EXECUTION COPY
                                                                January 14, 2003


                  BANC OF AMERICA MORTGAGE CAPITAL CORPORATION

                                    PURCHASER

                                       AND

                         WELLS FARGO HOME MORTGAGE, INC.

                                     COMPANY


               MASTER SELLER'S WARRANTIES AND SERVICING AGREEMENT

                           DATED AS OF JANUARY 1, 2003


                            FIXED RATE MORTGAGE LOANS






                                             TABLE OF CONTENTS

ARTICLE I           DEFINITIONS............................................................................1

ARTICLE II          CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS AND RECORDS;
                    CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS.............................................9
    Section 2.01    Conveyance of Mortgage Loans; Possession of Mortgage Files; Maintenance of
                      Servicing Files......................................................................9
    Section 2.02    Books and Records; Transfers of Mortgage Loans.........................................9
    Section 2.03    Custodial Agreement; Delivery of Documents............................................10

ARTICLE III         REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH....................................11
    Section 3.01    Company Representations and Warranties................................................11
    Section 3.02    Representations and Warranties Regarding Individual Mortgage Loans....................14
    Section 3.03    Repurchase............................................................................23

ARTICLE IV          ADMINISTRATION AND SERVICING OF MORTGAGE LOANS........................................25
    Section 4.01    Company to Act as Servicer............................................................25
    Section 4.02    Liquidation of Mortgage Loans.........................................................26
    Section 4.03    Collection of Mortgage Loan Payments..................................................28
    Section 4.04    Establishment of and Deposits to Custodial Account....................................28
    Section 4.05    Permitted Withdrawals From Custodial Account..........................................29
    Section 4.06    Establishment of and Deposits to Escrow Account.......................................30
    Section 4.07    Permitted Withdrawals From Escrow Account.............................................31
    Section 4.08    Payment of Taxes, Insurance and Other Charges.........................................32
    Section 4.09    Protection of Accounts................................................................32
    Section 4.10    Maintenance of Hazard Insurance.......................................................32
    Section 4.11    Maintenance of Mortgage Impairment Insurance..........................................33
    Section 4.12    Maintenance of Fidelity Bond and Errors and Omissions Insurance.......................34
    Section 4.13    Inspections...........................................................................34
    Section 4.14    Restoration of Mortgaged Property.....................................................35
    Section 4.15    Maintenance of PMI Policy; Claims.....................................................35
    Section 4.16    Title, Management and Disposition of REO Property.....................................36
    Section 4.17    Real Estate Owned Reports.............................................................37
    Section 4.18    Liquidation Reports...................................................................37
    Section 4.19    Reports of Foreclosures and Abandonments of Mortgaged Property........................37
    Section 4.20    Confidentiality/Protection of Customer Information....................................38
    Section 4.21    Disaster Recovery/Business Continuity Plan............................................38



                                        i





ARTICLE V           PAYMENTS TO PURCHASER.................................................................38
    Section 5.01    Remittances...........................................................................38
    Section 5.02    Statements to Purchaser...............................................................39
    Section 5.03    Monthly Advances by Company...........................................................39

ARTICLE VI          GENERAL SERVICING PROCEDURES..........................................................40
    Section 6.01    Transfers of Mortgaged Property.......................................................40
    Section 6.02    Satisfaction of Mortgages and Release of Mortgage Files...............................40
    Section 6.03    Servicing Compensation................................................................41
    Section 6.04    Annual Statement as to Compliance.....................................................41
    Section 6.05    Annual Independent Public Accountants' Servicing Report...............................41
    Section 6.06    Right to Examine Company Records......................................................42
    Section 6.07    Compliance with REMIC Provisions......................................................42

ARTICLE VII         COMPANY TO COOPERATE..................................................................42
    Section 7.01    Provision of Information..............................................................42
    Section 7.02    Financial Statements; Servicing Facility..............................................43
    Section 7.03    Cooperation with Third Party Service Providers........................................43

ARTICLE VIII        THE COMPANY...........................................................................43
    Section 8.01    Indemnification; Third Party Claims...................................................43
    Section 8.02    Merger or Consolidation of the Company................................................44
    Section 8.03    Limitation on Liability of Company and Others.........................................44
    Section 8.04    Limitation on Resignation and Assignment by Company...................................45

ARTICLE IX          REMOVAL OF MORTGAGE LOANS FROM AGREEMENT..............................................45
    Section 9.01    Removal of Mortgage Loans from Inclusion Under this Agreement.........................45

ARTICLE X           DEFAULT...............................................................................47
    Section 10.01   Events of Default.....................................................................47
    Section 10.02   Waiver of Defaults....................................................................48

ARTICLE XI          TERMINATION...........................................................................49
    Section 11.01   Termination...........................................................................49
    Section 11.02   Termination Without Cause.............................................................49

ARTICLE XII         MISCELLANEOUS PROVISIONS..............................................................49
    Section 12.01   Successor to Company..................................................................49
    Section 12.02   Amendment.............................................................................50
    Section 12.03   Governing Law.........................................................................50
    Section 12.04   Arbitration...........................................................................51
    Section 12.05   Duration of Agreement.................................................................51
    Section 12.06   Notices...............................................................................51
    Section 12.07   Severability of Provisions............................................................52
    Section 12.08   Relationship of Parties...............................................................52
    Section 12.09   Execution; Successors and Assigns.....................................................52



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    Section 12.10   Recordation of Assignments of Mortgage................................................52
    Section 12.11   Assignment by Purchaser...............................................................53
    Section 12.12   Solicitation of Mortgagor.............................................................53
    Section 12.13   Further Agreements....................................................................53
    Section 12.14   Confidential Information..............................................................53


                                    EXHIBITS

                    Exhibit A     Custodial Agreement
                    Exhibit B     Data File
                    Exhibit C     Contents of Each Mortgage Loan File
                    Exhibit D     Underwriting Guidelines
                    Exhibit E     Form of Assignment and Conveyance Agreement
                    Exhibit F     Form of Sarbanes-Oxley Certificate
                    Exhibit G     Form of Assignment, Assumption and Recognition
                                    Agreement


                                      iii



      This is a Master Seller's Warranties and Servicing Agreement for fixed
rate residential first mortgage loans, dated and effective as of January 1,
2003, and is executed between Banc of America Mortgage Capital Corporation, as
purchaser (the "Purchaser"), and Wells Fargo Home Mortgage, Inc., as seller and
servicer (the "Company").

                               W I T N E S S E T H

      WHEREAS, the Purchaser has agreed to purchase from the Company and the
Company has agreed to sell to the Purchaser from time to time (each a
"Transaction") certain fixed rate residential Mortgage Loans which shall be
delivered as whole loans (each a "Loan Package") on various dates (each a
"Closing Date") as provided for in certain Assignment and Conveyance Agreements
by and between the Purchaser and the Company as executed from time to time; and

      WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed of
trust or other security instrument creating a first lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule;
and

      WHEREAS, the Purchaser and the Company wish to prescribe the manner of
purchase of the Mortgage Loans and the conveyance, servicing and control of the
Mortgage Loans.

      NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the Purchaser and the Company agree as follows:

                                   ARTICLE I

                                   DEFINITIONS

      Whenever used herein, the following words and phrases, unless the content
otherwise requires, shall have the following meanings:

      Accepted Servicing Practices: With respect to any Mortgage Loan,
procedures (including collection procedures) that comply with applicable
federal, state and local law, and that the Company customarily employs and
exercises in servicing and administering mortgage loans for its own account and
that are in accordance with accepted mortgage servicing practices of prudent
mortgage lending institutions which service mortgage loans of the same type as
the Mortgage Loans in the jurisdiction where the related Mortgaged Property is
located.

      Agreement: This Master Seller's Warranties and Servicing Agreement and all
amendments hereof and supplements hereto.

      ALTA: The American Land Title Association or any successor thereto.

      Appraisal: A written appraisal of a Mortgaged Property made by a Qualified
Appraiser, which appraisal must be written, in form and substance, acceptable to
Fannie Mae and Freddie Mac standards, and satisfy the requirements of Title XI
of the Financial Institution, Reform, Recovery and Enforcement Act of 1989 and
the regulations promulgated thereunder, in effect as of the date of the
Appraisal.




      Appraised Value: With respect to any Mortgage Loan, the lesser of (i) the
value set forth on the Appraisal made in connection with the origination of the
related Mortgage Loan as the value of the related Mortgaged Property, or (ii)
the purchase price paid for the Mortgaged Property, provided, however, that in
the case of a refinanced Mortgage Loan, such value shall be based solely on the
Appraisal made in connection with the origination of such Mortgage Loan.

      Assignment, Assumption and Recognition Agreement: Substantially in the
form of Exhibit G hereto, an assignment and transfer of all right, title and
interest in certain Mortgage Loans identified therein and related Mortgage Loan
Files and agreements .

      Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
sale of the Mortgage to the Purchaser.

      Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day
on which banking and savings and loan institutions in the states where the
parties are located are authorized or obligated by law or executive order to be
closed.

      Closing Date: The date or dates, set forth in the related Commitment
Letter, on which from time to time the Purchaser shall purchase and the Company
shall sell the Mortgage Loans listed on the respective Mortgage Loan Schedule
for each Transaction.

      Code: The Internal Revenue Code of 1986, as it may be amended from time to
time or any successor statute thereto, and applicable U.S. Department of the
Treasury regulations issued pursuant thereto.

      Commitment Letter: The commitment letter between the Company and the
Purchaser which sets forth, among other things, the Purchase Price for certain
Mortgage Loans described therein to be sold by the Company and purchased by the
Purchaser on the Closing Date set forth therein.

      Company: Wells Fargo Home Mortgage, Inc., or its successor in interest or
assigns, or any successor to the Company under this Agreement appointed as
herein provided.

      Company Employees: As defined in Section 4.12.

      Condemnation Proceeds: 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, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Mortgage
Loan Documents.

      Custodial Account: The separate account or accounts created and maintained
pursuant to Section 4.04.

      Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents, a form of which is annexed hereto as Exhibit A.


                                       2



      Custodian: The custodian under the Custodial Agreement, or its successor
in interest or assigns, or any successor to the Custodian under the Custodial
Agreement as provided therein.

      Cut-off Date: With respect to each Transaction, the first day of the month
in which the Closing Date occurs.

      Data File: The electronic data file prepared by the Company and delivered
to the Purchaser, including the data fields set forth on Exhibit B with respect
to each Mortgage Loan, in relation to each Transaction.

      Deleted Mortgage Loan: A Mortgage Loan which is repurchased by the Company
in accordance with the terms of this Agreement and which is, in the case of a
substitution pursuant to Section 3.03, replaced or to be replaced with a
Qualified Substitute Mortgage Loan.

      Determination Date: The Business Day immediately preceding the related
Remittance Date.

      Due Date: The first day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.

      Due Period: With respect to each Remittance Date, the period commencing on
the second day of the month preceding the month of the Remittance Date and
ending on the first day of the month of the Remittance Date.

      Errors and Omissions Insurance Policy: An errors and omissions insurance
policy to be maintained by the Company pursuant to Section 4.12.

      Escrow Account: The separate account or accounts created and maintained
pursuant to Section 4.06.

      Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other related
document.

      Event of Default: Any one of the conditions or circumstances enumerated in
Section 10.01.

      Fannie Mae: The entity formerly known as Federal National Mortgage
Association (FNMA), or any successor thereto.

      FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.

      Fidelity Bond: A fidelity bond to be maintained by the Company pursuant to
Section 4.12.


                                       3



      Freddie Mac: The entity known as the Federal Home Loan Mortgage
Corporation (FHLMC), or any successor thereto.

      Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.

      Liquidation Proceeds: Cash received in connection with the liquidation of
a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the
related Mortgaged Property if the Mortgaged Property is acquired in satisfaction
of the Mortgage Loan.

      Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the ratio
of the original loan amount of the Mortgage Loan at its origination (unless
otherwise indicated) to the Appraised Value of the Mortgaged Property.

      Monthly Advance: The portion of each Monthly Payment that is delinquent
with respect to each Mortgage Loan at the close of business on the Determination
Date, required to be advanced by the Company pursuant to Section 5.03 on the
Business Day immediately preceding the Remittance Date of the related month.

      Monthly Payment: The scheduled monthly payment of principal and interest
on a Mortgage Loan.

      Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note.

      Mortgage File: The items pertaining to a particular Mortgage Loan referred
to in Exhibit C annexed hereto, and any additional documents required to be
added to the Mortgage File pursuant to this Agreement.

      Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in Section 4.11.

      Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note in accordance with the provisions of the Mortgage Note.

      Mortgage Loan: An individual Mortgage Loan which is the subject of this
Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the related Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the Mortgage File, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition Proceeds and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.

      Mortgage Loan Documents: With respect to a Mortgage Loan, the original
related Mortgage Note with applicable addenda and riders, the original related
Mortgage and the originals of any required addenda and riders, the original
related Assignment of Mortgage and any original intervening related Assignments
of Mortgage, the original related title insurance


                                       4



policy, related PMI policy, if any, the related Appraisal report and any
security agreement, chattel mortgage or equivalent executed in connection with
the Mortgage.

      Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Purchaser, which shall be equal to the
related Mortgage Interest Rate minus the Servicing Fee Rate.

      Mortgage Loan Schedule: With respect to each Transaction, a schedule of
Mortgage Loans setting forth the following information with respect to each
Mortgage Loan: (1) the Company's Mortgage Loan number; (2) the city, state and
zip code of the Mortgaged Property; (3) a code indicating whether the Mortgaged
Property is a single family residence, two-family residence, three-family
residence, four-family residence, planned unit development or condominium; (4)
the current Mortgage Interest Rate; (5) the current net Mortgage Interest Rate;
(6) the current Monthly Payment; (7) the original term to maturity; (8) the
scheduled maturity date; (9) the principal balance of the Mortgage Loan as of
the Cut-off Date after deduction of payments of principal due on or before the
Cut-off Date whether or not collected; (10) the Loan-to-Value Ratio; (11) a code
indicating the mortgage guaranty insurance company and (12) the Servicing Fee.

      Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.

      Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note.

      Mortgagor: The obligor on a Mortgage Note.

      OCC: The Office of the Comptroller of the Currency.

      Officer's Certificate: A certificate signed by the Chairman of the Board
or the Vice Chairman of the Board or the President or a Vice President or an
Assistant Vice President and by the Treasurer or the Secretary or one of the
Assistant Treasurers or Assistant Secretaries of the Company, and delivered to
the Purchaser as required by this Agreement.

      Opinion of Counsel: A written opinion of counsel, who may be an employee
of the Company, reasonably acceptable to the Purchaser.

      Pass-Through Transfer: The sale or transfer of some or all of the Mortgage
Loans by the Purchaser to a trust to be formed as part of a publicly issued or
privately placed mortgage-backed securities transaction.

      Person: Any individual, corporation, partnership, joint venture, limited
liability company, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.

      PMI Policy: A policy of primary mortgage guaranty insurance issued by a
Qualified Insurer, as required by this Agreement with respect to certain
Mortgage Loans.


                                       5



      Prepayment Interest Shortfall: As to any Remittance Date and each Mortgage
Loan subject to a Principal Prepayment received during the calendar month
preceding such Remittance Date, the amount, if any, by which one month's
interest at the related Mortgage Interest Rate (net of the Servicing Fee) on
such Principal Prepayment exceeds the amount of interest paid in connection with
such Principal Prepayment.

      Prime Rate: The prime rate announced to be in effect from time to time, as
published as the average rate in The Wall Street Journal.
      Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, including
any prepayment penalty or premium thereon and which is not accompanied by an
amount of interest representing scheduled interest due on any date or dates in
any month or months subsequent to the month of prepayment.

      Principal Prepayment Period: The month preceding the month in which the
related Remittance Date occurs.

      Purchaser: Banc of America Mortgage Capital Corporation, or its successor
in interest or any successor or assignee to the Purchaser under this Agreement
as herein provided.

      Purchase Price: The purchase price for each Loan Package shall be the
percentage of par as stated in the related Commitment Letter, multiplied by the
aggregate scheduled principal balance, as of the related Cut-off Date, of the
Mortgage Loans in the related Loan Package, after application of scheduled
payments of principal for such related Loan Package due on or before the related
Cut-off Date whether or not collected. The purchase price for a Loan Package may
be adjusted as stated in the related Commitment Letter.

      Qualified Appraiser: An appraiser, duly appointed by the Company, who had
no interest, direct or indirect, in the Mortgaged Property or in any loan made
on the security thereof, and whose compensation is not affected by the approval
or disapproval of the Mortgage Loan, and such appraiser and the appraisal made
by such appraiser both satisfy the requirements of Title XI of the Financial
Institution Reform, Recovery, and Enforcement Act and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated.

      Qualified Depository: A deposit account or accounts maintained with a
federal or state chartered depository institution the deposits in which are
insured by the FDIC to the applicable limits and the short-term unsecured debt
obligations of which (or, in the case of a depository institution that is a
subsidiary of a holding company, the short-term unsecured debt obligations of
such holding company) are rated A-1 by Standard & Poor's Ratings Services or
Prime-1 by Moody's Investors Service, Inc. (or a comparable rating if another
rating agency is specified by the Purchaser by written notice to the Company) at
the time any deposits are held on deposit therein.

      Qualified Insurer: A mortgage guaranty insurance company duly authorized
and licensed where required by law to transact mortgage guaranty insurance
business and approved as an insurer by Fannie Mae or Freddie Mac.


                                       6



      Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Company for a Deleted Mortgage Loan which must, on the date
of such substitution be approved by the Purchaser and, (i) have an outstanding
principal balance, after deduction of all scheduled payments due in the month of
substitution (or in the case of a substitution of more than one mortgage loan
for a Deleted Mortgage Loan, an aggregate principal balance), not in excess of
the Stated Principal Balance of the Deleted Mortgage Loan; (ii) have a Mortgage
Loan Remittance Rate not less than, and not more than two percent (2%) greater
than, the Mortgage Loan Remittance Rate of the Deleted Mortgage Loan; (iii) have
a remaining term to maturity not greater than and not more than one year less
than that of the Deleted Mortgage Loan; (iv) comply with each representation and
warranty set forth in Sections 3.01 and 3.02; and (v) be of the same type as the
Deleted Mortgage Loan.

      Reconstitution Date: The date on which any or all of the Mortgage Loans
serviced under this Agreement shall be removed from this Agreement and
reconstituted as part of a Pass-Through Transfer or Whole Loan Transfer pursuant
to Section 9.01 hereof. The Reconstitution Date shall be such date as the
Purchaser and the shelf registrant shall designate. On such date, the Mortgage
Loans transferred shall cease to be covered by this Agreement and the Company's
servicing responsibilities shall cease under this Agreement with respect to the
related transferred Mortgage Loans.

      Record Date: The close of business of the last Business Day of the month
preceding the month of the related Remittance Date.

      REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.

      REMIC Provisions: Provisions of the federal income tax law relating to a
REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.

      Remittance Date: The 18th day (or if such 18th day is not a Business Day,
the first Business Day immediately following) of any month.

      REO Disposition: The final sale by the Company of any REO Property.

      REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.16.

      REO Property: A Mortgaged Property acquired by the Company on behalf of
the Purchaser through foreclosure or by deed in lieu of foreclosure, as
described in Section 4.16.

      Repurchase Price: Unless otherwise agreed by the Purchaser and the
Company, a price equal to (i) the Stated Principal Balance of the Mortgage Loan
as of the date on which such repurchase takes place plus (ii) interest on such
Stated Principal Balance at the Mortgage Loan Remittance Rate from the date on
which interest has last been paid and distributed to the Purchaser through the
last day of the month in which such repurchase takes place, less amounts


                                       7



received or advanced in respect of such repurchased Mortgage Loan which are
being held in the Custodial Account for distribution in the month of repurchase.

      Securities Act of 1933 or the 1933 Act: The Securities Act of 1933, as
amended.

      Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses other than Monthly Advances (including reasonable
attorney's fees and disbursements) incurred in the performance by the Company of
its servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the management
and liquidation of any REO Property and (d) compliance with the obligations
under Section 4.08.

      Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Purchaser shall pay to the Company, which shall, for a period of
one full month, be equal to one-twelfth of the product of (a) the Servicing Fee
Rate and (b) the outstanding principal balance of such Mortgage Loan. Such fee
shall be payable monthly, computed on the basis of the same principal amount and
period respecting which any related interest payment on a Mortgage Loan is
computed. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds, to the
extent permitted by Section 4.05) of such Monthly Payment collected by the
Company, or as otherwise provided under Section 4.05.

      Servicing Fee Rate: The per annum percentage for each Mortgage Loan, as
stated in the Commitment Letter.

      Servicing File: With respect to each Mortgage Loan, the file retained by
the Company consisting of originals of all documents in the Mortgage File which
are not delivered to the Custodian and copies of the Mortgage Loan Documents
listed in the Custodial Agreement the originals of which are delivered to the
Custodian pursuant to Section 2.03.

      Servicing Officer: Any officer of the Company involved in or responsible
for the administration and servicing of the Mortgage Loans whose name appears on
a list of servicing officers furnished by the Company to the Purchaser upon
request, as such list may from time to time be amended.

      Stated Principal Balance: As to each Mortgage Loan, (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, whether or not received, minus (ii) all
amounts previously distributed to the Purchaser with respect to the related
Mortgage Loan representing payments or recoveries of principal or advances in
lieu thereof.

      Underwriting Guidelines: The underwriting guidelines of the Company
attached hereto as Exhibit D.

      Whole Loan Transfer: Any sale or transfer of some or all of the Mortgage
Loans by the Purchaser to a third party, which sale or transfer is not a
Pass-Through Transfer.


                                       8



                                   ARTICLE II

           CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
         BOOKS AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS

Section 2.01   Conveyance of Mortgage Loans; Possession of Mortgage Files;
               Maintenance of Servicing Files.

      Pursuant to an Assignment and Conveyance Agreement, on the related Closing
Date, the Company, simultaneously with the payment of the Purchase Price by the
Purchaser, shall thereby sell, transfer, assign, set over and convey to the
Purchaser, without recourse, but subject to the terms of this Agreement and the
related Assignment and Conveyance Agreement, all the right, title and interest
of the Company in and to the Mortgage Loans listed on the respective Mortgage
Loan Schedule annexed to such Assignment and Conveyance Agreement, together with
the Mortgage Files and all rights and obligations arising under the documents
contained therein. The Company shall deliver the related Mortgage Loan Schedule
to the Purchaser at least two (2) Business Days before the Closing Date.
Pursuant to Section 2.03, the Company shall deliver the Mortgage Loan Documents
for each Mortgage Loan comprising the related Loan Package to the Custodian.

      The contents of each Mortgage File not delivered to the Custodian are and
shall be held in trust by the Company for the benefit of the Purchaser as the
owner thereof. The Company shall maintain a Servicing File consisting of a copy
of the contents of each Mortgage File and the originals of the documents in each
Mortgage File not delivered to the Custodian. The possession of each Servicing
File by the Company is at the will of the Purchaser for the sole purpose of
servicing the related Mortgage Loan, and such retention and possession by the
Company is in a custodial capacity only. Upon the sale of the Mortgage Loans the
ownership of each Mortgage Note, the related Mortgage and the related Mortgage
File and Servicing File shall vest immediately in the Purchaser, and the
ownership of all records and documents with respect to the related Mortgage Loan
prepared by or which come into the possession of the Company shall vest
immediately in the Purchaser and shall be retained and maintained by the
Company, in trust, at the will of the Purchaser and only in such custodial
capacity. The Company shall release its custody of the contents of any Servicing
File only in accordance with written instructions from the Purchaser, unless
such release is required as incidental to the Company's servicing of the
Mortgage Loans or is in connection with a repurchase of any Mortgage Loan
pursuant to Section 3.03 or 6.02. All such costs associated with the release,
transfer and re-delivery to the Company shall be the responsibility of the
Purchaser.

Section 2.02   Books and Records; Transfers of Mortgage Loans.

      From and after the sale to the Purchaser of the Mortgage Loans in the
related Loan Package on each Closing Date, all rights arising out of such
Mortgage Loans, including, but not limited to, all funds received on or in
connection with such Mortgage Loans, shall be received and held by the Company
in trust for the benefit of the Purchaser as owner of such Mortgage Loans, and
the Company shall retain record title to the related Mortgages for the sole
purpose of facilitating the servicing and the supervision of the servicing of
such Mortgage Loans.


                                       9



      The sale of each Mortgage Loan shall be reflected on the Company's balance
sheet and other financial statements as a sale of assets by the Company. The
Company shall be responsible for maintaining, and shall maintain, a complete set
of books and records for each Mortgage Loan which shall be marked clearly to
reflect the ownership of each Mortgage Loan by the Purchaser. In particular, the
Company shall maintain in its possession, available for inspection by the
Purchaser, or its designee, and shall deliver to the Purchaser upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations, and requirements of Fannie Mae or Freddie Mac, including but not
limited to documentation as to the method used in determining the applicability
of the provisions of the Flood Disaster Protection Act of 1973, as amended, to
the Mortgaged Property, documentation evidencing insurance coverage and
eligibility of any condominium project for approval by Fannie Mae or Freddie Mac
and periodic inspection reports as required by Section 4.13. To the extent that
original documents are not required for purposes of realization of Liquidation
Proceeds or Insurance Proceeds, documents maintained by the Company may be in
the form of microfilm or microfiche or such other reliable means of recreating
original documents, including but not limited to, optical imagery techniques so
long as the Company complies with the requirements of the Fannie Mae Selling and
Servicing Guide, as amended from time to time.

      The Company shall maintain with respect to each Mortgage Loan and shall
make available for inspection by the Purchaser or its designee the related
Servicing File during the time the Purchaser retains ownership of such Mortgage
Loan and thereafter in accordance with applicable laws and regulations.

      The Company shall keep at its servicing office books and records in which,
subject to such reasonable regulations as it may prescribe, the Company shall
note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made
unless such transfer is in compliance with the terms hereof. For the purposes of
this Agreement, the Company shall be under no obligation to deal with any person
with respect to this Agreement or the Mortgage Loans unless the books and
records show such person as the owner of the Mortgage Loan. The Purchaser may,
subject to the terms of this Agreement, sell and transfer one or more of the
Mortgage Loans. The Purchaser also shall advise the Company of the transfer.
Upon receipt of notice of the transfer, the Company shall mark its books and
records to reflect the ownership of the Mortgage Loans of such assignee, and
shall release the previous Purchaser from its obligations hereunder with respect
to the Mortgage Loans sold or transferred. If the Company receives notification
of a transfer less than five (5) Business Days before the last calendar day of
the month, the Company's duties to remit and report as required by Section 5
shall begin with the next Due Period.

Section 2.03   Custodial Agreement; Delivery of Documents.

      On each Closing Date with respect to each Mortgage Loan comprising the
related Loan Package, the Company shall have delivered and released to the
Custodian, at least two (2) Business Days prior to such Closing Date, the
related Mortgage Loan Documents listed in Exhibit C to this Agreement.

      The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement, as
evidenced by the Initial Certification of the


                                       10



Custodian in the form annexed to the Custodial Agreement. The Company shall be
responsible for recording the initial assignments of mortgage. The Purchaser
will be responsible for the fees and expenses of the Custodian.

      The Company shall forward to the Custodian original documents evidencing
an assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.01 or 6.01 within one week of their
execution, provided, however, that the Company shall provide the Custodian with
a certified true copy of any such document submitted for recordation within ten
(10) days of its execution, and shall provide the original of any document
submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
original within sixty days of its submission for recordation.

      If the original or a copy of any document submitted for recordation to the
appropriate public recording office is not so delivered to the Custodian with
240 days following the related Closing Date, and if the Company does not cure
such failure within thirty (30) days after receipt of written notification of
such failure from the Purchaser, the related Mortgage Loan shall, upon the
request of the Purchaser, be repurchased by the Company at a price and in the
manner specified in Section 3.03.

      In the event the public recording office is delayed in returning any
original document, the Company shall deliver to the Custodian within 270 days of
its submission for recordation, a copy of such document and an Officer's
Certificate, which shall (i) identify the recorded document; (ii) state that the
recorded document has not been delivered to the Custodian due solely to a delay
by the public recording office, (iii) state the amount of time generally
required by the applicable recording office to record and return a document
submitted for recordation, and (iv) specify the date the applicable recorded
document will be delivered to the Custodian. The Company will be required to
deliver the document to the Custodian by the date specified in (iv) above. An
extension of the date specified in (iv) above may be requested from the
Purchaser, which consent shall not be unreasonably withheld. However, if the
Company cannot deliver such original or clerk-certified copy of any document
submitted for recordation to the appropriate public recording office within the
specified time for any reason, within thirty (30) days after receipt of written
notification of such failure from the Purchaser, the Company shall repurchase
the related Mortgage Loan at the price and in the manner specified in Section
3.03.

                                  ARTICLE III

               REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH

Section 3.01   Company Representations and Warranties.

      The Company hereby represents and warrants to the Purchaser that, as of
the related Closing Date:

      (a)   Due Organization and Authority.

      The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of California and has all licenses
necessary to carry on its business as


                                       11



now being conducted and is licensed, qualified and in good standing in each
state where a Mortgaged Property is located if the laws of such state require
licensing or qualification in order to conduct business of the type conducted by
the Company, and in any event the Company is in compliance with the laws of any
such state to the extent necessary to ensure the enforceability of the related
Mortgage Loan and the servicing of such Mortgage Loan in accordance with the
terms of this Agreement; the Company has the full corporate power and authority
to execute and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all instruments
of transfer to be delivered pursuant to this Agreement) by the Company and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and enforceable
obligation of the Company; and all requisite corporate action has been taken by
the Company to make this Agreement valid and binding upon the Company in
accordance with its terms;

      (b)   Ordinary Course of Business.

      The consummation of the transactions contemplated by this Agreement are in
the ordinary course of business of the Company, who is in the business of
selling and servicing loans, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Company pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;

      (c)   No Conflicts.

      Neither the execution and delivery of this Agreement, the acquisition of
the Mortgage Loans by the Company, the sale of the Mortgage Loans to the
Purchaser or the transactions contemplated hereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement will conflict with or
result in a breach of any of the terms, articles of incorporation or by-laws or
any legal restriction or any agreement or instrument to which the Company is now
a party or by which it is bound, or constitute a default or result in the
violation of any law, rule, regulation, order, judgment or decree to which the
Company or its property is subject, or impair the ability of the Purchaser to
realize on the Mortgage Loans, or impair the value of the Mortgage Loans;

      (d)   Ability to Service.

      The Company is an approved seller/servicer of conventional residential
mortgage loans for Fannie Mae or Freddie Mac, with the facilities, procedures,
and experienced personnel necessary for the sound servicing of mortgage loans of
the same type as the Mortgage Loans. The Company is a HUD approved mortgagee
pursuant to Section 203 of the National Housing Act and is in good standing to
sell mortgage loans to and service mortgage loans for Fannie Mae or Freddie Mac,
and no event has occurred, including but not limited to a change in insurance
coverage, which would make the Company unable to comply with Fannie Mae or
Freddie Mac eligibility requirements or which would require notification to
either Fannie Mae or Freddie Mac;


                                       12



      (e)   Reasonable Servicing Fee; Fair Consideration.

      The Company acknowledges and agrees that the Servicing Fee represents
reasonable compensation for performing such services and that the entire
Servicing Fee shall be treated by the Company, for accounting and tax purposes,
as compensation for the servicing and administration of the Mortgage Loans
pursuant to this Agreement. The consideration received by the Company upon the
sale of the Mortgage Loans under this Agreement constitutes fair consideration
and reasonably equivalent value for the Mortgage Loans;

      (f)   Ability to Perform; Solvency.

      The Company does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant contained in this
Agreement. The Company is solvent and the sale of the Mortgage Loans will not
cause the Company to become insolvent. The sale of the Mortgage Loans is not
undertaken to hinder, delay or defraud any of the Company's creditors;

      (g)   No Litigation Pending.

      There is no action, suit, proceeding or investigation pending or
threatened against the Company which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Company, or in any
material impairment of the right or ability of the Company to carry on its
business substantially as now conducted, or in any material liability on the
part of the Company, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be contemplated
herein, or which would be likely to impair materially the ability of the Company
to perform under the terms of this Agreement;

      (h)   No Consent Required.

      No consent, approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and performance by the
Company of or compliance by the Company with this Agreement or the sale of the
Mortgage Loans as evidenced by the consummation of the transactions contemplated
by this Agreement, or if required, such approval has been obtained prior to the
Closing Date;

      (i)   Selection Process.

      The Mortgage Loans were selected from among the outstanding 15- or 30-year
fixed rate one to four family mortgage loans in the Company's portfolio at the
related Closing Date as to which the representations and warranties set forth in
Section 3.02 could be made and such selection was not made in a manner so as to
affect adversely the interests of the Purchaser;

      (j)   No Untrue Information.

      Neither this Agreement nor any statement, report or other document
furnished or to be furnished pursuant to this Agreement or in connection with
the transactions contemplated hereby


                                       13



contains any untrue statement of fact or omits to state a fact necessary to make
the statements contained therein not misleading;

      (k)   Sale Treatment.

      The Company has determined that the disposition of the Mortgage Loans
pursuant to this Agreement will be afforded sale treatment for accounting and
tax purposes;

      (l)   No Material Change.

      There has been no material adverse change in the business, operations,
financial condition or assets of the Company since the date of the Company's
most recent financial statements; and

      (m)   No Brokers' Fees.

      The Company has not dealt with any broker, investment banker, agent or
other Person that may be entitled to any commission or compensation in the
connection with the sale of the Mortgage Loans.

Section 3.02   Representations and Warranties Regarding Individual Mortgage
               Loans.

      As to each Mortgage Loan, the Company hereby represents and warrants to
the Purchaser that as of the related Closing Date:

      (a)   Mortgage Loans as Described.

      The information set forth in the respective Mortgage Loan Schedule and the
information contained on the respective Data Files delivered to the Purchaser is
true and correct;

      (b)   Payments Current.

      All payments required to be made up to the Cut-off Date for the Mortgage
Loan under the terms of the Mortgage Note have been made and credited. No
payment under any Mortgage Loan has been 30 days delinquent more than one time
within twelve months prior to the related Closing Date;

      (c)   No Outstanding Charges.

      There are no defaults in complying with the terms of the Mortgages, and
all taxes, governmental assessments, insurance premiums, leasehold payments,
water, sewer and municipal charges, 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. The Company has not advanced funds, or induced, or
solicited directly or indirectly, the payment of any amount required under the
Mortgage Loan, except for interest accruing from the date of the Mortgage Note
or date of disbursement of the Mortgage Loan proceeds, whichever is later, to
the day which precedes by one month the Due Date of the first installment of
principal and interest;


                                       14



      (d)   Original Terms Unmodified.

      The terms of the Mortgage Note and Mortgage have not been impaired,
waived, altered or modified in any respect, except by a written instrument which
has been recorded, if necessary, to protect the interests of the Purchaser and
maintain the lien priority of the Mortgage and which has been delivered to the
Custodian. The substance of any such waiver, alteration or modification has been
approved by the issuer of any related PMI policy and the title insurer, to the
extent required by the policy, and its terms are reflected on the related
Mortgage Loan Schedule. No instrument of waiver, alteration or modification has
been executed, and no Mortgagor has been released, in whole or in part, except
in connection with an assumption agreement approved by the issuer of any related
PMI policy and the title insurer, to the extent required by the policy, and
which assumption agreement is part of the Mortgage Loan File delivered to the
Custodian and the terms of which are reflected in the related Mortgage Loan
Schedule;

      (e)   No Defenses.

      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 thereunder, render either the Mortgage Note or the
Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, and no such right of rescission, set-off, counterclaim or
defense has been asserted with respect thereto;

      (f)   No Satisfaction of Mortgage.

      The Mortgage has not been satisfied, canceled, 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, nor has any instrument been executed
that would effect any such satisfaction, release, cancellation, subordination or
rescission;

      (g)   Validity of Mortgage Documents.

      The Mortgage Note and the Mortgage and related documents are genuine, and
each is the legal, valid and binding obligation of the maker thereof enforceable
in accordance with its terms. All parties to the Mortgage Note and the Mortgage
had legal capacity to enter into the Mortgage Loan and to execute and deliver
the Mortgage Note and the Mortgage, and the Mortgage Note and the Mortgage have
been duly and properly executed by such parties;

      (h)   No Fraud.

      No error, omission, misrepresentation, negligence, fraud or similar
occurrence with respect to a Mortgage Loan has taken place on the part of the
Company, or the Mortgagor, or to the best of the Company's knowledge, any
appraiser, any builder, or any developer, or any other party involved in the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan;


                                       15



      (i)   Compliance with Applicable Laws.

      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 or disclosure laws
applicable to the origination and servicing of the Mortgage Loan have been
complied with, the Mortgagor received all disclosure materials required by
applicable law with respect to the making of mortgage loans of the same type as
the Mortgage Loan and, if the Mortgage Loan is a refinanced Mortgage Loan,
rescission materials required by applicable laws, and the Company shall maintain
in its possession, available for the Purchaser's inspection, and shall deliver
to the Purchaser upon demand, evidence of compliance with all such requirements.
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;

      (j)   Location and Type of Mortgaged Property.

      The Mortgaged Property is located in the state identified in the related
Mortgage Loan Schedule and consists of a contiguous parcel of real property with
a detached single family residence erected thereon, or a two to four family
dwelling, or an individual condominium unit in a condominium project, or an
individual unit in a planned unit development or a townhouse, provided, however,
that any condominium project or planned unit development shall conform with the
applicable Fannie Mae requirements regarding such dwellings, and no residence or
dwelling is a mobile home or a cooperative unit. As of the respective date of
the Appraisal, no portion of the Mortgaged Property was being used for
commercial purposes. If the Mortgaged Property is a condominium unit or a
planned unit development (other than a de minimis planned unit development) such
condominium or planned unit development project meets Fannie Mae eligibility
requirements or is located in a condominium or planned unit development project
which has received Fannie Mae project approval and the representations and
warranties required by Fannie Mae with respect to such condominium or planned
unit development have been made and remain true and correct in all respects;

      (k)   Valid First Lien.

      The Mortgage is a valid, subsisting and enforceable first lien on the
Mortgaged Property, including all buildings 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:

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

            (2)   covenants, conditions and restrictions, rights of way,
                  easements and other matters of the public record as of the
                  date of recording acceptable to mortgage lending institutions
                  generally and specifically referred to in the lender's title
                  insurance policy delivered to the originator of the Mortgage


                                       16



                  Loan and (i) referred to or otherwise considered in the
                  Appraisal made for the originator of the Mortgage Loan and
                  (ii) which do not adversely affect the Appraised Value of the
                  Mortgaged Property set forth in such Appraisal; and

            (3)   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.

      Any security agreement, chattel mortgage or equivalent document related to
and delivered in connection with the Mortgage Loan establishes and creates a
valid, subsisting and enforceable first lien and first priority security
interest on the property described therein and the Company has full right to
sell and assign the same to the Purchaser;

      (l)   Full Disbursement of Proceeds.

      The proceeds of the Mortgage Loan have been fully disbursed, except for
escrows established or created due to seasonal weather conditions, and there is
no requirement for future advances thereunder. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

      (m)   Consolidation of Future Advances.

      Any future advances made prior to the Cut-off Date, have been consolidated
with the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term reflected on the related Mortgage Loan Schedule. The lien of the
Mortgage securing the consolidated principal amount is expressly insured as
having first lien priority by a title insurance policy, an endorsement to the
policy insuring the mortgagee's consolidated interest or by other title evidence
acceptable to Fannie Mae or Freddie Mac; the consolidated principal amount does
not exceed the original principal amount of the Mortgage Loan; the Company shall
not make future advances after the Cut-off Date;

      (n)   Ownership.

      The Company is the sole owner of record and holder of the Mortgage Loan
and the related Mortgage Note and the Mortgage are not assigned or pledged, and
the Company has good and marketable title thereto and has full right and
authority to transfer and sell the Mortgage Loan to the Purchaser. The Company
is transferring the Mortgage Loan free and clear of any and all encumbrances,
liens, pledges, equities, participation interests, claims, agreements with other
parties to sell or otherwise transfer the Mortgage Loan, charges or security
interests of any nature encumbering such Mortgage Loan;


                                       17



      (o)   Origination/Doing Business.

      The Mortgage Loan was originated by a savings and loan association, a
savings bank, a commercial bank, a credit union, an insurance company, or
similar institution that is supervised and examined by a federal or state
authority or by a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act. All
parties which have had any interest in the Mortgage Loan, whether as mortgagee,
assignee, pledgee or otherwise, are (or, during the period in which they held
and disposed of such interest, were) (1) in compliance with any and all
applicable licensing requirements of the laws of the state wherein the Mortgaged
Property is located, and (2) organized under the laws of such state, or (3)
qualified to do business in such state, or (4) federal savings and loan
associations or national banks having principal offices in such state, or (5)
not doing business in such state;

      (p)   LTV, PMI Policy.

      No Mortgage Loan has a LTV greater than 95%. If a Mortgage Loan had an
original LTV of 80% or greater, the excess over 78% is and will be insured as to
payment defaults by a PMI Policy until terminated pursuant to the Homeowners
Protection Act of 1998, 12 USC SS.4901, et seq. All provisions of such PMI
policy have been and are being complied with, such policy is in full force and
effect, and all premiums due thereunder have been paid. The Qualified Insurer
has a claims paying ability acceptable to Fannie Mae or Freddie Mac. Any
Mortgage Loan subject to a PMI policy obligates the Company to maintain the PMI
policy and to pay all premiums and charges in connection therewith. The Mortgage
Interest Rate for the Mortgage Loan as set forth on the related Mortgage Loan
Schedule is net of any such insurance premium;

      (q)   Title Insurance.

      The Mortgage Loan is covered by an ALTA lender's title insurance policy
(or in the case of any Mortgage Loan secured by a Mortgaged Property located in
a jurisdiction where such policies are generally not available, an opinion of
counsel of the type customarily rendered in such jurisdiction in lieu of title
insurance) or other generally acceptable form of policy of insurance acceptable
to Fannie Mae or Freddie Mac, issued by a title insurer acceptable to Fannie Mae
or Freddie Mac and qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring the Company, its successors and assigns,
as to the first priority lien of the Mortgage in the original principal amount
of the Mortgage Loan, subject only to the exceptions contained in clauses (1),
(2) and (3) of Paragraph (k) of this Section 3.02. The Company is the sole
insured of such lender's title insurance policy, and such lender's title
insurance policy is in full force and effect and will be in force and effect
upon the consummation of the transactions contemplated by this Agreement. No
claims have been made under such lender's title insurance policy, and no prior
holder of the Mortgage, including the Company, has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy;

      (r)   No Defaults.

      There is no default, breach, violation or event of acceleration existing
under the Mortgage or the Mortgage Note and no event which, with the passage of
time or with notice and the


                                       18



expiration of any grace or cure period, would constitute a default, breach,
violation or event of acceleration, and neither the Company nor its predecessors
have waived any default, breach, violation or event of acceleration;

      (s)   No Mechanics' Liens.

      There are no mechanics' or similar liens or claims which have been filed
for work, labor or material (and no rights are outstanding that under the law
could give rise to such liens) affecting the related Mortgaged Property which
are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage which are not insured against by the title insurance policy
referenced in Paragraph (q) above;

      (t)   Location of Improvements; No Encroachments.

      Except as insured against by the title insurance policy referenced in
Paragraph (q) above, all improvements which were considered in determining the
Appraised Value of the Mortgaged Property lay wholly within the boundaries and
building restriction lines of the Mortgaged Property and no improvements on
adjoining properties encroach upon the Mortgaged Property. No improvement
located on or being part of the Mortgaged Property is in violation of any
applicable zoning law or regulation;

      (u)   Payment Terms.

      Principal payments commenced no more than 60 days after the funds were
disbursed to the Mortgagor in connection with the Mortgage Loan. Each Mortgage
Loan is payable on the first day of each month in equal monthly installments of
principal and interest, with interest calculated and payable in arrears,
sufficient to amortize the Mortgage Loan fully by the stated maturity date set
for in the Mortgage Note over an original term to maturity of not more than 30
years. No Mortgage Loan contains terms or provisions which would result in
negative amortization;

      (v)   Customary Provisions.

      The Mortgage and related Mortgage Note contain customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits of
the security provided thereby, 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;

      (w)   Occupancy of the Mortgaged Property.

      As of the date of origination, the Mortgaged Property was lawfully
occupied under applicable law and to the best of the Company's knowledge, the
Mortgaged Property is lawfully occupied as of the related Closing Date;


                                       19



      (x)   No Additional Collateral.

      The Mortgage Note is not and has not been secured by any collateral,
pledged account or other security except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in Paragraph (k) above;

      (y)   Deeds of Trust.

      In the event the Mortgage constitutes a deed of trust, a trustee, duly
qualified under applicable law to serve as such, has been properly designated
and currently so serves and is named in the Mortgage, and no fees or expenses
are or will become payable by the Mortgagee to the trustee under the deed of
trust, except in connection with a trustee's sale after default by the
Mortgagor;

      (z)   Acceptable Investment.

      The Company has no knowledge of any circumstances or conditions with
respect to the Mortgage Loan, the Mortgaged Property, the Mortgagor or the
Mortgagor's credit standing that can reasonably be expected to cause private
institutional investors to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent, or adversely affect
the value or marketability of the Mortgage Loan;

      (aa)  Transfer of Mortgage Loans.

      The Assignment of Mortgage upon the insertion of the name of the assignee
and recording information is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is located;

      (bb)  Mortgaged Property Undamaged.

      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;

      (cc)  Collection Practices; Escrow Deposits.

      The origination, servicing and collection practices used with respect to
the Mortgage Loan have been in accordance with Accepted Servicing Practices, and
have been in all material respects legal and proper. With respect to escrow
deposits and Escrow Payments, all such payments are in the possession of the
Company and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. All Escrow
Payments have been collected in full compliance with state and federal law. No
escrow deposits or Escrow Payments or other charges or payments due the Company
have been capitalized under the Mortgage Note;


                                       20



      (dd)  No Condemnation.

      There is no proceeding pending or to the best of the Company's knowledge
threatened for the total or partial condemnation of the related Mortgaged
Property;

      (ee)  The Appraisal.

      The Mortgage Loan Documents contain an Appraisal of the related Mortgaged
Property by a Qualified Appraiser acceptable to Fannie Mae or Freddie Mac;

      (ff)  Insurance.

      The Mortgaged Property securing each Mortgage Loan is insured by an
insurer acceptable to Fannie Mae or Freddie Mac against loss by fire and such
hazards as are covered under a standard extended coverage endorsement and such
other hazards as are customary in the area where the Mortgaged Property is
located pursuant to insurance policies conforming to the requirements of Section
4.10, in an amount which is not less than the lesser of 100% of the insurable
value of the Mortgaged Property and the outstanding principal balance of the
Mortgage Loan, but in no event less than the minimum amount necessary to fully
compensate for any damage or loss on a replacement cost basis. If the Mortgaged
Property is a condominium unit, it is included under the coverage afforded by a
blanket policy for the project. If the Mortgaged Property is in an area
identified in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a flood insurance policy meeting the requirements
of the current guidelines of the Federal Insurance Administration is in effect
with a generally acceptable insurance carrier and such policy conforms to Fannie
Mae or Freddie Mac requirements, in an amount representing coverage not less
than the least of (A) the outstanding principal balance of the Mortgage Loan,
(B) the full insurable value and (C) the maximum amount of insurance which was
available under the Flood Disaster Protection Act of 1973, as amended. All
individual insurance policies contain a standard mortgagee clause naming the
Company and its successors and assigns as mortgagee, and all premiums thereon
have been paid. The Mortgage obligates the Mortgagor thereunder to maintain a
hazard insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at such Mortgagor's cost and expense, and to seek
reimbursement therefor from the Mortgagor. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the transactions contemplated by this Agreement. The Company
has not acted or failed to act so as to impair the coverage of any such
insurance policy or the validity, binding effect and enforceability thereof;

      (gg)  Soldiers' and Sailors' Civil Relief Act

      The Mortgagor has not notified the Company, and the Company has no
knowledge of any relief requested by or allowed to the Mortgagor under the
Soldiers' and Sailors' Civil Relief Act of 1940, as amended, or similar state
laws;


                                       21



      (hh)  Balloon Payments, Graduated Payments or Contingent Interests.

      The Mortgage Loan is not a balloon mortgage loan or a graduated payment
mortgage loan and the Mortgage Loan does not have a shared appreciation or other
contingent interest feature;

      (ii)  No Construction Loans.

      No Mortgage Loan was made in connection with (i) the construction or
rehabilitation of a Mortgaged Property or (ii) facilitating the trade-in or
exchange of a Mortgaged Property other than a construction-to-permanent loan
which has converted to a permanent Mortgage Loan;

      (jj)  Underwriting.

      Each Mortgage Loan was underwritten in accordance with the underwriting
guidelines of the Company attached as Exhibit D annexed hereto; and the Mortgage
Note and Mortgage are on forms acceptable to Freddie Mac or Fannie Mae;

      (kk)  No Bankruptcy.

      No Mortgagor was a debtor in any state or federal bankruptcy or insolvency
proceeding at the time the Mortgage Loan was originated and as of the related
Closing Date, the Company has not received notice that any Mortgagor is a debtor
under any state or federal bankruptcy or insolvency proceeding;

      (ll)  Delivery of Mortgage Files.

      The Mortgage, Mortgage Note, Assignment of Mortgage and any other
documents required to be delivered by the Company hereunder have been delivered
to the Custodian. The Company is in possession of a complete Mortgage File in
compliance with Exhibit A, except for such documents the originals of which have
been delivered to the Custodian. With respect to each Mortgage Loan for which a
lost note affidavit has been delivered to the Custodian in place of the original
Mortgage Note, the related Mortgage Note is no longer in existence, and, if such
Mortgage Loan is subsequently in default, the enforcement of such Mortgage Loan
or of the related Mortgage by or on behalf of the Purchaser will not be affected
by the absence of the original Mortgage Note;

      (mm)  No Buydowns.

      No Mortgage Loan contains provisions pursuant to which Monthly payments
are (a) paid or partially paid with funds deposited in any separate account
established by the Company, the Mortgagor or anyone on behalf of the Mortgagor,
(b) paid by any source other than the Mortgagor or (c) contains any other
similar provisions which may constitute a "buydown" provision;


                                       22



      (nn)  Interest Calculation.

      Interest on each Mortgage Loan is calculated on the basis of a 360-day
year consisting of twelve 30-day months;

      (oo)  Violation of Environmental Laws.

      There is no pending action or proceeding directly involving any Mortgaged
Property of which the Company is aware in which compliance with any
environmental law, rule or regulation is an issue; and to the best of the
Company's knowledge, nothing further remains to be done to satisfy in full all
requirements of each such law, rule or regulation constituting a prerequisite to
use and enjoyment of said property;

      (pp)  Texas Refinance Mortgage Loans.

      Each Mortgage Loan originated in the state of Texas pursuant to Article
XVI, Section 50(a)(6) of the Texas Constitution (a "Texas Refinance Loan") has
been originated in compliance with the provisions of Article XVI, Section
50(a)(6) of the Texas Constitution, Texas Civil Statutes and the Texas Finance
Code;

      (qq)  Homeownership and Equity Protection Act.

      No Mortgage Loan is subject to the provisions of the Home Ownership and
Equity Protection Act of 1994, as amended, or is considered a "high cost loan"
under any other state, federal or local laws or ordinances;

      (rr)  Due on Sale.

      The Mortgage contains an enforceable provision, to the extent not
prohibited by federal law as of the date of such Mortgage, for the acceleration
of the payment of the unpaid principal balance of the Mortgage Loan in the event
that the Mortgaged Property is sold or transferred without the prior written
consent of the mortgagee thereunder.

      (ss)  Regarding the Mortgagor.

      The Mortgagor is one or more natural persons and/or trustees for an
Illinois land trust or a trustee under a "living trust" and such "living trust"
is in compliance with Fannie Mae guidelines for such trusts; and

      (tt)  Single Premium Credit Life Insurance.

      None of the proceeds of the Mortgage Loan were used to finance single
premium credit life insurance policies.

Section 3.03   Repurchase.

      It is understood and agreed that the representations and warranties set
forth in Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to
the Purchaser and the


                                       23



delivery of the Mortgage Loan Documents to the Custodian and shall inure to the
benefit of the Purchaser, notwithstanding any restrictive or qualified
endorsement on any Mortgage Note or Assignment of Mortgage or the examination or
failure to examine any Mortgage File. Upon discovery by either the Company or
the Purchaser of a breach of any of the foregoing representations and warranties
that materially and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser (or that materially and adversely affects the
interests of Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the other.

      Within ninety (90) days after the earlier of either discovery by or notice
to the Company of any breach of a representation or warranty which materially
and adversely affects the value of the Mortgage Loans, the Company shall use its
best efforts promptly to cure such breach in all material respects and, if such
breach cannot be cured, the Company shall, at the Purchaser's option, repurchase
such Mortgage Loan at the Repurchase Price. In the event that a breach shall
involve any representation or warranty set forth in Section 3.01, and such
breach cannot be cured within 90 days of the earlier of either discovery by or
notice to the Company of such breach, all of the Mortgage Loans shall, at the
Purchaser's option, be repurchased by the Company at the Repurchase Price.
However, if the breach shall involve a representation or warranty set forth in
Section 3.02 and the Company discovers or receives notice of any such breach
within 90 days of the Closing Date, the Company shall, if the breach cannot be
cured, at the Purchaser's option and provided that the Company has a Qualified
Substitute Mortgage Loan, rather than repurchase the Mortgage Loan as provided
above, remove such Mortgage Loan (a "Deleted Mortgage Loan") and substitute in
its place a Qualified Substitute Mortgage Loan or Loans, provided that any such
substitution shall be effected not later than one hundred twenty (120) days
after the Closing Date.

      If the Company has no Qualified Substitute Mortgage Loan, it shall
repurchase the deficient Mortgage Loan within ninety (90) days after the written
notice of the breach or the failure to cure, whichever is later. Any repurchase
of a Mortgage Loan or Loans pursuant to the foregoing provisions of this Section
3.03 shall be accomplished by deposit in the Custodial Account of the amount of
the Repurchase Price for distribution to Purchaser on the next scheduled
Remittance Date, after deducting therefrom any amount received in respect of
such repurchased Mortgage Loan or Loans and being held in the Custodial Account
for future distribution.

      At the time of repurchase or substitution, the Purchaser and the Company
shall arrange for the reassignment of the Deleted Mortgage Loan to the Company
and the delivery to the Company of any documents held by the Custodian relating
to the Deleted Mortgage Loan. In the event of a repurchase or substitution, the
Company shall, simultaneously with such reassignment, give written notice to the
Purchaser that such repurchase or substitution has taken place, amend the
related Mortgage Loan Schedule to reflect the withdrawal of the Deleted Mortgage
Loan from this Agreement, and, in the case of substitution, identify a Qualified
Substitute Mortgage Loan and amend the related Mortgage Loan Schedule to reflect
the addition of such Qualified Substitute Mortgage Loan to this Agreement. In
connection with any such substitution, the Company shall be deemed to have made
as to such Qualified Substitute Mortgage Loan the representations and warranties
set forth in this Agreement except that all such representations and warranties
set forth in this Agreement shall be deemed made as of the date of such


                                       24



substitution. The Company shall effect such substitution by delivering to the
Custodian for such Qualified Substitute Mortgage Loan the documents required by
Section 2.03, with the Mortgage Note endorsed as required by Section 2.03. No
substitution will be made in any calendar month after the Determination Date for
such month. The Company shall deposit in the Custodial Account the Monthly
Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or
Loans in the month following the date of such substitution. Monthly Payments due
with respect to Qualified Substitute Mortgage Loans in the month of substitution
shall be retained by the Company. With respect to any Deleted Mortgage Loan,
distributions to Purchaser shall include the Monthly Payment due on any Deleted
Mortgage Loan in the month of substitution, and the Company shall thereafter be
entitled to retain all amounts subsequently received by the Company in respect
of such Deleted Mortgage Loan.

      For any month in which the Company substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Company shall determine the
amount (if any) by which the aggregate principal balance of all Qualified
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
The amount of such shortfall shall be distributed by the Company in the month of
substitution pursuant to Section 5.01. Accordingly, on the date of such
substitution, the Company shall deposit from its own funds into the Custodial
Account an amount equal to the amount of such shortfall.

      In addition to such repurchase or substitution obligation, the Company
shall indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from a breach of
the representations and warranties contained in this Agreement. It is understood
and agreed that the obligations of the Company set forth in this Section 3.03 to
cure, substitute for or repurchase a defective Mortgage Loan and to indemnify
the Purchaser as provided in this Section 3.03 constitute the sole remedies of
the Purchaser respecting a breach of the foregoing representations and
warranties.

      Any cause of action against the Company relating to or arising out of the
breach of any representations and warranties made in Sections 3.01 and 3.02
shall accrue as to any Mortgage Loan upon (i) discovery of such breach by the
Purchaser or notice thereof by the Company to the Purchaser, (ii) failures by
the Company to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Company by the Purchaser for compliance with
this Agreement.

                                   ARTICLE IV

                 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

Section 4.01   Company to Act as Servicer.

      The Company, as an independent contractor, shall service and administer
the Mortgage Loans and shall have full power and authority, acting alone or
through the utilization of a third party servicing provider, to do any and all
things in connection with such servicing and


                                       25



administration which the Company may deem necessary or desirable, consistent
with the terms of this Agreement and with Accepted Servicing Practices.

      Consistent with the terms of this Agreement, the Company may waive, modify
or vary any term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any Mortgagor
if in the Company's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser, provided, however, the Company shall not make any future advances
with respect to a Mortgage Loan. Unless the Mortgagor is in default with respect
to the Mortgage Loan or such default is, in the judgment of the Company,
imminent, the Company shall not permit any modification with respect to any
Mortgage Loan that would change the Mortgage Interest Rate, defer or forgive the
payment of principal or change the final maturity date on such Mortgage Loan.
The Company shall request written consent from the Purchaser to permit such a
modification and the Purchaser shall provide written consent or notify the
Company of its objection to such modification within five (5) Business Days
after its receipt of the Company's request. In the event of any such
modification which permits the deferral of interest or principal payments on any
Mortgage Loan, the Company shall, on the Business Day immediately preceding the
Remittance Date in any month in which any such principal or interest payment has
been deferred, deposit in the Custodial Account from its own funds, in
accordance with Section 5.03, the difference between (a) such month's principal
and one month's interest at the Mortgage Loan Remittance Rate on the unpaid
principal balance of such Mortgage Loan and (b) the amount paid by the
Mortgagor. The Company shall be entitled to reimbursement for such advances to
the same extent as for all other advances made pursuant to Section 5.03. Without
limiting the generality of the foregoing, the Company shall continue, and is
hereby authorized and empowered, to execute and deliver on behalf of itself and
the Purchaser, all instruments of satisfaction or cancellation, or of partial or
full release, discharge and all other comparable instruments, with respect to
the Mortgage Loans and with respect to the Mortgaged Properties. If reasonably
required by the Company, the Purchaser shall furnish the Company with any powers
of attorney and other documents necessary or appropriate to enable the Company
to carry out its servicing and administrative duties under this Agreement.

      In servicing and administering the Mortgage Loans, the Company shall
employ procedures (including collection procedures) and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account, giving due consideration to Accepted
Servicing Practices where such practices do not conflict with the requirements
of this Agreement, and the Purchaser's reliance on the Company.

Section 4.02   Liquidation of Mortgage Loans.

      In the event that any payment due under any Mortgage Loan and not
postponed pursuant to Section 4.01 is not paid when the same becomes due and
payable, or in the event the Mortgagor fails to perform any other covenant or
obligation under the Mortgage Loan and such failure continues beyond any
applicable grace period, the Company shall take such action as (1) the Company
would take under similar circumstances with respect to a similar mortgage loan
held for its own account for investment, (2) shall be consistent with Accepted
Servicing Practices, (3) the Company shall determine prudently to be in the best
interest of Purchaser, and (4) is consistent with any related PMI Policy. In the
event that any payment due under any


                                       26



Mortgage Loan is not postponed pursuant to Section 4.01 and remains delinquent
for a period of 90 days or any other default continues for a period of ninety
(90) days beyond the expiration of any grace or cure period, the Company shall
commence foreclosure proceedings, the Company shall notify the Purchaser in
writing of the Company's intention to do so, and shall provide such information
regarding the Mortgage Loan as the Purchaser reasonably may request, provided
that the Company shall not commence foreclosure proceedings if the Purchaser
objects to such action within three (3) Business Days after receiving such
notice. The Company shall follow any written directions of the Purchaser with
respect to the servicing of such Mortgage Loan, as long as such directions are
in accordance with Accepted Servicing Practices and do not violate applicable
law. In the event the Purchaser objects to such foreclosure action, the Company
shall not be required to make Monthly Advances with respect to such Mortgage
Loan, pursuant to Section 5.03, and the Company's obligation to make such
Monthly Advances shall terminate on the 90th day referred to above. In such
connection, the Company shall from its own funds make all necessary and proper
Servicing Advances, provided, however, that the Company shall not be required to
expend its own funds in connection with any foreclosure or towards the
restoration or preservation of any Mortgaged Property, unless it shall determine
(a) that such preservation, restoration and/or foreclosure will increase the
proceeds of liquidation of the Mortgage Loan to Purchaser after reimbursement to
itself for such expenses and (b) that such expenses will be recoverable by it
either through Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Custodial Account pursuant to Section 4.05) or
through Insurance Proceeds (respecting which it shall have similar priority).

      Notwithstanding anything to the contrary contained herein, in connection
with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event
the Company has reasonable cause to believe that a Mortgaged Property is
contaminated by hazardous or toxic substances or wastes, or if the Purchaser
otherwise requests an environmental inspection or review of such Mortgaged
Property, such an inspection or review is to be conducted by a qualified
inspector. The cost for such inspection or review shall be borne by the
Purchaser. Upon completion of the inspection or review, the Company shall
promptly provide the Purchaser with a written report of the environmental
inspection.

      After reviewing the environmental inspection report, the Purchaser shall
determine how the Company shall proceed with respect to the Mortgaged Property.
In the event (a) the environmental inspection report indicates that the
Mortgaged Property is contaminated by hazardous or toxic substances or wastes
and (b) the Purchaser directs the Company to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Company shall be reimbursed for
all reasonable costs associated with such foreclosure or acceptance of a deed in
lieu of foreclosure and any related environmental clean up costs, as applicable,
from the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse the Company, the Company shall be entitled to be
reimbursed from amounts in the Custodial Account pursuant to Section 4.05
hereof. In the event the Purchaser directs the Company not to proceed with
foreclosure or acceptance of a deed in lieu of foreclosure, the Company shall be
reimbursed for all Servicing Advances made with respect to the related Mortgaged
Property from the Custodial Account pursuant to Section 4.05 hereof.


                                       27



Section 4.03   Collection of Mortgage Loan Payments.

      Continuously from the respective Cut-off Date until the principal and
interest on all Mortgage Loans are paid in full, the Company shall proceed
diligently to collect all payments due under each of the Mortgage Loans when the
same shall become due and payable and shall take special care in ascertaining
and estimating Escrow Payments and all other charges that will become due and
payable with respect to the Mortgage Loan and the Mortgaged Property, to the end
that the installments payable by the Mortgagors will be sufficient to pay such
charges as and when they become due and payable.

Section 4.04   Establishment of and Deposits to Custodial Account.

      The Company shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts,
in the form of time deposit or demand accounts, titled "Wells Fargo Home
Mortgage, Inc., in trust for Banc of America Mortgage Capital Corporation and/or
subsequent purchasers of Mortgage Loans, and various Mortgagors - P & I." The
Custodial Account shall be established with a Qualified Depository. Upon request
of the Purchaser and within ten (10) days thereof, the Company shall provide the
Purchaser with written confirmation of the existence of such Custodial Account.
Any funds deposited in the Custodial Account shall at all times be insured to
the fullest extent allowed by applicable law. Funds deposited in the Custodial
Account may be drawn on by the Company in accordance with Section 4.05.

      The Company shall deposit in the Custodial Account within two (2) Business
Days of Company's receipt, and retain therein, the following collections
received by the Company and payments made by the Company after the Cut-off Date,
or received by the Company prior to the Cut-off Date but allocable to a period
subsequent thereto, other than payments of principal and interest due on or
before the Cut-off Date:

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

            (ii)   all payments on account of interest on the Mortgage Loans
      adjusted to the Mortgage Loan Remittance Rate;

            (iii)  all Liquidation Proceeds;

            (iv)   all Insurance Proceeds including amounts required to be
      deposited pursuant to Section 4.10 (other than proceeds to be held in the
      Escrow Account and applied to the restoration or repair of the Mortgaged
      Property or released to the Mortgagor in accordance with Section 4.14),
      Section 4.11 and Section 4.15;

            (v)    all Condemnation Proceeds which are not applied to the
      restoration or repair of the Mortgaged Property or released to the
      Mortgagor in accordance with Section 4.14;


                                       28



            (vi)   any amount required to be deposited in the Custodial Account
      pursuant to Section 4.01, 5.03, 6.01 or 6.02;

            (vii)  any amounts payable in connection with the repurchase of any
      Mortgage Loan pursuant to Section 3.03 and all amounts required to be
      deposited by the Company in connection with a shortfall in principal
      amount of any Qualified Substitute Mortgage Loan pursuant to Section 3.03;

            (viii) with respect to each Principal Prepayment, the Prepayment
      Interest Shortfall (to be paid by the Company out of its own funds);

            (ix)   any amounts required to be deposited by the Company pursuant
      to Section 4.11 in connection with the deductible clause in any blanket
      hazard insurance policy; and

            (x)    any amounts received with respect to or related to any REO
      Property and all REO Disposition Proceeds pursuant to Section 4.16.

      The foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 6.01, need not be deposited by the
Company into the Custodial Account. Any interest paid on funds deposited in the
Custodial Account by the depository institution shall accrue to the benefit of
the Company and the Company shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to Section 4.05. The Company shall
maintain adequate records with respect to all withdrawals made pursuant to this
Section 4.04. All funds required to be deposited in the Custodial Account shall
be held in trust for the Purchaser until withdrawn in accordance with Section
4.05.

Section 4.05   Permitted Withdrawals From Custodial Account.

      The Company shall, from time to time, withdraw funds from the Custodial
Account for the following purposes:

            (i)    to make payments to the Purchaser in the amounts and in the
      manner provided for in Section 5.01;

            (ii)   to reimburse itself for Monthly Advances of the Company's
      funds made pursuant to Section 5.03, the Company's right to reimburse
      itself pursuant to this subclause (ii) being limited to amounts received
      on the related Mortgage Loan which represent late payments of principal
      and/or interest respecting which any such advance was made, it being
      understood that, in the case of any such reimbursement, the Company's
      right thereto shall be prior to the rights of Purchaser, except that,
      where the Company is required to repurchase a Mortgage Loan pursuant to
      Section 3.03 or 6.02, the Company's right to such reimbursement shall be
      subsequent to the payment to the Purchaser of the Repurchase Price
      pursuant to such sections and all other amounts required to be paid to the
      Purchaser with respect to such Mortgage Loan;


                                       29



            (iii)  to reimburse itself for unreimbursed Servicing Advances, and
      for any unpaid Servicing Fees, the Company's right to reimburse itself
      pursuant to this subclause (iii) with respect to any Mortgage Loan being
      limited to related Liquidation Proceeds, Condemnation Proceeds, Insurance
      Proceeds and such other amounts as may be collected by the Company from
      the Mortgagor or otherwise relating to the Mortgage Loan, it being
      understood that, in the case of any such reimbursement, the Company's
      right thereto shall be prior to the rights of Purchaser, except that where
      the Company is required to repurchase a Mortgage Loan pursuant to Section
      3.03 or 6.02, in which case the Company's right to such reimbursement
      shall be subsequent to the payment to the Purchaser of the Repurchase
      Price pursuant to such sections and all other amounts required to be paid
      to the Purchaser with respect to such Mortgage Loan;

            (iv)   to pay itself interest on funds deposited in the Custodial
      Account if such interest amount was previously credited;

            (v)    to reimburse itself for expenses incurred and reimbursable to
      it pursuant to Section 8.01;

            (vi)   to pay any amount required to be paid pursuant to Section
      4.16 related to any REO Property, it being understood that, in the case of
      any such expenditure or withdrawal related to a particular REO Property,
      the amount of such expenditure or withdrawal from the Custodial Account
      shall be limited to amounts on deposit in the Custodial Account with
      respect to the related REO Property;

            (vii)  to reimburse itself for any Servicing Advances or REO
      expenses after liquidation of the Mortgaged Property not otherwise
      reimbursed above;

            (viii) to remove funds inadvertently placed in the Custodial Account
      by the Company; and

            (ix)   to clear and terminate the Custodial Account upon the
      termination of this Agreement.

      In the event that the Custodial Account is interest bearing, on each
Remittance Date, the Company shall withdraw all funds from the Custodial Account
except for those amounts which, pursuant to Section 5.01, the Company is not
obligated to remit on such Remittance Date. The Company may use such withdrawn
funds only for the purposes described in this Section 4.05. The Company shall
keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan
basis, for the purpose of justifying any withdrawal from the Custodial Account.

Section 4.06   Establishment of and Deposits to Escrow Account.

      The Company shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart from
any of its own funds and general assets and shall establish and maintain one or
more Escrow Accounts, in the form of time deposit or demand accounts, titled,
"Wells Fargo Home Mortgage, Inc., in trust for Banc of America Mortgage Capital
Corporation and/or subsequent purchasers, Residential Mortgage Loans, and
various Mortgagors - T & I." The Escrow Accounts shall be established with a


                                       30



Qualified Depository, in a manner which shall provide maximum available
insurance thereunder. Upon request of the Purchaser and within ten (10) days
thereof, the Company shall provide the Purchaser with written confirmation of
the existence of such Escrow Account. Funds deposited in the Escrow Account may
be drawn on by the Company in accordance with Section 4.07.

      The Company shall deposit in the Escrow Account or Accounts within two (2)
Business Days of Company's receipt, and retain therein:

            (i)    all Escrow Payments collected on account of the Mortgage
      Loans, for the purpose of effecting timely payment of any such items as
      required under the terms of this Agreement; and

            (ii)   all amounts representing Insurance Proceeds or Condemnation
      Proceeds which are to be applied to the restoration or repair of any
      Mortgaged Property.

      The Company shall make withdrawals from the Escrow Account only to effect
such payments as are required under this Agreement, as set forth in Section
4.07. The Company shall be entitled to retain any interest paid on funds
deposited in the Escrow Account by the depository institution, other than
interest on escrowed funds required by law to be paid to the Mortgagor. To the
extent required by law, the Company shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing or
that interest paid thereon is insufficient for such purposes.

Section 4.07   Permitted Withdrawals From Escrow Account.

      Withdrawals from the Escrow Account or Accounts may be made by the Company
only:

            (i)    to effect timely payments of ground rents, taxes,
      assessments, water rates, mortgage insurance premiums, condominium
      charges, fire and hazard insurance premiums or other items constituting
      Escrow Payments for the related Mortgage;

            (ii)   to reimburse the Company for any Servicing Advances made by
      the Company pursuant to Section 4.08 with respect to a related Mortgage
      Loan, but only from amounts received on the related Mortgage Loan which
      represent late collections of Escrow Payments thereunder;

            (iii)  to refund to any Mortgagor any funds found to be in excess of
      the amounts required under the terms of the related Mortgage Loan;

            (iv) for transfer to the Custodial Account for application to reduce
      the principal balance of the Mortgage Loan in accordance with the terms of
      the related Mortgage and Mortgage Note;

            (v) for application to the restoration or repair of the Mortgaged
      Property in accordance with the procedures outlined in Section 4.14;

            (vi)   to pay to the Company, or any Mortgagor to the extent
      required by law, any interest paid on the funds deposited in the Escrow
      Account;


                                       31



            (vii)  to remove funds inadvertently placed in the Escrow Account by
      the Company; and

            (viii) to clear and terminate the Escrow Account on the termination
      of this Agreement.

Section 4.08   Payment of Taxes, Insurance and Other Charges.

      With respect to each Mortgage Loan, the Company shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates,
sewer rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of PMI Policy premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of such
charges (including renewal premiums) and shall effect payment thereof prior to
the applicable penalty or termination date, employing for such purpose deposits
of the Mortgagor in the Escrow Account which shall have been estimated and
accumulated by the Company in amounts sufficient for such purposes, as allowed
under the terms of the Mortgage. The Company assumes full responsibility for the
timely payment of all such bills and shall effect timely payment of all such
charges irrespective of each Mortgagor's faithful performance in the payment of
same of the making of the Escrow Payments, and the Company shall make advances
from its own funds to effect such payments.

Section 4.09   Protection of Accounts.

      The Company may transfer the Custodial Account or the Escrow Account to a
different Qualified Depository from time to time, provided that the Company
shall give notice to the Purchaser of any proposed change of the location of
either Account not later than ten (10) days prior to any change thereof.

Section 4.10   Maintenance of Hazard Insurance.

      The Company shall cause to be maintained for each Mortgage Loan hazard
insurance such that all buildings upon the Mortgaged Property are insured by an
insurer acceptable to Fannie Mae or Freddie Mac against loss by fire, hazards of
extended coverage and such other hazards as are customary or required by law in
the area where the Mortgaged Property is located, in an amount which is at least
equal to the lesser of (i) the maximum insurable value of the improvements
securing such Mortgage Loan and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) an amount such that the proceeds
thereof shall be sufficient to prevent the Mortgagor or the loss payee from
becoming a co-insurer. In the event a hazard insurance policy shall be in danger
of being terminated, or in the event the insurer shall cease to be acceptable to
Fannie Mae or Freddie Mac, the Company shall notify the Purchaser and the
related Mortgagor, and shall use its best efforts, as permitted by applicable
law, to obtain from another qualified insurer a replacement hazard insurance
policy substantially and materially similar in all respects to the original
policy. In no event, however, shall a Mortgage Loan be without a hazard
insurance policy at any time, subject only to Section 4.11 hereof.

      If the related Mortgaged Property is located in an area identified by the
Flood Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) a flood insurance policy meeting the
requirements of the current guidelines of the


                                       32



Federal Insurance Administration is in effect with a generally acceptable
insurance carrier acceptable to Fannie Mae or Freddie Mac in an amount
representing coverage equal to the lesser of (i) the minimum amount required,
under the terms of coverage, to compensate for any damage or loss on a
replacement cost basis (or the unpaid balance of the mortgage if replacement
cost coverage is not available for the type of building insured) and (ii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended.

      If a Mortgage is secured by a unit in a condominium project, the Company
shall verify that the coverage required of the owner's association, including
hazard, flood, liability, and fidelity coverage, is being maintained in
accordance with then current Fannie Mae requirements, and secure from the
owner's association its agreement to notify the Company promptly of any change
in the insurance coverage or of any condemnation or casualty loss that may have
a material effect on the value of the Mortgaged Property as security.

      In the event that any Purchaser or the Company shall determine that the
Mortgaged Property should be insured against loss or damage by hazards and risks
not covered by the insurance required to be maintained by the Mortgagor pursuant
to the terms of the Mortgage, the Company shall communicate and consult with the
Mortgagor with respect to the need for such insurance and bring to the
Mortgagor's attention the desirability of protection of the Mortgaged Property.

      All policies required hereunder shall name the Company as loss payee and
shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for at least 30 days prior written notice of
any cancellation, reduction in amount or material change in coverage.

      The Company shall not interfere with the Mortgagor's freedom of choice in
selecting either his insurance carrier or agent, provided, however, that the
Company shall not accept any such insurance policies from insurance companies
unless such companies are acceptable to Fannie Mae and Freddie Mac and are
licensed to do business in the jurisdiction in which the Mortgaged Property is
located. The Company shall determine that such policies provide sufficient risk
coverage and amounts, that they insure the property owner, and that they
properly describe the property address.

      Pursuant to Section 4.04, any amounts collected by the Company under any
such policies (other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the related Mortgaged Property, or
property acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with the Company's normal servicing procedures as
specified in Section 4.14) shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 4.05.

Section 4.11   Maintenance of Mortgage Impairment Insurance.

      In the event that the Company shall obtain and maintain a blanket policy
insuring against losses arising from fire and hazards covered under extended
coverage on all of the Mortgage Loans, then, to the extent such policy (1) names
the Company as loss payee, (2) provides coverage in an amount equal to the
amount required pursuant to Section 4.10 without


                                       33



coinsurance and (3) otherwise complies with all other requirements of Section
4.10, it shall conclusively be deemed to have satisfied its obligations as set
forth in Section 4.10. The Company shall prepare and make any claims on the
blanket policy as deemed necessary by the Company in accordance with prudent
servicing practices. Any amounts collected by the Company under any such policy
relating to a Mortgage Loan shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 4.05. Such policy may contain a deductible
clause, in which case, in the event that there shall not have been maintained on
the related Mortgaged Property a policy complying with Section 4.10, and there
shall have been a loss which would have been covered by such policy, the Company
shall deposit in the Custodial Account at the time of such loss the amount not
otherwise payable under the blanket policy because of such deductible clause,
such amount to be deposited from the Company's funds, without reimbursement
therefor. Upon request of any Purchaser, the Company shall cause to be delivered
to such Purchaser a certified true copy of such policy and a statement from the
insurer thereunder that such policy shall in no event be terminated or
materially modified without 30 days' prior written notice to such Purchaser.

Section 4.12   Maintenance of Fidelity Bond and Errors and Omissions Insurance.

      The Company shall maintain with responsible companies, at its own expense,
a blanket Fidelity Bond and an Errors and Omissions Insurance Policy, with broad
coverage on all officers, employees or other persons acting in any capacity
requiring such persons to handle funds, money, documents or papers relating to
the Mortgage Loans ("Company Employees"). Any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be in the form of the Mortgage Banker's Blanket
Bond and shall protect and insure the Company against losses, including forgery,
theft, embezzlement, fraud, errors and omissions and negligent acts of such
Company Employees. Such Fidelity Bond and Errors and Omissions Insurance Policy
also shall protect and insure the Company against losses in connection with the
release or satisfaction of a Mortgage Loan without having obtained payment in
full of the indebtedness secured thereby. No provision of this Section 4.12
requiring such Fidelity Bond and Errors and Omissions Insurance Policy shall
diminish or relieve the Company from its duties and obligations as set forth in
this Agreement. The minimum coverage under any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be at least equal to the amounts acceptable to
Fannie Mae or Freddie Mac. Upon the request of any Purchaser, the Company shall
cause to be delivered to such Purchaser a certificate of insurance for such
Fidelity Bond and Errors and Omissions Insurance Policy and a statement from the
surety and the insurer that such Fidelity Bond and Errors and Omissions
Insurance Policy shall in no event be terminated or materially modified without
30 days' prior written notice to the Purchaser.

Section 4.13   Inspections.

      If any Mortgage Loan is more than sixty (60) days delinquent, the Company
immediately shall inspect the Mortgaged Property and shall conduct subsequent
inspections in accordance with Accepted Servicing Practices or as may be
required by the primary mortgage guaranty insurer. The Company shall keep a
written report of each such inspection.


                                       34



Section 4.14   Restoration of Mortgaged Property.

      The Company need not obtain the approval of the Purchaser prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be
applied to the restoration or repair of the Mortgaged Property if such release
is in accordance with Accepted Servicing Practices. For claims greater than
$15,000, at a minimum the Company shall comply with the following conditions in
connection with any such release of Insurance Proceeds or Condemnation Proceeds:

            (i)    The Company shall receive satisfactory independent
      verification of completion of repairs and issuance of any required
      approvals with respect thereto;

            (ii)   the Company shall take all steps necessary to preserve the
      priority of the lien of the Mortgage, including, but not limited to
      requiring waivers with respect to mechanics' and materialmen's liens;

            (iii)  the Company shall verify that the Mortgage Loan is not in
      default; and

            (iv)   pending repairs or restoration, the Company shall place the
      Insurance Proceeds or Condemnation Proceeds in the Escrow Account.

      If the Purchaser is named as an additional loss payee, the Company is
hereby empowered to endorse any loss draft issued in respect of such a claim in
the name of the Purchaser.

Section 4.15   Maintenance of PMI Policy; Claims.

      With respect to each Mortgage Loan with an LTV in excess of 80%, the
Company shall, without any cost to the Purchaser maintain in full force and
effect a PMI Policy insuring the portion over 78% until terminated pursuant to
the Homeowners Protection Act of 1998, 12 USC SS.4901, et seq. In the event that
such PMI Policy shall be terminated other than as required by law, the Company
shall obtain from another Qualified Insurer a comparable replacement policy,
with a total coverage equal to the remaining coverage of such terminated PMI
Policy. If the insurer shall cease to be a Qualified Insurer, the Company shall
determine whether recoveries under the PMI Policy are jeopardized for reasons
related to the financial condition of such insurer, it being understood that the
Company shall in no event have any responsibility or liability for any failure
to recover under the PMI Policy for such reason. If the Company determines that
recoveries are so jeopardized, it shall notify the Purchaser and the Mortgagor,
if required, and obtain from another Qualified Insurer a replacement insurance
policy. The Company shall not take any action which would result in noncoverage
under any applicable PMI Policy of any loss which, but for the actions of the
Company would have been covered thereunder. In connection with any assumption or
substitution agreement entered into or to be entered into pursuant to Section
6.01, the Company shall promptly notify the insurer under the related PMI
Policy, if any, of such assumption or substitution of liability in accordance
with the terms of such PMI Policy and shall take all actions which may be
required by such insurer as a condition to the continuation of coverage under
such PMI Policy. If such PMI Policy is terminated as a result of such assumption
or substitution of liability, the Company shall obtain a replacement PMI Policy
as provided above.


                                       35



      In connection with its activities as servicer, the Company agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any PMI Policy in a timely fashion in accordance with the terms of
such PMI Policy and, in this regard, to take such action as shall be necessary
to permit recovery under any PMI Policy respecting a defaulted Mortgage Loan.
Pursuant to Section 4.04, any amounts collected by the Company under any PMI
Policy shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 4.05.

Section 4.16   Title, Management and Disposition of REO Property.

      In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Purchaser, or in the event the Purchaser is
not authorized or permitted to hold title to real property in the state where
the REO Property is located, or would be adversely affected under the "doing
business" or tax laws of such state by so holding title, the deed or certificate
of sale shall be taken in the name of such Person or Persons as shall be
consistent with an Opinion of Counsel obtained by the Company from any attorney
duly licensed to practice law in the state where the REO Property is located.
The Person or Persons holding such title other than the Purchaser shall
acknowledge in writing that such title is being held as nominee for the
Purchaser.

      The Purchaser shall have the option to manage and operate the REO Property
provided the Purchaser gives written notice of its intention to do so within
thirty (30) days after such REO Property is acquired in foreclosure or by deed
in lieu of foreclosure. The election by the Purchaser to manage the REO Property
shall not constitute a termination of any rights of the Company pursuant to
Section 11.02.

      In the event the Purchaser does not elect to manage its own REO Property,
the Company shall manage, conserve, protect and operate each REO Property for
the Purchaser solely for the purpose of its prompt disposition and sale. The
Company, either itself or through an agent selected by the Company, shall
manage, conserve, protect and operate the REO Property in the same manner that
it manages, conserves, protects and operates other foreclosed property for its
own account, and in the same manner that similar property in the same locality
as the REO Property is managed. The Company shall attempt to sell the same (and
may temporarily rent the same for a period not greater than one year, except as
otherwise provided below) on such terms and conditions as the Company deems to
be in the best interest of the Purchaser.

      The Company shall use its best efforts to dispose of the REO Property as
soon as possible and shall sell such REO Property in any event within one year
after title has been taken to such REO Property, unless (i) a REMIC election has
not been made with respect to the arrangement under which the Mortgage Loans and
the REO Property are held, and (ii) the Company determines, and gives an
appropriate notice to the Purchaser to such effect, that a longer period is
necessary for the orderly liquidation of such REO Property. If a period longer
than one year is permitted under the foregoing sentence and is necessary to sell
any REO Property, (i) the Company shall report monthly to the Purchaser as to
the progress being made in selling such REO Property and (ii) if, with the
written consent of the Purchaser, a purchase money mortgage is taken in
connection with such sale, such purchase money mortgage shall name the Company
as mortgagee, and such purchase money mortgage shall not be held pursuant to
this Agreement,


                                       36



but instead a separate agreement among the Company and Purchaser shall be
entered into with respect to such purchase money mortgage.

      The Company shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property,
liability insurance and, to the extent required and available under the Flood
Disaster Protection Act of 1973, as amended, flood insurance in the amount
required above.

      The disposition of REO Property shall be carried out by the Company at
such price, and upon such terms and conditions, as the Company deems to be in
the best interests of the Purchaser. The proceeds of sale of the REO Property
shall be promptly deposited in the Custodial Account. As soon as practical
thereafter the expenses of such sale shall be paid and the Company shall
reimburse itself for any related unreimbursed Servicing Advances, unpaid
Servicing Fees and unreimbursed advances made pursuant to Section 5.03. On the
Remittance Date immediately following the receipt of such sale proceeds, the net
cash proceeds of such sale remaining in the Custodial Account shall be
distributed to the Purchaser.

      The Company shall withdraw from the Custodial Account funds necessary for
the proper operation management and maintenance of the REO Property, including
the cost of maintaining any hazard insurance pursuant to Section 4.10 and the
fees of any third party managing agent of the Company, or the Company itself.
The REO management fee shall be the greater of one percent (1%) of the gross
sales price of the REO Property or $1500 per REO Property, provided however, the
REO management fee shall not exceed the net Liquidation Proceeds. The Company
shall make monthly distributions on each Remittance Date to the Purchaser of the
net cash flow from the REO Property (which shall equal the revenues from such
REO Property net of the expenses described in this Section 4.16 and of any
reserves reasonably required from time to time to be maintained to satisfy
anticipated liabilities for such expenses).

Section 4.17   Real Estate Owned Reports.

      Together with the statement furnished pursuant to Section 5.02, the
Company shall furnish to the Purchaser on or before the Remittance Date each
month a statement with respect to any REO Property covering the operation of
such REO Property for the previous month and the Company's efforts in connection
with the sale of such REO Property and any rental of such REO Property
incidental to the sale thereof for the previous month. That statement shall be
accompanied by such other information as the Purchaser shall reasonably request.

Section 4.18   Liquidation Reports.

      Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Purchaser pursuant to a deed in lieu of foreclosure, the Company
shall submit to the Purchaser a liquidation report with respect to such
Mortgaged Property.

Section 4.19   Reports of Foreclosures and Abandonments of Mortgaged Property.

      Following the foreclosure sale or abandonment of any Mortgaged Property,
the Company shall report such foreclosure or abandonment as required pursuant to
Section 6050J of the Code.


                                       37



The Company shall file information reports with respect to the receipt of
mortgage interest received in a trade or business and information returns
relating to cancellation of indebtedness income with respect to any Mortgaged
Property as required by the Code. Such reports shall be in form and substance
sufficient to meet the reporting requirements imposed by the Code.

Section 4.20   Confidentiality/Protection of Customer Information.

      Each party agrees that it shall comply with all applicable laws and
regulations regarding the privacy or security of Customer Information, and shall
maintain appropriate administrative, technical and physical safeguards to
protect the security, confidentiality and integrity of Customer Information,
including maintaining security measures designed to meet the Interagency
Guidelines Establishing Standards for Safeguarding Customer Information, 66 Fed.
Reg. 8616, and the rules promulgated thereunder. The Company shall promptly make
available to the Purchaser's regulators information regarding such security
measures as requested by such regulators. For purposes of this Section,
"Customer Information" means any personal information concerning a Mortgagor
that is disclosed to a party to this Agreement by or on behalf of a Mortgagor.

Section 4.21   Disaster Recovery/Business Continuity Plan

      The Company shall establish and maintain contingency plans, recovery plans
and proper risk controls to ensure Company's continued performance under this
Agreement. The Company agrees to make available to the Purchaser's regulators
information regarding such plans as requested by such regulators.

                                   ARTICLE V

                              PAYMENTS TO PURCHASER

Section 5.01   Remittances.

      On each Remittance Date, the Company shall remit by wire transfer of
immediately available funds to the Purchaser (a) all amounts deposited in the
Custodial Account as of the close of business on the Determination Date (net of
charges against or withdrawals from the Custodial Account pursuant to Section
4.05), plus (b) all amounts, if any, which the Company is obligated to
distribute pursuant to Section 5.03, minus (c) any amounts attributable to
Principal Prepayments received after the applicable Principal Prepayment Period
which amounts shall be remitted on the following Remittance Date, together with
any additional interest required to be deposited in the Custodial Account in
connection with such Principal Prepayment in accordance with Section 4.04(viii);
and minus (d) any amounts attributable to Monthly Payments collected but due on
a Due Date or Dates subsequent to the first day of the month of the Remittance
Date.

      With respect to any remittance received by the Purchaser after the next
Business Day following the Business Day on which such payment was due, the
Company shall pay to the Purchaser interest on any such late payment at an
annual rate equal to the Prime Rate, adjusted as of the date of each change,
plus three percentage points, but in no event greater than the maximum amount
permitted by applicable law. Such interest shall be deposited in the Custodial
Account by the Company on the date such late payment is made and shall cover the
period


                                       38



commencing with the day following such second Business Day and ending with the
Business Day on which such payment is made, both inclusive. Such interest shall
be remitted along with the distribution payable on the next succeeding
Remittance Date. The payment by the Company of any such interest shall not be
deemed an extension of time for payment or a waiver of any Event of Default by
the Company.

Section 5.02   Statements to Purchaser.

      Not later than the tenth (10th )Business Day of each month, the Company
shall furnish to the Purchaser in either written or electronic format, a monthly
remittance advice, in a form mutually acceptable to the Company and the
Purchaser, with a trial balance report attached thereto, as to the period ending
on the last day of the preceding month.

Section 5.03   Monthly Advances by Company.

      On the Business Day immediately preceding each Remittance Date, the
Company shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution an amount equal to all Monthly Payments
(with interest adjusted to the Mortgage Loan Remittance Rate) which were due on
the Mortgage Loans during the applicable Due Period and which were delinquent at
the close of business on the immediately preceding Determination Date or which
were deferred pursuant to Section 4.01. Any amounts held for future distribution
and so used shall be replaced by the Company by deposit in the Custodial Account
on or before any future Remittance Date if funds in the Custodial Account on
such Remittance Date shall be less than payments to the Purchaser required to be
made on such Remittance Date. The Company's obligation to make such Monthly
Advances as to any Mortgage Loan will continue through the last Monthly Payment
due prior to the payment in full of the Mortgage Loan, or through the earlier
of: (i) the last Remittance Date prior to the Remittance Date for the
distribution of all Liquidation Proceeds and other payments or recoveries
(including Insurance Proceeds and Condemnation Proceeds) with respect to the
Mortgage Loan; and (ii) the Remittance Date prior to the date the Mortgage Loan
is converted to REO Property, provided however, that if requested by a Rating
Agency (hereinafter defined) in connection with a securitization, the Company
shall be obligated to make such advances through the Remittance Date prior to
the date on which cash is received in connection with the liquidation of REO
Property; provided, however, that such obligation shall cease if the Company
determines, in its sole reasonable opinion, that advances with respect to such
Mortgage Loan are non-recoverable by the Company from Liquidation Proceeds, REO
Disposition Proceeds, Insurance Proceeds, Condemnation Proceeds, or otherwise
with respect to a particular Mortgage Loan. In the event that the Company
determines that any such advances are non-recoverable, the Company shall provide
the Purchaser with a certificate signed by two officers of the Company
evidencing such determination. For purposes of this paragraph, "Rating Agency"
shall mean Moody's Investors Services, Inc., Standard & Poor's Ratings Services,
Fitch, Inc., or any other nationally recognized statistical credit rating
agency.


                                       39



                                   ARTICLE VI

                          GENERAL SERVICING PROCEDURES

Section 6.01   Transfers of Mortgaged Property.

      The Company shall use its best efforts to enforce any "due-on-sale"
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the person to whom the Mortgaged Property has been or is about to be sold
whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains liable on the Mortgage and the Mortgage Note. When the
Mortgaged Property has been conveyed by the Mortgagor, the Company shall, to the
extent it has knowledge of such conveyance, exercise its rights to accelerate
the maturity of such Mortgage Loan under the "due-on-sale" clause applicable
thereto, provided, however, that the Company shall not exercise such rights if
prohibited by law from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related PMI Policy, if any.

      If the Company reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause, the Company shall enter into (i) an
assumption and modification agreement with the person to whom such property has
been conveyed, pursuant to which such person becomes liable under the Mortgage
Note and the original Mortgagor remains liable thereon or (ii) in the event the
Company is unable under applicable law to require that the original Mortgagor
remain liable under the Mortgage Note and the Company has the prior consent of
the primary mortgage guaranty insurer, a substitution of liability agreement
with the purchaser of the Mortgaged Property pursuant to which the original
Mortgagor is released from liability and the purchaser of the Mortgaged Property
is substituted as Mortgagor and becomes liable under the Mortgage Note. If an
assumption fee is collected by the Company for entering into an assumption
agreement the fee will be retained by the Company as additional servicing
compensation. In connection with any such assumption, neither the Mortgage
Interest Rate borne by the related Mortgage Note, the term of the Mortgage Loan,
the outstanding principal amount of the Mortgage Loan nor any other materials
terms shall be changed without Purchaser's consent.

      To the extent that any Mortgage Loan is assumable, the Company shall
inquire diligently into the credit worthiness of the proposed transferee, and
shall use the underwriting criteria for approving the credit of the proposed
transferee which are used with respect to underwriting mortgage loans of the
same type as the Mortgage Loans. If the credit worthiness of the proposed
transferee does not meet such underwriting criteria, the Company diligently
shall, to the extent permitted by the Mortgage or the Mortgage Note and by
applicable law, accelerate the maturity of the Mortgage Loan.

Section 6.02   Satisfaction of Mortgages and Release of Mortgage Files.

      Upon the payment in full of any Mortgage Loan, or the receipt by the
Company of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Company shall notify the Purchaser in the
monthly remittance advice as provided in Section 5.02, and may request the
release of any Mortgage Loan Documents.


                                       40



      If the Company satisfies or releases a Mortgage without first having
obtained payment in full of the indebtedness secured by the Mortgage or should
the Company otherwise prejudice any rights the Purchaser may have under the
mortgage instruments, upon written demand of the Purchaser, the Company shall
repurchase the related Mortgage Loan at the Repurchase Price by deposit thereof
in the Custodial Account within (two) 2 Business Days of receipt of such demand
by the Purchaser. The Company shall maintain the Fidelity Bond and Errors and
Omissions Insurance Policy as provided for in Section 4.12 insuring the Company
against any loss it may sustain with respect to any Mortgage Loan not satisfied
in accordance with the procedures set forth herein.

Section 6.03   Servicing Compensation.

      As compensation for its services hereunder, the Company shall be entitled
to withdraw from the Custodial Account the amount of its Servicing Fee. The
Servicing Fee shall be payable monthly and shall be computed on the basis of the
same unpaid scheduled principal balance and for the period respecting which any
related interest payment on a Mortgage Loan is computed. The obligation of the
Purchaser to pay the Servicing Fee is limited to, and payable solely from, the
interest portion of such Monthly Payments. Notwithstanding the foregoing, with
respect to the payment of the Servicing Fee for any month, the aggregate
Servicing Fee shall be reduced (but not below zero) by an amount equal to the
Prepayment Interest Shortfall for such Remittance Date relating to the Mortgage
Loans.

      Additional servicing compensation in the form of assumption fees, to the
extent provided in Section 6.01, and late payment charges shall be retained by
the Company to the extent not required to be deposited in the Custodial Account.
The Company shall be required to pay all expenses incurred by it in connection
with its servicing activities hereunder and shall not be entitled to
reimbursement thereof except as specifically provided for herein.

Section 6.04   Annual Statement as to Compliance.

      The Company shall deliver to the Purchaser, on or before February 28 of
each year, beginning February 28, 2003, an Officer's Certificate, stating that
(i) a review of the activities of the Company during the preceding calendar year
and of performance under this Agreement or similar agreements has been made
under such officer's supervision, and (ii) to the best of such officer's
knowledge, based on such review, the Company has fulfilled all its obligations
under this Agreement throughout 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 thereof and the action being taken by the
Company to cure such default.

Section 6.05   Annual Independent Public Accountants' Servicing Report.

      On or before February 28 of each year, beginning February 28, 2003, the
Company, at its expense, shall cause a firm of independent public accountants
which is a member of the American Institute of Certified Public Accountants to
furnish a statement to each Purchaser to the effect that such firm has examined
certain documents and records relating to the servicing of the mortgage loans
similar in nature and that such firm is of the opinion that the provisions of
this or similar Agreements have been complied with, and that, on the basis of
such examination


                                       41



conducted substantially in compliance with the Uniform Single Attestation
Program for Mortgage Bankers, nothing has come to their attention which would
indicate that such servicing has not been conducted in compliance therewith,
except for (i) such exceptions as such firm shall believe to be immaterial, and
(ii) such other exceptions as shall be set forth in such statement. By providing
Purchaser a copy of a Uniform Single Attestation Program Report from their
independent public accountant's on an annual basis, Company shall be considered
to have fulfilled its obligations under this Section 6.05.

Section 6.06   Right to Examine Company Records.

      The Purchaser, or its designee, shall have the right to examine and audit
any and all of the books, records, or other information of the Company, whether
held by the Company or by another on its behalf, with respect to or concerning
this Agreement or the Mortgage Loans, during business hours or at such other
times as may be reasonable under applicable circumstances, upon reasonable
advance notice. The Purchaser shall pay its own travel expenses associated with
such examination.

Section 6.07   Compliance with REMIC Provisions.

      If a REMIC election has been made with respect to the arrangement under
which the Mortgage Loans and REO Property are held, the Company shall not take
any action, cause the REMIC to take any action or fail to take (or fail to cause
to be taken) any action that, under the REMIC Provisions, if taken or not taken,
as the case may be, could (i) endanger the status of the REMIC as a REMIC or
(ii) result in the imposition of a tax upon the REMIC (including but not limited
to the tax on "prohibited transactions" as defined in Section 860 (a) (2) of the
Code and the tax on "contributions" to a REMIC set forth in Section 860 (d) of
the Code) unless the Company has received an Opinion of Counsel (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.

                                  ARTICLE VII

                              COMPANY TO COOPERATE

Section 7.01   Provision of Information.

      During the term of this Agreement, the Company shall furnish to the
Purchaser such periodic, special, or other reports or information, and copies or
originals of any documents contained in the Servicing File for each Mortgage
Loan provided for herein. All other special reports or information not provided
for herein as shall be necessary, reasonable, or appropriate with respect to the
Purchaser or any regulatory agency will be provided at the Purchaser's expense.
All such reports, documents or information shall be provided by and in
accordance with all reasonable instructions and directions which the Purchaser
may give. In addition, during the term of this Agreement, the Company shall
provide to the OCC and to comparable regulatory authorities supervising the
Purchaser or any of Purchaser's assigns (including beneficial owners of
securities issued in Pass-Through Transfers backed by the Mortgage Loans) and
the examiners and supervisory agents of the OCC and such other authorities,
access to the documentation


                                       42



required by applicable regulations of the OCC and other comparable regulatory
authorities supervising the Purchaser with respect to the Mortgage Loans. Such
access shall be afforded upon reasonable and prior written request and during
normal business hours at the offices designated by the Company.

      The Company shall execute and deliver all such instruments and take all
such action as the Purchaser may reasonably request from time to time, in order
to effectuate the purposes and to carry out the terms of this Agreement.

Section 7.02   Financial Statements; Servicing Facility.

      In connection with marketing the Mortgage Loans, the Purchaser may make
available to a prospective Purchaser a Consolidated Statement of Operations of
the Company for the most recently completed two (2) fiscal years for which such
a statement is available, as well as a Consolidated Statement of Condition at
the end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Company also shall make available any comparable interim
statements to the extent any such statements have been prepared by or on behalf
of the Company (and are available upon request to members or stockholders of the
Company or to the public at large).

      The Company also shall make available to Purchaser or prospective
purchasers a knowledgeable financial or accounting officer for the purpose of
answering questions respecting recent developments affecting the Company or the
financial statements of the Company, and to permit any prospective Purchaser to
inspect the Company's servicing facilities for the purpose of satisfying such
prospective Purchaser that the Company has the ability to service the Mortgage
Loans as provided in this Agreement.

Section 7.03   Cooperation with Third Party Service Providers.

      The Company shall cooperate with the Purchaser in servicing the Mortgage
Loans in accordance with the usual and customary requirements of any credit
enhancement, risk management and other service providers and shall otherwise
cooperate with the Purchaser in connection with such third party service
providers and the provision of third party services; provided, however, that
such requirements are reasonably acceptable to the Company and pose no greater
risk, obligation or expense to the Company than otherwise set forth in this
Agreement. Any additional costs and/or expenses will be paid by the requesting
party.

                                  ARTICLE VIII

                                   THE COMPANY

Section 8.01   Indemnification; Third Party Claims.

      The Company shall indemnify the Purchaser and hold it harmless against any
and all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that the Purchaser may sustain in any way related to the failure of the
Company to perform its duties and service the Mortgage Loans in strict
compliance with the terms of this Agreement. The Company immediately shall


                                       43



notify the Purchaser if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the prior written consent of the
Purchaser) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Purchaser in respect
of such claim. The Company shall follow any written instructions received from
the Purchaser in connection with such claim. The Purchaser promptly shall
reimburse the Company for all amounts advanced by it pursuant to the preceding
sentence except when the claim is in any way related to the Company's
indemnification pursuant to Section 3.03, or the failure of the Company to
service and administer the Mortgage Loans in strict compliance with the terms of
this Agreement.

Section 8.02   Merger or Consolidation of the Company.

      The Company shall keep in full effect its existence, rights and franchises
as a corporation, and shall obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement
or any of the Mortgage Loans and to perform its duties under this Agreement.

      Any person into which the Company may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Company shall be a party, or any Person succeeding to the business of the
Company, shall be the successor of the Company hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding, provided, however, that
the successor or surviving Person shall be an institution which is a Fannie
Mae/Freddie Mac-approved company in good standing. Furthermore, in the event the
Company transfers or otherwise disposes of all or substantially all of its
assets to an affiliate of the Company, such affiliate shall satisfy the
condition above, and shall also be fully liable to the Purchaser for all of the
Company's obligations and liabilities hereunder.

Section 8.03   Limitation on Liability of Company and Others.

      Neither the Company nor any of the directors, officers, employees or
agents of the Company shall be under any liability to the Purchaser for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment, provided, however, that
this provision shall not protect the Company or any such person against any
breach of warranties or representations made herein, or failure to perform its
obligations in strict compliance with any standard of care set forth in this
Agreement or any other liability which would otherwise be imposed under this
Agreement. The Company and any director, officer, employee or agent of the
Company may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Company shall not be under any obligation to appear in, prosecute or defend
any legal action which is not incidental to its duties to service the Mortgage
Loans in accordance with this Agreement and which in its opinion may involve it
in any expense or liability, provided, however, that the Company may, with the
consent of the Purchaser, undertake any such action which it may deem necessary
or desirable in respect to this Agreement and the rights


                                       44



and duties of the parties hereto. In such event, the Company shall be entitled
to reimbursement from the Purchaser of the reasonable legal expenses and costs
of such action.

Section 8.04   Limitation on Resignation and Assignment by Company.

      The Purchaser has entered into this Agreement with the Company and
subsequent purchasers will purchase the Mortgage Loans in reliance upon the
independent status of the Company, and the representations as to the adequacy of
its servicing facilities, personnel, records and procedures, its integrity,
reputation and financial standing, and the continuance thereof. Therefore, the
Company shall neither assign this Agreement or the servicing hereunder or
delegate its rights or duties hereunder or any portion hereof or sell or
otherwise dispose of all of its property or assets without the prior written
consent of the Purchaser, which consent shall not be unreasonably withheld.

      The Company shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Company and the Purchaser or upon
the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Company. Any such
determination permitting the resignation of the Company shall be evidenced by an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Company's responsibilities and obligations hereunder in the manner provided in
Section 12.01.

      Without in any way limiting the generality of this Section 8.04, in the
event that the Company either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof or sell or otherwise dispose of all or substantially all of its property
or assets, without the prior written consent of the Purchaser, then the
Purchaser shall have the right to terminate this Agreement upon notice given as
set forth in Section 10.01, without any payment of any penalty or damages and
without any liability whatsoever to the Company or any third party.

                                   ARTICLE IX

                    REMOVAL OF MORTGAGE LOANS FROM AGREEMENT

Section 9.01   Removal of Mortgage Loans from Inclusion Under this Agreement.

      The Purchaser and the Company agree that with respect to some or all of
the Mortgage Loans, the Purchaser, at its sole option, may effect Whole Loan
Transfers or Pass-Through Transfers, retaining the Company as the servicer
thereof or subservicer if a master servicer is employed, or as applicable the
"seller/servicer." On the Reconstitution Date, the Mortgage Loans transferred
shall cease to be covered by this Agreement; provided, however, that, in the
event that any Mortgage Loan transferred pursuant to this Section 9.01 is
rejected by the transferee, the Company shall continue to service such rejected
Mortgage Loan on behalf of the Purchaser in accordance with the terms and
provisions of this Agreement.


                                       45



      The Company shall cooperate with the Purchaser in connection with each
Whole Loan Transfer or Pass-Through Transfer in accordance with this Section
9.01. In connection therewith the Company shall:

      (a)   make all representations and warranties with respect to the Mortgage
Loans as of the Closing Date and with respect to the Company itself as of the
closing date of each Whole Loan Transfer or Pass-Through Transfer;

      (b)   negotiate in good faith and execute any seller/servicer agreements
required by the shelf registrant to effectuate the foregoing provided such
agreements create no greater obligation or cost on the part of the Company than
otherwise set forth in this Agreement;

      (c)   make representations and warranties (1) that the Company has
serviced the Mortgage Loans in accordance with the terms of this Agreement,
provided accurate statements to the Purchaser pursuant to Section 5.02 of this
Agreement, and otherwise complied with all covenants and obligations hereunder
and (2) that the Company has taken no action nor omitted to take any required
action the omission of which would have the effect of impairing any mortgage
insurance or guarantee on the Mortgage Loans;

      (d)   provide as applicable:

            (i)    any and all information and appropriate verification of
      information which may be reasonably available to the Company, including
      the Company's foreclosure, delinquency experience and the Company's
      underwriting standards, whether through letters of its auditors and
      counsel or otherwise, as the Purchaser shall request;

            (ii)   such additional representations, warranties, covenants,
      opinions of counsel, letters from auditors, and certificates of public
      officials or officers of the Company as are reasonably believed necessary
      by the trustee, any rating agency or the Purchaser, as the case may be, in
      connection with such Whole Loan Transfers or Pass-Through Transfers. The
      Purchaser shall pay all third party costs associated with the preparation
      of such information. The Company shall execute any seller/servicer
      agreements required within a reasonable period of time after receipt of
      such seller/servicer agreements which time shall be sufficient for the
      Company and the Company's counsel to review such seller/servicer
      agreements. Under this Agreement, the Company shall retain a Servicing Fee
      for each Mortgage Loan, at the Servicing Fee Rate;

      (e)   indemnify the Purchaser for any material misstatements or omissions
contained in the information provided pursuant to (d) above, provided that the
Purchaser shall also provide indemnification to the Company, it successors or
assigns, with respect to the accuracy of all other information the Purchaser may
disclose in any securitization offering materials; and

      (f)   with respect to any Mortgage Loans that are subject to a
Pass-Through Transfer or other securitization (a "Securitization") in which the
filing of a Sarbanes-Oxley Certification directly with the SEC is required, by
February 28th of each year or in connection with any additional Sarbanes-Oxley
Certification required to be filed upon thirty (30) days written request, an
officer of the Company shall execute and deliver an Officer's Certification
substantially in the form attached hereto as Exhibit F, to the entity filing the
Sarbanes-Oxley Certification directly


                                       46



with the SEC (such as the Purchaser, any master servicer, any trustee or any
depositor) for the benefit of such entity and such entity's affiliates and the
officers, directors and agents of such entity and such entity's affiliates, and
shall indemnify such entity or persons arising out of any breach of Company's
obligations or representations relating thereto as provided in such Officer's
Certification.

      In the event the Purchaser has elected to have the Company hold record
title to the Mortgages, prior to the Reconstitution Date the Company shall
prepare an Assignment in blank or to the trustee from the Company acceptable to
the trustee for each Mortgage Loan that is part of the Whole Loan Transfers or
Pass-Through Transfers. The Purchaser shall pay all preparation and recording
costs associated therewith if the Assignments of Mortgage have not been
previously prepared and recorded in Purchaser's name. The Company shall execute
each Assignment, track such Assignments to ensure they have been recorded and
deliver them as required by the trustee upon the Company's receipt thereof.
Additionally, the Company shall prepare and execute, at the direction of the
Purchaser, any note endorsements in connection with any and all seller/servicer
agreements.

      All Mortgage Loans not sold or transferred pursuant to Whole Loan
Transfers or Pass-Through Transfers shall remain subject to this Agreement and
shall continue to be serviced in accordance with the terms of this Agreement and
with respect thereto this Agreement shall remain in full force and effect.

                                    ARTICLE X

                                     DEFAULT

Section 10.01  Events of Default.

      Each of the following shall constitute an Event of Default on the part of
the Company:

            (i)    any failure by the Company to remit to the Purchaser any
      payment required to be made under the terms of this Agreement which
      continues unremedied for a period of one Business Day after the date upon
      which written notice of such failure, requiring the same to be remedied,
      shall have been given to the Company by the Purchaser; or

            (ii)   failure by the Company duly to observe or perform in any
      material respect any other of the covenants or agreements on the part of
      the Company set forth in this Agreement or in the Custodial Agreement
      which continues unremedied for a period of thirty days after the date on
      which written notice of such failure, requiring the same to be remedied,
      shall have been given to the Company by the Purchaser or by the Custodian;
      or

            (iii)  failure by the Company to maintain its license to do business
      in any jurisdiction where the Mortgaged Property is located if such
      license is required; or

            (iv)   a decree or order of a court or agency or supervisory
      authority having jurisdiction for the appointment of a conservator or
      receiver or liquidator in any insolvency, readjustment of debt, including
      bankruptcy, marshaling of assets and


                                       47



      liabilities or similar proceedings, or for the winding-up or liquidation
      of its affairs, shall have been entered against the Company and such
      decree or order shall have remained in force undischarged or unstayed for
      a period of 60 days; or

            (v)    the Company shall consent to the appointment of a conservator
      or receiver or liquidator in any insolvency, readjustment of debt,
      marshaling of assets and liabilities or similar proceedings of or relating
      to the Company or of or relating to all or substantially all of its
      property; or

            (vi)   the Company shall admit in writing its inability to pay its
      debts generally as they become due, file a petition to take advantage of
      any applicable insolvency, bankruptcy or reorganization statute, make an
      assignment for the benefit of its creditors, voluntarily suspend payment
      of its obligations or cease its normal business operations for three
      Business Days; or

            (vii)  the Company ceases to meet the qualifications of a Fannie
      Mae/Freddie Mac servicer; or

            (viii) the Company attempts to assign its right to servicing
      compensation hereunder or to assign this Agreement or the servicing
      responsibilities hereunder or to delegate its duties hereunder or any
      portion thereof in violation of Section 8.04.

      If the Company obtains knowledge of an Event of Default, the Company shall
promptly notify the Purchaser. In each and every such case, so long as an Event
of Default shall not have been remedied, in addition to whatever rights the
Purchaser may have at law or equity to damages, including injunctive relief and
specific performance, the Purchaser, by notice in writing to the Company, may
terminate all the rights and obligations of the Company under this Agreement and
in and to the Mortgage Loans and the proceeds thereof.

      Upon receipt by the Company of such written notice, all authority and
power of the Company under this Agreement, whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in the successor appointed
pursuant to Section 12.01. Upon written request from any Purchaser, the Company
shall prepare, execute and deliver to the successor entity designated by the
Purchaser any and all documents and other instruments, place in such successor's
possession all Mortgage Files, and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, including but not limited to the transfer and endorsement or
assignment of the Mortgage Loans and related documents, at the Company's sole
expense. The Company shall cooperate with the Purchaser and such successor in
effecting the termination of the Company's responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Company to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.

Section 10.02  Waiver of Defaults.

      By a written notice, the Purchaser may waive any default by the Company in
the performance of its obligations hereunder and its consequences. Upon any
waiver of a past default, such default shall cease to exist, and any Event of
Default arising therefrom shall be


                                       48



deemed to have been remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived.

                                   ARTICLE XI

                                   TERMINATION

Section 11.01  Termination.

      This Agreement shall terminate upon either: (i) the later of the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or the disposition of any REO Property with respect to the last
Mortgage Loan and the remittance of all funds due hereunder; or (ii) mutual
consent of the Company and the Purchaser in writing.

      Upon written request from the Purchaser in connection with any such
termination, the Company shall prepare, execute and deliver, any and all
documents and other instruments, place in the Purchaser's possession all
Mortgage Files, and do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise, at the Company's sole expense. The Company
agrees to cooperate with the Purchaser and such successor in effecting the
termination of the Company's responsibilities and rights hereunder as servicer,
including, without limitation, the transfer to such successor for administration
by it of all cash amounts which shall at the time be credited by the Company to
the Custodial Account or Escrow Account or thereafter received with respect to
the Mortgage Loans.

Section 11.02  Termination Without Cause.

      The Purchaser may terminate, at its sole option, any rights the Company
may have hereunder, without cause as provided in this Section 11.02. Any such
notice of termination shall be in writing and delivered to the Company by
registered mail as provided in Section 12.05.

      The Company shall be entitled to receive, as such liquidated damages, upon
the transfer of the servicing rights, an amount equal to 2.25% of the aggregate
outstanding principal amount of the transferred Mortgage Loans as of the
termination date.

                                  ARTICLE XII

                            MISCELLANEOUS PROVISIONS

Section 12.01  Successor to Company.

      Prior to termination of the Company's responsibilities and duties under
this Agreement pursuant to Sections 8.04, 10.01, 11.01(ii) or Section 11.02 the
Purchaser shall, (i) succeed to and assume all of the Company's
responsibilities, rights, duties and obligations under this Agreement, or (ii)
appoint a successor having the characteristics set forth in Section 8.02 and
which shall succeed to all rights and assume all of the responsibilities, duties
and liabilities of the


                                       49



Company under this Agreement prior to the termination of Company's
responsibilities, duties and liabilities under this Agreement. In connection
with such appointment and assumption, the Purchaser may make such arrangements
for the compensation of such successor out of payments on Mortgage Loans as it
and such successor shall agree. In the event that the Company's duties,
responsibilities and liabilities under this Agreement should be terminated
pursuant to the aforementioned sections, the Company shall discharge such duties
and responsibilities during the period from the date it acquires knowledge of
such termination until the effective date thereof with the same degree of
diligence and prudence which it is obligated to exercise under this Agreement,
and shall take no action whatsoever that might impair or prejudice the rights or
financial condition of its successor. The resignation or removal of the Company
pursuant to the aforementioned sections shall not become effective until a
successor shall be appointed pursuant to this Section 12.01 and shall in no
event relieve the Company of the representations and warranties made pursuant to
Sections 3.01 and 3.02 and the remedies available to the Purchaser under Section
3.03, it being understood and agreed that the provisions of such Sections 3.01,
3.02, and 3.03 shall be applicable to the Company notwithstanding any such sale,
assignment, resignation or termination of the Company, or the termination of
this Agreement.

      Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Company and to the Purchaser an instrument accepting such
appointment, wherein the successor shall make the representations and warranties
set forth in Section 3.01, except for subsections (h), (i) and (k) thereof,
whereupon such successor shall become fully vested with all the rights, powers,
duties, responsibilities, obligations and liabilities of the Company, with like
effect as if originally named as a party to this Agreement. Any termination or
resignation of the Company or termination of this Agreement pursuant to Section
8.04, 10.01, 11.01 or 11.02 shall not affect any claims that any Purchaser may
have against the Company arising out of the Company's actions or failure to act
prior to any such termination or resignation.

      The Company shall deliver promptly to the successor servicer the funds in
the Custodial Account and Escrow Account and all Mortgage Files and related
documents and statements held by it hereunder and the Company shall account for
all funds and shall execute and deliver such instruments and do such other
things as may reasonably be required to more fully and definitively vest in the
successor all such rights, powers, duties, responsibilities, obligations and
liabilities of the Company.

      Upon a successor's acceptance of appointment as such, the Company shall
notify by mail the Purchaser of such appointment in accordance with the
procedures set forth in Section 12.05.

Section 12.02  Amendment.

      This Agreement may be amended from time to time by written agreement
signed by the Company and the Purchaser.

Section 12.03  Governing Law.

      This Agreement shall be construed in accordance with the laws of the State
of New York and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.


                                       50



      Each of the Company and the Purchaser hereby knowingly, voluntarily and
intentionally waives any and all rights it may have to a trial by jury in
respect of any litigation based on, or arising out of, under, or in connection
with this Agreement, or any other documents and instruments executed in
connection herewith, or any course of conduct, course of dealing, statements
(whether oral or written), or actions of the Company or the Purchaser. This
provision is a material inducement for the Purchaser to enter into this
Agreement.

Section 12.04  Arbitration.

      In the event a claim or controversy arises concerning the interpretation
or enforcement of the terms of this Agreement, the Purchaser and the Company
agree that such claim or controversy may be settled by final, binding
arbitration if the Purchaser and the Company, as applicable, consent to such
arbitration at the time such claim or controversy arises which consent may be
withheld by the Purchaser and the Company in their sole discretion.

Section 12.05  Duration of Agreement.

      This Agreement shall continue in existence and effect until terminated as
herein provided. This Agreement shall continue notwithstanding transfers of the
Mortgage Loans by the Purchaser.

Section 12.06  Notices.

      All demands, notices and communications hereunder shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
registered mail, postage prepaid, addressed as follows:

      if to the Company with respect to servicing and investor reporting issues:

            Wells Fargo Home Mortgage, Inc.
            1 Home Campus
            Des Moines, IA 50328-0001
            Attention: John B. Brown, MAC X2401-042

      if to the Company with respect to all other issues:

            Wells Fargo Home Mortgage, Inc.
            7485 New Horizon Way, Building 3
            Frederick, MD 21703
            Attention: Trisha Lowe, MAC X3901-016

            In each instance with a copy to:

            Wells Fargo Home Mortgage, Inc.
            1 Home Campus
            Des Moines, Iowa 50328-0001
            Attention: General Counsel MAC X2401-06T


                                       51



            or such other address as may hereafter be furnished to the Purchaser
            in writing by the Company;

      if to Purchaser:

            Banc of America Mortgage Capital Corporation
            Bank of America Corporate Center
            NC1-007-11-07
            100 North Tryon Street
            Charlotte, North Carolina 28255
            Attention: Managing Director

            or such other address as may hereafter be furnished to the Company
            in writing by the Purchaser;

Section 12.07  Severability of Provisions.

      If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement.

Section 12.08  Relationship of Parties.

      Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto and the services of the
Company shall be rendered as an independent contractor and not as agent for the
Purchaser.

Section 12.09  Execution; Successors and Assigns.

      This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Section 8.04, this Agreement
shall inure to the benefit of and be binding upon the Company and the Purchaser
and their respective successors and assigns.

Section 12.10  Recordation of Assignments of Mortgage.

      To the extent permitted by applicable law, each of the Assignments of
Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Company's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.


                                       52



Section 12.11  Assignment by Purchaser.

      The Purchaser shall have the right, without the consent of the Company but
subject to the limit set forth in Section 2.02 hereof, to assign, in whole or in
part, its interest under this Agreement with respect to some or all of the
Mortgage Loans, and designate any person to exercise any rights of the Purchaser
hereunder, by executing an Assignment, Assumption and Recognition Agreement and
the assignee or designee shall accede to the rights and obligations hereunder of
the Purchaser with respect to such Mortgage Loans. All references to the
Purchaser in this Agreement shall be deemed to include its assignee or designee.

Section 12.12  Solicitation of Mortgagor.

      The Purchaser, its affiliates, successors or assigns shall not, without
the prior written consent of the Company, take any action to solicit or make
direct contact with the Mortgagor under any Mortgage Loan except to the extent
required by the Company's breach of this Agreement or as required under
applicable law or regulatory authority. In the event the Purchaser, its
affiliates, successors or assigns fails to obtain such written consent, the
Company shall be entitled, in its sole discretion, to terminate its obligations
and duties to service the Mortgage Loans under this Agreement. Upon transfer of
the servicing rights and obligations under this Agreement to the Purchaser or
Purchaser's designee, the Company shall be entitled to receive as liquidated
damages, an amount equal to 2.25% of the aggregate outstanding principal amount
of the Mortgage Loans as of the termination date. It is understood and agreed
that promotions undertaken by the Purchaser which are directed to the general
public at large, including, without limitation, mass mailings based upon
commercially acquired mailing lists, newspaper, radio, television advertisements
or from servicing needs of a Mortgagor who, without solicitation, contacts the
Purchaser, shall not constitute solicitation under this Section.

      The Company agrees that, after the respective Closing Date, it will not
take any action to solicit the refinancing of any Mortgage Loan. It is
understood and agreed that promotions undertaken by the Company or any affiliate
of the Company which are directed to the general public at large, including,
without limitation, mass mailings based upon commercially acquired mailing
lists, newspaper, radio, television advertisements or from servicing the
refinancing needs of a Mortgagor who, without solicitation, contacts the Company
in connection with the refinance of such Mortgage or Mortgage Loan, shall not
constitute solicitation under this Section. Notwithstanding anything to the
contrary, this Section shall not prohibit the Company from soliciting any
Mortgagor to provide other services including but not limited to credit cards,
insurance investments and banking related services.

Section 12.13  Further Agreements.

      The Purchaser and the Company each agree to execute and deliver to the
other such additional documents, instruments or agreements as may be necessary
or appropriate to effectuate the purposes of this Agreement.

Section 12.14  Confidential Information.

      The Company shall keep confidential and shall not divulge to any party,
without the Purchaser's prior written consent, the price paid by the Purchaser
for the Mortgage Loans, except


                                       53



to the extent that it is reasonable and necessary for the Company to do so in
working with legal counsel, auditors, taxing authorities or other governmental
agencies.


                [Intentionally Blank -- Next Page Signature Page]




      IN WITNESS WHEREOF, the Company and the Purchaser have caused their names
to be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.

BANC OF AMERICA MORTGAGE CAPITAL             WELLS FARGO HOME MORTGAGE, INC.
CORPORATION                                  COMPANY
PURCHASER


By: /s/ Bruce W. Good                        By: /s/ Trisha Lowe
    ----------------------------------           -------------------------------
Name: Bruce W. Good                          Name: Trisha Lowe
      --------------------------------             -----------------------------
Title: Vice President                        Title: Vice President
       -------------------------------              ----------------------------


                                       55



STATE OF                   )
                           )       ss:
COUNTY OF ___________      )

      On the _____ day of _______________ 20__ before me, a Notary Public in and
for said State, personally appeared ___________________________________, known
to me to be ___________________________________ of Wells Fargo Home Mortgage,
Inc., the corporation that executed the within instrument and also known to me
to be the person who executed it on behalf of said corporation, and acknowledged
to me that such corporation executed the within instrument.

      IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the
day and year in this certificate first above written.

                                             Notary Public

                                             My Commission expires


                                       56



STATE OF                   )
                           )       ss:
COUNTY OF                  )

      On the _____ day of _______________ 20___ before me, a Notary Public in
and for said State, personally appeared _____________________________________,
known to me to be the ______________________________ of Banc of America Mortgage
Capital Corporation, the corporation that executed the within instrument and
also known to me to be the person who executed it on behalf of said corporation,
and acknowledged to me that such corporation executed the within instrument.

      IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal the
day and year in this certificate first above written.

                                             Notary Public

                                             My Commission expires


                                       57



                                    EXHIBIT A

                               CUSTODIAL AGREEMENT


                               EXHIBIT A - Page 1



                                    EXHIBIT B

                                    DATA FILE

Loan Number
Channel
Property City
Property State
Property Zip
Property County
Note Date
First Payment Date
Last Payment Date
Maturity Date
Original Loan Amount
Purchase Price
Appraised Value
Current Balance
Sale Balance
Current Interest Rate
Current PANDI
Product Type
Remaining Term
LTV
MI Code
Property Type
Occupancy Code
Purpose Code
Stream Code
Conforming
Client Name
LEX Number
Employer Name
Subsidy Code
Initial Interest Rate
Relo Indicator
Temp Buydown
Servicing Fee
Master Service Fee
Servicer Name
TLTV
ECS Raw Score
ECS Score Code
FICO Raw Score
FICO Score Code
ECS Version Number
Leasehold Indicator


                               EXHIBIT B - Page 1



No Ratio Indicator
Alt A Indicator
Citizen Type Code
Program Code
Credit Grade
Lien Status
Terminal Didget
Servicer Code
Loan Term Number
Loan MI Certificate Number
Loan MI Coverage Percent
Borrower Last Name
Borrower First Name
Borrower Street Address
Pledged Asset Indicator
Loan Effect LTV Percent
Timesaver Indicator
Interest Only Indicator


                               EXHIBIT B - Page 2



                                    EXHIBIT C

                         CONTENTS OF EACH MORTGAGE FILE

      With respect to each Mortgage Loan, the Mortgage File shall include each
of the following items, which shall be available for inspection by the Purchaser
and any prospective Purchaser, and which shall be retained by the Company in the
Servicing File or delivered to the Custodian pursuant to Sections 2.01 and 2.03
of the Seller's Warranties and Servicing Agreement to which this Exhibit is
attached (the "Agreement"):

      (a)   The original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of without recourse" and signed in the name of the
Company by an authorized officer (in the event that the Mortgage Loan was
acquired by the Company in a merger, the signature must be in the following
form: "[Company], successor by merger to [name of predecessor]"; and in the
event that the Mortgage Loan was acquired or originated by the Company while
doing business under another name, the signature must be in the following form:
"[Company], formerly known as [previous name]").

      (b)   The original of any guarantee executed in connection with the
Mortgage Note (if any).

      (c)   The original Mortgage, with evidence of recording thereon or a
certified true and correct copy of the Mortgage sent for recordation. If in
connection with any Mortgage Loan, the Company cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Company shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Company stating that such Mortgage has been dispatched to the appropriate public
recording office for recordation and that the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered to
the Custodian upon receipt thereof by the Company; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office or by
the title insurance company that issued the title policy to be a true and
complete copy of the original recorded Mortgage.

      (d)   The originals or certified true copies of any document sent for
recordation of all assumption, modification, consolidation or extension
agreements, with evidence of recording thereon.

      (e)   The original Assignment of Mortgage for each Mortgage Loan, in form
and substance acceptable for recording (except for the insertion of the name of
the assignee and recording information). The Assignment of Mortgage must be duly
recorded only if recordation is either necessary under applicable law or
commonly required by private institutional mortgage


                               EXHIBIT C - Page 1



investors in the area where the Mortgaged Property is located or on direction of
the Purchaser. If the Assignment of Mortgage is to be recorded, the Mortgage
shall be assigned to the Purchaser. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in blank. If the
Mortgage Loan was acquired by the Company in a merger, the Assignment of
Mortgage must be made by "[Company], successor by merger to [name of
predecessor]." If the Mortgage Loan was acquired or originated by the Company
while doing business under another name, the Assignment of Mortgage must be by
"[Company], formerly know as [previous name]." Subject to the foregoing and
where permitted under the applicable laws of the jurisdiction wherein the
Mortgaged property is located, such Assignments of Mortgage may be made by
blanket assignments for Mortgage Loans secured by the Mortgaged Properties
located in the same county.

      (f)   Originals or certified true copies of documents sent for recordation
of all intervening assignments of the Mortgage with evidence of recording
thereon, or if any such intervening assignment has not been returned from the
applicable recording office or has been lost or if such public recording office
retains the original recorded assignments of mortgage, the Company shall deliver
or cause to be delivered to the Custodian, a photocopy of such intervening
assignment, together with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of the Company stating that such
intervening assignment of mortgage has been dispatched to the appropriate public
recording office for recordation and that such original recorded intervening
assignment of mortgage or a copy of such intervening assignment of mortgage
certified by the appropriate public recording office or by the title insurance
company that issued the title policy to be a true and complete copy of the
original recorded intervening assignment of mortgage will be promptly delivered
to the Custodian upon receipt thereof by the Company; or (ii) in the case of an
intervening assignment where a public recording office retains the original
recorded intervening assignment or in the case where an intervening assignment
is lost after recordation in a public recording office, a copy of such
intervening assignment certified by such public recording office to be a true
and complete copy of the original recorded intervening assignment.

      (g)   The original PMI Policy or certificate of insurance, where required
pursuant to the Agreement.

      (h)   The original mortgagee policy of title insurance or evidence of
title.

      (i)   Any security agreement, chattel mortgage or equivalent executed in
connection with the Mortgage.

      (j)   Original power of attorney, if applicable

With respect to each Mortgage Loan, the Mortgage File shall include each of the
following items to the extent in the possession of the Company or in the
possession of the Company's agent(s):

      (a)   The original hazard insurance policy and, if required by law, flood
insurance policy, in accordance with Section 4.10 of the Agreement.

      (b)   Residential loan application.


                               EXHIBIT C - Page 2



      (c)   Mortgage Loan closing statement.

      (d)   Verification of employment and income, unless originated under the
Company's Limited Documentation program, Fannie Mae Timesaver Plus.

      (e)   Verification of acceptable evidence of source and amount of down
payment.

      (f)   Credit report on the Mortgagor.

      (g)   Residential Appraisal report.

      (h)   Photograph of the Mortgaged Property.

      (i)   Survey of the Mortgaged Property, if required by the title company
or applicable law.

      (j)   Copy of each instrument necessary to complete identification of any
exception set forth in the exception schedule in the title policy, i.e. map or
plat, restrictions, easements, sewer agreements, home association declarations,
etc.

      (k)   All required disclosure statements.

      (l)   If available, termite report, structural engineer's report, water
potability and septic certification.

      (m)   Sales contract, if applicable.

      (n)   Evidence of payment of taxes and insurance premiums, insurance claim
files, correspondence, current and historical computerized data files, and all
other processing, underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are required to document
the Mortgage Loan or to service the Mortgage Loan.

      (o)   Amortization schedule, if available.

      (p)   Payment history for any Mortgage Loan that has been closed for more
than 90 days.

      In the event an Officer's Certificate of the Company is delivered to the
Custodian because of a delay caused by the public recording office in returning
any recorded document, the Company shall deliver to the Custodian, within 240
days of the Closing Date, an Officer's Certificate which shall (i) identify the
recorded document, (ii) state that the recorded document has not been delivered
to the Custodian due solely to a delay caused by the public recording office,
(iii) state the amount of time generally required by the applicable recording
office to record and return a document submitted for recordation, and (iv)
specify the date the applicable recorded document will be delivered to the
Custodian. The Company shall be required to deliver to the Custodian the
applicable recorded document by the date specified in (iv) above. An extension
of the date specified in (iv) above may be requested form the Purchaser, which
consent shall not be unreasonably withheld.


                               EXHIBIT C - Page 3



                                    EXHIBIT D

                             UNDERWRITING GUIDELINES


                               EXHIBIT D - Page 1



                                    EXHIBIT E

                   FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT

On this _____ day of __________ 20___, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, _______________________
(the "Seller") as the Seller under that certain Master Mortgage Loan Purchase
Agreement, ("Purchase Agreement") and as the Company under that certain Master
Seller's Warranties and Servicing Agreement (the "Servicing Agreement") each
dated as of _______________, 20___, (collectively, the "Agreements") does hereby
sell, transfer, assign, set over and convey to ___________________________ as
the Purchaser (the "Purchaser") under the Purchase Agreement, and Purchaser
hereby accepts from Seller, without recourse, but subject to the terms of the
Agreements, all right, title and interest of, in and to each of the Mortgage
Loans listed on the related Mortgage Loan Schedule attached hereto as Exhibit A,
together with the Mortgage Files and all rights and obligations arising under
the documents contained therein. Pursuant to Section 2.03 of the Servicing
Agreement, the Seller has delivered to the Custodian the documents required to
be delivered under the Agreements for each Mortgage Loan to be purchased. The
Servicing Files retained by the Seller pursuant to Section 2.01 of the Servicing
Agreement shall be appropriately marked to clearly reflect the sale of the
related Mortgage Loans to the Purchaser.

Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Agreements.


___________________________                  ___________________________________
PURCHASER                                    COMPANY


By: __________________________________       By: _______________________________

Name: ________________________________       Name: _____________________________

Title: _______________________________       Title: ____________________________


                               EXHIBIT E - Page 1



                                    EXHIBIT F

                       FORM OF SARBANES-OXLEY CERTIFICATE

      I, __________________________, certify to ____________________________,
and its officers, directors, agents and affiliates (the "[ ]") , and with the
knowledge and intent that they will rely upon this certification, that:

      (i)   Based on my knowledge, the information relating to the Mortgage
            Loans and the servicing thereof submitted by the Servicer to the [ ]
            which is used in connection with preparation of the reports on Form
            8-K and the annual report on Form 10-K filed with the SEC with
            respect to the Securitization, taken as a whole, does not contain
            any untrue statement of a material fact or omit to state a material
            fact necessary to make the statements made, in light of the
            circumstances under which such statements were made, not misleading
            as of the date of this certification;

      (ii)  The servicing information required to be provided to the [ ] by the
            Servicer under the [applicable servicing agreement] has been
            provided to the [ ];

      (iii) I am responsible for reviewing the activities performed by the
            Servicer under the [applicable servicing agreement] and based upon
            the review required by the [applicable servicing agreement], and
            except as disclosed in the Annual Statement of Compliance, the
            Annual Independent Public Accountant's Servicing Report and all
            servicing reports, officer's certificates and other information
            relating to the servicing of the Mortgage Loans submitted to the
            [ ], the Servicer has, as of the date of this certification,
            fulfilled its obligations under the [applicable servicing
            agreement];

      (iv)  I have disclosed to the [ ] all significant deficiencies relating to
            the Servicer's compliance with the minimum servicing standards in
            accordance with a review conducted in compliance with the Uniform
            Single Attestation Program for Mortgage Bankers or similar standard
            as set forth in the [applicable servicing agreement]; and

      (v)   The Servicer shall indemnify and hold harmless the [ ] and its
            officers, directors, agents and affiliates from and against any
            losses, damages, penalties, fines, forfeitures, reasonable legal
            fees and related costs, judgments and other costs and expenses
            arising out of or based upon a breach by the Servicer or any of its
            officers, directors, agents or affiliates of its obligations or
            representations under this Certification or the negligence, bad
            faith or willful misconduct of the Servicer in connection therewith.
            If the indemnification provided for herein is unavailable or
            insufficient to hold harmless the [ ], then the Servicer agrees that
            it shall contribute to the amount paid or payable by the [ ] as a
            result of the losses, claims, damages or liabilities of the [ ] in
            such proportion as is appropriate to reflect the relative fault of
            the [ ] on the one hand and the Servicer on the other in connection
            with a breach of the Servicer's obligations under this Certification
            or the Servicer's negligence, bad faith or willful misconduct in
            connection therewith.


                               EXHIBIT F - Page 1



Capitalized words not otherwise defined herein have the meaning assigned to them
in the Master Seller's Warranties and Servicing Agreement dated January 1, 2003
by and between Banc of America Mortgage Capital Corporation, as Purchaser and
the Servicer.

      IN WITNESS WHEREOF, I have hereunto signed by name and affixed the seal of
the Company.

Dated:  _________________                    By: _______________________________

                                             Name: _____________________________

                                             Title: ____________________________


                               EXHIBIT F - Page 2



                                    EXHIBIT G

                ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT

                                                              ____________, 20__

      ASSIGNMENT AND ASSUMPTION, dated ___________________, 20__ among
_________________, a _________________ corporation having an office at
_________________ ("Assignor") and _________________, having an office at
_________________ ("Assignee") and Wells Fargo Home Mortgage, Inc. (the
"Company"), having an office at 1 Home Campus, Des Moines, IA 50328-0001:

      For and in consideration of the sum of one dollar ($1.00) and other
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:

      1.    With respect to the mortgage loans listed on Exhibit A hereto (the
"Mortgage Loans"), the Assignor hereby grants, transfers and assigns to the
Assignee all of the right, title and interest of the Assignor, as Purchaser, in,
to and under that certain Master Seller's Warranties and Servicing Agreement
(the "Warranties and Servicing Agreement"), dated as of January 1, 2003, the
related Master Mortgage Loan Purchase Agreement (the "Purchase Agreement"),
dated January 1, 2003 and that certain Assignment and Conveyance Agreement,
dated as of January 14, 2003 (together with the Warranties and Servicing
Agreement and the Purchase Agreement, the "Sale Agreement"), each by and between
the Assignor and the Company, the Mortgage Loans delivered thereunder by the
Company to the Assignor, and that certain Custodial Agreement (the "Custodial
Agreement"), dated as of January 1, 2003, by and between the Purchaser and Wells
Fargo Bank Minnesota, National Association (the "Custodian").

      2.    The Assignor warrants and represents to, and covenants with, the
Assignee that:

            a.    The Assignor is the lawful owner of the Mortgage Loans with
the full right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;

            b.    The Assignor has not received notice of, and has no knowledge
of, any offsets, counterclaims or other defenses available to the Company with
respect to the Seller's Warranties and Servicing Agreement or the Mortgage
Loans;

            c.    The Assignor has not waived or agreed to any waiver under, or
agreed to any amendment or other modification of, the Seller's Warranties and
Servicing Agreement, the Custodial Agreement or the Mortgage Loans, including
without limitation the transfer of the servicing obligations under the Seller's
Warranties and Servicing Agreement. The Assignor has no knowledge of, and has
not received notice of, any waivers under or amendments or other modifications
of, or assignments of rights or obligations under, the Seller's Warranties and
Servicing Agreement or the Mortgage Loans; and

            d.    Neither the Assignor nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans,
any interest in the


                               EXHIBIT G - Page 1



Mortgage Loans or any other similar security to, or solicited any offer to buy
or accept a transfer, pledge or other disposition of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security from, or otherwise
approached or negotiated with respect to the Mortgage Loans, any interest in the
Mortgage Loans or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action which would constitute a distribution of the
Mortgage Loans under the Securities Act of 1933 (the "33 Act") or which would
render the disposition of the Mortgage Loans a violation of Section 5 of the 33
Act or require registration pursuant thereto.

      3.    That Assignee warrants and represent to, and covenants with, the
Assignor and the Company pursuant to Section 12.11 of the Seller's Warranties
and Servicing Agreement that:

            a.    The Assignee agrees to be bound, as Purchaser, by all of the
terms, covenants and conditions of the Seller's Warranties and Servicing
Agreement, the Mortgage Loans and the Custodial Agreement, and from and after
the date hereof, the Assignee assumes for the benefit of each of the Company and
the Assignor all of the Assignor's obligations as purchaser thereunder;

            b.    The Assignee understands that the Mortgage Loans have not been
registered under the 33 Act or the securities laws of any state;

            c.    The purchase price being paid by the Assignee for the Mortgage
Loans are in excess of $250,000.00 and will be paid by cash remittance of the
full purchase price within 60 days of the sale;

            d.    The Assignee is acquiring the Mortgage Loans for investment
for its own account only and not for any other person. In this connection,
neither the Assignee nor any person authorized to act therefor has offered to
sell the Mortgage Loans by means of any general advertising or general
solicitation within the meaning of Rule 502(c) of US Securities and Exchange
Commission Regulation D, promulgated under the 1933 Act;

            e.    The Assignee considers itself a substantial sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Mortgage Loans;

            f.    The Assignee has been furnished with all information regarding
the Mortgage Loans that it has requested from the Assignor or the Company;

            g.    Neither the Assignee nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security to, or
solicited any offer to buy or accepted a transfer, pledge or other disposition
of the Mortgage Loans, any interest in the Mortgage Loans or any other similar
security from, or otherwise approached or negotiated with respect to the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
with, any person in any manner which would constitute a distribution of the
Mortgage Loans under the 33 Act or which would render the disposition of the
Mortgage Loans a violation of Section 5 of the 33 Act or require registration
pursuant thereto, nor will it act, nor has it authorized or will it authorize
any person to act, in such manner with respect to the Mortgage Loans; and


                               EXHIBIT G - Page 2



            h.    Either (1) the Assignee is not an employee benefit plan
("Plan") within the meaning of section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or a plan (also "Plan") within the
meaning of section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code"), and
the Assignee is not directly or indirectly purchasing the Mortgage Loans on
behalf of, investment manager of, as named fiduciary of, as Trustee of, or with
assets of, a Plan; or (2) the Assignee's purchase of the Mortgage Loans will not
result in a prohibited transaction under section 406 of ERISA or section 4975 of
the Code.

            i.    The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans and the Seller's Warranties and
Servicing Agreements is:


                 Attention:

      The Assignee's wire transfer instructions for purposes of all remittances
and payments related to the Mortgage Loans and the Seller's Warranties and
Servicing Agreement is:


                 Attention:

      4.    From and after the date hereof, the Company shall note the transfer
of the Mortgage Loans to the Assignee in its books and records, the Company
shall recognize the Assignee as the owner of the Mortgage Loans and the Company
shall service the Mortgage Loans for the benefit of the Assignee pursuant to the
Seller's Warranties and Servicing Agreement, the terms of which are incorporated
herein by reference. It is the intention of the Assignor, the Company and the
Assignee that the Seller's Warranties and Servicing Agreement shall be binding
upon and inure to the benefit of the Company and the Assignee and their
respective successors and assigns.

                               [Signatures Follow]


                               EXHIBIT G - Page 3




      IN WITNESS WHEREOF, the parties have caused this Assignment, Assumption
and Recognition Agreement to be executed by their duly authorized officers as of
the date first above written.

_______________________________                _____________________________
ASSIGNOR                                       ASSIGNEE


By: ____________________________________       By: _____________________________

Name: __________________________________       Name: ___________________________

Title: _________________________________       Title: __________________________

Tax Payer Identification No.:                  Tax Payer Identification No.:

________________________________________       _________________________________


Acknowledged this ___ day of ________________, 20___

WELLS FARGO HOME MORTGAGE, INC.
Company


By:
Name:
Its:


                               EXHIBIT G - Page 4