated Amount is initially as specified in this
          prospectus supplement and thereafter decreases in accordance with the
          provisions in this prospectus supplement;

     o    with respect to each adjustable rate mortgage loan, (a) the interest
          rate for each mortgage loan is adjusted on its next rate Adjustment
          Date (and on subsequent Adjustment Dates, if necessary) to a rate
          equal to the


                                      S-116



          Gross Margin plus the Loan Index (subject to the applicable periodic
          rate cap and minimum and maximum interest rate), (b) the Loan Index
          remains constant at 4.34%, and (c) the scheduled monthly payment on
          the mortgage loans is adjusted to equal a fully amortizing payment
          (except, with respect to mortgage loans that are interest-only for a
          period of time, during that period of time, and balloon mortgage
          loans);

     o    One-Month LIBOR remains constant at 3.97%;

     o    no delinquencies or defaults in the payment by mortgagors of principal
          of and interest on the mortgage loans are experienced;

     o    no Swap Termination Payments are paid or received by the trust;

     o    scheduled payments of interest and/or principal on the mortgage loans
          are received on the first day of each month, commencing in the
          calendar month following the month in which the closing date occurs,
          and are computed prior to giving effect to prepayments received on the
          last day of the prior month;

     o    prepayments represent prepayments in full of individual mortgage loans
          and are received on the last day of each month, commencing in the
          calendar month in which the closing date occurs;

     o    the initial Class Certificate Balance of each class of Offered
          Certificates is as set forth on the cover page of this prospectus
          supplement;

     o    the mortgage loans accrue interest on the basis of a 360-day year
          consisting of twelve 30-day months;

     o    interest accrues on each class of Offered Certificates at the
          applicable Pass-Through Rate set forth or described in this prospectus
          supplement; and

     o    the assumed mortgage loans have the approximate initial
          characteristics described below:


                                      S-117





                          ORIGINAL                   CUT-OFF
                          INTEREST      CUT-OFF       DATE                ORIGINAL      REMAINING
                            ONLY          DATE        GROSS   EXPENSE   AMORTIZATION  AMORTIZATION
                INDEX      PERIOD      PRINCIPAL    MORTGAGE  FEE RATE      TERM          TERM
GROUP  TYPE     NAME      (MONTHS)    BALANCE ($)   RATE (%)     (%)      (MONTHS)      (MONTHS)
-----  ----  -----------  --------  --------------  --------  --------  ------------  ------------

  1     ARM  6MonthLIBOR      0         400,483.86    8.047     0.520        360           356
  1     ARM  6MonthLIBOR     60         268,000.00    6.250     0.520        360           355
  1     ARM  6MonthLIBOR      0       1,179,059.87    6.669     0.520        360           356
  1     ARM  6MonthLIBOR     24         415,139.05    7.022     0.520        360           356
  1     ARM  6MonthLIBOR     60         665,850.00    6.267     0.520        360           354
  1     ARM  6MonthLIBOR      0         243,665.48    9.279     0.520        360           357
  1     ARM  6MonthLIBOR      0         100,529.87    6.590     0.520        360           357
  1     ARM  6MonthLIBOR      0       1,802,960.13    7.289     0.520        359           356
  1     ARM  6MonthLIBOR     24         155,000.00    6.990     0.520        360           357
  1     ARM  6MonthLIBOR     60         124,800.00    7.290     0.520        360           357
  1     ARM  6MonthLIBOR      0       1,473,946.67    7.322     0.520        360           356
  1     ARM  6MonthLIBOR     24       1,624,366.97    7.340     0.520        360           356
  1     ARM  6MonthLIBOR      0         171,507.82    6.250     0.520        360           357
  1     ARM  6MonthLIBOR      0         297,886.24    8.836     0.520        360           356
  1     ARM  6MonthLIBOR      0         143,490.34    7.800     0.520        360           355
  1     ARM  6MonthLIBOR      0         118,979.70    7.150     0.520        480           475
  1     ARM  6MonthLIBOR      0         255,098.47    7.825     0.520        360           355
  1     ARM  6MonthLIBOR      0       1,678,027.58    6.902     0.520        360           355
  1     ARM  6MonthLIBOR     24       1,888,999.95    7.234     0.520        360           356
  1     ARM  6MonthLIBOR     60       1,694,900.00    6.323     0.520        360           355
  1     ARM  6MonthLIBOR      0          54,769.48    9.750     0.520        360           355
  1     ARM  6MonthLIBOR      0         597,728.63    5.500     0.520        360           357
  1     ARM  6MonthLIBOR      0         630,873.06    7.362     0.520        480           475
  1     ARM  6MonthLIBOR      0      17,704,850.78    7.291     0.520        360           356
  1     ARM  6MonthLIBOR     24         812,699.97    6.788     0.520        360           357
  1     ARM  6MonthLIBOR     60       2,673,224.36    6.919     0.520        360           356
  1     ARM  6MonthLIBOR      0       2,280,599.71    6.372     0.520        360           357
  1     ARM  6MonthLIBOR      0      27,347,334.77    7.333     0.520        360           357
  1     ARM  6MonthLIBOR     24       1,181,789.12    7.189     0.520        360           356
  1     ARM  6MonthLIBOR     60       1,389,604.25    6.995     0.520        360           357
  1     ARM  6MonthLIBOR      0         305,703.97    7.841     0.520        360           353
  1     ARM  6MonthLIBOR     24         477,120.00    6.571     0.520        360           356
  1     ARM  6MonthLIBOR      0          95,758.19    6.025     0.520        480           475
  1     ARM  6MonthLIBOR      0         179,447.25    5.880     0.520        360           357
  1     ARM  6MonthLIBOR      0     124,709,878.81    7.272     0.520        360           357
  1     ARM  6MonthLIBOR     60       2,888,080.00    6.494     0.520        360           357
  1     ARM  6MonthLIBOR      0       1,652,319.04    7.678     0.520        360           356
  1     ARM  6MonthLIBOR      0         206,816.27    8.200     0.520        480           475
  1     ARM  6MonthLIBOR      0         950,022.68    6.892     0.520        359           353
  1     ARM  6MonthLIBOR     24       1,146,999.96    6.469     0.520        360           356
  1     ARM  6MonthLIBOR      0         338,409.55    8.440     0.520        360           353
  1     ARM  6MonthLIBOR      0       1,559,371.12    6.855     0.520        360           354
  1     ARM  6MonthLIBOR      0          62,476.70    6.840     0.520        360           354
  1     ARM  6MonthLIBOR      0         334,383.72    6.150     0.520        480           475
  1     ARM  6MonthLIBOR      0         773,989.18    6.556     0.520        360           356
  1     ARM  6MonthLIBOR      0       5,977,114.09    7.014     0.520        479           474
  1     ARM  6MonthLIBOR      0      67,475,223.97    6.971     0.520        360           355
  1     ARM  6MonthLIBOR     24      52,018,624.14    6.649     0.520        360           356


        STATED                           RATE     GROSS   GROSS   CURRENT    NEXT
       REMAINING   GROSS  NEXT RATE   ADJUSTMENT   LIFE   LIFE   PERIODIC  PERIODIC
         TERM     MARGIN  ADJUSTMENT  FREQUENCY   FLOOR    CAP     RATE      RATE
GROUP  (MONTHS)     (%)    (MONTHS)    (MONTHS)    (%)     (%)    CAP (%)   CAP (%)
-----  ---------  ------  ----------  ----------  -----  ------  --------  --------

  1       356      6.974      20          6       8.047  14.187    3.000     1.000
  1       355      6.125      19          6       6.250  12.750    3.000     1.000
  1       356      6.122      20          6       6.669  12.898    2.874     1.000
  1       356      5.678      20          6       7.022  14.022    1.500     1.500
  1       354      6.646      18          6       6.267  12.767    3.000     1.000
  1       357      9.029      21          6       9.279  15.279    3.000     1.000
  1       357      6.340      33          6       6.590  12.590    3.000     1.000
  1       356      6.338      21          6       7.289  13.289    3.000     1.000
  1       357      5.550      21          6       6.990  13.990    1.500     1.500
  1       357      6.290      21          6       7.290  13.290    3.000     1.000
  1       356      6.570      20          6       7.322  13.575    2.608     1.000
  1       356      5.636      20          6       7.340  14.340    1.500     1.500
  1       357      5.250      33          6       6.250  12.250    3.000     1.000
  1       356      7.836      20          6       8.836  14.836    3.000     1.000
  1       355      4.410      19          6       7.800  14.300    1.500     1.000
  1       355      6.500      19          6       7.150  13.650    3.000     1.000
  1       355      7.500      31          6       7.825  14.325    3.000     1.000
  1       355      6.279      19          6       6.860  13.536    2.600     1.133
  1       356      5.933      20          6       7.234  14.234    1.690     1.500
  1       355      6.187      19          6       6.323  12.823    3.000     1.000
  1       355      8.000       1          6       9.750  16.250    1.000     1.000
  1       357      4.500      33          6       5.500  11.500    3.000     1.000
  1       355      6.740      19          6       7.362  13.862    3.000     1.000
  1       356      6.403      20          6       7.291  13.439    2.922     1.000
  1       357      5.729      21          6       6.788  13.788    1.500     1.500
  1       356      6.244      20          6       6.945  13.234    2.864     1.000
  1       357      5.364      33          6       6.372  12.372    3.000     1.000
  1       357      6.396      21          6       7.333  13.347    2.988     1.000
  1       356      5.741      20          6       7.189  14.189    1.500     1.500
  1       357      6.019      21          6       7.019  13.019    3.000     1.000
  1       353      7.424      17          6       7.841  14.341    2.589     1.000
  1       356      5.639      20          6       6.571  13.571    1.500     1.500
  1       355      6.025      19          6       6.025  12.525    3.000     1.000
  1       357      4.880      33          6       5.880  11.880    3.000     1.000
  1       357      6.326      21          6       7.273  13.274    3.000     1.000
  1       357      5.494      21          6       6.494  12.494    3.000     1.000
  1       356      6.694      20          6       7.678  13.678    3.000     1.000
  1       355      6.875      19          6       8.200  14.700    3.000     1.000
  1       353      6.249      18          6       6.892  13.392    2.413     1.000
  1       356      5.634      20          6       6.469  13.469    1.500     1.500
  1       353      6.900      17          6       8.440  14.940    3.000     1.000
  1       354      6.230      18          6       6.855  13.355    2.907     1.000
  1       354      5.840       6          6       6.840  13.340    1.000     1.000
  1       355      5.875      31          6       6.150  12.650    3.000     1.000
  1       356      5.334      32          6       6.556  12.736    3.000     1.000
  1       355      6.569      19          6       7.014  13.514    3.000     1.000
  1       355      6.211      19          6       6.971  13.479    2.516     1.107
  1       356      5.639      20          6       6.649  13.649    1.500     1.500



                                      S-118





                          ORIGINAL                  CUT-OFF
                          INTEREST     CUT-OFF       DATE                ORIGINAL      REMAINING
                            ONLY         DATE        GROSS   EXPENSE   AMORTIZATION  AMORTIZATION
                INDEX      PERIOD     PRINCIPAL    MORTGAGE  FEE RATE      TERM          TERM
GROUP  TYPE     NAME      (MONTHS)   BALANCE ($)   RATE (%)     (%)      (MONTHS)      (MONTHS)
-----  ----  -----------  --------  -------------  --------  --------  ------------  ------------

  1     ARM  6MonthLIBOR     60     19,199,307.25    6.313     0.520        360           354
  1     ARM  6MonthLIBOR      0        495,783.51    6.861     0.520        360           356
  1     ARM  6MonthLIBOR      0      8,253,197.03    7.438     0.520        360           357
  1     ARM  6MonthLIBOR     36        164,000.00    6.975     0.520        360           357
  1     ARM  6MonthLIBOR     60        154,700.00    6.240     0.520        360           357
  1     ARM  6MonthLIBOR      0        655,348.21    7.697     0.520        360           356
  1     ARM  6MonthLIBOR      0        820,105.70    7.754     0.520        360           357
  1     ARM  6MonthLIBOR     60        480,400.00    6.497     0.520        360           357
  1     ARM  6MonthLIBOR     36        354,400.00    6.482     0.520        360           357
  1     ARM  6MonthLIBOR      0        287,354.76    7.500     0.520        360           357
  1     ARM  6MonthLIBOR      0      2,137,213.69    7.057     0.520        360           357
  1     ARM  6MonthLIBOR      0      7,502,335.21    6.717     0.520        360           357
  1     ARM  6MonthLIBOR     60        396,192.14    6.370     0.520        360           357
  1     ARM  6MonthLIBOR      0         86,320.64    8.490     0.520        360           356
  1     ARM  6MonthLIBOR     36        138,400.00    7.475     0.520        360           357
  1     ARM  6MonthLIBOR      0        304,186.13    6.871     0.520        480           475
  1     ARM  6MonthLIBOR      0      2,639,195.82    6.986     0.520        359           354
  1     ARM  6MonthLIBOR      0      3,679,992.51    8.086     0.520        360           356
  1     ARM  6MonthLIBOR     36      1,398,174.48    6.651     0.520        360           357
  1     ARM  6MonthLIBOR      0        351,907.99    6.340     0.520        480           475
  1     ARM  6MonthLIBOR      0      3,046,278.26    7.259     0.520        480           475
  1     ARM  6MonthLIBOR      0      4,515,740.32    7.166     0.520        359           355
  1     ARM  6MonthLIBOR      0     89,748,299.07    7.286     0.520        360           356
  1     ARM  6MonthLIBOR     24      5,667,541.63    7.404     0.520        360           356
  1     ARM  6MonthLIBOR     36        412,200.00    7.618     0.520        360           357
  1     ARM  6MonthLIBOR     60        507,200.00    6.955     0.520        360           357
  1     ARM  6MonthLIBOR     60     12,537,568.23    6.514     0.520        360           355
  1     ARM  6MonthLIBOR    120        152,000.00    5.500     0.520        360           354
  1     FRM      N/A          0        160,795.66   10.124     0.520        360           354
  1     FRM      N/A          0        180,352.93    7.750     0.520        360           355
  1     FRM      N/A          0        227,950.87    6.290     0.520        360           357
  1     FRM      N/A          0        170,533.71    6.500     0.520        360           357
  1     FRM      N/A          0         29,318.05   12.700     0.520        240           237
  1     FRM      N/A          0        285,709.11   11.039     0.520        360           355
  1     FRM      N/A          0        331,762.94    9.752     0.520        360           356
  1     FRM      N/A          0         40,830.56    9.050     0.520        358           352
  1     FRM      N/A          0         58,889.16   10.850     0.520        240           237
  1     FRM      N/A          0         63,125.66   10.103     0.520        360           355
  1     FRM      N/A          0         88,659.57    8.108     0.520        180           175
  1     FRM      N/A          0        183,455.54    6.907     0.520        360           356
  1     FRM      N/A          0         84,532.27   10.859     0.520        360           355
  1     FRM      N/A          0        108,814.26   10.970     0.520        360           356
  1     FRM      N/A          0        183,657.56    7.125     0.520        480           475
  1     FRM      N/A          0      1,376,610.77    7.173     0.520        360           353
  1     FRM      N/A          0         26,043.56   11.000     0.520        180           174
  1     FRM      N/A          0         41,704.09    9.600     0.520        240           235
  1     FRM      N/A          0        158,814.48   11.603     0.520        360           355
  1     FRM      N/A          0        166,746.21   11.670     0.520        360           357


        STATED                           RATE     GROSS   GROSS   CURRENT    NEXT
       REMAINING   GROSS  NEXT RATE   ADJUSTMENT   LIFE   LIFE   PERIODIC  PERIODIC
         TERM     MARGIN  ADJUSTMENT  FREQUENCY   FLOOR    CAP     RATE      RATE
GROUP  (MONTHS)     (%)    (MONTHS)    (MONTHS)    (%)     (%)    CAP (%)   CAP (%)
-----  ---------  ------  ----------  ----------  -----  ------  --------  --------

  1       354      6.289      18          6       6.313  12.796    2.993     1.000
  1       356      6.656      32          6       6.861  13.088    3.000     1.000
  1       357      6.459      21          6       7.438  13.438    3.000     1.000
  1       357      5.550      33          6       6.975  13.975    1.500     1.500
  1       357      5.240      21          6       6.240  12.240    3.000     1.000
  1       356      6.697      32          6       7.697  13.697    3.000     1.000
  1       357      6.893      21          6       7.754  13.754    3.000     1.000
  1       357      5.868      33          6       6.497  12.497    3.000     1.000
  1       357      5.550      33          6       6.482  13.482    1.500     1.500
  1       357      6.500      21          6       7.500  13.500    3.000     1.000
  1       357      6.087      21          6       7.087  13.087    3.000     1.000
  1       357      5.759      33          6       6.717  12.717    3.000     1.000
  1       357      5.370      33          6       6.370  12.370    3.000     1.000
  1       356      7.490      20          6       8.490  14.490    3.000     1.000
  1       357      5.800      33          6       7.475  14.475    1.500     1.500
  1       355      6.349      19          6       6.871  13.371    3.000     1.000
  1       354      6.471      31          6       6.986  13.550    2.872     1.043
  1       356      7.077      20          6       8.086  14.192    2.908     1.000
  1       357      5.662      33          6       6.651  13.651    1.500     1.500
  1       355      7.375      31          6       6.340  12.840    3.000     1.000
  1       355      6.220      19          6       7.259  13.759    3.000     1.000
  1       355      6.310      32          6       7.166  13.388    3.000     1.000
  1       356      6.428      20          6       7.286  13.495    2.901     1.009
  1       356      5.708      20          6       7.404  14.404    1.500     1.500
  1       357      5.748      33          6       7.618  14.618    1.500     1.500
  1       357      5.955      33          6       6.955  12.955    3.000     1.000
  1       355      6.139      19          6       6.514  12.952    2.944     1.000
  1       354      4.500      18          6       5.500  12.000    1.500     1.000
  1       174       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       355       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       237       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       356       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       352       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       237       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       356       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       356       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       355       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       353       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       174       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       235       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A



                                      S-119





                          ORIGINAL                  CUT-OFF
                          INTEREST     CUT-OFF       DATE                ORIGINAL      REMAINING
                            ONLY        DATE         GROSS    EXPENSE  AMORTIZATION  AMORTIZATION
                INDEX      PERIOD     PRINCIPAL    MORTGAGE  FEE RATE      TERM          TERM
GROUP  TYPE      NAME     (MONTHS)   BALANCE ($)   RATE (%)     (%)      (MONTHS)      (MONTHS)
-----  ----  -----------  --------  -------------  --------  --------  ------------  ------------

  1     FRM      N/A          0        347,628.05    7.236     0.520        358           353
  1     FRM      N/A          0        359,219.84    7.106     0.520        180           174
  1     FRM      N/A          0         74,925.20   12.046     0.520        360           357
  1     FRM      N/A          0        512,615.74   10.809     0.520        360           355
  1     FRM      N/A          0        742,266.20    6.921     0.520        360           357
  1     FRM      N/A          0         14,954.63   11.250     0.520        357           351
  1     FRM      N/A          0        176,065.17    9.655     0.520        360           357
  1     FRM      N/A          0         95,016.64    9.177     0.520        360           355
  1     FRM      N/A          0         58,384.55   11.059     0.520        360           355
  1     FRM      N/A          0         69,462.57    9.540     0.520        360           356
  1     FRM      N/A          0        359,896.95   10.210     0.520        356           351
  1     FRM      N/A          0         29,912.43    8.750     0.520        360           355
  1     FRM      N/A          0         57,497.32    9.500     0.520        180           174
  1     FRM      N/A          0        146,176.25    7.125     0.520        180           172
  1     FRM      N/A          0         22,280.66   10.500     0.520        180           174
  1     FRM      N/A          0         28,901.19   11.200     0.520        240           237
  1     FRM      N/A          0         47,192.11   10.500     0.520        476           471
  1     FRM      N/A          0        166,043.65    7.425     0.520        180           174
  1     FRM      N/A          0        362,813.38    7.130     0.520        480           475
  1     FRM      N/A          0      2,286,568.66    6.582     0.520        360           355
  1     FRM      N/A          0      2,404,693.79   10.334     0.520        359           356
  1     FRM      N/A          0      3,637,050.29    9.974     0.520        360           354
  1     FRM      N/A          0         32,544.69   10.196     0.520        359           349
  1     FRM      N/A          0         58,599.60    8.200     0.520        480           475
  1     FRM      N/A          0         66,414.18   10.309     0.520        360           357
  1     FRM      N/A          0        180,523.91    6.857     0.520        180           174
  1     FRM      N/A          0        501,821.96    7.581     0.520        240           236
  1     FRM      N/A          0      1,543,336.85    7.571     0.520        360           356
  1     FRM      N/A          0        118,535.75   10.279     0.520        360           355
  1     FRM      N/A          0        143,619.77   10.318     0.520        360           357
  1     FRM      N/A          0      1,921,210.34    7.277     0.520        360           356
  1     FRM      N/A          0         36,347.59    9.655     0.520        360           357
  1     FRM      N/A          0         38,592.52    7.125     0.520        120           114
  1     FRM      N/A          0         18,937.17    8.650     0.520        240           234
  1     FRM      N/A          0         20,775.24   10.550     0.520        360           357
  1     FRM      N/A          0         88,764.31    9.858     0.520        359           354
  1     FRM      N/A          0        381,576.20    7.184     0.520        180           177
  1     FRM      N/A          0        441,092.98    6.734     0.520        240           237
  1     FRM      N/A          0     10,510,823.28    7.426     0.520        360           357
  1     FRM      N/A          0        259,005.45    6.250     0.520        360           356
  1     FRM      N/A          0         69,862.54   11.500     0.520        360           354
  1     FRM      N/A          0      1,149,177.40    6.291     0.520        360           354
  1     FRM      N/A          0         18,842.72    8.600     0.520        180           177
  1     FRM      N/A          0         73,107.58    8.475     0.520        120           113
  1     FRM      N/A          0        466,153.15   10.315     0.520        360           354
  1     FRM      N/A          0        548,656.45    6.964     0.520        240           235
  1     FRM      N/A          0        920,292.96    6.987     0.520        480           475
  1     FRM      N/A          0      1,031,866.69    7.281     0.520        179           173


        STATED                           RATE     GROSS   GROSS   CURRENT    NEXT
       REMAINING   GROSS   NEXT RATE  ADJUSTMENT   LIFE   LIFE   PERIODIC  PERIODIC
          TERM    MARGIN  ADJUSTMENT  FREQUENCY   FLOOR    CAP     RATE      RATE
GROUP  (MONTHS)     (%)    (MONTHS)    (MONTHS)    (%)     (%)    CAP (%)   CAP (%)
-----  ---------  ------  ----------  ----------  -----  ------  --------  --------

  1       353       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       174       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       174       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       355       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       176       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       174       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       172       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       174       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       237       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       355       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       174       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       355       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       355       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       356       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       174       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       170       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       355       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       174       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       236       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       356       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       356       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       114       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       234       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       177       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       237       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       356       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       174       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       354       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       177       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       113       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       174       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       235       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       355       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       173       N/A      N/A         N/A       N/A     N/A      N/A       N/A



                                      S-120





                          ORIGINAL                  CUT-OFF
                          INTEREST     CUT-OFF       DATE                ORIGINAL      REMAINING
                            ONLY         DATE        GROSS   EXPENSE   AMORTIZATION  AMORTIZATION
                INDEX      PERIOD     PRINCIPAL    MORTGAGE  FEE RATE      TERM          TERM
GROUP  TYPE     NAME      (MONTHS)   BALANCE ($)   RATE (%)     (%)      (MONTHS)      (MONTHS)
-----  ----  -----------  --------  -------------  --------  --------  ------------  ------------

  1     FRM      N/A          0      1,186,979.57    9.818     0.520        360           356
  1     FRM      N/A          0      3,965,743.74    7.053     0.520        360           354
  1     FRM      N/A          0        183,272.58    7.201     0.520        240           233
  1     FRM      N/A          0        211,799.93    7.167     0.520        120           114
  1     FRM      N/A          0        229,640.82    6.500     0.520        299           292
  1     FRM      N/A          0        271,480.93   10.980     0.520        240           233
  1     FRM      N/A          0        355,189.23   10.298     0.520        179           174
  1     FRM      N/A          0      1,167,725.44    6.451     0.520        180           174
  1     FRM      N/A          0      1,372,390.28    6.969     0.520        479           474
  1     FRM      N/A          0      2,528,437.79   10.775     0.520        359           356
  1     FRM      N/A          0      7,346,748.18   10.227     0.520        358           353
  1     FRM      N/A          0     12,138,843.98    7.265     0.520        360           355
  2     ARM  6MonthLIBOR      0        114,722.46    7.125     0.520        360           357
  2     ARM  6MonthLIBOR      0      3,483,414.46    6.712     0.520        360           356
  2     ARM  6MonthLIBOR     60        369,550.04    6.689     0.520        360           355
  2     ARM  6MonthLIBOR      0         49,917.76    9.020     0.520        360           357
  2     ARM  6MonthLIBOR      0      2,707,741.44    7.405     0.520        360           356
  2     ARM  6MonthLIBOR      0         66,683.70    7.990     0.520        337           334
  2     ARM  6MonthLIBOR      0      8,503,672.51    7.416     0.520        360           357
  2     ARM  6MonthLIBOR     24        565,254.98    7.261     0.520        360           356
  2     ARM  6MonthLIBOR      0        129,447.97    5.700     0.520        360           356
  2     ARM  6MonthLIBOR      0        163,346.14    6.462     0.520        360           356
  2     ARM  6MonthLIBOR      0        179,587.75    6.375     0.520        480           475
  2     ARM  6MonthLIBOR      0        239,084.90    7.426     0.520        360           355
  2     ARM  6MonthLIBOR      0        350,880.28    4.500     0.520        480           474
  2     ARM  6MonthLIBOR      0      8,165,703.23    7.305     0.520        360           355
  2     ARM  6MonthLIBOR     24      5,754,805.69    7.025     0.520        360           356
  2     ARM  6MonthLIBOR     60      6,287,780.70    6.880     0.520        360           355
  2     ARM  6MonthLIBOR      0        235,202.84    5.990     0.520        360           357
  2     ARM  6MonthLIBOR      0      3,414,136.15    6.582     0.520        480           475
  2     ARM  6MonthLIBOR      0     25,414,530.36    7.541     0.520        360           356
  2     ARM  6MonthLIBOR     24         98,325.00    6.800     0.520        360           357
  2     ARM  6MonthLIBOR     60      2,046,049.91    6.746     0.520        360           354
  2     ARM  6MonthLIBOR      0        472,864.77    6.752     0.520        359           356
  2     ARM  6MonthLIBOR      0     21,075,721.00    7.456     0.520        360           357
  2     ARM  6MonthLIBOR     24        457,118.36    8.182     0.520        360           356
  2     ARM  6MonthLIBOR     60        928,000.00    6.070     0.520        360           358
  2     ARM  6MonthLIBOR      0      2,101,643.70    7.270     0.520        360           357
  2     ARM  6MonthLIBOR     24        180,000.00    6.875     0.520        360           357
  2     ARM  6MonthLIBOR     60        848,999.99    4.990     0.520        360           352
  2     ARM  6MonthLIBOR      0        119,578.33    6.690     0.520        360           356
  2     ARM  6MonthLIBOR      0     89,793,550.66    7.133     0.520        360           357
  2     ARM  6MonthLIBOR     60      1,356,127.31    6.618     0.520        360           357
  2     ARM  6MonthLIBOR      0        882,064.48    7.236     0.520        360           355
  2     ARM  6MonthLIBOR      0        507,129.82    5.025     0.520        480           475
  2     ARM  6MonthLIBOR      0      3,676,769.57    7.241     0.520        360           356
  2     ARM  6MonthLIBOR      0        330,491.73    6.625     0.520        480           475
  2     ARM  6MonthLIBOR      0      1,795,729.53    7.405     0.520        360           354


        STATED                           RATE     GROSS   GROSS   CURRENT    NEXT
       REMAINING   GROSS  NEXT RATE   ADJUSTMENT   LIFE   LIFE   PERIODIC  PERIODIC
         TERM     MARGIN  ADJUSTMENT  FREQUENCY   FLOOR    CAP     RATE      RATE
GROUP  (MONTHS)     (%)    (MONTHS)    (MONTHS)    (%)     (%)    CAP (%)   CAP (%)
-----  ---------  ------  ----------  ----------  -----  ------  --------  --------

  1       356       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       354       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       233       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       114       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       292       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       233       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       174       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       174       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       355       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       356       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  1       355       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       357      5.550      33          6       7.125  14.125    1.500     1.500
  2       356      5.827      20          6       6.712  13.177    2.457     1.181
  2       355      6.689      19          6       6.689  13.189    3.000     1.000
  2       357      8.770      33          6       9.020  15.020    3.000     1.000
  2       356      6.503      20          6       7.405  13.573    2.747     1.084
  2       334      6.990      33          6       7.990  13.990    3.000     1.000
  2       357      5.980      21          6       7.416  14.271    1.710     1.428
  2       356      5.550      20          6       7.261  14.261    1.500     1.500
  2       356      5.550      32          6       5.700  12.700    1.500     1.500
  2       356      6.323      56          6       6.462  13.145    2.451     1.183
  2       355      6.625      55          6       6.375  12.875    3.000     1.000
  2       355      7.375      55          6       7.426  13.926    3.000     1.000
  2       354      5.000      18          6       4.500  11.000    3.000     1.000
  2       355      6.251      19          6       7.305  13.999    2.021     1.193
  2       356      5.720      20          6       7.025  14.025    1.500     1.500
  2       355      6.414      19          6       6.880  13.380    3.000     1.000
  2       357      4.990      33          6       5.990  11.990    3.000     1.000
  2       355      6.376      19          6       6.582  13.082    2.811     1.000
  2       356      6.230      20          6       7.541  13.974    2.411     1.161
  2       357      5.550      21          6       6.800  13.800    1.500     1.500
  2       354      6.378      18          6       6.746  13.178    3.000     1.000
  2       356      5.752      33          6       6.752  12.752    3.000     1.000
  2       357      6.271      21          6       7.456  13.770    2.528     1.157
  2       356      5.656      20          6       8.182  15.182    1.500     1.500
  2       358      5.070      22          6       6.070  12.070    3.000     1.000
  2       357      5.757      21          6       7.270  14.270    1.500     1.500
  2       357      5.550      21          6       6.875  13.875    1.500     1.500
  2       352      4.375      16          6       4.990  11.490    3.000     1.000
  2       356      5.690      32          6       6.690  12.690    3.000     1.000
  2       357      6.174      21          6       7.133  13.140    2.991     1.003
  2       357      5.618      21          6       6.618  12.618    3.000     1.000
  2       355      6.641      19          6       7.236  13.236    3.000     1.000
  2       355      5.375      19          6       5.025  11.525    3.000     1.000
  2       356      5.789      20          6       7.241  14.166    1.566     1.425
  2       355      7.375      19          6       6.625  13.125    3.000     1.000
  2       354      6.450      18          6       7.405  13.968    2.812     1.063



                                      S-121





                          ORIGINAL                   CUT-OFF
                          INTEREST      CUT-OFF       DATE                ORIGINAL      REMAINING
                            ONLY          DATE        GROSS   EXPENSE   AMORTIZATION  AMORTIZATION
                INDEX      PERIOD      PRINCIPAL    MORTGAGE  FEE RATE      TERM          TERM
GROUP  TYPE     NAME      (MONTHS)    BALANCE ($)   RATE (%)     (%)      (MONTHS)      (MONTHS)
-----  ----  -----------  --------  --------------  --------  --------  ------------  ------------

  2     ARM  6MonthLIBOR     60         418,499.99    6.100     0.520        360           354
  2     ARM  6MonthLIBOR      0         832,932.71    6.200     0.520        480           475
  2     ARM  6MonthLIBOR      0       1,066,066.65    5.399     0.520        360           354
  2     ARM  6MonthLIBOR      0       1,865,318.41    6.269     0.520        360           356
  2     ARM  6MonthLIBOR      0      24,059,631.58    6.522     0.520        480           475
  2     ARM  6MonthLIBOR      0     172,740,274.02    6.873     0.520        360           356
  2     ARM  6MonthLIBOR     24      96,362,232.51    6.565     0.520        360           357
  2     ARM  6MonthLIBOR     60         174,381.17    6.990     0.520        360           355
  2     ARM  6MonthLIBOR     60       3,893,822.89    6.287     0.520        360           354
  2     ARM  6MonthLIBOR     60      93,991,808.38    6.209     0.520        360           355
  2     ARM  6MonthLIBOR    120         328,000.00    6.225     0.520        360           355
  2     ARM  6MonthLIBOR      0         191,696.34    7.700     0.520        480           475
  2     ARM  6MonthLIBOR      0         197,270.67    7.600     0.520        360           355
  2     ARM  6MonthLIBOR      0       1,665,139.64    7.727     0.520        360           357
  2     ARM  6MonthLIBOR      0       4,754,802.12    7.455     0.520        360           357
  2     ARM  6MonthLIBOR      0         139,175.38    8.750     0.520        360           356
  2     ARM  6MonthLIBOR      0         524,429.20    7.874     0.520        360           357
  2     ARM  6MonthLIBOR      0         887,647.72    7.361     0.520        360           357
  2     ARM  6MonthLIBOR     60         347,200.00    7.169     0.520        360           357
  2     ARM  6MonthLIBOR      0         412,359.29    6.018     0.520        360           357
  2     ARM  6MonthLIBOR      0       1,886,354.76    6.462     0.520        360           357
  2     ARM  6MonthLIBOR      0       4,851,497.31    6.839     0.520        360           357
  2     ARM  6MonthLIBOR     60         279,600.00    5.540     0.520        360           357
  2     ARM  6MonthLIBOR      0         870,952.56    5.525     0.520        480           475
  2     ARM  6MonthLIBOR      0       1,004,030.14    5.951     0.520        480           475
  2     ARM  6MonthLIBOR      0       3,265,300.13    7.956     0.520        360           357
  2     ARM  6MonthLIBOR      0       5,454,100.91    6.026     0.520        360           354
  2     ARM  6MonthLIBOR      0       6,347,855.93    6.864     0.520        360           356
  2     ARM  6MonthLIBOR     36       1,553,566.22    6.176     0.520        360           356
  2     ARM  6MonthLIBOR     60         379,589.19    7.250     0.520        360           353
  2     ARM  6MonthLIBOR     60         456,000.00    6.875     0.520        360           355
  2     ARM  6MonthLIBOR     60       7,491,113.50    6.094     0.520        360           354
  2     ARM  6MonthLIBOR      0         474,058.68    6.900     0.520        480           475
  2     ARM  6MonthLIBOR      0       2,250,496.81    6.449     0.520        360           355
  2     ARM  6MonthLIBOR      0       5,774,056.78    6.637     0.520        479           474
  2     ARM  6MonthLIBOR      0       9,313,534.17    7.048     0.520        360           356
  2     ARM  6MonthLIBOR      0     125,197,053.11    7.197     0.520        360           356
  2     ARM  6MonthLIBOR     24       4,145,643.33    7.677     0.520        360           356
  2     ARM  6MonthLIBOR     36       2,216,931.23    6.505     0.520        360           356
  2     ARM  6MonthLIBOR     60         364,800.00    6.990     0.520        360           357
  2     ARM  6MonthLIBOR     60       6,738,418.50    5.784     0.520        360           354
  2     ARM  6MonthLIBOR     60      22,783,908.84    6.575     0.520        360           355
  2     FRM      N/A          0          67,930.47   11.250     0.520        360           357
  2     FRM      N/A          0         100,175.33   10.203     0.520        360           355
  2     FRM      N/A          0         756,712.09    7.153     0.520        360           357
  2     FRM      N/A          0         100,151.42   10.930     0.520        349           344
  2     FRM      N/A          0         156,929.72    9.965     0.520        355           351
  2     FRM      N/A          0          29,384.99   10.550     0.520        360           357


        STATED                           RATE     GROSS   GROSS   CURRENT    NEXT
       REMAINING   GROSS  NEXT RATE   ADJUSTMENT   LIFE   LIFE   PERIODIC  PERIODIC
         TERM     MARGIN  ADJUSTMENT  FREQUENCY   FLOOR    CAP     RATE      RATE
GROUP  (MONTHS)     (%)    (MONTHS)    (MONTHS)    (%)     (%)    CAP (%)   CAP (%)
-----  ---------  ------  ----------  ----------  -----  ------  --------  --------

  2       354      7.375      18          6       6.100  12.600    3.000     1.000
  2       355      5.576      31          6       6.200  12.700    3.000     1.000
  2       354      6.514      54          6       5.399  11.899    3.000     1.000
  2       356      5.213      32          6       6.269  12.538    2.939     1.020
  2       355      6.369      19          6       6.522  13.022    2.965     1.000
  2       356      5.979      20          6       6.871  13.611    2.048     1.274
  2       357      5.720      21          6       6.565  13.565    1.505     1.500
  2       355      6.990      31          6       6.990  13.490    3.000     1.000
  2       354      6.442      54          6       6.287  12.787    5.000     1.000
  2       355      6.041      19          6       6.209  12.701    2.975     1.000
  2       355      6.000      19          6       6.225  12.725    3.000     1.000
  2       355      7.250      31          6       7.700  14.200    3.000     1.000
  2       355      7.000      55          6       7.600  14.100    3.000     1.000
  2       357      6.236      33          6       7.727  14.046    2.522     1.159
  2       357      6.480      21          6       7.455  13.455    3.000     1.000
  2       356      6.250      56          6       8.750  15.750    1.500     1.500
  2       357      6.874      21          6       7.874  13.874    3.000     1.000
  2       357      5.866      33          6       7.361  14.089    1.907     1.364
  2       357      6.169      33          6       7.169  13.169    3.000     1.000
  2       357      5.550      33          6       6.018  13.018    1.500     1.500
  2       357      5.509      21          6       6.462  12.462    3.000     1.000
  2       357      5.844      33          6       6.839  12.851    2.981     1.006
  2       357      4.540      33          6       5.540  11.540    3.000     1.000
  2       355      6.300      55          6       5.525  12.025    3.000     1.000
  2       355      5.884      31          6       5.951  12.451    3.000     1.000
  2       357      6.955      21          6       7.944  13.950    3.000     1.000
  2       354      5.925      54          6       6.026  12.561    2.896     1.035
  2       356      5.964      32          6       6.864  13.739    1.829     1.390
  2       356      5.580      32          6       6.176  13.176    1.500     1.500
  2       353      7.250      29          6       7.250  13.250    3.000     1.000
  2       355      7.000      19          6       6.875  13.375    3.000     1.000
  2       354      6.113      54          6       6.094  12.460    4.816     1.000
  2       355      6.900      31          6       6.900  13.400    3.000     1.000
  2       355      6.166      55          6       6.449  12.972    2.933     1.022
  2       355      6.350      19          6       6.637  13.137    2.848     1.000
  2       356      5.972      32          6       7.048  13.601    2.326     1.225
  2       356      6.034      20          6       7.197  13.680    2.408     1.170
  2       356      5.789      20          6       7.677  14.677    1.500     1.500
  2       356      5.599      32          6       6.505  13.505    1.500     1.500
  2       357      5.990      33          6       6.990  12.990    3.000     1.000
  2       354      5.821      54          6       5.784  12.284    4.587     1.000
  2       355      6.254      19          6       6.576  13.048    2.984     1.000
  2       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       351       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A



                                      S-122





                          ORIGINAL                   CUT-OFF
                          INTEREST      CUT-OFF       DATE                ORIGINAL      REMAINING
                            ONLY          DATE        GROSS   EXPENSE   AMORTIZATION  AMORTIZATION
                INDEX      PERIOD      PRINCIPAL    MORTGAGE  FEE RATE      TERM          TERM
GROUP  TYPE     NAME      (MONTHS)    BALANCE ($)   RATE (%)     (%)      (MONTHS)      (MONTHS)
-----  ----  -----------  --------  --------------  --------  --------  ------------  ------------

  2     FRM      N/A          0          51,547.72    9.000     0.520        360           352
  2     FRM      N/A          0          59,428.79    7.000     0.520        180           177
  2     FRM      N/A          0         468,188.00    7.300     0.520        360           357
  2     FRM      N/A          0         933,684.18   10.595     0.520        360           357
  2     FRM      N/A          0       2,478,115.12    9.700     0.520        359           354
  2     FRM      N/A          0       3,325,216.95    6.568     0.520        360           354
  2     FRM      N/A          0          45,944.65   10.500     0.520        360           357
  2     FRM      N/A          0         355,322.08    7.499     0.520        360           358
  2     FRM      N/A          0         120,225.03   11.063     0.520        360           356
  2     FRM      N/A          0         857,734.02    7.512     0.520        360           357
  2     FRM      N/A          0       1,200,012.90   10.483     0.520        360           355
  2     FRM      N/A          0          82,436.38    9.585     0.520        360           356
  2     FRM      N/A          0          34,320.52   10.750     0.520        360           354
  2     FRM      N/A          0         151,516.88    6.790     0.520        180           177
  2     FRM      N/A          0         241,354.13    9.968     0.520        360           355
  2     FRM      N/A          0         805,913.74    7.198     0.520        360           357
  2     FRM      N/A          0         187,220.12   10.621     0.520        359           354
  2     FRM      N/A          0         319,580.59   10.690     0.520        359           354
  2     FRM      N/A          0          48,008.51    8.500     0.520        240           235
  2     FRM      N/A          0         349,023.68   10.820     0.520        180           175
  2     FRM      N/A          0         446,810.75    5.990     0.520        360           353
  2     FRM      N/A          0       7,892,638.45   10.116     0.520        359           356
  2     FRM      N/A          0      23,021,539.91    9.822     0.520        360           354
  2     FRM      N/A         60         130,000.00    6.815     0.520        360           358
  2     FRM      N/A          0          63,260.94   10.990     0.520        360           354
  2     FRM      N/A          0         143,681.27    6.500     0.520        480           475
  2     FRM      N/A          0       3,482,546.25    7.392     0.520        360           357
  2     FRM      N/A          0         192,605.96   10.703     0.520        360           355
  2     FRM      N/A          0       2,206,365.06    7.376     0.520        360           357
  2     FRM      N/A          0          48,330.32    9.655     0.520        360           357
  2     FRM      N/A          0          18,060.27   10.390     0.520        240           234
  2     FRM      N/A          0         111,843.11    7.990     0.520        300           297
  2     FRM      N/A          0         222,212.63    8.840     0.520        120           116
  2     FRM      N/A          0         325,171.21    7.451     0.520        180           177
  2     FRM      N/A          0         327,013.45    7.133     0.520        240           238
  2     FRM      N/A          0      19,402,583.50    7.410     0.520        360           357
  2     FRM      N/A          0         218,625.87    7.040     0.520        360           357
  2     FRM      N/A          0         165,852.07   10.977     0.520        360           355
  2     FRM      N/A          0          48,394.48    8.800     0.520        240           235
  2     FRM      N/A          0          48,658.32   10.500     0.520        180           177
  2     FRM      N/A          0          92,598.80    6.575     0.520        480           475
  2     FRM      N/A          0       1,983,365.44    9.685     0.520        359           353
  2     FRM      N/A          0       4,158,572.71    9.835     0.520        360           356
  2     FRM      N/A          0       4,515,103.29    6.831     0.520        359           353
  2     FRM      N/A          0          93,980.56    7.590     0.520        360           354
  2     FRM      N/A          0         179,417.53    8.240     0.520        240           236
  2     FRM      N/A          0         213,969.82    9.328     0.520        180           174
  2     FRM      N/A          0         271,577.78    9.289     0.520        240           234


        STATED                           RATE     GROSS   GROSS   CURRENT    NEXT
       REMAINING   GROSS  NEXT RATE   ADJUSTMENT   LIFE   LIFE   PERIODIC  PERIODIC
         TERM     MARGIN  ADJUSTMENT  FREQUENCY   FLOOR    CAP     RATE      RATE
GROUP  (MONTHS)     (%)    (MONTHS)    (MONTHS)    (%)     (%)    CAP (%)   CAP (%)
-----  ---------  ------  ----------  ----------  -----  ------  --------  --------

  2       172       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       177       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       354       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       358       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       356       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       356       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       174       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       177       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       235       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       353       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       356       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       174       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       358       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       174       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       355       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       234       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       297       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       116       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       177       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       238       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       357       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       235       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       177       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       355       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       174       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       356       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       353       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       174       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       236       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       174       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       234       N/A      N/A         N/A       N/A     N/A      N/A       N/A



                                      S-123





                          ORIGINAL                   CUT-OFF
                          INTEREST      CUT-OFF       DATE                ORIGINAL      REMAINING
                            ONLY          DATE        GROSS   EXPENSE   AMORTIZATION  AMORTIZATION
                INDEX      PERIOD      PRINCIPAL    MORTGAGE  FEE RATE      TERM          TERM
GROUP  TYPE     NAME      (MONTHS)    BALANCE ($)   RATE (%)     (%)      (MONTHS)      (MONTHS)
-----  ----  -----------  --------  --------------  --------  --------  ------------  ------------

  2     FRM      N/A          0         594,931.20    6.534     0.520        180           175
  2     FRM      N/A          0       2,206,741.66   10.616     0.520        360           356
  2     FRM      N/A          0      10,721,914.81    7.346     0.520        360           356
  2     FRM      N/A          0      15,347,379.61   10.068     0.520        357           352


        STATED                           RATE     GROSS   GROSS   CURRENT    NEXT
       REMAINING   GROSS  NEXT RATE   ADJUSTMENT   LIFE   LIFE   PERIODIC  PERIODIC
         TERM     MARGIN  ADJUSTMENT  FREQUENCY   FLOOR    CAP     RATE      RATE
GROUP  (MONTHS)     (%)    (MONTHS)    (MONTHS)    (%)     (%)    CAP (%)   CAP (%)
-----  ---------  ------  ----------  ----------  -----  ------  --------  --------

  2       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       356       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       356       N/A      N/A         N/A       N/A     N/A      N/A       N/A
  2       175       N/A      N/A         N/A       N/A     N/A      N/A       N/A



                                      S-124



     While it is assumed that each of the mortgage loans prepays at the
specified constant percentages of the prepayment assumption, this is not likely
to be the case. Moreover, discrepancies exist between the characteristics of the
actual mortgage loans that will be delivered to the trustee or the applicable
custodian, as applicable, and characteristics of the mortgage loans assumed in
preparing the tables in this prospectus supplement.

DEFAULTS

     The yield to maturity of the Offered Certificates, and particularly the
Class B and Class M certificates, will be sensitive to defaults on the mortgage
loans. If a purchaser of an Offered Certificate calculates its anticipated yield
based on an assumed rate of default and amount of losses that is lower than the
default rate and amount of losses actually incurred, its actual yield to
maturity will be lower than that so calculated. Holders of the Offered
Certificates may not receive reimbursement for Applied Realized Loss Amounts in
the months following the occurrence of those losses. In general, the earlier a
loss occurs, the greater is the effect on an investor's yield to maturity. There
can be no assurance as to the delinquency, foreclosure or loss experience with
respect to the mortgage loans. Because the mortgage loans were underwritten in
accordance with standards less stringent than those generally acceptable to
Fannie Mae and Freddie Mac with regard to a borrower's credit standing and
repayment ability, the risk of delinquencies with respect to, and losses on, the
mortgage loans will be greater than that of mortgage loans underwritten in
accordance with Fannie Mae and Freddie Mac standards.

PREPAYMENT CONSIDERATIONS AND RISKS

     The rate of principal payments on the Offered Certificates, the aggregate
amount of distributions on the Offered Certificates and the yields to maturity
of the Offered Certificates will be related to the rate and timing of payments
of principal on the mortgage loans in the related loan group. The rate of
principal payments on the mortgage loans will in turn be affected by the
amortization schedules of the mortgage loans and by the rate of principal
prepayments (including for this purpose prepayments resulting from refinancing,
liquidations of the mortgage loans due to defaults, casualties or condemnations
and repurchases by a selling party or purchases, pursuant to the optional
clean-up call, by one or all of the servicers). Because certain of the mortgage
loans contain Prepayment Premiums, the rate of principal payments may be less
than the rate of principal payments for mortgage loans which did not have
Prepayment Premiums. The mortgage loans are subject to the "due-on-sale"
provisions included in the mortgage loans. See "The Mortgage Loan Pool" in this
prospectus supplement.

     Prepayments, liquidations and purchases of the mortgage loans (including
any optional repurchase of the remaining mortgage loans in the trust fund in
connection with the termination of the trust fund, in each case as described in
this prospectus supplement) will result in distributions on the Offered
Certificates of principal amounts which would otherwise be distributed over the
remaining terms of the mortgage loans. Since the rate of payment of principal on
the mortgage loans will depend on future events and a variety of other factors,
no assurance can be given as to that rate or the rate of principal prepayments.
The extent to which the yield to maturity of a class of Offered Certificates may
vary from the anticipated yield will depend upon the degree to which that
Offered Certificate is purchased at a discount or premium, and the degree to
which the timing of payments on that Offered Certificate is sensitive to
prepayments, liquidations and purchases of the mortgage loans. Further, an
investor should consider the risk that, in the case of any Offered Certificate
purchased at a discount, a slower than anticipated rate of principal payments
(including prepayments) on the mortgage loans could result in an actual yield to
that investor that is lower than the anticipated yield and, in the case of any
Offered Certificate purchased at a premium, a faster than anticipated rate of
principal payments on the mortgage loans could result in an actual yield to that
investor that is lower than the anticipated yield.

     The rate of principal payments (including prepayments) on pools of mortgage
loans may vary significantly over time and may be influenced by a variety of
economic, geographic, social and other factors, including changes in mortgagors'
housing needs, job transfers, unemployment, mortgagors' net equity in the
mortgaged properties and servicing decisions. In general, if prevailing interest
rates were to fall significantly below the interest rates on the fixed rate
mortgage loans, the mortgage loans could be subject to higher prepayment rates
than if prevailing interest rates were to remain at or above the interest rates
on the mortgage loans. Conversely, if prevailing interest rates were to rise
significantly, the rate of prepayments on the fixed rate mortgage loans would
generally be expected to


                                      S-125



decrease. No assurances can be given as to the rate of prepayments on the
mortgage loans in stable or changing interest rate environments.

     As is the case with fixed rate mortgage loans, the adjustable rate mortgage
loans, or ARMs, may be subject to a greater rate of principal prepayments in a
low interest rate environment. For example, if prevailing interest rates were to
fall, mortgagors with ARMs may be inclined to refinance their ARMs with a fixed
rate loan to "lock in" a lower interest rate. The existence of the applicable
periodic rate cap and Maximum Rate also may affect the likelihood of prepayments
resulting from refinancings. In addition, the delinquency and loss experience of
the ARMs may differ from that on the fixed rate mortgage loans because the
amount of the monthly payments on the ARMs are subject to adjustment on each
Adjustment Date. In addition, a substantial majority of the ARMs (the 2/28
Adjustable Rate Mortgage Loans, the 3/27 Adjustable Rate Mortgage Loans and the
5/25 Adjustable Rate Mortgage Loans) will not have their initial Adjustment Date
until two, three or five years after their origination. The prepayment
experience of the 2/28 Adjustable Rate Mortgage Loans, the 3/27 Adjustable Rate
Mortgage Loans and the 5/25 Adjustable Rate Mortgage Loans may differ from that
of the other ARMs. The 2/28 Adjustable Rate Mortgage Loans, the 3/27 Adjustable
Rate Mortgage Loans and the 5/25 Adjustable Rate Mortgage Loans may be subject
to greater rates of prepayments as they approach their initial Adjustment Dates
even if market interest rates are only slightly higher or lower than the
interest rates on the 2/28 Adjustable Rate Mortgage Loans, the 3/27 Adjustable
Rate Mortgage Loans or the 5/25 Adjustable Rate Mortgage Loans (as the case may
be) as borrowers seek to avoid changes in their monthly payments.

     The timing of changes in the rate of prepayments on the mortgage loans may
significantly affect an investor's actual yield to maturity, even if the average
rate of principal payments is consistent with an investor's expectation. In
general, the earlier a prepayment of principal on the mortgage loans, the
greater the effect on an investor's yield to maturity. The effect on an
investor's yield as a result of principal payments occurring at a rate higher
(or lower) than the rate anticipated by the investor during the period
immediately following the issuance of the Offered Certificates may not be offset
by a subsequent like decrease (or increase) in the rate of principal payments.

     The Pass-Through Rate for each class of Offered Certificates will be
adjusted by reference to One-Month LIBOR, subject to the effects of the
applicable limitations described in this prospectus supplement.

     The Pass-Through Rate for each class of Offered Certificates may be
calculated by reference to the net interest rates of the mortgage loans, which
are based on the Loan Index. If the mortgage loans bearing higher interest
rates, either through higher margins or an increase in the Loan Index (and
consequently, higher net interest rates), were to prepay, the weighted average
net interest rate would be lower than otherwise would be the case. Changes in
One-Month LIBOR may not correlate with changes in the Loan Index. It is possible
that a decrease in the Loan Index, which would be expected to result in faster
prepayments, could occur simultaneously with an increased level of One-Month
LIBOR. If the sum of One-Month LIBOR plus the applicable fixed margin for a
class or classes of Offered Certificates were to be higher than the Group I Loan
Cap, the Group II Loan Cap and the WAC Cap, as applicable, the Pass Through Rate
on the related Offered Certificates would be lower than otherwise would be the
case. Although holders of the Offered Certificates are entitled to receive any
Basis Risk CarryForward Amount from and to the extent of funds available in the
Excess Reserve Fund Account and the Swap Account, there is no assurance that
those funds will be available or sufficient for those purposes. The ratings of
the Offered Certificates do not address the likelihood of the payment of any
Basis Risk CarryForward Amount.

OVERCOLLATERALIZATION PROVISIONS

     The operation of the overcollateralization provisions of the pooling and
servicing agreement will affect the weighted average lives of the Offered
Certificates and consequently the yields to maturity of those certificates. If
at any time the Subordinated Amount is less than the Specified Subordinated
Amount, Total Monthly Excess Spread and certain amounts available in the Swap
Account will be applied as distributions of principal of the class or classes of
certificates then entitled to distributions of principal, until the Subordinated
Amount equals the Specified Subordinated Amount. This would have the effect of
reducing the weighted average lives of those certificates. The actual
Subordinated Amount may change from distribution date to distribution date
producing uneven distributions of Total Monthly Excess Spread. There can be no
assurance that the Subordinated Amount will never be less than the Specified
Subordinated Amount.


                                      S-126



     Total Monthly Excess Spread generally is a function of the excess of
interest collected or advanced on the mortgage loans over the interest required
to pay interest on the Offered Certificates and expenses at the Expense Fee
Rate, as well as Net Swap Payments to the Swap Provider. Mortgage loans with
higher net interest rates will contribute more interest to the Total Monthly
Excess Spread. Mortgage loans with higher net interest rates may prepay faster
than mortgage loans with relatively lower net interest rates in response to a
given change in market interest rates. Any disproportionate prepayments of
mortgage loans with higher net interest rates may adversely affect the amount of
Total Monthly Excess Spread available to make accelerated payments of principal
of the Offered Certificates.

     As a result of the interaction of the foregoing factors, the effect of the
overcollateralization provisions on the weighted average lives of the Offered
Certificates may vary significantly over time and from class to class.

SUBORDINATED CERTIFICATES

     Each class of Subordinated Certificates provides credit enhancement for
certain other classes of Offered Certificates that have a higher payment
priority, and each class of Subordinated Certificates may absorb losses on the
mortgage loans. The weighted average lives of, and the yields to maturity on,
the Subordinated Certificates, in order of their relative payment priorities
(with the Class M-1 certificates having the highest priority, then the Class M-2
certificates, then the Class M-3 certificates, then the Class M-4 certificates,
then the Class M-5 certificates, then the Class M-6 certificates, then the Class
B-1 certificates, then the Class B-2 certificates and then the Class B-3
certificates) will be progressively more sensitive to the rate and timing of
mortgagor defaults and the severity of ensuing losses on the mortgage loans. If
the actual rate and severity of losses on the mortgage loans is higher than
those assumed by a holder of a related Subordinated Certificate, the actual
yield to maturity on such holder's certificate may be lower than the yield
expected by such holder based on that assumption. Realized Losses on the
mortgage loans will reduce the Class Certificate Balance of the class of the
related Subordinated Certificates then outstanding with the lowest relative
payment priority if and to the extent that the aggregate Class Certificate
Balances of all classes of certificates, following all distributions on a
distribution date exceeds the aggregate Stated Principal Balance of the mortgage
loans. As a result of this reduction of the Class Certificate Balance of a class
of Subordinated Certificates, less interest will accrue on those classes than
would otherwise be the case.

     The Principal Distribution Amount to be made to the holders of the Offered
Certificates includes the net proceeds in respect of principal received upon the
liquidation of a related mortgage loan. If such net proceeds are less than the
unpaid principal balance of the liquidated mortgage loan, the aggregate Stated
Principal Balance of the mortgage loans will decline more than the aggregate
Class Certificate Balances of the Offered Certificates, thus reducing the amount
of the overcollateralization. If such difference is not covered by the amount of
the overcollateralization or excess interest, after taking into account certain
payments received or paid by the trust pursuant to the interest rate swap
agreement, the class of Subordinated Certificates then outstanding with the
lowest relative payment priority will bear such loss. In addition, the
Subordinated Certificates will generally not be entitled to any principal
distributions prior to the Stepdown Date or during the continuation of a Trigger
Event (unless all of the certificates with a higher relative payment priority
have been paid in full). Because a Trigger Event may be based on the
delinquency, as opposed to the loss, experience on the mortgage loans, a holder
of a Subordinated Certificate may not receive distributions of principal for an
extended period of time, even if the rate, timing and severity of Realized
Losses on the applicable mortgage loans is consistent with such holder's
expectations. Because of the disproportionate distribution of principal of the
senior certificates, depending on the timing of Realized Losses, the
Subordinated Certificates may bear a disproportionate percentage of the Realized
Losses on the mortgage loans.

     For all purposes, the Class B-3 certificates will have the lowest payment
priority of any class of Subordinated Certificates.

EFFECT ON YIELDS DUE TO RAPID PREPAYMENTS

     Any net payment payable to the Swap Provider under the terms of the
interest rate swap agreement will reduce amounts available for distribution to
certificateholders, and may reduce the Pass-Through Rates on the Offered
Certificates. If the rate of prepayments on the mortgage loans is faster than
anticipated, the scheduled notional amount on which payments due under the
interest rate swap agreement are calculated may exceed the aggregate


                                      S-127



scheduled principal balance of the mortgage loans, thereby increasing the
relative proportion of interest collections on the loans that must be applied to
make Net Swap Payments to the Swap Provider. The combination of a rapid rate of
prepayment and low prevailing interest rates could adversely affect the yields
on the Offered Certificates.

WEIGHTED AVERAGE LIVES OF THE OFFERED CERTIFICATES

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

     For a discussion of the factors which may influence the rate of payments
(including prepayments) of the mortgage loans, see "--Prepayment Considerations
and Risks" above and "Yield and Prepayment Considerations" in the prospectus.

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

     The interaction of the foregoing factors may have different effects on
various classes of Offered Certificates and the effects on any class may vary at
different times during the life of that class. Accordingly, no assurance can be
given as to the weighted average life of any class of Offered Certificates.
Further, to the extent the prices of the Offered Certificates represent
discounts or premiums to their respective original Class Certificate Balances,
variability in the weighted average lives of those classes of Offered
Certificates will result in variability in the related yields to maturity. For
an example of how the weighted average lives of the classes of Offered
Certificates may be affected at various constant percentages of the prepayment
assumption, see "--Decrement Tables" below.

DECREMENT TABLES

     The following tables indicate the percentages of the initial Class
Certificate Balances of the classes of Offered Certificates that would be
outstanding after each of the distribution dates shown at various constant
percentages of the applicable prepayment assumption and the corresponding
weighted average lives of those classes. The tables have been prepared on the
basis of the structuring assumptions. It is not likely that (i) all of the
mortgage loans will have the characteristics assumed, (ii) all of the mortgage
loans will prepay at the constant percentages of the applicable prepayment
assumption specified in the tables or at any other constant rate or (iii) all of
the mortgage loans will prepay at the same rate. Moreover, the diverse remaining
terms to maturity and interest rates of the mortgage loans could produce slower
or faster principal distributions than indicated in the tables at the specified
constant percentages of the applicable prepayment assumption, even if the
weighted average remaining term to maturity and weighted average interest rates
of the mortgage loans are consistent with the remaining terms to maturity and
interest rates of the mortgage loans specified in the structuring assumptions.

                              PREPAYMENT SCENARIOS



                                            SCENARIO I   SCENARIO II   SCENARIO III   SCENARIO IV   SCENARIO V
                                            ----------   -----------   ------------   -----------   ----------

Fixed rate mortgage loans (% of
   prepayment assumption)................       0%           75%           100%           125%         150%
Adjustable rate mortgage loans (% of
   prepayment assumption)................       0%           75%           100%           125%         150%



                                      S-128



           PERCENT OF INITIAL CLASS CERTIFICATE BALANCE OUTSTANDING(1)



                                                CLASS A-1                           CLASS A-2A
        DISTRIBUTION DATE                  PREPAYMENT SCENARIO                 PREPAYMENT SCENARIO
---------------------------------   ---------------------------------   ---------------------------------
                                      I      II     III    IV      V      I      II     III    IV      V
                                    -----   ----   ----   ----   ----   -----   ----   ----   ----   ----

Initial Percentage...............     100    100    100    100    100     100    100    100    100    100
October 2006.....................      99     74     65     57     48      99     59     46     33     19
October 2007.....................      98     52     39     27     17      97     26      5      0      0
October 2008.....................      97     35     21      8      0      96      0      0      0      0
October 2009.....................      96     28     20      8      0      95      0      0      0      0
October 2010.....................      95     22     14      8      0      93      0      0      0      0
October 2011.....................      94     17     10      6      0      91      0      0      0      0
October 2012.....................      93     14      7      4      0      89      0      0      0      0
October 2013.....................      91     11      5      2      0      87      0      0      0      0
October 2014.....................      89      8      4      2      0      85      0      0      0      0
October 2015.....................      88      7      3      1      0      82      0      0      0      0
October 2016.....................      86      5      2      1      0      79      0      0      0      0
October 2017.....................      84      4      1      0      0      76      0      0      0      0
October 2018.....................      81      3      1      0      0      72      0      0      0      0
October 2019.....................      78      2      1      0      0      68      0      0      0      0
October 2020.....................      73      2      0      0      0      55      0      0      0      0
October 2021.....................      70      1      0      0      0      51      0      0      0      0
October 2022.....................      67      1      0      0      0      46      0      0      0      0
October 2023.....................      63      1      0      0      0      40      0      0      0      0
October 2024.....................      59      0      0      0      0      34      0      0      0      0
October 2025.....................      54      0      0      0      0      27      0      0      0      0
October 2026.....................      49      0      0      0      0      19      0      0      0      0
October 2027.....................      43      0      0      0      0      10      0      0      0      0
October 2028.....................      37      0      0      0      0       1      0      0      0      0
October 2029.....................      33      0      0      0      0       0      0      0      0      0
October 2030.....................      29      0      0      0      0       0      0      0      0      0
October 2031.....................      24      0      0      0      0       0      0      0      0      0
October 2032.....................      18      0      0      0      0       0      0      0      0      0
October 2033.....................      13      0      0      0      0       0      0      0      0      0
October 2034.....................       6      0      0      0      0       0      0      0      0      0
October 2035.....................       0      0      0      0      0       0      0      0      0      0
Weighted Average Life to
   Maturity (years)(2)...........   19.59   3.40   2.44   1.74   1.14   15.43   1.36   1.00   0.78   0.63
Weighted Average Life to Call
   (years)(2)(3).................   19.56   3.15   2.25   1.59   1.14   15.43   1.36   1.00   0.78   0.63


----------
(1)  Rounded to the nearest whole percentage.

(2)  The weighted average life of a certificate of any class is determined by
     (i) multiplying the net reduction, if any, of the Class Certificate Balance
     by the number of years from the date of issuance of the certificate to the
     related distribution date, (ii) adding the results, and (iii) dividing them
     by the aggregate of the net reductions of the Class Certificate Balance
     described in clause (i).

(3)  Calculation assumes the exercise of the 10% optional clean-up call on the
     earliest possible date.


                                      S-129



           PERCENT OF INITIAL CLASS CERTIFICATE BALANCE OUTSTANDING(1)



                                                CLASS A-2B                          CLASS A-2C
        DISTRIBUTION DATE                  PREPAYMENT SCENARIO                  PREPAYMENT SCENARIO
---------------------------------   ---------------------------------   ----------------------------------
                                      I      II     III    IV      V      I       II     III    IV      V
                                    -----   ----   ----   ----   ----   -----   -----   ----   ----   ----

Initial Percentage...............     100    100    100    100    100     100     100    100    100    100
October 2006.....................     100    100    100    100    100     100     100    100    100    100
October 2007.....................     100    100    100     58      5     100     100    100    100    100
October 2008.....................     100     98     24      0      0     100     100    100     54      0
October 2009.....................     100     62     20      0      0     100     100    100     54      0
October 2010.....................     100     32      0      0      0     100     100     90     54      0
October 2011.....................     100      8      0      0      0     100     100     65     37      0
October 2012.....................     100      0      0      0      0     100      87     47     24      0
October 2013.....................     100      0      0      0      0     100      69     34     16      0
October 2014.....................     100      0      0      0      0     100      54     24     10      0
October 2015.....................     100      0      0      0      0     100      42     18      7      0
October 2016.....................     100      0      0      0      0     100      33     13      4      0
October 2017.....................     100      0      0      0      0     100      26      9      1      0
October 2018.....................     100      0      0      0      0     100      20      7      0      0
October 2019.....................     100      0      0      0      0     100      16      4      0      0
October 2020.....................     100      0      0      0      0     100      11      1      0      0
October 2021.....................     100      0      0      0      0     100       9      0      0      0
October 2022.....................     100      0      0      0      0     100       7      0      0      0
October 2023.....................     100      0      0      0      0     100       5      0      0      0
October 2024.....................     100      0      0      0      0     100       3      0      0      0
October 2025.....................     100      0      0      0      0     100       1      0      0      0
October 2026.....................     100      0      0      0      0     100       0      0      0      0
October 2027.....................     100      0      0      0      0     100       0      0      0      0
October 2028.....................     100      0      0      0      0     100       0      0      0      0
October 2029.....................      82      0      0      0      0     100       0      0      0      0
October 2030.....................      61      0      0      0      0     100       0      0      0      0
October 2031.....................      38      0      0      0      0     100       0      0      0      0
October 2032.....................      13      0      0      0      0     100       0      0      0      0
October 2033.....................       0      0      0      0      0      80       0      0      0      0
October 2034.....................       0      0      0      0      0      41       0      0      0      0
October 2035.....................       0      0      0      0      0       0       0      0      0      0
Weighted Average Life to
   Maturity (years)(2)...........   25.46   4.51   3.00   2.12   1.70   28.75   10.38   7.67   5.25   2.47
Weighted Average Life to Call
   (years)(2)(3).................   25.46   4.51   3.00   2.12   1.70   28.53    8.73   6.40   4.23   2.47


----------
(1)  Rounded to the nearest whole percentage.

(2)  The weighted average life of a certificate of any class is determined by
     (i) multiplying the net reduction, if any, of the Class Certificate Balance
     by the number of years from the date of issuance of the certificate to the
     related distribution date, (ii) adding the results, and (iii) dividing them
     by the aggregate of the net reductions of the Class Certificate Balance
     described in clause (i).

(3)  Calculation assumes the exercise of the 10% optional clean-up call on the
     earliest possible date.


                                      S-130



           PERCENT OF INITIAL CLASS CERTIFICATE BALANCE OUTSTANDING(1)



                                                CLASS M-1                           CLASS M-2
        DISTRIBUTION DATE                  PREPAYMENT SCENARIO                 PREPAYMENT SCENARIO
---------------------------------   ---------------------------------   ---------------------------------
                                      I      II     III    IV      V      I      II     III    IV      V
                                    -----   ----   ----   ----   ----   -----   ----   ----   ----   ----

Initial Percentage...............     100    100    100    100    100     100    100    100    100    100
October 2006.....................     100    100    100    100    100     100    100    100    100    100
October 2007.....................     100    100    100    100    100     100    100    100    100    100
October 2008.....................     100    100    100    100     93     100    100    100    100    100
October 2009.....................     100     78     55    100     93     100     78     55     86    100
October 2010.....................     100     62     40     32     93     100     62     40     24     50
October 2011.....................     100     49     29     16     75     100     49     29     16      8
October 2012.....................     100     38     21     10     44     100     38     21     10      5
October 2013.....................     100     30     15      7     26     100     30     15      7      1
October 2014.....................     100     24     11      4     10     100     24     11      4      0
October 2015.....................     100     19      8      3      1     100     19      8      1      0
October 2016.....................     100     15      6      0      0     100     15      6      0      0
October 2017.....................     100     11      4      0      0     100     11      4      0      0
October 2018.....................     100      9      3      0      0     100      9      0      0      0
October 2019.....................     100      7      0      0      0     100      7      0      0      0
October 2020.....................     100      5      0      0      0     100      5      0      0      0
October 2021.....................     100      4      0      0      0     100      4      0      0      0
October 2022.....................     100      3      0      0      0     100      1      0      0      0
October 2023.....................     100      0      0      0      0     100      0      0      0      0
October 2024.....................     100      0      0      0      0     100      0      0      0      0
October 2025.....................     100      0      0      0      0     100      0      0      0      0
October 2026.....................     100      0      0      0      0     100      0      0      0      0
October 2027.....................     100      0      0      0      0     100      0      0      0      0
October 2028.....................     100      0      0      0      0     100      0      0      0      0
October 2029.....................      90      0      0      0      0      90      0      0      0      0
October 2030.....................      79      0      0      0      0      79      0      0      0      0
October 2031.....................      66      0      0      0      0      66      0      0      0      0
October 2032.....................      51      0      0      0      0      51      0      0      0      0
October 2033.....................      35      0      0      0      0      35      0      0      0      0
October 2034.....................      17      0      0      0      0      17      0      0      0      0
October 2035.....................       0      0      0      0      0       0      0      0      0      0
Weighted Average Life to
   Maturity (years)(2)...........   26.91   7.03   5.52   5.32   6.94   26.91   7.01   5.42   4.92   5.20
Weighted Average Life to Call
   (years)(2)(3).................   26.82   6.35   4.99   4.91   4.31   26.82   6.35   4.91   4.52   4.41


----------
(1)  Rounded to the nearest whole percentage.

(2)  The weighted average life of a certificate of any class is determined by
     (i) multiplying the net reduction, if any, of the Class Certificate Balance
     by the number of years from the date of issuance of the certificate to the
     related distribution date, (ii) adding the results, and (iii) dividing them
     by the aggregate of the net reductions of the Class Certificate Balance
     described in clause (i).

(3)  Calculation assumes the exercise of the 10% optional clean-up call on the
     earliest possible date.


                                      S-131



           PERCENT OF INITIAL CLASS CERTIFICATE BALANCE OUTSTANDING(1)



                                                CLASS M-3                           CLASS M-4
        DISTRIBUTION DATE                  PREPAYMENT SCENARIO                 PREPAYMENT SCENARIO
---------------------------------   ---------------------------------   ---------------------------------
                                      I      II     III    IV      V      I      II     III    IV      V
                                    -----   ----   ----   ----   ----   -----   ----   ----   ----   ----

Initial Percentage...............     100    100    100    100    100     100    100    100    100    100
October 2006.....................     100    100    100    100    100     100    100    100    100    100
October 2007.....................     100    100    100    100    100     100    100    100    100    100
October 2008.....................     100    100    100    100    100     100    100    100    100    100
October 2009.....................     100     78     55     37    100     100     78     55     37     38
October 2010.....................     100     62     40     24     14     100     62     40     24     14
October 2011.....................     100     49     29     16      8     100     49     29     16      8
October 2012.....................     100     38     21     10      5     100     38     21     10      5
October 2013.....................     100     30     15      7      0     100     30     15      7      0
October 2014.....................     100     24     11      4      0     100     24     11      4      0
October 2015.....................     100     19      8      0      0     100     19      8      0      0
October 2016.....................     100     15      6      0      0     100     15      6      0      0
October 2017.....................     100     11      4      0      0     100     11      0      0      0
October 2018.....................     100      9      0      0      0     100      9      0      0      0
October 2019.....................     100      7      0      0      0     100      7      0      0      0
October 2020.....................     100      5      0      0      0     100      5      0      0      0
October 2021.....................     100      3      0      0      0     100      0      0      0      0
October 2022.....................     100      0      0      0      0     100      0      0      0      0
October 2023.....................     100      0      0      0      0     100      0      0      0      0
October 2024.....................     100      0      0      0      0     100      0      0      0      0
October 2025.....................     100      0      0      0      0     100      0      0      0      0
October 2026.....................     100      0      0      0      0     100      0      0      0      0
October 2027.....................     100      0      0      0      0     100      0      0      0      0
October 2028.....................     100      0      0      0      0     100      0      0      0      0
October 2029.....................      90      0      0      0      0      90      0      0      0      0
October 2030.....................      79      0      0      0      0      79      0      0      0      0
October 2031.....................      66      0      0      0      0      66      0      0      0      0
October 2032.....................      51      0      0      0      0      51      0      0      0      0
October 2033.....................      35      0      0      0      0      35      0      0      0      0
October 2034.....................      17      0      0      0      0      17      0      0      0      0
October 2035.....................       0      0      0      0      0       0      0      0      0      0
Weighted Average Life to
   Maturity (years)(2)...........   26.91   6.99   5.36   4.71   4.61   26.91   6.97   5.31   4.60   4.35
Weighted Average Life to Call
   (years)(2)(3).................   26.82   6.35   4.87   4.32   4.30   26.82   6.35   4.84   4.22   4.05


----------
(1)  Rounded to the nearest whole percentage.

(2)  The weighted average life of a certificate of any class is determined by
     (i) multiplying the net reduction, if any, of the Class Certificate Balance
     by the number of years from the date of issuance of the certificate to the
     related distribution date, (ii) adding the results, and (iii) dividing them
     by the aggregate of the net reductions of the Class Certificate Balance
     described in clause (i).

(3)  Calculation assumes the exercise of the 10% optional clean-up call on the
     earliest possible date.


                                      S-132



           PERCENT OF INITIAL CLASS CERTIFICATE BALANCE OUTSTANDING(1)



                                                CLASS M-5                           CLASS M-6
        DISTRIBUTION DATE                  PREPAYMENT SCENARIO                 PREPAYMENT SCENARIO
---------------------------------   ---------------------------------   ---------------------------------
                                      I      II     III    IV      V      I      II     III    IV      V
                                    -----   ----   ----   ----   ----   -----   ----   ----   ----   ----

Initial Percentage...............     100    100    100    100    100     100    100    100    100    100
October 2006.....................     100    100    100    100    100     100    100    100    100    100
October 2007.....................     100    100    100    100    100     100    100    100    100    100
October 2008.....................     100    100    100    100    100     100    100    100    100    100
October 2009.....................     100     78     55     37     24     100     78     55     37     24
October 2010.....................     100     62     40     24     14     100     62     40     24     14
October 2011.....................     100     49     29     16      8     100     49     29     16      8
October 2012.....................     100     38     21     10      3     100     38     21     10      0
October 2013.....................     100     30     15      7      0     100     30     15      7      0
October 2014.....................     100     24     11      0      0     100     24     11      0      0
October 2015.....................     100     19      8      0      0     100     19      8      0      0
October 2016.....................     100     15      6      0      0     100     15      1      0      0
October 2017.....................     100     11      0      0      0     100     11      0      0      0
October 2018.....................     100      9      0      0      0     100      9      0      0      0
October 2019.....................     100      7      0      0      0     100      7      0      0      0
October 2020.....................     100      2      0      0      0     100      0      0      0      0
October 2021.....................     100      0      0      0      0     100      0      0      0      0
October 2022.....................     100      0      0      0      0     100      0      0      0      0
October 2023.....................     100      0      0      0      0     100      0      0      0      0
October 2024.....................     100      0      0      0      0     100      0      0      0      0
October 2025.....................     100      0      0      0      0     100      0      0      0      0
October 2026.....................     100      0      0      0      0     100      0      0      0      0
October 2027.....................     100      0      0      0      0     100      0      0      0      0
October 2028.....................     100      0      0      0      0     100      0      0      0      0
October 2029.....................      90      0      0      0      0      90      0      0      0      0
October 2030.....................      79      0      0      0      0      79      0      0      0      0
October 2031.....................      66      0      0      0      0      66      0      0      0      0
October 2032.....................      51      0      0      0      0      51      0      0      0      0
October 2033.....................      35      0      0      0      0      35      0      0      0      0
October 2034.....................      17      0      0      0      0      17      0      0      0      0
October 2035.....................       0      0      0      0      0       0      0      0      0      0
Weighted Average Life to
   Maturity (years)(2)...........   26.91   6.94   5.28   4.51   4.17   26.91   6.91   5.23   4.43   4.03
Weighted Average Life to Call
   (years)(2)(3).................   26.82   6.35   4.83   4.15   3.89   26.82   6.35   4.81   4.09   3.76


----------
(1)  Rounded to the nearest whole percentage.

(2)  The weighted average life of a certificate of any class is determined by
     (i) multiplying the net reduction, if any, of the Class Certificate Balance
     by the number of years from the date of issuance of the certificate to the
     related distribution date, (ii) adding the results, and (iii) dividing them
     by the aggregate of the net reductions of the Class Certificate Balance
     described in clause (i).

(3)  Calculation assumes the exercise of the 10% optional clean-up call on the
     earliest possible date.


                                      S-133



           PERCENT OF INITIAL CLASS CERTIFICATE BALANCE OUTSTANDING(1)



                                                CLASS B-1                           CLASS B-2
        DISTRIBUTION DATE                  PREPAYMENT SCENARIO                 PREPAYMENT SCENARIO
---------------------------------   ---------------------------------   ---------------------------------
                                      I      II     III    IV      V      I      II     III    IV      V
                                    -----   ----   ----   ----   ----   -----   ----   ----   ----   ----

Initial Percentage...............     100    100    100    100    100     100    100    100    100    100
October 2006.....................     100    100    100    100    100     100    100    100    100    100
October 2007.....................     100    100    100    100    100     100    100    100    100    100
October 2008.....................     100    100    100    100    100     100    100    100    100    100
October 2009.....................     100     78     55     37     24     100     78     55     37     24
October 2010.....................     100     62     40     24     14     100     62     40     24     14
October 2011.....................     100     49     29     16      8     100     49     29     16      2
October 2012.....................     100     38     21     10      0     100     38     21     10      0
October 2013.....................     100     30     15      2      0     100     30     15      0      0
October 2014.....................     100     24     11      0      0     100     24     11      0      0
October 2015.....................     100     19      6      0      0     100     19      0      0      0
October 2016.....................     100     15      0      0      0     100     15      0      0      0
October 2017.....................     100     11      0      0      0     100     11      0      0      0
October 2018.....................     100      9      0      0      0     100      4      0      0      0
October 2019.....................     100      2      0      0      0     100      0      0      0      0
October 2020.....................     100      0      0      0      0     100      0      0      0      0
October 2021.....................     100      0      0      0      0     100      0      0      0      0
October 2022.....................     100      0      0      0      0     100      0      0      0      0
October 2023.....................     100      0      0      0      0     100      0      0      0      0
October 2024.....................     100      0      0      0      0     100      0      0      0      0
October 2025.....................     100      0      0      0      0     100      0      0      0      0
October 2026.....................     100      0      0      0      0     100      0      0      0      0
October 2027.....................     100      0      0      0      0     100      0      0      0      0
October 2028.....................     100      0      0      0      0     100      0      0      0      0
October 2029.....................      90      0      0      0      0      90      0      0      0      0
October 2030.....................      79      0      0      0      0      79      0      0      0      0
October 2031.....................      66      0      0      0      0      66      0      0      0      0
October 2032.....................      51      0      0      0      0      51      0      0      0      0
October 2033.....................      35      0      0      0      0      35      0      0      0      0
October 2034.....................      17      0      0      0      0      17      0      0      0      0
October 2035.....................       0      0      0      0      0       0      0      0      0      0
Weighted Average Life to
   Maturity (years)(2)...........   26.91   6.87   5.18   4.35   3.91   26.90   6.80   5.12   4.28   3.81
Weighted Average Life to Call
   (years)(2)(3).................   26.82   6.35   4.80   4.05   3.67   26.82   6.35   4.79   4.01   3.60


----------
(1)  Rounded to the nearest whole percentage.

(2)  The weighted average life of a certificate of any class is determined by
     (i) multiplying the net reduction, if any, of the Class Certificate Balance
     by the number of years from the date of issuance of the certificate to the
     related distribution date, (ii) adding the results, and (iii) dividing them
     by the aggregate of the net reductions of the Class Certificate Balance
     described in clause (i).

(3)  Calculation assumes the exercise of the 10% optional clean-up call on the
     earliest possible date.


                                      S-134



           PERCENT OF INITIAL CLASS CERTIFICATE BALANCE OUTSTANDING(1)



                                                CLASS B-3
        DISTRIBUTION DATE                  PREPAYMENT SCENARIO
---------------------------------   ---------------------------------
                                      I      II     III    IV      V
                                    -----   ----   ----   ----   ----

Initial Percentage...............     100    100    100    100    100
October 2006.....................     100    100    100    100    100
October 2007.....................     100    100    100    100    100
October 2008.....................     100    100    100    100    100
October 2009.....................     100     78     55     37     24
October 2010.....................     100     62     40     24     14
October 2011.....................     100     49     29     16      0
October 2012.....................     100     38     21      2      0
October 2013.....................     100     30     15      0      0
October 2014.....................     100     24      3      0      0
October 2015.....................     100     19      0      0      0
October 2016.....................     100     15      0      0      0
October 2017.....................     100      6      0      0      0
October 2018.....................     100      0      0      0      0
October 2019.....................     100      0      0      0      0
October 2020.....................     100      0      0      0      0
October 2021.....................     100      0      0      0      0
October 2022.....................     100      0      0      0      0
October 2023.....................     100      0      0      0      0
October 2024.....................     100      0      0      0      0
October 2025.....................     100      0      0      0      0
October 2026.....................     100      0      0      0      0
October 2027.....................     100      0      0      0      0
October 2028.....................     100      0      0      0      0
October 2029.....................      90      0      0      0      0
October 2030.....................      79      0      0      0      0
October 2031.....................      66      0      0      0      0
October 2032.....................      51      0      0      0      0
October 2033.....................      35      0      0      0      0
October 2034.....................      17      0      0      0      0
October 2035.....................       0      0      0      0      0
Weighted Average Life to
   Maturity (years)(2)...........   26.89   6.71   5.05   4.20   3.71
Weighted Average Life to Call
   (years)(2)(3).................   26.82   6.35   4.79   3.99   3.55


----------
(1)  Rounded to the nearest whole percentage.

(2)  The weighted average life of a certificate of any class is determined by
     (i) multiplying the net reduction, if any, of the Class Certificate Balance
     by the number of years from the date of issuance of the certificate to the
     related distribution date, (ii) adding the results, and (iii) dividing them
     by the aggregate of the net reductions of the Class Certificate Balance
     described in clause (i).

(3)  Calculation assumes the exercise of the 10% optional clean-up call on the
     earliest possible date.


                                      S-135



HYPOTHETICAL AVAILABLE FUNDS AND SUPPLEMENTAL INTEREST RATE CAP TABLE

     Assuming that prepayments on the mortgage loans occur at 100% of the
applicable fixed rate or adjustable rate prepayment assumption (i.e., Scenario
III), that no losses are experienced with respect to the mortgage loans and that
One-Month LIBOR and the Loan Index each remain constant at 20% and that the 10%
optional clean-up call is not exercised, the following table indicates the
Available Funds and Supplemental Interest Rate Cap that would result for
indicated distribution dates under an assumed hypothetical scenario. It is
highly unlikely, however, that prepayments on the mortgage loans will occur at a
constant rate of 100% of the applicable prepayment assumption or at any other
constant percentage. There is no assurance, therefore, of whether or to what
extent the actual interest rates on the mortgage loans on any distribution date
will conform to the corresponding rate set forth for that distribution date in
the following table.


                                      S-136



                         SCHEDULE OF AVAILABLE FUNDS AND
              SUPPLEMENTAL INTEREST RATE CAP RATES (CASH CAP)(1)(2)



                CLASS A-1   CLASS A-2A   CLASS A-2B   CLASS A-2C    CLASS M-1    CLASS M-2    CLASS M-3
DISTRIBUTION     CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)
    DATE       ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360
------------   ----------   ----------   ----------   ----------   ----------   ----------   ----------

Closing Date         --           --           --           --           --           --           --
  11/25/2005      20.24        20.10        20.25        20.34        20.42        20.43        20.45
  12/25/2005      20.24        20.10        20.25        20.34        20.42        20.43        20.45
   1/25/2006      20.24        20.10        20.25        20.34        20.42        20.43        20.45
   2/25/2006      20.24        20.10        20.25        20.34        20.42        20.43        20.45
   3/25/2006      20.24        20.10        20.25        20.34        20.42        20.43        20.45
   4/25/2006      20.24        20.10        20.25        20.34        20.42        20.43        20.45
   5/25/2006      20.24        20.10        20.25        20.34        20.42        20.43        20.45
   6/25/2006      20.24        20.10        20.25        20.34        20.42        20.43        20.45
   7/25/2006      20.24        20.10        20.25        20.33        20.20        20.21        20.22
   8/25/2006      20.09        20.04        20.04        20.04        19.61        19.61        19.61
   9/25/2006      19.90        19.85        19.85        19.85        19.41        19.41        19.41
  10/25/2006      19.82        19.78        19.78        19.78        19.30        19.30        19.30
  11/25/2006      19.54        19.49        19.49        19.49        19.01        19.01        19.01
  12/25/2006      19.48        19.43        19.43        19.43        18.91        18.91        18.91
   1/25/2007      19.19        19.15        19.15        19.15        18.63        18.63        18.63
   2/25/2007      19.03        18.98        18.98        18.98        18.44        18.44        18.44
   3/25/2007      19.26        19.21        19.21        19.21        18.58        18.58        18.58
   4/25/2007      18.72        18.67        18.67        18.67        18.08        18.08        18.08
   5/25/2007      18.77        18.69        18.69        18.69        18.06        18.06        18.06
   6/25/2007      17.31        17.26        17.26        17.26        16.56        16.56        16.56
   7/25/2007      12.98        12.94        12.94        12.94        12.10        12.10        12.10
   8/25/2007      11.28        11.12        11.12        11.12        10.24        10.24        10.24
   9/25/2007      11.31        11.15        11.15        11.15        10.23        10.23        10.23
  10/25/2007      11.64        11.48        11.48        11.48        10.48        10.48        10.48
  11/25/2007      11.40        11.23        11.23        11.23        10.22        10.22        10.22
  12/25/2007      11.95        11.77        11.77        11.77        10.65        10.65        10.65
   1/25/2008      12.12           --        11.98        11.98        10.77        10.77        10.77
   2/25/2008      12.50           --        12.36        12.36        11.05        11.05        11.05
   3/25/2008      13.27           --        13.12        13.12        11.64        11.64        11.64
   4/25/2008      12.62           --        12.48        12.48        11.02        11.02        11.02
   5/25/2008      13.07           --        12.91        12.91        11.32        11.32        11.32
   6/25/2008      12.99           --        12.83        12.83        11.17        11.17        11.17
   7/25/2008      13.77           --        13.64        13.64        11.73        11.73        11.73
   8/25/2008      13.75           --        13.61        13.61        11.58        11.58        11.58


                CLASS M-4    CLASS M-5    CLASS M-6    CLASS B-1    CLASS B-2    CLASS B-3
DISTRIBUTION     CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)
    DATE       ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360
------------   ----------   ----------   ----------   ----------   ----------   ----------

Closing Date         --           --           --           --           --           --
  11/25/2005      20.58        20.62        20.67        21.10        21.30        21.75
  12/25/2005      20.58        20.62        20.67        21.10        21.30        21.75
   1/25/2006      20.58        20.62        20.67        21.10        21.30        21.75
   2/25/2006      20.58        20.62        20.67        21.10        21.30        21.75
   3/25/2006      20.58        20.62        20.67        21.10        21.30        21.75
   4/25/2006      20.58        20.62        20.67        21.10        21.30        21.75
   5/25/2006      20.58        20.62        20.67        21.10        21.30        21.75
   6/25/2006      20.58        20.62        20.67        21.10        21.30        21.75
   7/25/2006      20.30        20.32        20.35        20.60        20.72        20.98
   8/25/2006      19.61        19.61        19.61        19.61        19.61        19.61
   9/25/2006      19.41        19.41        19.41        19.41        19.41        19.41
  10/25/2006      19.30        19.30        19.30        19.30        19.30        19.30
  11/25/2006      19.01        19.01        19.01        19.01        19.01        19.01
  12/25/2006      18.91        18.91        18.91        18.91        18.91        18.91
   1/25/2007      18.63        18.63        18.63        18.63        18.63        18.63
   2/25/2007      18.44        18.44        18.44        18.44        18.44        18.44
   3/25/2007      18.58        18.58        18.58        18.58        18.58        18.58
   4/25/2007      18.08        18.08        18.08        18.08        18.08        18.08
   5/25/2007      18.06        18.06        18.06        18.06        18.06        18.06
   6/25/2007      16.56        16.56        16.56        16.56        16.56        16.56
   7/25/2007      12.10        12.10        12.10        12.10        12.10        12.10
   8/25/2007      10.24        10.24        10.24        10.24        10.24        10.24
   9/25/2007      10.23        10.23        10.23        10.23        10.23        10.23
  10/25/2007      10.48        10.48        10.48        10.48        10.48        10.48
  11/25/2007      10.22        10.22        10.22        10.22        10.22        10.22
  12/25/2007      10.65        10.65        10.65        10.65        10.65        10.65
   1/25/2008      10.77        10.77        10.77        10.77        10.77        10.77
   2/25/2008      11.05        11.05        11.05        11.05        11.05        11.05
   3/25/2008      11.64        11.64        11.64        11.64        11.64        11.64
   4/25/2008      11.02        11.02        11.02        11.02        11.02        11.02
   5/25/2008      11.32        11.32        11.32        11.32        11.32        11.32
   6/25/2008      11.17        11.17        11.17        11.17        11.17        11.17
   7/25/2008      11.73        11.73        11.73        11.73        11.73        11.73
   8/25/2008      11.58        11.58        11.58        11.58        11.58        11.58



                                      S-137





                CLASS A-1   CLASS A-2A   CLASS A-2B   CLASS A-2C    CLASS M-1    CLASS M-2    CLASS M-3
DISTRIBUTION     CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)
    DATE       ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360
------------   ----------   ----------   ----------   ----------   ----------   ----------   ----------

   9/25/2008      13.86         --          13.73        13.73        11.58        11.58        11.58
  10/25/2008      14.40         --          14.26        14.26        11.90        11.90        11.90
  11/25/2008      86.58         --          86.44        86.44        11.58        11.58        11.58
  12/25/2008      21.27         --          21.12        21.12        12.04        12.04        12.04
   1/25/2009      19.50         --          19.39        19.39        12.12        12.12        12.12
   2/25/2009      19.64         --          19.53        19.53        12.41        12.41        12.41
   3/25/2009      21.35         --          21.22        21.22        13.55        13.55        13.55
   4/25/2009      19.25         --          19.13        19.13        12.39        12.39        12.39
   5/25/2009      19.65         --          19.52        19.52        12.74        12.74        12.74
   6/25/2009      18.99         --          18.87        18.87        12.47        12.47        12.47
   7/25/2009      19.64         --          19.55        19.55        13.07        13.07        13.07
   8/25/2009      18.95         --          18.91        18.91        12.77        12.77        12.77
   9/25/2009      18.78         --          18.73        18.73        12.76        12.76        12.76
  10/25/2009      19.28         --          19.23        19.23        13.12        13.12        13.12
  11/25/2009      18.69         --          18.65        18.65        12.74        12.74        12.74
  12/25/2009      19.26         --          19.21        19.21        13.10        13.10        13.10
   1/25/2010      18.69         --          18.65        18.65        12.74        12.74        12.74
   2/25/2010      18.70         --          18.66        18.66        12.74        12.74        12.74
   3/25/2010      20.53         --          20.48        20.48        13.94        13.94        13.94
   4/25/2010      17.52         --          17.47        17.47        11.56        11.56        11.56
   5/25/2010      18.16         --          18.15        18.15        12.01        12.01        12.01
   6/25/2010      17.58         --          17.58        17.58        11.63        11.63        11.63
   7/25/2010      18.17         --          18.18        18.18        12.03        12.03        12.03
   8/25/2010      17.59         --             --        17.59        11.64        11.64        11.64
   9/25/2010      17.58         --             --        17.59        11.64        11.64        11.64
  10/25/2010      18.17         --             --        18.17        12.02        12.02        12.02
  11/25/2010      17.59         --             --        17.60        11.64        11.64        11.64
  12/25/2010      18.17         --             --        18.19        12.03        12.03        12.03
   1/25/2011      17.58         --             --        17.60        11.64        11.64        11.64
   2/25/2011      17.58         --             --        17.60        11.64        11.64        11.64
   3/25/2011      19.46         --             --        19.48        12.88        12.88        12.88
   4/25/2011      17.57         --             --        17.59        11.63        11.63        11.63
   5/25/2011      18.16         --             --        18.19        12.03        12.03        12.03
   6/25/2011      17.57         --             --        17.61        11.64        11.64        11.64
   7/25/2011      18.15         --             --        18.19        12.02        12.02        12.02
   8/25/2011      17.57         --             --        17.60        11.63        11.63        11.63
   9/25/2011      17.56         --             --        17.60        11.63        11.63        11.63
  10/25/2011      18.15         --             --        18.18        12.02        12.02        12.02
  11/25/2011      17.56         --             --        17.60        11.63        11.63        11.63
  12/25/2011      18.14         --             --        18.18        12.02        12.02        12.02
   1/25/2012      17.55         --             --        17.59        11.62        11.62        11.62
   2/25/2012      17.55         --             --        17.59        11.62        11.62        11.62
   3/25/2012      18.76         --             --        18.80        12.42        12.42        12.42


                CLASS M-4    CLASS M-5    CLASS M-6    CLASS B-1    CLASS B-2    CLASS B-3
DISTRIBUTION     CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)
    DATE       ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360
------------   ----------   ----------   ----------   ----------   ----------   ----------

   9/25/2008      11.58        11.58        11.58        11.58        11.58        11.58
  10/25/2008      11.90        11.90        11.90        11.90        11.90        11.90
  11/25/2008      11.58        11.58        11.58        11.58        11.58        11.58
  12/25/2008      12.04        12.04        12.04        12.04        12.04        12.04
   1/25/2009      12.12        12.12        12.12        12.12        12.12        12.12
   2/25/2009      12.41        12.41        12.41        12.41        12.41        12.41
   3/25/2009      13.55        13.55        13.55        13.55        13.55        13.55
   4/25/2009      12.39        12.39        12.39        12.39        12.39        12.39
   5/25/2009      12.74        12.74        12.74        12.74        12.74        12.74
   6/25/2009      12.47        12.47        12.47        12.47        12.47        12.47
   7/25/2009      13.07        13.07        13.07        13.07        13.07        13.07
   8/25/2009      12.77        12.77        12.77        12.77        12.77        12.77
   9/25/2009      12.76        12.76        12.76        12.76        12.76        12.76
  10/25/2009      13.12        13.12        13.12        13.12        13.12        13.12
  11/25/2009      12.74        12.74        12.74        12.74        12.74        12.74
  12/25/2009      13.10        13.10        13.10        13.10        13.10        13.10
   1/25/2010      12.74        12.74        12.74        12.74        12.74        12.74
   2/25/2010      12.74        12.74        12.74        12.74        12.74        12.74
   3/25/2010      13.94        13.94        13.94        13.94        13.94        13.94
   4/25/2010      11.56        11.56        11.56        11.56        11.56        11.56
   5/25/2010      12.01        12.01        12.01        12.01        12.01        12.01
   6/25/2010      11.63        11.63        11.63        11.63        11.63        11.63
   7/25/2010      12.03        12.03        12.03        12.03        12.03        12.03
   8/25/2010      11.64        11.64        11.64        11.64        11.64        11.64
   9/25/2010      11.64        11.64        11.64        11.64        11.64        11.64
  10/25/2010      12.02        12.02        12.02        12.02        12.02        12.02
  11/25/2010      11.64        11.64        11.64        11.64        11.64        11.64
  12/25/2010      12.03        12.03        12.03        12.03        12.03        12.03
   1/25/2011      11.64        11.64        11.64        11.64        11.64        11.64
   2/25/2011      11.64        11.64        11.64        11.64        11.64        11.64
   3/25/2011      12.88        12.88        12.88        12.88        12.88        12.88
   4/25/2011      11.63        11.63        11.63        11.63        11.63        11.63
   5/25/2011      12.03        12.03        12.03        12.03        12.03        12.03
   6/25/2011      11.64        11.64        11.64        11.64        11.64        11.64
   7/25/2011      12.02        12.02        12.02        12.02        12.02        12.02
   8/25/2011      11.63        11.63        11.63        11.63        11.63        11.63
   9/25/2011      11.63        11.63        11.63        11.63        11.63        11.63
  10/25/2011      12.02        12.02        12.02        12.02        12.02        12.02
  11/25/2011      11.63        11.63        11.63        11.63        11.63        11.63
  12/25/2011      12.02        12.02        12.02        12.02        12.02        12.02
   1/25/2012      11.62        11.62        11.62        11.62        11.62        11.62
   2/25/2012      11.62        11.62        11.62        11.62        11.62        11.62
   3/25/2012      12.42        12.42        12.42        12.42        12.42        12.42



                                      S-138





                CLASS A-1   CLASS A-2A   CLASS A-2B   CLASS A-2C    CLASS M-1    CLASS M-2    CLASS M-3
DISTRIBUTION     CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)
    DATE       ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360
------------   ----------   ----------   ----------   ----------   ----------   ----------   ----------

   4/25/2012      17.54           --           --        17.59        11.62        11.62        11.62
   5/25/2012      18.13           --           --        18.17        12.00        12.00        12.00
   6/25/2012      17.54           --           --        17.58        11.61        11.61        11.61
   7/25/2012      18.12           --           --        18.17        12.00        12.00        12.00
   8/25/2012      17.53           --           --        17.58        11.61        11.61        11.61
   9/25/2012      17.53           --           --        17.57        11.60        11.60        11.60
  10/25/2012      18.11           --           --        18.16        11.99        11.99        11.99
  11/25/2012      17.52           --           --        17.57        11.60        11.60        11.60
  12/25/2012      18.11           --           --        18.15        11.98        11.98        11.98
   1/25/2013      17.52           --           --        17.56        11.59        11.59        11.59
   2/25/2013      17.52           --           --        17.56        11.59        11.59        11.59
   3/25/2013      19.39           --           --        19.44        12.82        12.82        12.82
   4/25/2013      17.51           --           --        17.55        11.58        11.58        11.58
   5/25/2013      18.09           --           --        18.14        11.96        11.96        11.96
   6/25/2013      17.50           --           --        17.55        11.57        11.57        11.57
   7/25/2013      18.08           --           --        18.13        11.96        11.96        11.96
   8/25/2013      17.50           --           --        17.54        11.57        11.57        11.57
   9/25/2013      17.50           --           --        17.54        11.56        11.56        11.56
  10/25/2013      18.08           --           --        18.12        11.95        11.95        11.95
  11/25/2013      17.49           --           --        17.53        11.56        11.56        11.56
  12/25/2013      18.07           --           --        18.12        11.94        11.94        11.94
   1/25/2014      17.48           --           --        17.53        11.55        11.55        11.55
   2/25/2014      17.48           --           --        17.52        11.55        11.55        11.55
   3/25/2014      19.35           --           --        19.40        12.78        12.78        12.78
   4/25/2014      17.48           --           --        17.52        11.54        11.54        11.54
   5/25/2014      15.01           --           --        15.06        11.92        11.92        11.92
   6/25/2014      13.15           --           --        13.19        11.53        11.53        11.53
   7/25/2014      13.63           --           --        13.68        11.92        11.92        11.92
   8/25/2014      13.23           --           --        13.28        11.53        11.53        11.53
   9/25/2014      13.28           --           --        13.32        11.52        11.52        11.52
  10/25/2014      13.77           --           --        13.81        11.91        11.91        11.91
  11/25/2014      13.37           --           --        13.41        11.52        11.52        11.52
  12/25/2014      13.87           --           --        13.91        11.90        11.90        11.90
   1/25/2015      13.47           --           --        13.51        11.51        11.51        11.51
   2/25/2015      13.52           --           --        13.56        11.51        11.51        11.51
   3/25/2015      15.02           --           --        15.07        12.74        12.74        12.74
   4/25/2015      13.62           --           --        13.67        11.50        11.50        11.50
   5/25/2015      14.14           --           --        14.18        11.88        11.88        11.88
   6/25/2015      13.74           --           --        13.78        11.49        11.49        11.49
   7/25/2015      14.26           --           --        14.30        11.87        11.87        11.87
   8/25/2015      13.86           --           --        13.90        11.49        11.49        11.49
   9/25/2015      13.92           --           --        13.96        11.48        11.48        11.48
  10/25/2015      14.45           --           --        14.49        11.86        11.86        11.86


                CLASS M-4    CLASS M-5    CLASS M-6    CLASS B-1    CLASS B-2    CLASS B-3
DISTRIBUTION     CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)
    DATE       ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360
------------   ----------   ----------   ----------   ----------   ----------   ----------

   4/25/2012      11.62        11.62        11.62        11.62        11.62        11.62
   5/25/2012      12.00        12.00        12.00        12.00        12.00        12.00
   6/25/2012      11.61        11.61        11.61        11.61        11.61        11.61
   7/25/2012      12.00        12.00        12.00        12.00        12.00        12.00
   8/25/2012      11.61        11.61        11.61        11.61        11.61        11.61
   9/25/2012      11.60        11.60        11.60        11.60        11.60        11.60
  10/25/2012      11.99        11.99        11.99        11.99        11.99        11.99
  11/25/2012      11.60        11.60        11.60        11.60        11.60        11.60
  12/25/2012      11.98        11.98        11.98        11.98        11.98        11.98
   1/25/2013      11.59        11.59        11.59        11.59        11.59        11.59
   2/25/2013      11.59        11.59        11.59        11.59        11.59        11.59
   3/25/2013      12.82        12.82        12.82        12.82        12.82        12.82
   4/25/2013      11.58        11.58        11.58        11.58        11.58        11.58
   5/25/2013      11.96        11.96        11.96        11.96        11.96        11.96
   6/25/2013      11.57        11.57        11.57        11.57        11.57        11.57
   7/25/2013      11.96        11.96        11.96        11.96        11.96        11.96
   8/25/2013      11.57        11.57        11.57        11.57        11.57        11.57
   9/25/2013      11.56        11.56        11.56        11.56        11.56        11.56
  10/25/2013      11.95        11.95        11.95        11.95        11.95        11.95
  11/25/2013      11.56        11.56        11.56        11.56        11.56        11.56
  12/25/2013      11.94        11.94        11.94        11.94        11.94        11.94
   1/25/2014      11.55        11.55        11.55        11.55        11.55        11.55
   2/25/2014      11.55        11.55        11.55        11.55        11.55        11.55
   3/25/2014      12.78        12.78        12.78        12.78        12.78        12.78
   4/25/2014      11.54        11.54        11.54        11.54        11.54        11.54
   5/25/2014      11.92        11.92        11.92        11.92        11.92        11.92
   6/25/2014      11.53        11.53        11.53        11.53        11.53        11.53
   7/25/2014      11.92        11.92        11.92        11.92        11.92        11.92
   8/25/2014      11.53        11.53        11.53        11.53        11.53        11.53
   9/25/2014      11.52        11.52        11.52        11.52        11.52        11.52
  10/25/2014      11.91        11.91        11.91        11.91        11.91        11.91
  11/25/2014      11.52        11.52        11.52        11.52        11.52        11.52
  12/25/2014      11.90        11.90        11.90        11.90        11.90        11.90
   1/25/2015      11.51        11.51        11.51        11.51        11.51        11.51
   2/25/2015      11.51        11.51        11.51        11.51        11.51           --
   3/25/2015      12.74        12.74        12.74        12.74        12.74           --
   4/25/2015      11.50        11.50        11.50        11.50        11.50           --
   5/25/2015      11.88        11.88        11.88        11.88        11.88           --
   6/25/2015      11.49        11.49        11.49        11.49        11.49           --
   7/25/2015      11.87        11.87        11.87        11.87        11.87           --
   8/25/2015      11.49        11.49        11.49        11.49        11.49           --
   9/25/2015      11.48        11.48        11.48        11.48        11.48           --
  10/25/2015      11.86        11.86        11.86        11.86        11.86           --



                                      S-139





                CLASS A-1   CLASS A-2A   CLASS A-2B   CLASS A-2C    CLASS M-1    CLASS M-2    CLASS M-3
DISTRIBUTION     CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)
    DATE       ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360
------------   ----------   ----------   ----------   ----------   ----------   ----------   ----------

  11/25/2015      14.05           --           --        14.09        11.48        11.48        11.48
  12/25/2015      14.59           --           --        14.63        11.86        11.86        11.86
   1/25/2016      14.18           --           --        14.23        11.47        11.47        11.47
   2/25/2016      14.26           --           --        14.30        11.47        11.47        11.47
   3/25/2016      15.32           --           --        15.36        12.26        12.26        12.26
   4/25/2016      14.41           --           --        14.45        11.46        11.46        11.46
   5/25/2016      14.97           --           --        15.01        11.84        11.84        11.84
   6/25/2016      14.56           --           --        14.61        11.45        11.45        11.45
   7/25/2016      15.14           --           --        15.18        11.83        11.83        11.83
   8/25/2016      14.73           --           --        14.77        11.45        11.45        11.45
   9/25/2016      14.82           --           --        14.86        11.44        11.44        11.44
  10/25/2016      15.41           --           --        15.45        11.82        11.82        11.82
  11/25/2016      15.00           --           --        15.04        11.44        11.44        11.44
  12/25/2016      15.60           --           --        15.64        11.82        11.82        11.82
   1/25/2017      15.20           --           --        15.24        11.43        11.43        11.43
   2/25/2017      15.30           --           --        15.34        11.43        11.43        11.43
   3/25/2017      17.05           --           --        17.10        12.65        12.65        12.65
   4/25/2017      15.51           --           --        15.55        11.42        11.42        11.42
   5/25/2017      16.14           --           --        16.18        11.80        11.80        11.80
   6/25/2017      15.73           --           --        15.77        11.41        11.41        11.41
   7/25/2017      16.37           --           --        16.42        11.79        11.79        11.79
   8/25/2017      15.96           --           --        16.01        11.41        11.41        11.41
   9/25/2017      16.09           --           --        16.13        11.40        11.40        11.40
  10/25/2017      16.75           --           --        16.80        11.78        11.78        11.78
  11/25/2017      16.34           --           --        16.38        11.40        11.40        11.40
  12/25/2017      17.03           --           --        17.07        11.77        11.77        11.77
   1/25/2018      16.62           --           --        16.66        11.39        11.39        11.39
   2/25/2018      16.76           --           --        16.80        11.39        11.39        11.39
   3/25/2018      18.71           --           --        18.76        12.60        12.60        12.60
   4/25/2018      17.05           --           --        17.09        11.38        11.38        11.38
   5/25/2018      17.78           --           --        17.82        11.76        11.76        11.76
   6/25/2018      17.37           --           --        17.41        11.37        11.37           --
   7/25/2018      18.11           --           --        18.15        11.75        11.75           --
   8/25/2018      17.70           --           --        17.74        11.37        11.37           --
   9/25/2018      17.87           --           --        17.91        11.36        11.36           --
  10/25/2018      18.65           --           --        18.69        11.74        11.74           --
  11/25/2018      18.23           --           --        18.27        11.36        11.36           --
  12/25/2018      19.03           --           --        19.07        11.73        11.73           --
   1/25/2019      18.61           --           --        18.65        11.35        11.35           --
   2/25/2019      18.81           --           --        18.85        11.35           --           --
   3/25/2019      21.06           --           --        21.10        12.56           --           --
   4/25/2019      19.23           --           --        19.27        11.34           --           --
   5/25/2019      20.09           --           --        20.13        11.71           --           --


                CLASS M-4    CLASS M-5    CLASS M-6    CLASS B-1    CLASS B-2    CLASS B-3
DISTRIBUTION     CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)
    DATE       ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360
------------   ----------   ----------   ----------   ----------   ----------   ----------

  11/25/2015      11.48        11.48        11.48        11.48           --           --
  12/25/2015      11.86        11.86        11.86        11.86           --           --
   1/25/2016      11.47        11.47        11.47        11.47           --           --
   2/25/2016      11.47        11.47        11.47        11.47           --           --
   3/25/2016      12.26        12.26        12.26        12.26           --           --
   4/25/2016      11.46        11.46        11.46        11.46           --           --
   5/25/2016      11.84        11.84        11.84        11.84           --           --
   6/25/2016      11.45        11.45        11.45           --           --           --
   7/25/2016      11.83        11.83        11.83           --           --           --
   8/25/2016      11.45        11.45        11.45           --           --           --
   9/25/2016      11.44        11.44        11.44           --           --           --
  10/25/2016      11.82        11.82        11.82           --           --           --
  11/25/2016      11.44        11.44        11.44           --           --           --
  12/25/2016      11.82        11.82        11.82           --           --           --
   1/25/2017      11.43        11.43           --           --           --           --
   2/25/2017      11.43        11.43           --           --           --           --
   3/25/2017      12.65        12.65           --           --           --           --
   4/25/2017      11.42        11.42           --           --           --           --
   5/25/2017      11.80        11.80           --           --           --           --
   6/25/2017      11.41        11.41           --           --           --           --
   7/25/2017      11.79           --           --           --           --           --
   8/25/2017      11.41           --           --           --           --           --
   9/25/2017      11.40           --           --           --           --           --
  10/25/2017      11.78           --           --           --           --           --
  11/25/2017      11.40           --           --           --           --           --
  12/25/2017      11.77           --           --           --           --           --
   1/25/2018         --           --           --           --           --           --
   2/25/2018         --           --           --           --           --           --
   3/25/2018         --           --           --           --           --           --
   4/25/2018         --           --           --           --           --           --
   5/25/2018         --           --           --           --           --           --
   6/25/2018         --           --           --           --           --           --
   7/25/2018         --           --           --           --           --           --
   8/25/2018         --           --           --           --           --           --
   9/25/2018         --           --           --           --           --           --
  10/25/2018         --           --           --           --           --           --
  11/25/2018         --           --           --           --           --           --
  12/25/2018         --           --           --           --           --           --
   1/25/2019         --           --           --           --           --           --
   2/25/2019         --           --           --           --           --           --
   3/25/2019         --           --           --           --           --           --
   4/25/2019         --           --           --           --           --           --
   5/25/2019         --           --           --           --           --           --



                                      S-140





                CLASS A-1   CLASS A-2A   CLASS A-2B   CLASS A-2C    CLASS M-1    CLASS M-2    CLASS M-3
DISTRIBUTION     CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)
    DATE       ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360
------------   ----------   ----------   ----------   ----------   ----------   ----------   ----------

   6/25/2019      19.67           --           --        19.71        11.33           --           --
   7/25/2019      20.56           --           --        20.60        11.71           --           --
   8/25/2019      20.22           --           --        20.26           --           --           --
   9/25/2019      20.68           --           --        20.71           --           --           --
  10/25/2019      21.87           --           --        21.91           --           --           --
  11/25/2019      21.70           --           --        21.73           --           --           --
  12/25/2019      23.01           --           --        23.05           --           --           --
   1/25/2020      22.90           --           --        22.93           --           --           --
   2/25/2020      23.57           --           --        23.61           --           --           --
   3/25/2020      26.00           --           --        26.03           --           --           --
   4/25/2020      25.14           --           --        25.17           --           --           --
   5/25/2020      28.84           --           --        28.95           --           --           --
   6/25/2020      31.81           --           --        31.94           --           --           --
   7/25/2020      34.63           --           --        34.77           --           --           --
   8/25/2020      35.47           --           --        35.60           --           --           --
   9/25/2020      37.73           --           --        37.87           --           --           --
  10/25/2020      41.74           --           --        41.87           --           --           --
  11/25/2020      43.55           --           --        43.68           --           --           --
  12/25/2020      48.93           --           --        49.07           --           --           --
   1/25/2021      52.05           --           --        52.18           --           --           --
   2/25/2021      57.96           --           --        58.09           --           --           --
   3/25/2021      72.68           --           --        72.83           --           --           --
   4/25/2021      76.02           --           --        76.16           --           --           --
   5/25/2021      93.84           --           --        93.98           --           --           --
   6/25/2021     113.58           --           --       113.72           --           --           --
   7/25/2021     158.22           --           --       158.36           --           --           --
   8/25/2021         --           --           --       238.84           --           --           --
   9/25/2021         --           --           --            *           --           --           --
  10/25/2021         --           --           --           --           --           --           --


                CLASS M-4    CLASS M-5    CLASS M-6    CLASS B-1    CLASS B-2    CLASS B-3
DISTRIBUTION     CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)      CAP (%)
    DATE       ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360   ACTUAL/360
------------   ----------   ----------   ----------   ----------   ----------   ----------

   6/25/2019         --           --           --           --           --           --
   7/25/2019         --           --           --           --           --           --
   8/25/2019         --           --           --           --           --           --
   9/25/2019         --           --           --           --           --           --
  10/25/2019         --           --           --           --           --           --
  11/25/2019         --           --           --           --           --           --
  12/25/2019         --           --           --           --           --           --
   1/25/2020         --           --           --           --           --           --
   2/25/2020         --           --           --           --           --           --
   3/25/2020         --           --           --           --           --           --
   4/25/2020         --           --           --           --           --           --
   5/25/2020         --           --           --           --           --           --
   6/25/2020         --           --           --           --           --           --
   7/25/2020         --           --           --           --           --           --
   8/25/2020         --           --           --           --           --           --
   9/25/2020         --           --           --           --           --           --
  10/25/2020         --           --           --           --           --           --
  11/25/2020         --           --           --           --           --           --
  12/25/2020         --           --           --           --           --           --
   1/25/2021         --           --           --           --           --           --
   2/25/2021         --           --           --           --           --           --
   3/25/2021         --           --           --           --           --           --
   4/25/2021         --           --           --           --           --           --
   5/25/2021         --           --           --           --           --           --
   6/25/2021         --           --           --           --           --           --
   7/25/2021         --           --           --           --           --           --
   8/25/2021         --           --           --           --           --           --
   9/25/2021         --           --           --           --           --           --
  10/25/2021         --           --           --           --           --           --


----------
(1)  Annualized interest rate based on total interest paid to the applicable
     class of certificates including Accrued Certificate Interest, Unpaid
     Interest Amounts and Basis Risk CarryForward Amounts divided by the current
     Class Certificate Balance.

(2)  Assumes 100% of prepayment assumption, no losses, One-Month LIBOR of 20%
     and the Loan Index of 20% and that the optional clean-up call is not
     exercised.

*    On the distribution date in September 2021, Class A-2c has a beginning
     class certificate balance of approximately $154,406 and is paid
     approximately $134,602 in interest.


                                      S-141



FINAL SCHEDULED DISTRIBUTION DATE

     The "FINAL SCHEDULED DISTRIBUTION DATE" for each class of Offered
Certificates is the distribution date occurring in September 2035.

     The Final Scheduled Distribution Dates for all classes have been calculated
as the distribution date in the month following the month in which the latest
maturity date of any mortgage loan occurs.

     Since the rate of distributions in reduction of the Class Certificate
Balance of each class of Offered Certificates will depend on the rate of payment
(including prepayments) of the mortgage loans, the Class Certificate Balance of
each class could be reduced to zero significantly earlier or later than the
Final Scheduled Distribution Date. The rate of payments on the mortgage loans
will depend on their particular characteristics, as well as on prevailing
interest rates from time to time and other economic factors, and no assurance
can be given as to the actual payment experience of the mortgage loans. See
"--Prepayment Considerations and Risks" and "--Weighted Average Lives of the
Offered Certificates" above in this prospectus supplement and "Yield and
Prepayment Considerations" in the prospectus.

                        FEDERAL INCOME TAX CONSIDERATIONS

     The discussion in this section and in the section "Material Federal Income
Tax Consequences" in the prospectus is based upon laws, regulations, rulings and
decisions now in effect, all of which are subject to change. The discussion
below and in the prospectus does not purport to deal with all federal tax
consequences applicable to all categories of investors, some of which may be
subject to special rules. Investors may wish to consult their own tax advisors
in determining the federal, state, local and any other tax consequences to them
of the purchase, ownership and disposition of the Offered Certificates.
References in this section and in the "ERISA Considerations" section of this
prospectus supplement to the "CODE" and "SECTIONS" are to the Internal Revenue
Code of 1986, as amended.

GENERAL

     The pooling and servicing agreement provides that the trust (exclusive of
the assets held in the Excess Reserve Fund Account, the Swap Account and certain
other accounts specified in the pooling and servicing agreement and the right of
each class of Offered Certificates to receive Basis Risk CarryForward Amounts),
will comprise multiple REMICs organized in a tiered REMIC structure (each a
"TRUST REMIC"). Each class of Offered Certificates (exclusive of the right to
receive Basis Risk CarryForward Amounts) represents ownership of a regular
interest in a Trust REMIC. The Class R certificates will represent ownership of
the sole class of residual interest in each of the Trust REMICs. In addition,
each class of Offered Certificates will represent a beneficial interest in the
right to receive payments of Basis Risk CarryForward Amounts from the Excess
Reserve Fund Account and the Swap Account. Elections will be made to treat each
of the Trust REMICs as a REMIC for federal income tax purposes.

     Upon the issuance of the Offered Certificates, Cadwalader, Wickersham &
Taft LLP will deliver its opinion to the effect that, assuming compliance with
the pooling and servicing agreement, for federal income tax purposes, each Trust
REMIC will qualify as a REMIC within the meaning of Section 860D of the Code.

TAXATION OF REGULAR INTERESTS

     A holder of a class of Offered Certificates will be treated for federal
income tax purposes as owning an interest in the corresponding class of regular
interests (each, a "REGULAR INTEREST") in a Trust REMIC. In addition, the
pooling and servicing agreement provides that each holder of an Offered
Certificate will be treated as owning an interest in a limited recourse interest
rate cap contract (each, a "BASIS RISK CONTRACT"), representing the right to
receive Basis Risk CarryForward Amounts from the Excess Reserve Fund Account and
the Swap Account. The Regular Interest component of an Offered Certificate
generally will be entitled to receive interest and principal payments at the
times and in the amounts equal to those made on the Offered Certificate to which
it corresponds, except that (i) Basis Risk CarryForward Amounts will be payable
from both the Excess Reserve Fund Account and the Swap Account, and (ii) any
Swap Termination Payment will be treated as being payable first from Net Monthly


                                      S-142



Excess Cash Flow and second from amounts distributed on the Regular Interests.
As a result of the foregoing, the amount of distributions on the Regular
Interest component of an Offered Certificate may be less than or may exceed the
actual amount of distributions on the Offered Certificate.

     A holder of an Offered Certificate must allocate its purchase price for the
Offered Certificate between its components - the Regular Interest component and
the Basis Risk Contract component. To the extent the Basis Risk Contract
component has significant value, the Regular Interest component will be viewed
as having been issued with a lesser premium or an additional amount of original
issue discount ("OID") (which could cause the total amount of OID to exceed a
statutorily defined de minimis amount). See "Material Federal Income Tax
Consequences--Taxation of Debt Securities--Interest and Acquisition Discount" in
the prospectus.

     Upon the sale, exchange, or other disposition of an Offered Certificate,
the holder must allocate the amount realized between the components of the
Offered Certificate based on the relative fair market values of those components
at the time of sale. Assuming that an Offered Certificate is held as a "capital
asset" within the meaning of Section 1221 of the Code, gain or loss on the
disposition of an interest in the Basis Risk Contract component should be
capital gain or loss and gain or loss on the Regular Interest component will be
treated as described in the prospectus under "Material Federal Income Tax
Consequences--Sale or Exchange."

     Interest on the Regular Interest component of an Offered Certificate must
be included in income by a holder under the accrual method of accounting,
regardless of the holder's regular method of accounting. In addition, the
Regular Interest components of the Offered Certificates could be considered to
have been issued with OID. See "Material Federal Income Tax
Consequences--Taxation of Debt Securities--Interest and Acquisition Discount" in
the prospectus. The prepayment assumption that will be used in determining the
accrual of any OID, market discount, or bond premium, if any, will be a rate
equal to 100% of the applicable prepayment assumption. No representation is made
that the mortgage loans will prepay at such a rate or at any other rate. OID
must be included in income as it accrues on a constant yield method, regardless
of whether the holder receives currently the cash attributable to such OID.

STATUS OF THE OFFERED CERTIFICATES

     The Regular Interest components of the Offered Certificates will be treated
as assets described in Section 7701(a)(19)(C) of the Code for a "domestic
building and loan association," and as "real estate assets" under Section
856(c)(5)(B) of the Code for a "real estate investment trust" ("REIT"),
generally, in the same proportion that the assets of the trust, exclusive of the
Excess Reserve Fund Account and the Swap Account, would be so treated. In
addition, to the extent the Regular Interest component of an Offered Certificate
represents real estate assets under Section 856(c)(5)(B) of the Code, the
interest derived from that component would be interest on obligations secured by
interests in real property for purposes of Section 856(c)(3)(B) of the Code for
a REIT. The Basis Risk Contract components of the Offered Certificates will not,
however, 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 BASIS RISK CONTRACT COMPONENT

     Each holder of an Offered Certificate will be treated for federal income
tax purposes as having entered into a notional principal contract pursuant to
its rights to receive payment with respect to the Basis Risk Contract component
on the date it purchases its certificate. The Basis Risk Contract components are
beneficially owned by the holders of the Offered Certificates in the portion of
the trust fund, exclusive of the REMICs, which is treated as a grantor trust for
federal income tax purposes. The Internal Revenue Service (the "IRS") has issued
final regulations under Section 446 of the Code relating to notional principal
contracts (the "Notional Principal Contract Regulations").

     As indicated above, holders of the Offered Certificates must allocate the
price they pay for such certificates between the Regular Interest component and
the Basis Risk Contract component based on their relative fair market values. To
the extent the Basis Risk Contract component is determined to have a value on
the closing date that is greater than zero, a portion of such purchase price
will be allocable to such rights, and such portion will be treated as a cap
premium (the "Cap Premium") paid by holders of the Offered Certificates. A
holder of an Offered Certificate will be required to amortize the Cap Premium
under a level payment method as if the Cap Premium represented the present value
of a series of equal payments made over the life of the Basis Risk Contract
(adjusted to take into


                                      S-143



account decreases in notional principal amount), discounted at a rate equal to
the rate used to determine the amount of the Cap Premium (or some other
reasonable rate). Holders are urged to consult their tax advisors concerning the
appropriate method of amortizing any Cap Premium. The Notional Principal
Contract Regulations treat a nonperiodic payment made under a cap contract as a
loan for federal income tax purposes if the payment is "significant." It is not
known whether any Cap Premium would be treated in part as a loan under the
Notional Principal Contract Regulations.

     Under the Notional Principal Contract Regulations (i) all taxpayers must
recognize periodic payments with respect to a notional principal contract under
the accrual method of accounting, and (ii) any periodic payments received under
the applicable Basis Risk Contract must be netted against payments, if any,
deemed made as a result of the Cap Premiums over the recipient's taxable year,
rather than accounted for on a gross basis. Net income or deduction with respect
to net payments under a Basis Risk Contract for a taxable year should constitute
ordinary income or ordinary deduction. The IRS could contend the amount is
capital gain or loss, but such treatment is unlikely, at least in the absence of
further regulations. Any regulations requiring capital gain or loss treatment
presumably would apply only prospectively.

     In addition, any amounts payable on a Regular Interest component in excess
of the amount of payments on the Offered Certificates to which it relates as a
result of certain Swap Termination Payments will be treated as having been
received by the beneficial owners of such Offered Certificates and then paid by
such owners to the Swap Account pursuant to the Basis Risk Contract, and such
excess may be treated as a payment on a notional principal contract that is made
by the beneficial owner during the applicable taxable year and that is taken
into account in determining the beneficial owner's net income or net deduction
with respect to the Basis Risk Contract for such taxable year. Although not
clear, net income or a net deduction with respect to the Basis Risk Contract
should be treated as ordinary income or as an ordinary deduction. Alternatively,
such payments by beneficial owners of the Offered Certificates may be treated as
a guarantee of the obligation of the holder of the Class X certificates to make
payments under the interest rate swap agreement.

     Any amount of proceeds from the sale, redemption or retirement of an
Offered Certificate that is considered to be allocated to the holder's rights
under the applicable Basis Risk Contract would be considered a "termination
payment" under the Notional Principal Contract Regulations allocable to that
Offered Certificate. A holder of such Offered Certificate will have gain or loss
from such a termination of a Basis Risk Contract equal to (i) any termination
payment it received or is deemed to have received minus (ii) the unamortized
portion of any Cap Premium paid (or deemed paid) by the beneficial owner upon
entering into or acquiring its interest in a Basis Risk Contract.

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

     A beneficial owner's ability to recognize a net deduction with respect to
the Basis Risk Contract component of an Offered Certificate or any such
guarantee payment may be limited under Sections 67 and/or 68 of the Code in the
case of (1) estates and trusts and (2) individuals owning an interest in such
component directly or through a "pass-through entity" (other than in connection
with such individual's trade or business). Pass-through entities include
partnerships, S corporations, grantor trusts and non-publicly offered regulated
investment companies, but do not include estates, nongrantor trusts,
cooperatives, real estate investment trusts and publicly offered regulated
investment companies. Further, such a beneficial owner will not be able to
recognize a net deduction with respect to the Basis Risk Contract component or
any such guarantee payment in computing the beneficial owner's alternative
minimum tax liability. Because a beneficial owner of an Offered Certificate will
be required to include in income the amount deemed to have been paid by such
owner pursuant to the Basis Risk Contract or such guarantee but may not be able
to deduct that amount from income, a beneficial owner of an Offered Certificate
may have income that exceeds cash distributions on the Offered Certificate, in
any period and over the term of the Offered Certificate. As a result, the
Offered Certificates may not be a suitable investment for any taxpayer whose net
deduction with respect to the Basis Risk Contract or guarantee would be subject
to the limitations described above. Subject to the foregoing, if for any year
the amount of that year's amortized cost exceeds the sum of the periodic
payments, such excess is allowable as an ordinary deduction.


                                      S-144



OTHER MATTERS

     For a discussion of information reporting, backup withholding and taxation
of foreign investors in the certificates, see "Material Federal Income Tax
Consequences--Administrative Matters" and "--Tax Treatment of Foreign Investors"
in the prospectus.

                              STATE AND LOCAL TAXES

     The depositor makes no representations regarding the tax consequences of
purchase, ownership or disposition of the Offered Certificates under the tax
laws of any state or local jurisdiction. Investors considering an investment in
the Offered Certificates may wish to consult their own tax advisors regarding
these tax consequences.

                              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
subject to Title I of ERISA, and on certain other retirement plans and
arrangements, including individual retirement accounts and annuities and Keogh
plans, as well as on collective investment funds, separate accounts and other
entities in which such plans, accounts or arrangements are invested
(collectively, the "PLANS") and on persons who bear certain relationships to
such Plans. See "ERISA Considerations" in the prospectus.

     The U.S. Department of Labor (the "DOL") has granted to Morgan Stanley &
Co. Incorporated, one of the underwriters, an administrative exemption
(Prohibited Transaction Exemption ("PTE") 90-24, Exemption Application No.
D-8019, 55 Fed. Reg. 20548 (1990)) (the "EXEMPTION") from certain of the
prohibited transaction rules of ERISA with respect to the initial purchase, the
holding and the subsequent resale by Plans of certificates representing
interests in asset-backed pass-through trusts that consist of certain
receivables, loans and other obligations that meet the conditions and
requirements of the Exemption. The receivables covered by the Exemption include
secured residential, commercial, and home equity loans such as the mortgage
loans in the trust fund. The Exemption was amended by PTE 2000-58, Exemption
Application No. D-10829, 65 Fed. Reg. 67765 (2000) and PTE 2002-41, Exemption
Application No. D-11077, 67 Fed. Reg. 54487 (2002) to extend exemptive relief to
certificates, including Subordinated Certificates, rated in the four highest
generic rating categories in certain designated transactions, provided the
conditions of the Exemption are met. The Exemption will apply to the
acquisition, holding and resale of the Offered Certificates (the "ERISA ELIGIBLE
CERTIFICATES") by a Plan, provided that specific conditions (certain of which
are described below) are met.

     Among the conditions which must be satisfied for the Exemption, as amended,
to apply to the ERISA Eligible Certificates are the following:

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

               (ii) The ERISA Eligible Certificates acquired by the Plan have
          received a rating at the time of such acquisition that is one of the
          four highest generic rating categories from Fitch, Moody's or S& P;

               (iii) The trustee is not an affiliate of any other member of the
          Restricted Group (as defined below), other than an underwriter;

               (iv) The sum of all payments made to and retained by the
          underwriters in connection with the distribution of the ERISA Eligible
          Certificates represents not more than reasonable compensation for
          underwriting the ERISA Eligible Certificates. The sum of all payments
          made to and retained by the depositor pursuant to the sale of the
          ERISA Eligible Certificates to the trust fund represents not more than
          the fair market value of such mortgage loans. The sum of all payments
          made to and retained by the servicer represents not more than
          reasonable compensation for the servicer's services under the pooling
          and servicing agreement and reimbursement of the servicer's reasonable
          expenses in connection with its services; and


                                      S-145



               (v) The Plan investing in the ERISA Eligible Certificates is an
          "accredited investor" as defined in Rule 501(a)(1) of Regulation D of
          the Securities and Exchange Commission under the Securities Act of
          1933, as amended.

     Moreover, the Exemption would provide relief from certain
self-dealing/conflict of interest prohibited transactions that may arise when a
Plan fiduciary causes a Plan to acquire certificates in a trust containing
receivables on which the fiduciary (or its affiliate) is an obligor only if,
among other requirements, (i) in the case of the acquisition of ERISA Eligible
Certificates in connection with the initial issuance, at least 50% of each class
of ERISA Eligible Certificates and at least 50% of the aggregate interests in
the trust fund are acquired by persons independent of the Restricted Group (as
defined below), (ii) the Plan's investment in ERISA Eligible Certificates does
not exceed 25% of each class of ERISA Eligible Certificates outstanding at the
time of the acquisition, (iii) immediately after the acquisition, no more than
25% of the assets of any Plan for which the fiduciary has discretionary
authority or renders investment advice are invested in certificates representing
an interest in one or more trusts containing assets sold or serviced by the same
entity, and (iv) the fiduciary or its affiliate is an obligor with respect to
obligations representing no more than 5% of the fair market value of the
obligations in the trust. This relief is not available to Plans sponsored by the
depositor, any underwriter, the Swap Provider, the trustee, the servicer, any
obligor with respect to mortgage loans included in the trust fund constituting
more than five percent of the aggregate unamortized principal balance of the
assets in the trust fund, or any affiliate of such parties (the "RESTRICTED
GROUP").

     Except as provided below with respect to the interest rate swap agreement,
the depositor believes that the Exemption will apply to the acquisition and
holding by Plans of the ERISA Eligible Certificates sold by the underwriters and
that all conditions of the Exemption other than those within the control of the
investors have been met. In addition, as of the date of this prospectus
supplement, there is no obligor with respect to mortgage loans included in the
trust fund constituting more than 5% of the aggregate unamortized principal
balance of the assets of the trust fund.

     Each purchaser that is a Plan or that is investing on behalf of or with
plan assets of a Plan in reliance on the Exemption will be deemed to represent
that it qualifies as an accredited investor as defined in Rule 501(a)(1) of
Regulation D of the Securities Act.

     The rating of a certificate may change. If a class of certificates no
longer has a rating of at least BBB- or its equivalent, then certificates of
that class will no longer be eligible for relief under the Exemption, and
consequently may not be purchased by or sold to a Plan (although a Plan that had
purchased the certificates when it had a permitted rating would not be required
by the Exemption to dispose of it).

     The interest rate swap agreement does not meet all of the requirements for
an "eligible swap" under the Exemption, and consequently is not eligible for the
exemptive relief available under the Exemption. For ERISA purposes, an interest
in a class of Offered Certificates should represent beneficial interest in two
assets, (i) the right to receive payments with respect to the applicable class
without taking into account payments made or received with respect to the
interest rate swap agreement and (ii) the rights and obligations under the
interest rate swap agreement. A Plan's purchase and holding of an ERISA Eligible
Certificate could constitute or otherwise result in a prohibited transaction
under ERISA and Section 4975 of the Code between the Plan and the Swap Provider
unless an exemption is available.

     Accordingly, as long as the interest rate swap agreement is in effect, no
Plan or other person using Plan assets may acquire or hold any interest in an
ERISA Eligible Certificate unless such acquisition or holding is eligible for
the exemptive relief available under Department of Labor Prohibited Transaction
Class Exemption ("PTE") 84-14 (for transactions by independent "qualified
professional asset managers"), PTE 91-38 (for transactions by bank collective
investment funds), PTE 90-1 (for transactions by insurance company pooled
separate accounts), PTE 95-60 (for transactions by insurance company general
accounts) or PTE 96-23 (for transactions effected by "in-house asset managers")
or similar exemption under similar law (collectively, the "INVESTOR-BASED
EXEMPTIONS"). It should be noted, however, that even if the conditions specified
in one or more of the Investor-Based Exemptions are met, the scope of relief
provided by the Investor-Based Exemptions may not necessarily cover all acts
that might be construed as prohibited transactions. Plan fiduciaries should
consult their legal counsel concerning these issues. As long as the interest
rate swap agreement is in effect, each beneficial owner of an ERISA Eligible
Certificate, or any interest in an ERISA Eligible Certificate, shall be deemed
to have represented that either (i) it is not a Plan or person


                                      S-146



using Plan assets or (ii) the acquisition and holding of the Offered
Certificates are eligible for the exemptive relief available under at least one
of the Investor-Based Exemptions.

     Employee benefit plans that are governmental plans (as defined in section
3(32) of ERISA) and certain church plans (as defined in section 3(33) of ERISA)
are not subject to ERISA requirements. However, such plans may be subject to
applicable provisions of other federal and state laws materially similar to the
provisions of ERISA or the Code.

     Any Plan fiduciary who proposes to cause a Plan to purchase ERISA Eligible
Certificates should consult with its own counsel with respect to the potential
consequences under ERISA and the Code of the Plan's acquisition and ownership of
ERISA Eligible Certificates. Assets of a Plan should not be invested in the
ERISA Eligible Certificates unless it is clear that the assets of the trust fund
will not be plan assets or unless it is clear that the Exemption and, as long as
the interest rate swap agreement is in effect, one or more of the Investor-Based
Exemptions will apply and exempt all potential prohibited transactions.

                                LEGAL INVESTMENT

     None of the Offered Certificates will constitute "mortgage related
securities" for purposes of the Secondary Mortgage Market Enhancement Act of
1984, as amended and, as a result, the appropriate characterization of the
Offered Certificates under various legal investment restrictions, and the
ability of investors subject to these restrictions to purchase the Offered
Certificates, are subject to significant interpretive uncertainties.

     No representations are made as to the proper characterization of the
Offered Certificates for legal investment, financial institution regulatory, or
other purposes, or as to the ability of particular investors to purchase the
Offered Certificates under applicable legal investment restrictions. The
uncertainties described above (and any unfavorable future determinations
concerning the legal investment or financial institution regulatory
characteristics of the Offered Certificates) may adversely affect the liquidity
of the Offered Certificates.

     All investors whose investment activities are subject to legal investment
laws and regulations, regulatory capital requirements, or review by regulatory
authorities should consult with their own legal advisors in determining whether
and to what extent the Offered Certificates will constitute legal investments
for them or are subject to investment, capital, or other restrictions.

     See "Legal Investment" in the prospectus.


                                      S-147



                              PLAN OF DISTRIBUTION

     Subject to the terms and conditions of the underwriting agreement, dated
October 26, 2005, between the depositor and the underwriters, the depositor has
agreed to sell to the underwriters and the underwriters have agreed severally to
purchase from the depositor the Offered Certificates in the respective principal
amounts set forth under their names below:



                              PRINCIPAL     PRINCIPAL     PRINCIPAL     PRINCIPAL    PRINCIPAL    PRINCIPAL    PRINCIPAL
                              AMOUNT OF     AMOUNT OF     AMOUNT OF     AMOUNT OF    AMOUNT OF    AMOUNT OF    AMOUNT OF
        UNDERWRITER           CLASS A-1    CLASS A-2A    CLASS A-2B    CLASS A-2C    CLASS M-1    CLASS M-2    CLASS M-3
--------------------------  ------------  ------------  ------------  ------------  -----------  -----------  -----------

Morgan Stanley & Co.
   Incorporated...........  $439,924,749  $443,620,349  $139,147,765  $110,358,573  $53,352,597  $49,647,611  $31,122,680
Countrywide Securities
   Corporation............            --    17,039,567     5,344,700     4,238,900           --           --           --
Utendahl Capital Partners,
   L.P....................     1,545,251     1,618,084       507,535       402,527      187,403      174,389      109,320
                                          ------------  ------------  ------------  -----------  -----------  -----------
Total.....................  $441,470,000  $462,278,000  $145,000,000  $115,000,000  $53,540,000  $49,822,000  $31,232,000
                                          ============  ============  ============  ===========  ===========  ===========




                             PRINCIPAL    PRINCIPAL    PRINCIPAL    PRINCIPAL    PRINCIPAL    PRINCIPAL
                             AMOUNT OF    AMOUNT OF    AMOUNT OF    AMOUNT OF    AMOUNT OF    AMOUNT OF
        UNDERWRITER          CLASS M-4    CLASS M-5    CLASS M-6    CLASS B-1    CLASS B-2    CLASS B-3
--------------------------  -----------  -----------  -----------  -----------  -----------  -----------

Morgan Stanley & Co.
   Incorporated...........  $26,676,299  $24,453,108  $22,971,312  $20,748,121  $19,265,330  $15,561,340
Countrywide Securities
   Corporation............           --           --           --           --           --           --
Utendahl Capital Partners,
   L.P....................       93,701       85,892       80,688       72,879       67,670       54,660
                            -----------  -----------  -----------  -----------  -----------  -----------
Total.....................  $26,770,000  $24,539,000  $23,052,000  $20,821,000  $19,333,000  $15,616,000
                            ===========  ===========  ===========  ===========  ===========  ===========


     The depositor is obligated to sell, and the underwriters are obligated to
purchase, all of the certificates offered under this prospectus supplement if
any are purchased.

     The underwriters have advised the depositor that they propose to offer the
Offered Certificates purchased by the underwriters for sale from time to time in
one or more negotiated transactions or otherwise, at market prices prevailing at
the time of sale, at prices related to such market prices or at negotiated
prices. The underwriters may effect such transactions by selling such
certificates to or through dealers, and such dealers may receive compensation in
the form of underwriting discounts, concessions or commissions from the
underwriter or purchasers of the Offered Certificates for whom they may act as
agent. Any dealers that participate with the underwriters in the distribution of
the Offered Certificates purchased by the underwriters may be deemed to be an
underwriter, and any discounts or commissions received by them or the
underwriters and any profit on the resale of Offered Certificates by them or the
underwriters may be deemed to be underwriting discounts or commissions under the
Securities Act of 1933.

     The depositor has been advised by the underwriters that the underwriters
presently intend to make a market in the Offered Certificates, as permitted by
applicable laws and regulations. The underwriters are not obligated to make a
market in the Offered Certificates and any market making may be discontinued at
any time at the sole discretion of the underwriters. Accordingly, no assurance
can be given as to the liquidity of, or trading markets for, the Offered
Certificates.

     For further information regarding any offer or sale of the Offered
Certificates pursuant to this prospectus supplement and the accompanying
prospectus, see "Method of Distribution" in the prospectus.

     The underwriting agreement provides that the depositor will indemnify the
underwriters or contribute to losses arising out of certain liabilities,
including liabilities under the Securities Act.

     Morgan Stanley & Co. Incorporated is an affiliate of the depositor and the
Swap Provider. Countrywide Securities Corporation is an affiliate of Countrywide
Home Loans Servicing LP, a servicer.

                                  LEGAL MATTERS

     The validity of the certificates and certain federal income tax matters
will be passed upon for the depositor and the underwriters by Cadwalader,
Wickersham & Taft LLP, New York, New York.


                                      S-148



                                     RATINGS

     In order to be issued, the Offered Certificates must be assigned ratings
not lower than the following by S&P, Fitch and Moody's:

CLASS    S&P   FITCH   MOODY'S
-----   ----   -----   -------
 A-1     AAA    AAA      Aaa
A-2a     AAA    AAA      Aaa
A-2b     AAA    AAA      Aaa
A-2c     AAA    AAA      Aaa
 M-1     AA+    AA+      Aa1
 M-2     AA+    AA+      Aa2
 M-3     AA     AA       Aa3
 M-4     AA-    AA-       A1
 M-5     A+     A+        A2
 M-6      A      A        A3
 B-1     A-     A-       Baa1
 B-2    BBB+    BBB+     Baa2
 B-3     BBB    BBB      Baa3

     A securities rating addresses the likelihood of the receipt by a
certificateholder of distributions on the mortgage loans to which they are
entitled by the Final Scheduled Distribution Date. The rating takes into
consideration the characteristics of the mortgage loans and the structural,
legal and tax aspects associated with the certificates. The ratings on the
Offered Certificates do not, however, constitute statements regarding the
likelihood or frequency of prepayments on the mortgage loans, the payment of the
Basis Risk CarryForward Amount or the possibility that a holder of an Offered
Certificate might realize a lower than anticipated yield. Explanations of the
significance of such ratings may be obtained from Standard & Poor's Ratings
Services, 55 Water Street, New York, New York 10041, Fitch, Inc., One State
Street Plaza, New York, New York 10007 and Moody's Investors Service, Inc., 99
Church Street, New York, New York 10007.

     A security rating is not a recommendation to buy, sell or hold securities
and may be subject to revision or withdrawal at any time by the assigning rating
organization. Each security rating should be evaluated independently of any
other security rating. In the event that the ratings initially assigned to any
of the Offered Certificates by S&P, Fitch or Moody's are subsequently lowered
for any reason, no person or entity is obligated to provide any additional
support or credit enhancement with respect to such Offered Certificates.


                                      S-149



                                    GLOSSARY

     The following terms have the meanings given below when used in this
prospectus supplement.

     "ACCRUED CERTIFICATE INTEREST" means, for each class of Offered
Certificates on any distribution date, the amount of interest accrued during the
related Interest Accrual Period on the related Class Certificate Balance
immediately prior to such distribution date at the related Pass-Through Rate, as
reduced by that class's share of net prepayment interest shortfalls and any
shortfalls resulting from the application of the Relief Act, as described in
"Description of the Certificates--Distributions of Interest and Principal" in
this prospectus supplement.

     "ADJUSTMENT DATE" has the meaning set forth in "The Mortgage Loan
Pool--Adjustable Rate Mortgage Loans" in this prospectus supplement.

     "APPLIED REALIZED LOSS AMOUNT" has the meaning set forth in "Description of
the Certificates--Distributions of Interest and Principal" in this prospectus
supplement.

     "AVAILABLE FUNDS" means, with respect to any distribution date, the sum of
the following amounts, to the extent received by the trustee, with respect to
the mortgage loans, net of amounts payable or reimbursable to the depositor, the
servicers, the trustee and the custodians: (i) the aggregate amount of monthly
payments on the mortgage loans due on the related due date and received by the
servicers on or prior to the related Determination Date, after deduction of the
aggregate servicing fee in respect of prior distribution dates and the other
components of the Expense Fee Rate for that distribution date, together with any
related P&I Advance; (ii) certain unscheduled payments in respect of the
mortgage loans received by the servicers during the related Prepayment Period,
including prepayments, Insurance Proceeds, Condemnation Proceeds, Liquidation
Proceeds, excluding Prepayment Premiums; (iii) Compensating Interest payments
from the servicers to the trustee, in respect of net prepayment interest
shortfalls for that distribution date; (iv) the proceeds from repurchases of
mortgage loans, and any Substitution Adjustment Amounts received in connection
with substitutions for mortgage loans, with respect to that distribution date;
and (v) all proceeds received with respect to any optional clean-up call. The
holders of the Class P certificates will be entitled to all Prepayment Premiums
received on the mortgage loans and such amounts will not be part of Available
Funds or available for distribution to the holders of the Offered Certificates.

     "BASIC PRINCIPAL DISTRIBUTION AMOUNT" means, with respect to any
distribution date, the excess of (i) the Principal Remittance Amount for that
distribution date over (ii) the Excess Subordinated Amount, if any, for that
distribution date.

     "BASIS RISK CARRYFORWARD AMOUNT" has the meaning set forth in "Description
of the Certificates--Excess Reserve Fund Account" in this prospectus supplement.

     "BASIS RISK CONTRACT" has the meaning set forth in "Federal Income Tax
Considerations--Taxation of Regular Interests" in this prospectus supplement.

     "BASIS RISK PAYMENT" has the meaning set forth in "Description of the
Certificates--Excess Reserve Fund Account" in this prospectus supplement.

     "CLASS A" means, collectively, the Class A-1, Class A-2a, Class A-2b and
Class A-2c certificates.

     "CLASS A CERTIFICATE GROUP" means either the Group I Class A Certificates
or the Group II Class A Certificates, as applicable.

     "CLASS A PRINCIPAL ALLOCATION PERCENTAGE" for any distribution date is the
percentage equivalent of a fraction, determined as follows:

          (1) with respect to the Group I Class A Certificates, a fraction, the
     numerator of which is the portion of the Principal Remittance Amount for
     that distribution date that is attributable to the principal received or
     advanced on the group I mortgage loans and the denominator of which is the
     Principal Remittance Amount for that distribution date; and


                                      S-150



          (2) with respect to the Group II Class A Certificates, a fraction, the
     numerator of which is the portion of the Principal Remittance Amount for
     that distribution date that is attributable to the principal received or
     advanced on the group II mortgage loans and the denominator of which is the
     Principal Remittance Amount for that distribution date.

     "CLASS A PRINCIPAL DISTRIBUTION AMOUNT" with respect to any distribution
date is the excess of (A) the aggregate Class Certificate Balance of the Class A
certificates immediately prior to that distribution date over (B) the lesser of
(x) approximately 56.50% of the aggregate Stated Principal Balance of the
mortgage loans for that distribution date and (y) the excess, if any, of the
aggregate Stated Principal Balance of the mortgage loans for that distribution
date over $7,436,094.

     "CLASS B" means, collectively, the Class B-1, Class B-2 and Class B-3
certificates.

     "CLASS B-1 PRINCIPAL DISTRIBUTION AMOUNT" with respect to any distribution
date is the excess of (i) the sum of (A) the aggregate Class Certificate
Balances of the Class A certificates (after taking into account the distribution
of the Class A Principal Distribution Amount for that distribution date), (B)
the Class Certificate Balance of the Class M-1 certificates (after taking into
account the distribution of the Class M-1 Principal Distribution Amount for that
distribution date), (C) the Class Certificate Balance of the Class M-2
certificates (after taking into account the distribution of the Class M-2
Principal Distribution Amount for that distribution date), (D) the Class
Certificate Balance of the Class M-3 certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for that
distribution date), (E) the Class Certificate Balance of the Class M-4
certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for that distribution date), (F) the Class
Certificate Balance of the Class M-5 certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for that
distribution date), (G) the Class Certificate Balance of the Class M-6
certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for that distribution date), and (H) the Class
Certificate Balance of the Class B-1 certificates immediately prior to that
distribution date over (ii) the lesser of (A) approximately 87.40% of the
aggregate Stated Principal Balance of the mortgage loans for that distribution
date and (B) the excess, if any, of the aggregate Stated Principal Balance of
the mortgage loans for that distribution date over $7,436,094.

     "CLASS B-2 PRINCIPAL DISTRIBUTION AMOUNT" with respect to any distribution
date is the excess of (i) the sum of (A) the aggregate Class Certificate
Balances of the Class A certificates (after taking into account the distribution
of the Class A Principal Distribution Amount for that distribution date), (B)
the Class Certificate Balance of the Class M-1 certificates (after taking into
account the distribution of the Class M-1 Principal Distribution Amount for that
distribution date), (C) the Class Certificate Balance of the Class M-2
certificates (after taking into account the distribution of the Class M-2
Principal Distribution Amount for that distribution date), (D) the Class
Certificate Balance of the Class M-3 certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for that
distribution date), (E) the Class Certificate Balance of the Class M-4
certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for that distribution date), (F) the Class
Certificate Balance of the Class M-5 certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for that
distribution date), (G) the Class Certificate Balance of the Class M-6
certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for that distribution date), (H) the Class
Certificate Balance of the Class B-1 certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for that
distribution date), and (I) the Class Certificate Balance of the Class B-2
certificates immediately prior to that distribution date over (ii) the lesser of
(A) approximately 90.00% of the aggregate Stated Principal Balance of the
mortgage loans for that distribution date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the mortgage loans for that distribution
date over $7,436,094.

     "CLASS B-3 PRINCIPAL DISTRIBUTION AMOUNT" with respect to any distribution
date is the excess of (i) the sum of (A) the aggregate Class Certificate
Balances of the Class A certificates (after taking into account the distribution
of the Class A Principal Distribution Amount for that distribution date), (B)
the Class Certificate Balance of the Class M-1 certificates (after taking into
account the distribution of the Class M-1 Principal Distribution Amount for that
distribution date), (C) the Class Certificate Balance of the Class M-2
certificates (after taking into account the distribution of the Class M-2
Principal Distribution Amount for that distribution date), (D) the Class
Certificate Balance of the Class M-3 certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for that
distribution date), (E) the Class Certificate Balance of the Class M-4
certificates (after


                                      S-151



taking into account the distribution of the Class M-4 Principal Distribution
Amount for that distribution date), (F) the Class Certificate Balance of the
Class M-5 certificates (after taking into account the distribution of the Class
M-5 Principal Distribution Amount for that distribution date), (G) the Class
Certificate Balance of the Class M-6 certificates (after taking into account the
distribution of the Class M-6 Principal Distribution Amount for that
distribution date), (H) the Class Certificate Balance of the Class B-1
certificates (after taking into account the distribution of the Class B-1
Principal Distribution Amount for that distribution date), (I) the Class
Certificate Balance of the Class B-2 certificates (after taking into account the
distribution of the Class B-2 Principal Distribution Amount for that
distribution date), and (J) the Class Certificate Balance of the Class B-3
certificates immediately prior to that distribution date over (ii) the lesser of
(A) approximately 92.10% of the aggregate Stated Principal Balance of the
mortgage loans for that distribution date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the mortgage loans for that distribution
date over $7,436,094.

     "CLASS CERTIFICATE BALANCE" means, with respect to any class of Offered
Certificates as of any distribution date, the aggregate principal amount of that
class upon initial issuance on the closing date reduced by the sum of (i) all
amounts previously distributed to holders of certificates of that class as
distributions of principal and (ii) in the case of any class of Class M or Class
B certificates, the amount of any Applied Realized Loss Amounts previously
allocated to that class of Class M or Class B certificates; provided, however,
that immediately following the distribution date on which a Subsequent Recovery
is distributed, the Class Certificate Balance of any class or classes of
certificates that have been previously reduced by Applied Realized Loss Amounts
will be increased, in order of seniority, by the amount of any Subsequent
Recoveries distributed on that distribution date (up to the amount of the Unpaid
Realized Loss Amount for such class or classes for that distribution date).

     "CLASS M" means, collectively, the Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class M-6 certificates.

     "CLASS M ENHANCEMENT PERCENTAGE" means, for any distribution date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balances of the Class M and Class B certificates (other than the
Class M-1 certificates) and (ii) the Subordinated Amount, in each case after
taking into account the distributions of the related Principal Distribution
Amount and any principal payments on those classes of certificates from the Swap
Account on that distribution date, by (y) the aggregate Stated Principal Balance
of the mortgage loans for that distribution date.

     "CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT" with respect to any distribution
date is the excess of (i) the sum of (A) the aggregate Class Certificate
Balances of the Class A certificates (after taking into account the distribution
of the Class A Principal Distribution Amount for that distribution date) and (B)
the Class Certificate Balance of the Class M-1 certificates immediately prior to
that distribution date over (ii) the lesser of (A) approximately 63.70% of the
aggregate Stated Principal Balance of the mortgage loans for that distribution
date and (B) the excess, if any, of the aggregate Stated Principal Balance of
the mortgage loans for that distribution date over $7,436,094.

     "CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT" with respect to any distribution
date is the excess of (i) the sum of (A) the aggregate Class Certificate
Balances of the Class A certificates (after taking into account the distribution
of the Class A Principal Distribution Amount for that distribution date), (B)
the Class Certificate Balance of the Class M-1 certificates (after taking into
account the distribution of the Class M-1 Principal Distribution Amount for that
distribution date) and (C) the Class Certificate Balance of the Class M-2
certificates immediately prior to that distribution date over (ii) the lesser of
(A) approximately 70.40% of the aggregate Stated Principal Balance of the
mortgage loans for that distribution date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the mortgage loans for that distribution
date over $7,436,094.

     "CLASS M-3 PRINCIPAL DISTRIBUTION AMOUNT" with respect to any distribution
date is the excess of (i) the sum of (A) the aggregate Class Certificate
Balances of the Class A certificates (after taking into account the distribution
of the Class A Principal Distribution Amount for that distribution date), (B)
the Class Certificate Balance of the Class M-1 certificates (after taking into
account the distribution of the Class M-1 Principal Distribution Amount for that
distribution date), (C) the Class Certificate Balance of the Class M-2
certificates (after taking into account the distribution of the Class M-2
Principal Distribution Amount for that distribution date) and (D) the Class
Certificate Balance of the Class M-3 certificates immediately prior to that
distribution date over (ii) the lesser of (A) approximately 74.60% of the
aggregate Stated Principal Balance of the mortgage loans for that distribution
date


                                      S-152



and (B) the excess, if any, of the aggregate Stated Principal Balance of the
mortgage loans for that distribution date over $7,436,094.

     "CLASS M-4 PRINCIPAL DISTRIBUTION AMOUNT" with respect to any distribution
date is the excess of (i) the sum of (A) the aggregate Class Certificate
Balances of the Class A certificates (after taking into account the distribution
of the Class A Principal Distribution Amount for that distribution date), (B)
the Class Certificate Balance of the Class M-1 certificates (after taking into
account the distribution of the Class M-1 Principal Distribution Amount for that
distribution date), (C) the Class Certificate Balance of the Class M-2
certificates (after taking into account the distribution of the Class M-2
Principal Distribution Amount for that distribution date), (D) the Class
Certificate Balance of the Class M-3 certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for that
distribution date) and (E) the Class Certificate Balance of the Class M-4
certificates immediately prior to that distribution date over (ii) the lesser of
(A) approximately 78.20% of the aggregate Stated Principal Balance of the
mortgage loans for that distribution date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the mortgage loans for that distribution
date over $7,436,094.

     "CLASS M-5 PRINCIPAL DISTRIBUTION AMOUNT" with respect to any distribution
date is the excess of (i) the sum of (A) the aggregate Class Certificate
Balances of the Class A certificates (after taking into account the distribution
of the Class A Principal Distribution Amount for that distribution date), (B)
the Class Certificate Balance of the Class M-1 certificates (after taking into
account the distribution of the Class M-1 Principal Distribution Amount for that
distribution date), (C) the Class Certificate Balance of the Class M-2
certificates (after taking into account the distribution of the Class M-2
Principal Distribution Amount for that distribution date), (D) the Class
Certificate Balance of the Class M-3 certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for that
distribution date), (E) the Class Certificate Balance of the Class M-4
certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for that distribution date) and (F) the Class
Certificate Balance of the Class M-5 certificates immediately prior to that
distribution date over (ii) the lesser of (A) approximately 81.50% of the
aggregate Stated Principal Balance of the mortgage loans for that distribution
date and (B) the excess, if any, of the aggregate Stated Principal Balance of
the mortgage loans for that distribution date over $7,436,094.

     "CLASS M-6 PRINCIPAL DISTRIBUTION AMOUNT" with respect to any distribution
date is the excess of (i) the sum of (A) the aggregate Class Certificate
Balances of the Class A certificates (after taking into account the distribution
of the Class A Principal Distribution Amount for that distribution date), (B)
the Class Certificate Balance of the Class M-1 certificates (after taking into
account the distribution of the Class M-1 Principal Distribution Amount for that
distribution date), (C) the Class Certificate Balance of the Class M-2
certificates (after taking into account the distribution of the Class M-2
Principal Distribution Amount for that distribution date), (D) the Class
Certificate Balance of the Class M-3 certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for that
distribution date), (E) the Class Certificate Balance of the Class M-4
certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for that distribution date), (F) the Class
Certificate Balance of the Class M-5 certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for that
distribution date) and (G) the Class Certificate Balance of the Class M-6
certificates immediately prior to that distribution date over (ii) the lesser of
(A) approximately 84.60% of the aggregate Stated Principal Balance of the
mortgage loans for that distribution date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the mortgage loans for that distribution
date over $7,436,094.

     "CODE" has the meaning set forth in "Federal Income Tax Considerations" in
this prospectus supplement.

     "COMPENSATING INTEREST" has the meaning set forth in "The Pooling and
Servicing Agreement--Prepayment Interest Shortfalls" in this prospectus
supplement.

     "CONDEMNATION PROCEEDS" means all awards or settlements in respect of a
mortgaged property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.

     "COUNTRYWIDE" has the meaning set forth in "The Servicers--Countrywide Home
Loans Servicing LP" in this prospectus supplement.

     "COUNTRYWIDE HOME LOANS" has the meaning set forth in "The
Servicers--Countrywide Home Loans Servicing LP" in this prospectus supplement.


                                      S-153



     "CREDIT SCORES" has the meaning set forth in "The Mortgage Loan
Pool--Credit Scores" in this prospectus supplement.

     "CUMULATIVE LOSS TRIGGER EVENT" with respect to any distribution date means
the circumstances in which the aggregate amount of Realized Losses incurred
since the cut-off date through the last day of the related Prepayment Period
divided by the aggregate Stated Principal Balance of the mortgage loans as of
the cut-off date exceeds the applicable cumulative loss percentages described
below with respect to such distribution date:



  DISTRIBUTION DATE OCCURRING IN                       CUMULATIVE LOSS PERCENTAGE
----------------------------------   --------------------------------------------------------------

November 2007 through October 2008   1.500% for the first month, plus an additional 1/12th of 1.85%
                                     for each month thereafter (e.g., 2.425% in May 2008)

November 2008 through October 2009   3.350% for the first month, plus an additional 1/12th of 1.90%
                                     for each month thereafter (e.g., 4.300% in May 2009)

November 2009 through October 2010   5.250% for the first month, plus an additional 1/12th of 1.50%
                                     for each month thereafter (e.g., 6.000% in May 2010)

November 2010 through October 2011   6.750% for the first month, plus an additional 1/12th of 0.75%
                                     for each month thereafter (e.g., 7.125% in May 2011)

November 2011 and thereafter         7.500%


     "DECISION ONE MORTGAGE" has the meaning set forth in "The Mortgage Loan
Pool--Underwriting Guidelines" in this prospectus supplement.

     "DECISION ONE UNDERWRITING GUIDELINES" has the meaning set forth in "The
Mortgage Loan Pool--Underwriting Guidelines" in this prospectus supplement.

     "DEFAULTED SWAP TERMINATION PAYMENT" has the meaning set forth in
"Description of the Certificates--Interest Rate Swap Agreement" in this
prospectus supplement.

     "DELINQUENCY TRIGGER EVENT" means (1) with respect to any distribution date
until the aggregate Class Certificate Balance of the Class A certificates has
been reduced to zero, the circumstances in which the quotient (expressed as a
percentage) of (x) the rolling three month average of the aggregate unpaid
principal balance of mortgage loans that are 60 days or more Delinquent
(including mortgage loans in foreclosure and mortgage loans related to REO
property) and (y) the aggregate unpaid principal balance of the mortgage loans,
as of the last day of the related Due Period, equals or exceeds (z) 36.75% of
the prior period's Senior Enhancement Percentage and (2) with respect to any
distribution date on or after the distribution date on which aggregate Class
Certificate Balance of the Class A certificates has been reduced to zero, the
circumstances in which the quotient (expressed as a percentage) of (x) the
rolling three month average of the aggregate unpaid principal balance of
mortgage loans that are 60 days or more Delinquent (including mortgage loans in
foreclosure and mortgage loans related to REO property) and (y) the aggregate
unpaid principal balance of the mortgage loans, as of the last day of the
related Due Period, equals or exceeds (z) 44.00% of the prior period's Class M
Enhancement Percentage.

     "DELINQUENT," with respect to any mortgage loan, means any monthly payment
due on a due date that is not made by the close of business on the next
scheduled due date for that mortgage loan.

     "DETERMINATION DATE" means, with respect to each distribution date, the
18th day (or if that day is not a business day, the immediately preceding
business day) in the calendar month in which that distribution date occurs.

     "DOL" has the meaning set forth in "ERISA Considerations" in this
prospectus supplement.

     "DOWNGRADE TERMINATING EVENT" has the meaning set forth in "Description of
the Certificates--Interest Rate Swap Agreement" in this prospectus supplement.

     "DUE PERIOD" means, with respect to any distribution date, the period
commencing on the second day of the calendar month preceding the month in which
that distribution date occurs and ending on the first day of the calendar month
in which that distribution date occurs.


                                      S-154



     "ERISA" has the meaning set forth in "ERISA Considerations" in this
prospectus supplement.

     "EXCESS RESERVE FUND ACCOUNT" has the meaning set forth in "Description of
the Certificates--Excess Reserve Fund Account" in this prospectus supplement.

     "EXCESS SUBORDINATED AMOUNT" is described in "Description of the
Certificates--Overcollateralization Provisions" in this prospectus supplement.

     "EXEMPTION" has the meaning set forth in "ERISA Considerations" in this
prospectus supplement.

     "EXPENSE FEE RATE" means, with respect to any mortgage loan, a per annum
rate equal to the sum of the servicing fee rate, the trustee fee rate and the
lender-paid mortgage insurance rate, if any. The Expense Fee Rate is not
expected to exceed 0.52%. See "The Pooling and Servicing Agreement--Servicing
and Trustee Fees and Other Compensation and Payment of Expenses" in this
prospectus supplement.

     "EXTRA PRINCIPAL DISTRIBUTION AMOUNT" means, as of any distribution date,
the lesser of (x) the related Total Monthly Excess Spread for that distribution
date and (y) the related Subordination Deficiency for that distribution date.

     "FINAL SCHEDULED DISTRIBUTION DATE" has the meaning set forth in
"Prepayment and Yield Considerations--Final Scheduled Distribution Date" in this
prospectus supplement.

     "FITCH" has the meaning set forth in "Transaction Overview--Parties--The
Rating Agencies" in this prospectus supplement.

     "GROSS MARGIN" has the meaning set forth in "The Mortgage Loan
Pool--Adjustable Rate Mortgage Loans" in this prospectus supplement.

     "GROUP I CLASS A CERTIFICATES" means the Class A-1 certificates,
collectively.

     "GROUP I LOAN CAP" has the meaning set forth in "Description of the
Certificates--Distributions of Interest and Principal" in this prospectus
supplement.

     "GROUP II CLASS A CERTIFICATES" means the Class A-2a, Class A-2b and Class
A-2c certificates, collectively.

     "GROUP II LOAN CAP" has the meaning set forth in "Description of the
Certificates--Distributions of Interest and Principal" in this prospectus
supplement.

     "HOMEQ" has the meaning set forth in "The Servicers--HomEq Servicing
Corporation" in this prospectus supplement.

     "INITIAL CAP" has the meaning set forth in "The Mortgage Loan
Pool--Adjustable Rate Mortgage Loans" in this prospectus supplement.

     "INSURANCE PROCEEDS" means, with respect to each mortgage loan, proceeds of
insurance policies insuring the mortgage loan or the related mortgaged property.

     "INTEREST ACCRUAL PERIOD" means, for any distribution date, the period
commencing on the immediately preceding distribution date (or, for the initial
distribution date, the closing date) and ending on the day immediately preceding
the current distribution date.

     "INTEREST REMITTANCE AMOUNT" means, with respect to any distribution date
and the mortgage loans in a loan group, that portion of Available Funds
attributable to interest relating to mortgage loans in that loan group.

     "INVESTOR-BASED EXEMPTIONS" has the meaning set forth in "ERISA
Considerations" in this prospectus supplement.

     "IRS" means the Internal Revenue Service.


                                      S-155



     "JPMORGAN" has the meaning set forth in "The Servicers--General" in this
prospectus supplement.

     "LIBOR DETERMINATION DATE" means, with respect to any Interest Accrual
Period for the Offered Certificates, the second London business day preceding
the commencement of that Interest Accrual Period. For purposes of determining
One-Month LIBOR, a "London business day" is any day on which dealings in
deposits of United States dollars are transacted in the London interbank market.

     "LIQUIDATION PROCEEDS" means any cash received in connection with the
liquidation of a defaulted mortgage loan, whether through a trustee's sale,
foreclosure sale or otherwise, including any Subsequent Recoveries.

     "LOAN INDEX" has the meaning set forth in "The Mortgage Loan Pool--The
Index" in this prospectus supplement.

     "MAXIMUM RATE" has the meaning set forth in "The Mortgage Loan
Pool--Adjustable Rate Mortgage Loans" in this prospectus supplement.

     "MINIMUM RATE" has the meaning set forth in "The Mortgage Loan
Pool--Adjustable Rate Mortgage Loans" in this prospectus supplement.

     "MOODY'S" has the meaning set forth in "Transaction Overview--Parties--The
Rating Agencies" in this prospectus supplement.

     "MSMC" means Morgan Stanley Mortgage Capital Inc.

     "NC CAPITAL" has the meaning set forth in "The Mortgage Loan
Pool--Underwriting Guidelines" in this prospectus supplement.

     "NET INTEREST MARGIN SECURITIES" has the meaning set forth in "The Pooling
and Servicing Agreement--Termination; Optional Clean-up Call" in this prospectus
supplement.

     "NET MONTHLY EXCESS CASH FLOW" has the meaning set forth in "Description of
the Certificates--Overcollateralization Provisions" in this prospectus
supplement.

     "NET SWAP PAYMENT" has the meaning set forth in "Description of the
Certificates--Interest Rate Swap Agreement" in this prospectus supplement.

     "NET SWAP RECEIPT" has the meaning set forth in "Description of the
Certificates--Interest Rate Swap Agreement" in this prospectus supplement.

     "NEW CENTURY UNDERWRITING GUIDELINES" has the meaning set forth in "The
Mortgage Loan Pool--Underwriting Guidelines" in this prospectus supplement.

     "OFFERED CERTIFICATES" has the meaning set forth in "Description of the
Certificates" in this prospectus supplement.

     "OID" has the meaning set forth in "Federal Income Tax Considerations" in
this prospectus supplement.

     "ONE-MONTH LIBOR" means, as of any LIBOR Determination Date, the London
interbank offered rate for one-month United States dollar deposits which appears
in the Telerate Page 3750 as of 11:00 a.m., London time, on that date. If the
rate does not appear on Telerate Page 3750, the rate for that day will be
determined on the basis of the rates at which deposits in United States dollars
are offered by the Reference Banks at approximately 11:00 a.m. (London time), on
that day to prime banks in the London interbank market. The trustee will be
required to request the principal London office of each of the Reference Banks
to provide a quotation of its rate. If at least two quotations are provided, the
rate for that day will be the arithmetic mean of the quotations (rounded upwards
if necessary to the nearest whole multiple of 1/16%). If fewer than two
quotations are provided as requested, the rate for that day will be the
arithmetic mean of the rates quoted by major banks in New York City, selected by
the trustee, after consultation with the depositor, at approximately 11:00 a.m.
(New York City time) on that day for loans in United States dollars to leading
European banks.


                                      S-156



     "P&I ADVANCES" means advances made by the related servicer on each Servicer
Remittance Date with respect to delinquent payments of interest and/or principal
on the mortgage loans, less the servicing fee.

     "PASS-THROUGH RATE" has the meaning set forth in "Description of
Certificates--Distributions of Interest and Principal" in this prospectus
supplement.

     "PERIODIC CAP" has the meaning set forth in "The Mortgage Loan
Pool--Adjustable Rate Mortgage Loans" in this prospectus supplement.

     "PLAN" has the meaning set forth in "ERISA Considerations" in this
prospectus supplement.

     "PREPAYMENT INTEREST EXCESSES" has the meaning set forth in "The Pooling
and Servicing Agreement--Prepayment Interest Shortfalls" in this prospectus
supplement.

     "PREPAYMENT PERIOD" means, with respect to any distribution date:

     o    in the case of any mortgage loan serviced by HomEq, either (i) the
          period commencing on the 16th day of the month preceding the month in
          which such distribution date occurs (or in the case of the first
          distribution date, commencing on the cut-off date) and ending on the
          15th day of the month in which that distribution date occurs, with
          respect to any voluntary principal prepayments in full, or (ii) the
          calendar month prior to that distribution date, with respect to
          voluntary partial principal prepayments or any involuntary principal
          prepayments, or

     o    in the case of all other mortgage loans, the calendar month preceding
          the month in which that distribution date occurs.

     "PREPAYMENT PREMIUM" has the meaning set forth in "The Mortgage Loan
Pool--Prepayment Premiums" in this prospectus supplement.

     "PRINCIPAL DISTRIBUTION AMOUNT" has the meaning set forth in "Description
of the Certificates--Distributions of Interest and Principal" in this prospectus
supplement.

     "PRINCIPAL REMITTANCE AMOUNT" means, with respect to any distribution date,
to the extent of funds available for distribution as described in this
prospectus supplement, the amount equal to the sum of the following amounts
(without duplication) with respect to the related Due Period: (i) each scheduled
payment of principal on a mortgage loan due during the related Due Period and
received by the applicable servicer on or prior to the related Determination
Date or advanced by the applicable servicer for the related Servicer Remittance
Date; (ii) all full and partial principal prepayments received during the
related Prepayment Period; (iii) all net Liquidation Proceeds, Condemnation
Proceeds and Insurance Proceeds on the mortgage loans allocable to principal and
received during the related Prepayment Period; (iv) the portion allocable to
principal of proceeds of repurchases of mortgage loans with respect to that
distribution date; (v) all Substitution Adjustment Amounts allocable to
principal received in connection with the substitution of any mortgage loan as
of that distribution date; and (vi) the allocable portion of the proceeds
received with respect to any optional clean-up call (to the extent they relate
to principal).

     "PTE" has the meaning set forth in "ERISA Considerations" in this
prospectus supplement.

     "RATING AGENCY CONDITION" means, with respect to any action to which a
Rating Agency Condition applies, that each rating agency shall have been given
ten days (or such shorter period as is acceptable to each rating agency) prior
notice of that action and that each of the rating agencies shall have notified
the trustee, the servicers, the depositor and the trust in writing that such
action will not result in a reduction, qualification or withdrawal of the then
current rating of the certificates that it maintains.

     "REALIZED LOSS" is the excess of the scheduled principal balance of a
defaulted mortgage loan over the net liquidation proceeds with respect thereto
that are allocated to principal.

     "RECORD DATE" means, with respect to the Offered Certificates, the business
day immediately preceding the related distribution date, unless the Offered
Certificates are issued in definitive form, in which case the Record Date will
be the last business day of the calendar month immediately preceding the related
distribution date.


                                      S-157



     "REFERENCE BANKS" means leading banks selected by the trustee, after
consultation with the depositor, and engaged in transactions in Eurodollar
deposits in the international Eurocurrency market.

     "REGULAR INTEREST" has the meaning set forth in "Federal Income Tax
Considerations--Taxation of Regular Interests" in this prospectus supplement.

     "RELIEF ACT" means the Servicemembers Civil Relief Act and any similar
state statutes.

     "REQUIRED SWAP COUNTERPARTY RATING" means, with respect to a counterparty
or entity guaranteeing the obligations of such counterparty, (x) either (i) if
such counterparty or entity has only a long-term rating by Moody's, a long-term
senior, unsecured debt obligation rating, credit rating or other similar rating
(as the case may be, the "Long-Term Rating") of at least "Aa3" by Moody's and if
rated "Aa3" by Moody's is not on negative credit watch by Moody's or (ii) if
such counterparty or entity has a Long-Term Rating and a short-term rating by
Moody's, a Long-Term Rating of at least "A1" by Moody's and a short-term rating
of "P-1" by Moody's and, in each case, such rating is not on negative credit
watch by Moody's, (y) (i) a short-term rating of at least "A-1" by S&P or (ii)
if such counterparty or entity does not have a short-term rating by S&P, a
Long-Term Rating of at least "A+" by S&P and (z) (i) short-term rating of at
least "F1" by Fitch or (ii) if such counterparty or entity does not have a
short-term rating by Fitch, a Long-Term Rating of at least "A+" by Fitch.

     "RESTRICTED GROUP" has the meaning set forth in "ERISA Considerations" in
this prospectus supplement.

     "S&P" has the meaning set forth in "Transaction Overview--Parties--The
Rating Agencies" in this prospectus supplement.

     "SENIOR ENHANCEMENT PERCENTAGE" means, for any distribution date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balances of the Class M and Class B certificates and (ii) the
Subordinated Amount, in each case after taking into account the distributions of
the related Principal Distribution Amount and any principal payments on those
classes of certificates from the Swap Account on that distribution date, by (y)
the aggregate Stated Principal Balance of the mortgage loans for that
distribution date.

     "SENIOR SPECIFIED ENHANCEMENT PERCENTAGE" on any date of determination is
approximately 43.50%.

     "SERVICER REMITTANCE DATE" will be the second business day immediately
preceding each distribution date.

     "SPECIFIED SUBORDINATED AMOUNT" means, prior to the Stepdown Date, an
amount equal to 3.95% of the aggregate Stated Principal Balance of the mortgage
loans as of the cut-off date. On and after the Stepdown Date, an amount equal to
7.90% of the aggregate Stated Principal Balance of the mortgage loans for that
distribution date, subject, until the Class Certificate Balance of each class of
Offered Certificates has been reduced to zero, to a minimum amount equal to
0.50% of the aggregate Stated Principal Balance of the mortgage loans as of the
cut-off date; provided, however, that if, on any distribution date, a Trigger
Event exists, the Specified Subordinated Amount will not be reduced to the
applicable percentage of the then aggregate Stated Principal Balance of the
mortgage loans, but instead will remain the same as the prior period's Specified
Subordinated Amount until the distribution date on which a Trigger Event no
longer exists . When the Class Certificate Balance of each class of Offered
Certificates has been reduced to zero, the Specified Subordinated Amount will
thereafter equal zero.

     "STATED PRINCIPAL BALANCE" means, as to any mortgage loan and as of any
date of determination, (i) the principal balance of the mortgage loan at the
cut-off date after giving effect to payments of principal due on or before such
date, minus (ii) all amounts previously remitted to the trustee with respect to
the related mortgage loan representing payments or recoveries of principal,
including advances in respect of scheduled payments of principal. For purposes
of any distribution date, the Stated Principal Balance of any mortgage loan will
give effect to any scheduled payments of principal received by the servicer on
or prior to the related Determination Date or advanced by the servicer for the
related Servicer Remittance Date and any unscheduled principal payments and
other unscheduled principal collections received during the related Prepayment
Period, and the Stated Principal Balance of any mortgage loan that has prepaid
in full or has been liquidated during the related Prepayment Period will be
zero.

     "STEPDOWN DATE" means the later to occur of (i) the earlier to occur of (a)
the distribution date in November 2008 and (b) the distribution date following
the distribution date on which the aggregate Class Certificate


                                      S-158



Balances of the Class A certificates have been reduced to zero and (ii) the
first distribution date on which the Senior Enhancement Percentage (calculated
for this purpose only after taking into account payments of principal applied to
reduce the Stated Principal Balance of the mortgage loans for that distribution
date but prior to any allocation of the Principal Distribution Amount and
principal payments from the Swap Account to the certificates on that
distribution date) is greater than or equal to the Senior Specified Enhancement
Percentage.

     "SUBORDINATED AMOUNT" is described in "Description of the
Certificates--Overcollateralization Provisions" in this prospectus supplement.

     "SUBORDINATED CERTIFICATES" means any of the Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class B-1, Class B-2 or Class B-3
certificates.

     "SUBORDINATION DEFICIENCY" has the meaning set forth in "Description of the
Certificates--Overcollateralization Provisions" in this prospectus supplement.

     "SUBORDINATION REDUCTION AMOUNT" is described in "Description of the
Certificates--Overcollateralization Provisions" in this prospectus supplement.

     "SUBSEQUENT RECOVERY" has the meaning set forth in "Description of the
Certificates--Distributions of Interest and Principal" in this prospectus
supplement.

     "SUBSTITUTE MORTGAGE LOAN" means a mortgage loan substituted by the
applicable original loan seller for a mortgage loan that is in breach of the
applicable original loan seller, its representations and warranties regarding
the mortgage loans or with respect to which a document defect exists, which
must, on the date of such substitution (i) have a principal balance, after
deduction of the principal portion of the scheduled payment due in the month of
substitution, not in excess of, and not more than 10% less than, the outstanding
principal balance of the mortgage loan in breach; (ii) be accruing interest at a
rate no lower than and not more than 1% per annum higher than, that of the
mortgage loan in breach; (iii) have a loan-to-value ratio no higher than that of
the mortgage loan in breach; (iv) have a remaining term to maturity no greater
than (and not more than one year less than that of) the mortgage loan in breach;
and (v) comply with each representation and warranty made by the applicable
original loan seller.

     "SUBSTITUTION ADJUSTMENT AMOUNT" has the meaning set forth in "Description
of the Certificates--Representations and Warranties Relating to the Mortgage
Loans" in this prospectus supplement.

     "SUBSTITUTION EVENT" has the meaning set forth in "Description of the
Certificates--Interest Rate Swap Agreement" in this prospectus supplement.

     "SWAP ACCOUNT" has the meaning set forth in "Description of the
Certificates--Swap Account" in this prospectus supplement.

     "SWAP PAYMENT ALLOCATION" has the meaning set forth in "Description of the
Certificates--Swap Account" in this prospectus supplement.

     "SWAP PAYMENT RATE" has the meaning set forth in "Description of the
Certificates--Distributions of Interest and Principal" in this prospectus
supplement.

     "SWAP PROVIDER" has the meaning set forth in "Description of the
Certificates--Interest Rate Swap Agreement" in this prospectus supplement.

     "SWAP TERMINATION PAYMENT" has the meaning set forth in "Description of the
Certificates--Interest Rate Swap Agreement" in this prospectus supplement.

     "TELERATE PAGE 3750" means the display page currently so designated on the
Bridge Telerate Service (or any other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).

     "TOTAL MONTHLY EXCESS SPREAD" as to any distribution date equals the
excess, if any, of (x) the interest on the mortgage loans received by the
servicers on or prior to the related Determination Date (exclusive of Prepayment
Interest Excesses) or advanced by the servicers for the related Servicer
Remittance Date, net of the aggregate


                                      S-159



servicing fee and the expenses used to determine the Expense Fee Rate, over (y)
the sum of (a) the amounts paid to the classes of certificates pursuant to
clause (i) under the eighth full paragraph of "Description of the
Certificates--Distributions of Interest and Principal" in this prospectus
supplement and (b) any Net Swap Payments to the Swap Provider.

     "TRIGGER EVENT" means either a Cumulative Loss Trigger Event or a
Delinquency Trigger Event.

     "TRUST REMIC" has the meaning set forth in "Federal Income Tax
Considerations--General" in this prospectus supplement.

     "UNPAID INTEREST AMOUNT" for any class of certificates and any distribution
date will equal the sum of (a) the portion of Accrued Certificate Interest from
distribution dates prior to the current distribution date remaining unpaid
immediately prior to the current distribution date, and (b) interest on the
amount in clause (a) above at the applicable Pass-Through Rate (to the extent
permitted by applicable law).

     "UNPAID REALIZED LOSS AMOUNT" means, with respect to any class of Class M
or Class B certificates and as to any distribution date, the excess of (i)
Applied Realized Loss Amounts with respect to that class over (ii) the sum of
(a) all distributions in reduction of Applied Realized Loss Amounts on all
previous distribution dates, and (b) the amount by which the Class Certificate
Balance of such class has been increased due to the distribution of any
Subsequent Recoveries on all previous distribution dates. Any amounts
distributed to a class of Subordinated Certificates in respect of any Unpaid
Realized Loss Amount will not be applied to reduce the Class Certificate Balance
of that class.

     "WAC CAP" has the meaning set forth in "Description of the
Certificates--Distributions of Interest and Principal" in this prospectus
supplement.

     "WMC" has the meaning set forth in "The Mortgage Loan Pool--Underwriting
Guidelines" in this prospectus supplement.


                                      S-160



                                     ANNEX I

           CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS

     A holder that is not a "United States person" (a "U.S. person") within the
meaning of Section 7701(a)(30) of the Internal Revenue Code (a "non-U.S.
holder") holding a book-entry certificate through Clearstream, societe anonyme,
Euroclear or DTC may be subject to U.S. withholding tax unless such holder
provides certain documentation to the issuer of such holder's book-entry
certificate, the paying agent or any other entity required to withhold tax (any
of the foregoing, a "U.S. withholding agent") establishing an exemption from
withholding. A non-U.S. holder may be subject to withholding unless each U.S.
withholding agent receives:

     1. from a non-U.S. holder that is classified as a corporation for U.S.
federal income tax purposes or is an individual, and is eligible for the
benefits of the portfolio interest exemption or an exemption (or reduced rate)
based on a treaty, a duly completed and executed IRS Form W-8BEN (or any
successor form);

     2. from a non-U.S. holder that is eligible for an exemption on the basis
that the holder's income from the Offered Certificate is effectively connected
to its U.S. trade or business, a duly completed and executed IRS Form W-8ECI (or
any successor form);

     3. from a non-U.S. holder that is classified as a partnership for U.S.
federal income tax purposes, a duly completed and executed IRS Form W-8IMY (or
any successor form) with all supporting documentation (as specified in the U.S.
Treasury Regulations) required to substantiate exemptions from withholding on
behalf of its partners; certain partnerships may enter into agreements with the
IRS providing for different documentation requirements and it is recommended
that such partnerships consult their tax advisors with respect to these
certification rules;

     4. from a non-U.S. holder that is an intermediary (i.e., a person acting as
a custodian, a broker, nominee or otherwise as an agent for the beneficial owner
of an Offered Certificate):

               (a) if the intermediary is a "qualified intermediary" within the
          meaning of section 1.1441-1(e)(5)(ii) of the U.S. Treasury Regulations
          (a "qualified intermediary"), a duly completed and executed IRS Form
          W-8IMY (or any successor or substitute form)--

               (i) stating the name, permanent residence address and qualified
          intermediary employer identification number of the qualified
          intermediary and the country under the laws of which the qualified
          intermediary is created, incorporated or governed,

               (ii) certifying that the qualified intermediary has provided, or
          will provide, a withholding statement as required under section
          1.1441-1(e)(5)(v) of the U.S. Treasury Regulations,

               (iii) certifying that, with respect to accounts it identifies on
          its withholding statement, the qualified intermediary is not acting
          for its own account but is acting as a qualified intermediary, and

               (iv) providing any other information, certifications, or
          statements that may be required by the IRS Form W-8IMY or accompanying
          instructions in addition to, or in lieu of, the information and
          certifications described in section 1.1441-1(e)(3)(ii) or
          1.1441-1(e)(5)(v) of the U.S. Treasury Regulations; or

               (b) if the intermediary is not a qualified intermediary (a
          "nonqualified intermediary"), a duly completed and executed IRS Form
          W-8IMY (or any successor or substitute form)--

               (i) stating the name and permanent residence address of the
          nonqualified intermediary and the country under the laws of which the
          nonqualified intermediary is created, incorporated or governed,

               (ii) certifying that the nonqualified intermediary is not acting
          for its own account,


                                       I-1



               (iii) certifying that the nonqualified intermediary has provided,
          or will provide, a withholding statement that is associated with the
          appropriate IRS Forms W-8 and W-9 required to substantiate exemptions
          from withholding on behalf of such nonqualified intermediary's
          beneficial owners, and

               (iv) providing any other information, certifications or
          statements that may be required by the IRS Form W-8IMY or accompanying
          instructions in addition to, or in lieu of, the information,
          certifications, and statements described in section
          1.1441-1(e)(3)(iii) or (iv) of the U.S. Treasury Regulations; or

     5. from a non-U.S. holder that is a trust, depending on whether the trust
is classified for U.S. federal income tax purposes as the beneficial owner of
the Offered Certificate, either an IRS Form W-8BEN or W-8IMY; any non-U.S.
holder that is a trust should consult its tax advisors to determine which of
these forms it should provide.

     All non-U.S. holders will be required to update the above-listed forms and
any supporting documentation in accordance with the requirements under the U.S.
Treasury Regulations. These forms generally 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
on the form incorrect. Under certain circumstances, an IRS Form W-8BEN, if
furnished with a taxpayer identification number, remains in effect until the
status of the beneficial owner changes, or a change in circumstances makes any
information on the form incorrect.

     In addition, all holders, including holders that are U.S. persons, holding
book-entry certificates through Clearstream, societe anonyme, Euroclear or DTC
may be subject to backup withholding unless the holder--

                    (i) provides the appropriate IRS Form W-8 (or any successor
               or substitute form), duly completed and executed, if the holder
               is a non-U.S. holder;

                    (ii) provides a duly completed and executed IRS Form W-9, if
               the holder is a U.S. person; or

                    (iii) can be treated as a "exempt recipient" within the
               meaning of section 1.6049-4(c)(1)(ii) of the U.S. Treasury
               Regulations (e.g., a corporation or a financial institution such
               as a bank).

     This summary does not deal with all of the aspects of U.S. federal income
tax withholding or backup withholding that may be relevant to investors that are
non-U.S. holders. Such holders are advised to consult their own tax advisors for
specific tax advice concerning their holding and disposing of book-entry
certificates.


                                       I-2



                                    ANNEX II

                           INTEREST RATE SWAP SCHEDULE

 DISTRIBUTION       NOTIONAL
    DATES          AMOUNT ($)    MULTIPLIER
-------------   --------------   ----------
   11/25/2005   142,549,927.41       10
   12/25/2005   133,647,246.89       10
    1/25/2006   128,138,478.34       10
    2/25/2006   122,837,462.47       10
    3/25/2006   117,734,543.49       10
    4/25/2006   112,820,682.15       10
    5/25/2006   108,087,431.38       10
    6/25/2006   103,526,911.52       10
    7/25/2006    99,131,785.31       10
    8/25/2006    94,895,258.17       10
    9/25/2006    90,811,163.83       10
   10/25/2006    86,881,952.99       10
   11/25/2006    83,111,887.44       10
   12/25/2006    79,495,737.76       10
    1/25/2007    76,037,550.16       10
    2/25/2007    72,730,421.51       10
    3/25/2007    69,567,729.64       10
    4/25/2007    66,543,143.57       10
    5/25/2007    63,650,610.46       10
    6/25/2007    51,764,377.80       10
    7/25/2007    21,819,994.03       10
    8/25/2007     9,546,817.16       10
    9/25/2007     9,204,359.70       10
   10/25/2007     8,874,164.75       10
   11/25/2007     8,555,793.17       10
   12/25/2007     8,248,821.19       10
    1/25/2008     7,952,836.34       10
    2/25/2008     7,667,345.98       10
    3/25/2008     7,392,069.86       10
    4/25/2008     7,126,656.50       10
    5/25/2008     6,870,752.56       10
    6/25/2008     6,536,827.90       10
    7/25/2008     5,594,490.75       10
    8/25/2008     4,878,663.44       10
    9/25/2008     4,715,287.43       10
   10/25/2008     4,557,230.28       10
   11/25/2008     4,404,325.40       10
   12/25/2008     4,256,411.13       10
    1/25/2009     4,113,330.44       10
    2/25/2009     3,974,928.59       10
    3/25/2009     3,841,060.05       10
    4/25/2009     3,711,582.35       10
    5/25/2009     3,586,356.46       10
    6/25/2009     3,465,247.55       10
    7/25/2009     3,348,124.83       10
    8/25/2009     3,234,861.29       10
    9/25/2009     3,125,334.13       10
   10/25/2009     3,019,424.12       10
   11/25/2009     2,917,015.61       10
   12/25/2009     2,817,996.51       10
    1/25/2010     2,722,258.13       10
    2/25/2010     2,629,695.13       10
    3/25/2010     2,540,205.37       10
4/25/2010 and
   thereafter          --            --


                                      II-1

Prospectus

--------------------------------
CONSIDER CAREFULLY THE RISK
FACTORS BEGINNING ON PAGE 7 OF
THIS PROSPECTUS.

The securities represent
obligations of the trust only
and do not represent an
interest in or obligation of
Morgan Stanley ABS Capital I
Inc., the master servicer or
any of their affiliates.

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

No market will exist for the
securities of any series
before the securities are
issued.  In addition, even
after the securities of a
series have been issued and
sold, there can be no
assurance that a resale market
will develop.
--------------------------------



 Morgan Stanley ABS Capital I Inc.
 Asset Backed Securities
 (Issuable in Series)

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

 Morgan Stanley ABS Capital I Inc. may periodically
 establish trusts which will issue securities.  The securities
 may be in the form of asset-backed certificates or asset-
 backed notes.  Each issue of securities will have its own
 series designation.

 Each series of securities will:

 o be backed by one or more pools of mortgage loans,
 manufactured housing contracts or mortgage backed
 securities

 o consist of one or more classes of securities.

 Each class of securities:

 o will be entitled to all, some or none of the interest
 payments and principal payments on the assets of the trust;

 o may be senior or subordinate in right of payment to
 other classes; and

 o may receive payments from an insurance
 policy, cash account or other form of
 credit enhancement to cover losses on the
 trust assets.


Neither the SEC nor any state securities commission has approved or disapproved
these securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.

May 10, 2005






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

We provide information to you about the securities in two separate documents
that progressively provide more detail:

     o    this prospectus, which provides general information, some of which may
          not apply to your series of securities and

     o    the accompanying prospectus supplement, which describes the specific
          terms of your series of securities.

You should rely only on the information provided in this prospectus and the
accompanying prospectus supplement, including the information incorporated by
reference. We have not authorized anyone to provide you with different
information. We are not offering the securities in any state where the offer is
not permitted.

We include cross-references in this prospectus and the accompanying prospectus
supplement to captions in these materials where you can find further related
discussions. There is a Glossary on page 162 where you will find definitions of
the capitalized terms used in this prospectus. The following Table of Contents
and the Table of Contents included in the accompanying prospectus supplement
provide the pages on which these captions are located.


                                       2


                                TABLE OF CONTENTS



                                                                                                                PAGE
                                                                                                                ----

Risk Factors......................................................................................................7
         The limited resale market for the securities could adversely affect your ability to
              liquidate your investment...........................................................................7
         Protection against losses is limited since the securities will receive payments only
              from specified sources..............................................................................7
         The timing and level of prepayments on the loans could adversely affect your yield.......................8
         If your securities are interest only securities, the return on your investment will be
              especially sensitive to prepayments on the loans....................................................9
         Prepayments on the loans could lead to shortfalls in the distribution of interest on
              your securities.....................................................................................9
         If the trust includes a pre-funding account and if the funds on deposit in the
              pre-funding account are not used to purchase additional loans, those funds will be
              distributed as a payment of principal, which may adversely affect the yield on the
              affected securities................................................................................10
         Your investment will be subject to counterparty risk if payments on your securities are
              dependant to any degree on payment on cash flow agreements.........................................11
         The credit enhancement features may be inadequate to provide protection for the
              securities.........................................................................................11
         The interest rates of the securities with adjustable interest rates may be limited by
              the effect of interest rates on the loans and other factors........................................11
         If the credit enhancement for your securities is provided in whole or in part by
              overcollateralization, the interest generated by the loans may be insufficient to
              maintain the required level of overcollateralization...............................................13
         The value of your securities may be adversely affected by losses on the loans even if
              losses are not allocated to your securities........................................................14
         Newly originated loans may be more likely to default, which may cause losses on the
              securities.........................................................................................14
         Additional risks associated with the mezzanine and subordinate securities...............................14
         Declining property values and delays and expenses inherent in foreclosure procedures
              could delay distributions to you or result in losses...............................................15
         The trust may contain loans secured by junior liens; these loans are more likely than
              loans secured by senior liens to experience losses.................................................16
         The loans will be underwritten using varying standards, and less stringent underwriting
              standards and the resultant potential for delinquencies on the loans could lead to
              losses on your securities..........................................................................16
         Some types of loans may be more prone to defaults and the trust may contain large
              concentrations of these loans......................................................................17
         Geographic concentration of the loans may increase the risk of loss.....................................17
         High loan-to-value ratios increase risk of loss.........................................................18


                                       3







         Some of the loans may have an initial interest-only period, which may result in
              increased delinquencies and losses.................................................................18
         If consumer protection laws are violated in the origination or servicing of the loans,
              losses on your investment could result.............................................................19
         Some pools may include a small portion of commercial mortgage loans; commercial loans
              present different risks than residential mortgage loans............................................20
         Losses could result if violations of environmental laws occurred affecting the mortgaged
              properties.........................................................................................20
         Delay in receipt of liquidation proceeds; liquidation proceeds may be less than the loan
              balance............................................................................................20
         The bankruptcy of the depositor or a seller may delay or reduce collections on loans....................21
         The loan seller or other responsible parties may not be able to repurchase defective
              loans..............................................................................................22
         External events may increase the risk of loss on the loans..............................................22
         Drug, RICO and money laundering violations could lead to property forfeitures...........................22
         The ratings on your securities could be reduced or withdrawn............................................23
         The securities may not be suitable investments..........................................................23

The Trust Fund...................................................................................................24
         General.................................................................................................24
         The Loans...............................................................................................26
         Modification of Loans...................................................................................33
         Agency Securities.......................................................................................33
         Private Mortgage-Backed Securities......................................................................40
         Representations by Sellers or Originators; Repurchases..................................................42
         Substitution of Trust Fund Assets.......................................................................44

Use of Proceeds..................................................................................................45

The Depositor....................................................................................................45

Description of the Securities....................................................................................45
         General.................................................................................................46
         Distributions on Securities.............................................................................48
         Advances................................................................................................50
         Reports to Securityholders..............................................................................51
         Categories of Classes of Securities.....................................................................52
         Indices Applicable to Floating Rate and Inverse Floating Rate Classes...................................56
         LIBOR...................................................................................................56
         COFI....................................................................................................57
         Treasury Index..........................................................................................59
         Prime Rate..............................................................................................60
         Book-Entry Registration of Securities...................................................................60

Credit Enhancement...............................................................................................65
         General.................................................................................................65


                                       4





         Subordination...........................................................................................65
         Letter of Credit........................................................................................67
         Insurance Policies, Surety Bonds and Guaranties.........................................................67
         Over-Collateralization..................................................................................68
         Spread Account..........................................................................................68
         Reserve Accounts........................................................................................68
         Pool Insurance Policies.................................................................................70
         Cross-Collateralization.................................................................................72
         Other Insurance, Surety Bonds, Guaranties, and Letters of Credit........................................72
         Derivative Products.....................................................................................73

Yield and Prepayment Considerations..............................................................................73

The Agreements...................................................................................................76
         Assignment of the Trust Fund Assets.....................................................................76
         No Recourse to Sellers, Originators, Depositor or Master Servicer.......................................79
         Payments on Loans; Deposits to Security Account.........................................................79
         Pre-Funding Account.....................................................................................82
         Sub-Servicing by Sellers................................................................................84
         Hazard Insurance........................................................................................84
         Realization Upon Defaulted Loans........................................................................87
         Servicing and Other Compensation and Payment of Expenses................................................88
         Evidence as to Compliance...............................................................................89
         Matters Regarding the Master Servicer and the Depositor.................................................89
         Events of Default; Rights Upon Event of Default.........................................................90
         Amendment...............................................................................................93
         Termination; Optional Termination.......................................................................94
         The Trustee.............................................................................................95

Material Legal Aspects of the Loans..............................................................................95
         General.................................................................................................96
         Foreclosure/Repossession................................................................................97
         Environmental Risks....................................................................................100
         Rights of Redemption...................................................................................101
         Anti-Deficiency Legislation, Bankruptcy Laws and Other Limitations on Lenders..........................101
         Due-on-Sale Clauses....................................................................................102
         Enforceability of Prepayment and Late Payment Fees.....................................................103
         Applicability of Usury Laws............................................................................104
         The Contracts..........................................................................................104
         Installment Contracts..................................................................................107
         Servicemembers Civil Relief Act and the California Military and Veterans Code..........................108
         Junior Mortgages; Rights of Senior Mortgagees..........................................................109
         Commercial Loans.......................................................................................110
         The Title I Program....................................................................................111
         Consumer Protection Laws...............................................................................116
         "High Cost" Loans and Predatory Lending Laws...........................................................116


                                       5






Material Federal Income Tax Consequences........................................................................117
         General................................................................................................117
         Taxation of Debt Securities............................................................................118
         Taxation of the REMIC and Its Holders..................................................................125
         REMIC Expenses; Single Class REMICS....................................................................127
         Taxation of the REMIC..................................................................................127
         Taxation of Holders of Residual Interest Securities....................................................129
         Administrative Matters.................................................................................133
         Tax Status as a Grantor Trust..........................................................................133
         Sale or Exchange.......................................................................................137
         Miscellaneous Tax Aspects..............................................................................137
         Tax Treatment of Foreign Investors.....................................................................138
         Tax Characterization of the Trust Fund as a Partnership................................................139
         Tax Consequences to Holders of the Notes...............................................................140
         Tax Consequences to Holders of the Certificates........................................................142
         Reportable Transactions................................................................................148

State and Local Tax Considerations..............................................................................148

ERISA Considerations............................................................................................148
         General................................................................................................148
         Prohibited Transactions................................................................................149
         Plan Asset Regulation..................................................................................149
         Exemption 83-1.........................................................................................150
         The Underwriter's Exemption............................................................................152
         Insurance Company Purchasers...........................................................................155
         Consultation with Counsel..............................................................................155

Legal Investment................................................................................................156

Method of Distribution..........................................................................................158

Legal Matters...................................................................................................159

Financial Information...........................................................................................159

Rating..........................................................................................................160

Where You Can Find More Information.............................................................................161

Incorporation Of Certain Documents By Reference.................................................................161

Glossary........................................................................................................162



                                       6


                                  RISK FACTORS

You should consider the following risk factors in deciding whether to purchase
any of the securities.

THE LIMITED RESALE MARKET FOR THE SECURITIES COULD ADVERSELY AFFECT YOUR ABILITY
TO LIQUIDATE YOUR INVESTMENT.

         The underwriters intend to make a secondary market in the securities,
         but they will have no obligation to do so. There is no assurance that
         such a secondary market will develop or, if it develops, that it will
         continue. Consequently, you may not be able to sell your securities
         readily or at prices that will enable you to realize your desired
         yield. The market values of the securities are likely to fluctuate;
         these 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 especially sensitive to prepayment, credit, or
         interest rate risk, or that have been structured to meet the investment
         requirements of limited categories of investors.

         Certain classes of securities may not constitute "mortgage related
         securities" for purposes of the Secondary Mortgage Market Enhancement
         Act of 1984, as amended. Accordingly, many institutions that lack the
         legal authority to invest in securities that do not constitute
         "mortgage related securities" will not be able to invest in such
         securities, thereby limiting the market for those securities. If your
         investment activities are subject to legal investment laws and
         regulations, regulatory capital requirements or review by regulatory
         authorities, then you may be subject to restrictions on investment in
         the securities. You should consult your own legal advisors for
         assistance in determining the suitability of and consequences to you of
         the purchase, ownership, and sale of the securities. We refer you to
         "Legal Investment" for additional information.

PROTECTION AGAINST LOSSES IS LIMITED SINCE THE SECURITIES WILL RECEIVE PAYMENTS
ONLY FROM SPECIFIED SOURCES.

         The securities of each series will be payable solely from the assets of
         the related trust, including any applicable credit enhancement. In
         addition, at the times specified in the related prospectus supplement,
         some assets of the trust may be released to the seller, the depositor,
         the master servicer, a credit enhancement provider or other person.
         Once released, those assets will no longer be available to make
         payments to securityholders.

         The securities will not represent an interest in the seller, the
         depositor, the master servicer or any of their respective affiliates,
         nor will the securities represent an obligation of any of them. The
         seller of loans or mortgage backed securities to the depositor for
         inclusion in a trust will make particular representations and
         warranties as to those assets. Those representations and warranties
         will be described in the related prospectus supplement. The only
         obligation of the seller with respect to a trust will be to repurchase
         a trust asset if the seller or originator breaches a representation and
         warranty concerning the related

                                       7



         trust asset. There will be no recourse against the seller, the
         depositor or the master servicer if any required distribution on the
         securities is not made. Consequently, you will be reliant entirely on
         the trust assets and any available credit enhancement for payments on
         the securities. If payments on the trust assets are insufficient to
         make all payments required on the securities you may incur a loss of
         your investment.

         Credit enhancement is intended to reduce the effect of delinquent
         payments or loan losses on those classes of securities that have the
         benefit of the credit enhancement. However, the amount of any credit
         enhancement may decline or be depleted before the securities are paid
         in full. Third party providers of credit enhancement like insurance
         policies could default. In addition, credit enhancement may not cover
         all potential sources of loss, including, for instance, a loss
         resulting from fraud or negligence by a loan originator or other party.
         Credit enhancement may therefore be limited in coverage and in amount.
         It may also include the credit risk of a third party like an insurer.
         The terms of any credit enhancement and the limitations will be
         described in the related prospectus supplement.

         You must carefully assess the specific assets of the trust issuing your
         securities and any credit enhancement because they will be your only
         protection against losses on your investment.

THE TIMING AND LEVEL OF PREPAYMENTS ON THE LOANS COULD ADVERSELY AFFECT YOUR
YIELD.

         The loans contained in the trust generally may be prepaid in whole or
         in part at any time. We cannot predict the rate at which borrowers will
         repay their loans.

         The yield on the securities of each series will depend in part on the
         rate of principal payment on the loans held by the trust for that
         series, including borrower prepayments, liquidations due to defaults
         and loan repurchases due to breaches of representations and warranties
         or the exercise of a purchase option on the loans. In particular:

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

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

         o     The yield on classes of securities entitling their holders
               primarily or exclusively to payments of interest or primarily or
               exclusively to payments of principal will be extremely sensitive
               to the rate of prepayments on the related loans.

         o     The yield on certain classes of securities may be relatively more
               sensitive to the rate of prepayment of specified loans than other
               classes.

         The rate of prepayments on loans is influenced by a number of factors.

         o     The rate of prepayments on the loans will be sensitive to
               prevailing interest rates. Generally, for fixed-rate loans, if
               prevailing interest rates decline significantly below the
               interest rates on the fixed-rate loans, the fixed-rate loans are
               more likely

                                       8



               to prepay than if prevailing rates remain above the interest
               rates on the fixed-rate loans. Conversely, if prevailing interest
               rates rise significantly, prepayments on the fixed-rate loans may
               decrease.

         o     The prepayment behavior of adjustable-rate loans and of
               fixed-rate loans may respond to different factors, or may respond
               differently to the same factors. If, at the time of their first
               adjustment, the interest rates on any adjustable-rate loans would
               be subject to adjustment to a rate higher than the then
               prevailing mortgage interest rates available to borrowers, the
               borrowers may prepay their adjustable-rate loans. The
               adjustable-rate loans may also suffer an increase in defaults and
               liquidations following upward adjustments of their interest
               rates, especially following their initial adjustments.

         o     Prepayments may also be affected by local and national economic
               conditions, homeowner mobility, and the ability of the borrower
               to obtain refinancing.

         The related prospectus supplement will indicate the extent to which
         prepayment of the loans may be subject to a prepayment charge. A
         prepayment charge may or may not discourage a borrower from prepaying
         the related loan during the applicable period.

         In addition, your yield may be adversely affected by interest
         shortfalls which may result from the timing of the receipt of
         prepayments or liquidations to the extent that such interest shortfalls
         are not covered by aggregate servicing fees or other mechanisms
         specified in the applicable prospectus supplement.

         To the extent specified in the related prospectus supplement, certain
         parties may be entitled to purchase all of the loans when the aggregate
         stated principal balance of the loans as of the last day of the related
         due period is equal to or less than 10% of the aggregate stated
         principal balance of the loans as of the cut-off date.

         We refer you to "Yield and Prepayment Considerations" for additional
         information.

IF YOUR SECURITIES ARE INTEREST ONLY SECURITIES, THE RETURN ON YOUR INVESTMENT
WILL BE ESPECIALLY SENSITIVE TO PREPAYMENTS ON THE LOANS.

         An investment in interest only securities is especially sensitive to
         prepayments on the loans held by the related trust because payments on
         interest only securities depend entirely on the interest payments
         received on the loans. When borrowers prepay their loans, no further
         interest payments are made on such loans, and therefore no further
         amounts from such loans are available to make payments on the interest
         only securities. If borrowers prepay their loans at a particularly high
         rate, investors in interest only securities may not recover their
         initial investments.

PREPAYMENTS ON THE LOANS COULD LEAD TO SHORTFALLS IN THE DISTRIBUTION OF
INTEREST ON YOUR SECURITIES.

         When a voluntary principal prepayment is made by the borrower on a loan
         (excluding any payments made upon liquidation of any loan), the
         borrower is generally charged


                                       9


         interest only up to the date of the prepayment, instead of for a full
         month. However, principal prepayments will only be passed through to
         the holders of the securities on the distribution date that follows the
         prepayment period in which the prepayment was received by the
         applicable servicer. If and to the extent described in the related
         prospectus supplement, the applicable servicer will be obligated,
         without any right of reimbursement, for the amount of shortfalls in
         interest collections that are attributable to the difference between
         the interest paid by a borrower in connection with those principal
         prepayments and thirty (or such other number as may be specified in the
         related prospectus supplement) days' interest on the prepaid loans, but
         only to the extent those shortfalls do not exceed all or the specified
         percentage set forth in the prospectus supplement of the servicing fees
         for that distribution date payable to that servicer.

         For trusts to which this obligation of the servicer is applicable, if
         the servicer fails to make such payments or the resulting shortfall
         exceeds the applicable portion of the servicing fees payable to that
         servicer for the month, there will be fewer funds available for the
         distribution of interest on the securities. In addition, no such
         payments from any servicer will be available to cover prepayment
         interest shortfalls resulting from involuntary prepayments such as
         liquidation of a defaulted loan. Such shortfalls of interest, if they
         result in the inability of the trust to pay the full amount of the
         current interest on the securities, will result in a reduction the
         yield on your securities.

IF THE TRUST INCLUDES A PRE-FUNDING ACCOUNT AND IF THE FUNDS ON DEPOSIT IN THE
PRE-FUNDING ACCOUNT ARE NOT USED TO PURCHASE ADDITIONAL LOANS, THOSE FUNDS WILL
BE DISTRIBUTED AS A PAYMENT OF PRINCIPAL, WHICH MAY ADVERSELY AFFECT THE YIELD
ON THE AFFECTED SECURITIES.

         If, as described in the related prospectus supplement, the trust
         includes a pre-funding account and if all of the money originally
         deposited in the pre-funding account has not been used by the end of
         the pre-funding period as described in the related prospectus
         supplement, the remaining amount will be applied as a payment of
         principal on the following distribution date to the holders of the
         securities in the manner described in the prospectus supplement. If the
         amount of cash is substantial, the affected securities will receive a
         significant unexpected early payment of principal. These payments could
         adversely affect your yield, particularly if you purchased the affected
         securities at a premium.

         Any purchase of additional loans by the trust using funds on deposit in
         the pre-funding account will be subject to the following conditions,
         among others:

         o     each additional loan must satisfy specified statistical criteria
               and representations and warranties; and

         o     additional loans will not be selected in a manner that is
               believed to be adverse to the interests of the holders of the
               securities.

         The ability of the related seller to acquire subsequent loans meeting
         the requirements for inclusion in the loan pool may be affected as a
         result of a variety of social and economic factors. Economic factors
         include interest rates, unemployment levels, the rate of



                                       10


         inflation and consumer perception of economic conditions generally.
         However, we cannot assure you as to whether or to what extent economic
         or social factors will affect the seller's ability to acquire
         additional loans and therefore the ability of the trust to fully
         utilize the amount deposited into the pre-funding account.

YOUR INVESTMENT WILL BE SUBJECT TO COUNTERPARTY RISK IF PAYMENTS ON YOUR
SECURITIES ARE DEPENDANT TO ANY DEGREE ON PAYMENT ON CASH FLOW AGREEMENTS.

         The assets of the trust may, if specified in the related prospectus
         supplement, include agreements, such as interest rate swaps, caps,
         floors or other similar agreements which will require the provider of
         such instrument to make payments to the trust under the circumstances
         described in the prospectus supplement. If payments on one or more
         classes of the securities of the related series depend in part on
         payments to be received under such a cash flow agreement, the ability
         of the trust to make payments on the applicable classes will be subject
         to the credit risk of the provider of the cash flow agreement. The
         related prospectus supplement will describe any mechanism, such as the
         payment of "breakage fees," which may exist to facilitate replacement
         of a cash flow agreement upon the default or credit impairment of the
         provider of the agreement. However, there can be no assurance that any
         such mechanism will be successful in enabling the related trust to
         obtain a replacement cash flow agreement in the event the credit of its
         provider becomes impaired, and the yield on the affected classes of
         securities could be adversely affected as a result.

THE CREDIT ENHANCEMENT FEATURES MAY BE INADEQUATE TO PROVIDE PROTECTION FOR THE
SECURITIES.

         The credit enhancement features for the securities are described in the
         related prospectus supplement and may include, among other things,
         senior-subordinated structures, application of excess cash flow to
         losses, overcollateralization or external credit support such as
         financial guaranty insurance policies, mortgage insurance policies,
         guarantees or letters of credit. Such credit enhancements are intended
         to enhance the likelihood that the intended beneficiaries of such
         crediti enhancement (including, for senior-subordinated structures,
         holders of senior securities, and to a limited extent, the holders of
         mezzanine securities and, to a lesser degree, the holders of certain
         subordinated securities), will receive regular payments of interest and
         principal. However, we cannot assure you that the applicable credit
         enhancement will adequately cover any shortfalls in cash available to
         pay your securities. No servicer or any other entity will advance
         scheduled monthly payments of interest and principal on delinquent or
         defaulted loans if the advances are not likely to be recovered.
         Accordingly, if substantial losses occur as a result of defaults and
         delinquent payments on the loans, you may suffer losses.

THE INTEREST RATES OF THE SECURITIES WITH ADJUSTABLE INTEREST RATES MAY BE
LIMITED BY THE EFFECT OF INTEREST RATES ON THE LOANS AND OTHER FACTORS.

         The securities may accrue interest at interest rates based on an index
         plus a specified margin as specified in the related prospectus
         supplement, but are subject to certain limitations. Those limitations
         on the interest rates for such securities may, in part, be


                                       11


         based on the weighted average of the interest rates on the loans net of
         certain fees and expenses of the trust.

         A variety of factors, in addition to those described in the next Risk
         Factor, could limit the interest rates and adversely affect the yield
         to maturity on such securities. Some of these factors are described
         below:

         o     The interest rates on fixed-rate loans will not adjust, and the
               interest rates on adjustable-rate loans may be based on a variety
               of indexes, as specified in the related prospectus supplement.
               Adjustable-rate loans generally have periodic, minimum and
               maximum limitations on adjustments to their interest rates, and,
               as discussed in the next Risk Factor, most adjustable-rate loans
               will not have the first adjustment to their interest rates for
               some period of time after the origination of those loans. As a
               result of the limit on the interest rates for the securities
               bearing an adjustable interest rate, these securities may accrue
               less interest than they would accrue if their interest rates were
               based solely on the applicable index plus the specified margins.

         o     The index for the loans may change at different times and in
               different amounts than the index for the securities. As a result,
               it is possible that interest rates on certain of the
               adjustable-rate loans may decline while the interest rates on
               such securities are stable or rising. It is also possible that
               the interest rates on certain of the adjustable-rate loans and
               the interest rates for such securities may decline or increase
               during the same period, but that the interest rates on such
               securities may decline more slowly or increase more rapidly.

         o     If prepayments, defaults and liquidations occur more rapidly on
               the loans with relatively higher interest rates than on the loans
               with relatively lower interest rates, the interest rates on the
               securities with adjustable interest rates that are subject to cap
               based on weighted average net-mortgage rates are more likely to
               be limited.

         o     To the extent specified in the related prospectus supplement, if
               the interest rates on securities with adjustable interest rates
               are limited for any distribution date due to a cap based on the
               weighted average net interest rates of the loans or any
               particular groups, the resulting interest shortfalls may be
               recovered by the holders of these securities on the same
               distribution date or on future distribution dates on a
               subordinated basis to the extent that on that distribution date
               or future distribution dates there are available funds remaining
               after certain other distributions on the securities and the
               payment of certain fees and expenses of the trust. These
               shortfalls suffered by such securities may, to the extent
               specified in the related prospectus supplement, also be covered
               by amounts payable under an interest rate cap or other similar
               agreement relating to such securities. However, we cannot assure
               you that these funds, if available, will be sufficient to fully
               cover these shortfalls.



                                       12


IF THE CREDIT ENHANCEMENT FOR YOUR SECURITIES IS PROVIDED IN WHOLE OR IN PART BY
OVERCOLLATERALIZATION, THE INTEREST GENERATED BY THE LOANS MAY BE INSUFFICIENT
TO MAINTAIN THE REQUIRED LEVEL OF OVERCOLLATERALIZATION.

         For securities credit enhanced by overcollateralization, the weighted
         average of the net interest rates on the loans is expected to be higher
         than the weighted average of the interest rates on the securities. In
         such cases, the loans are expected to generate more interest than is
         needed to pay interest owed on the securities and to pay certain fees
         and expenses of the trust. Any remaining interest generated by the
         loans will then be used to absorb losses that occur on the loans. After
         these financial obligations of the trust are covered, the available
         excess interest generated by the loans will be used to maintain
         overcollateralization at the required level determined as provided in
         the related agreement. We cannot assure you, however, that enough
         excess interest will be generated to absorb losses or to maintain the
         required level of overcollateralization. The factors described below,
         as well as the factors described in the previous Risk Factor, will
         affect the amount of excess interest that the loans will generate:

         o     Every time a loan is prepaid in full, excess interest may be
               reduced because the loan will no longer be outstanding and
               generating interest or, in the case of a partial prepayment, the
               loan will be generating less interest.

         o     Every time a loan is liquidated or written off, excess interest
               may be reduced because those loans will no longer be outstanding
               and generating interest.

         o     If the rates of delinquencies, defaults or losses on the loans
               turn out to be higher than expected, excess interest will be
               reduced by the amount necessary to compensate for any shortfalls
               in cash available to make required distributions on the
               securities.

         o     To the extent the mortgage pool includes adjustable-rate loans,
               such loans may have interest rates that adjust based on an index
               that is different from the index used to determine the interest
               rates on the securities that bear adjustable rates of interest,
               and any fixed-rate loans have interest rates that do not adjust.
               In addition, the first adjustment of the interest rates for any
               adjustable rate loans may not occur for a significant period
               after the date of origination. As a result, the interest rates on
               any adjustable rate securities may increase relative to the
               weighted average of the interest rates on the loans, or the
               interest rate on any adjustable rate securities may remain
               constant as the weighted average of the interest rates on the
               loans declines. In either case, this would require that more of
               the interest generated by the loans be applied to cover interest
               on the securities.

         o     If prepayments, defaults and liquidations occur more rapidly on
               the loans with relatively higher interest rates that on the loans
               with relatively lower interest rates, the amount of excess
               interest generated by the loans will be less than would otherwise
               be the case.



                                       13


         o     Investors in securities, and particularly subordinate securities,
               should consider the risk that the overcollateralization may not
               be sufficient to protect your securities from losses.

THE VALUE OF YOUR SECURITIES MAY BE ADVERSELY AFFECTED BY LOSSES ON THE LOANS
EVEN IF LOSSES ARE NOT ALLOCATED TO YOUR SECURITIES.

         o     If the rate of default and the amount of losses on the loans is
               higher than you expect, then your yield may be lower than you
               expect. Liquidations of defaulted loans, whether or not realized
               losses are incurred upon the liquidations, are likely to result
               in an earlier return of principal to senior securities and are
               likely to influence the yield on such securities in a manner
               similar to the manner in which principal prepayments on the loans
               would influence the yield on such securities. You may be
               particularly affected if credit enhancement is provided in the
               form of overcollateralization as described in the applicable
               prospectus supplement. Such overcollateralization provisions are
               intended to result in an accelerated rate of principal
               distributions to holders of the securities then entitled to
               principal distributions at any time that the
               overcollateralization provided by the loan pool falls below the
               required level. An earlier return of principal to the holders of
               the securities as a result of the overcollateralization
               provisions will influence the yield on the securities in a manner
               similar to the manner in which principal prepayments on the loans
               will influence the yield on the securities.

         o     The value of your securities may be reduced if the rate of
               default or the amount of losses is higher than expected. If the
               performance of loans is substantially worse than assumed by the
               rating agencies, the ratings of any class of the securities may
               be lowered or withdrawn in the future. This may reduce the value
               of those securities. No one will be required to supplement any
               credit enhancement or to take any other action to maintain any
               rating of the securities.

NEWLY ORIGINATED LOANS MAY BE MORE LIKELY TO DEFAULT, WHICH MAY CAUSE LOSSES ON
THE SECURITIES.

         Defaults on loans tend to occur at higher rates during the early years
         of the loans. The loans described in the related prospectus supplement
         may primarily have been originated within the 12 months prior to their
         sale to the trust. In any such case, the trust may experience higher
         rates of default than if the loans had been outstanding for a longer
         period of time.

ADDITIONAL RISKS ASSOCIATED WITH THE MEZZANINE AND SUBORDINATE SECURITIES.

         The weighted average lives of, and the yields to maturity on, mezzanine
         and subordinate securities will be progressively more sensitive to the
         rate and timing of borrower defaults and the severity of ensuing losses
         on the loans. If the actual rate and severity of losses on the loans is
         higher than those assumed by an investor in such securities, the actual
         yield to maturity of such securities may be lower than the yield
         anticipated by such holder based on such assumption. The timing of
         losses on the loans will also affect an investor's


                                       14


         actual yield to maturity, even if the rate of defaults and severity of
         losses over the life of the loans are consistent with an investor's
         expectations. In general, the earlier a loss occurs, the greater the
         effect on an investor's yield to maturity. If so specified in the
         related prospectus supplement, realized losses on the loans, to the
         extent they exceed the amount of any overcollateralization following
         distributions of principal on the related distribution date, will
         reduce the aggregate principal balance of the subordinate and mezzanine
         securities in inverse order of severity. Once a realized loss is
         allocated to security, no principal or interest will be distributable
         with respect to such written down amount, except to such extent and in
         such priority as may be specified in the related prospectus supplement
         in the event of any subsequent recoveries received on liquidated loans
         after they are liquidated.

         In addition, to the extent mezzanine and subordinate securities are
         issued in the multiple classes, as described in the related prospectus
         supplement, the yield of such classes may be particularly sensitive to
         changes in the rates of prepayments of the loans. Distributions of
         principal will be made to the holders of such securities according to
         the priorities described in the related prospectus supplement and the
         yield to maturity on such classes of securities will be sensitive to
         the rates of prepayment on the loans experienced both before and after
         the commencement of principal distributions on such classes. The yield
         to maturity on such classes of securities will also be extremely
         sensitive to losses due to defaults on the loans (and the timing of
         those losses), to the extent such losses are not covered by excess
         interest, overcollateralization, more subordinate securities or other
         credit enhancement. Furthermore, as described in the related prospectus
         supplement, the timing of receipt of principal and interest by such
         securities may be adversely affected by losses even if such classes of
         securities do not ultimately bear such loss.

DECLINING PROPERTY VALUES AND DELAYS AND EXPENSES INHERENT IN FORECLOSURE
PROCEDURES COULD DELAY DISTRIBUTIONS TO YOU OR RESULT IN LOSSES.

         o     Delays Due to Liquidation Procedures. Substantial delays may
               occur before defaulted loans are liquidated and the proceeds
               forwarded to investors. Property foreclosure actions are
               regulated by state statutes and rules and, like many lawsuits,
               are characterized by significant delays and expenses if defenses
               or counterclaims are made. As a result, foreclosure actions can
               sometimes take several years to complete and property proceeds
               may not cover the defaulted loan amount. Expenses incurred in the
               course of liquidating defaulted loans will be applied to reduce
               the foreclosure proceeds available to investors. Also, some
               states prohibit a mortgage lender from obtaining a judgment
               against the borrower for amounts not covered by property proceeds
               if the property is sold outside of a judicial proceeding. As a
               result, you may experience delays in receipt of moneys or
               reductions in payable to you.

               There is no assurance that the value of the trust assets for any
               series of securities at any time will equal or exceed the
               principal amount of the outstanding securities of the series. If
               trust assets have to be sold because of an event of default or
               otherwise, providers of services to the trust (including the
               trustee, the master servicer and the credit enhancer, if any)
               generally will be entitled to receive the


                                       15


               proceeds of the sale to the extent of their unpaid fees and other
               amounts due them before any proceeds are paid to securityholders.
               As a result, you may not receive the full amount of interest and
               principal due on your security.

         o     Decline in Property Values May Increase Loan Losses. Your
               investment may be adversely affected by declines in property
               values. If the outstanding balance of a loan or contract and any
               secondary financing on the underlying property is greater than
               the value of the property, there is an increased risk of
               delinquency, foreclosure and loss. A decline in property values
               could extinguish the value of a junior mortgagee's interest in a
               property and, thus, reduce proceeds payable to the
               securityholders.

         We refer you to "Material Legal Aspects of the Loans--Anti-Deficiency
         Legislation and other Limitations on Lenders" for additional
         information.

THE TRUST MAY CONTAIN LOANS SECURED BY JUNIOR LIENS; THESE LOANS ARE MORE LIKELY
THAN LOANS SECURED BY SENIOR LIENS TO EXPERIENCE LOSSES.

         The trust may contain loans that are in a junior lien position.
         Mortgages or deeds of trust securing junior loans will be satisfied
         after the claims of the senior mortgage holders and the foreclosure
         costs are satisfied. In addition, a junior mortgage lender may only
         foreclose in a manner that is consistent with the rights of the senior
         mortgage lender. As a result, the junior mortgage lender generally must
         either pay the related senior mortgage lender in full at or before the
         foreclosure sale or agree to make the regular payments on the senior
         mortgage. Since the trust will not have any source of funds to satisfy
         any senior mortgage or to continue making payments on that mortgage,
         the trust's ability as a practical matter to foreclose on any junior
         mortgage will be limited. In addition, since foreclosure proceeds first
         retire any senior liens, the foreclosure proceeds may not be sufficient
         to pay all amounts owed to you.

THE LOANS WILL BE UNDERWRITTEN USING VARYING STANDARDS, AND LESS STRINGENT
UNDERWRITING STANDARDS AND THE RESULTANT POTENTIAL FOR DELINQUENCIES ON THE
LOANS COULD LEAD TO LOSSES ON YOUR SECURITIES.

         The trust may contain loans that were made, in part, to borrowers who,
         for one reason or another, are not able, or do not wish, to obtain
         financing from traditional sources. These loans may be considered to be
         of a riskier nature than loans made by traditional sources of
         financing, so that the holders of the securities may be deemed to be at
         greater risk than if the loans were made to other types of borrowers.
         In this event, the underwriting standards used in the origination of
         the loans held by the trust will generally be less stringent than those
         of Fannie Mae or Freddie Mac with respect to a borrower's credit
         history and in certain other respects. Borrowers on the loans may have
         an impaired or unsubstantiated credit history. As a result of this less
         stringent approach to underwriting, the loans purchased by the trust
         for your series of securities may experience higher rates of
         delinquencies, defaults and foreclosures than loans underwritten in a
         manner which is more similar to the Fannie Mae and Freddie Mac
         guidelines.



                                       16


SOME TYPES OF LOANS MAY BE MORE PRONE TO DEFAULTS AND THE TRUST MAY CONTAIN
LARGE CONCENTRATIONS OF THESE LOANS.

         Because your securities represent an interest in the loans held by the
         related trust, your investment may be affected by a decline in real
         estate values and changes in individual borrowers' financial
         conditions. You should be aware that the value of the mortgaged
         properties may decline. If the outstanding balance of a loan and any
         secondary financing on the underlying property is greater than the
         value of the property, there is an increased risk of delinquency,
         foreclosure and losses. If the residential real estate market
         experiences an overall decline in property values, the rates of
         delinquencies, foreclosures and losses could be higher than those now
         generally experienced in the lending industry. To the extent your
         securities are not covered by credit enhancements, you will bear all of
         the risks resulting from defaults by borrowers.

         In addition, certain types of loans which have higher than average
         rates of default may be included in the trust that issues your
         securities. The following types of loans may be included:

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

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

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

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

         We refer you to "The Trust Fund - The Loans" for additional
         information. The related prospectus supplement will disclose the extent
         to which any of these or other types of special risk loans are present
         in the pool applicable to your securities.

GEOGRAPHIC CONCENTRATION OF THE LOANS MAY INCREASE THE RISK OF LOSS.

         The loans underlying a series of securities may be concentrated in
         certain regions, states or zip codes. This concentration may present
         risks of losses on the related securities that are greater than those
         generally present for similar asset-backed securities without such
         concentration. Certain geographic regions of the United States from
         time to time will experience weaker regional economic conditions and
         housing markets than the nation


                                       17


         generally and this weakness may result in losses on the related loans
         being higher than those in the nation generally. In addition,
         particular areas may be directly or indirectly affected by natural
         disasters or civil disturbances such as earthquakes, hurricanes,
         floods, eruptions, riots, industrial accidents or terrorism. Loans in
         areas adversely affected by these factors will experience higher rates
         of loss and delinquency than loans generally. The related prospectus
         supplement will contain information regarding the geographic
         concentration of the loans.

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

         Loans with higher loan-to-value ratios may present a greater risk of
         loss than loans with loan-to-value ratios of 80.00% or below. The
         related prospectus supplement will identify the extent to which loans
         in the trust have high loan-to-value ratios. Additionally, the
         determination of the value of a mortgaged property used in the
         calculation of the loan-to-value ratios or combined loan-to-value
         ratios of the loans may differ from the appraised value of such
         mortgaged properties or the actual value of such mortgaged properties.

SOME OF THE LOANS MAY HAVE AN INITIAL INTEREST-ONLY PERIOD, WHICH MAY RESULT IN
INCREASED DELINQUENCIES AND LOSSES.

         To the extent specified in the related prospectus supplement, certain
         loans may be interest-only until for a period of months or years after
         the date of origination. During this period, the payment made by the
         related borrower will be less than it would be if the principal of the
         loan was required to amortize. In addition, the loan principal balance
         will not be reduced because there will be no scheduled monthly payments
         of principal during this period. As a result, no principal payments
         will be made on the securities with respect to these loans during their
         interest-only period unless there is a principal prepayment.

         After the initial interest-only period, the scheduled monthly payment
         on these loans will increase, which may result in increased
         delinquencies by the related borrowers. In addition, losses may be
         greater on these loans as a result of there being no principal
         amortization during the early years of these loans. Although the amount
         of principal included in each scheduled monthly payment for a
         traditional loan is relatively small during the first few years after
         the origination of a loan, in the aggregate, the amount can be
         significant. Any resulting delinquencies and losses, to the extent not
         covered by available credit enhancement, will be allocated to the
         securities in reverse order of seniority.

         Loans with an initial interest-only period are relatively new in the
         mortgage marketplace. The performance of these loans may be
         significantly different from loans that amortize from origination. In
         particular, the failure by the related borrower to build equity in the
         property may affect the delinquency, loss and prepayment experience
         with respect to these loans.



                                       18


IF CONSUMER PROTECTION LAWS ARE VIOLATED IN THE ORIGINATION OR SERVICING OF THE
LOANS, LOSSES ON YOUR INVESTMENT COULD RESULT.

         There has been an increased focus by state and federal banking
         regulatory agencies, state attorneys general offices, the Federal Trade
         Commission, the U.S. Department of Justice, the U.S. Department of
         Housing and Urban Development and state and local governmental
         authorities on certain lending practices by some companies in the
         subprime industry, sometimes referred to as "predatory lending"
         practices. Sanctions have been imposed by state, local and federal
         governmental agencies for practices including, but not limited to,
         charging borrowers excessive fees, imposing higher interest rates than
         the borrower's credit risk warrants and failing to adequately disclose
         the material terms of loans to the borrowers.

         Applicable state and local laws generally regulate interest rates and
         other charges, require certain disclosure, and require licensing of the
         originators. In addition, other state and local laws, public policy and
         general principles of equity relating to the protection of consumers,
         unfair and deceptive practices and debt collection practices may apply
         to the origination, servicing and collection of the loans.

         The loans are also subject to federal laws, including:

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

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

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

         Violations of certain provisions of these federal, state and local laws
         may limit the ability of the servicers to collect all or part of the
         principal of, or interest on, the loans and in addition could subject
         the trust to damages and administrative enforcement (including
         disgorgement of prior interest and fees paid). In particular, an
         originator's failure to comply with certain requirements of these
         federal, state or local laws could subject the trust (and other
         assignees of the loans) to monetary penalties, and result in the
         obligors' rescinding the loans against either the trust or subsequent
         holders of the loans.

         The loan seller, and other responsible parties making representations
         with respect to the mortgage loans, will represent that each mortgage
         loan sold by it is in compliance with applicable federal, state and
         local laws and regulations. In addition, such party will represent that
         none of the mortgage loans sold by it are covered by the Home Ownership
         and Equity Protection Act of 1994 or are classified as a "high cost
         home," "threshold," "covered," "high risk home," "predatory," or
         similar loan under any other applicable federal, state or local law. In
         the event of a breach of any such representations, such


                                       19


         party will be obligated to cure such breach or repurchase or replace
         the affected mortgage loan, in the manner and to the extent described
         in the related prospectus supplement.

SOME POOLS MAY INCLUDE A SMALL PORTION OF COMMERCIAL MORTGAGE LOANS; COMMERCIAL
LOANS PRESENT DIFFERENT RISKS THAN RESIDENTIAL MORTGAGE LOANS.

         Mortgage loans made with respect to commercial properties, including
         commercial properties, and multifamily and mixed use properties that
         are predominantly used for commercial purposes, will present different
         risks than residential mortgage loans, and may entail greater risks of
         delinquency, foreclosure and loss. The ability of a borrower to repay a
         loan secured by an income-producing property typically is dependent
         primarily upon the successful operation of the property rather than any
         independent income or assets of the mortgagor. The successful operation
         of the property may in turn be dependant on the creditworthiness of
         tenants to whom commercial space is leased and the business operated by
         them, while the risks associated with tenants may be offset by the
         number of tenants or, if applicable, the diversity of types of
         businesses operated by them. A decline in the net operating income of
         an income-producing property will likely affect both the performance of
         the related loan as well as the liquidation value of the property. By
         contrast, a decline in the income of a mortgagor on a single family
         property will likely affect the performance of the related loan but may
         not affect the liquidation value of the property.

         Commercial mortgage loans may be nonrecourse loans to the assets of the
         mortgagor. Further, the concentration of default, foreclosure and loss
         risks in individual mortgagors or commercial mortgage loans could be
         greater than for residential loans because the related mortgage loans
         could have higher principal balances.

LOSSES COULD RESULT IF VIOLATIONS OF ENVIRONMENTAL LAWS OCCURRED AFFECTING THE
MORTGAGED PROPERTIES.

         Under the laws of some states, contamination of a property may give
         rise to a lien on the property to assure the costs of cleanup. In
         several states, a lien to assure cleanup has priority over the lien of
         an existing mortgage. In addition, the trust issuing your securities,
         because it is a mortgage holder, may be held responsible for the costs
         associated with the clean up of hazardous substances released at a
         property. Those costs could result in a loss to the securityholders.

         We refer you to "Material Legal Aspects of the Loans--Environmental
         Risks" for additional information.

DELAY IN RECEIPT OF LIQUIDATION PROCEEDS; LIQUIDATION PROCEEDS MAY BE LESS THAN
THE LOAN BALANCE.

         Substantial delays could be encountered in connection with the
         liquidation of delinquent loans. Further, reimbursement of advances
         made on a loan, liquidation expenses such as legal fees, real estate
         taxes, hazard insurance and maintenance and preservation expenses may
         reduce the portion of liquidation proceeds payable on the securities.
         If a mortgaged


                                       20


         property fails to provide adequate security for the loan, you will
         incur a loss on your investment if the credit enhancements are
         insufficient to cover the loss.

THE BANKRUPTCY OF THE DEPOSITOR OR A SELLER MAY DELAY OR REDUCE COLLECTIONS ON
LOANS.

         Neither the United States Bankruptcy Code nor similar applicable state
         insolvency laws prohibit the depositor from filing a voluntary
         application for bankruptcy relief under applicable law. However, the
         transactions contemplated by the related prospectus will be structured
         so that

         o     the voluntary or involuntary application for bankruptcy relief by
               the depositor is unlikely,

         o     in the event of a bankruptcy filing by the depositor, the loans
               backing your series of securities should be treated by the
               bankruptcy court as property of the related trust and not as part
               of the bankrupt estate of the depositor, and

         o     a bankruptcy filing by a seller which is an affiliate of the
               depositor from whom the depositor acquires the loans should not
               result in consolidation of the assets and liabilities of the
               depositor with those of such seller.

         These steps include the creation of the depositor as a separate,
         limited purpose subsidiary, the certificate of incorporation of which
         contains limitations on the nature of the depositor's business,
         restrictions on the ability of the depositor to commence voluntary or
         involuntary cases or proceedings under insolvency laws without the
         prior unanimous affirmative vote of all its directors and the
         structuring of each transfer of loans from the depositor to the related
         trust as a sale rather than a pledge. However, there can be no
         assurance that the activities of the depositor would not result in a
         court concluding that the assets and liabilities of the depositor
         should be consolidated with those of such a seller, or that the
         transfer of loans to the trust would in fact be treated by a court as a
         sale.

         The trust assets will be acquired by the depositor, either directly or
         through affiliates, from sellers. Each seller will transfer its related
         loans to the depositor and the depositor will transfer the loans to the
         related trust. If a seller were to become a debtor in a bankruptcy
         case, a creditor or trustee, or the debtor itself, may take the
         position that the transfer of the loans by the seller should be
         characterized as a pledge of the related loans to secure a borrowing of
         such debtor, with the result that the depositor or the trust is deemed
         to be a creditor of such seller, secured by a pledge of the applicable
         loans.

         An attempt to recharacterize the loan transfers related to your series
         of securities, if successful, could result in delays in payments of
         collections on the loans or reductions in the amount of such payments
         which could result in losses on the securities, or in a trustee in
         bankruptcy electing to accelerate payment by liquidating the loans.
         Even if such an attempt were unsuccessful, delays in payments on the
         loans and resulting delays or losses on the securities could result.



                                       21


THE LOAN SELLER OR OTHER RESPONSIBLE PARTIES MAY NOT BE ABLE TO REPURCHASE
DEFECTIVE LOANS.

         Each loan seller or another responsible party will make various
         representations and warranties related to the loans. If any such loan
         seller or responsible party fails to cure a material breach of its
         representations and warranties with respect to any loan in a timely
         manner, then it would be required to repurchase or, if so specified in
         the related prospectus supplement, substitute for the defective loan.
         It is possible that any such loan seller or responsible party may not
         be capable of repurchasing or substituting any defective loans, for
         financial or other reasons. The inability of any such party to
         repurchase or substitute for defective loans would likely cause the
         loans to experience higher rates of delinquencies, defaults and losses.
         As a result, shortfalls in the distributions due on the securities
         could occur.

EXTERNAL EVENTS MAY INCREASE THE RISK OF LOSS ON THE LOANS.

         In response to previously executed and threatened terrorist attacks in
         the United States and foreign countries, the United States has
         initiated military operations and has placed a substantial number of
         armed forces reservists and members of the National Guard on active
         duty status. It is possible that the number of reservists and members
         of the National Guard placed on active duty status in the near future
         may increase. To the extent that a member of the military, or a member
         of the armed forces reserves or National Guard who is called to active
         duty is a borrower of a loan in the trust, the interest rate limitation
         of the Servicemembers Civil Relief Act, and any comparable state law,
         will apply. Generally, substantially all of the loans in the trust for
         a series of securities are expected to have interest rates which exceed
         such limitation, if applicable. This may result in interest shortfalls
         on the loans, which may result in shortfalls of interest on your
         securities.

DRUG, RICO AND MONEY LAUNDERING VIOLATIONS COULD LEAD TO PROPERTY FORFEITURES.

         Federal law provides that property purchased or improved with assets
         derived from criminal activity or otherwise tainted, or used in the
         commission of certain offenses, can be seized and ordered forfeited to
         the United States of America. The offenses which can trigger such a
         seizure and forfeiture include, among others, violations of the
         Racketeer Influenced and Corrupt Organizations Act, the Bank Secrecy
         Act, the anti-money laundering laws and regulations, including the USA
         Patriot Act of 2001 and the regulations issued pursuant to that Act, as
         well as the narcotic drug laws. In many instances, the United States
         may seize the property even before a conviction occurs.

         In the event of a forfeiture proceeding, a lender may be able to
         establish its interest in the property by proving that (1) its mortgage
         was executed and recorded before the commission of the illegal conduct
         from which the assets used to purchase or improve the property were
         derived or before the commission of any other crime upon which the
         forfeiture is based, or (2) the lender, at the time of the execution of
         the mortgage, did not know or was reasonably without cause to believe
         that the property was subject to forfeiture. However, there is no
         assurance that such a defense would be successful.



                                       22


THE RATINGS ON YOUR SECURITIES COULD BE REDUCED OR WITHDRAWN.

         Each rating agency rating the securities of any series may change or
         withdraw its initial ratings at any time in the future if, in its
         judgment, circumstances warrant a change. If your securities have the
         benefit of a surety bond, such as a note or certificate insurance
         policy, the ratings of the securities will depend primarily on the
         creditworthiness of the insurer as the provider of the bond or policy
         relating to the securities. In that event, any reduction in the
         insurer's financial strength and claims-paying ability ratings could
         result in a reduction of the ratings on the securities. In all cases,
         no person is obligated to maintain the ratings at their initial levels.
         If a rating agency qualifies, reduces or withdraws its rating on one or
         more classes of the securities, the liquidity and market value of the
         affected securities is likely to be reduced.

THE SECURITIES MAY NOT BE SUITABLE INVESTMENTS.

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




                                       23



                                 THE TRUST FUND

GENERAL

         The certificates of each series will represent interests in the assets
of a trust fund established by the depositor, 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. For each series, a separate trust fund in the form of a common
law trust or a Delaware business trust will be formed under the related pooling
and servicing agreement or trust agreement. The assets of each trust fund will
consist primarily of a pool comprised of, as specified in the related prospectus
supplement, any one or more of the following:

         o     single family mortgage loans, including

               oo   mortgage loans secured by first, second and/or more
                    subordinate liens on one to four-family residential
                    properties,

               oo   closed-end and/or revolving home equity loans secured by
                    first, second and/or more subordinate liens on one- to
                    four-family residential properties,

               oo   home improvement installment sale contracts and installment
                    loan agreements that are either unsecured or secured by
                    first, second and/or more subordinate liens on one- to
                    four-family residential properties, or by purchase money
                    security interests in the financed home improvements,
                    including loans insured under the FHA Title I Credit
                    Insurance program administered pursuant to the National
                    Housing Act of 1934, and

               oo   manufactured housing installment sales contracts and
                    installment loan agreements secured by first, second and/or
                    more subordinate liens on manufactured homes or by mortgages
                    on real estate on which the related manufactured homes are
                    located;

         o     commercial mortgage loans, including mortgage loans secured by
               traditional commercial properties, multifamily properties and
               mixed use properties that are primarily used for commercial
               purposes, but as of the creation date of the related pool, no
               more than 5% of the assets of the trust fund may be comprised of
               commercial mortgage loans;

         o     mortgaged-backed securities issued or guaranteed by Ginnie Mae,
               Fannie Mae or Freddie Mac;

         o     privately issued mortgaged-backed securities representing
               interests in any of the above asset types; and

         o     all monies due under each of the loans or securities held in the
               trust fund, net, if and as provided in the related prospectus
               supplement, of required amounts payable to the servicer of the
               loans, agency securities or private mortgaged-


                                       24


               backed securities, together with payments in respect of, and
               other accounts, obligations or agreements, in each case, as
               specified in the related prospectus supplement.

         The pool will be created on the first day of the month of the issuance
of the related series of securities or any other date specified in the related
prospectus supplement, which date is the cut-off date. 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 sellers. The sellers may be affiliates of
the depositor. Loans acquired by the depositor will have been originated in
accordance with the underwriting criteria described in this prospectus under
"The Loans--Underwriting Standards." The depositor will cause the trust fund
assets to be assigned without recourse 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 as subservicers, under a pooling and servicing agreement among the
depositor, the master servicer and the trustee with respect to a series
consisting of certificates, or a master servicing agreement or a sale and
servicing agreement between the trustee and the master servicer with respect to
a series consisting of notes or of certificates and notes, and will receive a
fee for its services. See "The Agreements." With respect to loans serviced by
the master servicer through a subservicer, the master servicer will remain
liable for its servicing obligations under the related agreement as if the
master servicer alone were servicing those loans.

         Any mortgage backed securities issued or guaranteed by Ginnie Mae,
Fannie Mae or Freddie Mac will be securities that are exempt from registration
under the Securities Act of 1933.

         As used in this prospectus, agreement means, with respect to a series
consisting of certificates, the pooling and servicing agreement, and with
respect to a series consisting of notes or of certificates and notes, the trust
agreement, the indenture and the master servicing agreement, as the context
requires.

         If so specified in the related prospectus supplement, a trust fund
relating to a series of securities may be a business trust formed under the laws
of the state specified in the related prospectus supplement pursuant to a trust
agreement between the depositor and the trustee of the related trust fund.

         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 will engage in any activities other than acquiring, managing and
holding the related trust fund assets and other assets contemplated in this
prospectus and in the related prospectus supplement, issuing securities and
making payments and distributions on the securities and related activities. No
trust fund will have any source of capital other than its assets and any related
credit enhancement.

                                       25


         In general, the only obligations of the depositor with respect to a
series of securities will be to obtain representations and warranties from the
sellers or the originators regarding the assets to the depositor for inclusion
in the related trust fund. The depositor will also establish the trust fund for
each series of securities and will assign to the trustee for the related series
the assets to be included in the related trust fund and the depositor's rights
with respect to those representations and warranties. See "The
Agreements--Assignment of the Trust Fund Assets." The only ongoing
responsibilities of the depositor with respect to any series of securities will
be, if necessary, to assure that it has fully transferred to the trust fund its
rights in the assets of the trust fund. The depositor will have no ongoing
servicing, administrative or enforcement obligations with respect to any trust
fund.

         The obligations of the master servicer with respect to the loans
included in a trust fund will consist principally of its contractual servicing
obligations under the related agreement, including its obligation to enforce the
obligations of the subservicers or sellers, or both, as more fully described in
this prospectus under "The Trust Fund--Representations by Sellers or
Originators; Repurchases" and "The Agreements--Sub-Servicing By Sellers" and
"--Assignment of the Trust Fund Assets", and its obligation, if any, to make
cash advances in the event of recoverable delinquencies in payments on or with
respect to the loans. Any obligation of the master servicer to make advances
will be limited in the manner described in this prospectus under "Description of
the Securities--Advances."

         The following, together with the discussion under "Credit Enhancement"
in this prospectus, is a brief description of the assets that will 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 in this prospectus will be
provided in the related prospectus supplement, and specific information will be
set forth in a Current Report on Form 8-K to be filed with the SEC within
fifteen days after the initial issuance of those securities. A copy of the
agreement with respect to each series of securities will be attached to the Form
8-K 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,
agency securities and/or private mortgage-backed securities relating to a series
will be attached to the agreement delivered to the trustee upon delivery of the
securities. If so specified in the related prospectus supplement, the actual
statistical characteristics of a pool as of the closing date may differ from
those set forth in the prospectus supplement. However, in no event will more
than five percent of the assets as a percentage of the cut-off date pool
principal balance vary from the characteristics described in the related
prospectus supplement.

THE LOANS

         General. Loans may consist of mortgage loans or deeds of trust secured
by first or subordinated liens on one- to four-family residential properties,
home equity loans, home improvement contracts or manufactured housing contracts.
If so specified, the loans may include cooperative apartment loans secured by
security interests in shares issued by private, non-profit, cooperative housing
corporations and in the related proprietary leases or occupancy agreements
granting exclusive rights to occupy specific dwelling units in the cooperatives'
buildings. If so specified, the loans may also include, to a limited extent,
mortgage loans or deeds of trust secured by liens on commercial properties,
multifamily properties and mixed use properties that


                                       26


are primarily used for commercial purposes. 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 like the FHA or VA. The
loans will have been originated in accordance with the underwriting criteria
specified in the related prospectus supplement.

         In general, the loans in a pool will have monthly payments due on the
first day of each month. However, as described in the related prospectus
supplement, the loans in a pool may have payments due more or less frequently
than monthly. In addition, payments may be due on any day during a 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,
all as described in this prospectus or in the related prospectus supplement:

         o     Interest may be payable at a fixed rate, a rate adjustable from
               time to time in relation to an index specified in the related
               prospectus supplement, a rate that is fixed for a period of time
               or under limited 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
               those limitations. As specified in the related prospectus
               supplement, the loans may provide for payments in level monthly
               installments, for balloon payments, or for payments that are
               allocated to principal and interest according to the "sum of the
               digits" or "Rule of 78s" methods. Accrued interest may be
               deferred and added to the principal of a loan for the periods and
               under the circumstances as may be specified in the related
               prospectus supplement.

         o     Principal may be payable on a level debt service basis to fully
               amortize the 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--a
               balloon payment. 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. Loans 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     Prepayments of principal may be conditioned on payment of 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 particular lockout periods. Some 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 which permit the mortgagee to demand payment of


                                       27


               the entire loan in connection with the sale or transfers of the
               related property. Other loans may be assumable by persons meeting
               the then applicable underwriting standards of the related seller.

         Any loans that provide for payments to be allocated to principal and
interest based on the "sum of the digits" or "Rule of 78s" method will be
described in the related prospectus supplement. Generally, for any loan, the
"sum of the digits" or "Rule of 78s" refers to a method of allocating the total
monthly payment due from the borrower between interest due on the loan and the
repayment of principal. Under this method, during the early months of the loan,
the portion of each payment allocable to interest is higher, and the portion of
each payment allocable to principal is correspondingly lower that would be the
case for a loan that fully amortizes on a level debt service basis. During the
later months the situation reverses with the portion of each payment allocable
to interest lower and the portion allocable to principal higher than would be
the case for a loan that fully amortizes on a level debt service basis.

         A trust fund may contain buydown loans that include provisions for a
third party to subsidize partially the monthly payments of the borrowers on
those loans during the early years of those loans, the difference to be made up
from a buydown fund contributed by that third party at the time of origination
of the loan. A buydown fund will be established at the origination of loan in an
amount equal either to the discounted value or full aggregate amount of future
payment subsidies. For any trust fund that acquires buydown loan, the related
prospectus supplement will state whether the related buydown fund has been
acquired by the trust along with the buydown loan. The underlying assumption of
buydown plans is that the income of the borrower will increase during the
buydown period as a result of normal increases in compensation and inflation, so
that the borrower will be able to meet the full loan payments at the end of the
buydown period. If assumption of 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 borrower 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. Home improvement contracts and manufactured housing
contracts may, and the other 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, the related liens may be
subordinated to one or more senior liens on the related mortgaged properties as
described in the related prospectus supplement. As specified in the related
prospectus supplement, home improvement contracts and manufactured housing
contracts may be unsecured or secured by purchase money security interests in
the financed home improvements and the financed manufactured homes. The
mortgaged properties, the home improvements and the manufactured homes are
collectively referred to in this prospectus as the properties. The properties
relating to loans will consist primarily of detached or semi-detached one- to
four-family dwelling units, townhouses, rowhouses, individual condominium units,
individual units in planned unit developments, and other dwelling
units--single-family properties--or mixed use properties that are primarily
residential. Any mixed use property that is classified for purposes of the trust
fund's assets as primarily residential will not exceed three stories and will be
predominantly one- to four-family residential in that its primary use will be
for dwelling, with the remainder of its


                                       28


space for retail, professional or other commercial uses. Mixed use properties
not meeting these characteristics will be treated as being predominately used
for commercial purposes and will be classified for purposes of the trust fund's
assets as commercial properties. Properties may include vacation and second
homes, investment properties, leasehold interests and, to the limited extent
described under "Commercial Loans" below, commercial properties. In the case of
leasehold interests, the term of the leasehold will exceed the scheduled
maturity of the loan by a time period specified in the related prospectus
supplement. 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 specified loan-to-value ratios and/or principal balances may
be covered wholly or partially by primary mortgage guaranty insurance policies.
The existence, extent and duration of any coverage provided by primary mortgage
guaranty insurance policies will be described in the related prospectus
supplement.

         The aggregate principal balance of loans secured by properties that are
owner-occupied will be disclosed in the related prospectus supplement.
Typically, the basis for a representation that a given percentage of the loans
is secured by single family properties that are owner-occupied will be either
the making of a representation by the borrower at the loan's origination 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 a finding that the address of the underlying property is
the borrower's mailing address.

         Home Equity Loans. As more fully described in the related prospectus
         supplement, interest on each revolving credit line loan, excluding
         introduction rates offered from time to time during promotional
         periods, is computed and payable monthly on the average daily
         outstanding principal balance of that loan. Principal amounts on a
         revolving credit line loan may be drawn down, subject 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. The related prospectus
         supplement will indicate the extent, if any, to which the trust fund
         will 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 sufficient to amortize fully 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 generally will not exceed 360 months. If specified in
         the related prospectus supplement, the terms to stated maturity of
         closed-end loans may exceed 360 months. Under limited circumstances,
         under either a revolving credit line loan or a closed-end loan, a
         borrower may choose an interest only payment option and will be
         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.

                                       29


         Home Improvement Contracts. The trust fund assets for a series of
         securities may consist, in whole or in part, of home improvement
         contracts originated by a commercial bank, a savings and loan
         association, a commercial mortgage banker or other financial
         institution in the ordinary course of business. The home improvements
         securing the home improvement 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. As specified in the related prospectus
         supplement, the home improvement contracts will either be unsecured or
         secured by mortgages on single family properties which are generally
         subordinate to other mortgages on the same property, or secured by
         purchase money security interests in the financed home improvements.
         The home improvement contracts may be fully amortizing or provide for
         balloon payments and may have fixed interest rates or adjustable
         interest rates and may provide for other payment characteristics as in
         this prospectus and in the related prospectus supplement. The initial
         loan-to-value ratio of a home improvement contract will be computed in
         the manner described in the related prospectus supplement.

         Manufactured Housing Contracts. The trust fund assets for a series may
         consist, in whole or part, of conventional manufactured housing
         installment sales contracts and installment loan agreements, originated
         by a manufactured housing dealer in the ordinary course of business. As
         specified in the related prospectus supplement, the manufactured
         housing contracts will be secured by manufactured homes, located in any
         of the fifty states or the District of Columbia or by mortgages on the
         real estate on which the manufactured homes are located.

         The manufactured homes securing the manufactured housing contracts will
consist of manufactured homes within the meaning of 42 United States Code,
Section 5402(6), or manufactured homes meeting those other standards as shall be
described in the related prospectus supplement. Section 5402(6) defines a
"manufactured home" as "a structure, transportable in one or more sections,
which, in the traveling mode, is eight body feet or more in width or forty body
feet or more in length, or, when erected on site, is three hundred twenty or
more square feet, and which is built on a permanent chassis and designed to be
used as a dwelling with or without a permanent foundation when connected to the
required utilities, and includes the plumbing, heating, air conditioning and
electrical systems contained therein; except that the term shall include any
structure which meets all the requirements of [this] paragraph except the size
requirements and with respect to which the manufacturer voluntarily files a
certification required by the Secretary of Housing and Urban Development and
complies with the standards established under [this] chapter."

         Manufactured homes, and home improvements, unlike mortgaged properties,
generally depreciate in value. Consequently, at any time after origination it is
possible, especially in the case of contracts with high loan-to-value ratios at
origination, that the market value of a manufactured home or home improvement
may be lower than the principal amount outstanding under the related contract.

         Commercial Loans. The trust fund assets for a series may include, in an
amount not to exceed, as of the related cut-off date, 5% by principal balance of
the trust fund assets,


                                       30


commercial mortgage loans. The commercial mortgage loans may be secured by liens
on, or security interests in, mortgaged properties consisting of

         o     primarily residential properties consisting of five or more
               rental or cooperatively owned dwelling units in high-rise,
               mid-rise or garden apartment buildings and which may include
               limited retail, office or other commercial space -- multifamily
               properties,

         o     retail stores and establishments, that are primarily for
               commercial purposes

         o     office buildings, or

         o     hotels or motels, nursing homes, assisted living facilities,
               continuum care facilities, day care centers, schools, hospitals
               or other healthcare related facilities, industrial properties,
               warehouse facilities, mini-warehouse facilities, self-storage
               facilities, distribution centers, transportation centers, parking
               facilities, entertainment and/or recreation facilities, movie
               theaters, restaurants, golf courses, car washes, automobile
               dealerships, mobile home parks, mixed use properties, including
               mixed commercial uses and mixed commercial and residential uses,
               and/or unimproved land.

         The mortgage loans will be secured by first or junior mortgages or
deeds of trust or other similar security instruments creating a first or junior
lien on mortgaged property. Commercial loans will generally also be secured by
an assignment of leases and rents and/or operating or other cash flow guarantees
relating to the mortgage loan. It is anticipated that the mortgagors will be
required to maintain hazard insurance on the mortgaged properties in accordance
with the terms of the underlying mortgage loan documents.

         Multifamily properties are residential income-producing properties
consisting of five or more rental or cooperatively owned dwelling units in
high-rise, mid-rise or garden apartment buildings and which may include limited
retail, office or other commercial space. Multifamily leases tend to be
relatively short-term (i.e., one to five years). Multifamily properties face
competition from other such properties within the same geographical area, and
compete on the basis of rental rates, amenities, physical condition and
proximity to retail centers and transportation. Certain states and
municipalities may regulate the relationships between landlords and residential
tenants and may impose restrictions on rental rates.

         Retail properties are income-producing properties leased by borrowers
to tenants that sell various goods and services. Tenant leases may have a base
rent component and an additional component tied to sales. Retail properties may
include single- or multiple-tenant properties, in the latter case such as
shopping malls or strip shopping centers. Some retail properties have anchor
tenants or are located adjacent to an anchor store. While there is no strict
definition of an anchor, it is generally understood that a retail anchor tenant
is proportionately larger in size and is vital in attracting customers to the
retail property, whether or not such retail anchor is located on the related
mortgaged property. Catalogue retailers, home shopping networks, the internet,
telemarketing and outlet centers all compete with more traditional retail
properties for consumer dollars spent on products and services sold in retail
stores. Continued growth of these alternative


                                       31


retail outlets, which are often characterized by lower operating costs, could
adversely affect the rents collectible at retail properties.

         Pursuant to a lease assignment, the related mortgagor may assign its
rights, title and interest as lessor under each lease and the income derived
therefrom to the related mortgagee, while retaining a license to collect the
rents for so long as there is no default. If the mortgagor defaults, the license
terminates and the mortgagee or its agent is entitled to collect the rents from
the related lessee or lessees for application to the monetary obligations of the
mortgagor. State law may limit or restrict the enforcement of the lease
assignments by a mortgagee until it takes possession of the related mortgaged
property and/or a receiver is appointed.

         Additional Information. Each prospectus supplement will contain
information, as of the date of that prospectus supplement or the related cut-off
date 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 applicable
               cut-off date,

         o     the type of property securing the loan--e.g., single family
               residences, individual units in condominium apartment buildings,
               two- to four-family dwelling units, other real property, home
               improvements or manufactured homes,

         o     the original terms to maturity of the loans,

         o     the largest principal balance and the smallest principal balance
               of any of the loans,

         o     the earliest origination date and latest maturity date of any of
               the loans,

         o     the loan-to-value ratios or combined loan-to-value ratios, as
               applicable, of the loans,

         o     the loan interest rates or range of loan interest rates borne by
               the loans,

         o     the maximum and minimum per annum loan interest rates, and

         o     the geographical location of the loans.

If specific information about 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 related prospectus
supplement, and specific information will be set forth in the Current Report on
Form 8-K filed within 15 days of the closing date.

         No assurance can be given 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 causing the sum of the outstanding principal balances of the
loans and any primary or secondary financing on the properties, as applicable,
in a particular pool to 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


                                       32


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 losses are
not covered by subordination provisions or alternative arrangements, those
losses will be borne, at least in part, by the holders of the securities of the
related series.

         Underwriting Standards. The loans will be acquired by the depositor,
either directly or through affiliates, from the sellers. The depositor does not
originate loans and has not identified specific originators or sellers of loans
from whom the depositor, either directly or through affiliates, will purchase
the loans to be included in a trust fund. The underwriting standards for loans
of a particular series will be described in the related prospectus supplement.
Each seller or originator 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
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
or originator will represent that it has complied with underwriting policies of
the FHA or the VA, as the case may be.

         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 mortgaged property, home improvements or manufactured
home, as applicable, as collateral.

         The maximum loan amount will vary depending upon a borrower's credit
grade and loan program but will not generally exceed an amount specified in the
related prospectus supplement. Variations in maximum loan amount limits will be
permitted based on compensating factors. Compensating factors may generally
include, but are not limited to, and 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.

MODIFICATION OF LOANS

         The master servicer for the loans of a particular series will be
authorized to modify, waive or amend any term of a loan in a manner that is
consistent with the servicing standard and the specific limitations set forth in
the servicing agreement and described in the related prospectus supplement.
However, those agreements will require that the modification, waiver or
amendment not affect the tax status of the trust fund or cause any tax to be
imposed on the trust fund or materially impair the security for the related
loan.

AGENCY SECURITIES

         Ginnie Mae. Ginnie Mae is a wholly-owned corporate instrumentality of
HUD. Section 306(g) of Title II of the National Housing Act of 1934, as amended,
authorizes Ginnie Mae to, among other things, guarantee the timely payment of
principal of and interest on certificates which represent an interest in a pool
of mortgage loans insured by the FHA under the National Housing Act or Title V
of the National Housing Act of 1949, or partially guaranteed by the VA


                                       33


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 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 guarantee under this subsection." In
order to meet its obligations under any guarantee under Section 306(g) of the
National Housing Act, Ginnie Mae may, under Section 306(d) of the National
Housing Act, borrow from the United States Treasury in an amount which is at any
time sufficient to enable Ginnie Mae, with no limitations as to amount, to
perform its obligations under its guarantee.

         Ginnie Mae Certificates. Each Ginnie Mae certificate held in a trust
fund for a series of securities will be a "fully modified pass-through"
mortgaged-backed certificate issued and serviced by a mortgage banking company
or other financial concern approved by Ginnie Mae or approved by Fannie Mae as a
seller-servicer of FHA Loans and/or VA Loans. Each Ginnie Mae certificate may be
a GNMA I certificate or a GNMA II certificate. The mortgage loans underlying the
Ginnie Mae certificates will consist of FHA Loans and/or VA Loans. Each mortgage
loan of this type is secured by a one- to four-family residential property or a
manufactured home. Ginnie Mae will approve the issuance of each Ginnie Mae
certificate in accordance with a guaranty agreement between Ginnie Mae and the
issuer and servicer of the Ginnie Mae certificate. Pursuant to its guaranty
agreement, a Ginnie Mae servicer will be required to advance its own funds in
order to make timely payments of all amounts due on each of the related Ginnie
Mae certificates, even if the payments received by the Ginnie Mae servicer on
the FHA Loans or VA Loans underlying each of those Ginnie Mae certificates are
less than the amounts due on those Ginnie Mae certificates.

         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 40 years (but may have original
maturities of substantially less than 40 years). Each Ginnie Mae certificate
will provide for the payment by or on behalf of the Ginnie Mae servicer 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 guarantee fee which together equal the difference between the
interest on the FHA Loans or VA Loans and the pass-through rate on the Ginnie
Mae certificate. In addition, each payment will include proportionate
pass-through payments of any prepayments of principal on the FHA Loans or VA
Loans underlying the Ginnie Mae certificate and liquidation proceeds in the
event of a foreclosure or other disposition of any the related FHA Loans or VA
Loans.

         If a Ginnie Mae servicer 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 payments directly to the registered holder of a Ginnie Mae certificate. In
the event no payment is made by a Ginnie Mae servicer and the Ginnie Mae
servicer fails to notify and request Ginnie Mae to make the payment, the holder
of the related Ginnie Mae certificate will have recourse only against Ginnie Mae
to obtain the


                                       34


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 certificate must
have the same interest rate, except for pools of mortgage loans secured by
manufactured homes, over the term of the loan. The interest rate on a GNMA I
certificate will equal the interest rate on the mortgage loans included in the
pool of mortgage loans underlying the GNMA I certificate, less one-half
percentage point per annum of the unpaid principal balance of the mortgage
loans.

         Mortgage loans underlying a particular GNMA II certificate may have per
annum interest rates that vary from each other by up to one percentage point.
The interest rate on each GNMA 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 GNMA II certificate (except for pools of mortgage loans secured
by manufactured homes).

         Regular monthly installment payments on each Ginnie Mae certificate
will be comprised of interest due as specified on a Ginnie Mae certificate plus
the scheduled principal payments on the FHA Loans or VA Loans underlying a
Ginnie Mae certificate due on the first day of the month in which the scheduled
monthly installments on a Ginnie Mae certificate is due. Regular monthly
installments on each Ginnie Mae certificate are required to be paid to the
trustee identified in the related prospectus supplement as registered holder by
the 15th day of each month in the case of a GNMA I certificate and are required
to be mailed to the Trustee by the 20th day of each month in the case of a GNMA
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 a loan will be passed through to the trustee identified
in the related prospectus supplement as the registered holder of a Ginnie Mae
certificate.

         Ginnie Mae certificates may be backed by graduated payment mortgage
loans or by "buydown" mortgage 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" mortgage 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 that interest, will be paid in subsequent years. The obligations of
Ginnie Mae and of a Ginnie Mae issuer/servicer will be the same irrespective of
whether the Ginnie Mae certificates are backed by graduated payment mortgage
loans or "buydown" mortgage loans. No statistics comparable to the FHA's
prepayment experience on level payment, non-buydown loans are available in
inspect of graduated payment or buydown mortgages. Ginnie Mae certificates
related to a series of certificates may be held in book-entry form.

                                       35


         Fannie Mae. Fannie Mae is a federally chartered and privately owned
corporation organized and existing under the Federal National Mortgage
Association Charter Act. 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. Fannie Mae acquires funds to purchase
mortgage loans from many capital market investors that may not ordinarily invest
in mortgages. In so doing, it expands 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. Fannie Mae certificates are either guaranteed
mortgage pass-through certificates or stripped mortgage-backed securities. The
following discussion of Fannie Mae certificates applies equally to both types of
Fannie Mae certificates, except as otherwise indicated. Each Fannie Mae
certificate included in the trust fund for a series will represent a fractional
undivided interest in a pool of mortgage loans formed by Fannie Mae. Each pool
formed by Fannie Mae will consist of mortgage loans of one of the following
types:

         o     fixed-rate level installment conventional mortgage loans;

         o     fixed-rate level installment mortgage loans that are insured by
               FHA or partially guaranteed by the VA;

         o     adjustable rate conventional mortgage loans; or

         o     adjustable rate mortgage loans that are insured by the FHA or
               partially guaranteed by the VA.

Each mortgage loan must meet the applicable standards set forth under the Fannie
Mae purchase program. Each of those mortgage loans will be secured by a first
lien on a one- to four-family residential property.

         Each Fannie Mae certificate will be issued pursuant to a trust
indenture. 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 guaranteed mortgage-backed
certificate and the series pass-through rate payable with respect to a Fannie
Mae stripped mortgage-backed securities 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 pursuant to which the mortgagee or other
servicer assumes the entire risk of foreclosure losses, 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 the annual pass-through rate,
in the


                                       36


case of a Fannie Mae guaranteed mortgage-backed certificate, or the series
pass-through rate in the case of a Fannie Mae stripped mortgage-backed security.
Under a special servicing option (pursuant to which Fannie Mae assumes the
entire risk for foreclosure losses), 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 pass-through rate, in the
case of a Fannie Mae guaranteed mortgage-backed certificate, or the series
pass-through rate in the case of a Fannie Mae stripped mortgage-backed security.

         Fannie Mae guarantees to each registered holder of a Fannie Mae
certificate that it will distribute on a timely basis amounts representing that
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 guarantees are
obligations solely of Fannie Mae and are not backed by, nor entitled to, the
full faith and credit of the United States. 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 those mortgage loans.

         Fannie Mae stripped mortgage-backed securities are issued in series of
two or more classes, with each class representing a specified undivided
fractional interest in principal distributions and interest distributions,
adjusted to the series pass-through rate, on the underlying pool of mortgage
loans. The fractional interests of each class in principal and interest
distributions are not identical, but the classes in the aggregate represent 100%
of the principal distributions and interest distributions, adjusted to the
series pass-through rate, on the respective pool. Because of the difference
between the fractional interests in principal and interest of each class, the
effective rate of interest on the principal of each class of Fannie Mae stripped
mortgage-backed securities may be significantly higher or lower than the series
pass-through rate and/or the weighted average interest rate of the underlying
mortgage loans.

         Unless otherwise specified by Fannie Mae, Fannie Mae certificates
evidencing interests in pools of mortgages formed on or after May 1, 1985 will
be 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 in the case of fully registered Fannie Mae certificates as of the close
of business on the last day of the preceding month. With respect to Fannie Mae
certificates issued in book-entry form, distributions on the Fannie Mae
certificates will be made by wire, and with respect to fully registered Fannie
Mae certificates, distributions on the Fannie Mae certificates will be made by
check.

         Freddie Mac. Freddie Mac is a publicly held United States government
sponsored enterprise created pursuant to the Federal Home Loan Mortgage
Corporation Act, 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. Freddie Mac was established primarily for the purpose


                                       37


of increasing the availability of mortgage credit for the financing of 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
FHA Loans, VA Loans or participation interests in those mortgage loans and the
sale of the loans or participations so purchased in the form of mortgage
securities, primarily Freddie Mac certificates. Freddie Mac is confined to
purchasing, so far as practicable, mortgage loans that it deems to be of the
quality, type and class which meet generally the purchase standards imposed by
private institutional mortgage investors.

         Freddie Mac Certificates. Each Freddie Mac certificate included in a
trust fund for a series will represent 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. Typically,
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 of those mortgage loans must meet the applicable standards set forth
in the law governing Freddie Mac. A Freddie Mac certificate group may include
whole loans, participation interests in whole loans and undivided interests in
whole loans and/or participations comprising another Freddie Mac certificate
group. Under the guarantor program, any 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 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 a Freddie Mac
certificate, whether or not received. Freddie Mac also guarantees to each
registered holder of a Freddie Mac certificate ultimate receipt by a holder of
all principal on the underlying mortgage loans, without any offset or deduction,
to the extent of that holder's pro rata share, but does not, except if and to
the extent specified in the prospectus supplement for a series, 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 related month of distribution.
Pursuant to its guarantees, Freddie Mac indemnifies holders of Freddie Mac
certificates against any diminution in principal by reason of charges for
property repairs, maintenance and foreclosure. Freddie Mac may remit the amount
due on account of its guarantee of collection of principal at any time after
default on an underlying mortgage loan, but not later than (1) 30 days following
foreclosure sale, (2) 30 days following payment of the claim by any mortgage
insurer, or (3) 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 which 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


                                       38


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 guarantee are obligations solely of Freddie Mac and are not backed by,
nor 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 those 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 by the party that sold
the related mortgage loans to Freddie Mac. 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 like prepayment fees, within 60 days of the date on which
those payments are deemed to have been received by Freddie Mac.

         Under Freddie Mac's Cash Program, with respect to pools formed prior to
June 1, 1987, there is no limitation on be 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. With respect to Freddie Mac certificates
issued on or after June 1, 1987, the maximum interest rate on the mortgage loans
underlying those Freddie Mac certificates may exceed the pass-through rate of
the Freddie Mac certificates by 50 to 100 basis points. 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 expressed as a percentage
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. For Freddie Mac certificate groups formed under the Guarantor
Program with certificate numbers beginning with 18-012, the range between the
lowest and the highest annual interest rates on the mortgage loans in a Freddie
Mac certificate group may not exceed two percentage points.

                                       39


         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 certificates. Subsequent remittances 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 with respect to Freddie Mac certificates sold by Freddie Mac
on or after January 2, 1985, and makes payments of principal and interest each
month to the registered holders of Freddie Mac certificates in accordance with
the holders' instructions.

         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 which
consists of one or more stripped mortgage-backed securities will represent an
undivided interest in all or part of either the principal distributions or the
interest distributions, or in some specified portion of the principal and
interest distributions, on particular Freddie Mac, Fannie Mae, Ginnie Mae or
other government agency or government-sponsored agency certificates. The
underlying securities will be held under a trust agreement by Freddie Mac,
Fannie Mae, Ginnie Mae or another government agency or government-sponsored
agency, each as trustee, or by another trustee named in the related prospectus
supplement. Freddie Mac, Fannie Mae, Ginnie Mae or another government agency or
government-sponsored agency will guarantee each stripped agency security to the
same extent as the applicable entity guarantees the underlying securities
backing the stripped agency security, unless otherwise specified in the related
prospectus supplement.

PRIVATE MORTGAGE-BACKED SECURITIES

         General. Private mortgage-backed securities may consist of mortgage
pass-through certificates evidencing an undivided interest in an asset pool, or
collateralized mortgage obligations secured by an asset pool. Each asset pool
will consist either of loans or mortgage-backed securities that would otherwise
qualify for inclusion as trust assets under this prospectus. Private
mortgage-backed securities will have been issued pursuant to an agreement that
will be described in the related prospectus supplement. That agreement will have
appointed a trustee to act for the benefit of the PMBS holders. The PMBS trustee
or its agent, or a custodian, will possess the loans underlying the private
mortgage-backed security. Loans underlying a private mortgage-backed security
will be serviced by the PMBS servicer directly or by one or more sub-servicers
under the supervision of the PMBS servicer.

         The issuer of the private mortgage-backed security will be a financial
institution or other entity engaged generally in the business of mortgage
lending or the acquisition of mortgage loans, a public agency or instrumentality
of a state, local or federal government, or a limited purpose or other
corporation organized for the purpose of, among other things, establishing
trusts and acquiring and selling housing loans to those trusts and selling
beneficial interests in those trusts. If the depositor or any of its affiliates
participated in the original issuance of any of the private mortgage-backed
securities underlying any series of securities offered under the prospectus, the
related prospectus supplement will disclose this fact. Any private
mortgage-backed securities acquired by the depositor will be acquired in the
secondary market and not


                                       40


pursuant to an initial offering of the securities. In addition, private
mortgage-backed securities will have previously been registered under the
Securities Act of 1933 or will be freely transferable pursuant to Rule 144(k)
promulgated under the Securities Act of 1933.

         Where the related PMBS issuer is not an affiliate of the depositor, it
will generally not be involved in the issuance of the securities other than as
set forth in the next two succeeding sentences. The obligations of the PMBS
issuer will generally be limited to representations and warranties with respect
to the assets conveyed by it to the related PMBS trust. Unless otherwise
specified in the related prospectus supplement, the PMBS issuer will not have
guaranteed any of the assets conveyed to by it or any of the PMBS. Additionally,
although the mortgage loans underlying the private mortgage-backed securities
may be guaranteed by an agency or instrumentality of the United States, the
private mortgage-backed securities themselves will not be so guaranteed.

         Distributions of principal and interest will be made on the private
mortgage-backed securities on the dates specified in the related prospectus
supplement. The private mortgage-backed securities may be entitled to receive
nominal or no principal distributions or nominal or no interest distributions.
Principal and interest distributions will be made on the private mortgage-backed
securities by the PMBS trustee or the PMBS servicer. The PMBS issuer or the PMBS
servicer may have the right to repurchase assets underlying the private
mortgage-backed securities after a specified date or under other circumstances
specified in the related prospectus supplement.

         Underlying Loans. The mortgage loans underlying the private
mortgage-backed securities may consist of, but are not limited to, fixed rate,
level payment, fully amortizing or graduated payment mortgage loans, buydown
loans, adjustable rate mortgage loans, loans having balloon or other special
payment features, home equity loans, including closed-end loans and revolving
lines of credit, home improvement contracts, manufactured housing contracts and
cooperative loans. As described in the prospectus supplement,

         o     no mortgage loan underlying the private mortgage-backed
               securities will have had a combined loan-to-value ratio at
               origination in excess of the percentage set forth in the related
               prospectus supplement,

         o     the underlying mortgage loan may have had an original term to
               stated maturity of not less than 5 years and not more than 40
               years or any other term specified in the related prospectus
               supplement,

         o     the underlying mortgage loan, other than cooperative loans, may
               be required to be covered by a standard hazard insurance policy,
               which may be a blanket policy, and

         o     the underlying mortgage loan other than cooperative loans or
               contracts secured by a manufactured home, may be covered by a
               Title Insurance policy.

         Credit Support Relating to Private Mortgage-Backed Securities. Credit
support in the form of subordination of other private mortgage certificates
issued under the same issuance agreement, reserve funds, insurance policies,
letters of credit, financial guaranty insurance


                                       41


policies, guarantees or other types of credit support may be provided with
respect to the mortgage loans underlying the PMBS or with respect to the PMBS
themselves.

         Additional Information. The prospectus supplement for a series for
which the related trust fund includes private mortgage-backed securities will
specify:

         (1) the aggregate approximate principal amount and type of the private
         mortgage-backed securities to be included in the trust fund;

         (2) characteristics of the mortgage loans underlying the private
         mortgage-backed securities including (A) the payment features of the
         mortgage loans, (B) the approximate aggregate principal balance, if
         known, of underlying mortgage loans insured or guaranteed by a
         governmental entity, (C) the servicing fee or range of servicing fees
         with respect to the underlying mortgage loans, and (D) the minimum and
         maximum stated maturities of the underlying mortgage loans at
         origination;

         (3) the maximum original term-to-stated maturity of the private
         mortgage-backed securities;

         (4) the weighted average term-to-stated maturity of the private
         mortgage-backed securities;

         (5) the pass-through or certificate rate of the private mortgage-backed
         securities;

         (6) the weighted average pass-through or certificate rate of the
         private mortgage-backed securities;

         (7) the PMBS issuer, the PMBS servicer, and the PMBS trustee for the
         private mortgage-backed securities;

         (8) characteristics of credit support, if any, like reserve funds,
         insurance policies, letters of credit or guarantees relating to the
         mortgage loans underlying the private mortgage-backed securities or to
         the private mortgage-backed securities themselves;

         (9) the terms on which the underlying mortgage loans for the private
         mortgage-backed securities may, or are required to, be purchased prior
         to their stated maturity or the stated maturity of the private
         mortgage-backed securities; and

         (10) the terms on which other mortgage loans may be substituted for
         those originally underlying the private mortgage-backed securities.

REPRESENTATIONS BY SELLERS OR ORIGINATORS; REPURCHASES

         Each seller or originator of loans that are included in a trust fund
for a series of securities will have made representations and warranties in
respect of the loans sold by that seller or originated by that originator. The
representations and warranties may include, among other things:

                                       42


         o     that Title Insurance, or in the case of properties located in
               areas where those policies are generally not available, an
               attorney's certificate of title, and any required hazard
               insurance policy were effective at origination of each loan,
               other than a cooperative loan, and that each policy, or
               certificate of title as applicable, remained in effect on the
               date of purchase of the loan from the originator by the seller or
               the depositor or from the seller by or on behalf of the
               depositor;

         o     that the seller or originator had good title to each loan and
               that loan was subject to no offsets, defenses, counterclaims or
               rights of rescission except to the extent that any buydown
               agreement may forgive some indebtedness of a borrower;

         o     that each loan constituted a valid lien on, or a perfected
               security interest with respect to, the related property, subject
               only to permissible liens disclosed, if applicable, Title
               Insurance exceptions, if applicable, and other exceptions
               described in the related agreement, and that the property was
               free from damage and was in acceptable condition;

         o     that there were no delinquent tax or assessment liens against the
               property;

         o     that no required payment on a loan was delinquent more than the
               number of days specified in the related prospectus supplement;
               and

         o     that each loan was made in compliance with, and is enforceable
               under, all applicable local, state and federal laws and
               regulations in all material respects.

However, the prospectus supplement relating to a series of securities may
contain additional or different representations and warranties for the loans in
the related trust fund.

         If so specified in the related prospectus supplement, the
representations and warranties of a seller or originator in respect of a loan
will be made not as of the cut-off date but as of the date on which the
applicable originator sold the loan to the seller or the depositor or the
applicable 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 or originator do not address events that may occur following the sale
of a loan by that seller or originator, its repurchase obligation described in
this prospectus will not arise if the relevant event that would otherwise have
given rise to a repurchase obligation with respect to a loan occurs after the
date of sale of the loan by the applicable originator or seller. 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 or originator
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 or originator of loans with respect to a
particular series of securities, the 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 also the
seller or originator, will promptly notify the relevant seller or originator of
any breach of any representation or


                                       43


warranty made by it in respect of a loan which materially and adversely affects
the interests of the securityholders in the loan. If the applicable seller or
originator cannot cure a breach within the time period specified in the related
prospectus supplement following notice from the master servicer or the trustee,
as the case may be, then that seller or originator will be obligated either

         o     to repurchase the loan from the trust fund at a price equal to
               100% of its unpaid principal balance as of the date of the
               repurchase plus accrued interest on the unpaid principal balance
               to the first day of the month following the month of repurchase
               at the loan interest rate, less any advances or amount payable as
               related servicing compensation if the seller or originator 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
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 any 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 or originator, 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 or
originator.

         Neither the depositor nor the master servicer, unless the master
servicer is the seller or originator, will be obligated to purchase or
substitute a loan if a seller or originator defaults on its obligation to do so,
and no assurance can be given that sellers or originators 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 or originator 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 under "The Agreements--Assignment of the Trust Fund
Assets."

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 will be indicated in the related prospectus
supplement. Substitution of trust fund assets will be permitted if, among other
things, the credit criteria relating to the origination of the initial trust
fund assets is substantially equivalent to the credit criteria relating to the
origination of the substitute trust fund assets. The


                                       44


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.

                                 USE OF PROCEEDS

         The depositor will apply all or substantially all of the net proceeds
from the sale of each series of securities for one or more of the following
purposes:

         o     to purchase the related trust fund assets;

         o     to establish any pre-funding account, capitalized interest
               account or reserve account as described in the related prospectus
               supplement; and

         o     to pay the costs of structuring and issuing the securities,
               including the costs of obtaining any credit enhancement as
               described under "Credit Enhancement".

         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

         Morgan Stanley ABS Capital I Inc. is a direct, wholly-owned subsidiary
of Morgan Stanley. Morgan Stanley ABS Capital I Inc. will act as the depositor
for the trust with respect to each series of securities. As depositor it will
establish the trust and will be the party that deposits, sells or otherwise
conveys the trust fund assets to the trust. The depositor was incorporated in
the State of Delaware on January 7, 1997. The principal executive offices of the
depositor are located at 1585 Broadway, 2nd Floor, New York, New York 10036. Its
telephone number is (212) 761-4000. The depositor does not have, nor is it
expected in the future to have, any significant assets.

         Neither the depositor nor any of the depositor's affiliates will insure
or guarantee distributions on the securities of any series.

                          DESCRIPTION OF THE SECURITIES

         Each series of certificates will be issued pursuant to separate pooling
and servicing agreements or trust agreements among the depositor and the
entities named in the related prospectus supplement as master servicer and
trustee. A form of each of the pooling and servicing agreement and trust
agreement has been filed as an exhibit to the registration statement of which
this prospectus forms a part. Each series of notes will be issued pursuant to an
indenture between the related trust fund and the entity named in the related
prospectus supplement as indenture trustee, and the related loans will be
serviced by the master servicer pursuant to a master servicing agreement or a
sale and servicing agreement. A form of indenture and a form of master servicing
agreement have been filed as exhibits to the registration statement of which
this prospectus forms a part. A series of securities may consist of both notes
and certificates. A trust that only issues notes, or that issues both notes and
certificates, will be


                                       45


formed under a trust agreement. A trust that issues only certificates will be
formed under a pooling and servicing agreement. Each pooling and servicing
agreement and indenture will be governed by New York law and each trust
agreement will be governed by Delaware law. Each trust, as issuer of securities
under the applicable agreement, will therefore be subject to the governing law
of the agreement. The provisions of each of the above agreements will vary
depending upon the nature of the securities to be issued and the nature of the
related trust fund. The following are descriptions of the material provisions
which may appear in any of the above agreements. The prospectus supplement for a
series of securities will describe more fully the provisions of the agreements
for the related series.

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. If the securities are certificates, they will evidence
specified beneficial ownership interests in the assets of the related trust
fund. If the securities are notes, they will be debt obligations secured by the
assets of the related trust fund. The securities generally will not be entitled
to payments in respect of the assets included in any other trust fund
established by the depositor. However, if so specified in the related prospectus
supplement, the securities may be entitled to payments in respect of the assets
of other trust funds established by the depositor. In general, the securities
will not represent obligations of the depositor or any affiliate of the
depositor. A trust fund may include loans that are guaranteed or insured as set
forth in the related prospectus supplement. Each trust fund will consist of, to
the extent provided in the related agreement:

         o     the trust fund assets that are included from time to time in the
               related trust fund, exclusive of any retained interest described
               in the related prospectus supplement, including all payments of
               interest and principal received after the cut-off date with
               respect to the loans included in the trust fund assets to the
               extent not applied in computing the principal balance of the
               loans as of the cut-off date;

         o     the assets that from time to time have been deposited in the
               related security account, as described in this prospectus under
               "The Agreements--Payments on Loans; Deposits to Security
               Account";

         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 account, a mortgage pool insurance policy, a
special hazard insurance policy, a bankruptcy bond, one or more letters of
credit, a surety bond, guaranties or similar instruments or other agreements.

         Each series of securities will be issued in one or more classes. Each
class of certificates of a series will evidence beneficial ownership of a
specified percentage or portion of future


                                       46


interest and principal payments on the related trust fund assets. A class of
certificates may represent different specified percentages or portions of
interest and principal payments on the related trust fund assets. In each case,
that percentage or portion may be zero or may represent any other specified
interest to and including 100%, as specified in the related prospectus
supplement. Each class of notes of 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 the
series. A 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" 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 of principal or interest. 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 distributions may vary among
classes or over time as specified in the related prospectus supplement.

         Distributions of principal and interest or of principal only or
interest only, as applicable, on the related securities will be made by the
trustee on each distribution date, which may be monthly, quarterly,
semi-annually or at other intervals and on the dates as are specified in the
related prospectus supplement. Distributions of principal and interest or of
principal only or interest only, as applicable, will be made 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 related record date specified in the related prospectus
supplement. Distributions will be made in the manner specified in the related
prospectus supplement to the persons entitled to distributions at the address
appearing in 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 that 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.

         Under current law the purchase and holding of a class of securities by
or on behalf of any employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Keogh plans and
collective investment funds in which those plans, accounts or arrangements are
invested, subject to provisions of ERISA or the Internal Revenue Code, could
result in prohibited transactions, within the meaning of ERISA and the Internal
Revenue Code. See "ERISA Considerations." Each prospectus supplement may
identify one or more classes of securities that are restricted from purchases by
plans. The transfer of securities of a restricted class will not be registered
unless the transferee either represents that it is not, and is not purchasing on
behalf of, any plan, account or arrangement or provides an opinion of counsel
satisfactory to the trustee and the depositor that the purchase of securities of
that class by or on behalf of that plan, account or 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


                                       47


those undertaken in the agreements. If the restricted class of securities is
held in book-entry form, the conditions in the preceding sentence may be deemed
satisfied by the transferee's acceptance of the security.

         As to each series, an election may be made to treat the related trust
fund or designated portions of the trust fund as a REMIC as defined in the
Internal Revenue Code. The related prospectus supplement will specify whether a
REMIC election is to be made. Alternatively, the agreement for a series may
provide that a REMIC election may be made at the discretion of the depositor or
the master servicer and may only be made if specified conditions are satisfied.
As to any of those series, the terms and provisions applicable to the making of
a REMIC election will be set forth in the related prospectus supplement. If a
REMIC election is 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 Internal Revenue Code. All other classes of securities
in that series will constitute "regular interests" in the related REMIC, as
defined in the Internal Revenue Code. As to each series with respect to which a
REMIC election is to be made, the trustee, 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. The trustee or the master servicer may be
entitled to reimbursement for any payment in respect of prohibited transaction
taxes from the assets of the trust fund or from any holder of the related
residual certificate if so specified in the related prospectus supplement.

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 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 that 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
account. As between securities of different classes and as between distributions
of principal, and, if applicable, between distributions of principal prepayments
and scheduled payments of principal, and interest, distributions made on any
distribution date will be applied as specified in the related prospectus
supplement. The prospectus supplement will also describe the method for
allocating the distributions among securities of a particular class.

         Available Funds. All distributions on the securities of each series on
each distribution date will be made from the available funds, in accordance with
the terms described in the related prospectus supplement and specified in the
agreement. Available funds for each distribution date will generally equal the
amount on deposit in the related security account allocable to the securities of
that series on that distribution date, net of related fees and expenses payable
by the related trust fund, other than amounts to be held in that security
account for distribution on future distribution dates.

                                       48


         Distributions of Interest. Interest will accrue on each class of
securities entitled to interest at the pass-through rate or interest rate, as
applicable, specified in the related prospectus supplement. In any case, the
rate will be a fixed rate per annum or a variable rate calculated in the method
and for the periods described in the related prospectus supplement. To the
extent funds are available, interest accrued during the 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
that security is entitled. 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 that 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 other specified 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.

         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
that 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 that class of securities specified
in the related prospectus supplement, reduced by all distributions reported to
the holders of that securities as allocable to principal and, (1) in the case of
accrual securities, unless otherwise specified in the related prospectus
supplement, increased by all interest accrued but not then distributable on the
accrual securities and (2) in the case of adjustable rate securities, reduced by
the effect of negative amortization, if applicable.

         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,
including principal prepayments, which are received in advance of their
scheduled due dates and are not accompanied by amounts representing scheduled
interest due after the month of those payments in the percentages and under the
circumstances or for the periods specified in the prospectus supplement. Any
allocation of those principal payments to a class or classes of securities will
have the effect of accelerating 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 some classes of securities
relative to that of other securities is intended to preserve the availability of
the subordination provided by the other securities. See "Credit
Enhancement--Subordination."

                                       49


         Unscheduled Distributions. If specified in the related prospectus
supplement, the securities may receive distributions before the next scheduled
distribution date under the circumstances and in the manner described in this
prospectus and in that 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 account, may be insufficient to make required distributions on the
securities on the related distribution date. Typically, 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; however, if so specified in the
related prospectus supplement, it may. The unscheduled distributions may or may
not 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 that prospectus
supplement.

ADVANCES

         If so specified 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 date specified in the related prospectus
supplement and were not advanced by any sub-servicer, net of the servicing fee.
The master servicer will make advances if the master servicer determines that
those 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 addition, to the extent provided in the related
prospectus supplement, a cash account may be established to provide for advances
to be made in the event of payment defaults or collection shortfalls on trust
fund assets.

         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 that distribution date would be less than the amount required to be
available for distributions to securityholders on that 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 any advances previously made are not
ultimately recoverable as described above. To the extent provided in the related
prospectus supplement, the


                                       50


master servicer also will be obligated to make advances, to the extent
recoverable out of insurance proceeds, liquidation proceeds or otherwise, in
respect of 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, in each case as described in the related prospectus
supplement.

         If so specified in the related prospectus supplement, in the event the
master servicer or a sub-servicer fails to make a required advance, the trustee
will be obligated to make an advance in its capacity as successor servicer. If
the trustee makes an advance, it will be entitled to be reimbursed for that
advance to the same extent and degree as the master servicer or a sub-servicer
is entitled to be reimbursed for advances. See "--Distributions on Securities"
above.

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
that 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 penalties included in that distribution;

         o     the amount of the distribution allocable to interest;

         o     the amount of any advance;

         o     the aggregate amount otherwise allocable to the subordinated
               securityholders on that distribution date, or withdrawn from the
               reserve 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 that distribution date;

         o     the percentage of principal payments on the loans, excluding
               prepayments, if any, which each class will be entitled to receive
               on the following distribution date;

         o     the percentage of principal prepayments on the loans, if any,
               which each class will be entitled to receive on the following
               distribution date;

         o     the related amount of the servicing compensation retained or
               withdrawn from the 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 that are
               delinquent but not in foreclosure as of the close of business on
               the last day of the calendar month


                                       51


               preceding the distribution date, grouped by those loans that are
               31 to 60 days, 61 to 90 days or 91 or more days delinquent;

         o     the number and aggregate principal balances of loans that are in
               foreclosure as of the close of business on the last day of the
               calendar month preceding the distribution date, grouped by those
               loans that have been in foreclosure for 1 to 30 days, 31 to 60
               days, 61 to 90 days or 91 or more days;

         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 any class
               expected to be applicable to the next distribution to that class;

         o     if applicable, the amount remaining in any reserve 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 that calendar year a report as to
the aggregate of amounts reported under the first and second bullets above for
that calendar year or, in the event that person was a securityholder of record
during a portion of that calendar year, for the applicable portion of that year
and any 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.
Classes of securities, in general, fall into different categories. The following
chart identifies and generally describes the more typical categories. The
prospectus supplement for a series of securities may identify the classes which
comprise that series by reference to the following categories.



                                       52


Categories of Classes
---------------------

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.

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.

Notional Amount Securities............    A class having no principal balance
                                          and bearing interest on a 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 securities
                                          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 securities will be
                                          narrower than that for the primary
                                          planned principal class of that
                                          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


                                       53


                                          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.

Sequential Pay Class..................    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.

Support Class or 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
                                          and/or scheduled principal classes on
                                          that distribution date.

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 that
                                          class.

Floating Rate.........................    A class with an interest rate that
                                          resets periodically based upon a
                                          designated index and that varies
                                          directly with changes in that index as
                                          specified in the related prospectus
                                          supplement. Interest payable to a
                                          floating rate class on a distribution
                                          date may be subject to a



                                       54


                                          cap based on the amount of funds
                                          available to pay interest on that
                                          distribution date.

Inverse Floating Rate.................    A class with an interest rate that
                                          resets periodically based upon a
                                          designated index as specified in the
                                          related prospectus supplement and that
                                          varies inversely with changes in that
                                          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.

Auction Rate..........................    A class with an interest rate that
                                          resets periodically to an auction rate
                                          that is calculated on the basis of
                                          auction procedures described in the
                                          related prospectus supplement.

Interest Only.........................    A class that receives some or all of
                                          the interest payments made on the
                                          underlying trust fund assets or other
                                          assets of the trust fund and little or
                                          no principal. Interest only classes
                                          have either a nominal principal
                                          balance or a notional amount. A
                                          nominal principal balance represents
                                          actual principal that will be paid on
                                          the class. It is referred to as
                                          nominal since it is extremely small
                                          compared to other classes. A notional
                                          amount is the amount used as a
                                          reference to calculate the amount of
                                          interest due on an interest only class
                                          that is not entitled to any
                                          distributions in respect of principal.

Principal Only........................    A class that does not bear interest
                                          and is entitled to receive
                                          distributions in respect of principal
                                          only.

Partial Accrual.......................    A class that accretes a portion of the
                                          amount of accrued interest with
                                          respect to that class. The accreted
                                          interest will not be distributed but
                                          will instead be added to the principal
                                          balance of that class on each
                                          applicable distribution date, with the
                                          remainder of the accrued interest to
                                          be distributed currently as interest
                                          on that class. This partial accrual
                                          without distribution may


                                       55


                                          continue until a specified event has
                                          occurred or until the partial accrual
                                          class is retired.

Accrual...............................    A class that accretes the full amount
                                          of accrued interest with respect to
                                          that class.

                                          The accreted interest will not be
                                          distributed but will instead be added
                                          as principal to the principal balance
                                          of that class on each applicable
                                          distribution date. This accrual
                                          without distribution may continue
                                          until some specified event has
                                          occurred or until the accrual class is
                                          retired.

INDICES APPLICABLE TO FLOATING RATE AND INVERSE FLOATING RATE CLASSES

         The indices applicable to floating rate and inverse floating rate
classes will be LIBOR, COFI, the Treasury Index, the Prime Rate, in each case
calculated as described in this prospectus or any other index described in the
related prospectus supplement.

LIBOR

         On the date specified in the related prospectus supplement for any
class of securities the interest rate of which is determined by reference to an
index designated as LIBOR, the calculation agent designated in the prospectus
supplement will determine LIBOR for the related interest accrual period. On that
determination date, the calculation agent will determine the quotations, as of
11:00 a.m., London time, offered by the principal London office of each of the
designated reference banks meeting the criteria set forth below, for making
one-month United States dollar deposits in the London Interbank market. The
calculation agent will determine those quotations by reference to the Reuters
Screen LIBO Page, as defined in the International Swap Dealers Association, Inc.
Code of Standard Wording, Assumptions and Provisions for Swaps, 1986 Edition, or
to the Telerate Screen Page 3750. In lieu of relying on the quotations for those
reference banks that appear at that time on the Reuters Screen LIBO Page or on
the Telerate Screen Page 3750, the calculation agent may request each of the
reference banks to provide offered quotations at that time.

         LIBOR will be established as follows:

         (1) If on any LIBOR determination date two or more reference banks
provide offered quotations, LIBOR for the next interest accrual period shall be
the arithmetic mean of the offered quotations (rounded upwards if necessary to
the nearest whole multiple of 1/32%).

         (2) If on any LIBOR determination date only one or none of the
reference banks provides offered quotations, LIBOR for the next interest accrual
period shall be whichever is the higher of

             o    LIBOR as determined on the previous LIBOR determination date
                  or

                                       56


             o    the reserve interest rate.

         The reserve rate is the rate per annum which the calculation agent
determines to be either (a) the arithmetic mean, rounded upwards if necessary to
the nearest whole multiple of 1/32%, of the one-month United States dollar
lending rates that New York City banks selected by the calculation agent are
quoting, on the relevant LIBOR determination date, to the principal London
offices of at least two of the reference banks to which quotations are, in the
opinion of the calculation agent, being so made, or (b) in the event that the
calculation agent can determine no arithmetic mean, the lowest one-month United
States dollar lending rate which New York City banks selected by the calculation
agent are quoting on the LIBOR determination date to leading European banks.

         (3) If on any LIBOR determination date for a class specified in
the related prospectus supplement, the calculation agent is required but is
unable to determine the reserve interest rate in the manner provided in
paragraph (2) above, LIBOR for the next interest accrual period shall be LIBOR
as determined on the preceding LIBOR determination date, or, in the case of the
first LIBOR determination date, LIBOR shall be deemed to be the per annum rate
specified as such in the related prospectus supplement.

         Each reference bank shall be a leading bank engaged in transactions in
Eurodollar deposits in the international Eurocurrency market; shall not control,
be controlled by, or be under common control with the calculation agent; and
shall have an established place of business in London. If any reference bank
should be unwilling or unable to act or if appointment of any reference bank is
terminated, another leading bank meeting the criteria specified above will be
appointed.

         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

         On the date specified in the related prospectus supplement for any
class of securities the interest rate of which is determined by reference to an
index designated as COFI, the calculation agent designated in the prospectus
supplement will ascertain the Eleventh District Cost of Funds Index for the
related interest accrual period. 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 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, or 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


                                       57


at the end of the relevant month. The major components of funds of Eleventh
District member institutions are:

             o    savings deposits,

             o    time deposits,

             o    FHLBSF advances,

             o    repurchase agreements, and

             o    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 with
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 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. In addition, 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. On the tenth day, or
any other day of the month specified in the related prospectus supplement, COFI
for each class of COFI securities for the interest accrual period commencing in
that month shall be the most recently published Eleventh District Cost of Funds
Index, unless the most recently published index relates to a month prior to the
third preceding month. If the


                                       58


most recently published Eleventh District Cost of Funds Index relates to a month
prior to the third preceding month, COFI 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 Cost of Funds
Index published by the OTS. 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 COFI is based on the National Cost of
Funds Index it will be based on the most recently published index, unless the
most recently published index, as of the tenth or other designated day of the
month in which an interest accrual period commences, relates to a month prior to
the fourth preceding month. In that case, the index applicable to each class of
COFI securities, for that 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 related series of securities. 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, particularly if LIBOR is
the alternative index, could increase its volatility.

         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

         On the date specified in the related prospectus supplement for any
class of securities the interest rate of which is determined by reference to an
index denominated as a Treasury Index, the calculation agent designated in the
prospectus supplement will ascertain the Treasury Index for Treasury securities
of the maturity and for the period, or, if applicable, date, specified in the
prospectus supplement. As described in the related prospectus supplement, the
Treasury Index for any period means the average of the yield for each business
day during the period specified in the related prospectus supplement, and for
any date means the yield for that date, expressed as a per annum percentage
rate, on

         (1) U.S. Treasury securities adjusted to the "constant maturity"
specified in that prospectus supplement or

         (2) if no "constant maturity" is so specified, U.S. Treasury
securities trading on the secondary market having the maturity specified in that
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
that week, then it will use the Statistical Release from the immediately
preceding week.

         Yields on U.S. Treasury securities at "constant maturity" are derived
from the U.S. Treasury's daily yield curve. This curve, which relates the yield
on a security to its time to maturity, is based on the closing market bid yields
on actively traded Treasury securities in the over-the-counter market. These
market yields are calculated from composites of quotations


                                       59


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

         On the date specified in the related prospectus supplement for any
class of securities the interest rate of which is determined by reference to an
index denominated as the Prime Rate, the calculation agent designated in the
prospectus supplement will ascertain the Prime Rate for the related interest
accrual period. As described in the related prospectus supplement, 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 determination date. If
a prime rate range is given, then the average of the 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 form, each class of securities will be registered as book-entry
securities. Persons acquiring beneficial ownership interests in the
securities--the security owners--will hold their securities through The
Depository Trust Company in the United States, or, if provided in the related
prospectus supplement, Clearstream Banking (formerly Cedelbank) or Euroclear
Bank S.A./N.V., as operator of the Euroclear System in Europe, or indirectly
through organizations that are Participants in these systems. The Depository
Trust Company is referred to as "DTC." Clearstream Banking, societe anonyme is
referred to as "Clearstream." The Euroclear System is referred to as
"Euroclear."

         The book-entry securities will be issued in one or more certificates
which equal the aggregate principal balance of the securities and will initially
be registered in the name of Cede & Co., the nominee of DTC or one of the
relevant depositories. If the aggregate principal amount of any book-entry
security exceeds $500 million, one certificate will be issued with respect to
each $500 million of principal amount and an additional certificate will be
issued with respect to any remaining principal amount. Clearstream and Euroclear
will hold omnibus positions on behalf of their participants through customers'
securities accounts in Clearstream's and Euroclear's names on the books of their
respective depositaries which in turn will hold those positions in customers'
securities accounts in the depositaries' names on the books of DTC. Citibank,
N.A., will act as depositary for Clearstream and The Chase Manhattan Bank will
act as depositary for Euroclear. Except as described in this prospectus, no
person acquiring a book-


                                       60


entry security will be entitled to receive a physical certificate representing
that security. Unless and until definitive securities are issued, it is
anticipated that the only securityholders of the securities will be Cede & Co.,
as nominee of DTC or one of the relevant depositories. Security owners are only
permitted to exercise their rights indirectly through participants and DTC.

         Purchases of book-entry securities under the DTC system must be made by
or through Participants, which will receive a credit for the book-entry
securities on DTC's records. The ownership interest of each security owner is in
turn to be recorded on the Participants' or Securities Intermediaries' records.
The Securities Intermediary's ownership of a book-entry security will be
recorded on the records of DTC or of a participating firm that acts as agent for
the Securities Intermediary, whose interest will in turn be recorded on the
records of DTC, if the beneficial owner's Securities Intermediary is not a
Participant and on the records of Clearstream or Euroclear, as appropriate.
security owners will not receive written confirmation from DTC of their
purchase, but security owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the Participant or indirect participant through which the
security owner entered into the transaction. Transfers of ownership interests in
the book-entry securities are to be accomplished by entries made on the books of
Participants and indirect participants acting on behalf of security owners.
security owners will not receive certificates representing their ownership
interests in the book-entry securities, except in the event that use of the
book-entry system for the book-entry securities is discontinued.

         To facilitate subsequent transfers, all book-entry securities deposited
by Participants with DTC are registered in the name of DTC's partnership
nominee, Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of book-entry securities with DTC and their
registration in the name of Cede & Co. or such other nominee do not effect any
change in beneficial ownership. DTC has no knowledge of the actual security
owners of the book-entry securities; DTC's records reflect only the identity of
the Participants to whose accounts such book-entry securities are credited,
which may or may not be the security owners. The Participants and indirect
participants will remain responsible for keeping account of their holdings on
behalf of their customers.

         Conveyance of notices and other communications by DTC to Participants,
by Participants to indirect participants, and by Participants and indirect
participants to security owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.

         Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or
vote with respect to the book-entry securities. Under its usual procedures, DTC
mails an omnibus proxy to the issuer as soon as possible after the record date.
The omnibus proxy assigns Cede & Co.'s consenting or voting rights to those
Participants to whose accounts the book-entry securities are credited on the
record date (identified in a listing attached to the omnibus proxy).

         Distributions on the book-entry securities will be made to Cede & Co.,
or such other nominee as may be requested by an authorized representative of
DTC. DTC's practice is to credit Participants' accounts, upon DTC's receipt of
funds and corresponding detail information from the issuer or agent on the
payable date in accordance with their respective holdings shown


                                       61


on DTC's records. Payments by Participants to security owners will be governed
by standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of DTC, agent,
or issuer, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of distributions to Cede & Co. (or such other
nominee as may be requested by an authorized representative of DTC) is the
responsibility of issuer or agent, disbursement of such payments to Participants
shall be the responsibility of DTC, and disbursement of such payments to the
security owners shall be the responsibility of Participants and indirect
participants.

         Because of time zone differences, credits of securities received in
Clearstream or Euroclear as a result of a transaction with a participant will be
made during subsequent securities settlement processing and dated the business
day following the DTC settlement date. Credits or any transactions in securities
settled during the processing will be reported to the relevant Euroclear or
Clearstream Participants on that business day. Cash received in Clearstream or
Euroclear as a result of sales of securities by or through a Clearstream
Participant or Euroclear Participant to a DTC participant will be received with
value on the DTC settlement date but will be available in the relevant
Clearstream or Euroclear cash account only as of the business day following
settlement in DTC.

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

         Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Clearstream
Participants or Euroclear Participants, on the other, will be effected in DTC in
accordance with DTC rules on behalf of the relevant European international
clearing system by the relevant depositary, each of which is a participating
member of DTC. However, such 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. 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 Participants and Euroclear
Participants may not deliver instructions directly to the relevant depositaries
for Clearstream or Euroclear.

         DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its Participants deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Participants include
securities brokers and dealers, banks, trust companies,


                                       62


clearing corporations, and certain other organizations. DTC is owned by a number
of its Participants and Members of the National Securities Clearing Corporation,
Government Securities Clearing Corporation, MBS Clearing Corporation, and
Emerging Markets Clearing Corporation, as well as by the New York Stock
Exchange, Inc., the American Stock Exchange LLC, and the National Association of
Securities Dealers, Inc. Access to the DTC system is also available to others
such as securities brokers and dealers, banks, and trust companies that clear
through or maintain a custodial relationship with a Direct Participant, either
directly or indirectly. The rules applicable to DTC and its Participants and
indirect participants are on file with the Securities and Exchange Commission.

         Clearstream is a duly licensed bank organized as a "societe anonyme",
limited company, under the laws of Luxembourg. Clearstream holds securities for
its Participant organizations and facilitates the clearance and settlement of
securities transactions between Clearstream Participants through electronic
book-entry changes in accounts of Clearstream Participants, thus eliminating the
need for physical movement of certificates. Transactions may be settled in
Clearstream in any of 37 currencies, including United States dollars.
Clearstream provides to its Clearstream Participants, among other things,
services for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Clearstream interfaces with domestic markets in several countries. As a licensed
bank, Clearstream is regulated by the Luxembourg Monetary Institute. Clearstream
Participants are recognized financial institutions around the world, including
underwriters, securities brokers and dealers, banks, trust companies, clearing
corporations and other organizations. Indirect access to Clearstream is also
available to others, such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a Clearstream
participant, either directly or indirectly.

         Euroclear was created in 1968 to hold securities for its participants
and to clear and settle transactions between Euroclear participants through
simultaneous electronic book-entry delivery against payment, thereby eliminating
the need for physical movement of certificates and any risk from lack of
simultaneous transfers of securities and cash. Transactions may be settled in
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 Euroclear Bank, as Euroclear Operator, under contract
with Euroclear Clearance Systems S.C., a Belgian cooperative corporation. All
operations are conducted by Euroclear Bank, and all Euroclear securities
clearance accounts and Euroclear cash accounts are accounts with the Euroclear
operator, not the Belgian cooperative. The Belgian cooperative establishes
policy for Euroclear on behalf of Euroclear participants. Euroclear participants
include banks, 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 holds securities and book-entry interests in
securities for participating organizations and facilitates the clearance and
settlement of securities transactions between Euroclear Participants, and
between Euroclear Participants and Participants of certain


                                       63


other securities intermediaries through electronic book-entry changes in
accounts of such Participants or other securities intermediaries.
Non-Participants of Euroclear may hold and transfer book-entry interests in the
offered certificates through accounts with a direct Participant of Euroclear or
any other securities intermediary that holds a book-entry interest in the
offered certificates through one or more securities intermediaries standing
between such other securities intermediary and the Euroclear Operator.

         Securities clearance accounts and cash accounts for Euroclear
participants with Euroclear Bank are governed by the Terms and Conditions
Governing Use of Euroclear and the related Operating Procedures of the Euroclear
system and applicable Belgian law. 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.

         Under a book-entry format, beneficial owners of the book-entry
securities may experience some delay in their receipt of payments, since
payments will be forwarded by the trustee to Cede & Co., as nominee of DTC.
Distributions with respect to securities held through Clearstream or Euroclear
will be credited to the cash accounts of Clearstream participants or Euroclear
participants in accordance with the relevant system's rules and procedures, to
the extent received by the relevant depositary. 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." Because DTC can only act on behalf of Securities Intermediaries,
the ability of a beneficial owner to pledge book-entry securities to persons or
entities that do not participate in the depository system, may be limited due to
the lack of physical certificates for book-entry securities.

         Monthly and annual reports on the trust fund will be provided to Cede &
Co., as nominee of DTC, and may be made available by Cede & Co. to beneficial
owners upon request, in accordance with the rules, regulations and procedures
creating and affecting the depository, and to the Securities Intermediaries to
whose DTC accounts the book-entry securities of those beneficial owners are
credited.

         DTC has advised the depositor 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 Securities Intermediaries to whose DTC accounts the
book-entry securities are credited, to the extent that actions are taken on
behalf of Securities Intermediaries whose holdings include those book-entry
securities. Clearstream or the Euroclear operator, as the case may be, will take
any other action permitted to be taken by a securityholder under the agreement
on behalf of a Clearstream participant or Euroclear participant only in
accordance with its and DTC's relevant rules and procedures. DTC may take
actions, at the direction of the related participants, with respect to some
securities which conflict with actions taken with respect to other securities.

                                       64


         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 that 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 then will
recognize the holders of the definitive securities as securityholders under the
applicable agreement.

         Although DTC, Clearstream and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of securities among participants of
DTC, Clearstream and Euroclear, they are under no obligation to perform or
continue to perform those procedures and those 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 a limited financial guaranty policy
issued by an entity named in the related prospectus supplement, the
subordination of one or more classes of the securities of that series, the
establishment of one or more reserve accounts, the use of a
cross-collateralization feature, use of a mortgage pool insurance policy, FHA
insurance, VA guarantee, bankruptcy bond, special hazard insurance policy,
surety bond, letter of credit, guaranteed investment contract,
overcollateralization, interest rate swap agreement, interest rate cap agreement
or another method of credit enhancement contemplated in this prospectus and
described in the related prospectus supplement, or any combination of the
foregoing. 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 on those securities. 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 that series to distributions of
scheduled principal, principal prepayments, interest or any combination thereof
that otherwise would have been payable to holders of one or more classes of
subordinated 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:

         o     reducing the ownership interest, if applicable, of the related
               subordinated securities;

                                       65


         o     a combination of the immediately preceding sentence and the
               above; or

         o     another method described in the related prospectus supplement.

         If so specified in the related prospectus supplement, delays in receipt
of scheduled payments on the loans held in a trust fund and losses on defaulted
loans may be borne first by the various classes of subordinated securities and
subsequently by the various classes of senior securities, in each case under the
circumstances and in accordance with the limitations specified in that
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
subordinated securities by virtue of subordination and the amount of the
distributions otherwise distributable to the subordinated securityholders 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 payment on the loans or aggregate losses
in respect of those 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 subordinated securities on any distribution date may
instead be deposited into one or more reserve accounts established with the
trustee or distributed to holders of senior securities. Deposits may be made on
each distribution date, for specified periods, or until the balance in the
reserve account has reached a specified amount, in each case as specified in the
related prospectus supplement. Deposits may also be made following payments from
the reserve account to holders of securities or otherwise to the extent
necessary to restore the balance in the reserve account to required levels, in
each case as also specified in the related prospectus supplement. Amounts on
deposit in the reserve account may be released to the holders of classes of
securities at the times and under the circumstances specified in that prospectus
supplement.

         If specified in the related prospectus supplement, various classes of
senior securities and subordinated securities may themselves be subordinate in
their right to receive specified distributions to other classes of senior and
subordinated securities, respectively, through a cross-collateralization
mechanism or otherwise.

         As between classes of senior securities and as between classes of
subordinated securities, distributions may be allocated among those classes:

         o     in the order of their scheduled final distribution dates;

         o     in accordance with a schedule or formula;

         o     in relation to the occurrence of events; or

         o     by another method as specified in the related prospectus
               supplement.



                                       66


As between classes of subordinated securities, payments to holders of senior
securities on account of delinquencies or losses and payments to any reserve
account 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. Under the letter of credit, the entity providing the L/ C
will be obligated to honor drawings under the L/C in an aggregate fixed dollar
amount, net of unreimbursed payments, 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. 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 applicable 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 under the letter of credit. The obligations of the entity providing the
L/C 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 to be filed within 15
days of 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 on specified
classes will be covered by insurance policies and/or surety bonds provided by
one or more insurance companies or sureties. Those 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:

         o     maintaining timely payments or providing additional protection
               against losses on the trust fund assets;

         o     paying administrative expenses; or

         o     establishing a minimum reinvestment rate on the payments made in
               respect of those assets or principal payment rate on those
               assets.

         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. A copy of any
arrangement instrument for a series will be filed


                                       67


with the SEC as an exhibit to a Current Report on Form 8-K to be filed with the
SEC within 15 days of issuance of the securities of the related series.

OVER-COLLATERALIZATION

         If so provided in the prospectus supplement for a series of securities,
a portion of the interest payment on each loan included in the trust fund may be
applied as an additional distribution in respect of principal to reduce the
principal balance of a class or classes of securities and, thus, accelerate the
rate of payment of principal on that class or those classes of securities.

SPREAD ACCOUNT

         If so specified in the related prospectus supplement, support for a
series or one or more classes of a series of securities may be provided by the
periodic deposit of a portion of available excess cash flow from the trust fund
assets into a spread account intended to assure the subsequent distribution of
interest and principal on the securities of that series or class or classes of a
series of securities in the manner specified in the related prospectus
supplement.

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 that series of securities, in trust, of one or
more reserve accounts for that series. The prospectus supplement relating to a
series will specify whether or not any reserve accounts will be included in the
trust fund for that series.

         The reserve account for a series will be funded:

         o     by the deposit in the reserve account of cash, United States
               Treasury securities, instruments evidencing ownership of
               principal or interest payments on those amounts or instruments,
               letters of credit, demand notes, certificates of deposit or a
               combination thereof in the aggregate amount specified in the
               related prospectus supplement;

         o     by the deposit in the reserve account from time to time of
               amounts, as specified in the related prospectus supplement to
               which the subordinate securityholders, if any, would otherwise be
               entitled; or

         o     in any other manner as may be specified in the related prospectus
               supplement.

         Any amounts on deposit in the reserve account and the proceeds of any
other instrument upon maturity will be held in cash or will be invested in
permitted investments which may include:

               (1) obligations of the United States or any of its agencies,
         provided those obligations are backed by the full faith and credit of
         the United States;

                                       68


               (2) 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 as will not result in he downgrading
         or withdrawal of the ratings then assigned to those securities by each
         rating agency rating those securities;

               (3) commercial or finance company paper which is then receiving
         the highest commercial or finance company paper rating of each rating
         agency rating those securities, or a lower rating as will not result in
         the downgrading or withdrawal of the ratings then assigned to those
         securities by each rating agency rating those securities;

               (4) 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 and
         regulated by federal and/or state banking authorities, provided that
         the commercial paper and/or long-term unsecured debt obligations of
         that 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 is not a rating agency, are then rated in
         one of the two highest long term and the highest short-term ratings of
         each rating agency for those securities, or any lower ratings as will
         not result in the downgrading or withdrawal of the rating then assigned
         to those securities by any rating agency;

               (5) 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;

               (6) guaranteed reinvestment agreements issued by any bank,
         insurance company or other corporation containing, at the time of the
         issuance of those agreements, the terms and conditions as will not
         result in the downgrading or withdrawal of the rating then assigned to
         the related securities by any rating agency rating those securities;

               (7) repurchase obligations with respect to any security described
         in clauses (1) and (2) above, in either case entered into with a
         depository institution or trust company acting as principal described
         in clause (4) above;

               (8) securities, other than stripped bonds, stripped coupons or
         instruments sold at a purchase price in excess of 115% of face amount,
         bearing interest or sold at a discount and issued by any corporation
         incorporated under the laws of the United States or any state which, at
         the time of the investment, have one of the two highest ratings of each
         rating agency, except that if the rating agency is Moody's, the rating
         shall be the highest commercial paper rating of Moody's for any
         securities, or a lower rating as will not result in the downgrading or
         withdrawal of the rating then assigned to the securities by any rating
         agency rating those securities;

               (9) interests in any money market fund which at the date of
         acquisition of the interests in that fund and throughout the time those
         interests are held in the fund has the


                                       69


         highest applicable rating by each rating agency rating those securities
         or any lower rating as will not result in the downgrading or withdrawal
         of the ratings then assigned to the securities by each rating agency
         rating those securities; and

               (10) short term investment funds sponsored by any trust company
         or national banking association incorporated under the laws of the
         United States or any state which on the date of acquisition has been
         rated by each rating agency rating those securities in their respective
         highest applicable rating category or any lower rating as will not
         result in the downgrading or withdrawal of the ratings then assigned to
         those securities by each rating agency rating those securities;

provided, that no instrument shall be a permitted investment if that instrument
evidences the right to receive interest only payments with respect to the
obligations underlying that instrument. If a letter of credit is deposited with
the trustee, the letter of credit will be irrevocable. In general, any
instrument deposited in the spread account 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. If approved by each rating agency rating a
series of securities, the instruments deposited in the spread account may be in
the name of another entity. Additional information with respect to instruments
deposited in the reserve accounts will be set forth in the related prospectus
supplement.

         Any amounts so deposited and payments on instruments so deposited will
be available for withdrawal from the reserve account 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 will be obtained for the loans included in the trust fund. The
insurer issuing the pool insurance policy will be named in that prospectus
supplement.

         Each pool insurance policy will provide limited coverage of losses
caused by payment defaults on loans in the related pool. Coverage will be 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 in this prospectus, the master
servicer will present claims 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
under the policies may only be made respecting particular defaulted loans and
only upon satisfaction of the conditions precedent contained in each policy.
Typically, 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; however, if
so specified in the related prospectus supplement, the pool insurance policies
may cover those claims.

         The pool insurance policy may provide that no claims may be validly
presented unless:

                                       70


         o     any required primary mortgage insurance policy is in effect for
               the defaulted loan and a claim under that policy has been
               submitted and settled;

         o     hazard insurance on the related property has been kept in force
               and real estate taxes and other protection and preservation
               expenses have been paid;

         o     if there has been physical loss or damage to the property, it has
               been restored to its physical condition, reasonable wear and tear
               excepted, at the time of issuance of the policy; and

         o     the insured has acquired good and merchantable title to the
               property free and clear of liens except limited, 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 its principal balance plus accrued and unpaid interest at the loan interest
rate to the date of the purchase and a portion of 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 interest 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 a portion of 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 the restoration will increase the proceeds to
securityholders on liquidation of the loan after reimbursement of the master
servicer for its expenses and the expenses will be recoverable by it through
proceeds of the sale of the property or proceeds of the related pool insurance
policy or any related primary mortgage insurance policy.

         The pool insurance policy generally 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, fraud or negligence in the origination
or servicing of a loan, including misrepresentation by the borrower, the
originator or persons involved in the origination of the loan, or 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 or originator's representations described above, and, might
give rise to an obligation on the part of the applicable seller or originator to
repurchase the defaulted loan if the breach cannot be cured by that seller or
originator. 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 that loan was not approved by the applicable
insurer.

         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


                                       71


of the net amounts realized by the pool insurer upon disposition of all
foreclosed properties. The amount of claims paid will include a portion of
expenses incurred by the master servicer as well as, in most cases, 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.

CROSS-COLLATERALIZATION

         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. In that case, credit
support may be provided by a cross-collateralization feature which requires that
distributions be made with respect to securities evidencing a beneficial
ownership interest in, or secured by, one or more asset groups within the same
trust fund prior to distributions to subordinated securities evidencing a
beneficial ownership interest in, or secured by, one or more other asset groups
within that trust fund. Cross-collateralization may be provided by the
allocation of a portion of excess amounts generated by one or more asset groups
within the same trust fund to one or more other asset groups within the same
trust fund or the allocation of losses with respect to one or more asset groups
to one or more other asset groups within the same trust fund. Excess amounts
will be applied and/or losses will be allocated to the class or classes of
subordinated securities of the related series then outstanding having the lowest
rating assigned by any rating agency or the lowest payment priority, in each
case to the extent and in the manner more specifically described in the related
prospectus supplement. The prospectus supplement for a series which includes a
cross-collateralization feature will describe the manner and conditions for
applying the cross-collateralization feature.

         If specified in the related prospectus supplement, the coverage
provided by one or more forms of credit support described in this prospectus may
apply concurrently to two or more related trust funds. If applicable, the
related prospectus supplement will identify the trust funds to which credit
support relates and the manner of determining the amount of coverage the credit
support provides to the identified trust funds.

OTHER INSURANCE, SURETY BONDS, GUARANTIES, AND LETTERS OF CREDIT

         If specified in the related prospectus supplement, a trust fund may
also include bankruptcy bonds, special hazard insurance policies, other
insurance, guaranties, or similar arrangements for the purpose of:

         o     maintaining timely payments or providing additional protection
               against losses on the assets included in that trust fund;

         o     paying administrative expenses; or

         o     establishing a minimum reinvestment rate on the payments made in
               respect of the assets or principal payment rate on the assets.

                                       72


Those 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.

DERIVATIVE PRODUCTS

         If specified in the related prospectus supplement, a trust fund may
acquire the benefit of derivative products. For any series that includes
derivative products, the particular derivatives may provide support only to
certain specified classes of securities and will be subject to limitations and
conditions, all of which will be described in the prospectus supplement.

         The derivative products may include interest rate swaps and interest
rate caps, floors and collars, in each case the purpose of which will be to
minimize the risk to securityholders of adverse changes in interest rates. An
interest rate swap is an agreement between two parties to exchange a stream of
interest payments on an agreed hypothetical or "notional" principal amount. No
principal amount is exchanged between the counterparties to an interest rate
swap. In the typical swap, one party agrees to pay a fixed rate on a notional
principal amount, while the counterparty pays a floating rate based on one or
more reference interest rates including LIBOR, a specified bank's prime rate or
U.S. Treasury Bill rates. Interest rate swaps also permit counterparties to
exchange a floating rate obligation based on one reference interest rate (such
as LIBOR) for a floating rate obligation based on another referenced interest
rate (such as U.S. Treasury Bill rates).

         Other types or arrangements may be entered into to protect against
interest rate moves, to otherwise supplement the interest rates on one or more
classes of securities or to provide for payments to the trust fund based on the
occurrence of other specified events. These arrangements will be described in
the related prospectus supplement.

                       YIELD 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 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 in that pool. 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 have prepayment penalties. The prepayment
experience on the loans in a pool will affect the weighted average life of the
related series of securities.

         The rate of prepayment on the loans cannot be predicted. Home equity
loans and home improvement 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 those loans.
Generally, home equity loans and home improvement 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,


                                       73


or similar to, those of traditional fully-amortizing first mortgage loans. The
prepayment experience of the related trust fund may be affected by a wide
variety of factors, including general economic conditions, prevailing interest
rate levels, the availability of alternative financing, homeowner mobility and
the frequency and amount of any future draws on any revolving credit line loans.
Other factors that might be expected to affect the prepayment rate of a pool of
home equity mortgage loans or home improvement contracts include the amounts of,
and interest rates on, the underlying senior mortgage loans, and 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 will have the same effect as
a prepayment of the related loan. See "Material Legal Aspects of the
Loans--Due-on-Sale Clauses." 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 from the rate
anticipated by that investor at the time those securities were purchased.

         Collections on revolving credit line loans may vary because, among
other things, borrowers may

         (1) make payments during any month as low as the minimum monthly
payment for the month or, during the interest-only period for a portion of
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 the month or

         (2) make payments as high as the entire outstanding principal
balance plus accrued interest and the fees and charges on the revolving credit
line loans. 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.

         If specified in the related prospectus supplement, conventional loans
will contain due-on-sale provisions permitting the mortgagee to accelerate the
maturity of the loan upon sale or transfers by the borrower of the related
property. On the other hand, if specified in the related prospectus supplement,
conventional loans will not contain due-on-sale provisions. FHA Loans and VA
Loans 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. As described in the related prospectus
supplement, 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
"Material Legal Aspects of the Loans" for a description of the applicable
provisions of each agreement and legal developments that may affect the
prepayment experience on the loans.

                                       74


         The rate of prepayments with respect to conventional mortgage loans has
fluctuated significantly in recent years. In general, if prevailing rates fall
significantly below the loan rates borne by the loans, those loans are more
likely to experience higher prepayment rates than if prevailing interest rates
remain at or above those loan rates. Conversely, if prevailing interest rates
rise appreciably above the loan rates borne by the loans, those loans are more
likely to experience a lower prepayment rate than if prevailing rates remain at
or below those loan rates. However, there can be no assurance that the preceding
sentence will be the case.

         When a full prepayment is made on a loan, the borrower is charged
interest on the principal amount of the loan prepaid only for the number of days
in the month actually elapsed up to the date of the prepayment, rather than for
a full month. In most cases, the effect of prepayments in full will be to reduce
the amount of interest passed through or paid in the following month to holders
of securities because interest on the principal amount of any loan so prepaid
generally will be paid only to the date of prepayment. If so specified in the
related prospectus supplement there may be a provision for the servicer or some
other specific entity to cover the shortfall resulting from prepayment in full.
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. In most cases,
neither full nor partial prepayments will be passed through or paid until the
month following receipt.

         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, like many
lawsuits, can be characterized by significant delays and expenses if defenses or
counterclaims are interposed. Foreclosure actions may require 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 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 disclosures, and require licensing of some originators and
servicers of loans. In addition, most have other laws, public policy and general
principles of equity relating to the protection of


                                       75


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 may entitle the
borrower to a refund of amounts previously paid and, in addition, could interest
on the loans, subject the master servicer to damages and administrative
sanctions.

         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 those 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 accrue on each loan from the first day of the month, the
distribution of that interest will not be made earlier than the month following
the month of accrual.

         Under some circumstances, the master servicer, the holders of the
residual interests in a REMIC or any person specified in the related prospectus
supplement may have the option to purchase the assets of a trust fund, and, in
so doing, cause earlier retirement of the related series of securities. See "The
Agreements--Termination; Optional Termination."

         If a funding period is established for the related series of securities
as described under "The Agreements - Pre-Funding Account" in this prospectus,
and the trust fund is unable to acquire sufficient loans during the pre-funding
period, the amounts remaining in the pre-funding account at the end of the
funding period will be applied as a prepayment of principal in the manner and
priority specified in the related prospectus supplement.

         The relative contribution of the various factors affecting prepayment
may also vary from time to time. There can be no assurance as to the rate of
payment of principal of the trust fund assets at any time or over the lives of
the securities.

         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 those securities.

                                 THE AGREEMENTS

         Set forth below is a description of the material provisions of the
indentures, pooling and servicing agreements and trust agreements which, as
applicable, will govern the terms of each series of securities and which are not
described elsewhere in this prospectus. The description of these agreements 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, the 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, and except as otherwise specified in the related prospectus supplement,
the depositor will cause the loans comprising the related trust fund to be
assigned to the trustee, without recourse, together with all


                                       76


principal and interest received by or on behalf of the depositor on or with
respect to those loans after the cut-off date, other than principal and interest
due on or before the cut-off date and other than any retained interest specified
in the related prospectus supplement. The trustee will, concurrently with the
assignment, deliver the securities to the depositor in exchange for the loans.
Each loan will be identified in a schedule appearing as an exhibit to the
related agreement. 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 interest rate, the
maturity of the loan, the loan-to-value ratios or combined loan-to-value ratios,
as applicable, at origination and other information.

         If specified in the related prospectus supplement, within the time
period specified in that prospectus supplement, the depositor, or the seller of
the related loans to the depositor, will be required to deliver or cause to be
delivered to the trustee or to the trustee's custodian as to each mortgage loan
or home equity loan, among other things:

               (1) the mortgage note or contract endorsed without recourse in
         blank or to the order of the trustee;

               (2) the mortgage, deed of trust or similar instrument with
         evidence of recording indicated on the mortgage, deed of trust or
         similar instrument, except for any mortgage not returned from the
         public recording office, in which case the depositor or seller 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
         applicable recording office;

               (3) an assignment of the mortgage to the trustee, which
         assignment will be in recordable form in the case of a mortgage
         assignment; and

               (4) the 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 agreement.

Notwithstanding the foregoing, if specified in the prospectus supplement, the
depositor or the seller may maintain possession of the documents in clauses (1)
through (4) above for the life of the transaction or until the occurrence of
events described in that prospectus supplement.

         If specified in the related prospectus supplement, the depositor or the
seller 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 interest in the loans against the claim of any
subsequent transferee or any successor to or creditor of the depositor or the
originators of the loans. Alternatively, if specified in the related prospectus
supplement, the depositor or the seller will not cause the assignments of the
loans to be recorded or will cause the recordation only upon the occurrence of
events specified in that prospective supplement.

         If so specified, in lieu of the delivery requirement set forth above,
with respect to any mortgage which has been recorded in the name of the Mortgage
Electronic Registration Systems, Inc., or MERS(R), or its designee, no mortgage
assignment in favor of the trustee will be required


                                       77


to be prepared or delivered. Instead, the master servicer will be required to
take all actions as are necessary to cause the applicable trust fund to be shown
as the owner of the related mortgage loan on the records of MERS for purposes of
the system of recording transfers of beneficial ownership of mortgages
maintained by MERS.

         With respect to any loans that are cooperative loans, the depositor or
the seller will cause to be delivered to the trustee the related original
cooperative note 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, an executed financing agreement and the
relevant stock certificate, related blank stock powers and any other document
specified in the related prospectus supplement. If so specified in the related
prospectus supplement, the depositor or the seller 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.

         If specified in the related prospectus supplement, the depositor or the
seller will as to each manufactured housing contract or home improvement
contract, deliver or cause to be delivered to the trustee the original contract
and copies of documents and instruments related to each contract and, other than
in the case of unsecured contracts, the security interest in the property
securing that contract. In order to give notice of the right, title and interest
of securityholders to the contracts, if specified in the related prospectus
supplement, the depositor or the seller will cause a UCC-1 financing statement
to be executed by the depositor or the seller identifying the trustee as the
secured party and identifying all contracts as collateral. If so specified in
the related prospectus supplement, the 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 contracts without notice of the assignment, the
interest of securityholders in the contracts could be defeated. See "Material
Legal Aspects of the Loans--The Contracts."

         The trustee or its custodian will review the loan documents delivered
to it within the time period specified in the related prospectus supplement, and
the trustee will hold those documents in trust for the benefit of the related
securityholders. If any document is found to be missing or defective in any
material respect, the trustee or its custodian will notify the master servicer
and the depositor, and the master servicer will notify the related seller or
originator.

         If the applicable seller or originator cannot cure the omission or
defect within the time period specified in the related prospectus supplement
after receipt of notice, that seller or originator 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 that loan from the trust
fund and substitute in its place one or more other loans that meets requirements
set forth in the prospectus supplement. There can be no assurance that a seller
or originator will fulfill this purchase or substitution obligation. Although
the master servicer may be obligated to enforce the obligation to the extent
described above under "The Trust Fund--Representations by Sellers or
Originators; Repurchases," neither the master servicer nor the depositor will be
obligated to purchase or replace the loan if the seller or originator 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. This obligation to cure, purchase or substitute constitutes the
sole


                                       78


remedy available to the securityholders or the trustee for omission of, or a
material defect in, a constituent document.

         The trustee will be authorized to appoint a custodian pursuant to a
custodial agreement to maintain possession of and, if applicable, to review the
documents relating to the loans as agent of the trustee.

         The master servicer will make representations and warranties regarding
its authority to enter into, and its ability to perform its obligations under,
the agreement. Upon a breach of any representation of the master servicer
regarding its authority or its ability which materially and adversely affects
the interests of the securityholders in a loan, the master servicer will be
obligated either to cure the breach in all material respects or to purchase at
the purchase price or if so specified in the related prospectus supplement,
replace the loan. This obligation to cure, purchase or substitute constitutes
the sole remedy available to the securityholders or the trustee for that breach
of representation by the master servicer.

         Notwithstanding the foregoing provisions, with respect to a trust fund
for which a REMIC election is 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 Internal Revenue Code.

NO RECOURSE TO SELLERS, ORIGINATORS, DEPOSITOR OR MASTER SERVICER

         As described above under "--Assignment of the Trust Fund Assets," the
depositor will cause the loans comprising the related trust fund to be assigned
to the trustee, without recourse. However, each seller of the loans to the
depositor or the originator of the loans will be obligated to repurchase or
substitute for any loan as to which representations and warranties are breached
or for failure to deliver the required documents relating to the loans as
described above under "--Assignment of the Trust Fund Assets" and under "The
Trust Fund--Representations by Sellers or Originators; Repurchases." These
obligations to purchase or substitute constitute the sole remedy available to
the securityholders or the trustee for a breach of any representation or failure
to deliver a constituent document.

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 which, unless otherwise specified in the related
prospectus supplement, must be either:

         o     maintained with a depository institution the debt obligations of
               which, or in the case of a depository institution that is the
               principal subsidiary of a holding company, the obligations of
               which, are rated in one of the two highest rating categories by
               the rating agency or rating agencies that rated one or more
               classes of the related series of securities;

         o     an account or accounts the deposits in which are fully insured by
               either the Bank Insurance Fund of the FDIC or the Savings
               Association Insurance Fund (as successor to the Federal Savings
               and Loan Insurance Corporation);

                                       79


         o     an account or accounts the deposits in which are insured by the
               BIF or SAIF to the limits established by the FDIC, and the
               uninsured deposits in which are otherwise secured so 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 those 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; or

         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 in the security account may be invested
pending each succeeding distribution date in permitted investments. The related
prospectus supplement will specify whether the master servicer or its designee
will be entitled to receive any interest or other income earned on funds in the
security account as additional compensation and the entity that 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 provided in the agreement, 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 retained interest:

         o     all payments on account of principal, including principal
               prepayments and, if specified in the related prospectus
               supplement, any applicable prepayment penalties, 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 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 those proceeds are not applied to the restoration
               of the property or released to the mortgagor in accordance with
               the master servicer's normal servicing procedures and all other
               cash amounts, net of unreimbursed expenses incurred in connection
               with liquidation or foreclosure and unreimbursed advances 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;

                                       80


         o     all proceeds of any loan or property purchased by the master
               servicer, the depositor or any seller or originators as described
               under "The Trust Funds--Representations by Sellers or
               Originators; Repurchases" or under "--Assignment of Trust Fund
               Assets" above and all proceeds of any loan repurchased 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
               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.

The master servicer or the depositor, as applicable, will from time to time
direct the institution that maintains the security account to withdraw funds
from the security account for specified purposes which may include the
following:

         o     to pay to the master servicer the servicing fees described in the
               related prospectus supplement, the master servicing fees and, as
               additional servicing compensation, earnings on or investment
               income with respect to funds in the amounts in the security
               account credited to the security account;

         o     to reimburse the master servicer for advances, the right of
               reimbursement with respect to any loan being 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 to that loan) with respect to which the
               advance was made;

         o     to reimburse the master servicer 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,
               the right of reimbursement being limited to amounts received
               representing late recoveries of the payments for which the
               advances were made;

         o     to pay to the master servicer, with respect to each loan or
               property that has been purchased by the master servicer under the
               related agreement, all amounts


                                       81


               received on the loan or property and not taken into account in
               determining the principal balance of the repurchased loan;

         o     to reimburse the master servicer or the depositor for expenses
               incurred and reimbursable pursuant to the agreement;

         o     to withdraw any amount deposited in the security account and not
               required to be deposited in the security account; and

         o     to clear and terminate the security account upon termination of
               the agreement.

In addition, on or prior to the business day immediately preceding each
distribution date or any other day specified in the related prospectus
supplement, the master servicer shall withdraw from the security account the
amount of available funds, to the extent on deposit, for deposit in an account
maintained by the trustee for the related series of securities.

PRE-FUNDING ACCOUNT

         If so provided in the related prospectus supplement, a funding period
will be established for the related series of securities and the master servicer
will establish and maintain a pre-funding account. Any pre-funding account for a
trust fund will be maintained in the name of the related trustee, and will be
the account into which the depositor or the seller will deposit cash from the
proceeds of the issuance of the related securities in an amount equal to the
pre-funded amount on the related closing date. The pre-funded amount will not
exceed 25% of the initial aggregate principal amount of the certificates and/or
notes of the related series. Any funding period 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.

         The pre-funding account will be designed solely to hold funds to be
applied by the related trustee during the funding period to pay to the depositor
or the seller the purchase price for loans deposited into the trust fund
subsequent to the related closing date. The purchase of these subsequent loans
will be the sole use for which amounts on deposit in the pre-funding account may
be used during the funding period. Monies on deposit in the pre-funding account
will not be available to cover losses on or in respect of the related loans.
Each subsequent loan that is purchased by the related trustee will be required
to be underwritten in accordance with the eligibility criteria set forth in the
related agreement and in the related prospectus supplement. The eligibility
criteria will be determined in consultation with the applicable rating agency or
rating agencies prior to the issuance of the related series of securities and
are designed to ensure that if subsequent loans were included as part of the
initial loans, the credit quality of the assets would be consistent with the
initial rating or ratings of the securities of that series. The depositor or the
seller will certify to the trustee that all conditions precedent to the transfer
of the subsequent loans to the trust fund, including, among other things, the
satisfaction of the related eligibility criteria, have been satisfied. It is a
condition precedent to the transfer of any subsequent loans to the trust fund
that the applicable rating agency or rating agencies, after receiving prior
notice of the proposed transfer of the subsequent loans to the trust fund, will
not have advised the depositor, the seller or the related trustee that the
conveyance of the subsequent

                                       82


loans to the trust fund will result in a qualification, modification or
withdrawal of their current rating of any securities of that series. Upon the
purchase by the trustee of a subsequent loan, that subsequent loan will be
included in the related trust fund assets. 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 agreement. Earnings on investment of funds
in the pre-funding account will be deposited into the related security account
or any other trust account as is specified in the related prospectus supplement
or released to the depositor, the seller or the master servicer or any other
party and in the manner specified in the related prospectus supplement. Losses
on the investment of funds in the pre-funding account will be charged against
the funds on deposit in the pre-funding account unless otherwise specified in
the related prospectus supplement.

         For any series of securities for which a pre-funding account is
established, the amount deposited in the pre-funding account on the closing date
of the series will equal the depositor's estimate of the principal amount of
loans it expects the related seller to convey for deposit into the trust fund
during the funding period. However, there will be no assurance that the seller
will in fact be able to convey that amount of loans for deposit into the trust
fund prior to the date set for the funding period to end. Any amounts remaining
in the pre-funding account at the end of the funding period will be distributed
to the related securityholders in the manner and priority specified in the
related prospectus supplement, as a prepayment of principal of the related
securities. Therefore, any inability of the seller to convey a sufficient
principal amount of loans and the resulting prepayment of principal could cause
the overall rate of prepayments on the related securities to be higher than you
may have anticipated when you made your investment decision. See "Yield and
Prepayment Considerations."

         The depositor will include information regarding the additional
subsequent loans in a Current Report on Form 8-K, to be filed after the end of
the funding period, to the extent that the information, individually or in the
aggregate, is material.

         In addition, if so provided in the related prospectus supplement, the
master servicer will establish and maintain, in the name of the trustee on
behalf of the related securityholders, a capitalized account into which the
depositor will deposit cash from the proceeds of the issuance of the related
securities in an amount necessary to cover shortfalls in interest on the related
series of securities that may arise as a result of a portion of the assets of
the trust fund not being invested in loans and the utilization of the
pre-funding account as described above. 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. Monies on
deposit in the capitalized interest account will not be available to cover
losses on or in respect of the related loans. Amounts on deposit in the
capitalized interest account will be distributed to securityholders on the
distribution dates occurring in the funding period to cover any shortfalls in
interest on the related series of securities as described in the related
prospectus supplement. Monies on deposit in the capitalized interest account may
be invested in permitted investments under the circumstances and in the manner
described in the related agreement. Earnings on and investment of funds in the
capitalized interest account will be deposited into the related security account
or any other trust account as specified in the related prospectus supplement or
released to the depositor or the master servicer or any other party and in the
manner specified in the related prospectus supplement. Losses on the investment
of funds in the capitalized interest


                                       83


account will be charged against the funds on deposit in the capitalized interest
account unless otherwise specified in the related prospectus supplement. 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 or the seller as
specified in the related prospectus supplement.

SUB-SERVICING BY SELLERS

         Each seller of a loan to the depositor in connection with a series or
any other servicing entity may act as the sub-servicer for a loan in connection
with that series pursuant to a sub-servicer agreement, which will not contain
any terms inconsistent with the related agreement. While each sub-servicing
agreement will be a contract solely between the master servicer and the
sub-servicer, the agreement pursuant to which a series of securities is issued
will provide that, if for any reason the master servicer for that series of
securities is no longer the master servicer of the related loans, the trustee or
any successor master servicer may assume the master servicer's rights and
obligations under the sub-servicing 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 master servicing agreement as if the master servicer alone were
servicing the loans.

HAZARD INSURANCE

         Except as otherwise specified in the related prospectus supplement, 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. Coverage will be in an
amount that is at least equal to the lesser of

         (1) the maximum insurable value of the improvements securing the
loan or

         (2) the greater of (y) the outstanding principal balance of the
loan and (z) an amount 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. A 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 in the security account 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 in each policy. Although the
policies relating to the loans may have been


                                       84


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 of the policies 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 some cases, vandalism. The foregoing list is merely
indicative of a subset of the 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.

         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 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

         (1) 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 or

         (2) 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 on the loans 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 a portion of the uninsured risks described above.
See "Credit Enhancement."

         In general, the master servicer will not require that a standard hazard
or flood insurance policy be maintained on the cooperative dwelling relating to
any cooperative loan. Generally, the cooperative itself is responsible for
maintenance of hazard insurance for the property owned by the cooperative and
the tenant-stockholders of that cooperative do not maintain individual hazard
insurance policies. To the extent, however, that a cooperative and the related
borrower on a cooperative loan do not maintain insurance or do not maintain
adequate coverage or any insurance proceeds are not applied to the restoration
of damaged property, any damage to the borrower's cooperative dwelling or the
cooperative's building could significantly reduce the value of the collateral
securing that 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

                                       85


         (1) that the restoration will increase the proceeds to
securityholders on liquidation of the loan after reimbursement of the master
servicer for its expenses and

         (2) that the related expenses will be recoverable by it from related
insurance proceeds or liquidation proceeds.

         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 the normal practices and
procedures 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 that loan plus interest accrued on the
loan that is payable to securityholders, the trust fund will realize a loss in
the amount of that 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 any of 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 that loan plus interest accrued
on the loan 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 that 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 specified in the related prospectus supplement, if the master
servicer or its designee recovers insurance proceeds which, when added to any
related liquidation proceeds and after deduction of a portion of expenses
reimbursable to the master servicer, exceed the principal balance of the related
loan plus interest accrued on the loan 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 that
loan. In the event that the master servicer has expended its own funds to
restore the damaged property and those 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 insurance proceeds cannot
exceed deficiency claims and a portion of expenses incurred by the master
servicer, no payment or recovery will result in a recovery to the trust fund
which exceeds the principal balance of the defaulted loan together with accrued
interest on the loan. See "Credit Enhancement."

         In general, the proceeds from any liquidation of a loan will be applied
in the following order of priority:

         o     first, 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 that loan;

         o     second, to reimburse the master servicer for any unreimbursed
               advances with respect to that loan;

                                       86


         o     third, to accrued and unpaid interest, to the extent no advance
               has been made for the amount, on that loan; and

         o     fourth, as a recovery of principal of that loan.

         The related prospectus supplement may specify an alternative priority
of allocation of proceeds from the liquidation of a loan.

REALIZATION UPON DEFAULTED LOANS

         General. The master servicer will use its reasonable best efforts to
foreclose upon, repossess or otherwise comparably convert the ownership of the
properties securing the related loans as come into and continue in default and
as to which no satisfactory arrangements can be made for the collection of
delinquent payments. In connection with a foreclosure or other conversion, the
master servicer will follow the practices and procedures as deems necessary or
advisable and as are normal and usual in its servicing activities with respect
to comparable loans serviced by it. However, the master servicer will not be
required to expend its own funds in connection with any foreclosure or towards
the restoration of the property unless it determines that the restoration or
foreclosure will increase the liquidation proceeds in respect of the related
loan available to the securityholders after reimbursement to itself for the
expenses and the expenses will be recoverable by it either through liquidation
proceeds or the proceeds of insurance. Notwithstanding anything to the contrary
in this prospectus, in the case of a trust fund for which a REMIC election has
been made, the master servicer shall liquidate any property acquired through
foreclosure within three years after the acquisition of the beneficial ownership
of that property. While the holder of a property acquired through foreclosure
can often maximize its recovery by providing financing to a new purchaser, the
trust fund, if applicable, will have no ability to do so and neither the master
servicer nor the depositor will be required to do so.

         The master servicer may arrange with the obligor on a defaulted loan, a
modification of that loan to the extent provided in the related prospectus
supplement. Modifications may only be entered into if they meet the underwriting
policies and procedures employed by the master servicer in servicing receivables
for its own account and meet the other conditions described in the related
prospectus supplement.

         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 specified losses sustained by
reason of defaults in payments by borrowers. Although the terms and conditions
of primary mortgage insurance policies differ, each primary mortgage insurance
policy will generally cover losses up to an amount equal to the excess of the
unpaid principal amount of a defaulted loan plus accrued and unpaid interest on
that loan and approved expenses over a specified percentage of the value of the
related mortgaged property. 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

                                       87



maintained with an insurer whose claims-paying ability is sufficient to maintain
the current rating of the classes of securities of that series that have been
rated.

         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 "Material Legal Aspects of the loans--The
Title I Program," some 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 related loan.

         Loans designated in the related prospectus supplement as guaranteed by
the VA will be partially guaranteed by the VA under the Serviceman's
Readjustment Act of 1944, as amended. The Serviceman's Readjustment Act of 1944,
as amended, permits a veteran or a spouse, in some instances, 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 that 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.

SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES

         The master servicing fee is 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, of the outstanding principal
balance of each loan, and the compensation will be retained by it from
collections of interest on the related loan in the related trust fund. In
addition, the master servicer or Sub-Servicer may be entitled to retain all
prepayment charges, assumption fees and late payment 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 to the extent specified
in the related prospectus supplement.

         The master servicer will pay or cause to be paid specified 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, 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


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obligations of sub-servicers and sellers under limited circumstances as
described in the related prospectus supplement or the applicable agreement.

EVIDENCE AS TO COMPLIANCE

         Each agreement will provide that on or before a specified date in each
year, a firm of independent public accountants will furnish a statement to the
trustee to the effect that, on the basis of the examination by that firm
conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers, the Audit Program for Mortgages serviced for
Freddie Mac or other program as specified in the related prospectus supplement,
the servicing by or on behalf of the master servicer of mortgage loans or
private asset backed securities, or under pooling and servicing agreements
substantially similar to each other, including the related agreement, was
conducted in compliance with those agreements except for any significant
exceptions or errors in records that, in the opinion of the firm, the Audit
Program for Mortgages serviced for Freddie Mac, or the Uniform Single
Attestation Program for Mortgage Bankers, it is required to report. In rendering
its statement the firm may rely, as to matters relating to the direct servicing
of loans by sub-servicers, upon comparable statements for examinations conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or the Audit Program for Mortgages serviced for Freddie Mac
rendered within one year of that statement of firms of independent public
accountants with respect to the related sub-servicer.

         Each agreement will also provide for delivery to the trustee, on or
before a specified date in each year, of an annual statement signed by two
officers of the master servicer to the effect that the master servicer has
fulfilled its obligations under the agreement throughout the preceding year.

         Copies of the annual accountants' statement and the statement of
officers of the master servicer 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.

MATTERS REGARDING THE MASTER SERVICER AND THE DEPOSITOR

         The master servicer under each pooling and servicing agreement or
master servicing agreement, as applicable, will be named in the related
prospectus supplement. Each servicing agreement will provide that the master
servicer may not resign from its obligations and duties under that agreement
except upon a determination that the performance by it of its duties is no
longer permissible under applicable law. 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 servicing agreement will further provide that neither the master
servicer, the depositor nor any director, officer, employee, or agent of the
master servicer or the depositor will be under any liability to the related
trust fund or 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 director,

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officer, employee, or agent of the master servicer or the depositor will be
protected against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of its duties or
by reason of reckless disregard of its obligations and duties. Each servicing
agreement will further provide that the master servicer, the depositor and any
director, officer, employee or agent of the master servicer or the depositor
will be entitled to indemnification by the related trust fund and will be held
harmless against any loss, liability or expense incurred in connection with any
legal action relating to the 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 negligence in the performance of its duties or by reason of reckless
disregard of its obligations and duties. 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 to the agreement and the interests of the securityholders.
In that event, the legal expenses and costs of the action and any resulting
liability will be expenses, costs and liabilities of the trust fund, and the
master servicer or the depositor, as the case may be, will be entitled to be
reimbursed for those amounts out of funds otherwise distributable to
securityholders.

         Except as otherwise specified in the related prospectus supplement, 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 and further
provided that the merger, consolidation or succession does not adversely affect
the then current rating or ratings of the class or classes of securities of that
series that have been rated.

EVENTS OF DEFAULT; RIGHTS UPON EVENT OF DEFAULT

         Events of default under each pooling and servicing agreement and master
servicing agreement generally will consist of:

         o     failure by the master servicer to distribute or cause to be
               distributed to securityholders of any class any required payment,
               other than an advance, 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
               voting interests constituting that class;

         o     any failure by the master servicer to make an advance as required
               under the agreement, unless cured as specified in that agreement;

         o     any failure by the master servicer duly to observe or perform in
               any material respect any of its other covenants or agreements in
               the agreement which continues

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               unremedied for thirty 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 voting interests constituting that
               class; or

         o     events of insolvency, readjustment of debt, marshalling of assets
               and liabilities or similar proceeding and actions by or on behalf
               of the master servicer indicating its insolvency, reorganization
               or inability to pay its obligations.

The prospectus supplement for a series of securities may describe additional or
alternative events of default for the pooling and servicing agreement or the
master servicing agreement.

         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" in this prospectus in the event
that payments in respect to the trust fund assets 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.

         So long as an event of default under an agreement remains unremedied,
the depositor or the trustee may, and at the direction of holders of securities
of any class evidencing not less than 25% of the aggregate voting interests
constituting a class and under the other circumstances specified in the related
agreement, the trustee shall terminate all of the rights and obligations of the
master servicer under the agreement relating to that trust fund and in and to
the related trust fund assets. Upon termination, the trustee or another entity
in the related prospectus supplement 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. In the event that the trustee is unwilling or unable so to act, it
may appoint, or petition a court of competent jurisdiction for the appointment
of, a mortgage loan servicing institution meeting the qualifications set forth
in the related agreement to act as successor to the master servicer under the
agreement. Pending the 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.

         No securityholder, solely by virtue of that holder's status as a
securityholder, will have any right under any agreement to institute any
proceeding with respect to the related agreement, unless that 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 voting interests constituting that class have made written request
upon the trustee to institute a proceeding in its own name as trustee and have
offered to the trustee reasonable indemnity, and the trustee for 60 days has
neglected or refused to institute any proceeding.

         Indenture. Except as otherwise specified in the related prospectus
supplement, events of default under the indenture for each series of notes
include:

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         o     a default 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 covenant of
               the depositor or the trust fund in the indenture which continues
               for a period of thirty (30) days after notice of the failure is
               given in accordance with the procedures described in the related
               prospectus supplement;

         o     events of bankruptcy, insolvency, receivership or liquidation of
               the depositor or the trust fund; or

         o     any other event of default provided with respect to notes of that
               series including but not limited to defaults on the part of the
               issuer, if any, of a credit enhancement instrument supporting the
               notes.

         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
a majority of the then aggregate outstanding amount of the notes of that series
may declare the principal amount, of all the notes of the series to be due and
payable immediately. That declaration may, under limited circumstances, be
rescinded and annulled by the holders of more than 50% of the voting interests
of the notes of that series.

         If, following an event of default with respect to any series of notes,
the notes of that series have been declared to be due and payable, the trustee
may, in its discretion, notwithstanding the acceleration, elect to maintain
possession of the collateral securing the notes of that 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 that series as they would
have become due if there had not been a declaration. In addition, 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 that series for five days or more, unless:

         o     the holders of 100% of the voting interests of the notes of that
               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 that 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 those
               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 66 2/3% of the voting interests of the
               notes of that series.

         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
provides that the trustee will have a prior lien on the proceeds of any



                                       92


liquidation for unpaid fees and expenses. As a result, upon the occurrence of an
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 an event of default.

         Except as otherwise specified in the related prospectus supplement, in
the event the principal of the notes of a series is declared due and payable, as
described above, the holders of any notes declared due and payable which was
issued at a discount from par may be entitled to receive no more than an amount
equal to its unpaid principal amount less the amount of the discount which is
unamortized.

         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 that series, unless those 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 that request or
direction. So long as they are acting in accordance with the provisions for
indemnification and the limitations contained in the indenture, the holders of a
majority of the then aggregate outstanding amount of the notes of that 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 that series. The
holders of a majority of the then aggregate outstanding amount of the notes of
that series may, in some cases, waive any default with respect to a series,
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 affected noteholders. Each indenture will provide
that, notwithstanding any other provision of the indenture, the right of any
noteholder to receive payments of principal and interest on its notes when due,
or to institute suit for any payments not made when due, shall not be impaired
or affected without the holder's consent.

AMENDMENT

         Except as otherwise specified in the related prospectus supplement,
each agreement may be amended by the depositor, the master servicer and the
trustee, without the consent of any of the securityholders, and any other party
specified in the related prospectus supplement:

         o     to cure any ambiguity;

         o     to correct or supplement any provision in that agreement which
               may be defective or inconsistent with any other provision in that
               agreement; or

         o     to make any other revisions with respect to matters or questions
               arising under the Agreement, provided that the amendment will not
               adversely affect in any material respect the interests of any
               securityholder.

An amendment will be deemed not to adversely affect in any material respect the
interests of the securityholders if the person requesting that amendment obtains
a letter from each rating agency requested to rate the class or classes of
securities of that series stating that the amendment will


                                       93


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 any change does not adversely affect the then current
rating on the class or classes of securities of that series that have been
rated. In addition, if a REMIC election is made with respect to a trust fund,
the related agreement may be amended to modify, eliminate or add to any of its
provisions to the extent necessary to maintain the qualification of the related
trust fund as a REMIC, provided that the trustee has received an opinion of
counsel to the effect that the action is necessary or helpful to maintain that
qualification.

         Except as otherwise specified in the related prospectus supplement,
each agreement may also be amended by the depositor, the master servicer and the
trustee with consent of holders of securities of the related series evidencing
not less than 66% of the aggregate voting interests of each affected class 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 no amendment
of this type may

         (1) reduce in any manner the amount of or delay the timing of,
payments received on loans which are required to be distributed on any security
without the consent of the holder of that security, or

         (2) reduce the aforesaid percentage of securities of any class the
holders of which are required to consent to that amendment without the consent
of the holders of all securities of the class covered by the related 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.

TERMINATION; OPTIONAL TERMINATION

         Pooling and Servicing Agreement; Trust Agreement. In addition, to the
circumstances specified in the related agreement, the obligations created by
each pooling and servicing agreement and trust 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 that agreement following the later of (1) the final
payment of or other liquidation of the last of the trust fund assets or the
disposition of all property acquired upon foreclosure of any trust fund assets
remaining in the trust fund and (2) the purchase by the master servicer or, if
REMIC treatment has been elected and if specified in the related prospectus
supplement, by the holder of the residual interest in the REMIC from the related
trust fund of all of the remaining trust fund assets and all property acquired
in respect of those 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, any other person or, if applicable, the holder of the
REMIC residual interest, at a price specified in the related prospectus
supplement. The exercise of that option will effect early retirement of the


                                       94


securities of that series, but the right of the master servicer, any other
person or, if applicable, the holder of the REMIC residual interest, to so
purchase is conditioned on 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. Upon that requirement being satisfied, the parties
specified in the related prospectus supplement may purchase all trust fund
assets, causing the retirement of the related series of securities. In that
event, the applicable purchase price will be sufficient to pay the aggregate
outstanding principal balance of that series of securities and any undistributed
shortfall in interest of that series of securities as will be described in the
related prospectus supplement. However, if a REMIC election has been made with
respect to a trust fund, the purchase will be made only in connection with a
"qualified liquidation" of the REMIC within the meaning of Section 860F(g)(4) of
the Internal Revenue Code.

         Indenture. The indenture will be discharged with respect to a series of
notes, other than continuing rights specified in the indenture, upon the
delivery to the trustee for cancellation of all the notes of that series or,
with specified limitations, upon deposit with the trustee of funds sufficient
for the payment in full of all of the notes of that series.

         In addition to that discharge with limitations, the indenture will
provide that, if so specified with respect to the notes of any series, the
related trust fund will be discharged from any and all obligations in respect of
the notes of that series, except for specified obligations relating to temporary
notes and exchange of notes, to register the transfer of or exchange notes of
that series, to replace stolen, lost or mutilated notes of that series, to
maintain paying agencies and to hold monies for 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 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 that series on the last scheduled distribution date for the notes
and any installment of interest on those notes in accordance with the terms of
the Indenture and the notes of that series. In the event of that defeasance and
discharge of notes of a series, holders of notes of that series would be able to
look only to money and/or direct obligations for payment of principal and
interest, if any, on their notes until maturity.

THE TRUSTEE

         The trustee under each applicable 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.

                       MATERIAL LEGAL ASPECTS OF THE LOANS

         The following discussion contains summaries, which are general in
nature, of the material legal matters relating to the loans. Because 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 to encompass the laws of all
states in which the security for the loans is situated.



                                       95


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 securing 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 time at which 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.

         Cooperatives. A portion 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. 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.

                                       96


         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 that 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 under "--Foreclosure/ Repossession" 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/REPOSSESSION

         Deed of Trust. Foreclosure of a deed of trust is generally accomplished
by a non-judicial sale under a specific provision in the deed of trust which
authorizes the trustee to sell the property at public auction upon any default
by the borrower under the terms of the note or deed of trust. In some states,
that 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, like 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 other specified 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


                                       97


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
related mortgage.

         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 that judgment is available. If it does
purchase the property, except as limited by 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
those 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.
These equitable principles 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 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 transfer restrictions under 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 that tenant-stockholder, including
mechanics' liens against the cooperative apartment building incurred by that
tenant-


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stockholder. The proprietary lease or occupancy agreement generally permits the
cooperative to terminate that lease or agreement in the event an obligor fails
to make payments or defaults in the performance of covenants under the lease or
agreement. 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 form the sale of the cooperative apartment,
subject, however, to the cooperative's right to sums due under that proprietary
lease or occupancy agreement. The total amount owed to the cooperative by the
tenant-stockholder, which the lender generally cannot restrict and does not
monitor, could reduce the value of the collateral below the outstanding
principal balance of the cooperative loan and accrued and unpaid interest on
that loan.

         Recognition agreements also provide that in the event of a foreclosure
on a cooperative loan, the lender must obtain the approval or consent of the
cooperative as required by the proprietary lease before transferring the
cooperative shares or assigning the proprietary lease. Generally, the lender is
not limited in any rights it may have to dispossess the tenant-stockholders.

         In some states, foreclosure on the cooperative shares is accomplished
by a sale in accordance with the provisions of Article 9 of the UCC and the
security agreement relating to those shares. Article 9 of the UCC requires that
a sale be conducted in a "commercially reasonable" manner. Whether a foreclosure
sale has been conducted in a "commercially reasonable" manner will depend on the
facts in each case. In determining commercial reasonableness, a court will look
to the notice given the debtor and the method, manner, time, place and terms of
the foreclosure. Generally, a sale conducted according to the usual practice of
banks selling similar collateral will be considered reasonably conducted.

         Article 9 of the UCC provides that the proceeds of the sale will be
applied first to pay the costs and expenses of the sale and then to satisfy the
indebtedness secured by the lender's security interest. The recognition
agreement, however, generally provides that the lender's right to reimbursement
is limited by 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, Bankruptcy
Laws 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


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at a foreclosure sale take the property subject to rent control and rent
stabilization laws which apply to some 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 subject the lender to
unforeseen environmental risks. Under the laws of some 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 a lien to assure the payment of the costs
of clean-up has priority over the lien of an existing mortgage against that
property. In addition, under the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, or 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, there are
circumstances under which 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 those costs on any and all "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 exclusion"--but without
"participating in the management" of the property. Thus, if a lender's
activities begin to 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 holds the facility or
property as an investment, including leasing the facility or property to a third
party, or fails to dispose of the property in a commercially reasonable time
frame.

         The Asset Conservation, Lender Liability and Deposit Insurance
Protection Act of 1996 amended CERCLA to clarify when actions taken by a lender
constitute participation in the management of a mortgaged property or the
business of a borrower, so as to render the secured creditor exemption
unavailable to a lender. It provides that, in order to be deemed to have
participated in the management of a mortgaged property, a lender must actually
participate in the operational affairs of the property or the borrower. The
legislation 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 exercises decision-making control over the
borrower's environmental compliance and hazardous substance handling and
disposal practices, or assumes day-to-day management of all operational
functions of the mortgaged property.

         If a lender is or becomes liable, it can bring an action for
contribution against any other "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 costs arising
from the circumstances set forth above could result in a loss to
securityholders.

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         A secured creditor exclusion does not govern liability for cleanup
costs under federal laws other than CERCLA, except with respect to underground
petroleum storage tanks regulated under the federal Resource Conservation and
Recovery Act, or RCRA. The Asset Conservation, Lender Liability and Deposit
Insurance Protection Act of 1996 amended RCRA so that the protections accorded
to lenders under CERCLA are also accorded to the holders of security interests
in underground petroleum storage tanks. It also endorsed EPA's lender liability
rule for underground petroleum storage tanks under Subtitle I of RCRA. Under
this rule, a holder of a security interest in an underground petroleum storage
tank or real property containing an underground petroleum storage tank is not
considered an operator of the underground petroleum storage tank as long as
petroleum is not added to, stored in or dispensed from the tank. 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.

         It is anticipated that, at the time the loans to be included in the
trust fund are originated, no environmental assessment or a very limited
environmental assessment of the mortgaged properties will be 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 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
prior 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.

ANTI-DEFICIENCY LEGISLATION, BANKRUPTCY LAWS AND OTHER LIMITATIONS ON LENDERS

         Some 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 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. 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.

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         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 other states, the lender has the option of bringing a personal action against
the borrower on the debt without first exhausting the 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
specific 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 prior 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 that mortgage
loan, change the rate of interest and alter the mortgage loan repayment
schedule. The effect of any of those 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 those payments.

         The federal tax laws provide priority of some tax liens over the lien
of a mortgage or secured party.

DUE-ON-SALE CLAUSES

         The loans to be included in a trust fund may or may not contain a
due-on-sale clause which will generally provide that if the mortgagor or obligor
sells, transfers or conveys the


                                      102


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 those clauses in many states. For
instance, the California Supreme Court in August 1978 held that due-on-sale
clauses were generally unenforceable. However, Section 341(b) of the Garn-St
Germain Act permits a lender, subject to certain conditions, to "enter into or
enforce a contract containing a due-on-sale clause with respect to a real
property loan," notwithstanding any contrary state law. The Garn-St Germain Act
gave states that previously had enacted "due-on-sale" restrictions a three-year
window to reenact the previous restrictions or enact new restrictions. Only six
states acted within this window period: Arizona, Florida, Michigan, Minnesota,
New Mexico and Utah. Consequently, due-on-sale provisions in documents governed
by the law of those states are not preempted by federal law.

         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 mortgaged property to an uncreditworthy person, which could
increase the likelihood of default or may result in a mortgage bearing an
interest rate below the current market rate being assumed by a new home buyer,
which may affect the average life of the loans and the number of loans which may
extend to maturity.

         Further, under federal bankruptcy law, due-on-sale clauses may not be
enforceable in bankruptcy proceedings and may, under limited circumstances, be
eliminated in any modified mortgage resulting from that 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
penalties if the obligation is paid prior to maturity. In some states, there are
or may be specific limitations upon the late charges which a lender may collect
from a borrower for delinquent payments. Some states also limit the amounts that
a lender may collect from a borrower as an additional charge if the loan is
prepaid. Under some state laws, prepayment charges may not be imposed after a
specified period of time following the origination of mortgage loans with
respect to prepayments on loans secured by liens encumbering owner-occupied
residential properties. Since, for each series, many of the mortgaged 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 type of a
restraint on prepayment, particularly with respect to fixed rate loans having
higher loan interest rates, may increase the likelihood of refinancing or other
early retirement of those loans or contracts.

         In addition, some state laws restrict the imposition of prepayment
charges and late fees even when the loans expressly provide for the collection
of those charges. Although the Alternative Mortgage Transaction Parity Act 1982,
or the Parity Act, permits the collection of prepayment charges and late fees in
connection with some types of eligible loans preempting any contrary state law
prohibitions, some states may not recognize the preemptive authority of the
Parity Act or have formally opted out of the Parity Act. As a result, it is
possible that prepayment charges and late fees may not be collected even on
loans that provide for the


                                      103


payment of those charges unless otherwise specified in the accompanying
prospectus supplement. The master servicer or another entity identified in the
accompanying prospectus supplement will be entitled to all prepayment charges
and late payment charges received on the loans and these amounts will not be
available for payment on the certificates. Effective July 1, 2003, the Office of
Thrift Supervision , referred to as the "OTS", the agency that administers the
Parity Act for unregulated housing creditors, has withdrawn its favorable Parity
Act regulations and Chief Counsel legal opinions that have authorized lenders to
charge prepayment charges and late fees in certain circumstances notwithstanding
contrary state law. However, the OTS's ruling does not have retroactive effect
on loans originated before July 1, 2003. The late charges and prepayment fees
described above are typically retained by servicers as additional servicing
compensation.

APPLICABILITY OF USURY LAWS

         Title V provides that state usury limitations shall not apply to some
types of residential first mortgage loans originated by particular lenders after
March 31, 1980. The OTS, 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 similar 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. Some states have taken action to reimpose
interest rate limits and/or to limit discount points or other charges.

THE CONTRACTS

         General. The manufactured housing contracts and home improvement
contracts, other than those that are unsecured or are secured by mortgages on
real estate generally, are "chattel paper" or constitute "purchase money
security interests" each 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 or the
seller will transfer physical possession of the contracts to the trustee or a
designated custodian or may retain possession of the contracts 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 fund's ownership of the contracts. The contracts will not be
stamped or otherwise marked to reflect their assignment from the depositor to
the trustee unless the related prospectus supplement states that they will be so
stamped. With respect to each transaction, a decision will be made as to whether
or not the contracts will be stamped or otherwise marked to reflect their
assignment from the depositor to the trustee, based upon, among other things,
the practices and procedures of the related originator and master servicer and
after consultation with the applicable rating agency or rating agencies.
Therefore, if the contracts are not stamped or otherwise marked to reflect their
assignment from the depositor to the trustee and through negligence, fraud or
otherwise, a subsequent purchaser were able to take physical possession of the
contracts without notice of the assignment, the trust fund's interest in the
contracts could be defeated.

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         Security Interests in Home Improvements. The contracts that are secured
by home improvements grant to the originator of those contracts a purchase money
security interest in the home improvements to secure all or part of the purchase
price of the home improvements and related services. A financing statement
generally is not required to be filed to perfect a purchase money security
interest in consumer goods. The 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 that 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
that 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
material incorporated into an improvement on land. Home improvement contracts
that finance lumber, bricks, other types of ordinary building material or other
goods that are deemed to lose that characterization upon incorporation of those
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 is not governed by real estate law, a creditor can repossess a
home improvement securing a contract by voluntary surrender, by "self-help"
repossession that is "peaceful"--i.e., without breach of the peace--or, in the
absence of voluntary surrender and the ability to repossess without breach of
the peace, by judicial process. The holder of a contract must give the debtor a
number of days' notice, which varies from 10 to 30 days depending on the state,
prior to commencement of any repossession. The UCC and consumer protection laws
in most states place restrictions on repossession sales, including requiring
prior notice to the debtor and commercial reasonableness in effecting a
repossession sale. The law in most states also requires that the debtor be given
notice of any sale prior to resale of the unit that the debtor may redeem at or
before the resale.

         Under the laws of most states, a creditor is entitled to obtain a
deficiency judgment from a debtor for any deficiency on repossession and resale
of the 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.

         Other statutory provisions, including federal and state bankruptcy and
insolvency laws and general equitable principles, may limit or delay the ability
of a lender to repossess and resell collateral or enforce a deficiency judgment.

         Security Interests in the Manufactured Homes. The manufactured homes
securing the manufactured housing contracts may be located in all 50 states and
the District of Columbia. Security interests in manufactured homes may be
perfected either by notation of the secured party's lien on the certificate of
title or by delivery of the required documents and payment of a fee to the state
motor vehicle authority, depending on state law. The security interests of the
related trustee in the


                                      105


manufactured homes will not be noted on the certificates of title or by delivery
of the required documents and payment of fees to the applicable state motor
vehicle authorities unless the related prospectus supplement so states. With
respect to each transaction, a decision will be made as to whether or not the
security interests of the related trustee in the manufactured homes will be
noted on the certificates of title and the required documents and fees will be
delivered to the applicable state motor vehicle authorities based upon, among
other things, the practices and procedures of the related originator and master
servicer and after consultation with the applicable rating agency or rating
agencies. In some nontitle states, perfection pursuant to the provisions of the
UCC is required. As manufactured homes have become large and often have been
attached to their sites without any apparent intention to move them, courts in
many states have held that manufactured homes, under particular circumstances,
may become governed by real estate title and recording laws. As a result, a
security interest in a manufactured home could be rendered subordinate to the
interests of other parties claiming an interest in the manufactured home under
applicable state real estate law. In order to perfect a security interest in a
manufactured home under real estate laws, the secured party must file either a
"fixture filing" under the provisions of the UCC or a real estate mortgage under
the real estate laws of the state where the home is located. These filings must
be made in the real estate records office of the county where the manufactured
home is located. If so specified in the related prospectus supplement, the
manufactured housing contracts may contain provisions prohibiting the borrower
from permanently attaching the manufactured home to its site. So long as the
borrower does not violate this agreement, a security interest in the
manufactured home will be governed by the certificate of title laws or the UCC,
and the notation of the security interest on the certificate of title or the
filing of a UCC financing statement will be effective to maintain the priority
of the security interest in the manufactured home. If, however, a manufactured
home is permanently attached to its site, the related lender may be required to
perfect a security interest in the manufactured home under applicable real
estate laws.

         In the event that the owner of a manufactured home moves it to a state
other than the state in which the manufactured home initially is registered,
under the laws of most states the perfected security interest in the
manufactured home would continue for four months after that relocation and,
after expiration of the four months, only if and after the owner re-registers
the manufactured home in that state. If the owner were to relocate a
manufactured home to another state and not re-register a security interest in
that state, the security interest in the manufactured home would cease to be
perfected. A majority of states generally require surrender of a certificate of
title to re-register a manufactured home; accordingly, the secured party must
surrender possession if it holds the certificate of title to that manufactured
home or, in the case of manufactured homes registered in states which provide
for notation of lien on the certificate of title, notice of surrender would be
given to the secured party noted on the certificate of title. In states which do
not require a certificate of title for registration of a manufactured home,
re-registration could defeat perfection.

         Under the laws of most states, liens for repairs performed on a
manufactured home and liens for personal property taxes take priority over a
perfected security interest in the manufactured home.

         Consumer Protection Laws. The so-called "Holder-in-Due Course" rule of
the FTC is intended to defeat the ability of the transferor of a consumer credit
contract who is the seller of goods which gave rise to the transaction, and
particular, related lenders and assignees, to transfer that contract free of
notice of claims by the contract debtor. The effect of this rule is to subject
the assignee of a contract of this type to all claims and defenses that the
debtor under the contract could assert against the seller of goods. Liability
under this rule is limited to amounts paid under


                                      106


a contract; however, the obligor also may be able to assert the rule to set off
remaining amounts due as a defense against a claim brought by the Trustee
against that obligor. Numerous other federal and state consumer protection laws
impose requirements applicable to the origination and lending pursuant to the
contracts, including the Truth in Lending Act, the Federal Trade Commission Act,
the Fair Credit Billing Act, the Fair Credit Reporting Act, the Equal Credit
Opportunity Act, the Fair Debt Collection Practices Act and the Uniform Consumer
Credit Code. In the case of some of these laws, the failure to comply with their
provisions may affect the enforceability of the related contract.

         Applicability of Usury Laws. Title V provides that state usury
limitations shall not apply to any contract which is secured by a first lien on
particular kinds of consumer goods, unless it is covered by any of the following
conditions. The contracts would be covered if they satisfy conditions governing,
among other things, the terms of any prepayments, late charges and deferral fees
and requiring a 30-day notice period prior to instituting any action leading to
repossession of the related unit.

         Title V authorized any state to reimpose limitations on interest rates
and finance charges by adopting before April 1, 1983 a law or constitutional
provision which expressly rejects application of the federal law. Fifteen states
adopted a similar law prior to the April 1, 1983 deadline. In addition, even
where Title V was not rejected, any state is authorized by the law to adopt a
provision limiting discount points or other charges on loans covered by Title V.

INSTALLMENT CONTRACTS

         The loans may also consist of installment contracts. Under an
installment contract the property seller, as lender under the contract, retains
legal title to the property and enters into an agreement with the purchaser, as
borrower under the contract, for the payment of the purchase price, plus
interest, over the term of that contract. Only after full performance by the
borrower of the contract is the lender obligated to convey title to the property
to the purchaser. As with mortgage or deed of trust financing, during the
effective period of the installment contract, the borrower is generally
responsible for maintaining the property in good condition and for paying real
estate taxes, assessments and hazard insurance premiums associated with the
property.

         The method of enforcing the rights of the lender under an installment
contract varies on a state-by-state basis depending upon the extent to which
state courts are willing, or able pursuant to state statute, to enforce the
contract strictly according to its terms. The terms of installment contracts
generally provide that upon a default by the borrower, the borrower loses his or
her right to occupy the property, the entire indebtedness is accelerated, and
the buyer's equitable interest in the property is forfeited. The lender in that
type of a situation does not have to foreclose in order to obtain title to the
property, although in some cases a quiet title action is in order if the
borrower has filed the installment contract in local land records and an
ejectment action may be necessary to recover possession. In a few states,
particularly in cases of borrower default during the early years of an
installment contract, the courts will permit ejectment of the buyer and a
forfeiture of his or her interest in the property. However, most state
legislatures have enacted provisions by analogy to mortgage law protecting
borrowers under installment contracts from the harsh consequences of forfeiture.
Under those statutes, a judicial or nonjudicial foreclosure may be required, the
lender may be required to give notice of default and


                                      107


the borrower may be granted some grace period during which the installment
contract may be reinstated upon full payment of the default amount and the
borrower may have a post-foreclosure statutory redemption right. In other
states, courts in equity may permit a borrower with significant investment in
the property under an installment contract for the sale of real estate to share
in the proceeds of sale of the property after the indebtedness is repaid or may
otherwise refuse to enforce the forfeiture clause. Nevertheless, generally
speaking, the lender's procedures for obtaining possession and clear title under
an installment contract in a given state are simpler and less time-consuming and
costly than are the procedures for foreclosing and obtaining clear title to a
property that is encumbered by one or more liens.

SERVICEMEMBERS CIVIL RELIEF ACT AND THE CALIFORNIA MILITARY AND VETERANS CODE

         Generally, under the terms of the Servicemembers Civil Relief Act, a
borrower who enters military service after the origination of the borrower's
residential loan, including a borrower who was in reserve status and is called
to active duty after origination of the mortgage loan, upon notification by such
borrower, shall not be charged interest, including fees and charges, in excess
of 6% per annum during the period of the borrower's active duty status, In
addition to adjusting the interest, the lender must forgive any such interest in
excess of 6%, unless a court or administrative agency orders otherwise upon
application of the lender. In addition, the Relief Act provides broad discretion
for a court to modify a mortgage loan upon application by the borrower. The
Relief Act applies to borrowers who are members of the Army, Navy, Air Force,
Marines, National Guard, Reserves, Coast Guard, and officers of the U.S. Public
Health Service or the National Oceanic and Atmospheric Administration assigned
to duty with the military. The California Military and Veterans Code provides
protection equivalent to that provided by the Relief Act to California national
guard members called up to active service by the Governor, California national
guard members called up to active service by the President and reservists called
to active duty. Because the Relief Act and the California Military and Veterans
Code apply to borrowers who enter military service, no information can be
provided as to the number of mortgage loans that may be affected by the Relief
Act or the California Military and Veterans Code. Application of the Relief Act
or the California Military and Veterans Code would adversely affect, for an
indeterminate period of time, the ability of the master servicer to collect full
amounts of interest on certain of the mortgage loans.

         Any shortfalls in interest collections resulting from the application
of the Relief Act or the California Military and Veterans Code would result in a
reduction of the amounts distributable to the holders of the related series of
securities, and the prospectus supplement may specify that the shortfalls would
not be covered by advances or, any form of credit support provided in connection
with the securities. In addition, the Relief Act and the California Military and
Veterans Code impose limitations that would impair the ability of a servicer to
foreclose on an affected mortgage loan or enforce rights under a home
improvement contract or manufactured housing contract during the borrower's
period of active duty status, and, under certain circumstances, during an
additional three month period after that period. Thus, if a mortgage loan or
home improvement contract or manufactured housing contract goes into default,
there may be delays and losses occasioned as a result.

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JUNIOR MORTGAGES; 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 any 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. This action
would in turn cause the junior mortgagee's lien to be extinguished 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 most states, absent a
provision in the mortgage or deed of trust, no notice of default is required to
be given to a junior mortgagee.

         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 the proceeds and awards to any indebtedness secured by
the mortgage, in that 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 priority 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.

         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 and not commit or permit any waste upon the
property, 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 mortgagee is
given the right under some mortgages to perform these obligations, 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.

         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. Any amounts so advanced after the
cut-off date with respect to any mortgage will not be included in the trust
fund. 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


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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.

COMMERCIAL LOANS

         The market value of any commercial property, including traditional
commercial, multifamily and mixed use properties that are predominantly used for
commercial purposes, obtained in foreclosure or by deed in lieu of foreclosure
will be based substantially on the operating income obtained from renting the
units. Because a default on a commercial loan is likely to have occurred because
operating income, net of expenses, is insufficient to make debt service payments
on such mortgage loan, it can be anticipated that the market value of such
property will be less than was anticipated when such mortgage loan was
originated. To the extent that the equity in the property does not absorb the
loss in market value and such loss is not covered by other credit support, a
loss may be experienced. With respect to multifamily property consisting of an
apartment building owned by a cooperative, the cooperative's ability to meet
debt service obligations on the mortgage loan, as well as all other operating
expenses, will be dependent in large part on the receipt of maintenance payments
from the tenant-stockholders. Unanticipated expenditures may in some cases have
to be paid by special assessments of the tenant-stockholders. The cooperative's
ability to pay the principal amount of the mortgage loan at maturity may depend
on its ability to refinance the mortgage loan. The depositor, the seller and the
master servicer will have no obligation to provide refinancing for any such
mortgage loan.

         Mortgages that encumber income-producing property often contain an
assignment of rents and leases, pursuant to which the mortgagor assigns its
right, title and interest as landlord under each lease and the income derived
therefrom to the lender, while the mortgagor retains a revocable license to
collect the rents for so long as there is no default. Under these assignments,
the mortgagor typically assigns its right, title and interest as lessor under
each lease and the income derived therefrom to the mortgagee, while retaining a
license to collect the rents for so long as there is no default under the
mortgage loan documentation. The manner of perfecting the mortgagee's interest
in rents may depend on whether the mortgagor's assignment was absolute or one
granted as security for the loan. Failure to properly perfect the mortgagee's
interest in rents may result in the loss of substantial pool of funds, which
could otherwise serve as a source of repayment of such loan. If the mortgagor
defaults, the license terminates and the lender is entitled to collect the
rents. Local law may require that the lender take possession of the property
and/or obtain a court-appointed receiver before becoming entitled to collect the
rents. In most states, hotel and motel room rates are considered accounts
receivable under the UCC; generally these rates are either assigned by the
mortgagor, which remains entitled to collect such rates


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absent a default, or pledged by the mortgagor, as security for the loan. In
general, the lender must file financing statements in order to perfect its
security interest in the rates and must file continuation statements, generally
every five years, to maintain perfection of such security interest. Even if the
lender's security interest in room rates is perfected under the UCC, the lender
will generally be required to commence a foreclosure or otherwise take
possession of the property in order to collect the room rates after a default.

         Even after a foreclosure, the potential rent payments from the property
may be less than the periodic payments that had been due under the mortgage. For
instance, the net income that would otherwise be generated from the property may
be less than the amount that would have been needed to service the mortgage debt
if the leases on the property are at below-market rents, or as the result of
excessive maintenance, repair or other obligations which a lender succeeds to as
landlord.

         Commercial mortgage loans may present additional risk depending upon
the type and use of the mortgaged property in question. For instance, mortgaged
properties which are hospitals, nursing homes or convalescent homes may present
special risks to lenders in large part due to significant governmental
regulation of the operation, maintenance, control and financing of health care
institutions. Mortgages on mortgaged properties which are owned by the borrower
under a condominium form of ownership are subject to the declaration, by-laws
and other rules and regulations of the condominium association. Mortgaged
properties which are hotels or motels may present additional risk in that:
hotels, motels, golf courses, restaurants, movie theaters, car washes, and auto
dealerships are typically operated in accordance with franchise, management and
operating agreements which may be terminable by the operator. In addition, the
transferability of the hotel's operating, liquor and other licenses to the
entity acquiring the hotel either through purchase or foreclosure is subject to
the variability of local law requirements. Mortgaged properties which are
multifamily residential properties may be subject to rent control laws, which
could impact the future cash flows of these properties. Finally, mortgaged
properties which are financed in the installment sales contract method may leave
the holder of the note exposed to tort and other claims as the true owner of the
property which could impact the availability of cash to pass through to
investors.

         The ability of borrowers under commercial loans to make timely payment
on their loans may be dependent upon such factors as location, market
demographics, the presence of certain other retail outlets in the same shopping
center, competition from catalog and internet retailers and insolvency of
tenants. Furthermore, such factors as the management skill, experience and
financial resources of the operator, who may or may not be the borrower,
national and regional economic conditions and other factors may affect the
ability of borrowers to make payments when due.

THE TITLE I PROGRAM

         General. If so specified in the related prospectus supplement, all or a
specified percentage of the loans contained in a trust fund may be loans insured
under the Title I Program, which is formally known as the FHA Title I Credit
Insurance Program created pursuant to Sections 1 and 2(a) of the National
Housing Act of 1934. For any series of securities backed by loans that are
insured under the Title I Program, the related trust fund will be assigned the



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benefits of the credit enhancement provided to the holders of the loans under
the Title I Program. The following describes the material terms of the Title I
Programs with respect to the benefits securityholders will receive and the
limitations to which they will be subject should the trust fund hold loans
insured under 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 specified 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 FHA insurance under the Title
I Program include property improvement loans. A property improvement 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 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.

         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 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 according to the actuarial method. 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


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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. This
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 then 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 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 on the property 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 lender is required to
obtain, 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 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
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 those 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 that year, FHA will not refund or abate the insurance premium.

         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 the amount of the FHA
insurance claims approved for payment relating to the insured loans and the
amount of insurance coverage attributable to insured loans sold by the lender.
The insurance coverage may also be reduced for any FHA insurance claims rejected
by the FHA. 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 in that reserve account may be earmarked with respect to each
or any eligible insured loans if a determination is made by the Secretary of HUD
that it is in its interest to do so. Origination 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
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 that 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 that 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 that 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



                                      114


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 to
provide recourse, 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
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
that 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, although that time
limit does not apply in the event it is contesting on the grounds 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. The claimable
amount is equal to 90% of the sum of:

         o     the unpaid loan obligation, net unpaid principal and the
               uncollected interest earned to the date of default, with
               adjustments to the unpaid loan obligation if the lender has
               proceeded against property securing that loan;

         o     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;

         o     the uncollected court costs;

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         o     the attorney's fees not to exceed $500; and

         o     the expenses for recording the assignment of the security to the
               United States.

CONSUMER PROTECTION LAWS

         Numerous federal and state consumer protection laws impose substantive
requirements upon mortgage lenders in connection with the origination, servicing
and enforcement of the loans that will be included in a trust fund. These laws
include the federal Truth-in-Lending Act and Regulation Z promulgated
thereunder, Real Estate Settlement Procedures Act and Regulation X promulgated
thereunder, Equal Credit Opportunity Act, Fair Credit Billing Act, Fair Credit
Reporting Act, Depository Institutions Deregulation and Monetary Control Act,
Gramm-Leach-Bliley Act and related statutes and regulations. In particular,
Regulation Z requires disclosures to the borrowers regarding the terms of the
loans; the Equal Credit Opportunity Act and Regulation B promulgated thereunder
prohibit discrimination on the basis of age, race, color, sex, religion, marital
status, national origin, receipt of public assistance or the exercise of any
right under the Consumer Credit Protection Act, in the extension of credit; and
the Fair Credit Reporting Act regulates the use and reporting of information
related to the borrower's credit experience. Particular provisions of these laws
impose specific statutory liabilities upon lenders who fail to comply with them.
In addition, violations of those laws may limit the ability of the originators
to collect all or part of the principal of or interest on the loans and could
subject the originators and in some case their assignees to damages and
administrative enforcement.

"HIGH COST" LOANS AND PREDATORY LENDING LAWS

         Mortgage Loans. Some of the mortgage loans, known as High Cost Loans,
may be subject to the Home Ownership and Equity Protection Act of 1994, or the
Homeownership Act, which amended TILA to provide new requirements applicable to
loans that exceed certain interest rates and/or points and fees thresholds.
Purchasers or assignees of any High Cost Loan, including any trust, could be
liable under federal law for all claims and subject to all defenses that the
borrower could assert against the originator of the High Cost Loan. Remedies
available to the borrower include monetary penalties, as well as rescission
rights if the appropriate disclosures were not given as required. The maximum
damages that may be recovered under these provisions from an assignee, including
the trust, is the remaining amount of indebtedness, plus the total amount paid
by the borrower in connection with the mortgage loan and plus attorneys' fees.

         In addition to the Homeownership Act, a number of states and local
governments have enacted, and other states or local governments may enact, laws
that impose requirements and restrictions greater than those in the
Homeownership Act. Among other things, these laws prohibit inclusion of some
provisions in mortgage loans that have interest rates or origination costs in
excess of prescribed levels, and require that borrowers be given certain
disclosures prior to the consummation of the mortgage loans. Purchasers or
assignees of a mortgage loan, including the related trust, could be exposed to
all claims and defenses that the mortgagor could assert against the originator
of the mortgage loan for a violation of state law. Claims and defenses available
to the borrower could include monetary penalties, rescission and defenses to a
foreclosure action or an action to collect.

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         Lawsuits have been brought in various states making claims against
assignees of High Cost Loans for violations of federal, state and local law
allegedly committed by the originator. Named defendants in these cases include
numerous participants within the secondary mortgage market, including some
securitization trusts.

                    MATERIAL FEDERAL INCOME TAX CONSEQUENCES

GENERAL

         The following is a discussion of the material federal income tax
consequences of the purchase, ownership, and disposition of the securities and
is based on advice of Sidley Austin Brown & Wood LLP, Cadwalader, Wickersham &
Taft LLP, Dewey Ballantine LLP and Mayer, Brown, Rowe & Maw LLP, each special
counsel to the depositor. The discussion is based upon the provisions of the
Internal Revenue 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 or possible
differing interpretations. The statutory provisions, regulations, and
interpretations on which this interpretation is based are subject to change, and
that type of a 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 particular types of investors who are the
subject of 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 in the securities are advised 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 of securities will vary
depending on whether:

         (1) the securities of a series are classified as indebtedness;

         (2) an election is made to treat the trust fund relating to a
         particular series of securities as one or more REMICs under the
         Internal Revenue Code;

         (3) the securities represent a beneficial ownership interest in some or
         all of the assets included in the trust fund for a series; or

         (4) the trust fund relating to a particular series of certificates is
         treated as a partnership.

         Sidley Austin Brown & Wood LLP, Cadwalader, Wickersham & Taft LLP,
Dewey Ballantine LLP and Mayer, Brown, Rowe & Maw LLP, each special counsel to
the depositor, are of the opinion that, for federal income tax purposes:

         o     securities issued as notes will be treated as indebtedness;

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         o     securities issued as certificates will be treated as one of the
               following:

               -   indebtedness;

               -   beneficial ownership interests in the related trust fund or
                   in its assets; or

               -   "REMIC regular interests" or "REMIC residual interests".

The latter treatment would occur in the event that a REMIC election is made with
respect to the trust fund, as described under "--Taxation of the REMIC and Its
Holders". Each prospectus supplement will specify if this treatment applies to
the securities being issued. Subject to the discussion under " --Taxation of the
REMIC and Its Holders", Sidley Austin Brown & Wood LLP, Cadwalader, Wickersham &
Taft LLP, Dewey Ballantine LLP and Mayer, Brown, Rowe & Maw LLP are of the
opinion that securities representing REMIC "regular interests" are taxable to
the holders of those securities in substantially the same manner as indebtedness
issued by the REMIC.

         In all cases, each trust fund will be structured to not be subject to
an entity level tax, and Sidley Austin Brown & Wood LLP, Cadwalader, Wickersham
& Taft LLP, Dewey Ballantine LLP and Mayer, Brown, Rowe & Maw LLP are of the
opinion that each trust fund will not be characterized as an association,
publicly traded partnership or taxable mortgage pool, taxable as a corporation.

         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 that
series.

TAXATION OF DEBT SECURITIES

         General. If securities of a series being issued as certificates or
notes are structured as indebtedness secured by the assets of the trust fund,
assuming compliance with all provisions of the related documents and applicable
law, Sidley Austin Brown & Wood LLP, Cadwalader, Wickersham & Taft LLP, Dewey
Ballantine LLP and Mayer, Brown, Rowe & Maw LLP, each special counsel to the
depositor, are of the opinion that the securities will be treated as debt for
United States federal income tax purposes and the trust fund will not be
characterized as an association, publicly traded partnership or taxable mortgage
pool, taxable as a corporation. At the time those securities are issued counsel
to the depositor will deliver an opinion generally to that effect.

         Status as Real Property Loans. Except to the extent otherwise provided
in the related prospectus supplement, special counsel to the depositor
identified in the prospectus supplement will have advised the depositor that:

         (1) Debt securities held by a domestic building and loan association
         will not constitute "loans...secured by an interest in real property"
         within the meaning of Code Section 7701(a)(19)(C)(v); and

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         (2) Debt securities held by a real estate investment trust will not
         constitute "real estate assets" within the meaning of Code Section
         856(c)(4)(A) and interest on 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).

         Interest and Acquisition Discount. Securities representing regular
interests in a REMIC are generally taxable to holders in the same manner as
evidences of indebtedness issued by the REMIC. Stated interest on 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 in
accordance with their usual methods of accounting.

         Debt Securities that are Compound Interest Securities--generally,
securities on which all or a portion of the interest is not paid
currently--will, and some of the other Debt Securities may, be issued with
original issue discount. The following discussion is based in part on the rules
governing OID which are set forth in Sections 1271-1275 of the Code and the
Treasury (the "OID regulations") regulations thereunder. A holder of Debt
Securities should be aware, however, that the OID regulations do not adequately
address some 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 if it is less than a de minimis amount 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 that class will be
treated as the fair market value of that class on that 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 those 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
in this prospectus, provided that those 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. Some 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,


                                      119


the interest payments will be included in the Debt Security's stated 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 on those Debt Securities. Where the interval between the issue date
and the first distribution date on a Debt Security is either longer or shorter
than the interval between subsequent distribution dates, all or part of the
interest foregone, in the case of the longer interval, and all of the additional
interest, in the case of the shorter interval, will be included in the stated
redemption price at maturity and tested under the de minimis rule described in
this prospectus. In the case of a Debt Security with a long first period which
has non-de minimis OID, all stated interest in excess of interest payable at the
effective interest rate for the long first period will be included in the stated
redemption price at maturity and the Debt Security will generally have OID.
Holders of Debt Securities should consult their own tax advisors to determine
the issue price and stated redemption price at maturity of a Debt Security.

         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. For this purpose, the weighted average maturity of the Debt Security
is computed as the sum of the amounts determined by multiplying the number of
full years--i.e., rounding down partial years--from the issue date until each
distribution in reduction of stated redemption price at maturity is scheduled to
be made by a fraction, the numerator of which is the amount of each distribution
included in the stated redemption price at maturity of the Debt Security and the
denominator of which is the stated redemption price at maturity of the Debt
Security. 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, accrual method 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:

         (1) the interest is unconditionally payable at least annually at a
         "current value" of the index;

         (2) the issue price of the debt instrument does not exceed the total
         noncontingent principal payments;

         (3) 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 that Debt Security; and

         (4) the principal payments are not contingent.

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         In the case of Compound Interest Securities, some Interest Weighted
Securities, and 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.

         In addition, the IRS has issued regulations 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 covered by 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), there can be 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 that OID. The daily portion 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 OID 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 trust fund assets, the amount of
OID for an accrual period, which is 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 on the
first day of that accrual period, reduced by any payments of qualified stated
interest allocable to that accrual period. The adjusted issue price of a Debt
Security on the first day of an accrual period is the sum of the issue price of
the Debt Security plus prior accruals of OID, reduced by the total payments made
with respect to that Debt Security on or before the first day of that accrual
period, other than qualified stated interest payments.

         The amount of OID to be included in income by a holder of a Pay-Through
Security, like some classes of the Debt Securities, that is subject to
acceleration due to prepayments on other debt obligations securing those
instruments, is computed by taking into account the rate of prepayments assumed
in pricing the debt instrument. The amount of OID that will accrue during an
accrual period on a Pay-Through Security is the excess, if any, of 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 at maturity of the Pay-Through Security, over
         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:
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         (1) 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,

         (2) events which have occurred before the end of the accrual period and

         (3) 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 of a Pay-Through Security 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 of
Pay-Through Securities 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 those adjustments, the rate of
accrual of OID for a class of Regular Interest Securities could increase.

         Some classes of Regular Interest Securities may represent more than one
class of REMIC regular interests. 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
unless the related prospectus supplement specifies that the trustee will treat
the separate regular interests separately.

         A subsequent holder of a Debt Security will also be required to include
OID in gross income, but a subsequent holder who purchases that 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 that excess.

         Effects of Defaults and Delinquencies. Holders of securities 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 trust fund assets, 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 a security in any period could significantly exceed the amount of cash
distributed to that 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 deducted as a
result of a trust fund asset default. However, the timing and character of
losses or reductions in


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income are uncertain and, accordingly, holders of securities should consult
their own tax advisors on this point.

         Interest Weighted Securities. It is not clear how income should be
accrued with respect to Regular Interest Securities or Stripped Securities 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. The depositor 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 that 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 that 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 that holder, as
described in this prospectus. Alternatively, the IRS could assert that an
Interest Weighted Security should be taxable under the rules governing bonds
issued with contingent payments. This treatment may be more likely in the case
of Interest Weighted Securities that are Stripped Securities as described in
this prospectus. See "--Tax Status as a Grantor Trust--Discount or Premium on
Pass-Through Securities" above.

         Variable Rate Debt Securities. In the case of Debt Securities bearing
interest at a rate that varies directly, according to a fixed formula, with an
objective index, it appears that

         (1)   the yield to maturity of those Debt Securities and

         (2)   in the case of Pay-Through Securities, the present value of all
               payments remaining to be made on those Debt Securities, should be
               calculated as if the interest index remained at its value as of
               the issue date of those securities.

         Because the proper method of adjusting accruals of OID on a variable
rate Debt Security is uncertain, holders of variable rate Debt Securities should
consult their own tax advisers regarding the appropriate treatment of those
securities for federal income tax purposes.

         Market Discount. A purchaser of a security may be subject to the market
discount rules of Sections 1276-1278 of the Code. A holder of a Debt Security
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. The market
discount would accrue in a manner to be provided in Treasury regulations but,
until those regulations are issued, the market discount would in general accrue
either

         (1) on the basis of a constant yield, in the case of a Pay-Through
Security, taking into account a prepayment assumption, or

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         (2) in the ratio of (a) in the case of securities, or in the case
of a Pass-Through Security, as set forth below, the loans underlying that
security, not originally issued with original issue discount, 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 in this prospectus, the loans underlying
that security, originally issued at a discount, 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
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 in this prospectus, the
underlying loans, with market discount over interest received on that 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 and after the taxable year the election is made,
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 Tax Reform Act of 1986, or the 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
that class. If a holder of a Debt Security makes an election to amortize premium
on a Debt Security, that 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 subsequently acquired by the holder, and
will be irrevocable without the consent of the IRS. Purchasers who pay a premium
for the securities should consult their tax advisers regarding the election to
amortize premium and the method to be employed.

         The IRS has issued Amortizable 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) like 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 should consult their tax advisors regarding the
possible application of the Amortizable 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. If


                                      124


that 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 or after the year of the election. 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.

         Consequences of Realized Losses. Under Section 166 of the Code, both
corporate holders of Debt Securities and noncorporate holders that acquire Debt
Securities in connection with a trade or business should be allowed to deduct,
as ordinary losses, any losses sustained during a taxable year in which such
securities become wholly or partially worthless as the result of one or more
realized losses on the underlying assets. However, a noncorporate holder that
does not acquire a Debt Security in connection with its trade or business will
not be entitled to deduct a loss under Code Section 166 until such security
becomes wholly worthless - i.e., until its outstanding principal balance has
been reduced to zero, and the loss will be characterized as short term capital
loss. Moreover, the character and timing of any such losses by holders of Debt
Securities of a series in which no REMIC election has been made may be governed
by Code Section 165(g) relating to worthless securities, rather than by Code
Section 166, if such securities are considered issued by a corporation. This
could occur, for example, if the issuing trust were disregarded as separate from
a single holder of the equity interest in the trust that was a corporation.

         Each holder of a Debt Security will be required to accrue OID on such
security without giving effect to any reduction in distributions attributable to
a default or delinquency on the underlying assets until a realized loss is
allocated to such Debt Security or until such earlier time as it can be
established that any such reduction ultimately will not be recoverable. As a
result, the amount of OID reported in any period by the holder of a Debt
Security could exceed significantly the amount of economic income actually
realized by the holder in such period. Although the holder of a Debt Security
eventually will recognize a loss or a reduction in income attributable to
previously included OID that, as a result of a realized loss, ultimately will
not be realized, the law is unclear with respect to the timing and character of
such loss or reduction in income. Accordingly, holders of Debt Securities should
consult with their own tax advisors with respect to the federal income tax
consequences of realized losses attributable to OID.

TAXATION OF THE REMIC AND ITS HOLDERS

         General. If a REMIC election is made with respect to a series of
securities, then upon the issuance of those securities, assuming the election is
properly made, the provisions of the applicable agreements are compiled with,
and the statutory and regulatory requirements are satisfied, Sidley Austin Brown
& Wood LLP, Cadwalader, Wickersham & Taft LLP, Dewey Ballantine LLP and Mayer,
Brown, Rowe & Maw LLP, each special counsel to the depositor, are of the opinion
that the arrangement by which the securities of that series are issued will be
treated as a REMIC. At the time the securities are issued Sidley Austin Brown &
Wood LLP, Cadwalader, Wickersham & Taft LLP, Dewey Ballantine LLP or Mayer,
Brown, Rowe & Maw


                                      125


LLP will deliver an opinion to the effect that the securities designated as
"regular interests" in the REMIC will be regular interests in a REMIC, and that
the securities designated as the sole class of "residual interests" in the REMIC
will be treated as the "residual interest" in the REMIC for United States
federal income tax purposes for as long as all of the provisions of the
applicable agreement are complied with and the statutory and regulatory
requirements are satisfied. As a REMIC, the trust fund is not generally subject
to an entity-level tax and will not be characterized as an association, publicly
traded partnership or taxable mortgage pool, taxable as a corporation. Subject
to the discussion below, REMIC regular interests are treated for holders of
those interests in substantially the same manner as debt issued by the REMIC for
U.S. federal income tax purpose. 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
a REMIC election is made with respect to a series of securities,

         (1) 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

         (2) 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
(1) or (2) above, then a security will qualify for the tax treatment described
in (1) or (2) in the proportion that those REMIC assets are qualifying assets.

         Status of Manufactured Housing Contracts. The REMIC Regulations provide
that obligations secured by interests in manufactured housing that qualify as
"single family residences" within the meaning of Code Section 25(e)(10) can be
treated as "qualified mortgages" of the REMIC.

         Under Section 25(e)(10), the term "single family residence" includes
any manufactured home which has a minimum of 400 square feet of living space, a
minimum width in excess of 102 inches and which is a kind customarily used at a
fixed location.

         Outside Reserve Fund. To the extent provided in the applicable
prospectus supplement, a security may represent not only the ownership of a
Regular Security but also an interest in a notional principal contract. This can
occur, for instance, if the applicable pooling and servicing agreement provides
that the rate of interest payable by the REMIC on the Regular Security is
subject to a cap based on the weighted average of the net interest rates payable
on the qualified mortgages held by the REMIC. In these instances, the pooling
and servicing agreement may provide for a reserve fund that will be held as part
of the trust fund but not as an asset of any


                                      126


REMIC created pursuant to the pooling and servicing agreement (an "outside
reserve fund"). The outside reserve fund would typically be funded from monthly
excess cashflow. If the interest payments on a Regular Security were limited due
to the above-described cap, payments of any interest shortfall due to
application of that cap would be made to the Regular Securityholder to the
extent of funds on deposit in the outside reserve fund. For federal income tax
purposes, payments from the outside reserve fund will be treated as payments
under a notional principal contract written by the owner of the outside reserve
fund in favor of the Regular Securityholders.

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 Interest Securities. 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 Interest Securities on a daily basis in proportion to
the relative amounts of income accruing to each holder of a Residual Interest
Security or Regular Interest Security 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 some pass-through entities but not including real estate
investment trusts, the expenses will be deductible only to the extent that those
expenses, plus other "miscellaneous itemized deductions" of the holder of a
Regular Interest Security, exceed 2% of the 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 for taxable years beginning
after 1990, scheduled to be phased out between 2006 and 2009, will be reduced by
the lesser of (1) 3% of the excess of adjusted gross income over the applicable
amount, or (2) 80% of the amount of itemized deductions otherwise allowable for
that taxable year. The reduction or disallowance of this deduction may have a
significant impact on the yield of the Regular Interest Security to a holder. In
general terms, a single class REMIC is one that either

         (1) 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

         (2) is similar to a grantor trust and which is structured with the
principal purpose of avoiding the single class REMIC rules.

         In general the expenses of the REMIC will be allocated to holders of
the related Residual Interest Securities. The prospectus supplement, however,
may specify another entity to whom the expenses of the REMIC may be allocated.

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 in the REMIC.

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         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 adjustments. In general, the taxable income or
net loss will be the difference between (1) 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 (2) 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 Security that is an
individual or a "pass-through interest holder", including some 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 those expenses, when
aggregated with that holder's other miscellaneous itemized deductions for that
year, do not exceed two percent of that 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.

         The OID provisions of the Code apply to loans of individuals originated
on or after March 2, 1984, and the market discount provisions apply to loans
originated after July 18, 1984. Subject to possible application of the de
minimis rules, the method of accrual by the REMIC of OID income on those loans
will be equivalent to the method under which holders of Pay-Through Securities
accrue original issue discount--i.e., 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 "Material Federal Income Tax Consequences--Taxation of Debt
Securities" above. However, a REMIC that acquires loans at a market discount
must include the market discount in income currently, as it accrues, on a
constant interest basis.

         To the extent that the REMIC's basis allocable to loans that it holds
exceeds their principal amounts, the resulting premium, if attributable to
mortgages originated after September 27, 1985, 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:

         (1) subject to limited exceptions, the sale or other disposition of any
         qualified mortgage transferred to the REMIC;


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         (2) subject to a limited exception, the sale or other disposition of a
         cash flow investment;

         (3) the receipt of any income from assets not permitted to be held by
         the REMIC pursuant to the Code; or

         (4) 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 Interest Securities will
generally be responsible for the payment of any taxes for prohibited
transactions imposed on the REMIC. To the extent not paid by those holders or
otherwise, however, taxes that will be paid out of the trust fund and will be
allocated pro rata to all outstanding classes of securities of that REMIC.

TAXATION OF HOLDERS OF RESIDUAL INTEREST SECURITIES

         The holder of a Residual Interest Security 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 that holder held the Residual Interest
Security. 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 that quarter, and by allocating that amount among the holders, on that
day, of the Residual Interest Securities in proportion to their respective
holdings on that day.

         The holder of a Residual Interest Security 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 some 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 some 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, while 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
Security 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 pretax yield. Therefore, the after-tax
yield on the Residual Interest Security may be less than that of a corporate
bond or stripped instrument having similar cash flow characteristics and pretax
yield.

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         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 at the
end of the calendar quarter in which that loss arises. A holder's basis in a
Residual Interest Security will initially equal that 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 Interest Securities to deduct net losses may be subject to
additional limitations under the Code, as to which those holders should consult
their tax advisers.

         Distributions. Distributions on a Residual Interest Security, 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 Security. If the amount of a payment exceeds a holder's adjusted basis
in the Residual Interest Security, however, the holder will recognize gain,
treated as gain from the sale of the Residual Interest Security, to the extent
of the excess.

         Sale or Exchange. A holder of a Residual Interest Security will
recognize gain or loss on the sale or exchange of a Residual Interest Security
equal to the difference, if any, between the amount realized and that holder's
adjusted basis in the Residual Interest Security at the time of the sale or
exchange. Except to the extent provided in regulations which have not yet been
issued, any loss upon disposition of a Residual Interest Security will be
disallowed if the selling holder acquires any residual interest in a REMIC or
similar mortgage pool within six months before or after disposition.

         Excess Inclusions. The portion of the REMIC taxable income of a holder
of a Residual Interest Security consisting of "excess inclusion" income may not
be offset by other deductions or losses, including net operating losses, on that
holder's federal income tax return. Further, if the holder of a Residual
Interest Security is an organization subject to the tax on unrelated business
income imposed by Code Section 511, that holder's excess inclusion income will
be treated as unrelated business taxable income of that 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 some cooperatives were
to own a Residual Interest Security, 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 Security 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 additional limitations. See "--Tax Treatment of
Foreign Investors."

         Alternative minimum taxable income for a residual holder is determined
without regard to the special rule that taxable income cannot be less than
excess inclusions. In addition, a residual holder's alternative minimum taxable
income for a tax year cannot be less than excess inclusions for the year.
Moreover, the amount of any alternative minimum tax net operating loss
deductions must be computed without regard to any excess inclusions.

         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 Security,


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over the daily accruals for a quarterly period of 120% of the long term
applicable Federal Rate on the startup day multiplied by the adjusted issue
price of the Residual Interest Security at the beginning of that quarterly
period. The adjusted issue price of a Residual Interest Security 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
Security, 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 Security
before the beginning of the quarter. The long-term Federal Rate, which is
announced monthly 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 some circumstances, transfers of
Residual Interest Securities may be disregarded. See "--Restrictions on
Ownership and Transfer of Residual Interest Securities" and "--Tax Treatment of
Foreign Investors" below.

         Restrictions on Ownership and Transfer of Residual Interest Securities.
As a condition to qualification as a REMIC, reasonable arrangements must be made
to prevent the ownership of a REMIC residual interest by "Disqualified
Organization. Disqualified Organizations include the United States, any State or
other political subdivision, any foreign government, any international
organization, or any agency or instrumentality of any of the foregoing (but not
an instrumentality if all of its activities are subject to tax and a majority of
its board of directors is not selected by the governmental entity), 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 1-1399 of the Code,
if that entity is not subject to tax on its unrelated business income.
Accordingly, the applicable agreement will prohibit Disqualified Organizations
from owning a Residual Interest Security. In addition, no transfer of a Residual
Interest Security 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 Security is transferred to a Disqualified
Organization in violation of the restrictions set forth above, a substantial tax
will be imposed on the transferor of that Residual Interest Security at the time
of the transfer. In addition, if a Disqualified Organization holds an interest
in a pass-through entity after March 31, 1988, including, among others, a
partnership, trust, real estate investment trust, regulated investment company,
or any person holding as nominee, that owns a Residual Interest Security, the
pass-through entity will be required to pay an annual tax on its allocable share
of the excess inclusion income of the REMIC.

         Under the REMIC Regulations, if a Residual Interest Security is a
"noneconomic residual interest," as described below, a transfer of a Residual
Interest Security to a United States person will be disregarded for all federal
tax purposes unless no significant purpose of the transfer was to impede the
assessment or collection of tax. A Residual Interest Security is a "noneconomic
residual interest" unless, at the time of the transfer the present value of the
expected future distributions on the Residual Interest Security at least equals
the product of the present value of the anticipated excess inclusions and the
highest rate of tax for the year in which the transfer


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occurs, and at the time of the transfer the transferor reasonably expects that
the transferee will receive distributions from the REMIC at or after the time at
which the taxes accrue on the anticipated excess inclusions in an amount
sufficient to satisfy the accrued taxes. If a transfer of a Residual Interest
Security is disregarded, the transferor would be liable for any federal income
tax imposed upon taxable income derived by the transferee from the REMIC. The
REMIC Regulations explain that a significant purpose to impede the assessment or
collection of tax exists if the transferor, at the time of the transfer, either
knew or should have known that the transferee would be unwilling or unable to
pay taxes due on its share of the taxable income of the REMIC. A safe harbor is
provided if (i) the transferor conducted, at the time of the transfer, a
reasonable investigation of the financial condition of the transferee and found
that the transferee historically had paid its debts as they came due and found
no significant evidence to indicate that the transferee would not continue to
pay its debts as they came due in the future, (ii) the transferee represents to
the transferor that it understands that, as the holder of the residual interest,
the transferee may incur tax liabilities in excess of cash flows generated by
the interest and that the transferee intends to pay taxes associated with
holding the residual interest as they become due, (iii) the transferee
represents that it will not cause income from the Residual Interest Security to
be attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the transferee or any other
United States Person and (iv) either the formula test or the assets test (each
as described below) is satisfied.

         The formula test is satisfied if the present value of the anticipated
tax liabilities associated with holding the Residual Interest Security 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 related
REMIC generates losses. However, the direct or indirect transfer of the Residual
Interest Security to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of a domestic transferee is not
eligible for the formula test. For purposes of this calculation, (i) the
transferee is assumed to pay tax at the highest rate currently specified in
Section 11(b) of the Code (but the tax rate in Section 55(b)(1)(B) of the Code
may be used in lieu of the highest rate specified in Section 11(b) of the Code
if the transferee has been subject to the alternative minimum tax under Section
55 of the Code in the preceding two years and will compute its taxable income in
the current taxable year using the alternative minimum tax rate) and (ii)
present values are computed using a discount rate equal to the short-term
Federal rate prescribed by Section 1274(d) of the Code for the month of the
transfer and the compounding period used by the transferee.

         The asset test is satisfied if the transfer of the interest complies
with Treasury Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly: (i)
the transferee is an "eligible corporation," as defined in Treasury Regulations
Section 1.860E-1(c)(6)(i), as to which income from the interest will only be
taxed in the United States; (ii) at the time of the transfer, and at the close
of the transferee's two fiscal years preceding the year of the transfer, the
transferee had gross assets for financial reporting purposes in excess of $100
million and net assets in excess of $10 million (excluding any obligation of a
person related to the transferee within the meaning of Treasury Regulations
Section 1.860E-1(c)(6)(ii) or any other asset if a principal purpose for holding
or acquiring the other asset is to permit the transferee to satisfy these
minimum asset requirements); (iii) the transferee must agree in writing that it
will transfer the interest only to another "eligible


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corporation," as defined in Treasury Regulations Section 1.860E-1(c)(6)(i), in a
transaction that satisfies the three other requirements of the safe harbor
identified above, and the transferor must not know or have reason to know that
the transferee will not honor these restrictions on the subsequent transfer of
the Residual Interest Security; and (iv) a reasonable person would not conclude,
based on the facts and circumstances known to the transferor on or before the
date of the transfer, that the taxes associated with the Residual Interest
Security will not be paid.

         Regulations have been issued addressing the federal income tax
treatment of "inducement fees" received by transferees of noneconomic residual
interests. These regulations require inducement fees to be included in income
over a period reasonably related to the period in which the related REMIC
residual interest is expected to generate taxable income or net loss to its
holder. Under two safe harbor methods, inducement fees may be included in income
(i) in the same amounts and over the same period that the taxpayer uses for
financial reporting purposes, provided that such period is not shorter than the
period the REMIC is expected to generate taxable income, or (ii) ratably over
the remaining anticipated weighted average life of all the regular and residual
interests issued by the REMIC, determined based on actual distributions
projected as remaining to be made on such interests under the Prepayment
Assumption. If the holder of a 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 regulations also
provide that inducement fees constitute income from sources within the United
States. Prospective purchasers of the REMIC residual interests should consult
with their tax advisors regarding the effect of these regulations.

         Mark to Market Rules. Under IRS regulations, a REMIC Residual Interest
Security cannot be marked-to-market.

ADMINISTRATIVE MATTERS

         The REMIC's books must be maintained on a calendar year and accrual
method basis and the REMIC must file an annual federal income tax return. The
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. If the related prospectus supplement does not specify that an
election will be made to treat the assets of the trust fund as one or more
REMICs or to treat the trust fund as a partnership, then the depositor will have
structured the trust fund, or the portion of its assets for which a REMIC
election will not be made, to be classified for United States federal income tax
purposes as a grantor trust under subpart E, Part I of subchapter J of the Code,
in which case, Sidley Austin Brown & Wood LLP, Cadwalader, Wickersham & Taft
LLP, Dewey Ballantine LLP and Mayer, Brown, Rowe & Maw LLP, each special counsel
to the depositor, are of the opinion that, assuming compliance with the
agreements and with applicable law, that arrangement will not be treated as an
association taxable as a corporation for United States federal income tax
purposes, and the securities will be treated as representing ownership interests
in the related trust fund assets and at the time those Pass-Through Securities
are issued, special


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counsel to the depositor will deliver an opinion generally to that effect. In
some series there will be no separation of the principal and interest payments
on the loans. In those circumstances, a holder of a Pass-Through Security will
be considered to have purchased a pro rata undivided interest in each of the
loans. With Stripped Securities, the 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 of a Pass-Through Security 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, 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 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, the 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 fees under Section 162 or Section 212 of the Code to the extent that
those 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, fees
payable to the trustee and the servicer 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 those fees,
when added to other miscellaneous itemized deductions, exceed 2% of adjusted
gross income and may not be deductible to any extent in computing that 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 in taxable years beginning after 1990 and is scheduled to
be phased out between 2006 and 2009, will be reduced by the lesser of

         (1) 3% of the excess of adjusted gross income over the applicable
amount or

         (2) 80% of the amount of itemized deductions otherwise allowable for
that taxable year.

         Discount or Premium on Pass-Through Securities. The holder's purchase
price of a Pass-Through Security is to be allocated among the 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, unless otherwise specified
in the related prospectus supplement, 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 on that Pass-Through Security 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, in circumstances under which the points are not currently deductible
pursuant to applicable Code provisions. 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 of a security that acquires an interest in a loan originated
after July 18, 1984 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.

         In the case of market discount on a Pass-Through Security attributable
to loans originated on or before July 18, 1984, the holder generally will be
required to allocate the portion of that 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 payments of both
interest and principal. 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 that 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--i.e., 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.

                                      135


         The Code, OID regulations and judicial decisions provide no direct
guidance as to how the interest and original issue discount rules are to apply
to Stripped Securities and other Pass-Through Securities. Under the cash flow
bond method described above for Pay-Through Securities, 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 that 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. Nevertheless, it is believed that the cash flow bond
method is a reasonable method of reporting income for those securities, and it
is expected that OID will be reported on that basis unless otherwise specified
in the related prospectus supplement. 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 some 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 rate slower
than the Prepayment Assumption, in some circumstances the use of this method may
decelerate 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
holders of securities as OID, in the manner described above for Interest
Weighted Securities.

         In light of the application of Section 1286 of the Code, a beneficial
owners of a Stripped Security generally will be required to compute accruals of
OID based on its yield, possibly taking into account its own prepayment
assumption. The information necessary to perform the related calculations for
information reporting purposes, however, generally will not be available to the
trustee. Accordingly, any information reporting provided by the trustee with
respect to these Stripped Securities, which information will be based on pricing
information as of the closing date, will largely fail to reflect the accurate
accruals of OID for these certificates. Prospective investors therefore should
be aware that the timing of accruals of OID applicable to a Stripped Security
generally will be different than that reported to holders and the IRS.
Prospective investors should consult their own tax advisors regarding their
obligation to compute and include in income the correct amount of OID accruals
and any possible tax consequences to them if they should fail to do so.

         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

         (1) in some 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;

         (2) the non-Interest Weighted Securities are subject to the
contingent payment provisions of the Contingent Regulations; or

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         (3) 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 own 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; 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 as to which
a partnership election is made, a holder's tax basis in its security is the
price a holder pays for a 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. The capital gain or loss will generally be long-term capital gain
if a holder held the security for more than one year prior to the disposition of
the security. 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

         (1) the amount that would have been includible in the holder's
income if the yield on a Regular Interest Security had equaled 110% of the
applicable Federal Rate as of the beginning of the holder's holding period, over

         (2) 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 as to which a partnership election is made, a holder of a security,
other than a holder of a REMIC


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Residual Security, may, under some circumstances, be subject to "backup
withholding" with respect to distributions or the proceeds of a sale of
certificates to or through brokers that represent interest or original issue
discount on the securities. This withholding generally applies if the holder of
a security

         (1) fails to furnish the trustee with its social security number or
         taxpayer identification number;

         (2) furnishes the trustee an incorrect social security number or
         taxpayer identification number;

         (3) fails to report properly interest, dividends or other "reportable
         payments" as defined in the Code; or

         (4) under some circumstances, fails to provide the trustee or the
         holder's securities broker with a certified statement, signed under
         penalty of perjury, that the taxpayer identification number provided is
         its correct number and that the holder is not subject to backup
         withholding.

         Backup withholding will not apply, however, with respect to some
payments made to holders of securities, including payments to particular exempt
recipients, like exempt organizations, and to some nonresident, alien
individual, foreign partnership or foreign corporation. Holders of securities
should 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 of securities and to the master
servicer for each calendar year the amount of any "reportable payments" during
that year and the amount of tax withheld, if any, with respect to payments on
the securities.

         On June 20, 2002 the IRS published proposed regulations, which will,
when effective, affect the information reporting obligations of trustees of
"widely-held fixed investment trusts" (that is, any grantor trust that is a
United States person under Code Section 7701(a) (30) (E) an interest in which is
held by one or more "middlemen") and of "middlemen" (a term that includes, among
other things, a custodian of a person's account, a nominee and a broker holding
an interest for a customer in a street). These regulations were proposed to be
effective on January 1, 2004, but such date has passed and the regulations have
not been finalized. It is unclear when, or if, these regulations will become
final.

TAX TREATMENT OF FOREIGN INVESTORS

         Subject to the discussion below with respect to trust funds as to which
a partnership election is made, under the Code, unless interest, including OID,
paid on a security other than a Residual Interest Security, 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,
the interest will normally qualify as portfolio interest, except where (1) the
recipient is a holder, directly or by attribution, of 10% or more of the capital
or profits interest in the issuer, or (2) 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


                                      138


statements, the issuer normally will be relieved of obligations to withhold tax
from 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 that rate were reduced or eliminated by an
applicable tax treaty, on, among other things, interest and other fixed or
determinable, annual or periodic income paid to nonresident alien individuals,
foreign partnerships or foreign corporations. Holders of Pass-Through Securities
and Stripped Securities, including Ratio Strip Securities, however, may be
subject to withholding to the extent that the loans were originated on or before
July 18, 1984.

         Interest and OID of holders of securities 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 Interest Securities who are foreign
persons will generally be treated as interest for purposes of the 30%, or lower
treaty rate, United States withholding tax. Holders of Residual Interest
Securities should assume that that 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 Security
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 account for withholding tax
purposes only when paid or distributed, or when the Residual Interest Security
is disposed of. The Treasury has statutory authority, however, to promulgate
regulations which would require those amounts to be taken into account at an
earlier time in order to prevent the avoidance of tax. Those regulations could,
for example, require withholding prior to the distribution of cash in the case
of Residual Interest Securities that do not have significant value. Under the
REMIC Regulations, if a Residual Interest Security has tax avoidance potential,
a transfer of a Residual Interest Security to a nonresident alien individual,
foreign partnership or foreign corporation will be disregarded for all federal
tax purposes. A Residual Interest Security has tax avoidance potential unless,
at the time of the transfer the transferor reasonably expects that the REMIC
will distribute to the transferee residual interest holder amounts that will
equal at least 30% of each excess inclusion, and that those 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
foreign person transfers a Residual Interest Security 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 Security for
purposes of the withholding tax provisions of the Code. See "--Taxation of
Holders of Residual Interest Securities--Excess Inclusions" above.

TAX CHARACTERIZATION OF THE TRUST FUND AS A PARTNERSHIP

         If the related prospectus supplement specifies that an election will be
made to treat the trust fund as a partnership, pursuant to agreements upon which
counsel shall conclude that

         (1) the trust fund will not have the characteristics necessary for
a business trust to be classified as an association taxable as a corporation,
and

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         (2) the nature of the income of the trust fund will exempt it from
the rule that some 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,

then assuming compliance with the related agreement and related documents and
applicable law, Sidley Austin Brown & Wood LLP, Cadwalader, Wickersham & Taft
LLP, Dewey Ballantine LLP and Mayer, Brown, Rowe & Maw LLP, each special counsel
to the depositor, are of the opinion that the trust fund will not be treated as
an association, or as a publicly traded partnership, taxable as a corporation
for United States federal income tax purposes, and upon the issuance of those
securities, will deliver an opinion to that effect. If the securities are
structured as indebtedness issued by the partnership, special counsel to the
depositor also will opine that the securities should be treated as debt for
United States federal income tax purposes, and, if the securities are structured
as equity interests in the partnership, will opine that the securities should be
treated as equity interest in the partnership for United States federal income
tax purposes, in each case assuming compliance with the related agreements and
applicable law.

         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. Any corporate income tax could
materially reduce cash available to make payments on the notes and distributions
on the certificates, and holders of certificates could be liable for any tax
that is unpaid by the trust fund.

TAX CONSEQUENCES TO HOLDERS OF THE NOTES

         Treatment of the Notes as Indebtedness. In the case of a trust fund
that issues notes intended to be debt for federal income tax purposes, the trust
fund will agree, and the holders of notes will agree by their purchase of notes,
to treat the notes as debt for federal income tax purposes. Special counsel to
the depositor will, to the extent provided in the related prospectus supplement,
opine that the notes will be classified as debt for federal income tax purposes.

         OID, etc. The discussion below assumes that all payments on the notes
are denominated in U.S. dollars, and that the notes are not Stripped Securities.
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--i.e.--any excess of the principal amount of the notes
over their issue price--does not exceed a de minimis amount (i.e., 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 those 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 on a note will be taxable to a holder of a note as
ordinary interest income when received or accrued in accordance with that
holder'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


                                      140


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.

         A holder of a short-term note--with a fixed maturity date of not more
than one year from the issue date of that note--may be subject to special rules.
An accrual basis holder of a short-term note, and some 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. Special rules apply if a short-term note
is purchased for more or less than its principal amount.

         Sale or Other Disposition. If a holder of a note 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 holder of a note will equal the
holder's cost for the note, increased by any market discount, acquisition
discount, OID and gain previously included by that holder 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 that
holder with respect to the note. Any 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 holder of a
note who is a nonresident alien, foreign corporation or other non-United States
person, or 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 (1) is not actually or constructively a "10 percent shareholder"
of the trust fund or the seller, including a holder of 10% of the outstanding
certificates, 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 (2) provides the depositor or other person who is otherwise required to
withhold U.S. tax with respect to the notes with an appropriate statement on
Form W-8BEN or a similar form, signed under penalties of perjury, certifying
that the beneficial owner of the note is a foreign person and providing the
foreign person's name and address. A holder of a note that is not an individual
or corporation (or an entity treated as a corporation for federal income tax
purposes) holding the note on its own behalf may have substantially increased
reporting


                                      141


requirements and should consult its tax advisor. If a note is held through a
securities clearing organization or 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.

         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 (1) the gain is not
effectively connected with the conduct of a trade or business in the United
States by the foreign person and (2) 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 holder of a note
fail to provide the required certification, the trust fund will be required to
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 special counsel to the depositor, 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 applicable
qualifying income tests. Nonetheless, treatment of the notes as equity interests
in that type of publicly traded partnership could have adverse tax consequences
to some holders. For example, income to some 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 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. In the case of a trust
fund that will elect to be treated as a partnership, the trust fund and the
master servicer will agree, and the holders of certificates 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 holders of
certificates, and the notes being debt of the partnership. However, the proper
characterization of the arrangement involving the trust fund,


                                      142


the certificates, the notes, the trust fund and the master servicer is not clear
because there is no authority on transactions closely comparable to that
contemplated in this prospectus.

         A variety of alternative characterizations are possible. For example,
because the certificates have some features characteristic of debt, the
certificates might be considered debt of the trust fund. This characterization
would not result in materially adverse tax consequences to holders of
certificates as compared to the consequences from treatment of the certificates
as equity in a partnership, described in this prospectus. The following
discussion assumes that the certificates represent equity interests in a
partnership.

         The following discussion assumes that all payments on the certificates
are denominated in U.S. dollars, none of the certificates are Stripped
Securities, 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 those
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 holder of a certificate will be
required to separately take into account that holder's allocated 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.

         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:

         (1) the interest that accrues on the certificates in accordance with
         their terms for that month, including interest accruing at the
         pass-through rate for that month and interest on amounts previously due
         on the certificates but not yet distributed;

         (2) 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;

         (3) prepayment premium payable to the holders of certificates for that
         month; and

         (4) any other amounts of income payable to the holders of certificates
         for that month.

         The 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 no assurance can be
given that the IRS would not require a greater amount of income to be allocated
to holders of certificates. Moreover, even under the foregoing method of
allocation, holders of certificates may be


                                      143


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 holders of certificates 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 holders of certificates but holders of certificates may be
purchasing certificates at different times and at different prices, holders of
certificates 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 holder of a certificate 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 master 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 that holder being taxed on an amount of
income that exceeds the amount of cash actually distributed to that holder over
the life of the trust fund.

         The trust fund intends to make all tax calculations relating to income
and allocations to holders of certificates 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 holders of certificates.

         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 the discount in income currently as it
accrues over the life of the loans or to offset the premium against interest
income on the loans. As indicated above, a portion of the market discount income
or premium deduction may be allocated to holders of certificates.

         Section 708 Termination. Under Section 708 of the Code, the trust fund
will be deemed to terminate for federal income tax purposes if 50% or more of
the capital and profits interests in the trust fund are sold or exchanged within
a 12-month period. If a termination occurs, the trust fund will be considered to
contribute all of its assets and liabilities to a new partnership and, then to
liquidate immediately by distributing interests in the new partnership to the
certificateholders, with the trust fund, as the new partnership continuing the
business of the partnership deemed liquidated. The trust fund will not comply
with particular technical requirements that might apply when a constructive
termination occurs. As a result, the trust fund may be subject to tax


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penalties and may incur additional expenses if it is required to comply with
those requirements. Furthermore, the trust fund might not be able to comply due
to lack of data.

         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 holder'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
those certificates, and, upon sale or other disposition of some of the
certificates, allocate a portion of the 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 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 holder of a certificate 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 to those certificates, that excess
will generally give rise to a capital loss upon the retirement of the
certificates.

         Allocations Between 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 holders of
certificates 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 that 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 holders of certificates. 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 holder of a certificate sells
its certificates at a profit, loss, the purchasing holder of a certificate will
have a higher, lower, basis in the certificates than the selling holder of a
certificate 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 the election. As a result,


                                      145


holders of certificates might be allocated a greater or lesser amount of trust
fund income than would be appropriate based on their own purchase price for
certificates.

         The American Jobs Creation Act of 2004 added a provision to the Code
that would require a partnership with a "substantial built-in loss" immediately
after a transfer of a partner's interest in such partnership to make the types
of basis adjustments that would be required if an election under Section 754 of
the Code were in effect. This new provision does not apply to a "securitization
partnership." The applicable prospectus supplement will address whether any
partnership in which a security represents an interest will constitute a
securitization partnership for this purpose.

         Administrative Matters. The trustee under a trust agreement is required
to keep or have kept complete and accurate books of the trust fund. The 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
under a trust agreement will file a partnership information return (IRS Form
1065) with the IRS for each taxable year of the trust fund and will report each
holder'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 in this prospectus 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 information on the nominee, the beneficial owners
and the certificates so held. That information includes the name, address and
taxpayer identification number of the nominee and as to each beneficial owner
the name, address and identification number of that person, whether that person
is a United States person, a tax-exempt entity or a foreign government, an
international organization, or any wholly owned agency or instrumentality of
either of the foregoing, and some information on certificates that were held,
bought or sold on behalf of that 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 is not required to furnish the
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 agreement and, in that capacity will be responsible for representing the
holders of certificates 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 holders of certificates,
and, under some circumstances, a holder of a certificate may be precluded from



                                      146


separately litigating a proposed adjustment to the items of the trust fund. An
adjustment could also result in an audit of a holder's returns and adjustments
of items not related to the income and losses of the trust fund.

         Tax Consequences to Foreign Holders of Certificates. 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 in this prospectus.
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 that is allocable to foreign
holders of certificates pursuant to Section 1446 of the Code, as if that 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.

         The term U.S. Person means a citizen or resident of the United States,
a corporation or partnership, including an entity treated as a corporation or
partnership for U.S. federal income tax purposes created in the United States or
organized under the laws of the United States or any state or the District of
Columbia, except, in the case of a partnership as otherwise provided by
regulations, an estate, the income of which is includible in gross income for
U.S. federal income tax purposes regardless of its source or a trust whose
administration is subject to the primary supervision of a United States court
and has one or more United States persons who have authority to control all
substantial decisions of the trust.

         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 to
the trust fund on Form W-8BEN 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 holder
of a certificate who is a foreign person generally will be considered guaranteed
payments to the extent that those 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, holders of certificates 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 the identification
procedures, unless the holder is an exempt recipient under applicable provisions
of the Code.

                                      147


REPORTABLE TRANSACTIONS

         Any holder of a security that reports any item or items of income,
gain, expense, or loss in respect of a security for tax purposes in an amount
that differs from the amount reported for book purposes by more than $10
million, on a gross basis, in any taxable year may be subject to certain
disclosure requirements for "reportable transactions." Prospective investors
should consult their tax advisers concerning any possible tax return disclosure
obligation with respect to the securities.

                       STATE AND LOCAL TAX CONSIDERATIONS

         In addition to the federal income tax consequences described in
"Material Federal Income Tax Consequences," potential investors should consider
the state and local income tax consequences of the acquisition, ownership, and
disposition of the securities. State and local income tax law may differ
substantially from the corresponding federal law, and this discussion does not
purport to describe any aspect of the income tax laws of any state or locality.
Therefore, potential investors should consult their own tax advisors with
respect to the various state and local tax consequences of an investment in the
securities.

                              ERISA CONSIDERATIONS

GENERAL

         ERISA and Section 4975 of the Code impose requirements on employee
benefit plans and other retirement plans and arrangements, including, but not
limited to, individual retirement accounts and annuities, as well as on
collective investment funds and separate and general accounts in which the plans
or arrangements are invested. Generally, ERISA applies to investments made by
these 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 those
Plans. ERISA also imposes 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 that Plan, subject to exceptions not here relevant.

         Any Plan fiduciary or other person which proposes to cause a Plan to
acquire any of the securities should determine whether that investment is
permitted under the governing Plan instruments and is prudent and appropriate
for the Plan in view of its overall investment policy and the composition and
diversification of its portfolio. More generally, any Plan fiduciary which
proposes to cause a Plan to acquire any of the securities or any other person
proposing to use the assets of a Plan to acquire any of the securities should
consult with its counsel with respect to the potential consequences under ERISA
and Section 4975 of the Code, including under the prohibited transaction rules
described in this prospectus, of the acquisition and ownership of those
securities.

         Some employee benefit plans, such as governmental plans and church
plans, if no election has been made under Section 410(d) of the Code, are not
subject to the restrictions of ERISA, and assets of those plans may be invested
in the securities without regard to the ERISA considerations described in this
prospectus, within other applicable federal and state law.


                                      148


However, any governmental or church plan which is qualified under Section 401(a)
of the Code and exempt from taxation under Section 501(a) of the Code is subject
to the prohibited transaction rules set forth in Section 503 of the Code.

PROHIBITED TRANSACTIONS

         Sections 406 and 407 of ERISA and Section 4975 of the Code prohibit
some transactions involving the assets of a Plan and "disqualified persons",
within the meaning of the Code, and "parties in interest", within the meaning of
ERISA, who have specified relationships to the Plan, unless an exemption
applies. Therefore, a Plan fiduciary or any other person using the assets of a
Plan and considering an investment in the securities should also consider
whether that investment might constitute or give rise to a prohibited
transaction under ERISA or Section 4975 of the Code, or whether there is an
applicable exemption.

         Depending on the relevant facts and circumstances, certain prohibited
transaction exemptions may apply to the purchase or holding of the Notes--for
example,

         o     Prohibited Transaction Class Exemption ("PTCE") 96-23, which
               exempts certain transactions effected on behalf of a Plan by an
               "in-house asset manager";

         o     PTCE 95-60, which exempts certain transactions by insurance
               company general accounts;

         o     PTCE 91-38, which exempts certain transactions by bank collective
               investment funds;

         o     PTCE 90-1, which exempts certain transactions by insurance
               company pooled separate accounts; or

         o     PTCE 84-14, which exempts certain transactions effected on behalf
               of a Plan by a "qualified professional asset manager".

There can be no assurance that any of these exemptions will apply with respect
to any Plan's investment in the securities, or that such an exemption, if it did
apply, would apply to all prohibited transactions that may occur in connection
with such investment. Furthermore, these exemptions would not apply to
transactions involved in operation of a trust if, as described below, the assets
of the trust were considered to include plan assets of investing Plans.

PLAN ASSET REGULATION

         The DOL has issued Plan Asset Regulations, which are final regulations
defining the "assets" of a Plan for purposes of ERISA and the prohibited
transaction provisions of the Code. (29 C.F.R. ss.2510.3-101.) The Plan Asset
Regulation describes the circumstances under which the assets of an entity in
which a Plan invests will be considered to be "plan assets" so that any person
who exercises control over those assets would be subject to ERISA's fiduciary
standards. Under the Plan Asset Regulation, generally when a Plan invests in
another entity, the Plan's assets do not include, solely by reason of that
investment, any of the underlying assets of the entity. However, the Plan Asset
Regulation provides that, if a Plan acquires an "equity interest"


                                      149


in an entity that is neither a "publicly-offered security"--defined as a
security which is widely held, freely transferable and registered under the
Securities Exchange Act of 1934--nor a security issued by an investment company
registered under the Investment Company Act of 1940, the assets of the entity
will be treated as assets of the Plan unless an exception applies. If the
securities were deemed to be equity interests and no statutory, regulatory or
administrative exception applies, the trust fund could be considered to hold
plan assets by reason of a Plan's investment in the securities. Those plan
assets would include an undivided interest in any assets held by the trust fund.
In that event, the trustee and other persons, in providing services with respect
to the trust fund's assets, may be Parties in Interest with respect to those
Plans, subject to the fiduciary responsibility provisions of ERISA, including
the prohibited transaction provisions with respect to transactions involving the
trust fund's assets.

         Under the Plan Asset 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 which has no "substantial equity
features." Although the Plan Asset Regulation is silent with respect to the
question of which law constitutes "applicable local law" for this purpose, the
DOL has stated that these determinations should be made under the state law
governing interpretation of the instrument in question. In the preamble to the
Plan Asset Regulation, the DOL declined to provide a precise definition of what
features are equity features or the circumstances under which those features
would be considered "substantial," noting that the question of whether a plan's
interest has substantial equity features is an inherently factual one, but that
in making a determination it would be appropriate to take into account whether
the equity features are such that a Plan's investment would be a practical
vehicle for the indirect provision of investment management services. The
prospectus supplement issued in connection with a particular series of
securities will indicate the anticipated treatment of these securities under the
Plan Asset Regulation.

EXEMPTION 83-1

         In Prohibited Transaction Class Exemption 83-1, the DOL exempted from
ERISA's prohibited transaction rules specified transactions relating to the
operation of residential mortgage pool investment trusts and the purchase, sale
and holding of "mortgage pool pass-through certificates" in the initial issuance
of those certificates. PTE 83-1 permits, subject to particular conditions,
transactions which might otherwise be prohibited between Plans and Parties in
Interest with respect to those Plans related to the origination, maintenance and
termination of mortgage pools consisting of mortgage loans secured by first or
second mortgages or deeds of trust on single-family residential property, and
the acquisition and holding of mortgage pool pass-through certificates
representing an interest in those mortgage pools by Plans. If the general
conditions of PTE 83-1 are satisfied, investments by a Plan in Single Family
Securities will be exempt from the prohibitions of ERISA Sections 406(a) and
407, relating generally to transactions with Parties in Interest who are not
fiduciaries, if the Plan purchases the Single Family Securities at no more than
fair market value, and will be exempt from the prohibitions of ERISA Sections
406(b)(1) and (2), relating generally to transactions with fiduciaries, if, in
addition, the purchase is approved by an independent fiduciary, no sales
commission is paid to the pool sponsor, the Plan does not purchase more than 25%
of all Single Family Securities, and at least 50% of all Single Family
Securities are purchased by persons independent of the pool sponsor or pool
trustee. PTE 83-1 does not provide an exemption for


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transactions involving subordinate securities. Accordingly, it is not
anticipated that a transfer of a subordinate security or a security which is not
a Single Family Security may be made to a Plan pursuant to this exemption.

         The discussion in this and the next succeeding paragraph applies only
to Single Family Securities. The depositor believes that, for purposes of PTE
83-1, the term "mortgage pool pass-through certificate" would include securities
issued in a series consisting of only a single class of securities provided that
the securities evidence the beneficial ownership of both a specified percentage
of future interest payments, greater than 0%, and a specified percentage of
future principal payments, greater than 0%, on the loans. It is not clear
whether a class of securities that evidences the beneficial ownership of a
specified percentage of interest payments only or principal payments only, or a
notional amount of either principal or interest payments, would be a "mortgage
pass-through certificate" for purposes of PTE 83-1.

         PTE 83-1 sets forth three general conditions which must be satisfied
for any transaction to be eligible for exemption:

         (1) the maintenance of a system of insurance or other protection for
         the pooled mortgage loans and property securing those loans, and for
         indemnifying securityholders against reductions in pass-through
         payments due to property damage or defaults in loan payments in an
         amount not less than the greater of one percent of the aggregate
         principal balance of all covered pooled mortgage loans or the principal
         balance of the largest covered pooled mortgage loan;

         (2) the existence of a pool trustee who is not an affiliate of the
         pool sponsor; and

         (3) a limitation on the amount of the payment retained by the pool
         sponsor, together with other funds inuring to its benefit, to not more
         than adequate consideration for selling the mortgage loans plus
         reasonable compensation for services provided by the pool sponsor to
         the pool.

         The depositor believes that the first general condition referred to
above will be satisfied with respect to the Single Family Securities in a series
if any reserve account, subordination by shifting of interests, pool insurance
or other form of credit enhancement described under "Credit Enhancement" in this
prospectus with respect to those Single Family Securities is maintained in an
amount not less than the greater of one percent of the aggregate principal
balance of the loans or the principal balance of the largest loan. See
"Description of the Securities" in this prospectus. In the absence of a ruling
that the system of insurance or other protection with respect to a series of
Single Family Securities satisfies the first general condition referred to
above, there can be no assurance that these features will be so viewed by the
DOL. The trustee will not be affiliated with the depositor.

         Each Plan fiduciary or other person who is responsible for making the
investment decisions whether to purchase or commit to purchase and to hold
Single Family Securities must make its own determination as to whether the first
and third general conditions, and the specific conditions described briefly in
the preceding paragraphs, of PTE 83-1 have been satisfied, or as to the
availability of any other prohibited transaction exemptions.

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THE UNDERWRITER'S EXEMPTION

         The DOL has granted to Morgan Stanley & Co. Incorporated an
administrative underwriter's exemption (Prohibited Transaction Exemption 90-24,
55 Fed. Reg. 20548 (1990)) from some of the prohibited transaction rules of
ERISA and the related excise tax provisions of Section 4975 of the Code with
respect to the initial purchase, the holding and the subsequent resale by Plans
of securities, including securities, issued by entities, including trusts
holding investment pools that consist of receivables, loans, and other
obligations that meet the conditions and requirements of the Morgan Stanley
Exemption.

         Among the conditions that must be satisfied for the underwriter's
exemption to apply are the following:

         (1) the acquisition of the securities by a Plan is on terms, including
         the price for those 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) unless the investment pool contains only certain types of
         collateral, such as fully-secured mortgages on real property (a
         "Designated Transaction") the rights and interests evidenced by the
         securities acquired by the Plan are not subordinated to the rights and
         interests evidenced by other securities of the trust fund;

         (3) the securities acquired by the Plan have received a rating at the
         time of acquisition that is one of the three highest generic rating
         categories (four, in a Designated Transaction) from at least one Rating
         Agency;

         (4) the trustee must not be an affiliate of any other member of the
         Restricted Group other than an underwriter;

         (5) the sum of all payments made to and retained by the underwriter in
         connection with the distribution of the securities represents not more
         than reasonable compensation for underwriting those securities; the sum
         of all payments made to and retained by the depositor pursuant to the
         assignment of the assets investment pool represents not more than the
         fair market value of those assets; the sum of all payments made to and
         retained by the master servicer and any other servicer represents not
         more than reasonable compensation for that person's services under the
         related agreement and reimbursements of that person's reasonable
         expenses in connection with providing those services; and

         (6) the Plan investing in the securities is an "accredited investor" as
         defined in Rule 501(a)(1) of Regulation D of the SEC under the
         Securities Act of 1933.

         The trust fund must also meet the following requirements:

         (a) the investment pool must consist solely of assets of the type that
         have been included in other investment pools;

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         (b) securities evidencing interests in other investment pools must have
         been rated in one of the three highest rating categories (four, in a
         Designated Transaction) of a Rating Agency for at least one year prior
         to the Plan's acquisition of the securities; and

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

         The Exemption extends exemptive relief to mortgage-backed and
asset-backed securities transactions that use pre-funding accounts. 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 securities being offered by the issuer, may be
transferred to the trust 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 following
conditions are met:

         (1) the ratio of the amount allocated to the pre-funding account to the
         total principal amount of the securities being offered does not exceed
         twenty-five percent (25%);

         (2) all obligations transferred after the closing date must meet the
         same terms and conditions for eligibility as the original obligations
         used to create the issuer, which terms and conditions have been
         approved by a Rating Agency;

         (3) the transfer of those additional obligations to the issuer during
         the pre-funding period must not result in the securities to be covered
         by the Morgan Stanley Exemption receiving a lower credit rating from a
         Rating Agency upon termination of the pre-funding period than the
         rating that was obtained at the time of the initial issuance of the
         securities;

         (4) solely as a result of the use of pre-funding, the weighted average
         annual percentage interest rate for all of the obligations in the
         investment pool at the end of the pre-funding period must not be more
         than 100 basis points lower than the average interest rate for the
         obligations transferred to the investment pool on the closing date;

         (5) in order to insure that the characteristics of the additional
         obligations are substantially similar to the original obligations which
         were transferred to the investment pool;

                  (a) the characteristics of the additional obligations must be
                  monitored by an insurer or other credit support provider that
                  is independent of the depositor; or

                  (b) an independent accountant retained by the depositor must
                  provide the depositor with a letter, with copies provided to
                  each Rating Agency rating the certificates, the related
                  underwriter and the related trustee, stating whether or not
                  the characteristics of the additional obligations conform to
                  the characteristics described in the related prospectus or
                  prospectus supplement and/or pooling and servicing agreement.
                  In preparing that letter, the independent accountant must use
                  the same type of procedures as were applicable to the
                  obligations transferred to the investment pool as of the
                  closing date;

                                      153


         (6) the pre-funding period must end no later than three months or 90
         days after the closing date or earlier in some circumstances if the
         pre-funding account falls below the minimum level specified in the
         pooling and servicing agreement or an event of default occurs;

         (7) amounts transferred to any pre-funding account and/or capitalized
         interest account used in connection with the pre-funding may be
         invested only in permitted investments;

         (8) the related prospectus or prospectus supplement must describe:

                  (a) any pre-funding account and/or capitalized interest
                  account used in connection with a pre-funding account;

                  (b) the duration of the pre-funding period;

                  (c) the percentage and/or dollar amount of the pre-funding
                  limit for the trust; and

                  (d) that the amounts remaining in the pre-funding account at
                  the end of the pre-funding period will be remitted to
                  certificateholders as repayments of principal; and

         (9) the related pooling and servicing agreement must describe the
         permitted investments for the pre-funding account and/or capitalized
         interest account and, if not disclosed in the related prospectus or
         prospectus supplement, the terms and conditions for eligibility of
         additional obligations.

         Moreover, the Exemption provides relief from some self-dealing/conflict
of interest prohibited transactions that may occur when any person who has
discretionary authority or renders investment advice with respect to the
investment of plan assets causes a Plan to acquire mortgage-backed or
asset-backed securities in a trust, provided that, among other requirements:

         (1) neither that person nor its affiliate is an obligor with respect to
         more than five percent of the fair market value of the obligations or
         receivables contained in the investment pool;

         (2) the Plan is not a plan with respect to which any member of the
         Restricted Group is the "plan sponsor" as defined in Section 3(16)(B)
         of ERISA;

         (3) in the case of an acquisition in connection with the initial
         issuance of securities, at least fifty percent of each class of
         securities in which Plans have invested is acquired by persons
         independent of the Restricted Group and at least fifty percent of the
         aggregate interest in the issuer are acquired by persons independent of
         the Restricted Group;

         (4) a Plan's investment in securities of any class does not exceed
         twenty-five percent of all of the securities of that class outstanding
         at the time of the acquisition; and


                                      154


         (5) immediately after the acquisition, no more than twenty-five percent
         of the assets of any Plan with respect to which that person has
         discretionary authority or renders investment advice are invested in
         securities representing an interest in one or more issuers containing
         assets sold or serviced by the same entity.

         This relief under the Morgan Stanley Exemption does not apply to Plans
sponsored by any member of the Restricted Group with respect to the related
series.

         The Morgan Stanley Exemption may apply to the acquisition, holding and
transfer of the securities by Plans if all of the conditions of the Morgan
Stanley Exemption are met, including those within the control of the investor.

INSURANCE COMPANY PURCHASERS

         Purchasers that are insurance companies should consult with their legal
advisors with respect to the applicability of Prohibited Transaction Class
Exemption 95-60, regarding transactions by insurance company general accounts.
In addition to any exemption that may be available under PTE 95-60 for the
purchase and holding of securities by an insurance company general account, the
Small Business Job Protection Act of 1996 added a new Section 401(c) to ERISA,
which provides exemptive relief from the provisions of Part 4 of Title I of
ERISA and Section 4975 of the Code, including the prohibited transaction
restrictions imposed by ERISA and the Code, for transactions involving an
insurance company general account. Pursuant to Section 401(c) of ERISA, the DOL
published final regulations on January 5, 2000. The 401(c) Regulations provide
guidance for the purpose of determining, in cases where insurance policies
supported by an insurer's general account are issued to or for the benefit of a
Plan on or before December 31, 1998, which general account assets constitute
plan assets. Any assets of an insurance company general account which support
insurance policies issued to a Plan after December 31, 1998 or issued to Plans
on or before December 31, 1998 for which the insurance company does not comply
with the 401(c) Regulations may be treated as plan assets. In addition, because
Section 401(c) does not relate to insurance company separate accounts, separate
account assets are still treated as plan assets of any Plan invested in that
separate account. Insurance companies contemplating the investment of general
account assets in the securities should consult with their legal counsel with
respect to the applicability of Section 401(c) of ERISA.

CONSULTATION WITH COUNSEL

         There can be no assurance that the Morgan Stanley Exemption or any
other DOL exemption will apply with respect to any particular Plan that acquires
the securities or, even if all of the conditions specified in the exemption were
satisfied, that the exemption would apply to all transactions involving a trust
fund. Prospective Plan investors should consult with their legal counsel
concerning the impact of ERISA and the Code and the potential consequences to
their specific circumstances prior to making an investment in the securities.

         Any fiduciary or other investor of plan assets that proposes to acquire
or hold securities on behalf of a Plan or with plan assets should consult with
its counsel with respect to the potential applicability of the fiduciary
responsibility provisions of ERISA and the prohibited


                                      155


transaction provisions of ERISA and Section 4975 of the Code to the proposed
investment and the Morgan Stanley Exemption and the availability of exemptive
relief under any class exemption.

                                LEGAL INVESTMENT

         If so specified in the prospectus supplement, certain classes of
securities will constitute "mortgage related securities" ("SMMEA Securities")
for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as
amended ("SMMEA"). Generally, the only classes of offered securities which will
qualify as "mortgage related securities" will be those that (1) are rated in one
of two highest rating categories by at least one nationally recognized
statistical rating organization; and (2) are part of a series evidencing
interests in or secured by a trust fund consisting of loans originated by
certain types of originators specified in SMMEA and secured by first liens on
real estate. The appropriate characterization of those offered securities not
qualifying as "mortgage related securities" for purposes of SMMEA ("Non-SMMEA
Securities") under various legal investment restrictions, and thus the ability
of investors subject to these restrictions to purchase such securities, may be
subject to significant interpretive uncertainties. Accordingly, all institutions
whose investment activities are subject to legal investment laws and
regulations, regulatory capital requirements, or review by regulatory
authorities should consult with their own legal advisors in determining whether
and to what extent the Non-SMMEA Securities constitute legal investments for
them.

         Those classes of offered certificates qualifying as "mortgage related
securities", will constitute legal investments for persons, trusts,
corporations, partnerships, associations, business trusts, and business
entities, including depository institutions, insurance companies, trustees 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
that, under applicable law, obligations issued by or guaranteed as to principal
and interest by the United States or any of its agencies or instrumentalities
constitute legal investments for those entities.

         Under SMMEA, a number of states enacted legislation, on or prior to the
October 3, 1991 cut off for those enactments, limiting to varying extents the
ability of certain entities (in particular, insurance companies) to invest in
"mortgage related securities" secured by liens on residential, or mixed
residential and commercial properties, in most cases by requiring the affected
investors to rely solely upon existing state law, and not SMMEA. Pursuant to
Section 347 of the Riegle Community Development and Regulatory Improvement Act
of 1994, which amended the definition of "mortgage related security" to include,
in relevant part, offered securities satisfying the rating and qualified
originator requirements for "mortgage related securities," but evidencing
interests in or secured by a trust fund consisting, in whole or in part, of
first liens on one or more parcels of real estate upon which are located one or
more commercial structures, states were authorized to enact legislation, on or
before September 23, 2001, specifically referring to Section 347 and prohibiting
or restricting the purchase, holding or investment by state-regulated entities
in those types of securities. Accordingly, the investors affected by any state
legislation overriding the preemptive effect of SMMEA will be authorized to
invest in the SMMEA Securities only to the extent provided in that legislation.

                                      156


         SMMEA also amended the legal investment authority of
federally-chartered depository institutions as follows: federal savings and loan
associations and federal savings banks may invest in, sell or otherwise deal in
"mortgage related securities" without limitation as to the percentage of their
assets represented, thereby, federal credit unions may invest in those
securities, and national banks may purchase those securities for their own
account without regard to the limitations generally applicable to investment
securities set forth in 12 U.S.C. ss. 24 (Seventh), subject in each case to
those regulations as the applicable federal authority may prescribe. In this
connection, the Office of the Comptroller of the Currency (the "OCC") has
amended 12 C.F.R. Part 1 to authorize national banks to purchase and sell for
their own account, without limitation as to a percentage of the bank's capital
and surplus (but subject to compliance with certain general standards in 12
C.F.R. ss. 1.5 concerning "safety and soundness" and retention of credit
information), certain "Type IV securities," defined in 12 C.F.R. ss. 1.2(m) to
include certain "residential mortgage-related securities" and "commercial
mortgage-related securities." As so defined, "residential mortgage-related
security" and "commercial mortgage-related security" mean, in relevant part,
"mortgage related security" within the meaning of SMMEA, provided that, in the
case of a "commercial mortgage-related security," it "represents ownership of a
promissory note or certificate of interest or participation that is directly
secured by a first lien on one or more parcels of real estate upon which one or
more commercial structures are located and that is fully secured by interests in
a pool of loans to numerous obligors." In the absence of any rule or
administrative interpretation by the OCC defining the term "numerous obligors,"
no representation is made as to whether any of the offered securities will
qualify as "commercial mortgage-related securities," and thus as "Type IV
securities," for investment by national banks. The National Credit Union
Administration (the "NCUA") has adopted rules, codified at 12 C.F.R. Part 703,
which permit federal credit unions to invest in "mortgage related securities,"
other than stripped mortgage related securities (unless the credit union
complies with the requirements of 12 C.F.R. sec. 703.16(e) for investing in
those securities), residual interests in mortgage related securities, and
commercial mortgage related securities, subject to compliance with general rules
governing investment policies and practices; however, credit unions approved for
the NCUA's "investment pilot program" under 12 C.F.R. sec. 703.19 may be able to
invest in those prohibited forms of securities. The Office of Thrift Supervision
(the "OTS") has issued Thrift Bulletin 13a (December 1, 1998), "Management of
Interest Rate Risk, Investment Securities, and Derivatives Activities," and
Thrift Bulletin 73a (December 18, 2001), "Investing in Complex Securities,"
which thrift institutions subject to the jurisdiction of the OTS should consider
before investing in any of the offered securities.

         All depository institutions considering an investment in the offered
securities should review the "Supervisory Policy Statement on Investment
Securities and End-User Derivatives Activities" (the "1998 Policy Statement") of
the Federal Financial Institutions Examination Council, which has been adopted
by the Board of Governors of the Federal Reserve System, the OCC, the Federal
Deposit Insurance Corporation and the OTS, effective May 26, 1998, and by the
NCUA, effective October 1, 1998. The 1998 Policy Statement sets forth general
guidelines which depository institutions must follow in managing risks
(including market, credit, liquidity, operational (transaction), and legal
risks) applicable to all securities (including mortgage pass-through securities
and mortgage-derivative products) used for investment purposes.

         Investors whose investment activities are subject to regulation by
federal or state authorities should review rules, policies, and guidelines
adopted from time to time by those


                                      157


authorities before purchasing any offered securities, as certain classes may be
deemed unsuitable investments, or may otherwise be restricted, under those
rules, policies, or guidelines (in certain instances irrespective of SMMEA).

         The foregoing does not take into consideration the applicability of
statutes, rules, regulations, orders, guidelines or agreements generally
governing investments made by a particular investor, including, but not limited
to "prudent investor" provisions, percentage-of-assets limits, provisions which
may restrict or prohibit investment in securities which are not
"interest-bearing" or "income-paying," and, with regard to any offered
securities issued in book-entry form, provisions which may restrict or prohibit
investments in securities which are issued in book-entry form.

         Except as to the status of certain classes of the offered securities as
"mortgage related securities," no representations are made as to the proper
characterization of the offered securities for legal investment purposes,
financial institution regulatory purposes, or other purposes, or as to the
ability of particular investors to purchase offered securities under applicable
legal investment restrictions. The uncertainties described above (and any
unfavorable future determinations concerning legal investment or financial
institution regulatory characteristics of the offered securities) may adversely
affect the liquidity of the offered securities.

         Accordingly, all investors whose investment activities are subject to
legal investment laws and regulations, regulatory capital requirements, or
review by regulatory authorities should consult with their own legal advisors in
determining whether and to what extent the offered securities constitute legal
investments or are subject to investment, capital, or other restrictions, and,
if applicable, whether SMMEA has been overridden in any jurisdiction relevant to
that investor.

                             METHOD OF DISTRIBUTION

         The securities offered by this prospectus and by the related prospectus
supplement will be offered in series. The distribution of the securities may be
effected from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices to be
determined at the time of sale or at the time of commitment therefor. If so
specified in the related prospectus supplement, the securities will be
distributed in a firm commitment underwriting, under the terms and conditions of
the underwriting agreement, by Morgan Stanley & Co. Incorporated, an affiliate
of the depositor, acting as underwriter with other underwriters, if any, named
in the underwriting agreement. In that event, the prospectus supplement may also
specify that the underwriters will not be obligated to pay for any securities
agreed to be purchased by purchasers pursuant to purchase agreements acceptable
to the depositor. In connection with the sale of securities, underwriters may
receive compensation from the depositor or from purchasers of securities in the
form of discounts, concessions or commissions. The prospectus supplement will
describe the nature and amount of the compensation paid to the underwriters for
each class of securities offered and in total.

         Alternatively, the prospectus supplement may specify that securities
will be distributed by Morgan Stanley & Co. Incorporated acting as agent or in
some cases as principal with respect to securities that it has previously
purchased or agreed to purchase. If Morgan Stanley acts as


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agent in the sale of securities, Morgan Stanley will receive a selling
commission with respect to those securities, depending on market conditions,
expressed as a percentage of the aggregate principal balance or notional amount
of those securities as of the cut-off date. The exact percentage for each series
of securities will be disclosed in the related prospectus supplement. To the
extent that Morgan Stanley elects to purchase securities as principal, Morgan
Stanley may realize losses or profits based upon the difference between its
purchase price and the sales price. The prospectus supplement with respect to
any series offered other than through underwriters will contain information
regarding the nature of that offering and any agreements to be entered into
between the depositor and purchasers of securities of that series.

         The depositor will indemnify Morgan Stanley and any other underwriters
against civil liabilities, including liabilities under the Securities Act of
1933, or will contribute to payments Morgan Stanley and any other underwriters
may be required to make in respect of those civil liabilities.

         The securities will be sold primarily to institutional investors.
Purchasers of securities, including dealers, may, depending on the facts and
circumstances of those purchases, be deemed to be "underwriters" within the
meaning of the Securities Act of 1933 in connection with reoffers and sales by
them of securities. Securityholders should consult with their legal advisors in
this regard prior to the reoffer or sale.

         As to each series of securities, only those classes rated in an
investment grade rating category by any rating agency will be offered by this
prospectus and the related prospectus supplement. Any non-investment grade class
may be initially retained by the depositor, and may be sold by the depositor at
any time in private transactions.

                                  LEGAL MATTERS

         Certain legal matters with respect to each series of securities and the
material federal income tax consequences with respect to that series will be
passed upon for the depositor by Sidley Austin Brown & Wood LLP, Cadwalader,
Wickersham & Taft LLP, Dewey Ballantine LLP or Mayer, Brown, Rowe & Maw LLP. For
each series of notes, either Sidley Austin Brown & Wood LLP, Cadwalader,
Wickersham & Taft LLP, Dewey Ballantine LLP or Mayer, Brown, Rowe & Maw LLP will
opine to the effect that the notes are binding obligations of the related trust
and Richards Layton & Finger, P.A. will opine to the effect that the notes are
duly authorized and validly issued by the trust. For each series of
certificates, either Sidley Austin Brown & Wood LLP, Cadwalader, Wickersham &
Taft LLP, Dewey Ballantine LLP or Mayer, Brown, Rowe & Maw LLP or, if the
certificates are issued by a Delaware trust, Richards Layton & Finger, P.A.,
will opine to the effect that the certificates are validly issued, fully paid
and non-assessable.

                              FINANCIAL INFORMATION

         A new trust fund will be formed with respect to each series of
securities and no trust fund will engage in any business activities or have any
assets or obligations prior to the issuance of the related series of securities.
Accordingly, no financial statements with respect to any trust fund will be
included in this prospectus or in the related prospectus supplement.

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                                     RATING

         It is a condition to the issuance of the securities of each series
offered by this prospectus that they shall have been rated in one of the four
highest rating categories by the nationally recognized statistical rating agency
or agencies specified in the related prospectus supplement.

         Any 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 that
class and will reflect that rating agency's assessment solely of the likelihood
that holders of a class of securities of that class will receive payments to
which those 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 those
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 that 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 particular
prepayment scenarios.

         There is also no assurance that any 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, that 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.

         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 that 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 class. There can be no assurance that the historical data
supporting any actuarial analysis will accurately reflect future experience nor
any 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. No assurance can be given 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 the rates of
delinquencies, foreclosures and losses could be higher than those now generally
experienced in the mortgage lending industry. This could be particularly the
case if loss levels were severe enough for the outstanding principal balances of
the loans in a particular trust fund and any secondary financing on the related
properties to become equal to or greater than the value of the properties. In
additional, 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


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losses with respect to any trust fund. To the extent that losses are not covered
by credit enhancement, those losses will be borne, at least in part, by the
holders of one or more classes of the securities of the related series.

                       WHERE YOU CAN FIND MORE INFORMATION

         The depositor, as originator of each trust, has filed with the SEC a
registration statement, registration No. 333-121914, under the Securities Act of
1933, with respect to the securities offered by this prospectus. You may read
and copy any reports or other information filed by or on behalf of the depositor
or any of the trusts and obtain copies, at prescribed rates, of the registration
statement at the SEC's public reference facility at 450 Fifth Street, N.W.,
Washington, D.C. 20549; and at the SEC's regional offices at Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. In addition, the
SEC maintains a public access site on the internet through the world wide web at
which reports and other information, including all electronic filings, may be
viewed. The internet address of this site is http://www.sec.gov. You may obtain
more information on the operation of the SEC's public reference facility by
calling the SEC at 1-800-SEC-0330.

         Each offering of securities by a trust under this prospectus will
create an obligation to file with the SEC periodic reports for that trust under
the Securities Exchange Act of 1934. Those reports will be filed under the name
of the trust that issued the related series of securities. The depositor intends
that those reports will be filed only for the duration of the required reporting
period prescribed by the SEC. The depositor expects that for each offering the
required reporting period will last only to the end of calendar year in which
the related series of securities were issued. All reports filed with the SEC for
each trust may be obtained through the SEC's public reference facilities,
through its web site, or by contacting the depositor at the address and
telephone number set forth under "The Depositor" in this prospectus.

                 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

         The SEC allows information filed with it regarding the depositor or
each trust to be incorporated by reference into this prospectus. This means that
the depositor and each trust can disclose important information to you by
referring to those reports. Information filed with the SEC that is incorporated
by reference into this prospectus is considered part of this prospectus and
automatically updates and supercedes the information in this prospectus and the
related prospectus supplement. All documents filed with the SEC by or an behalf
of each trust prior to the termination of the offering of the securities issued
by that trust will be incorporated by reference into this prospectus. All
reports filed with the SEC for each trust may be obtained through the SEC's
public reference facilities or through its web site. See "Where You Can Find
More Information" for information on where you can obtain these reports.


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                                    GLOSSARY

         Whenever used in this prospectus, the following terms have the
following meanings:

         "401(c) Regulations" means the final regulations published by DOL
pursuant to Section 401(c) of ERISA.

         "Clearstream" is Clearstream Banking, societe anonyme.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Compound Interest Securities" means securities all or a portion of the
interest on which is not paid currently, and includes any accrual classes or
partial accrual classes as described in this prospectus under "Description of
the Securities--Categories of Classes of Securities".

         "Contingent Regulations" means the regulations issued by the IRS
governing the calculation of OID on instruments having contingent interest
payments.

         "Debt Securities" means, collectively, those securities of a series
that are characterized as debt for federal income tax purposes and those that
are Regular Interest Securities.

         "DTC" is The Depository Trust Company.

         "Eligible Corporation" means a domestic C corporation that is fully
subject to corporate income tax.

         "Euroclear" is Euroclear Bank, S.A./N.V., as operator of the Euroclear
System.

         "FHA Loan" means a mortgage loan insured by the FHA under the National
Housing Act or Title V of the National Housing Act of 1949.

         "Interest Weighted Security" means, for federal income tax purposes and
any REMIC, securities 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 the Pass-Through Securities.

         "Morgan Stanley Exemption" or "Exemption" means the prohibited
Transaction Exemption 90-24, 55 Fed. Reg. 20548 (1990), as amended by prohibited
transaction Exemption 97-34, 62 Fed. Reg. 39021 (1997) and 2000-58, 65 Fed. Reg.
67765 (2000) the administrative exemption that has granted to Morgan Stanley &
Co. Incorporated.

         "OID" means with respect to any security, "original issue discount"
under the Code with respect to the issuance of that security.

         "Participants" are participating organizations through which a security
owner can hold its book-entry security.

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         "Parties in Interest" means, collectively, "disqualified persons"
within the meaning of the Code and "parties in interest" under ERISA who have
specified relationships with a Plan without an applicable exemption under ERISA
or the Code.

         "Pass-Through Security" means securities of a series that are treated
for federal income tax purposes as representing ownership interests in the
related trust fund.

         "Pay-Through Security" means, for federal income tax purposes, a debt
instrument, such as some classes of Debt Securities, that is subject to
acceleration due to prepayments on other debt obligations securing that
instrument.

         "Plan" means employee benefit plans and other retirement plans and
arrangements, including, but not limited to, individual retirement accounts and
annuities, as well as collective investment funds and separate general accounts
in which the plans or arrangements are invested, which have requirements imposed
upon them under ERISA and the Code.

         "Plan Asset Regulations" means the final regulations issued by DOL that
define the "assets" of a Plan for purposes of ERISA and the prohibited
transaction provisions of the Code (under 29 C.F.R. Sections 2510.3-101).

         "Prepayment Assumption" means, for federal income tax purposes and any
security, the rate of prepayments assumed in pricing the security.

         "Property Improvement Loans" means types of loans that are eligible for
FHA insurance under the Title I Program that are made to finance actions or
items that substantially protect or improve the basic livability or utility of a
property.

         "Ratio Stripped Securities" means a Stripped Security that represents a
right to receive differing percentages of both the interest and principal on
each underlying loan.

         "Regular Interests" or "Regular Interest Securities" means securities
that are designated as "regular interests" in a REMIC in accordance with the
Code.

         "Regular Security" are securities which constitute one or more classes
of regular interests with respect to each REMIC Pool.

         "Regular Securityholder" is a holder of a Regular Security.

         "Relief Act" means the Servicemembers Civil Relief Act.

         "REMIC" means a "real estate mortgage investment conduit" under the
Code.

         "Residual Interests" or "Residual Interest Securities" means securities
that are designated as "residual interests" in a REMIC in accordance with the
Code.

         "Restricted Group" means, for any series, the seller, the depositor,
Morgan Stanley & Co. Incorporated and the other underwriters set forth in the
related prospectus supplement, the trustee, the master servicer, any
sub-servicer, any pool insurer, any obligor with respect to the


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trust fund asset included in the trust fund constituting more than five percent
of the aggregate unamortized principal balance of the assets in the trust fund,
or any affiliate of any of those parties.

         "Securities Intermediary" is an entity that maintains the security
owner's account and records the security owner's ownership of securities on that
account.

         "Single Family Securities" are certificates that represent interests in
a pool consisting of loans of the type that may back the securities to be
offered under this prospectus.

         "Stripped Security" means a security that represents a right to receive
only a portion of the interest payments on the underlying loans, a right to
receive only principal payments on the underlying loans, or a right to receive
payments of both interest and principal on the underlying loans.

         "Title I Loans" means types of loans that are eligible for FHA
insurance under the Title I Program that are made to finance actions or items
that substantially protect or improve the basic livability or utility of a
property.

         "Title I Programs" means the FHA Title I Credit Insurance program
created pursuant to Sections 1 and 2(a) of the National Housing Act of 1934.

         "VA Loan" means a mortgage loan partially guaranteed by the VA under
the Servicemen's Readjustment Act of 1944, as amended, or Chapter 37 of Title
38, United States Code.


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