Filed Pursuant to Rule 424(b)(5)
                                               Registration File No.: 333-109307

          Prospectus supplement to prospectus dated November 22, 2004


                                 $1,109,051,000
                                 (APPROXIMATE)


                      ASSET BACKED SECURITIES CORPORATION
                                   Depositor


                         SAXON MORTGAGE SERVICES, INC.
                                   Servicer


                      ASSET BACKED SECURITIES CORPORATION
                    HOME EQUITY LOAN TRUST, SERIES 2005-HE1
                                    Issuer


            ASSET BACKED PASS-THROUGH CERTIFICATES, SERIES 2005-HE1

THE TRUST

The trust will consist primarily of a pool of subprime, fully amortizing and
balloon, fixed-rate and adjustable-rate mortgage loans secured by first and
second liens on residential properties.


OFFERED CERTIFICATES

The following classes of certificates are offered pursuant to this prospectus
supplement:

    o 6 classes of Class A Certificates and

    o 10 classes of Offered Mezzanine Certificates.


CREDIT ENHANCEMENT

Credit enhancement for all of these certificates will be provided by excess
interest, overcollateralization and subordination.

-------------------------------------------------------------------------------
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE S-13 IN THIS
PROSPECTUS SUPPLEMENT. THIS PROSPECTUS SUPPLEMENT MAY BE USED TO OFFER AND SELL
THE CERTIFICATES OFFERED HEREBY ONLY IF ACCOMPANIED BY THE PROSPECTUS.
-------------------------------------------------------------------------------

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

THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

Credit Suisse First Boston LLC will buy the Class A and Offered Mezzanine
Certificates from the depositor at a price equal to approximately 99.75% of the
aggregate certificate principal balance of the offered certificates, before
deducting expenses estimated to be approximately $625,000. The underwriter will
sell the offered certificates from time to time in negotiated transactions at
varying prices to be determined at the time of sale.

Delivery of the offered certificates will be made in book-entry form through
the facilities of The Depository Trust Company, Clearstream Banking societe
anonyme Luxembourg and the Euroclear System on or about February 4, 2005.


                          CREDIT SUISSE FIRST BOSTON

February 1, 2005




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

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. YOU SHOULD NOT
ASSUME THAT THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IS
ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS DOCUMENT.

We provide information to you about the offered certificates in two separate
documents that progressively provide more detail:

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

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

This prospectus supplement and the accompanying prospectus include
cross-references to captions in these materials where you can find further
related discussions. The following table of contents provides pages on which
these captions are located. You can find an index of defined terms on page S-160
of this prospectus supplement.

We have filed preliminary information regarding the trust's assets and the
certificates with the Securities and Exchange Commission. The information
contained in this document supersedes all of that preliminary information, which
was prepared by the underwriter for prospective investors.


                                      S-2




                                TABLE OF CONTENTS

                              PROSPECTUS SUPPLEMENT

                                                                            Page
                                                                            ----

SUMMARY......................................................................S-4

RISK FACTORS................................................................S-13

THE MORTGAGE POOL...........................................................S-23

THE ORIGINATORS.............................................................S-72

SERVICER....................................................................S-84

DESCRIPTION OF THE CERTIFICATES.............................................S-87

THE POOLING AGREEMENT......................................................S-118

YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS..............................S-127

USE OF PROCEEDS............................................................S-152

FEDERAL INCOME TAX CONSEQUENCES............................................S-153

ERISA CONSIDERATIONS.......................................................S-156

LEGAL INVESTMENT CONSIDERATIONS............................................S-157

METHOD OF DISTRIBUTION.....................................................S-157

LEGAL MATTERS..............................................................S-158

RATINGS....................................................................S-158

INDEX OF DEFINED TERMS.....................................................S-160

ANNEX I......................................................................I-1

ANNEX II....................................................................II-1


                                      S-3


                                     SUMMARY

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

o    THIS SUMMARY PROVIDES AN OVERVIEW OF CERTAIN CALCULATIONS, CASH FLOW
     PRIORITIES AND OTHER INFORMATION TO AID YOUR UNDERSTANDING AND IS QUALIFIED
     BY THE FULL DESCRIPTION OF THESE CALCULATIONS, CASH FLOW PRIORITIES AND
     OTHER INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
     PROSPECTUS. SOME OF THE INFORMATION CONSISTS OF FORWARD-LOOKING STATEMENTS
     RELATING TO FUTURE ECONOMIC PERFORMANCE OR PROJECTIONS AND OTHER FINANCIAL
     ITEMS. FORWARD-LOOKING STATEMENTS ARE SUBJECT TO A VARIETY OF RISKS AND
     UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER FROM THE PROJECTED
     RESULTS. THOSE RISKS AND UNCERTAINTIES INCLUDE, AMONG OTHERS, GENERAL
     ECONOMIC AND BUSINESS CONDITIONS, REGULATORY INITIATIVES AND COMPLIANCE
     WITH GOVERNMENTAL REGULATIONS, AND VARIOUS OTHER MATTERS, ALL OF WHICH ARE
     BEYOND OUR CONTROL. ACCORDINGLY, WHAT ACTUALLY HAPPENS MAY BE VERY
     DIFFERENT FROM WHAT WE PREDICT IN OUR FORWARD-LOOKING STATEMENTS.



Issuer...............................................        Asset Backed Securities Corporation Home Equity
                                                             Loan Trust, Series 2005-HE1.

Securities...........................................        Asset Backed Pass-Through Certificates, Series 2005-HE1.

Depositor............................................        Asset Backed Securities Corporation.

Seller...............................................        DLJ Mortgage Capital, Inc.

Servicer.............................................        Saxon Mortgage Services, Inc.

Originators..........................................        New Century Mortgage Corporation and WMC Mortgage Corp.

Trustee..............................................        U.S. Bank National Association.

Yield Maintenance Agreement
    Counterparty.....................................        Credit Suisse First Boston International.

Mortgage Pool........................................        On the closing date the trust will acquire
                                                             approximately 6,066 fixed-rate and adjustable-rate
                                                             mortgage loans (which are referred to in this
                                                             prospectus supplement as the mortgage loans) with an
                                                             aggregate principal balance of approximately
                                                             $1,139,825,654 as of the cut-off date, secured by first
                                                             and second liens on residential properties.
                                                             Approximately 3,008 and 3,058 of the mortgage loans
                                                             with an aggregate principal balance of approximately
                                                             $569,651,444 and $570,174,210 as



                                      S-4




                                                             of the cut-off date were originated or acquired by New
                                                             Century Mortgage Corporation and WMC Mortgage Corp.,
                                                             respectively.

Cut-off Date.........................................        February 1, 2005.

Closing Date.........................................        On or about February 4, 2005.

Distribution Date....................................        Beginning on March 25, 2005, and thereafter on the 25th
                                                             day of each month, or if the 25th day is not a business
                                                             day, on the next business day.

Determination Date...................................        The 15th day of the calendar month in which a
                                                             distribution date occurs or, if such 15th day is not a
                                                             business day, the business day immediately preceding
                                                             such 15th day.

Servicer Remittance Date.............................        The 21st day of each month or, if such 21st day is not
                                                             a business day, the business day immediately following
                                                             such 21st day.

Assumed Final Distribution Date......................        March 25, 2035.  The actual final distribution date
                                                             could be substantially earlier.

Form of offered certificates.........................        Book-entry.

Minimum denominations................................        With respect to all classes of offered certificates,
                                                             $25,000 and integral multiples of $1 in excess thereof.



                                      S-5


                                THE CERTIFICATES



                                                       PASS-
                            INITIAL PRINCIPAL         THROUGH              INITIAL RATING
        CLASS                  BALANCE(1)              RATE             (S&P/FITCH/MOODY'S/DBRS)         DESIGNATION
        -----               -----------------         -------           ------------------------         -----------

OFFERED
CERTIFICATES:
       A1                       $392,600,000        Floating(2)              AAA/AAA/Aaa/AAA                 Senior
       A2                        $98,200,000        Floating(2)              AAA/AAA/Aaa/AAA                 Senior
       A3                       $182,160,000        Floating(2)              AAA/AAA/Aaa/AAA                 Senior
       A4                       $102,000,000        Floating(2)              AAA/AAA/Aaa/AAA                 Senior
       A5                       $112,400,000        Floating(2)              AAA/AAA/Aaa/AAA                 Senior
       A6                        $15,382,000        Floating(2)              AAA/AAA/Aaa/AAA                 Senior
       M1                        $46,163,000        Floating(2)           AA+/AA+/Aa1/AA (high)            Mezzanine
       M2                        $35,335,000        Floating(2)                AA/AA/Aa2/AA                Mezzanine
       M3                        $21,657,000        Floating(2)            AA-/AA-/Aa3/AA (low)            Mezzanine
       M4                        $19,377,000        Floating(2)             A+/A+/A1/A (high)              Mezzanine
       M5                        $18,237,000        Floating(2)                  A/A/A2/A                  Mezzanine
       M6                        $17,667,000        Floating(2)              A-/A-/A3/A (low)              Mezzanine
       M7                        $14,248,000        Floating(2)         BBB+/BBB+/Baa1/BBB (high)          Mezzanine
       M8                        $12,538,000        Floating(2)              BBB/BBB/Baa2/BBB              Mezzanine
       M9                        $11,968,000        Floating(2)          BBB-/BBB-/Baa3/BBB (low)          Mezzanine
       M10                        $9,119,000        Floating(2)       BBB-/BBB-/Not Rated/BBB (low)        Mezzanine
                              --------------
Total Offered
Certificates:                 $1,109,051,000

NON-OFFERED
CERTIFICATES:

        M11                      $13,678,000        Floating(2)        BB+/BB+/Not Rated/BB (high)         Mezzanine
        X                        N/A(3)                 N/A                     Not Rated                 Subordinate
                                                                                                           Prepayment
        P                               $100           N/A(4)                   Not Rated                 Premium Only
        R                        N/A(5)                 N/A                     Not Rated                   Residual
                            ----------------
Total Non-Offered
Certificates:               $     13,678,100

TOTAL CERTIFICATES:           $1,122,729,100


(1)  The certificates are subject to a variance of no more than 5% prior to
     their issuance.

(2)  The pass-through rate on this class of certificates may change from
     distribution date to distribution date based on changes in the level of an
     index, is subject to a cap and will increase on the first distribution date
     after the servicer is first permitted to exercise the optional termination
     of the trust. See "Description of the Certificates--Pass-Through Rates" in
     this prospectus supplement.

(3)   These certificates will not have a certificate principal balance.

(4)   The Class P Certificates will not be entitled to distributions in respect
      of interest. The Class P Certificates will be entitled to all prepayment
      premiums or charges received in respect of the mortgage loans.

(5)   The Class R Certificates will not have a certificate principal balance and
      are the class of certificates representing the residual interests in the
      trust.


                                       S-6


         DESIGNATIONS

         Each class of certificates will have different characteristics, some of
which are reflected in the following general designations.

         o    Offered Certificates

         Class A Certificates and Offered Mezzanine Certificates.

         o    Class A Certificates

         Class A1 Certificates, Class A2 Certificates, Class A3 Certificates,
         Class A4 Certificates, Class A5 Certificates and Class A6 Certificates.

         o    Senior Certificates

         Class A Certificates.

         o    Mezzanine Certificates

         Class M1 Certificates, Class M2 Certificates, Class M3 Certificates,
         Class M4 Certificates, Class M5 Certificates, Class M6 Certificates,
         Class M7 Certificates, Class M8 Certificates, Class M9 Certificates,
         Class M10 Certificates and Class M11 Certificates.

         o    Offered Mezzanine Certificates

         Mezzanine Certificates, other than the Class M11 Certificates.

         o    LIBOR Certificates

         Class A Certificates and Mezzanine Certificates.

         o    Subordinate Certificates

         Mezzanine Certificates, Class X Certificates and Class R Certificates.

         o    Residual Certificates

         Class R Certificates.

         o    Book-Entry Certificates

         Class A Certificates and Mezzanine Certificates.

         o    Physical Certificates

         Class X Certificates, Class P Certificates and Class R Certificates.

         MORTGAGE LOANS

         On the closing date the trust will acquire a mortgage pool that
generally consists of first and second lien, fully amortizing and balloon,
fixed-rate and adjustable-rate mortgage loans, referred to in this prospectus
supplement as the mortgage loans.

         The mortgage loans will be divided into two subgroups: subgroup 1,
which will consist of mortgage loans that were originated or acquired by New
Century Mortgage Corporation or WMC Mortgage Corp. and have original principal
balances that conform to Fannie Mae or Freddie Mac guidelines; and subgroup 2,
which will consist of mortgage loans that were originated or acquired by either
New Century Mortgage Corporation or WMC Mortgage Corp. and have original
principal balances that may or may not conform to Fannie Mae or Freddie Mac
guidelines.

         The mortgage loans in the aggregate have the following characteristics
(with all figures being approximate):

Mortgage Loans with Prepayment Premiums
(by principal balance):                          72.82%

Range of Original Term                       120 months
to Stated Maturity:                                  to
                                             360 months

Weighted Average Remaining
Term to Stated Maturity:                     347 months

Range of Original                               $14,900
Principal Balances:                                  to
                                             $1,000,000


                                      S-7


Average Original
Principal Balance:                             $188,229

Range of Outstanding                            $14,690
Principal Balances:                                  to
                                               $998,651

Average Outstanding
Principal Balance:                             $187,904

Current Range of                                 3.375%
Loan Rates:                                          to
                                                13.000%

Current Weighted Average
Loan Rate:                                       7.005%

Current Weighted Average
Net Loan Rate:                                   6.505%

Weighted Average Gross
Margin of the
Adjustable-Rate Mortgage
Loans:                                           5.819%

Weighted Average
Maximum Loan Rate
of the Adjustable-Rate
Mortgage Loans:                                 13.520%

Weighted Average Initial
Periodic Rate Adjustment Cap
of the Adjustable-Rate
Mortgage Loans:                                  1.818%

Weighted Average Time
Until Next Adjustment Date
of the Adjustable-Rate
Mortgage Loans:                               23 months

First Lien Mortgage Loans:                       93.14%

Geographic Concentrations
in Excess of 5%:
California                                       48.60%
New York                                          6.50%

Fixed-rate Mortgage                              18.04%
Loans:

PAYMENTS ON THE OFFERED CERTIFICATES

         Interest Payments

         The initial pass-through rates for the LIBOR Certificates will be
calculated at the per annum rate of one-month LIBOR plus the related margin
indicated below, subject to the limitations described in this prospectus
supplement.

         In addition, if the servicer fails to exercise the option to terminate
the trust on the earliest permitted date as described below under "--Optional
Termination", the pass-through rates on the LIBOR Certificates will then
increase to the per annum rate of one-month LIBOR plus the related "post-call"
margin indicated below, subject to the limitations described in this prospectus
supplement.

                            Initial      Post-Call
Class of Certificates       Margin        Margin
---------------------       --------     ---------

Class A1                   0.3025%       0.6050%

Class A2                   0.3400%       0.6800%

Class A3                   0.2900%       0.5800%

Class A4                   0.1500%       0.3000%

Class A5                   0.2800%       0.5600%

Class A6                   0.3700%       0.7400%

Class M1                   0.5000%       0.7500%

Class M2                   0.5300%       0.7950%

Class M3                   0.5800%       0.8700%

Class M4                   0.8500%       1.2750%

Class M5                   0.9000%       1.3500%

Class M6                   1.0000%       1.5000%

Class M7                   1.5500%       2.3250%

Class M8                   1.6500%       2.4750%

Class M9                   2.3500%       3.5250%

Class M10                  3.0000%       4.5000%

Class M11                  3.0000%       4.5000%


                                      S-8



We refer you to "Description of the Certificates --Pass-Through Rates" in this
prospectus supplement for additional information.

         Interest payable on the certificates accrues during an accrual period.
The accrual period for the LIBOR Certificates for any distribution date is the
period from the previous distribution date or, in the case of the first accrual
period, from the closing date, to the day prior to the current distribution
date. Interest will be calculated for the LIBOR Certificates on the basis of the
actual number of days in the accrual period, based on a 360-day year.

         On each distribution date, you will be entitled to (i) interest at the
applicable pass-through rate on your outstanding certificate principal balance
immediately prior to that distribution date and (ii) any interest due on a prior
distribution date that was not paid plus interest on such amount of unpaid
interest.

         Yield Maintenance Agreements

         The trust will enter into three yield maintenance agreements between
the trustee and the counterparty described in this prospectus supplement on the
closing date. On any distribution date on or after the April 2005 distribution
date and on or prior to the distribution date in June 2008 payments may be made
to the trustee under a yield maintenance agreement. Generally, payments made to
the trustee under a yield maintenance agreement will be deposited into a reserve
fund account (which is referred to in this prospectus supplement as the Net WAC
Reserve Fund). Amounts on deposit in the Net WAC Reserve Fund will be available
to make distributions on the related LIBOR Certificates in respect of basis risk
shortfall amounts, to the limited extent described in this prospectus
supplement.

We refer you to "Descriptions of the Certificates--Distributions of
Interest--The Yield Maintenance Agreements" in this prospectus supplement for
more detail.

         Principal Payments

         Principal will be distributed to holders of the LIBOR Certificates on
each distribution date in the amounts described in this prospectus supplement
under "Description of the Certificates--Allocation of Available Funds."

         The amount of principal distributable on the LIBOR Certificates on any
distribution date will be determined by:

o    funds actually received or advanced on the mortgage loans that are
     available to make principal distributions on the certificates; and

o    the amount of excess interest available to pay principal on the LIBOR
     Certificates as described below.

         The manner of distributing principal among the classes of LIBOR
Certificates will differ, as described in this prospectus supplement, depending
generally upon whether a distribution date occurs before the distribution date
in March 2008 or on or after that date, and depending upon the loss and
delinquency performance of the mortgage loans.

We refer you to "Description of the Certificates" in this prospectus supplement
for additional information.

ADVANCES

         The servicer will make cash advances to cover delinquent payments of
principal and interest on the mortgage loans to the extent the servicer
reasonably believes that the cash advances are recoverable from future payments
on those mortgage loans. In the event that a balloon loan is not paid in full on
its maturity date, the servicer will be obligated to make advances with respect
to the assumed monthly payments that would have been due on such balloon loan
based upon the original amortization schedule for the loan, unless the servicer
determines that the advance would not be recoverable. In no event will the
servicer be obligated to advance the balloon payment due on


                                      S-9



any balloon loan. Advances are intended to maintain a regular flow of scheduled
interest and principal payments on the certificates and are not intended to
guarantee or insure against losses.

We refer you to "The Pooling Agreement--Advances" in this prospectus supplement
for additional information.

OPTIONAL TERMINATION

         The servicer may purchase all of the mortgage loans, together with any
real estate properties in respect of such mortgage loans acquired by the trust,
and retire the certificates when the current principal balance of the mortgage
loans is equal to or less than 10% of the aggregate principal balance of the
mortgage loans as of the cut-off date.

We refer you to "The Pooling Agreement--Termination" and "Description of the
Certificates--Pass-Through Rates" in this prospectus supplement for additional
information.

CREDIT ENHANCEMENT

1.       SUBORDINATION

         The rights of the holders of the Subordinate Certificates to receive
distributions will be subordinated, to the extent described in this prospectus
supplement, to the rights of the holders of the Class A Certificates.

         In addition, the rights of the holders of the Mezzanine Certificates
with a lower payment priority will be subordinated to the rights of holders of
the Mezzanine Certificates with a higher payment priority, in each case, to the
extent described in this prospectus supplement.

         Subordination is intended to enhance the likelihood of regular
distributions of interest and principal on the more senior certificates and to
afford those certificates protection against realized losses on the mortgage
loans.

We refer you to "Description of the Certificates--Credit Enhancement" in this
prospectus supplement for additional information.

2.       OVERCOLLATERALIZATION

         As of the closing date, the aggregate principal balance of the mortgage
loans as of the cut-off date will exceed the aggregate principal balance of the
LIBOR Certificates in an amount equal to approximately 1.50% of the aggregate
principal balance of the mortgage loans as of the cut-off date. This feature is
referred to as overcollateralization. The mortgage loans owned by the trust bear
interest each month in an amount that in the aggregate is expected to exceed the
amount needed to pay monthly interest on the LIBOR Certificates and to pay the
fees and expenses of the trust. This excess interest will be applied, if
necessary, to pay principal on the LIBOR Certificates in order to maintain the
required level of overcollateralization. The required level of
overcollateralization may decrease over time. We cannot assure you that
sufficient excess interest will be generated by the mortgage loans to maintain
the required level of overcollateralization.

We refer you to "Description of the Certificates--Overcollateralization
Provisions" in this prospectus supplement for additional information.

3.       EXCESS INTEREST

         The mortgage loans bear interest each month that in the aggregate is
expected to exceed the amount needed to pay monthly interest on the LIBOR
Certificates and to pay the fees and expenses of the trust. The excess interest
from the mortgage loans each month will be available to absorb realized losses
on the mortgage loans and to maintain overcollateralization at required levels
as described in the pooling and servicing agreement.

We refer you to "Description of the Certificates--Allocation of Available Funds"
and "--Overcollateralization Provisions" in this


                                      S-10


prospectus supplement for additional information.

4.       ALLOCATION OF LOSSES

         If on any distribution date there is not sufficient excess interest or
overcollateralization to absorb realized losses on the mortgage loans as
described under "Description of the Certificates--Overcollateralization
Provisions" in this prospectus supplement, then realized losses on the mortgage
loans will be allocated to the Mezzanine Certificates and to the limited extent
described below, the Class A2 Certificates. If realized losses on the mortgage
loans are allocated to the Mezzanine Certificates, they will be allocated first,
to the Class M11 Certificates, second, to the Class M10 Certificates, third, to
the Class M9 Certificates, fourth, to the Class M8 Certificates, fifth, to the
Class M7 Certificates, sixth, to the Class M6 Certificates, seventh, to the
Class M5 Certificates, eighth, to the Class M4 Certificates, ninth, to the Class
M3 Certificates, tenth, to the Class M2 Certificates and eleventh, to the Class
M1 Certificates. As further described herein, after the aggregate certificate
principal balance of the Mezzanine Certificates is reduced to zero, realized
losses on the mortgage loans in subgroup 1 may be allocated to the Class A2
Certificates. The pooling and servicing agreement does not permit the allocation
of realized losses on the mortgage loans to the Class A1, Class A3, Class A4,
Class A5, Class A6 or Class P Certificates; however, investors in the Class A1,
Class A3, Class A4, Class A5 and Class A6 Certificates should realize that under
certain loss scenarios there will not be enough principal and interest on the
mortgage loans on a distribution date to pay the Class A1, Class A3, Class A4,
Class A5 and Class A6 Certificates all interest and principal amounts to which
those certificates are then entitled.

         Any realized losses allocated to a class of Mezzanine Certificates or
the Class A2 Certificates will generally cause a permanent reduction to its
certificate principal balances. However, the amount of any realized losses
allocated to the Mezzanine Certificates or the Class A2 Certificates may be
reimbursed to the holders of these certificates according to the priorities set
forth under "Description of the Certificates--Overcollateralization Provisions"
in this prospectus supplement.

We refer you to "Description of the Certificates --Allocation of Losses;
Subordination" in this prospectus supplement for additional information.

TAX STATUS

         For federal income tax purposes, the trust (other than the Yield
Maintenance Agreements and the Net WAC Reserve Fund) will be treated as multiple
real estate mortgage investment conduits (REMICs). The LIBOR Certificates will
represent regular interests in the master REMIC. The LIBOR Certificates will
generally be treated as representing ownership of debt for federal income tax
purposes. Holders of these certificates will be required to include as income
all interest and original issue discount, if any, on such certificates in
accordance with the accrual method of accounting regardless of the
certificateholders' usual methods of accounting. The LIBOR Certificates may be
treated as having an ownership interest in the Yield Maintenance Agreements and
the Net WAC Reserve Fund. For federal income tax purposes, the Class R
Certificates will represent ownership of residual interests in the REMICs.

We refer you to "Federal Income Tax Consequences" in this prospectus supplement
and "Material Federal Income Tax Considerations" in the prospectus for
additional information.

ERISA CONSIDERATIONS

         We expect that the offered certificates may be purchased by or with
plan assets of a pension or other employee benefit plan subject to the Employee
Retirement Income Security Act of 1974 or similar plans subject to Section 4975
of the Internal Revenue Code of 1986, as amended. A fiduciary of a benefit plan
must determine that the purchase of a certificate is consistent with its
fiduciary duties under


                                      S-11



applicable law and does not result in a nonexempt prohibited transaction under
applicable law.

We refer you to "ERISA Considerations" in this prospectus supplement and "ERISA
Considerations" in the prospectus for additional information.

LEGAL INVESTMENT

         The offered certificates will NOT constitute "mortgage related
securities" for purposes of the Secondary Mortgage Market Enhancement Act of
1984, as amended.

We refer you to "Legal Investment Considerations" in this prospectus supplement
and "Legal Investment" in the prospectus for additional information.


                                      S-12


                                  RISK FACTORS

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

THE UNDERWRITING STANDARDS OF THE ORIGINATORS ARE NOT AS STRINGENT AS THOSE OF
FANNIE MAE AND FREDDIE MAC, WHICH MAY RESULT IN LOSSES

         The originators' underwriting standards are primarily intended to
assess the value of the mortgaged property and to evaluate the adequacy of that
property as collateral for the mortgage loan and the applicant's credit standing
and ability to repay. The originators provide loans primarily to borrowers who
do not qualify for loans conforming to Fannie Mae and Freddie Mac guidelines but
who generally have equity in their property. While the primary consideration in
underwriting a mortgage loan is the value and adequacy of the mortgaged property
as collateral, the originators also consider, among other things, a mortgagor's
credit history, repayment ability and debt service-to-income ratio, as well as
the type and use of the mortgaged property. The originators' underwriting
standards do not prohibit a mortgagor from obtaining secondary financing at the
time of origination of the first lien, which secondary financing would reduce
the equity the mortgagor would otherwise have in the related mortgaged property
as indicated in the originators' loan-to-value ratio determination.

         The mortgage loans may have been made to mortgagors with imperfect
credit histories, ranging from minor delinquencies to bankruptcy or mortgagors
with relatively high ratios of monthly mortgage payments to income or relatively
high ratios of total monthly credit payments to income.

         As a result of these underwriting standards, the mortgage loans in the
mortgage pool are likely to experience rates of delinquency, foreclosure and
bankruptcy that are higher, and that may be substantially higher, than those
experienced by mortgage loans underwritten in a more traditional manner.

         Furthermore, changes in the values of mortgaged properties may have a
greater effect on the delinquency, foreclosure, bankruptcy and loss experience
of the mortgage loans in the mortgage pool than on mortgage loans originated in
a more traditional manner. We cannot assure you that the values of the related
mortgaged properties have remained or will remain at the levels in effect on the
dates of origination of the related mortgage loans.

THE BALLOON LOANS IN THE MORTGAGE POOL HAVE A GREATER DEGREE OF RISK OF DEFAULT

         Approximately 4.78% of the mortgage loans (by aggregate principal
balance of the mortgage loans as of the cut-off date) will not fully amortize
over their terms to maturity and, thus, will require principal payments at their
stated maturity, which may be substantially greater than the monthly payments
otherwise due on such mortgage loans (i.e., balloon payments). Mortgage loans
with balloon payments involve a greater degree of risk because the ability of a
mortgagor to make a balloon payment typically will depend on the mortgagor's
ability either to timely refinance the mortgage loan or to timely sell the
mortgaged property. The ability of a mortgagor to refinance the mortgage loan or
sell the related mortgaged property will be affected by a number of factors,
including:

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

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

         o    prevailing general economic conditions; and


                                      S-13


         the availability of credit for residential properties generally.

UNPREDICTABILITY OF PREPAYMENTS MAY ADVERSELY AFFECT YOUR YIELD

         Borrowers may prepay their mortgage loans in whole or in part at any
time. We cannot predict the rate at which borrowers will repay their mortgage
loans. A prepayment of a mortgage loan will result in accelerated payments of
principal on the certificates.

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

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

         o    The rate of prepayments on the mortgage loans will be sensitive to
              prevailing interest rates. Generally, if interest rates decline,
              mortgage loan prepayments may increase due to the availability of
              fixed-rate mortgage loans or other adjustable-rate mortgage loans
              at lower interest rates. Conversely, if prevailing interest rates
              rise significantly, the prepayments on the mortgage loans may
              decrease.

         o    Approximately 71.49% of the subgroup 1 mortgage loans and
              approximately 74.41% of the subgroup 2 mortgage loans (in each
              case, by aggregate principal balance of the related subgroup as of
              the cut-off date) require the mortgagor to pay a charge in certain
              instances if the mortgagor prepays the mortgage loan during a
              stated period, which may be from inception to thirty-six months
              from the date of origination of that mortgage loan. A prepayment
              charge may or may not discourage a mortgagor from prepaying the
              mortgage loan during the applicable period.

         o    The originator or the seller, as applicable, may be required to
              purchase mortgage loans from the trust in the event certain
              breaches of representations and warranties occur and have not been
              cured. In addition, the servicer or the holder of the Class X
              Certificates, as applicable, has the option to purchase mortgage
              loans that become 90 days or more delinquent, subject to certain
              limitations and conditions described in this prospectus supplement
              and the pooling and servicing agreement. These purchases will have
              the same effect on the holders of the offered certificates as a
              prepayment of the mortgage loans.

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

         o    The overcollateralization provisions may result in an accelerated
              rate of principal distributions to holders of the more senior
              classes of offered certificates.

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

CREDIT ENHANCEMENT FOR THE OFFERED CERTIFICATES MAY BE INADEQUATE

         The credit enhancement features described in this prospectus supplement
are intended to enhance the likelihood that holders of the Class A Certificates,
and to a limited extent, the holders of the Mezzanine Certificates, will receive
regular payments of interest and principal, as applicable. However, we cannot
assure you that the applicable credit enhancement will adequately cover any
shortfalls in cash


                                      S-14


available to pay your certificates as a result of delinquencies or defaults on
the mortgage loans. If delinquencies or defaults occur on the mortgage loans,
neither the servicer nor any other entity will advance scheduled monthly
payments of interest and principal on delinquent or defaulted mortgage loans if
such advances are not likely to be recovered.

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

EXCESS INTEREST GENERATED BY THE MORTGAGE LOANS MAY BE INSUFFICIENT TO MAINTAIN
OVERCOLLATERALIZATION

         We expect the mortgage loans to generate more interest than is needed
to pay interest owed on the Class A Certificates and Mezzanine Certificates and
to pay certain fees and expenses of the trust. Any excess interest generated by
the mortgage loans will then be used to absorb losses that occur on the mortgage
loans. After these financial obligations of the trust are covered, the available
excess interest generated by the mortgage loans will be used, if necessary, to
maintain overcollateralization. We cannot assure you, however, that enough
excess interest will be generated to maintain the required level of
overcollateralization. The factors described below will affect the amount of
excess interest that the mortgage loans will generate.

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

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

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

         o    Approximately 81.96% of the mortgage loans, by aggregate principal
              balance of the mortgage loans as of the cut-off date, are
              adjustable-rate mortgage loans. The first adjustment of the loan
              rates for approximately 76.47%, 2.85% and 2.31% of the mortgage
              loans, by aggregate principal balance of the mortgage loans as of
              the cut-off date, will not occur for two, three or five years,
              respectively, after the date of origination. As a result, the
              pass-through rates on the LIBOR Certificates may increase relative
              to the interest rates on the mortgage loans, or may remain
              constant as the interest rates on the mortgage loans decline. In
              either case, this would require that more of the interest
              generated by the mortgage loans be applied to cover interest on
              the LIBOR Certificates.

MORTGAGE LOAN RATES MAY ADVERSELY AFFECT THE YIELD ON THE LIBOR CERTIFICATES

         The LIBOR Certificates accrue interest at pass-through rates based on
the one-month LIBOR index plus specified margins, but are subject to a limit.
The limit on the pass-through rates on the LIBOR Certificates is based on the
weighted average of the interest rates on the mortgage loans in the mortgage
pool net of certain fees and expenses of the trust. The loan rates on the
mortgage loans are either fixed-rate or adjust based on a one-month LIBOR index
or a six-month LIBOR index. All of the adjustable-rate mortgage loans have
periodic and maximum limitations on adjustments to their interest rates. As a
result,


                                      S-15


the LIBOR Certificates may accrue less interest than they would accrue if their
pass-through rates were based solely on the one-month LIBOR index plus the
specified margins.

         A variety of factors could limit the pass-through rates on the LIBOR
Certificates and may adversely affect the yields to maturity on the LIBOR
Certificates. Some of these factors are described below.

         o    The pass-through rates for the LIBOR Certificates adjust monthly
              while the loan rates on the mortgage loans either do not adjust or
              may adjust less frequently. Consequently, the cap on the LIBOR
              Certificates may limit increases in the pass-through rates for
              extended periods in a rising interest rate environment.

         o    Six-month LIBOR may change at different times and in different
              amounts than one-month LIBOR. As a result, it is possible that the
              six-month LIBOR rate applicable to the majority of the
              adjustable-rate mortgage loans may decline while the one-month
              LIBOR rate applicable to the LIBOR Certificates is stable or
              rising, increasing the likelihood that the pass-through rate
              applicable to one or more classes of LIBOR Certificates is the cap
              rate. It is also possible that the six-month LIBOR rate applicable
              to the majority of the adjustable-rate mortgage loans and the
              one-month LIBOR rate applicable to the LIBOR Certificates may
              decline or increase during the same period, but one-month LIBOR
              may decline more slowly or increase more rapidly.

         If the pass-through rates on the LIBOR Certificates are limited for any
distribution date, the resulting basis risk shortfalls may be recovered by the
holders of these classes of certificates on such distribution date or on future
distribution dates to the extent that there is sufficient cashflow generated
under the yield maintenance agreements and if there are available funds
remaining after distributions on the LIBOR Certificates and the payment of
certain fees and expenses of the trust. No assurances can be given that such
additional funds will be available. In addition, payments under the yield
maintenance agreements are subject to the credit risk of the counterparty.

THE MEZZANINE CERTIFICATES INVOLVE ADDITIONAL RISKS

         The weighted average lives of, and the yields to maturity on, the Class
M1, Class M2, Class M3, Class M4, Class M5, Class M6, Class M7, Class M8, Class
M9, Class M10 and Class M11 Certificates will be progressively more sensitive in
that order to the rate and timing of mortgagor defaults and the severity of
ensuing losses on the mortgage loans. If the actual rate and severity of losses
on the mortgage loans is higher than those assumed by an investor in such
certificates, the actual yield to maturity of those certificates may be lower
than the yield anticipated by such investor. The timing of losses on the
mortgage loans will also affect an investor's actual yield to maturity, even if
the rate of defaults and severity of losses over the life of the mortgage pool
are consistent with an investor's expectations. In general, the earlier a loss
occurs, the greater the effect on an investor's yield to maturity. Realized
losses on the mortgage loans, to the extent they exceed the amount of
overcollateralization following distributions of principal on the related
distribution date, will reduce the certificate principal balance of the class of
Mezzanine Certificates then outstanding with the lowest payment priority for
interest distributions. As a result of these reductions, less interest will
accrue on that class of Mezzanine Certificates than would otherwise be the case.
Once a realized loss is allocated to a Mezzanine Certificate, no amounts will
generally be distributable with respect to the written down amount, except as
described herein. However, the amount of any realized losses allocated to the
Mezzanine Certificates may be paid to the holders of the Mezzanine Certificates
according to the priorities set forth under "Description of the Certificates--
Overcollateralization Provisions" in this prospectus supplement. Unless the
aggregate certificate principal balance of the Class A Certificates has been
reduced to zero, the


                                      S-16


Mezzanine Certificates will not be entitled to any principal distributions until
at least March 2008 or a later date as provided in this prospectus supplement or
during any period in which delinquencies or losses on the mortgage loans exceed
certain levels. As a result, the weighted average lives of those certificates
will be longer than would otherwise be the case if distributions of principal
were allocated among all of the certificates at the same time. As a result of
the longer weighted average lives of such certificates, the holders of those
certificates have a greater risk of suffering a loss on their investments.

YIELDS ON THE MEZZANINE CERTIFICATES ARE SENSITIVE TO PREPAYMENTS AND LOSSES

         The multiple class structure of the Mezzanine Certificates causes the
yield of such classes to be particularly sensitive to changes in the rates of
prepayment of the mortgage loans. Because distributions of principal will be
made to such certificates according to the priorities described in this
prospectus supplement, the yield to maturity on such certificates will be
sensitive to the rates of prepayment on the mortgage loans experienced both
before and after the commencement of principal distributions on those classes.
The yield to maturity on those certificates will also be extremely sensitive to
losses due to defaults on the mortgage loans (and the timing thereof), to the
extent the losses are not covered by excess interest, overcollateralization or a
class of Mezzanine Certificates with a lower payment priority. Furthermore, as
described in this prospectus supplement, the timing of receipt of principal and
interest by the Mezzanine Certificates may be adversely affected by losses even
if such classes of certificates are subsequently reimbursed for such losses.

THE CLASS A2 CERTIFICATES INVOLVE ADDITIONAL RISKS

         After the Mezzanine Certificates are reduced to zero, realized losses
on the subgroup 1 mortgage loans, to the extent they exceed available excess
interest and overcollateralization on the related distribution date, will reduce
the certificate principal balance of the Class A2 Certificates. As a result of
any such reduction, less interest will accrue on that class than otherwise would
be the case. Once a realized loss is allocated to the Class A2 Certificates, no
amounts will be distributable with respect to the written down amount. However,
the amount of realized losses allocated to the Class A2 Certificates may be
reimbursed to the holders thereof according to the priorities set forth under
"Description of the Certificates--Overcollateralization Provisions" in this
prospectus supplement. In addition, the Class A2 Certificates will not receive
any distributions of principal on and after any such distribution date on which
they are allocated realized losses, unless the Class A1 Certificates have been
paid in full.

PREPAYMENT INTEREST SHORTFALLS AND RELIEF ACT SHORTFALLS MAY REDUCE YOUR YIELD

         When a mortgage loan is prepaid, the borrower is charged interest on
the amount prepaid only up to the date on which the prepayment is made, rather
than for an entire month. This may result in a shortfall in interest collections
available for payment on the next distribution date. The servicer is required to
cover a portion of the shortfall in interest collections that are attributable
to prepayments on the mortgage loans, but only up to the amount of the
servicer's servicing fee for the related calendar month.

         In addition, certain shortfalls in interest collections arising from
the application of the Servicemembers Civil Relief Act or comparable state laws
(together, for purposes of this prospectus supplement, the "Relief Act") may
occur (the "Relief Act Interest Shortfalls"). The Relief Act provides relief to
borrowers who enter active military service and to borrowers in reserve status
who are called to active duty after the origination of their mortgage loan.
These borrowers may not be charged interest on a mortgage loan in excess of 6%
per annum during the period of the borrower's active duty. These shortfalls are
not required to be paid by the borrower at any future time, will not be advanced
by the servicer, and, to the extent excess interest is insufficient, will reduce
accrued interest on each class of


                                      S-17


certificates on a pro rata basis. In addition, the Relief Act imposes certain
limitations that would impair the servicer's ability to foreclose on an affected
mortgage loan during the borrower's period of active service and, under some
circumstances, during an additional period thereafter.

         In response to the terrorist attacks in the United States on September
11, 2001 and the current situation in Iraq, the United States has initiated
military operations and has placed a substantial number of military reservists
and members of the National Guard on active duty status. It is possible that the
number of reservists and members of the National Guard placed on active duty
status in the near future may increase. These operations will increase the
likelihood that Relief Act Interest Shortfalls may occur.

         On any distribution date, any Relief Act Interest Shortfalls and any
prepayment interest shortfalls to the extent not covered by compensating
interest paid by the servicer will be allocated, first, to the excess interest,
and thereafter, to the interest otherwise due with respect to the LIBOR
Certificates on a pro rata basis based on the respective amounts of interest
accrued on those certificates for the distribution date. If Relief Act Interest
Shortfalls or prepayment interest shortfalls are allocated to the offered
certificates, the amount of interest paid on those certificates will be reduced,
adversely affecting the yield on these certificates.

CASH FLOW CONSIDERATIONS AND RISKS COULD CAUSE PAYMENT DELAYS AND LOSSES

         Substantial delays could be encountered in connection with the
liquidation of delinquent mortgage loans. Furthermore, an action to obtain a
deficiency judgment is regulated by statutes and rules, and the amount or
availability of a deficiency judgment may be limited by law. In the event of a
default by a borrower, these restrictions may impede the ability of the servicer
to foreclose on or to sell the mortgaged property or to obtain a deficiency
judgment. In addition, reimbursement of advances made on a mortgage loan and
liquidation expenses such as legal fees, real estate taxes, hazard insurance,
inspection fees and maintenance and preservation expenses, may reduce the
portion of liquidation proceeds payable to you.

         In the event that

         o    a mortgaged property fails to provide adequate security for the
              mortgage loan,

         o    any overcollateralization and excess interest is insufficient to
              cover such shortfalls, and

         o    the subordination of certain classes are insufficient to cover
              such shortfalls,

you may incur a loss on your investment in the certificates.

HIGH LOAN-TO-VALUE RATIOS INCREASE RISK OF LOSS

         Mortgage loans with high loan-to-value ratios may present a greater
risk of loss than mortgage loans with lower loan-to-value ratios. Approximately
40.50% of the mortgage loans, based on the aggregate scheduled principal balance
of the mortgage loans as of the cut-off date, had loan-to-value ratios at
origination in excess of 80%, but no more than 100%. Additionally, an
originator's determination of the value of a mortgaged property used in the
calculation of the loan-to-values ratios of the mortgage loans may differ from
the actual value of such mortgaged properties. None of the mortgage loans in the
mortgage pool were covered by a primary mortgage insurance policy at
origination.


                                      S-18


THERE ARE RISKS RELATING TO MORTGAGE LOANS SECURED BY SECOND LIENS

         Approximately 15.04% of the subgroup 2 mortgage loans (by aggregate
principal balance of the subgroup 2 mortgage loans as of the cut-off date) are
secured by a second lien that is subordinate to the rights of the mortgagee
under a first mortgage loan on the related mortgaged property. The weighted
average combined loan-to-value ratio of the subgroup 2 mortgage loans secured by
a second lien is approximately 99.58%. The proceeds from any liquidation,
insurance or condemnation proceeding will be available to satisfy the
outstanding principal balance of such subordinate mortgage loans only to the
extent that the claims of the senior mortgage loans have been satisfied in full,
including any foreclosure costs. In certain circumstances where the servicer
determines that it would be uneconomical to foreclose on the mortgaged property,
the servicer may modify or waive any term of the mortgage loan, including
accepting a lesser amount than stated in the mortgage note in satisfaction of
the mortgage note or charge-off the entire outstanding principal balance of the
related mortgage loan. The foregoing consideration will be particularly
applicable to subordinate mortgage loans that have high combined loan-to-value
ratios because the servicer is more likely to determine that foreclosure would
be uneconomical. You should consider the risk that to the extent losses on
second lien mortgage loans are not covered by available credit enhancement, such
losses will be borne by the holders of the certificates.

INTEREST ONLY MORTGAGE LOANS HAVE A GREATER DEGREE OF RISK OF DEFAULT

         Approximately 7.18%, 0.57%, 12.53% and 0.30% of the mortgage loans (by
aggregate principal balance of the mortgage loans as of the cut-off date), do
not provide for any payments of principal for two, three, five and ten years,
respectively, after origination. These mortgage loans may involve a greater
degree of risk because, if the related mortgagor defaults, the outstanding
principal balance of that mortgage loan will be higher than for a mortgage loan
that commences amortizing on its first payment date.

A DECREASE IN THE VALUE OF MORTGAGED PROPERTY MAY INCREASE THE RISK OF LOSS

         There are several factors that could adversely affect the value of a
mortgaged property and cause the outstanding balance of the related mortgage
loan, together with any senior financing, to equal or exceed the value of that
mortgaged property. Among the factors that could adversely affect the value of a
mortgaged property are:

         o    an overall decline in the residential real estate market in the
              areas in which the mortgaged properties are located;

         o    a decline in the general condition of the mortgaged properties as
              a result of failure of borrowers to maintain adequately the
              mortgaged properties; or

         o    natural disasters that are not necessarily covered by insurance,
              including earthquakes, hurricanes, wildfires, floods and
              eruptions.

If a decline in the value of the mortgaged properties occurs, the actual rates
of delinquencies, foreclosure and losses on the mortgage loans could be higher
than those currently experienced in the mortgage lending industry in general and
you could suffer a loss.


                                      S-19


GEOGRAPHIC CONCENTRATION MAY INCREASE THE RISK OF LOSS

         The following chart lists the states with the highest concentrations of
mortgage loans in excess of 5% of the mortgage pool, based on the aggregate
principal balance of the mortgage loans in the mortgage pool as of the cut-off
date:

          California...............................         48.60%
          New York.................................          6.50%

         Property in California may be particularly susceptible to certain types
of uninsurable hazards, such as earthquakes, floods, mudslides and other natural
disasters.

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

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

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

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

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

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

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

         o    the Federal Truth-in-Lending Act and Regulation Z promulgated
              thereunder, which require certain disclosures to the borrowers
              regarding the terms of the mortgage loans;

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

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

         Violations of certain provisions of these state and federal laws may
limit the ability of the servicer to collect all or part of the principal of or
interest on the mortgage loans and in addition could subject the trust to
damages and administrative enforcement. In particular, an originator's failure
to comply with


                                      S-20


certain requirements of the Federal Truth-in-Lending Act, as implemented by
Regulation Z, could subject the trust and other assignees of the mortgage loans
to monetary penalties, and result in the obligors' rescinding the mortgage loans
against the trust.

         The seller will represent in the pooling and servicing agreement that
any and all requirements of any federal, state or local law (including
applicable predatory and abusive lending laws) applicable to the origination of
each mortgage loan have been complied with. In the event of a breach of that
representation, the seller will be obligated to cure such breach or repurchase
or replace the affected mortgage loan in the manner described in this prospectus
supplement.

         Given that the mortgage lending and servicing business involves the
compliance with numerous local, state and federal lending laws, lenders and
servicers, including the originators from which the seller purchased the
mortgage loans, are subject to numerous claims, legal actions (including class
action lawsuits), investigations, subpoenas and inquiries in the ordinary course
of business. It is impossible to determine the outcome of any such actions,
investigations or inquiries and the resultant legal and financial liability with
respect thereto. If any finding were to have a material adverse effect on the
financial condition or results of an originator or on the validity of the
mortgage loans, losses on the certificates could result.

THE SELLER AND THE ORIGINATORS MAY NOT BE ABLE TO REPURCHASE DEFECTIVE MORTGAGE
LOANS

         The seller has made various representations and warranties related to
the mortgage loans and each originator has made various representations and
warranties related to the mortgage loans sold by it. Those representations are
summarized in "The Pooling Agreement--Assignment of the Mortgage Loans" in this
prospectus supplement.

         If the seller or an originator fails to cure a material breach of its
representations and warranties with respect to any mortgage loan in a timely
manner, then the seller or the related originator would be required to
repurchase or substitute the defective mortgage loan. It is possible that the
seller or an originator may not be capable of repurchasing or substituting any
defective mortgage loans, for financial or other reasons. The inability of the
seller or an originator to repurchase or substitute defective mortgage loans
would likely cause the mortgage loans to experience higher rates of
delinquencies, defaults and losses. As a result, shortfalls in the distributions
due on the certificates could occur.

THE CERTIFICATES ARE OBLIGATIONS OF THE TRUST ONLY

         The certificates will not represent an interest in or obligation of the
depositor, the servicer, the originators, the seller, the trustee, the
underwriter, the counterparty to the yield maintenance agreements or any of
their respective affiliates. Neither the offered certificates nor the mortgage
loans will be guaranteed or insured by any governmental agency or
instrumentality, or by the depositor, the servicer, the originators, the seller,
the trustee, the underwriter, the counterparty to the yield maintenance
agreements or any of their respective affiliates. Proceeds of the assets
included in the trust will be the sole source of payments on the offered
certificates, and there will be no recourse to any entity in the event that
those proceeds are insufficient or otherwise unavailable to make all payments
provided for under the offered certificates.

LACK OF LIQUIDITY

         The underwriter intends to make a secondary market in the offered
certificates, but has no obligation to do so. There is no assurance that a
secondary market will develop or, if it develops, that it will continue.
Consequently, you may not be able to sell your certificates readily or at prices
that will


                                      S-21


enable you to realize your desired yield. The market values of the certificates
are likely to fluctuate; these fluctuations may be significant and could result
in significant losses to you.

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

THE OFFERED CERTIFICATES ARE NOT SUITABLE INVESTMENTS FOR ALL INVESTORS

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

THE LACK OF PHYSICAL CERTIFICATES MAY CAUSE DELAYS IN PAYMENTS AND CAUSE
DIFFICULTY IN PLEDGING OR SELLING THE OFFERED CERTIFICATES

         The offered certificates will not be issued in physical form.
Certificateholders will be able to transfer certificates only through DTC,
participating organizations, indirect participants and certain banks. The
ability to pledge a certificate to a person that does not participate in DTC may
be limited because of the lack of a physical certificate. In addition,
certificateholders may experience some delay in receiving distributions on these
certificates because the trustee will not send distributions directly to them.
Instead, the trustee will send all distributions to DTC, which will then credit
those distributions to the participating organizations. Those organizations will
in turn credit accounts certificateholders have either directly or indirectly
through indirect participants.

COLLECTIONS ON THE MORTGAGE LOANS MAY BE DELAYED OR REDUCED IF THE SERVICER
BECOMES INSOLVENT

         In the event of a bankruptcy or insolvency of Saxon Mortgage Services,
Inc., the bankruptcy trustee or receiver may have the power to prevent U.S. Bank
National Association, as trustee, or the certificateholders from appointing a
successor servicer. Regardless of whether a successor servicer is appointed, any
termination of Saxon Mortgage Services, Inc., as servicer (whether due to
bankruptcy or insolvency or otherwise), could adversely affect the servicing of
the mortgage loans, including the delinquency experience of the mortgage loans.

IF SERVICING IS TRANSFERRED, DELINQUENCIES MAY INCREASE

         Primary servicing of all of the mortgage loans will be transferred from
an interim servicer to Saxon Mortgage Services, Inc. on or after the closing
date. It is expected that these transfers will be completed on or about February
25, 2005. Servicing transfers can result in a temporary increase in
delinquencies on the transferred loans, which in turn may result in delays in
distribution on the offered certificates and/or losses on the offered
certificates.


                                      S-22


                                THE MORTGAGE POOL

         Certain information with respect to the mortgage loans is set forth in
this prospectus supplement. Prior to the closing date, mortgage loans may be
substituted therefor. Certain of the mortgage loans may prepay in full, or may
be determined not to meet the eligibility requirements for the final pool of the
mortgage loans acquired by the trust on the closing date. The Depositor believes
that the information set forth in this prospectus supplement is representative
of the characteristics of the mortgage pool as it will be constituted at the
closing date, although certain characteristics of the mortgage loans may vary.

GENERAL

         Asset Backed Securities Corporation Home Equity Loan Trust, Series
2005-HE1 (the "Trust") will generally consist of a pool (the "Mortgage Pool") of
closed-end, first and second lien, fully amortizing and balloon, fixed-rate and
adjustable-rate mortgage loans (the "Mortgage Loans"). The Mortgage Loans will
be divided into two subgroups: subgroup 1, which will consist of Mortgage Loans
with original principal balances that conform to the guidelines of Fannie Mae or
Freddie Mac ("Subgroup 1") and were originated or acquired by New Century
Mortgage Corporation or WMC Mortgage Corp. and subgroup 2, which will consist of
Mortgage Loans with original principal balances that may or may not conform to
the guidelines of Fannie Mae or Freddie Mac ("Subgroup 2") and were originated
or acquired by New Century Mortgage Corporation or WMC Mortgage Corp. The
Mortgage Loans have original terms to maturity of not greater than 30 years and
an aggregate principal balance as of February 1, 2005 (the "Cut-off Date") of
approximately $1,139,825,654.

         All mortgage loan statistics set forth in this prospectus supplement
are based on Cut-off Date Principal Balances, interest rates, terms to stated
maturity, mortgage loan counts and similar statistics as of the close of
business on the Cut-off Date of the mortgage loans expected to be deposited into
the Trust on February 4, 2005 (the "Closing Date"). The "Principal Balance" of a
Mortgage Loan as of any date is equal to the principal balance of the Mortgage
Loan at its origination, less the sum of scheduled and unscheduled payments
received or advanced in respect of principal made on the Mortgage Loan. All
weighted averages specified in this prospectus supplement are based on the
Principal Balances of the Mortgage Loans as of the Cut-off Date, as adjusted for
the scheduled principal payments due on or before that date, whether or not
received, but only giving effect to prepayments received on or prior to January
21, 2005 with respect to the New Century Mortgage Loans and January 25, 2005
with respect to the WMC Mortgage Loans (each, a "Cut-off Date Principal
Balance"). References to percentages of the Mortgage Loans mean percentages
based on the Cut-off Date Pool Principal Balance, unless otherwise specified.
The "Cut-off Date Pool Principal Balance" is equal to the aggregate Cut-off Date
Principal Balance of the Mortgage Loans, plus or minus a permitted variance of
five percent. The "Pool Balance" is equal to the aggregate Principal Balances of
the Mortgage Loans as of any date of determination. Percentages in the Mortgage
Pool tables that follow may not add to 100% due to rounding.

         The Mortgage Loans are subject to the "due-on-sale" provisions included
therein which, among other things, may provide that the Mortgage Loan is
assumable by a creditworthy purchaser of the related Mortgaged Property (as
defined herein).

         Substantially all of the Mortgage Loans in the Mortgage Pool have
scheduled monthly payments due on the first day of the month (with respect to
each Mortgage Loan, a "Due Date").

         The Mortgage Loans were originated or acquired by (i) New Century
Mortgage Corporation ("New Century" or an "Originator") in the ordinary course
of business (the "New Century Mortgage Loans") and were transferred to its
affiliate, NC Capital Corporation ("NC Capital" and, together with New Century,
the "New Century Entities") or (ii) WMC Mortgage Corp. ("WMC" or an
"Originator",


                                      S-23


and together with New Century, the "Originators") in the ordinary course of
business (the "WMC Mortgage Loans").

         The New Century Mortgage Loans were previously acquired by the Seller
directly from NC Capital pursuant to one or more mortgage loan purchase and
interim servicing agreements among NC Capital, New Century and the Seller
(collectively, the "New Century Mortgage Loan Purchase Agreement"). The WMC
Mortgage Loans were previously acquired by the Seller directly from WMC pursuant
to one or more mortgage loan purchase and interim servicing agreements between
WMC and the Seller (collectively, the "WMC Mortgage Loan Purchase Agreement" and
together with the New Century Mortgage Loan Purchase Agreement, the "Mortgage
Loan Purchase Agreements"). The Seller will assign the Mortgage Loans and all of
its rights under the Mortgage Loan Purchase Agreements to the Depositor pursuant
to one or more assignment and assumption agreements. Pursuant to a pooling and
servicing agreement, dated as of February 1, 2005, among the Seller, the
Depositor, the Servicer and the Trustee (the "Pooling Agreement"), the Depositor
will cause the Mortgage Loans to be assigned to the Trust for the benefit of the
certificateholders. Under a reconstitution agreement, dated as of the Closing
Date, among the New Century Entities, the Seller and the Depositor (the "New
Century Reconstitution Agreement") and a reconstitution agreement, dated as of
the Closing Date, among WMC, the Seller and the Depositor (the "WMC
Reconstitution Agreement" and together with the New Century Reconstitution
Agreement, the "Reconstitution Agreements"), WMC and the New Century Entities,
as applicable, will make, as of the Closing Date, certain representations and
warranties to the Trust relating to, among other things, the due execution and
enforceability of the Reconstitution Agreement executed by it and certain
characteristics of the Mortgage Loans sold by it. In addition, WMC and the New
Century Entities, as applicable, will represent and warrant in the related
Reconstitution Agreement that as of the Closing Date, no WMC or New Century
Mortgage Loan has been delinquent for more than 30 days in the 12 months prior
to December 29, 2004. Subject to certain limitations set forth in the related
Reconstitution Agreement, the related Originator will be obligated to
repurchase, or substitute a similar mortgage loan for, any related Mortgage Loan
as to which (i) there exists deficient documentation or an uncured breach of any
such representation or warranty, if such breach of any such representation or
warranty materially and adversely affects the interests of the
certificateholders in such related Mortgage Loan and (ii) the related mortgagor
fails to make its January 2005 scheduled monthly payment. Subject to certain
limitations set forth in the Pooling Agreement, the Seller will be obligated to
repurchase, or substitute a similar loan for, any Mortgage Loan as to which
there exists an uncured breach of certain representations and warranties made by
the Seller in the Pooling Agreement, as described in "The Pooling
Agreement--Assignment of Mortgage Loans" in this prospectus supplement. The
Seller is selling the Mortgage Loans to the Depositor without recourse and will
have no obligation with respect to the certificates in its capacity as Seller
other than the repurchase or substitution obligations described in this
prospectus supplement. The Depositor is also selling the Mortgage Loans without
recourse and will have no obligation with respect to the certificates in its
capacity as Depositor. Neither WMC nor the New Century Entities will have any
obligation with respect to the certificates other than the repurchase or
substitution obligations of NC Capital and WMC, as applicable, described in this
prospectus supplement.

MORTGAGE POOL STATISTICS

         The Mortgage Loans consist of adjustable-rate Mortgage Loans with an
aggregate Cut-off Date Principal Balance of approximately $934,222,914 and
fixed-rate Mortgage Loans with an aggregate Cut-off Date Principal Balance of
approximately $205,602,740.

         Approximately 72.82% of the Mortgage Loans provide for payment by the
borrower of a prepayment charge in limited circumstances on certain prepayments.
Each such Mortgage Loan provides for the payment of a prepayment premium on
certain partial prepayments and prepayments in full made within a stated number
of months that is between inception and thirty-six months from the date of



                                      S-24


origination of that Mortgage Loan. The amount of the prepayment premium is
provided in the related mortgage note and is generally equal to up to six
months' interest on any amounts prepaid in excess of 20% of the original
Principal Balance of the related Mortgage Loan in any 12-month period but varies
by state. The holders of the Class P Certificates will be entitled to all
prepayment premiums received on the Mortgage Loans, and those amounts will not
be available for distribution on the other classes of certificates. Under
certain circumstances, as described in the Pooling Agreement, the Servicer may
waive the payment of any otherwise applicable prepayment premium. Investors
should conduct their own analysis of the effect, if any, that the prepayment
premiums, and decisions by the Servicer with respect to the waiver thereof, may
have on the prepayment performance of the Mortgage Loans. The Depositor makes no
representations as to the effect that the prepayment premiums, and decisions by
the Servicer with respect to the waiver thereof, may have on the prepayment
performance of the Mortgage Loans.

         The Mortgage Loans are secured by mortgages or deeds of trust or other
similar security instruments (each, a "Mortgage") creating first and/or second
liens on residential properties consisting of attached or detached, one- to
four-family dwelling units, individual condominium units and manufactured
housing (each, a "Mortgaged Property").

         Approximately 93.14% of the Mortgage Loans are secured by first liens
on the related Mortgaged Property. Approximately 6.86% of the Mortgage Loans are
secured by a mortgage that is subordinate to a senior mortgage loan on the
related Mortgaged Property.

         The majority of the adjustable-rate Mortgage Loans provide for
semi-annual adjustment (the other adjustable-rate Mortgage Loans adjust monthly)
to the loan rate (the "Loan Rate") thereon and for corresponding adjustments to
the monthly payment amount due thereon, in each case on each adjustment date
applicable thereto (each such date, an "Adjustment Date"). The first Adjustment
Date for 76.47%, 2.85% and 2.31% of the Mortgage Loans will not occur until two,
three and five years, respectively, after the date of origination. On each
Adjustment Date for each adjustable-rate Mortgage Loan, the Loan Rate thereon
generally will be adjusted to equal the sum, rounded to the nearest or next
highest multiple of 0.125%, of one-month LIBOR or six-month LIBOR, as
applicable, and a fixed percentage amount (the "Gross Margin"). The Loan Rate on
each adjustable-rate Mortgage Loan will not increase or decrease on the first
related Adjustment Date by more than a stated percentage specified in the
related mortgage note (the "Initial Periodic Rate Cap") and will not increase or
decrease by more than a stated percentage specified in the related mortgage note
on any Adjustment Date thereafter (the "Periodic Rate Cap"). The adjustable-rate
Mortgage Loans have a weighted average Initial Periodic Rate Cap of
approximately 1.818% per annum and a weighted average Periodic Rate Cap of
approximately 1.268% per annum. The Loan Rate on each adjustable-rate Mortgage
Loan will not exceed a specified maximum Loan Rate over the life of such
Mortgage Loan (the "Maximum Loan Rate") or decrease to less than a specified
minimum Loan Rate over the life of such Mortgage Loan (the "Minimum Loan Rate").
Except for the Interest Only Mortgage Loans described below, effective with the
first monthly payment due on each adjustable-rate Mortgage Loan after each
related Adjustment Date, the monthly payment amount will be adjusted to an
amount that will amortize fully the outstanding Principal Balance of the related
Mortgage Loan over its remaining term, and to pay interest at the Loan Rate as
so adjusted. Due to the application of the Periodic Rate Caps and the Maximum
Loan Rates, the Loan Rate on each such adjustable-rate Mortgage Loan, as
adjusted on any related Adjustment Date, may be less than the sum of the
applicable Index and the related Gross Margin, rounded as described in this
prospectus supplement. None of the Mortgage Loans permits the related mortgagor
to convert the adjustable Loan Rate thereon to a fixed Loan Rate. See "--The
Index" in this prospectus supplement.

         As of the Cut-off Date, approximately 4.78% of the Mortgage Loans will
not, by the terms of the related mortgage notes, fully amortize by their stated
maturity dates (each, a "Balloon Loan").

                                      S-25


         Approximately 7.18%, 0.57%, 12.53% and 0.30% of the Mortgage Loans do
not provide for any payments of principal for a period of 24, 36, 60 and 120
months, respectively, after the date of origination (the "Interest Only Mortgage
Loans"). Generally, after the interest-only period for any Interest Only
Mortgage Loan, the monthly payment due after each Adjustment Date will be
adjusted to an amount that will fully amortize the outstanding Principal Balance
over the related remaining term.

         The weighted average remaining term to stated maturity of the Mortgage
Loans is approximately 347 months as of the Cut-off Date. None of the Mortgage
Loans had a first Due Date prior to July 2004 or after March 2005 or will have a
remaining term to stated maturity of less than 117 months or greater than 360
months as of the Cut-off Date. The latest maturity date of any Mortgage Loan is
February 2035.

         Approximately 40.50% of the Mortgage Loans had a loan-to-value ratio
("LTV") at origination in excess of 80.00%. No Mortgage Loan had an LTV at
origination in excess of 100%, and the weighted average LTV of the first lien
Mortgage Loans at origination, based on the Cut-off Date Principal Balance, was
approximately 79.83%. The weighted average combined LTV of the second lien
Mortgage Loans at origination, based on the Cut-off Date Principal Balance, was
approximately 99.58%. None of the Mortgage Loans in the Mortgage Pool will be
covered by a primary mortgage insurance policy.

         The LTV of a first lien mortgage loan at any given time is a fraction,
expressed as a percentage, the numerator of which is the principal balance of
the mortgage loan at the date of origination and the denominator of which is (a)
in the case of a purchase money mortgage loan, the lesser of the sales price of
the related mortgaged property and its appraised value determined in an
appraisal obtained by the originator at origination of the mortgage loan or (b)
in the case of a refinancing mortgage loan, the appraised value of the mortgaged
property at the time of such refinance. The LTV of a second lien mortgage loan
at any given time is a fraction, expressed as a percentage of (i) the sum of (a)
the principal balance of such mortgage loan at the date of origination plus (b)
the outstanding balance of the senior mortgage loan at the date of origination
of such mortgage loan over (ii)(a) in the case of a purchase money mortgage
loan, the lesser of the sales price of the related Mortgaged Property and its
appraised value determined in an appraisal obtained by the originator at
origination of such mortgage loan or (b) in the case of a refinancing mortgage
loan, the appraised value of the Mortgaged Property at the time of such
refinance.

         No assurance can be given that the value of any Mortgaged Property has
remained or will remain at the level that existed on the appraisal or sales
date. If residential real estate values overall or in a particular geographic
area decline, the LTVs might not be a reliable indicator of the rates of
delinquencies, foreclosures and losses that could occur on the Mortgage Loans.




                                      S-26


                                THE MORTGAGE POOL

               ORIGINAL PRINCIPAL BALANCES OF THE MORTGAGE LOANS*



                                                                                           % OF AGGREGATE ORIGINAL
            ORIGINAL                      NUMBER OF                    ORIGINAL              PRINCIPAL BALANCE OF
     PRINCIPAL BALANCE ($)              MORTGAGE LOANS            PRINCIPAL BALANCE             MORTGAGE LOANS
-------------------------------     --------------------     -------------------------    --------------------------

1 - 25,000...................                   101              $     2,076,289.00                    0.18%
25,001 - 50,000..............                   486                   18,769,071.00                    1.64
50,001 - 75,000..............                   677                   42,466,863.40                    3.72
75,001 - 100,000.............                   609                   53,476,506.00                    4.68
100,001 - 125,000............                   583                   65,798,457.20                    5.76
125,001 - 150,000............                   472                   64,792,872.59                    5.67
150,001 - 175,000............                   457                   74,248,253.00                    6.50
175,001 - 200,000............                   409                   76,786,118.40                    6.73
200,001 - 250,000............                   676                  152,612,612.00                   13.37
250,001 - 300,000............                   500                  137,346,229.00                   12.03
300,001 - 400,000............                   637                  220,703,563.00                   19.33
400,001 - 500,000............                   277                  123,862,639.00                   10.85
500,001 - 600,000............                   122                   66,917,667.00                    5.86
600,001 - 700,000............                    37                   24,150,611.00                    2.12
700,001 or greater...........                    23                   17,788,035.00                    1.56
                                    --------------------     -------------------------    --------------------------
TOTAL:                                        6,066               $1,141,795,786.59                  100.00%
                                    --------------------     -------------------------    --------------------------


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

* The average Principal Balance of the Mortgage Loans at origination was
approximately $188,229.


             CUT-OFF DATE PRINCIPAL BALANCES OF THE MORTGAGE LOANS*



                                                                                           % OF AGGREGATE PRINCIPAL
                                                                                          BALANCE OF MORTGAGE LOANS
          CUT-OFF DATE                    NUMBER OF                  CUT-OFF DATE                OUTSTANDING
     PRINCIPAL BALANCE ($)              MORTGAGE LOANS            PRINCIPAL BALANCE           AS OF CUT-OFF DATE
-------------------------------     --------------------     -------------------------    --------------------------

1 - 25,000...................                 102                $      2,087,856.64                   0.18%
25,001 - 50,000..............                 489                      18,872,400.82                   1.66
50,001 - 75,000..............                 678                      42,567,498.01                   3.73
75,001 - 100,000.............                 604                      53,004,389.65                   4.65
100,001 - 125,000............                 588                      66,309,055.92                   5.82
125,001 - 150,000............                 470                      64,490,836.68                   5.66
150,001 - 175,000............                 456                      73,998,337.83                   6.49
175,001 - 200,000............                 409                      76,681,221.37                   6.73
200,001 - 250,000............                 681                     153,673,229.77                  13.48
250,001 - 300,000............                 495                     135,971,294.70                  11.93
300,001 - 400,000............                 638                     220,983,153.07                  19.39
400,001 - 500,000............                 274                     122,478,485.11                  10.75
500,001 - 600,000............                 122                      66,827,123.29                   5.86
600,001 - 700,000............                  37                      24,115,797.93                   2.12
700,001 or greater...........                  23                      17,764,972.96                   1.56
                                    --------------------     -------------------------    --------------------------
TOTAL:.......................               6,066                  $1,139,825,653.75                 100.00%
                                    --------------------     -------------------------    --------------------------


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

* The average Cut-off Date Principal Balance of the Mortgage Loans was
approximately $187,904.


                                      S-27


                       FICO SCORES FOR THE MORTGAGE LOANS*



                                                                                           % OF AGGREGATE PRINCIPAL
                                                                                          BALANCE OF MORTGAGE LOANS
                                          NUMBER OF                  CUT-OFF DATE                OUTSTANDING
           FICO SCORE                   MORTGAGE LOANS            PRINCIPAL BALANCE           AS OF CUT-OFF DATE
-------------------------------     --------------------     -------------------------    --------------------------

500..........................                    7              $         828,968.26                  0.07%
501 - 525....................                  244                     40,860,180.92                  3.58
526 - 550....................                  431                     76,537,244.09                  6.71
551 - 575....................                  528                     98,643,605.39                  8.65
576 - 600....................                  760                    141,687,996.12                 12.43
601 - 625....................                  829                    161,713,296.56                 14.19
626 - 650....................                1,017                    188,523,303.09                 16.54
651 - 675....................                  909                    172,460,248.63                 15.13
676 - 700....................                  574                    111,219,368.79                  9.76
701 - 725....................                  358                     68,693,180.42                  6.03
726 - 750....................                  204                     40,728,284.39                  3.57
751 - 775....................                  145                     27,756,059.01                  2.44
776 - 800....................                   48                      8,169,470.54                  0.72
801 - 825....................                   12                      2,004,447.54                  0.18
                                    --------------------     -------------------------    --------------------------
TOTAL:.......................                6,066                 $1,139,825,653.75                100.00%
                                    --------------------     -------------------------    --------------------------


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

*    The weighted average FICO score of the Mortgagors of the Mortgage Loans as
     of the Cut-off Date was approximately 632.


            ORIGINAL TERMS TO STATED MATURITY OF THE MORTGAGE LOANS*



                                                                                           % OF AGGREGATE PRINCIPAL
                                                                                          BALANCE OF MORTGAGE LOANS
                                          NUMBER OF                  CUT-OFF DATE                OUTSTANDING
     ORIGINAL TERM (MONTHS)             MORTGAGE LOANS            PRINCIPAL BALANCE           AS OF CUT-OFF DATE
-------------------------------     --------------------     -------------------------    --------------------------

120..........................                     2             $         103,496.26                   0.01%
121 - 180....................                   970                    63,887,497.81                   5.61
181 - 240....................                   169                     8,847,650.63                   0.78
241 - 300....................                    24                     4,741,940.39                   0.42
301 - 360....................                 4,901                 1,062,245,068.66                  93.19
                                    --------------------     -------------------------    --------------------------
TOTAL:.......................                 6,066                $1,139,825,653.75                 100.00%
                                    --------------------     -------------------------    --------------------------


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

* The weighted average original term of the Mortgage Loans was approximately 349
months.


            REMAINING TERMS TO STATED MATURITY OF THE MORTGAGE LOANS*



                                                                                           % OF AGGREGATE PRINCIPAL
                                                                                          BALANCE OF MORTGAGE LOANS
                                          NUMBER OF                  CUT-OFF DATE                OUTSTANDING
    REMAINING TERM (MONTHS)             MORTGAGE LOANS            PRINCIPAL BALANCE           AS OF CUT-OFF DATE
-------------------------------     --------------------     -------------------------    --------------------------

180 or less..................                   972              $    63,990,994.07                    5.61%
181 - 348....................                   193                   13,589,591.02                    1.19
349 - 360....................                 4,901                1,062,245,068.66                   93.19
                                    --------------------     -------------------------    --------------------------
TOTAL:.......................                 6,066               $1,139,825,653.75                  100.00%
                                    --------------------     -------------------------    --------------------------


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

*    The weighted average remaining term of the Mortgage Loans was approximately
     347 months.

                                      S-28



                      PROPERTY TYPES OF THE MORTGAGE LOANS



                                                                                           % OF AGGREGATE PRINCIPAL
                                                                                          BALANCE OF MORTGAGE LOANS
                                          NUMBER OF                  CUT-OFF DATE                OUTSTANDING
         PROPERTY TYPE                  MORTGAGE LOANS            PRINCIPAL BALANCE           AS OF CUT-OFF DATE
-------------------------------     --------------------     -------------------------    --------------------------

Single Family................                 4,483                $  830,889,611.04                72.90%
PUD - Detached*..............                   524                   106,940,122.60                 9.38
2-4 Unit.....................                   387                    88,387,382.81                 7.75
Condominium..................                   491                    85,680,113.28                 7.52
PUD - Attached*..............                   167                    26,072,076.29                 2.29
Manufactured Housing.........                    14                     1,856,347.73                 0.16
                                    --------------------     -------------------------    --------------------------
TOTAL:.......................                 6,066                $1,139,825,653.75               100.00%
                                    --------------------     -------------------------    --------------------------


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

*    PUD refers to a home or "unit" in a Planned Unit Development.


                     OCCUPANCY STATUS OF THE MORTGAGE LOANS*



                                                                                           % OF AGGREGATE PRINCIPAL
                                                                                          BALANCE OF MORTGAGE LOANS
                                          NUMBER OF                  CUT-OFF DATE                OUTSTANDING
        OCCUPANCY STATUS                MORTGAGE LOANS            PRINCIPAL BALANCE           AS OF CUT-OFF DATE
-------------------------------     --------------------     -------------------------    --------------------------

Primary Residence............                5,763                 $1,084,451,321.39                 95.14%
Investment Property..........                  217                     39,969,897.43                  3.51
Second Home..................                   86                     15,404,434.93                  1.35
                                    --------------------     -------------------------    --------------------------
TOTAL:.......................                6,066                 $1,139,825,653.75                100.00%
                                    --------------------     -------------------------    --------------------------


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

*    Occupancy as represented by the Mortgagor at the time of origination.


                          PURPOSE OF THE MORTGAGE LOANS



                                                                                           % OF AGGREGATE PRINCIPAL
                                                                                          BALANCE OF MORTGAGE LOANS
                                          NUMBER OF                  CUT-OFF DATE                OUTSTANDING
            PURPOSE                     MORTGAGE LOANS            PRINCIPAL BALANCE           AS OF CUT-OFF DATE
-------------------------------     --------------------     -------------------------    --------------------------

Refinance - Cashout..........               2,713                   $  568,260,240.12                 49.86%
Purchase.....................               2,806                      470,482,991.37                 41.28
Refinance - Rate/Term........                 547                      101,082,422.26                  8.87
                                    --------------------     -------------------------    --------------------------
TOTAL:.......................               6,066                   $1,139,825,653.75                100.00%
                                    --------------------     -------------------------    --------------------------



                                      S-29


              ORIGINAL LOAN-TO-VALUE RATIOS OF THE MORTGAGE LOANS*



                                                                                           % OF AGGREGATE PRINCIPAL
                                                                                          BALANCE OF MORTGAGE LOANS
     ORIGINAL LOAN-TO-VALUE               NUMBER OF                  CUT-OFF DATE                OUTSTANDING
           RATIO (%)                    MORTGAGE LOANS            PRINCIPAL BALANCE           AS OF CUT-OFF DATE
-------------------------------     --------------------     -------------------------    --------------------------

50.00 or less................                 140                 $     19,849,835.83                  1.74%
50.01 - 60.00................                 206                       40,465,307.60                  3.55
60.01 - 70.00................                 460                      105,250,331.96                  9.23
70.01 - 80.00................               2,223                      512,629,854.86                 44.97
80.01 - 90.00................               1,313                      282,863,082.38                 24.82
90.01 - 100.00...............               1,724                      178,767,241.12                 15.68
                                    --------------------     -------------------------    --------------------------
TOTAL:.......................               6,066                   $1,139,825,653.75                100.00%
                                    --------------------     -------------------------    --------------------------


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

*    The weighted average original loan-to-value ratio of the first lien
     Mortgage Loans as of the Cut-off Date was approximately 79.83%. The
     weighted average combined loan-to-value ratio of the second lien Mortgage
     Loans as of the Cut-off Date was approximately 99.58%.


             GEOGRAPHIC DISTRIBUTION OF THE MORTGAGED PROPERTIES(1)



                                                                                           % OF AGGREGATE PRINCIPAL
                                                                                          BALANCE OF MORTGAGE LOANS
                                          NUMBER OF                  CUT-OFF DATE                OUTSTANDING
            LOCATION                   MORTGAGE LOANS             PRINCIPAL BALANCE           AS OF CUT-OFF DATE
-------------------------------     --------------------     -------------------------    --------------------------

California...................                2,322                $  553,958,251.34                  48.60%
New York.....................                  298                    74,094,023.95                   6.50
Florida......................                  386                    53,303,647.54                   4.68
New Jersey...................                  220                    46,888,677.04                   4.11
Illinois.....................                  264                    44,180,063.90                   3.88
Texas........................                  325                    36,148,976.13                   3.17
Virginia.....................                  155                    28,366,232.17                   2.49
Maryland.....................                  157                    26,256,394.13                   2.30
Nevada.......................                  126                    24,509,159.58                   2.15
Arizona......................                  181                    23,871,299.46                   2.09
Washington...................                  142                    23,458,773.41                   2.06
Massachusetts................                  107                    23,416,063.20                   2.05
Other........................                1,383                   181,374,091.90                  15.91
                                    --------------------     -------------------------    --------------------------
TOTAL:.......................                6,066                $1,139,825,653.75                 100.00%
                                    --------------------     -------------------------    --------------------------


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

(1)  The greatest ZIP Code geographic concentration of Mortgage Loans, by
     Cut-off Date Principal Balance, was approximately 0.39% in the 94531 ZIP
     Code.

(2)  This row includes 38 other states and the District of Columbia with under
     2% concentrations individually.

                                      S-30



                   DOCUMENTATION LEVEL OF THE MORTGAGE LOANS*



                                                                                           % OF AGGREGATE PRINCIPAL
                                                                                              BALANCE OF MORTGAGE
                                              NUMBER OF             CUT-OFF DATE               LOANS OUTSTANDING
         DOCUMENTATION LEVEL               MORTGAGE LOANS         PRINCIPAL BALANCE           AS OF CUT-OFF DATE
-----------------------------------     --------------------   -------------------------  --------------------------

Full Documentation.................             3,053           $  531,625,692.81                    46.64%
Stated Documentation...............             1,630              348,166,302.64                    30.55
Streamlined - Stated (Assets Verified)            882              151,566,001.51                    13.30
Limited Documentation..............               337               75,984,533.28                     6.67
Lite Documentation.................                88               16,323,692.20                     1.43
Full Alternative Documentation.....                76               16,159,431.31                     1.42
                                        --------------------   -------------------------  --------------------------
TOTAL:.............................             6,066           $1,139,825,653.75                   100.00%
                                        --------------------   -------------------------  --------------------------


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

*    For a description of each documentation level, see "The Originators--New
     Century Mortgage Corporation" and "--WMC Mortgage Corp." in this prospectus
     supplement.


                    CURRENT LOAN RATES OF THE MORTGAGE LOANS



                                                                                            % OF AGGREGATE PRINCIPAL
                                                                                            BALANCE OF MORTGAGE LOANS
                                          NUMBER OF               CUT-OFF DATE                   OUTSTANDING
     CURRENT LOAN RATE (%)             MORTGAGE LOANS          PRINCIPAL BALANCE              AS OF CUT-OFF DATE
-------------------------------     --------------------      -------------------------    --------------------------

5.000 or less................                  44             $    13,590,779.36                       1.19%
5.001 - 5.500................                 216                  65,108,974.11                       5.71
5.501 - 6.000................                 787                 205,670,132.64                      18.04
6.001 - 6.500................                 897                 218,968,962.68                      19.21
6.501 - 7.000................                 929                 215,994,655.99                      18.95
7.001 - 7.500................                 558                 116,676,956.76                      10.24
7.501 - 8.000................                 592                 108,178,930.78                       9.49
8.001 - 8.500................                 375                  56,878,378.41                       4.99
8.501 - 9.000................                 359                  48,457,446.27                       4.25
9.001 - 9.500................                 225                  21,551,543.16                       1.89
9.501 - 10.000...............                 370                  26,333,653.18                       2.31
10.001 - 10.500..............                 262                  16,070,352.73                       1.41
10.501 - 11.000..............                 300                  18,799,161.84                       1.65
11.001 - 11.500..............                  68                   3,522,977.15                       0.31
11.501 - 12.000..............                  45                   2,408,207.07                       0.21
12.001 - 12.500..............                  12                     639,167.82                       0.06
12.501 - 13.000                                27                     975,373.80                       0.09
                                    --------------------      -------------------------    --------------------------
TOTAL:.......................               6,066              $1,139,825,653.75                  100.00%
                                    --------------------      -------------------------    --------------------------


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

*    The weighted average Loan Rate of the Mortgage Loans as of the Cut-off Date
     was approximately 7.005% per annum.

                                      S-31



                    MAXIMUM LOAN RATES OF THE MORTGAGE LOANS*



                                                                                             % OF AGGREGATE PRINCIPAL
                                                                                            BALANCE OF MORTGAGE LOANS
                                          NUMBER OF                  CUT-OFF DATE                  OUTSTANDING
     MAXIMUM LOAN RATE (%)             MORTGAGE LOANS             PRINCIPAL BALANCE            AS OF CUT-OFF DATE
-------------------------------     --------------------      -------------------------    --------------------------

Not Applicable...............               2,004                $   205,602,740.14                   18.04%
10.501 - 11.000..............                   1                        149,638.11                    0.01
11.001 - 11.500..............                  19                      6,984,767.38                    0.61
11.501 - 12.000..............                 147                     46,476,034.23                    4.08
12.001 - 12.500..............                 425                    118,933,919.71                   10.43
12.501 - 13.000..............                 694                    177,900,312.38                   15.61
13.001 - 13.500..............                 773                    189,484,709.98                   16.62
13.501 - 14.000..............                 570                    137,632,108.55                   12.07
14.001 - 14.500..............                 490                    100,988,011.02                    8.86
14.501 - 15.000..............                 360                     64,380,511.98                    5.65
15.001 - 15.500..............                 261                     43,388,175.95                    3.81
15.501 - 16.000..............                 203                     33,147,155.42                    2.91
16.001 - 16.500..............                  60                      8,308,846.43                    0.73
16.501 - 17.000..............                  41                      4,867,105.43                    0.43
17.001 - 17.500..............                  14                      1,166,374.43                    0.10
17.501 - 18.000..............                   3                        347,788.91                    0.03
18.001 - 18.500..............                   1                         67,453.70                    0.01
                                    --------------------      -------------------------    --------------------------
TOTAL:.......................               6,066                 $1,139,825,653.75                  100.00%
                                    --------------------      -------------------------    --------------------------


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

*    The weighted average Maximum Loan Rate of the Mortgage Loans that are
     adjustable-rate mortgage loans as of the Cut-off Date was approximately
     13.520% per annum.


                      GROSS MARGINS OF THE MORTGAGE LOANS*



                                                                                           % OF AGGREGATE PRINCIPAL
                                                                                          BALANCE OF MORTGAGE LOANS
                                          NUMBER OF                  CUT-OFF DATE                OUTSTANDING
       GROSS MARGINS (%)               MORTGAGE LOANS             PRINCIPAL BALANCE           AS OF CUT-OFF DATE
-------------------------------     --------------------     -------------------------    --------------------------

Not Applicable...............               2,004                $   205,602,740.14                   18.04%
0.501 - 1.000................                   1                        318,400.00                    0.03
2.501 - 3.000................                   4                      1,422,723.39                    0.12
3.001 - 3.500................                   7                      2,084,728.91                    0.18
3.501 - 4.000................                   1                        130,500.00                    0.01
4.001 - 4.500................                   6                      1,778,249.12                    0.16
4.501 - 5.000................                 301                     75,682,465.44                    6.64
5.001 - 5.500................                 993                    223,231,184.21                   19.58
5.501 - 6.000................               1,580                    368,270,646.76                   32.31
6.001 - 6.500................                 558                    129,413,834.40                   11.35
6.501 - 7.000................                 324                     71,992,531.88                    6.32
7.001 - 7.500................                 144                     30,831,394.46                    2.70
7.501 - 8.000................                 128                     26,249,244.45                    2.30
8.001 - 8.500................                   9                      1,731,694.93                    0.15
8.501 - 9.000................                   4                        658,510.63                    0.06
9.001 - 9.500................                   2                        426,805.03                    0.04
                                    --------------------      -------------------------    --------------------------
TOTAL:.......................               6,066                 $1,139,825,653.75                  100.00%
                                    --------------------      -------------------------    --------------------------


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

*    The weighted average Gross Margin of the Mortgage Loans that are
     adjustable-rate mortgage loans as of the Cut-off Date was approximately
     5.819%.


                                      S-32


                   NEXT ADJUSTMENT DATE FOR THE MORTGAGE LOANS



                                                                                           % OF AGGREGATE PRINCIPAL
                                                                                          BALANCE OF MORTGAGE LOANS
                                          NUMBER OF                  CUT-OFF DATE                OUTSTANDING
        RATE CHANGE DATE               MORTGAGE LOANS             PRINCIPAL BALANCE           AS OF CUT-OFF DATE
-------------------------------     --------------------       ----------------------     --------------------------

Not Applicable...............                2,004               $   205,602,740.14                   18.04%
March 2005...................                   10                     3,401,750.62                    0.30
June 2005....................                    2                       338,751.12                    0.03
June 2006....................                    1                       102,595.55                    0.01
August 2006..................                    4                       646,380.65                    0.06
September 2006...............                   23                     5,193,658.94                    0.46
October 2006.................                   89                    22,210,273.87                    1.95
November 2006................                  605                   150,090,841.15                   13.17
December 2006................                2,870                   650,041,342.47                   57.03
January 2007.................                  224                    43,835,306.86                    3.85
September 2007...............                    1                       323,351.27                    0.03
October 2007.................                    2                       329,370.38                    0.03
November 2007................                   27                     5,088,846.85                    0.45
December 2007................                  109                    25,228,616.30                    2.21
January 2008.................                    9                     2,120,316.06                    0.19
February 2008................                    1                       208,000.00                    0.02
November 2009................                   21                     5,900,574.65                    0.52
December 2009................                   64                    19,162,936.87                    1.68
                                    --------------------       ----------------------     --------------------------
TOTAL:.......................                6,066                $1,139,825,653.75                  100.00%
                                    --------------------       ----------------------     --------------------------



                                      S-33




                       PRODUCT TYPE OF THE MORTGAGE LOANS



                                                                                                 % OF AGGREGATE
                                                                                              PRINCIPAL BALANCE OF
                                                                                                 MORTGAGE LOANS
                                                  NUMBER OF              CUT-OFF DATE             OUTSTANDING
              PRODUCT TYPE                     MORTGAGE LOANS          PRINCIPAL BALANCE       AS OF CUT-OFF DATE
----------------------------------------     --------------------     -------------------   ------------------------

25 Year 1 Month LIBOR - 10 Year IO(1)..                 10             $    3,401,750.62              0.30%
2/28 ARM(2)............................              3,119                666,678,415.47             58.49
2/28 Interest Only ARM - 2 Year IO(3)..                294                 81,830,797.84              7.18
2/28 Interest Only ARM - 5 Year IO(4)..                400                123,171,837.91             10.81
3/27 ARM(5)............................                122                 25,561,461.59              2.24
3/27 Interest Only ARM - 3 Year IO(6)..                 24                  6,533,917.59              0.57
3/27 Interest Only ARM - 5Year IO(7)...                  2                    401,102.68              0.04
5/25 ARM(8)............................                 26                  7,071,885.87              0.62
5/25 Interest Only ARM - 5 Year IO(9)..                 63                 19,232,992.92              1.69
30 Year ARM(10)........................                  2                    338,751.12              0.03
Balloon 30/15..........................                865                 54,460,893.40              4.78
Fixed - 10 Year........................                  2                    103,496.26              0.01
Fixed - 15 Year........................                105                  9,426,604.41              0.83
Fixed - 20 Year........................                169                  8,847,650.63              0.78
Fixed - 25 Year........................                 14                  1,340,189.77              0.12
Fixed - 30 Year........................                849                131,423,905.67             11.53
                                             --------------------     -------------------   ------------------------
TOTAL:.................................              6,066             $1,139,825,653.75            100.00%
                                             --------------------     -------------------   ------------------------


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

(1)  25 Year 1 Month LIBOR - 10 Year IO refers to a Mortgage Loan that adjusts
     monthly and pays interest only for ten years after the origination of that
     Mortgage Loan. Thereafter, the Loan Rate on that Mortgage Loan adjusts
     monthly based upon the one-month LIBOR index.

(2)  2/28 ARM refers to a Mortgage Loan for which the Loan Rate is fixed for two
     years after the origination of that Mortgage Loan. Thereafter, the Loan
     Rate on that Mortgage Loan adjusts semi-annually based upon the six-month
     LIBOR index.

(3)  2/28 Interest Only ARM - 2 Year IO refers to a Mortgage Loan that pays
     interest only for two years after the origination of that Mortgage Loan and
     becomes fully amortizing thereafter. The Loan Rate on that Mortgage Loan is
     fixed for the first two years and then adjusts semi-annually based upon the
     six-month LIBOR index.

(4)  2/28 Interest Only ARM - 5 Year IO refers to a Mortgage Loan that pays
     interest only for five years after the origination of that Mortgage Loan
     and becomes fully amortizing thereafter. The Loan Rate on that Mortgage
     Loan is fixed for the first two years and then adjusts semi-annually based
     upon the six-month LIBOR index.

(5)  3/27 ARM refers to a Mortgage Loan for which the Loan Rate is fixed for
     three years after the origination of that Mortgage Loan. Thereafter, the
     Loan Rate on that Mortgage Loan adjusts semi-annually based upon the
     six-month LIBOR index.

(6)  3/27 Interest Only ARM - 3 Year IO refers to a Mortgage Loan that pays
     interest only for three years after the origination of that Mortgage Loan
     and becomes fully amortizing thereafter. The Loan Rate on that Mortgage
     Loan is fixed for the first three years and then adjusts semi-annually
     based upon the six-month LIBOR index.

(7)  3/27 Interest Only ARM - 5 Year IO refers to a Mortgage Loan that pays
     interest only for five years after the origination of that Mortgage Loan
     and becomes fully amortizing thereafter. The Loan Rate on that Mortgage
     Loan is fixed for the first three years and then adjusts semi-annually
     based upon the six-month LIBOR index.

(8)  5/25 ARM refers to a Mortgage Loan for which the Loan Rate is fixed for
     five years after the origination of that Mortgage Loan. Thereafter, the
     Loan Rate on that Mortgage Loan adjusts semi-annually based upon the
     six-month LIBOR index.

(9)  5/25 Interest Only ARM - 5 Year IO refers to a Mortgage Loan that pays
     interest only for five years after the origination of that Mortgage Loan
     and becomes fully amortizing thereafter. The Loan Rate on that Mortgage
     Loan is fixed for the first five years and then adjusts semi-annually based
     upon the six-month LIBOR index.

(10) 30 Year ARM refers to a Mortgage Loan that adjusts semi-annually based upon
     the six-month LIBOR index.

                                      S-34




                ORIGINAL TERM TO EXPIRATION OF PREPAYMENT PENALTY



                                                                                           % OF AGGREGATE PRINCIPAL
                                                                                          BALANCE OF MORTGAGE LOANS
  ORIGINAL NUMBER OF MONTHS TO            NUMBER OF                  CUT-OFF DATE                OUTSTANDING
           EXPIRATION                  MORTGAGE LOANS             PRINCIPAL BALANCE           AS OF CUT-OFF DATE
-------------------------------     --------------------     -------------------------    --------------------------

Not Applicable or Expired....               1,777               $   309,754,934.44                   27.18%
7 - 12.......................                 235                    56,330,462.26                    4.94
13 - 24......................               3,178                   642,506,718.45                   56.37
25 - 36......................                 876                   131,233,538.60                   11.51
                                    --------------------     -------------------------    --------------------------
Total:.......................               6,066                $1,139,825,653.75                  100.00%
                                    ====================      ========================    ==========================


                       CREDIT GRADE OF THE MORTGAGE LOANS*



                                                                                              % OF AGGREGATE PRINCIPAL
                                                                                                 BALANCE OF MORTGAGE
                                             NUMBER OF                 CUT-OFF DATE               LOANS OUTSTANDING
           CREDIT GRADE                   MORTGAGE LOANS             PRINCIPAL BALANCE           AS OF CUT-OFF DATE
-------------------------------        --------------------     -------------------------    --------------------------

AA (New Century) ............                  2,201                  $415,085,860.82                  36.42%
AA (WMC) ....................                  1,506                   290,463,614.70                  25.48
A+ (New Century) ............                    316                    63,700,641.56                   5.59
A (WMC) .....................                    818                   143,383,895.63                  12.58
A- (New Century) ............                    218                    38,902,978.35                   3.41
A- (WMC) ....................                    303                    51,475,517.14                   4.52
B+ (WMC) ....................                    192                    39,429,099.81                   3.46
B (New Century) .............                    173                    32,478,303.55                   2.85
B (WMC) .....................                    213                    40,056,570.16                   3.51
C (New Century) .............                     86                    15,672,823.18                   1.38
C (WMC) .....................                     26                     5,365,512.08                   0.47
C- (New Century) ............                      4                       409,086.15                   0.04
FICO (New Century)...........                     10                     3,401,750.62                   0.30
                                       --------------------    -------------------------    --------------------------
TOTAL:.......................                  6,066                $1,139,825,653.75                 100.00%
                                       ====================    =========================    ==========================


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

*    For a description of each credit grade, see "The Originators--New Century
     Mortgage Corporation" and "--WMC Mortgage Corp." in this prospectus
     supplement.

                       LIEN POSITION OF THE MORTGAGE LOANS



                                                                                           % OF AGGREGATE PRINCIPAL
                                                                                             BALANCE OF MORTGAGE
                                             NUMBER OF               CUT-OFF DATE             LOANS OUTSTANDING
           LIEN POSITION                   MORTGAGE LOANS          PRINCIPAL BALANCE         AS OF CUT-OFF DATE
-------------------------------        --------------------   -------------------------   --------------------------

First Lien...................                  4,802              $1,061,618,267.26                93.14%
Second Lien..................                  1,264                  78,207,386.49                 6.86
                                       --------------------   -------------------------   --------------------------
TOTAL:.......................                  6,066              $1,139,825,653.75               100.00%
                                       ====================   =========================   ==========================







                                      S-35



                            SUBGROUP 1 MORTGAGE LOANS

          ORIGINAL PRINCIPAL BALANCES OF THE SUBGROUP 1 MORTGAGE LOANS*



                                                                  ORIGINAL PRINCIPAL       % OF AGGREGATE ORIGINAL
            ORIGINAL                NUMBER OF SUBGROUP 1        BALANCE OF SUBGROUP 1        PRINCIPAL BALANCE OF
     PRINCIPAL BALANCE ($)             MORTGAGE LOANS               MORTGAGE LOANS        SUBGROUP 1 MORTGAGE LOANS
-------------------------------     --------------------     -------------------------    --------------------------

25,001 - 50,000..............                    36                $  1,632,918.00                 0.26%
50,001 - 75,000..............                   182                  11,720,393.00                 1.89
75,001 - 100,000.............                   309                  27,562,053.00                 4.44
100,001 - 125,000............                   383                  43,350,345.00                 6.98
125,001 - 150,000............                   339                  46,540,025.59                 7.49
150,001 - 175,000............                   357                  57,977,700.00                 9.34
175,001 - 200,000............                   330                  61,870,732.40                 9.96
200,001 - 250,000............                   563                 127,124,844.00                20.47
250,001 - 300,000............                   415                 113,999,817.00                18.36
300,001 - 400,000............                   353                 117,126,776.00                18.86
400,001 - 500,000............                    21                   9,238,415.00                 1.49
500,001 - 600,000............                     5                   2,830,250.00                 0.46
                                    --------------------     -------------------------    --------------------------
Total:.......................                 3,293                $620,974,268.99               100.00%
                                    ====================     =========================    ==========================


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

*    The average Principal Balance of the Subgroup 1 Mortgage Loans at
     origination was approximately $188,574.


        CUT-OFF DATE PRINCIPAL BALANCES OF THE SUBGROUP 1 MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                               CUT-OFF DATE PRINCIPAL     SUBGROUP 1 MORTGAGE LOANS
          CUT-OFF DATE              NUMBER OF SUBGROUP 1       BALANCE OF SUBGROUP 1             OUTSTANDING
     PRINCIPAL BALANCE ($)             MORTGAGE LOANS              MORTGAGE LOANS             AS OF CUT-OFF DATE
-------------------------------     --------------------     -------------------------    --------------------------

25,001 - 50,000..............                    36                $    1,616,852.48                 0.26%
50,001 - 75,000..............                   183                    11,776,516.20                 1.90
75,001 - 100,000.............                   308                    27,425,977.79                 4.43
100,001 - 125,000............                   388                    43,895,428.21                 7.08
125,001 - 150,000............                   336                    46,111,990.91                 7.44
150,001 - 175,000............                   357                    57,894,674.53                 9.34
175,001 - 200,000............                   330                    61,781,369.99                 9.97
200,001 - 250,000............                   567                   127,957,394.63                20.65
250,001 - 300,000............                   411                   112,893,609.46                18.22
300,001 - 400,000............                   351                   116,320,287.74                18.77
400,001 - 500,000............                    21                     9,217,132.14                 1.49
500,001 - 600,000............                     5                     2,823,717.60                 0.46
                                    --------------------     -------------------------    --------------------------
TOTAL:.......................                 3,293                  $619,714,951.68               100.00%
                                    ====================     =========================    ==========================


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

*    The average Cut-off Date Principal Balance of the Subgroup 1 Mortgage Loans
     was approximately $188,192.


                                      S-36


                 FICO SCORES FOR THE SUBGROUP 1 MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                               CUT-OFF DATE PRINCIPAL      SUBGROUP 1 MORTGAGE LOANS
                                     NUMBER OF SUBGROUP 1      BALANCE OF SUBGROUP 1            OUTSTANDING
           FICO SCORE                   MORTGAGE LOANS            MORTGAGE LOANS             AS OF CUT-OFF DATE
-------------------------------     --------------------     -------------------------    --------------------------

500..........................                   6              $      719,132.01                     0.12%
501 - 525....................                 186                  28,075,227.27                     4.53
526 - 550....................                 329                  55,301,868.56                     8.92
551 - 575....................                 404                  71,244,752.25                    11.50
576 - 600....................                 418                  75,084,616.47                    12.12
601 - 625....................                 403                  74,829,810.38                    12.07
626 - 650....................                 535                 105,899,900.41                    17.09
651 - 675....................                 413                  83,546,453.37                    13.48
676 - 700....................                 266                  51,951,492.77                     8.38
701 - 725....................                 144                  32,004,983.82                     5.16
726 - 750....................                  96                  22,022,368.27                     3.55
751 - 775....................                  67                  13,584,724.10                     2.19
776 - 800....................                  20                   4,246,148.44                     0.69
801 - 825....................                   6                   1,203,473.56                     0.19
                                    --------------------     -------------------------    --------------------------
TOTAL:.......................                 3,293               $619,714,951.68                  100.00%
                                    ====================     =========================    ==========================


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

*    The weighted average FICO score of the Mortgagors of the Subgroup 1
     Mortgage Loans as of the Cut-off Date was approximately 624.


       ORIGINAL TERMS TO STATED MATURITY OF THE SUBGROUP 1 MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 1 MORTGAGE LOANS
                                    NUMBER OF SUBGROUP 1        BALANCE OF SUBGROUP 1            OUTSTANDING
     ORIGINAL TERM (MONTHS)            MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
-------------------------------     --------------------     -------------------------    --------------------------

121 - 180....................                    54             $     5,782,197.09                   0.93%
181 - 240....................                    20                   2,815,394.71                   0.45
241 - 300....................                    18                   2,370,037.99                   0.38
301 - 360....................                 3,201                 608,747,321.89                  98.23
                                    --------------------     -------------------------    --------------------------
TOTAL:.......................                 3,293                $619,714,951.68                 100.00%
                                    ====================     =========================    ==========================


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

*    The weighted average original term of the Subgroup 1 Mortgage Loans was
     approximately 358 months.


      REMAINING TERMS TO STATED MATURITY OF THE SUBGROUP 1 MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 1 MORTGAGE LOANS
                                    NUMBER OF SUBGROUP 1        BALANCE OF SUBGROUP 1            OUTSTANDING
    REMAINING TERM (MONTHS)            MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
-------------------------------     --------------------       -----------------------    --------------------------

180 or less..................                    54               $     5,782,197.09                 0.93%
181 - 348....................                    38                     5,185,432.70                 0.84
349 - 360....................                 3,201                   608,747,321.89                98.23
                                    --------------------       -----------------------    --------------------------
TOTAL:.......................                 3,293                  $619,714,951.68               100.00%
                                    ====================       =======================    ==========================


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

*    The weighted average remaining term of the Subgroup 1 Mortgage Loans was
     approximately 355 months.

                                      S-37



                 PROPERTY TYPES OF THE SUBGROUP 1 MORTGAGE LOANS



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 1 MORTGAGE LOANS
                                    NUMBER OF SUBGROUP 1        BALANCE OF SUBGROUP 1            OUTSTANDING
         PROPERTY TYPE                 MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
-------------------------------     --------------------       ------------------------   --------------------------

Single Family................                 2,466                  $445,751,485.06                71.93%
2-4 Unit.....................                   240                    63,279,955.96                10.21
Condominium..................                   271                    51,944,110.24                 8.38
PUD - Detached*..............                   223                    41,039,456.59                 6.62
PUD - Attached*..............                    93                    17,699,943.83                 2.86
                                    --------------------       -----------------------    --------------------------
TOTAL:.......................                 3,293                  $619,714,951.68               100.00%
                                    ====================       =======================    ==========================


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

*    PUD refers to a home or "unit" in a Planned Unit Development.


               OCCUPANCY STATUS OF THE SUBGROUP 1 MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 1 MORTGAGE LOANS
                                     NUMBER OF SUBGROUP 1       BALANCE OF SUBGROUP 1            OUTSTANDING
        OCCUPANCY STATUS                MORTGAGE LOANS              MORTGAGE LOANS            AS OF CUT-OFF DATE
-------------------------------     --------------------       ------------------------   --------------------------

Primary Residence............                 3,095                  $584,561,135.36                94.33%
Investment Property..........                   152                    26,621,003.75                 4.30
Second Home..................                    46                     8,532,812.57                 1.38
                                    --------------------       -----------------------    --------------------------
TOTAL:.......................                 3,293                  $619,714,951.68               100.00%
                                    ====================       =======================    ==========================


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

*    Occupancy as represented by the Mortgagor at the time of origination.


                    PURPOSE OF THE SUBGROUP 1 MORTGAGE LOANS



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 1 MORTGAGE LOANS
                                    NUMBER OF SUBGROUP 1        BALANCE OF SUBGROUP 1            OUTSTANDING
            PURPOSE                    MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
-------------------------------     --------------------       ------------------------   --------------------------

Refinance - Cashout..........                 1,735                  $328,916,414.83                53.08%
Purchase.....................                 1,184                   226,144,237.84                36.49
Refinance - Rate/Term........                   374                    64,654,299.01                10.43
                                    --------------------       -----------------------    --------------------------
TOTAL:.......................                 3,293                  $619,714,951.68               100.00%
                                    ====================       =======================    ==========================


                                      S-38


        ORIGINAL LOAN-TO-VALUE RATIOS OF THE SUBGROUP 1 MORTGAGE LOANS *



                                                                                           % OF AGGREGATE PRINCIPAL
                                                                                            BALANCE OF SUBGROUP 1
                                                                CUT-OFF DATE PRINCIPAL          MORTGAGE LOANS
     ORIGINAL LOAN-TO-VALUE          NUMBER OF SUBGROUP 1       BALANCE OF SUBGROUP 1            OUTSTANDING
           RATIO (%)                    MORTGAGE LOANS              MORTGAGE LOANS            AS OF CUT-OFF DATE
-------------------------------     --------------------       ------------------------   --------------------------

50.00 or less................                    93                 $  13,192,205.10                 2.13%
50.01 - 60.00................                   146                    26,713,286.65                 4.31
60.01 - 70.00................                   303                    60,089,629.71                 9.70
70.01 - 80.00................                 1,545                   298,595,318.59                48.18
80.01 - 90.00................                   896                   163,858,899.96                26.44
90.01 - 100.00...............                   310                    57,265,611.67                 9.24
                                    --------------------       -----------------------    --------------------------
TOTAL:.......................                 3,293                  $619,714,951.68               100.00%
                                    ====================       =======================    ==========================

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

*    The weighted average original loan-to-value ratio of the Subgroup 1
     Mortgage Loans as of the Cut-off Date was approximately 79.57%.


        GEOGRAPHIC DISTRIBUTION OF THE SUBGROUP 1 MORTGAGED PROPERTIES(1)



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 1 MORTGAGE LOANS
                                    NUMBER OF SUBGROUP 1        BALANCE OF SUBGROUP 1            OUTSTANDING
            LOCATION                   MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
-------------------------------     --------------------       ------------------------   --------------------------

California...................                 1,009                  $239,076,829.28                38.58%
New York.....................                   179                    44,009,475.96                 7.10
Florida......................                   272                    40,441,722.98                 6.53
New Jersey...................                   141                    31,400,564.97                 5.07
Illinois.....................                   174                    30,764,043.22                 4.96
Texas........................                   207                    23,716,049.73                 3.83
Massachusetts................                    74                    17,882,051.71                 2.89
Maryland.....................                    91                    17,084,737.24                 2.76
Virginia.....................                    85                    16,241,053.33                 2.62
Nevada.......................                    72                    14,552,724.37                 2.35
Washington...................                    73                    13,155,526.04                 2.12
Other(2).....................                   916                   131,390,172.85                21.20
                                    --------------------       -----------------------    --------------------------
TOTAL:.......................                 3,293                  $619,714,951.68               100.00%
                                    ====================       =======================    ==========================


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

(1)  The greatest ZIP Code geographic concentration of Subgroup 1 Mortgage
     Loans, by Cut-off Date Principal Balance, was approximately 0.47% in the
     93550 ZIP Code.

(2)  This row includes 39 other states and the District of Columbia with under
     2% concentrations individually.


                                      S-39


              DOCUMENTATION LEVEL OF THE SUBGROUP 1 MORTGAGE LOANS*



                                                                                                  % OF AGGREGATE
                                                                                                PRINCIPAL BALANCE OF
                                                                  CUT-OFF DATE PRINCIPAL     SUBGROUP 1 MORTGAGE LOANS
                                       NUMBER OF SUBGROUP         BALANCE OF SUBGROUP 1             OUTSTANDING
         DOCUMENTATION LEVEL            1 MORTGAGE LOANS              MORTGAGE LOANS            AS OF CUT-OFF DATE
-----------------------------------   --------------------       ------------------------   --------------------------

Full Documentation.................             1,777                $312,340,107.70                50.40%
Stated Documentation...............               969                 193,023,903.46                31.15
Streamlined - Stated (Asset Verified)             329                  72,058,188.58                11.63
Limited Documentation..............               138                  26,394,250.77                 4.26
Lite Documentation.................                43                   8,632,253.35                 1.39
Full Alternative Documentation.....                37                   7,266,247.82                 1.17
                                      --------------------       ------------------------   --------------------------
TOTAL:.............................             3,293                $619,714,951.68               100.00%
                                      ====================       ========================   ==========================


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

*    For a description of each documentation level, see "The Originators--New
     Century Mortgage Corporation" and "--WMC Mortgage Corp." in this prospectus
     supplement.


              CURRENT LOAN RATES OF THE SUBGROUP 1 MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 1 MORTGAGE LOANS
                                    NUMBER OF SUBGROUP 1        BALANCE OF SUBGROUP 1            OUTSTANDING
     CURRENT LOAN RATE (%)             MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
-------------------------------     --------------------       ------------------------   --------------------------

5.000 or less................                    25                  $  5,324,481.23                 0.86%
5.001 - 5.500................                   121                    28,096,309.89                 4.53
5.501 - 6.000................                   488                   107,614,380.33                17.37
6.001 - 6.500................                   607                   126,156,719.24                20.36
6.501 - 7.000................                   648                   126,944,649.58                20.48
7.001 - 7.500................                   390                    70,964,880.09                11.45
7.501 - 8.000................                   446                    71,993,379.80                11.62
8.001 - 8.500................                   234                    36,202,118.43                 5.84
8.501 - 9.000................                   190                    29,838,176.66                 4.81
9.001 - 9.500................                    71                     9,049,255.75                 1.46
9.501 - 10.000...............                    51                     5,553,561.08                 0.90
10.001 - 10.500..............                    11                     1,021,949.11                 0.16
10.501 - 11.000..............                     6                       607,967.26                 0.10
11.001 - 11.500..............                     3                       175,533.98                 0.03
11.501 - 12.000..............                     2                       171,589.25                 0.03
                                    --------------------       ------------------------   --------------------------
TOTAL:.......................                 3,293                  $619,714,951.68               100.00%
                                    ====================       ========================   ==========================


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

*    The weighted average Loan Rate of the Subgroup 1 Mortgage Loans as of the
     Cut-off Date was approximately 6.886% per annum.

                                      S-40



              MAXIMUM LOAN RATES OF THE SUBGROUP 1 MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 1 MORTGAGE LOANS
                                    NUMBER OF SUBGROUP 1        BALANCE OF SUBGROUP 1            OUTSTANDING
     MAXIMUM LOAN RATE (%)             MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
-------------------------------     --------------------       ------------------------   --------------------------

Not Applicable...............                   583                 $  93,459,118.01                15.08%
10.501 - 11.000..............                     1                       149,638.11                 0.02
11.001 - 11.500..............                    10                     2,392,749.64                 0.39
11.501 - 12.000..............                    75                    17,909,634.31                 2.89
12.001 - 12.500..............                   261                    59,411,306.75                 9.59
12.501 - 13.000..............                   448                    96,814,691.50                15.62
13.001 - 13.500..............                   503                   105,014,738.36                16.95
13.501 - 14.000..............                   385                    75,874,574.10                12.24
14.001 - 14.500..............                   348                    60,333,298.08                 9.74
14.501 - 15.000..............                   272                    44,888,557.76                 7.24
15.001 - 15.500..............                   178                    29,076,134.83                 4.69
15.501 - 16.000..............                   143                    23,649,372.56                 3.82
16.001 - 16.500..............                    43                     5,878,693.41                 0.95
16.501 - 17.000..............                    31                     3,676,252.84                 0.59
17.001 - 17.500..............                     9                       838,402.51                 0.14
17.501 - 18.000..............                     3                       347,788.91                 0.06
                                    --------------------       ------------------------   --------------------------
TOTAL:.......................                 3,293                  $619,714,951.68               100.00%
                                    ====================       ========================   ==========================


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

*    The weighted average Maximum Loan Rate of the Subgroup 1 Mortgage Loans
     that are adjustable-rate mortgage loans as of the Cut-off Date was
     approximately 13.647% per annum.


                 GROSS MARGINS OF THE SUBGROUP 1 MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 1 MORTGAGE LOANS
                                    NUMBER OF SUBGROUP 1        BALANCE OF SUBGROUP 1           OUTSTANDING AS
       GROSS MARGINS (%)               MORTGAGE LOANS               MORTGAGE LOANS             OF CUT-OFF DATE
-------------------------------     --------------------       ------------------------   --------------------------

Not Applicable...............                   583                  $ 93,459,118.01                15.08%
2.501 - 3.000................                     1                       157,387.38                 0.03
3.001 - 3.500................                     3                       899,348.22                 0.15
3.501 - 4.000................                     1                       130,500.00                 0.02
4.001 - 4.500................                     3                       770,002.12                 0.12
4.501 - 5.000................                   183                    37,368,591.53                 6.03
5.001 - 5.500................                   667                   128,345,274.44                20.71
5.501 - 6.000................                 1,042                   204,322,967.25                32.97
6.001 - 6.500................                   403                    79,568,133.83                12.84
6.501 - 7.000................                   242                    46,721,043.23                 7.54
7.001 - 7.500................                   108                    18,065,309.07                 2.92
7.501 - 8.000................                    57                     9,907,276.60                 1.60
                                    --------------------       ------------------------   --------------------------
TOTAL:.......................                 3,293                  $619,714,951.68               100.00%
                                    ====================       ========================   ==========================


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

*    The weighted average Gross Margin of the Subgroup 1 Mortgage Loans that are
     adjustable-rate mortgage loans as of the Cut-off Date was approximately
     5.826%.


                                      S-41



             NEXT ADJUSTMENT DATE FOR THE SUBGROUP 1 MORTGAGE LOANS



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 1 MORTGAGE LOANS
                                    NUMBER OF SUBGROUP 1        BALANCE OF SUBGROUP 1            OUTSTANDING
        RATE CHANGE DATE               MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
-------------------------------     --------------------       ------------------------   --------------------------

Not Applicable...............                   583                 $  93,459,118.01                15.08%
March 2005...................                     4                     1,029,848.22                 0.17
June 2005....................                     2                       338,751.12                 0.05
June 2006....................                     1                       102,595.55                 0.02
August 2006..................                     3                       597,068.53                 0.10
September 2006...............                    13                     2,710,899.20                 0.44
October 2006.................                    49                    10,012,969.63                 1.62
November 2006................                   419                    84,790,667.86                13.68
December 2006................                 1,918                   368,322,927.51                59.43
January 2007.................                   162                    29,989,218.52                 4.84
September 2007...............                     1                       323,351.27                 0.05
October 2007.................                     2                       329,370.38                 0.05
November 2007................                    16                     2,758,488.25                 0.45
December 2007................                    74                    14,344,911.91                 2.31
January 2008.................                     3                       272,239.22                 0.04
February 2008................                     1                       208,000.00                 0.03
November 2009................                    10                     2,228,431.53                 0.36
December 2009................                    32                     7,896,094.97                 1.27
                                    --------------------       ------------------------   --------------------------
TOTAL:.......................                 3,293                  $619,714,951.68               100.00%
                                    ====================       ========================   ==========================















                                      S-42



                  PRODUCT TYPE OF THE SUBGROUP 1 MORTGAGE LOANS



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                NUMBER OF        CUT-OFF DATE PRINCIPAL   SUBGROUP 1 MORTGAGE LOANS
                                               SUBGROUP 1        BALANCE OF SUBGROUP 1           OUTSTANDING
               PRODUCT TYPE                  MORTGAGE LOANS          MORTGAGE LOANS           AS OF CUT-OFF DATE
---------------------------------------      --------------      ----------------------   --------------------------

25 Year 1 Month LIBOR - 10 Year IO(1)..                4            $    1,029,848.22                0.17%
2/28 ARM(2)............................            2,336               442,888,437.16               71.47
2/28 Interest Only ARM - 2 Year IO(3)..               75                17,425,802.40                2.81
2/28 Interest Only ARM - 5 Year IO(4)..              152                36,067,049.79                5.82
3/27 ARM(5)............................               92                17,223,301.23                2.78
3/27 Interest Only ARM - 3 Year IO (6).                6                 1,199,549.98                0.19
5/25 ARM(7)............................               19                 3,969,258.45                0.64
5/25 Interest Only ARM - 5 Year IO(8)..               24                 6,113,835.32                0.99
30 Year ARM(9).........................                2                   338,751.12                0.05
Fixed - 15 Year........................               54                 5,782,197.09                0.93
Fixed - 20 Year........................               20                 2,815,394.71                0.45
Fixed - 25 Year........................               14                 1,340,189.77                0.22
Fixed - 30 Year........................              495                83,521,336.44               13.48
                                                   -----              ---------------              ------
TOTAL:.................................            3,293              $619,714,951.68              100.00%
                                                   =====              ===============              ======


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

(1)      25 Year 1 Month LIBOR - 10 Year IO refers to a Mortgage Loan that
         adjusts monthly and pays interest only for ten years after the
         origination of that Mortgage Loan. Thereafter, the Loan Rate on that
         Mortgage Loan adjusts monthly based upon the one-month LIBOR index.

(2)      2/28 ARM refers to a Mortgage Loan for which the Loan Rate is fixed for
         two years after the origination of that Mortgage Loan. Thereafter, the
         Loan Rate on that Mortgage Loan adjusts semi-annually based upon the
         six-month LIBOR index.

(3)      2/28 Interest Only ARM - 2 Year IO refers to a Mortgage Loan that pays
         interest only for two years after the origination of that Mortgage Loan
         and becomes fully amortizing thereafter. The Loan Rate on that Mortgage
         Loan is fixed for the first two years and then adjusts semi-annually
         based upon the six-month LIBOR index.

(4)      2/28 Interest Only ARM - 5 Year IO refers to a Mortgage Loan that pays
         interest only for five years after the origination of that Mortgage
         Loan and becomes fully amortizing thereafter. The Loan Rate on that
         Mortgage Loan is fixed for the first two years and then adjusts
         semi-annually based upon the six-month LIBOR index.

(5)      3/27 ARM refers to a Mortgage Loan for which the Loan Rate is fixed for
         three years after the origination of that Mortgage Loan. Thereafter,
         the Loan Rate on that Mortgage Loan adjusts semi-annually based upon
         the six-month LIBOR index.

(6)      3/27 Interest Only ARM - 3 Year IO refers to a Mortgage Loan that pays
         interest only for three years after the origination of that Mortgage
         Loan and becomes fully amortizing thereafter. The Loan Rate on that
         Mortgage Loan is fixed for the first three years and then adjusts
         semi-annually based upon the six-month LIBOR index.

(7)      5/25 ARM refers to a Mortgage Loan for which the Loan Rate is fixed for
         five years after the origination of that Mortgage Loan. Thereafter, the
         Loan Rate on that Mortgage Loan adjusts semi-annually based upon the
         six-month LIBOR index.

(8)      5/25 Interest Only ARM - 5 Year IO refers to a Mortgage Loan that pays
         interest only for five years after the origination of that Mortgage
         Loan and becomes fully amortizing thereafter. The Loan Rate on that
         Mortgage Loan is fixed for the first five years and then adjusts
         semi-annually based upon the six-month LIBOR index.

(9)      30 Year ARM refers to a Mortgage Loan that adjusts semi-annually based
         upon the six-month LIBOR index.

                                      S-43





                 ORIGINAL TERM TO EXPIRATION OF PREPAYMENT PENALTY OF THE SUBGROUP 1 MORTGAGE LOANS

                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 1 MORTGAGE LOANS
  ORIGINAL NUMBER OF MONTHS TO      NUMBER OF SUBGROUP 1        BALANCE OF SUBGROUP 1            OUTSTANDING
           EXPIRATION                  MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
---------------------------------------      --------------      ----------------------   --------------------------

Not Applicable...............                   965                  $176,668,225.42                28.51%
7 - 12.......................                   122                    26,762,398.03                 4.32
13 - 24......................                 1,751                   340,542,880.01                54.95
25 - 36......................                   455                    75,741,448.22                12.22
                                              -----                  ---------------               ------
TOTAL:.......................                 3,293                  $619,714,951.68               100.00%
                                              =====                  ===============               ======



                 CREDIT GRADE OF THE SUBGROUP 1 MORTGAGE LOANS*





                                                                                                 % OF AGGREGATE
                                                                                              PRINCIPAL BALANCE OF
                                                                  CUT-OFF DATE PRINCIPAL       SUBGROUP 1 MORTGAGE
                                       NUMBER OF SUBGROUP 1        BALANCE OF SUBGROUP 1        LOANS OUTSTANDING
          CREDIT GRADE                    MORTGAGE LOANS              MORTGAGE LOANS           AS OF CUT-OFF DATE
------------------------------------   --------------------       -----------------------     ----------------------

AA (New Century) ............                  1,234                    $228,796,100.13               36.92%
AA (WMC) ....................                    650                     135,503,747.94               21.87
A+ (New Century) ............                    208                      39,850,637.17                6.43
A (WMC) .....................                    374                      69,747,255.52               11.25
A- (New Century) ............                    149                      24,740,872.08                3.99
A- (WMC) ....................                    150                      27,937,656.51                4.51
B+ (WMC) ....................                    155                      28,429,503.79                4.59
B (New Century) .............                    121                      21,038,185.25                3.39
B (WMC) .....................                    170                      28,883,064.88                4.66
C (New Century) .............                     59                      10,773,283.53                1.74
C (WMC) .....................                     17                       2,838,387.20                0.46
C- (New Century) ............                      2                         146,409.46                0.02
FICO (New Century)...........                      4                       1,029,848.22                0.17
                                               -----                    ---------------              ------
TOTAL:.......................                  3,293                    $619,714,951.68              100.00%t
                                               =====                    ===============              ======




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

*    For a description of each credit grade, see "The Originators--New Century
     Mortgage Corporation" and "--WMC Mortgage Corp." in this prospectus
     supplement.


                 LIEN POSITION OF THE SUBGROUP 1 MORTGAGE LOANS




                                                                                                 % OF AGGREGATE
                                                                                              PRINCIPAL BALANCE OF
                                                                       CUT-OFF DATE            SUBGROUP 1 MORTGAGE
                                             NUMBER OF             PRINCIPAL BALANCE OF         LOANS OUTSTANDING
           LIEN POSITION             SUBGROUP 1 MORTGAGE LOANS   SUBGROUP 1 MORTGAGE LOANS     AS OF CUT-OFF DATE
------------------------------------   --------------------       -----------------------     ----------------------

First Lien.......................                3,293                  $619,714,951.68              100.00%
                                                 -----                  ---------------              ------
TOTAL:...........................                3,293                  $619,714,951.68              100.00%
                                                 =====                  ===============              ======




                                      S-44




                            SUBGROUP 2 MORTGAGE LOANS

          ORIGINAL PRINCIPAL BALANCES OF THE SUBGROUP 2 MORTGAGE LOANS*



                                                                                           % OF AGGREGATE ORIGINAL
                                                                  ORIGINAL PRINCIPAL          PRINCIPAL BALANCE
            ORIGINAL                NUMBER OF SUBGROUP 2        BALANCE OF SUBGROUP 2           OF SUBGROUP 2
     PRINCIPAL BALANCE ($)             MORTGAGE LOANS               MORTGAGE LOANS              MORTGAGE LOANS
--------------------------------    --------------------        -----------------------     ----------------------

1 - 25,000...................                   101                $    2,076,289.00                 0.40%
25,001 - 50,000..............                   450                    17,136,153.00                 3.29
50,001 - 75,000..............                   495                    30,746,470.40                 5.90
75,001 - 100,000.............                   300                    25,914,453.00                 4.98
100,001 - 125,000............                   200                    22,448,112.20                 4.31
125,001 - 150,000............                   133                    18,252,847.00                 3.50
150,001 - 175,000............                   100                    16,270,553.00                 3.12
175,001 - 200,000............                    79                    14,915,386.00                 2.86
200,001 - 250,000............                   113                    25,487,768.00                 4.89
250,001 - 300,000............                    85                    23,346,412.00                 4.48
300,001 - 400,000............                   284                   103,576,787.00                19.89
400,001 - 500,000............                   256                   114,624,224.00                22.01
500,001 - 600,000............                   117                    64,087,417.00                12.31
600,001 - 700,000............                    37                    24,150,611.00                 4.64
700,001 or greater...........                    23                    17,788,035.00                 3.42
                                              -----                  ---------------               ------
TOTAL:.......................                 2,773                  $520,821,517.60               100.00%
                                              =====                  ===============               ======


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

*    The average Principal Balance of the Subgroup 2 Mortgage Loans at
     origination was approximately $187,819.


        CUT-OFF DATE PRINCIPAL BALANCES OF THE SUBGROUP 2 MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 2 MORTGAGE LOANS
          CUT-OFF DATE              NUMBER OF SUBGROUP 2        BALANCE OF SUBGROUP 2            OUTSTANDING
     PRINCIPAL BALANCE ($)             MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
--------------------------------    --------------------        -----------------------     ----------------------

1 - 25,000...................                   102                $    2,087,856.64                 0.40%
25,001 - 50,000..............                   453                    17,255,548.34                 3.32
50,001 - 75,000..............                   495                    30,790,981.81                 5.92
75,001 - 100,000.............                   296                    25,578,411.86                 4.92
100,001 - 125,000............                   200                    22,413,627.71                 4.31
125,001 - 150,000............                   134                    18,378,845.77                 3.53
150,001 - 175,000............                    99                    16,103,663.30                 3.10
175,001 - 200,000............                    79                    14,899,851.38                 2.86
200,001 - 250,000............                   114                    25,715,835.14                 4.94
250,001 - 300,000............                    84                    23,077,685.24                 4.44
300,001 - 400,000............                   287                   104,662,865.33                20.12
400,001 - 500,000............                   253                   113,261,352.97                21.78
500,001 - 600,000............                   117                    64,003,405.69                12.31
600,001 - 700,000............                    37                    24,115,797.93                 4.64
700,001 or greater...........                    23                    17,764,972.96                 3.42
                                              -----                  ---------------               ------
TOTAL:.......................                 2,773                  $520,110,702.07               100.00%
                                              =====                  ===============               ======

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

*    The average Cut-off Date Principal Balance of the Subgroup 2 Mortgage Loans
     was approximately $187,562.


                                      S-45


                 FICO SCORES FOR THE SUBGROUP 2 MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 2 MORTGAGE LOANS
                                    NUMBER OF SUBGROUP 2        BALANCE OF SUBGROUP 2            OUTSTANDING
           FICO SCORE                  MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
--------------------------------    --------------------        -----------------------     ----------------------

500..........................                   1               $       109,836.25                    0.02%
501 - 525....................                  58                    12,784,953.65                    2.46
526 - 550....................                 102                    21,235,375.53                    4.08
551 - 575....................                 124                    27,398,853.14                    5.27
576 - 600....................                 342                    66,603,379.65                   12.81
601 - 625....................                 426                    86,883,486.18                   16.70
626 - 650....................                 482                    82,623,402.68                   15.89
651 - 675....................                 496                    88,913,795.26                   17.10
676 - 700....................                 308                    59,267,876.02                   11.40
701 - 725....................                 214                    36,688,196.60                    7.05
726 - 750....................                 108                    18,705,916.12                    3.60
751 - 775....................                  78                    14,171,334.91                    2.72
776 - 800....................                  28                     3,923,322.10                    0.75
801 - 825....................                   6                       800,973.98                    0.15
                                            -----                  ---------------                  ------
TOTAL:.......................               2,773                  $520,110,702.07                  100.00%
                                            =====                  ===============                  ======


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

*    The weighted average FICO score of the Mortgagors of the Subgroup 2
     Mortgage Loans as of the Cut-off Date was approximately 640.


       ORIGINAL TERMS TO STATED MATURITY OF THE SUBGROUP 2 MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 2 MORTGAGE LOANS
                                    NUMBER OF SUBGROUP 2        BALANCE OF SUBGROUP 2            OUTSTANDING
     ORIGINAL TERM (MONTHS)            MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
--------------------------------    --------------------        -----------------------     ----------------------

120..........................                   2               $       103,496.26                    0.02%
121 - 180....................                 916                    58,105,300.72                   11.17
181 - 240....................                 149                     6,032,255.92                    1.16
241 - 300....................                   6                     2,371,902.40                    0.46
301 - 360....................               1,700                   453,497,746.77                   87.19
                                            -----                  ---------------                  ------
TOTAL:.......................               2,773                  $520,110,702.07                  100.00%
                                            =====                  ===============                  ======


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

*    The weighted average original term of the Subgroup 2 Mortgage Loans was
     approximately 338 months.


      REMAINING TERMS TO STATED MATURITY OF THE SUBGROUP 2 MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 2 MORTGAGE LOANS
                                    NUMBER OF SUBGROUP 2        BALANCE OF SUBGROUP 2            OUTSTANDING
    REMAINING TERM (MONTHS)            MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
--------------------------------    --------------------        -----------------------     ----------------------

180 or less..................                 918                 $  58,208,796.98                   11.19%
181 - 348....................                 155                     8,404,158.32                    1.62
349 - 360....................               1,700                   453,497,746.77                   87.19
---   ----                                  -----                   --------------                   -----
TOTAL:.......................               2,773                  $520,110,702.07                  100.00%
                                            =====                  ===============                  ======


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

*    The weighted average remaining term of the Subgroup 2 Mortgage Loans was
     approximately 336 months.

                                      S-46



                 PROPERTY TYPES OF THE SUBGROUP 2 MORTGAGE LOANS



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 2 MORTGAGE LOANS
                                    NUMBER OF SUBGROUP 2        BALANCE OF SUBGROUP 2            OUTSTANDING
         PROPERTY TYPE                 MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
--------------------------------    --------------------        -----------------------     ----------------------

Single Family................               2,017                  $385,138,125.98                   74.05%
PUD - Detached*..............                 301                    65,900,666.01                   12.67
Condominium..................                 220                    33,736,003.04                    6.49
2-4 Unit.....................                 147                    25,107,426.85                    4.83
PUD - Attached*..............                  74                     8,372,132.46                    1.61
Manufactured Housing.........                  14                     1,856,347.73                    0.36
                                            -----                  ---------------                  ------
TOTAL:.......................               2,773                  $520,110,702.07                  100.00%
                                            =====                  ===============                  ======


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

*    PUD refers to a home or "unit" in a Planned Unit Development.


               OCCUPANCY STATUS OF THE SUBGROUP 2 MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 2 MORTGAGE LOANS
                                     NUMBER OF SUBGROUP 2       BALANCE OF SUBGROUP 2            OUTSTANDING
        OCCUPANCY STATUS                MORTGAGE LOANS              MORTGAGE LOANS            AS OF CUT-OFF DATE
--------------------------------    --------------------        -----------------------     ----------------------

Primary Residence............               2,668                  $499,890,186.03                   96.11%
Investment Property..........                  65                    13,348,893.68                    2.57
Second Home..................                  40                     6,871,622.36                    1.32
                                            -----                  ---------------                  ------
TOTAL:.......................               2,773                  $520,110,702.07                  100.00%
                                            =====                  ===============                  ======
--------------------


*    Occupancy as represented by the Mortgagor at the time of origination.


                    PURPOSE OF THE SUBGROUP 2 MORTGAGE LOANS



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 2 MORTGAGE LOANS
                                    NUMBER OF SUBGROUP 2        BALANCE OF SUBGROUP 2            OUTSTANDING
            PURPOSE                    MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
--------------------------------    --------------------        -----------------------     ----------------------

Purchase.....................               1,622                  $244,338,753.53                   46.98%
Refinance - Cashout..........                 978                   239,343,825.29                   46.02
Refinance - Rate/Term........                 173                    36,428,123.25                    7.00
                                            -----                  ---------------                  ------
TOTAL:.......................               2,773                  $520,110,702.07                  100.00%
                                            =====                  ===============                  ======


                                      S-47



         ORIGINAL LOAN-TO-VALUE RATIOS OF THE SUBGROUP 2 MORTGAGE LOANS*



                                                                                               % OF AGGREGATE
                                                                                            PRINCIPAL BALANCE OF
                                                               CUT-OFF DATE PRINCIPAL     SUBGROUP 2 MORTGAGE LOANS
     ORIGINAL LOAN-TO-VALUE         NUMBER OF SUBGROUP 2        BALANCE OF SUBGROUP 2            OUTSTANDING
           RATIO (%)                   MORTGAGE LOANS              MORTGAGE LOANS            AS OF CUT-OFF DATE
--------------------------------    --------------------        -----------------------     ----------------------

50.00 or less................                  47                $    6,657,630.73                   1.28%
50.01 - 60.00................                  60                    13,752,020.95                   2.64
60.01 - 70.00................                 157                    45,160,702.25                   8.68
70.01 - 80.00................                 678                   214,034,536.27                  41.15
80.01 - 90.00................                 417                   119,004,182.42                  22.88
90.01 - 100.00...............               1,414                   121,501,629.45                  23.36
                                            -----                   --------------                  -----
TOTAL:.......................               2,773                  $520,110,702.07                 100.00%
                                            =====                  ===============                 ======


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

*    The weighted average original loan-to-value ratio of the first lien
     Subgroup 2 Mortgage Loans as of the Cut-off Date was approximately 80.19%.
     The weighted average combined loan-to-value ratio of the second lien
     Mortgage Loans as of the Cut-off Date was approximately 99.58%.


        GEOGRAPHIC DISTRIBUTION OF THE SUBGROUP 2 MORTGAGED PROPERTIES(1)



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 2 MORTGAGE LOANS
                                    NUMBER OF SUBGROUP 2        BALANCE OF SUBGROUP 2            OUTSTANDING
            LOCATION                   MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
--------------------------------    --------------------        -----------------------     ----------------------

California...................               1,313                  $314,881,422.06                   60.54%
New York.....................                 119                    30,084,547.99                    5.78
New Jersey...................                  79                    15,488,112.07                    2.98
Illinois.....................                  90                    13,416,020.68                    2.58
Florida......................                 114                    12,861,924.56                    2.47
Texas........................                 118                    12,432,926.40                    2.39
Virginia.....................                  70                    12,125,178.84                    2.33
Arizona......................                 101                    12,073,650.48                    2.32
Other(2).....................                 769                    96,746,918.99                   18.60
                                            -----                  ---------------                  ------
TOTAL:.......................               2,773                  $520,110,702.07                  100.00%
                                            =====                  ===============                  ======


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

(1)  The greatest ZIP Code geographic concentration of Subgroup 2 Mortgage
     Loans, by Cut-off Date Principal Balance, was approximately 0.59% in the
     94591 ZIP Code.

(2)  This row includes 41 other states and the District of Columbia with under
     2% concentrations individually.


                                      S-48


              DOCUMENTATION LEVEL OF THE SUBGROUP 2 MORTGAGE LOANS*



                                                                                                 % OF AGGREGATE
                                                                                              PRINCIPAL BALANCE OF
                                                                   CUT-OFF DATE PRINCIPAL      SUBGROUP 2 MORTGAGE
                                        NUMBER OF SUBGROUP 2       BALANCE OF SUBGROUP 2        LOANS OUTSTANDING
         DOCUMENTATION LEVEL               MORTGAGE LOANS              MORTGAGE LOANS          AS OF CUT-OFF DATE
-----------------------------------    --------------------        ----------------------    ----------------------

Full Documentation.................              1,276                $219,285,585.11                   42.16%
Stated Documentation...............                661                 155,142,399.18                   29.83
Streamlined - Stated (Asset Verified)              553                  79,507,812.93                   15.29
Limited Documentation..............                199                  49,590,282.51                    9.53
Full Alternative Documentation.....                 39                   8,893,183.49                    1.71
Lite Documentation.................                 45                   7,691,438.85                    1.48
                                                 -----                ---------------                  ------
TOTAL:.............................              2,773                $520,110,702.07                  100.00%
                                                 =====                ===============                  ======


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

*    For a description of each documentation level, see "The Originators--New
     Century Mortgage Corporation" and "--WMC Mortgage Corp." in this prospectus
     supplement.


              CURRENT LOAN RATES OF THE SUBGROUP 2 MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 2 MORTGAGE LOANS
                                    NUMBER OF SUBGROUP 2        BALANCE OF SUBGROUP 2            OUTSTANDING
     CURRENT LOAN RATE (%)             MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
-------------------------------     --------------------        ----------------------    --------------------------

5.000 or less................                  19                 $   8,266,298.13                    1.59%
5.001 - 5.500................                  95                    37,012,664.22                    7.12
5.501 - 6.000................                 299                    98,055,752.31                   18.85
6.001 - 6.500................                 290                    92,812,243.44                   17.84
6.501 - 7.000................                 281                    89,050,006.41                   17.12
7.001 - 7.500................                 168                    45,712,076.67                    8.79
7.501 - 8.000................                 146                    36,185,550.98                    6.96
8.001 - 8.500................                 141                    20,676,259.98                    3.98
8.501 - 9.000................                 169                    18,619,269.61                    3.58
9.001 - 9.500................                 154                    12,502,287.41                    2.40
9.501 - 10.000...............                 319                    20,780,092.10                    4.00
10.001 - 10.500..............                 251                    15,048,403.62                    2.89
10.501 - 11.000..............                 294                    18,191,194.58                    3.50
11.001 - 11.500..............                  65                     3,347,443.17                    0.64
11.501 - 12.000..............                  43                     2,236,617.82                    0.43
12.001 - 12.500..............                  12                       639,167.82                    0.12
12.501 - 13.000..............                  27                       975,373.80                    0.19
                                            -----                  ---------------                  ------
TOTAL:.......................               2,773                  $520,110,702.07                  100.00%
                                            =====                  ===============                  ======



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

*    The weighted average Loan Rate of the Subgroup 2 Mortgage Loans as of the
     Cut-off Date was approximately 7.146% per annum.


                                      S-49


              MAXIMUM LOAN RATES OF THE SUBGROUP 2 MORTGAGE LOANS*




                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 2 MORTGAGE LOANS
                                    NUMBER OF SUBGROUP 2        BALANCE OF SUBGROUP 2            OUTSTANDING
     MAXIMUM LOAN RATE (%)             MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
-------------------------------     --------------------        ----------------------    --------------------------

Not Applicable...............               1,421                  $112,143,622.13                   21.56%
11.001 - 11.500..............                   9                     4,592,017.74                    0.88
11.501 - 12.000..............                  72                    28,566,399.92                    5.49
12.001 - 12.500..............                 164                    59,522,612.96                   11.44
12.501 - 13.000..............                 246                    81,085,620.88                   15.59
13.001 - 13.500..............                 270                    84,469,971.62                   16.24
13.501 - 14.000..............                 185                    61,757,534.45                   11.87
14.001 - 14.500..............                 142                    40,654,712.94                    7.82
14.501 - 15.000..............                  88                    19,491,954.22                    3.75
15.001 - 15.500..............                  83                    14,312,041.12                    2.75
15.501 - 16.000..............                  60                     9,497,782.86                    1.83
16.001 - 16.500..............                  17                     2,430,153.02                    0.47
16.501 - 17.000..............                  10                     1,190,852.59                    0.23
17.001 - 17.500..............                   5                       327,971.92                    0.06
18.001 - 18.500..............                   1                        67,453.70                    0.01
                                            -----                  ---------------                  ------
TOTAL:.......................               2,773                  $520,110,702.07                  100.00%
                                            =====                  ===============                  ======


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

*    The weighted average Maximum Loan Rate of the Subgroup 2 Mortgage Loans
     that are adjustable-rate mortgage loans as of the Cut-off Date was
     approximately 13.356% per annum.


                 GROSS MARGINS OF THE SUBGROUP 2 MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 2 MORTGAGE LOANS
                                    NUMBER OF SUBGROUP 2        BALANCE OF SUBGROUP 2            OUTSTANDING
       GROSS MARGINS (%)               MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
-------------------------------     --------------------        ----------------------    --------------------------

Not Applicable...............               1,421                  $112,143,622.13                   21.56%
0.501 - 1.000................                   1                       318,400.00                    0.06
2.501 - 3.000................                   3                     1,265,336.01                    0.24
3.001 - 3.500................                   4                     1,185,380.69                    0.23
4.001 - 4.500................                   3                     1,008,247.00                    0.19
4.501 - 5.000................                 118                    38,313,873.91                    7.37
5.001 - 5.500................                 326                    94,885,909.77                   18.24
5.501 - 6.000................                 538                   163,947,679.51                   31.52
6.001 - 6.500................                 155                    49,845,700.57                    9.58
6.501 - 7.000................                  82                    25,271,488.65                    4.86
7.001 - 7.500................                  36                    12,766,085.39                    2.45
7.501 - 8.000................                  71                    16,341,967.85                    3.14
8.001 - 8.500................                   9                     1,731,694.93                    0.33
8.501 - 9.000................                   4                       658,510.63                    0.13
9.001 - 9.500................                   2                       426,805.03                    0.08
                                            -----                  ---------------                  ------
TOTAL:.......................               2,773                  $520,110,702.07                  100.00%
                                            =====                  ===============                  ======



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

*    The weighted average Gross Margin of the Subgroup 2 Mortgage Loans that are
     adjustable-rate mortgage loans as of the Cut-off Date was approximately
     5.809%.


                                      S-50


             NEXT ADJUSTMENT DATE FOR THE SUBGROUP 2 MORTGAGE LOANS



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 2 MORTGAGE LOANS
                                    NUMBER OF SUBGROUP 2        BALANCE OF SUBGROUP 2            OUTSTANDING
        RATE CHANGE DATE               MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
-------------------------------     --------------------        ----------------------    --------------------------

Not Applicable...............               1,421                  $112,143,622.13                   21.56%
March 2005...................                   6                     2,371,902.40                    0.46
August 2006..................                   1                        49,312.12                    0.01
September 2006...............                  10                     2,482,759.74                    0.48
October 2006.................                  40                    12,197,304.24                    2.35
November 2006................                 186                    65,300,173.29                   12.56
December 2006................                 952                   281,718,414.96                   54.17
January 2007.................                  62                    13,846,088.34                    2.66
November 2007................                  11                     2,330,358.60                    0.45
December 2007................                  35                    10,883,704.39                    2.09
January 2008.................                   6                     1,848,076.84                    0.36
November 2009................                  11                     3,672,143.12                    0.71
December 2009................                  32                    11,266,841.90                    2.17
                                            -----                  ---------------                  ------
TOTAL:.......................               2,773                  $520,110,702.07                  100.00%
                                            =====                  ===============                  ======



                                      S-51




                  PRODUCT TYPE OF THE SUBGROUP 2 MORTGAGE LOANS



                                                                                                 % OF AGGREGATE
                                                                                              PRINCIPAL BALANCE OF
                                               NUMBER OF         CUT-OFF DATE PRINCIPAL       SUBGROUP 2 MORTGAGE
                                               SUBGROUP 2         BALANCE OF SUBGROUP 2        LOANS OUTSTANDING
               PRODUCT TYPE                  MORTGAGE LOANS          MORTGAGE LOANS            AS OF CUT-OFF DATE
-----------------------------------------  -----------------     ----------------------    --------------------------

25 Year 1 Month LIBOR - 10 Year IO(1) ...             6           $    2,371,902.40                     0.46%
2/28 ARM(2)..............................           783              223,789,978.31                    43.03
2/28 Interest Only ARM - 2 Year IO(3)....           219               64,404,995.44                    12.38
2/28 Interest Only ARM - 5 Year IO(4)....           248               87,104,788.12                    16.75
3/27 ARM(5)..............................            30                8,338,160.36                     1.60
3/27 Interest Only ARM - 3 Year IO(6)....            18                5,334,367.61                     1.03
3/27 Interest Only ARM - 5Year IO(7).....             2                  401,102.68                     0.08
5/25 ARM(8)..............................             7                3,102,627.42                     0.60
5/25 Interest Only ARM - 5 Year IO(9)....            39               13,119,157.60                     2.52
Balloon 30/15............................           865               54,460,893.40                    10.47
Fixed - 10 Year..........................             2                  103,496.26                     0.02
Fixed - 15 Year..........................            51                3,644,407.32                     0.70
Fixed - 20 Year..........................           149                6,032,255.92                     1.16
Fixed - 30 Year..........................           354               47,902,569.23                     9.21
                                                  -----             ---------------                   ------
TOTAL:...................................         2,773             $520,110,702.07                   100.00%
                                                  =====             ===============                   ======



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

(1)  25 Year 1 Month LIBOR - 10 Year IO refers to a Mortgage Loan that adjusts
     monthly and pays interest only for ten years after the origination of that
     Mortgage Loan. Thereafter, the Loan Rate on that Mortgage Loan adjusts
     monthly based upon the one-month LIBOR index.

(2)  2/28 ARM refers to a Mortgage Loan for which the Loan Rate is fixed for two
     years after the origination of that Mortgage Loan. Thereafter, the Loan
     Rate on that Mortgage Loan adjusts semi-annually based upon the six-month
     LIBOR index.

(3)  2/28 Interest Only ARM - 2 Year IO refers to a Mortgage Loan that pays
     interest only for two years after the origination of that Mortgage Loan and
     becomes fully amortizing thereafter. The Loan Rate on that Mortgage Loan is
     fixed for the first two years and then adjusts semi-annually based upon the
     six-month LIBOR index.

(4)  2/28 Interest Only ARM - 5 Year IO refers to a Mortgage Loan that pays
     interest only for five years after the origination of that Mortgage Loan
     and becomes fully amortizing thereafter. The Loan Rate on that Mortgage
     Loan is fixed for the first two years and then adjusts semi-annually based
     upon the six-month LIBOR index.

(5)  3/27 ARM refers to a Mortgage Loan for which the Loan Rate is fixed for
     three years after the origination of that Mortgage Loan. Thereafter, the
     Loan Rate on that Mortgage Loan adjusts semi-annually based upon the
     six-month LIBOR index.

(6)  3/27 Interest Only ARM - 3 Year IO refers to a Mortgage Loan that pays
     interest only for three years after the origination of that Mortgage Loan
     and becomes fully amortizing thereafter. The Loan Rate on that Mortgage
     Loan is fixed for the first three years and then adjusts semi-annually
     based upon the six-month LIBOR index.

(7)  3/27 Interest Only ARM - 5 Year IO refers to a Mortgage Loan that pays
     interest only for five years after the origination of that Mortgage Loan
     and becomes fully amortizing thereafter. The Loan Rate on that Mortgage
     Loan is fixed for the first three years and then adjusts semi-annually
     based upon the six-month LIBOR index.

(8)  5/25 ARM refers to a Mortgage Loan for which the Loan Rate is fixed for
     five years after the origination of that Mortgage Loan. Thereafter, the
     Loan Rate on that Mortgage Loan adjusts semi-annually based upon the
     six-month LIBOR index.

(9)  5/25 Interest Only ARM - 5 Year IO refers to a Mortgage Loan that pays
     interest only for five years after the origination of that Mortgage Loan
     and becomes fully amortizing thereafter. The Loan Rate on that Mortgage
     Loan is fixed for the first five years and then adjusts semi-annually based
     upon the six-month LIBOR index.


                                      S-52




 ORIGINAL TERM TO EXPIRATION OF PREPAYMENT PENALTY OF THE SUBGROUP 2 MORTGAGE LOANS

                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL    SUBGROUP 2 MORTGAGE LOANS
  ORIGINAL NUMBER OF MONTHS TO      NUMBER OF SUBGROUP 2        BALANCE OF SUBGROUP 2            OUTSTANDING
           EXPIRATION                  MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
-----------------------------------------  -----------------     ----------------------    --------------------------

Not Applicable or Expired....                 812                  $133,086,709.02                   25.59%
7 - 12.......................                 113                    29,568,064.23                    5.68
13 - 24......................               1,427                   301,963,838.44                   58.06
25 - 36......................                 421                    55,492,090.38                   10.67
                                            -----                  ---------------                  ------
TOTAL:.......................               2,773                  $520,110,702.07                  100.00%
                                            =====                  ===============                  ======



                 CREDIT GRADE OF THE SUBGROUP 2 MORTGAGE LOANS*



                                                                                                 % OF AGGREGATE
                                                                                              PRINCIPAL BALANCE OF
                                                                  CUT-OFF DATE PRINCIPAL       SUBGROUP 2 MORTGAGE
                                        NUMBER OF SUBGROUP 2       BALANCE OF SUBGROUP 2        LOANS OUTSTANDING
           CREDIT GRADE                    MORTGAGE LOANS             MORTGAGE LOANS           AS OF CUT-OFF DATE
-----------------------------------------  -----------------     ----------------------    --------------------------

AA (New Century) ...............                 967                  $186,289,760.69                  35.82%
AA (WMC) .......................                 856                   154,959,866.76                  29.79
A+ (New Century) ...............                 108                    23,850,004.39                   4.59
A (WMC) ........................                 444                    73,636,640.11                  14.16
A- (New Century) ...............                  69                    14,162,106.27                   2.72
A- (WMC) .......................                 153                    23,537,860.63                   4.53
B+ (WMC) .......................                  37                    10,999,596.02                   2.11
B (New Century) ................                  52                    11,440,118.30                   2.20
B (WMC) ........................                  43                    11,173,505.28                   2.15
C (New Century) ................                  27                     4,899,539.65                   0.94
C (WMC) ........................                   9                     2,527,124.88                   0.49
C- (New Century) ...............                   2                       262,676.69                   0.05
FICO (New Century)..............                   6                     2,371,902.40                   0.46
                                               -----                  ---------------                 ------
TOTAL:..........................               2,773                  $520,110,702.07                 100.00%
                                               =====                  ===============                 ======



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

*    For a description of each credit grade, see "The Originators--New Century
     Mortgage Corporation" and "--WMC Mortgage Corp." in this prospectus
     supplement.


                 LIEN POSITION OF THE SUBGROUP 2 MORTGAGE LOANS



                                                                                                 % OF AGGREGATE
                                                                                              PRINCIPAL BALANCE OF
                                                                       CUT-OFF DATE            SUBGROUP 2 MORTGAGE
                                             NUMBER OF             PRINCIPAL BALANCE OF         LOANS OUTSTANDING
           LIEN POSITION             SUBGROUP 2 MORTGAGE LOANS   SUBGROUP 2 MORTGAGE LOANS     AS OF CUT-OFF DATE
-----------------------------------------  -----------------     ----------------------    --------------------------

First Lien......................               1,509                  $441,903,315.58                  84.96%
Second Lien.....................               1,264                    78,207,386.49                  15.04
                                               -----                    -------------                  -----
TOTAL:..........................               2,773                  $520,110,702.07                 100.00%
                                               =====                  ===============                 ======



                                      S-53




                           NEW CENTURY MORTGAGE LOANS

         ORIGINAL PRINCIPAL BALANCES OF THE NEW CENTURY MORTGAGE LOANS*



                                                                  ORIGINAL PRINCIPAL       % OF AGGREGATE ORIGINAL
            ORIGINAL                NUMBER OF NEW CENTURY       BALANCE OF NEW CENTURY     PRINCIPAL BALANCE OF NEW
     PRINCIPAL BALANCE ($)             MORTGAGE LOANS               MORTGAGE LOANS          CENTURY MORTGAGE LOANS
-----------------------------------------  -----------------     ----------------------    --------------------------

1 - 25,000...................                  16                $      368,780.00                    0.06%
25,001 - 50,000..............                 159                     6,328,555.00                    1.11
50,001 - 75,000..............                 310                    19,439,444.00                    3.41
75,001 - 100,000.............                 320                    28,289,849.00                    4.96
100,001 - 125,000............                 343                    38,752,110.20                    6.79
125,001 - 150,000............                 260                    35,688,361.59                    6.25
150,001 - 175,000............                 266                    43,282,313.00                    7.58
175,001 - 200,000............                 214                    40,127,739.40                    7.03
200,001 - 250,000............                 341                    76,681,820.00                   13.44
250,001 - 300,000............                 248                    68,136,119.00                   11.94
300,001 - 400,000............                 333                   115,262,430.00                   20.20
400,001 - 500,000............                 134                    60,426,496.00                   10.59
500,001 - 600,000............                  46                    25,478,502.00                    4.46
600,001 - 700,000............                  12                     7,761,651.00                    1.36
700,001 or greater...........                   6                     4,607,000.00                    0.81
                                            -----                  ---------------                  ------
TOTAL:.......................               3,008                  $570,631,170.19                  100.00%
                                            =====                  ===============                  ======


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

*    The average Principal Balance of the New Century Mortgage Loans at
     origination was approximately $189,705.


       CUT-OFF DATE PRINCIPAL BALANCES OF THE NEW CENTURY MORTGAGE LOANS*




                                                                                                % OF AGGREGATE
                                                                                           PRINCIPAL BALANCE OF NEW
                                                                CUT-OFF DATE PRINCIPAL      CENTURY MORTGAGE LOANS
          CUT-OFF DATE              NUMBER OF NEW CENTURY       BALANCE OF NEW CENTURY           OUTSTANDING
     PRINCIPAL BALANCE ($)             MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
-----------------------------------------  -----------------     ----------------------    --------------------------

1 - 25,000...................                  17                $      382,396.65                    0.07%
25,001 - 50,000..............                 162                     6,450,852.67                    1.13
50,001 - 75,000..............                 311                    19,575,439.17                    3.44
75,001 - 100,000.............                 315                    27,864,732.16                    4.89
100,001 - 125,000............                 347                    39,185,335.76                    6.88
125,001 - 150,000............                 258                    35,425,568.46                    6.22
150,001 - 175,000............                 264                    42,909,588.03                    7.53
175,001 - 200,000............                 214                    40,063,939.01                    7.03
200,001 - 250,000............                 345                    77,562,397.33                   13.62
250,001 - 300,000............                 245                    67,328,190.61                   11.82
300,001 - 400,000............                 333                   115,193,852.74                   20.22
400,001 - 500,000............                 133                    59,924,199.43                   10.52
500,001 - 600,000............                  46                    25,439,045.40                    4.47
600,001 - 700,000............                  12                     7,747,092.64                    1.36
700,001 or greater...........                   6                     4,598,814.17                    0.81
                                            -----                  ---------------                  ------
TOTAL:.......................               3,008                  $569,651,444.23                  100.00%
                                            =====                  ===============                  ======


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

*    The average Cut-off Date Principal Balance of the New Century Mortgage
     Loans was approximately $189,379.

                                      S-54



                 FICO SCORES FOR THE NEW CENTURY MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                           PRINCIPAL BALANCE OF NEW
                                                                CUT-OFF DATE PRINCIPAL      CENTURY MORTGAGE LOANS
                                    NUMBER OF NEW CENTURY       BALANCE OF NEW CENTURY           OUTSTANDING
           FICO SCORE                   MORTGAGE LOANS              MORTGAGE LOANS            AS OF CUT-OFF DATE
-----------------------------------------  -----------------     ----------------------    --------------------------

500..........................                   4                $      445,514.82                    0.08%
501 - 525....................                 161                    24,284,356.33                    4.26
526 - 550....................                 312                    53,581,742.24                    9.41
551 - 575....................                 347                    64,089,561.18                   11.25
576 - 600....................                 426                    82,181,166.62                   14.43
601 - 625....................                 396                    81,603,028.69                   14.33
626 - 650....................                 450                    84,565,103.54                   14.85
651 - 675....................                 356                    67,397,275.86                   11.83
676 - 700....................                 242                    50,947,770.27                    8.94
701 - 725....................                 130                    23,570,643.63                    4.14
726 - 750....................                  92                    18,362,910.35                    3.22
751 - 775....................                  59                    13,206,763.86                    2.32
776 - 800....................                  27                     4,330,046.94                    0.76
801 - 825....................                   6                     1,085,559.90                    0.19
                                            -----                  ---------------                  ------
TOTAL:.......................               3,008                  $569,651,444.23                  100.00%
                                            =====                  ===============                  ======


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

*    The weighted average FICO score of the Mortgagors of the New Century
     Mortgage Loans as of the Cut-off Date was approximately 622.


      ORIGINAL TERMS TO STATED MATURITY OF THE NEW CENTURY MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                           PRINCIPAL BALANCE OF NEW
                                                                CUT-OFF DATE PRINCIPAL      CENTURY MORTGAGE LOANS
                                    NUMBER OF NEW CENTURY       BALANCE OF NEW CENTURY           OUTSTANDING
     ORIGINAL TERM (MONTHS)            MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
-----------------------------------------  -----------------     ----------------------    --------------------------

120..........................                   1              $         54,287.07                    0.01%
121 - 180....................                  52                     5,054,627.75                    0.89
181 - 240....................                 159                     7,423,393.86                    1.30
241 - 300....................                  23                     4,602,799.68                    0.81
301 - 360....................               2,773                   552,516,335.87                   96.99
                                            -----                  ---------------                  ------
TOTAL:.......................               3,008                  $569,651,444.23                  100.00%
                                            =====                  ===============                  ======


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

*    The weighted average original term of the New Century Mortgage Loans was
     approximately 356 months.


      REMAINING TERMS TO STATED MATURITY OF THE NEW CENTURY MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                           PRINCIPAL BALANCE OF NEW
                                                                CUT-OFF DATE PRINCIPAL      CENTURY MORTGAGE LOANS
                                    NUMBER OF NEW CENTURY       BALANCE OF NEW CENTURY           OUTSTANDING
    REMAINING TERM (MONTHS)            MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
----------------------------------  ---------------------        ----------------------    --------------------------

180 or less..................                  53                $    5,108,914.82                    0.90%
181 - 348....................                 182                    12,026,193.54                    2.11
349 - 360....................               2,773                   552,516,335.87                   96.99
                                            -----                  ---------------                  ------
TOTAL:.......................               3,008                  $569,651,444.23                  100.00%
                                            =====                  ===============                  ======


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

*    The weighted average remaining term of the New Century Mortgage Loans was
     approximately 354 months.

                                      S-55


                PROPERTY TYPES OF THE NEW CENTURY MORTGAGE LOANS



                                                                                                % OF AGGREGATE
                                                                                           PRINCIPAL BALANCE OF NEW
                                                                CUT-OFF DATE PRINCIPAL      CENTURY MORTGAGE LOANS
                                    NUMBER OF NEW CENTURY       BALANCE OF NEW CENTURY           OUTSTANDING
         PROPERTY TYPE                 MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
----------------------------------  ---------------------        ----------------------    --------------------------

Single Family................               2,298                  $425,047,382.15                   74.62%
PUD - Detached*..............                 249                    53,966,290.87                    9.47
2-4 Unit.....................                 203                    45,142,433.90                    7.92
Condominium..................                 196                    34,766,966.73                    6.10
PUD - Attached*..............                  61                    10,616,000.51                    1.86
Manufactured Housing.........                   1                       112,370.07                    0.02
                                            -----                  ---------------                  ------
TOTAL:.......................               3,008                  $569,651,444.23                  100.00%
                                            =====                  ===============                  ======


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

*    PUD refers to a home or "unit" in a Planned Unit Development.


               OCCUPANCY STATUS OF THE NEW CENTURY MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                           PRINCIPAL BALANCE OF NEW
                                                                CUT-OFF DATE PRINCIPAL      CENTURY MORTGAGE LOANS
                                    NUMBER OF NEW CENTURY       BALANCE OF NEW CENTURY           OUTSTANDING
        OCCUPANCY STATUS                MORTGAGE LOANS              MORTGAGE LOANS            AS OF CUT-OFF DATE
----------------------------------  ---------------------        ----------------------    --------------------------

Primary Residence............               2,860                  $539,630,857.66                   94.73%
Investment Property..........                 133                    25,494,205.93                    4.48
Second Home..................                  15                     4,526,380.64                    0.79
                                            -----                  ---------------                  ------
TOTAL:.......................               3,008                  $569,651,444.23                  100.00%
                                            =====                  ===============                  ======


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

*    Occupancy as represented by the Mortgagor at the time of origination.


                    PURPOSE OF THE NEW CENTURY MORTGAGE LOANS



                                                                                                % OF AGGREGATE
                                                                                           PRINCIPAL BALANCE OF NEW
                                                                CUT-OFF DATE PRINCIPAL      CENTURY MORTGAGE LOANS
                                    NUMBER OF NEW CENTURY       BALANCE OF NEW CENTURY           OUTSTANDING
            PURPOSE                    MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
----------------------------------  ---------------------        ----------------------    --------------------------

Refinance - Cashout..........               1,759                  $364,525,564.24                   63.99%
Purchase.....................               1,059                   173,220,601.91                   30.41
Refinance - Rate/Term........                 190                    31,905,278.08                    5.60
                                            -----                  ---------------                  ------
TOTAL:.......................               3,008                  $569,651,444.23                  100.00%
                                            =====                  ===============                  ======



                                      S-56


        ORIGINAL LOAN-TO-VALUE RATIOS OF THE NEW CENTURY MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                           PRINCIPAL BALANCE OF NEW
                                                                CUT-OFF DATE PRINCIPAL      CENTURY MORTGAGE LOANS
     ORIGINAL LOAN-TO-VALUE         NUMBER OF NEW CENTURY       BALANCE OF NEW CENTURY           OUTSTANDING
           RATIO (%)                   MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
----------------------------------  ---------------------        ----------------------    --------------------------

50.00 or less................                  93                  $ 13,245,968.69                    2.33%
50.01 - 60.00................                 148                    30,068,475.50                    5.28
60.01 - 70.00................                 342                    76,256,257.78                   13.39
70.01 - 80.00................                 968                   206,411,603.71                   36.23
80.01 - 90.00................                 823                   170,699,901.34                   29.97
90.01 - 100.00...............                 634                    72,969,237.21                   12.81
                                            -----                  ---------------                  ------
TOTAL:.......................               3,008                  $569,651,444.23                  100.00%
                                            =====                  ===============                  ======


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

*    The weighted average original loan-to-value ratio of the first lien New
     Century Mortgage Loans as of the Cut-off Date was approximately 78.83%. The
     weighted average combined loan-to-value ratio of the second lien New
     Century Mortgage Loans as of the Cut-Off Date was approximately 99.94%.


       GEOGRAPHIC DISTRIBUTION OF THE NEW CENTURY MORTGAGED PROPERTIES(1)



                                                                                                % OF AGGREGATE
                                                                                           PRINCIPAL BALANCE OF NEW
                                                                CUT-OFF DATE PRINCIPAL      CENTURY MORTGAGE LOANS
                                    NUMBER OF NEW CENTURY       BALANCE OF NEW CENTURY           OUTSTANDING
            LOCATION                   MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
----------------------------------  ---------------------        ----------------------    --------------------------

California...................                 953                  $237,051,409.43                   41.61%
New York.....................                 147                    36,431,560.30                    6.40
Florida......................                 241                    33,580,773.04                    5.89
New Jersey...................                 138                    29,592,492.49                    5.19
Illinois.....................                 133                    24,166,245.57                    4.24
Texas........................                 157                    16,054,675.62                    2.82
Massachusetts................                  69                    15,824,631.90                    2.78
Washington...................                  86                    15,388,670.75                    2.70
Nevada.......................                  75                    15,347,848.63                    2.69
Arizona......................                  86                    11,398,762.73                    2.00
Other(2).....................                 923                   134,814,373.77                   23.67
                                            -----                  ---------------                  ------
TOTAL:.......................               3,008                  $569,651,444.23                  100.00%
                                            =====                  ===============                  ======


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

(1)  The greatest ZIP Code geographic concentration of New Century Mortgage
     Loans, by Cut-off Date Principal Balance, was approximately 0.43% in the
     92057 ZIP Code.

(2)  This row includes 40 other states and the District of Columbia with under
     2% concentrations individually.

                                      S-57



             DOCUMENTATION LEVEL OF THE NEW CENTURY MORTGAGE LOANS*


                                                                                                % OF AGGREGATE
                                                                                           PRINCIPAL BALANCE OF NEW
                                                                CUT-OFF DATE PRINCIPAL      CENTURY MORTGAGE LOANS
                                    NUMBER OF NEW CENTURY       BALANCE OF NEW CENTURY           OUTSTANDING
    DOCUMENTATION LEVEL                MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
----------------------------------  ---------------------        ----------------------    --------------------------

Full Documentation...........               1,570                  $276,532,645.30                   48.54%
Stated Documentation.........               1,315                   265,800,643.87                   46.66
Limited Documentation........                 123                    27,318,155.06                    4.80
                                            -----                  ---------------                  ------
TOTAL:.......................               3,008                  $569,651,444.23                  100.00%
                                            =====                  ===============                  ======


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

*    For a description of each documentation level, see "The Originators--New
     Century Mortgage Corporation" in this prospectus supplement.


              CURRENT LOAN RATES OF THE NEW CENTURY MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                           PRINCIPAL BALANCE OF NEW
                                                                CUT-OFF DATE PRINCIPAL      CENTURY MORTGAGE LOANS
                                    NUMBER OF NEW CENTURY       BALANCE OF NEW CENTURY           OUTSTANDING
     CURRENT LOAN RATE (%)             MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
----------------------------------  ---------------------        ----------------------    --------------------------

5.000 or less................                  26               $     6,822,271.80                    1.20%
5.001 - 5.500................                 100                    28,461,819.40                    5.00
5.501 - 6.000................                 411                   101,400,281.57                   17.80
6.001 - 6.500................                 451                   106,853,949.74                   18.76
6.501 - 7.000................                 428                    99,534,093.48                   17.47
7.001 - 7.500................                 313                    62,336,285.59                   10.94
7.501 - 8.000................                 328                    56,422,013.08                    9.90
8.001 - 8.500................                 227                    36,818,144.21                    6.46
8.501 - 9.000................                 211                    31,969,967.34                    5.61
9.001 - 9.500................                  99                    10,856,044.80                    1.91
9.501 - 10.000...............                 139                    11,089,934.81                    1.95
10.001 - 10.500..............                 148                     8,796,075.57                    1.54
10.501 - 11.000..............                  94                     6,367,052.44                    1.12
11.001 - 11.500..............                  24                     1,368,040.25                    0.24
11.501 - 12.000..............                   6                       333,010.60                    0.06
12.001 - 12.500..............                   3                       222,459.55                    0.04
                                            -----                  ---------------                  ------
TOTAL:.......................               3,008                  $569,651,444.23                  100.00%
                                            =====                  ===============                  ======



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

*    The weighted average Loan Rate of the New Century Mortgage Loans as of the
     Cut-off Date was approximately 7.015% per annum.

                                      S-58



              MAXIMUM LOAN RATES OF THE NEW CENTURY MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                           PRINCIPAL BALANCE OF NEW
                                                                CUT-OFF DATE PRINCIPAL      CENTURY MORTGAGE LOANS
                                    NUMBER OF NEW CENTURY       BALANCE OF NEW CENTURY           OUTSTANDING
     MAXIMUM LOAN RATE (%)             MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
----------------------------------  ---------------------        ----------------------    --------------------------

Not Applicable...............                 755                  $ 82,155,598.96                   14.42%
10.501 - 11.000..............                   1                       149,638.11                    0.03
11.001 - 11.500..............                   2                       281,381.23                    0.05
11.501 - 12.000..............                  35                    10,074,384.31                    1.77
12.001 - 12.500..............                  93                    25,994,734.67                    4.56
12.501 - 13.000..............                 318                    81,051,124.97                   14.23
13.001 - 13.500..............                 385                    95,006,281.77                   16.68
13.501 - 14.000..............                 375                    91,194,109.08                   16.01
14.001 - 14.500..............                 273                    57,035,682.57                   10.01
14.501 - 15.000..............                 284                    49,761,045.83                    8.74
15.001 - 15.500..............                 203                    34,211,724.66                    6.01
15.501 - 16.000..............                 175                    28,778,112.82                    5.05
16.001 - 16.500..............                  54                     7,850,945.21                    1.38
16.501 - 17.000..............                  39                     4,639,910.41                    0.81
17.001 - 17.500..............                  12                     1,051,527.02                    0.18
17.501 - 18.000..............                   3                       347,788.91                    0.06
18.001 - 18.500..............                   1                        67,453.70                    0.01
                                            -----                  ---------------                  ------
TOTAL:.......................               3,008                  $569,651,444.23                  100.00%
                                            =====                  ===============                  ======


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

*    The weighted average Maximum Loan Rate of the New Century Mortgage Loans
     that are adjustable-rate mortgage loans as of the Cut-off Date was
     approximately 13.875% per annum.


                GROSS MARGINS OF THE NEW CENTURY MORTGAGE LOANS*




                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL       NEW CENTURY MORTGAGE
                                    NUMBER OF NEW CENTURY       BALANCE OF NEW CENTURY       LOANS OUTSTANDING AS
       GROSS MARGINS (%)               MORTGAGE LOANS               MORTGAGE LOANS             OF CUT-OFF DATE
----------------------------------  ---------------------        ----------------------    --------------------------

Not Applicable ..............                 755                 $  82,155,598.96                   14.42%
0.501 - 1.000 ...............                   1                       318,400.00                    0.06
2.501 - 3.000 ...............                   3                     1,265,336.01                    0.22
3.001 - 3.500 ...............                   6                     2,005,914.61                    0.35
3.501 - 4.000 ...............                   1                       130,500.00                    0.02
4.501 - 5.000 ...............                 114                    22,246,230.16                    3.91
5.001 - 5.500 ...............                 681                   143,925,878.04                   25.27
5.501 - 6.000 ...............               1,208                   271,933,692.90                   47.74
6.001 - 6.500 ...............                 151                    29,108,919.98                    5.11
6.501 - 7.000 ...............                  86                    16,104,432.69                    2.83
8.501 - 9.000 ...............                   2                       456,540.88                    0.08
                                            -----                  ---------------                  ------
TOTAL:.......................               3,008                  $569,651,444.23                  100.00%
                                           =====                  ===============                  ======


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

*    The weighted average Gross Margin of the New Century Mortgage Loans that
     are adjustable-rate mortgage loans as of the Cut-off Date was approximately
     5.583%.


                                      S-59


             NEXT ADJUSTMENT DATE FOR THE NEW CENTURY MORTGAGE LOANS


                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL       NEW CENTURY MORTGAGE
                                    NUMBER OF NEW CENTURY       BALANCE OF NEW CENTURY       LOANS OUTSTANDING AS
     RATE CHANGE DATE                  MORTGAGE LOANS               MORTGAGE LOANS             OF CUT-OFF DATE
----------------------------------  ---------------------        ----------------------    --------------------------

Not Applicable....................                  755                $ 82,155,598.96                 14.42%
March 2005........................                   10                   3,401,750.62                  0.60
August 2006.......................                    1                     135,795.53                  0.02
September 2006....................                    8                   1,896,972.04                  0.33
October 2006......................                   37                   9,405,613.12                  1.65
November 2006.....................                  197                  50,024,166.70                  8.78
December 2006.....................                1,721                 366,958,244.80                 64.42
January 2007......................                  203                  37,903,363.02                  6.65
November 2007.....................                    5                     922,388.13                  0.16
December 2007.....................                   65                  15,966,842.18                  2.80
January 2008......................                    6                     880,709.13                  0.15
                                                  -----                ---------------                ------
Total:............................                3,008                $569,651,444.23                100.00%
                                                  =====                ===============                ======




                 PRODUCT TYPE OF THE NEW CENTURY MORTGAGE LOANS




                                                                                                   % OF AGGREGATE
                                                                                              PRINCIPAL BALANCE OF NEW
                                                                    CUT-OFF DATE PRINCIPAL     CENTURY MORTGAGE LOANS
                                           NUMBER OF NEW CENTURY    BALANCE OF NEW CENTURY           OUTSTANDING
              PRODUCT TYPE                    MORTGAGE LOANS            MORTGAGE LOANS           AS OF CUT-OFF DATE
----------------------------------  ---------------------        ----------------------    --------------------------

 25 Year 1 Month LIBOR - 10 Year IO(1)..            10                  $   3,401,750.62                 0.60%
 2/28 ARM(2)............................         1,873                    384,493,357.37                67.50
 2/28 Interest Only ARM - 2 Year IO(3)..           294                     81,830,797.84                14.37
 3/27 ARM(4)............................            52                     11,236,021.85                 1.97
 3/27 Interest Only ARM - 3 Year IO(5)..            24                      6,533,917.59                 1.15
 Fixed - 10 Year........................             1                         54,287.07                 0.01
 Fixed - 15 Year........................            52                      5,054,627.75                 0.89
 Fixed - 20 Year........................           159                      7,423,393.86                 1.30
 Fixed - 25 Year........................            13                      1,201,049.06                 0.21
 Fixed - 30 Year........................           530                     68,422,241.22                12.01
                                                 -----                   ---------------               ------
 TOTAL:.................................         3,008                   $569,651,444.23               100.00%
                                                 =====                   ===============               ======


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

(1)  25 Year 1 Month LIBOR - 10 Year IO refers to a Mortgage Loan that adjusts
     monthly and pays interest only for ten years after the origination of that
     Mortgage Loan. Thereafter, the Loan Rate on that Mortgage Loan adjusts
     monthly based upon the one-month LIBOR index.

(2)  2/28 ARM refers to a Mortgage Loan for which the Loan Rate is fixed for two
     years after the origination of that Mortgage Loan. Thereafter, the Loan
     Rate on that Mortgage Loan adjusts semi-annually based upon the six-month
     LIBOR index.

(3)  2/28 Interest Only ARM - 2 Year IO refers to a Mortgage Loan that pays
     interest only for two years after the origination of that Mortgage Loan and
     becomes fully amortizing thereafter. The Loan Rate on that Mortgage Loan is
     fixed for the first two years and then adjusts semi-annually based upon the
     six-month LIBOR index.

(4)  3/27 ARM refers to a Mortgage Loan for which the Loan Rate is fixed for
     three years after the origination of that Mortgage Loan. Thereafter, the
     Loan Rate on that Mortgage Loan adjusts semi-annually based upon the
     six-month LIBOR index.

(5)  3/27 Interest Only ARM - 3 Year IO refers to a Mortgage Loan that pays
     interest only for three years after the origination of that Mortgage Loan
     and becomes fully amortizing thereafter. The Loan Rate on that Mortgage
     Loan is fixed for the first three years and then adjusts semi-annually
     based upon the six-month LIBOR index.


                                      S-60





 ORIGINAL TERM TO EXPIRATION OF PREPAYMENT PENALTY OF THE NEW CENTURY MORTGAGE LOANS

                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL       NEW CENTURY MORTGAGE
  ORIGINAL NUMBER OF MONTHS TO      NUMBER OF NEW CENTURY       BALANCE OF NEW CENTURY        LOANS OUTSTANDING
           EXPIRATION                  MORTGAGE LOANS               MORTGAGE LOANS            AS OF CUT-OFF DATE
----------------------------------  ---------------------       -----------------------     -----------------------

Not Applicable...............                 872                  $159,337,582.57                   27.97%
7 - 12.......................                 113                    24,674,944.94                    4.33
13 - 24......................               1,661                   326,119,395.01                   57.25
25 - 36......................                 362                    59,519,521.71                   10.45
                                            -----                  ---------------                  ------
TOTAL:.......................               3,008                  $569,651,444.23                  100.00%
                                            =====                  ===============                  ======



                 CREDIT GRADE OF THE NEW CENTURY MORTGAGE LOANS*



                                                                                                 % OF AGGREGATE
                                                                                           PRINCIPAL BALANCE OF NEW
                                                                CUT-OFF DATE PRINCIPAL      CENTURY MORTGAGE LOANS
                                    NUMBER OF NEW CENTURY       BALANCE OF NEW CENTURY           OUTSTANDING
          CREDIT GRADE                  MORTGAGE LOANS              MORTGAGE LOANS            AS OF CUT-OFF DATE
----------------------------------  ---------------------       ----------------------     -------------------------

AA...........................               2,201                  $415,085,860.82                   72.87%
A+...........................                 316                    63,700,641.56                   11.18
A-...........................                 218                    38,902,978.35                    6.83
B............................                 173                    32,478,303.55                    5.70
C............................                  86                    15,672,823.18                    2.75
C-...........................                   4                       409,086.15                    0.07
FICO.........................                  10                     3,401,750.62                    0.60
                                            -----                  ---------------                  ------
TOTAL:.......................               3,008                  $569,651,444.23                  100.00%
                                            =====                  ===============                  ======


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

*    For a description of each credit grade, see "The Originators--New Century
     Mortgage Corporation" in this prospectus supplement.


                 LIEN POSITION OF THE NEW CENTURY MORTGAGE LOANS



                                                                                                % OF AGGREGATE
                                                                                           PRINCIPAL BALANCE OF NEW
                                                                     CUT-OFF DATE           CENTURY MORTGAGE LOANS
                                          NUMBER OF            PRINCIPAL BALANCE OF NEW           OUTSTANDING
         LIEN POSITION            NEW CENTURY MORTGAGE LOANS    CENTURY MORTGAGE LOANS        AS OF CUT-OFF DATE
----------------------------------  ---------------------      ------------------------    -------------------------

First Lien...................               2,632                  $547,146,085.16                   96.05%
Second Lien..................                 376                    22,505,359.07                    3.95
                                            -----                  ---------------                  ------
TOTAL:.......................               3,008                  $569,651,444.23                  100.00%
                                            =====                  ===============                  ======



                                      S-61




                               WMC MORTGAGE LOANS

             ORIGINAL PRINCIPAL BALANCES OF THE WMC MORTGAGE LOANS*



                                                                                           % OF AGGREGATE ORIGINAL
                                                                  ORIGINAL PRINCIPAL          PRINCIPAL BALANCE
            ORIGINAL               NUMBER OF WMC MORTGAGE      BALANCE OF WMC MORTGAGE              OF WMC
     PRINCIPAL BALANCE ($)                  LOANS                       LOANS                   MORTGAGE LOANS
-------------------------------- -------------------------  -----------------------------  -------------------------

1 - 25,000...................                  85                $    1,707,509.00                    0.30%
25,001 - 50,000..............                 327                    12,440,516.00                    2.18
50,001 - 75,000..............                 367                    23,027,419.40                    4.03
75,001 - 100,000.............                 289                    25,186,657.00                    4.41
100,001 - 125,000............                 240                    27,046,347.00                    4.74
125,001 - 150,000............                 212                    29,104,511.00                    5.10
150,001 - 175,000............                 191                    30,965,940.00                    5.42
175,001 - 200,000............                 195                    36,658,379.00                    6.42
200,001 - 250,000............                 335                    75,930,792.00                   13.29
250,001 - 300,000............                 252                    69,210,110.00                   12.12
300,001 - 400,000............                 304                   105,441,133.00                   18.46
400,001 - 500,000............                 143                    63,436,143.00                   11.11
500,001 - 600,000............                  76                    41,439,165.00                    7.26
600,001 - 700,000............                  25                    16,388,960.00                    2.87
700,001 or greater...........                  17                    13,181,035.00                    2.31
                                 --------------------------  --------------------------  ---------------------------
TOTAL:.......................               3,058                  $571,164,616.40                  100.00%
                                 ==========================  ==========================  ===========================

--------------------
* The average Principal Balance of the WMC Mortgage Loans at origination was
approximately $186,777.


           CUT-OFF DATE PRINCIPAL BALANCES OF THE WMC MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL        WMC MORTGAGE LOANS
          CUT-OFF DATE             NUMBER OF WMC MORTGAGE      BALANCE OF WMC MORTGAGE           OUTSTANDING
     PRINCIPAL BALANCE ($)                  LOANS                       LOANS                 AS OF CUT-OFF DATE
-------------------------------- --------------------------  ---------------------------  ---------------------------

1 - 25,000...................                  85                $    1,705,459.99                    0.30%
25,001 - 50,000..............                 327                    12,421,548.15                    2.18
50,001 - 75,000..............                 367                    22,992,058.84                    4.03
75,001 - 100,000.............                 289                    25,139,657.49                    4.41
100,001 - 125,000............                 241                    27,123,720.16                    4.76
125,001 - 150,000............                 212                    29,065,268.22                    5.10
150,001 - 175,000............                 192                    31,088,749.80                    5.45
175,001 - 200,000............                 195                    36,617,282.36                    6.42
200,001 - 250,000............                 336                    76,110,832.44                   13.35
250,001 - 300,000............                 250                    68,643,104.09                   12.04
300,001 - 400,000............                 305                   105,789,300.33                   18.55
400,001 - 500,000............                 141                    62,554,285.68                   10.97
500,001 - 600,000............                  76                    41,388,077.89                    7.26
600,001 - 700,000............                  25                    16,368,705.29                    2.87
700,001 or greater...........                  17                    13,166,158.79                    2.31
                                 --------------------------  --------------------------  ---------------------------
TOTAL:.......................               3,058                  $570,174,209.52                  100.00%
                                 =========================== =========================== ===========================

--------------------
* The average Cut-off Date Principal Balance of the WMC Mortgage Loans was
approximately $186,453.

                                      S-62



                     FICO SCORES FOR THE WMC MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL        WMC MORTGAGE LOANS
                                   NUMBER OF WMC MORTGAGE      BALANCE OF WMC MORTGAGE           OUTSTANDING
           FICO SCORE                       LOANS                       LOANS                 AS OF CUT-OFF DATE
-------------------------------- -------------------------  -----------------------------  -------------------------

500..........................                   3               $       383,453.44                    0.07%
501 - 525....................                  83                    16,575,824.59                    2.91
526 - 550....................                 119                    22,955,501.85                    4.03
551 - 575....................                 181                    34,554,044.21                    6.06
576 - 600....................                 334                    59,506,829.50                   10.44
601 - 625....................                 433                    80,110,267.87                   14.05
626 - 650....................                 567                   103,958,199.55                   18.23
651 - 675....................                 553                   105,062,972.77                   18.43
676 - 700....................                 332                    60,271,598.52                   10.57
701 - 725....................                 228                    45,122,536.79                    7.91
726 - 750....................                 112                    22,365,374.04                    3.92
751 - 775....................                  86                    14,549,295.15                    2.55
776 - 800....................                  21                     3,839,423.60                    0.67
801 - 825....................                   6                       918,887.64                    0.16
                                 --------------------------  --------------------------  ---------------------------
TOTAL:.......................               3,058                  $570,174,209.52                  100.00%
                                 ==========================  ==========================  ===========================

--------------------
*    The weighted average FICO score of the Mortgagors of the WMC Mortgage Loans
     as of the Cut-off Date was approximately 641.



          ORIGINAL TERMS TO STATED MATURITY OF THE WMC MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL        WMC MORTGAGE LOANS
                                   NUMBER OF WMC MORTGAGE      BALANCE OF WMC MORTGAGE           OUTSTANDING
     ORIGINAL TERM (MONTHS)                 LOANS                       LOANS                 AS OF CUT-OFF DATE
-------------------------------- -------------------------  -----------------------------  -------------------------

120..........................                   1              $         49,209.19                    0.01%
121 - 180....................                 918                    58,832,870.06                   10.32
181 - 240....................                  10                     1,424,256.77                    0.25
241 - 300....................                   1                       139,140.71                    0.02
301 - 360....................               2,128                   509,728,732.79                   89.40
                                 --------------------------  --------------------------  ---------------------------
TOTAL:.......................               3,058                  $570,174,209.52                  100.00%
                                 ==========================  ==========================  ===========================

--------------------
*    The weighted average original term of the WMC Mortgage Loans was
     approximately 341 months.


          REMAINING TERMS TO STATED MATURITY OF THE WMC MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL        WMC MORTGAGE LOANS
                                   NUMBER OF WMC MORTGAGE      BALANCE OF WMC MORTGAGE           OUTSTANDING
    REMAINING TERM (MONTHS)                 LOANS                       LOANS                 AS OF CUT-OFF DATE
-------------------------------- -------------------------  -----------------------------  -------------------------

180 or less..................                 919                 $  58,882,079.25                   10.33%
181 - 348....................                  11                     1,563,397.48                    0.27
349 - 360....................               2,128                   509,728,732.79                   89.40
                                 --------------------------  --------------------------  ---------------------------
TOTAL:.......................               3,058                  $570,174,209.52                  100.00%
                                 ==========================  ==========================  ===========================

--------------------
*    The weighted average remaining term of the WMC Mortgage Loans was
     approximately 339 months.

                                      S-63



                    PROPERTY TYPES OF THE WMC MORTGAGE LOANS



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL        WMC MORTGAGE LOANS
                                   NUMBER OF WMC MORTGAGE      BALANCE OF WMC MORTGAGE           OUTSTANDING
         PROPERTY TYPE                      LOANS                       LOANS                 AS OF CUT-OFF DATE
-------------------------------- -------------------------  -----------------------------  -------------------------

Single Family................               2,185                  $405,842,228.89                   71.18%
PUD Detached*................                 275                    52,973,831.73                    9.29
Condominium..................                 295                    50,913,146.55                    8.93
2-4 Unit.....................                 184                    43,244,948.91                    7.58
PUD Attached*................                 106                    15,456,075.78                    2.71
Manufactured Housing.........                  13                     1,743,977.66                    0.31
                                 --------------------------  --------------------------  ---------------------------
TOTAL:.......................               3,058                  $570,174,209.52                  100.00%
                                 ==========================  ==========================  ===========================

--------------------
*    PUD refers to a home or "unit" in a Planned Unit Development.


                   OCCUPANCY STATUS OF THE WMC MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL        WMC MORTGAGE LOANS
                                    NUMBER OF WMC MORTGAGE     BALANCE OF WMC MORTGAGE           OUTSTANDING
        OCCUPANCY STATUS                    LOANS                       LOANS                 AS OF CUT-OFF DATE
-------------------------------- -------------------------  -----------------------------  -------------------------

Primary Residence............               2,903                  $544,820,463.73                   95.55%
Investment Property..........                  84                    14,475,691.50                    2.54
Second Home..................                  71                    10,878,054.29                    1.91
                                 --------------------------  --------------------------  ---------------------------
TOTAL:.......................               3,058                  $570,174,209.52                  100.00%
                                 ==========================  ==========================  ===========================

--------------------
*    Occupancy as represented by the Mortgagor at the time of origination.


                        PURPOSE OF THE WMC MORTGAGE LOANS



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL        WMC MORTGAGE LOANS
                                   NUMBER OF WMC MORTGAGE      BALANCE OF WMC MORTGAGE           OUTSTANDING
            PURPOSE                         LOANS                       LOANS                 AS OF CUT-OFF DATE
-------------------------------- -------------------------  -----------------------------  -------------------------

Purchase.....................               1,747                  $297,262,389.46                   52.14%
Refinance - Cashout..........                 954                   203,734,675.88                   35.73
Refinance - Rate/Term........                 357                    69,177,144.18                   12.13
                                 --------------------------  --------------------------  ---------------------------
TOTAL:.......................               3,058                  $570,174,209.52                  100.00%
                                 ==========================  ==========================  ===========================


                                      S-64


            ORIGINAL LOAN-TO-VALUE RATIOS OF THE WMC MORTGAGE LOANS*



                                                                                               % OF AGGREGATE
                                                                                            PRINCIPAL BALANCE OF
                                                               CUT-OFF DATE PRINCIPAL        WMC MORTGAGE LOANS
     ORIGINAL LOAN-TO-VALUE        NUMBER OF WMC MORTGAGE      BALANCE OF WMC MORTGAGE           OUTSTANDING
           RATIO (%)                        LOANS                       LOANS                AS OF CUT-OFF DATE
-------------------------------- -------------------------  -----------------------------  -------------------------

50.00 or less................                  47                 $   6,603,867.14                   1.16%
50.01 - 60.00................                  58                    10,396,832.10                   1.82
60.01 - 70.00................                 118                    28,994,074.18                   5.09
70.01 - 80.00................               1,255                   306,218,251.15                  53.71
80.01 - 90.00................                 490                   112,163,181.04                  19.67
90.01 - 100.00...............               1,090                   105,798,003.91                  18.56
                                 --------------------------  --------------------------  ---------------------------
TOTAL:.......................               3,058                  $570,174,209.52                 100.00%
                                 ==========================  ==========================  ===========================

--------------------
*    The weighted average original loan-to-value ratio of the first lien WMC
     Mortgage Loans as of the Cut-off Date was approximately 80.89%. The
     weighted average original loan-to-value ratio of the second lien WMC
     Mortgage Loans as of the Cut-off Date was approximately 99.44%.



           GEOGRAPHIC DISTRIBUTION OF THE WMC MORTGAGED PROPERTIES(1)



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL        WMC MORTGAGE LOANS
                                   NUMBER OF WMC MORTGAGE      BALANCE OF WMC MORTGAGE           OUTSTANDING
            LOCATION                        LOANS                       LOANS                 AS OF CUT-OFF DATE
-------------------------------- -------------------------  -----------------------------  -------------------------

California...................               1,369                  $316,906,841.91                   55.58%
New York.....................                 151                    37,662,463.65                    6.61
Texas........................                 168                    20,094,300.51                    3.52
Illinois.....................                 131                    20,013,818.33                    3.51
Florida......................                 145                    19,722,874.50                    3.46
Virginia.....................                 116                    19,490,337.08                    3.42
New Jersey...................                  82                    17,296,184.55                    3.03
Maryland.....................                 104                    15,021,274.27                    2.63
Arizona......................                  95                    12,472,536.73                    2.19
Other(2).....................                 697                    91,493,577.99                   16.05
                                 --------------------------  --------------------------  ---------------------------
TOTAL:.......................               3,058                  $570,174,209.52                  100.00%
                                 ==========================  ==========================  ===========================

--------------------
(1)  The greatest ZIP Code geographic concentration of WMC Mortgage Loans, by
     Cut-off Date Principal Balance, was approximately 0.59% in the 94531 ZIP
     Code.

(2)  This row includes 37 other states and the District of Columbia with under
     2% concentrations individually.


                                      S-65


                 DOCUMENTATION LEVEL OF THE WMC MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                 CUT-OFF DATE PRINCIPAL       WMC MORTGAGE LOANS
                                             NUMBER OF WMC           BALANCE OF WMC              OUTSTANDING
          DOCUMENTATION LEVEL               MORTGAGE LOANS           MORTGAGE LOANS           AS OF CUT-OFF DATE
-------------------------------- -------------------------  -----------------------------  -------------------------

Full Documentation..................             1,483              $255,093,047.51                  44.74%
Streamlined - Stated (Assets Verified)             882               151,566,001.51                  26.58
Stated Documentation................               315                82,365,658.77                  14.45
Limited Documentation...............               214                48,666,378.22                   8.54
Lite Documentation..................                88                16,323,692.20                   2.86
Full Alternative Documentation......                76                16,159,431.31                   2.83
                                 --------------------------  --------------------------  ---------------------------
TOTAL:..............................             3,058              $570,174,209.52                 100.00%
                                 ==========================  ==========================  ===========================

--------------------
*    For a description of each documentation level, see "The Originators--WMC
     Mortgage Corp." in this prospectus supplement.

                CURRENT MORTGAGE RATES OF THE WMC MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL        WMC MORTGAGE LOANS
                                   NUMBER OF WMC MORTGAGE      BALANCE OF WMC MORTGAGE           OUTSTANDING
     CURRENT LOAN RATE (%)                  LOANS                       LOANS                 AS OF CUT-OFF DATE
-------------------------------- -------------------------  -----------------------------  -------------------------

5.000 or less................                  18               $     6,768,507.56                    1.19%
5.001 - 5.500................                 116                    36,647,154.71                    6.43
5.501 - 6.000................                 376                   104,269,851.07                   18.29
6.001 - 6.500................                 446                   112,115,012.94                   19.66
6.501 - 7.000................                 501                   116,460,562.51                   20.43
7.001 - 7.500................                 245                    54,340,671.17                    9.53
7.501 - 8.000................                 264                    51,756,917.70                    9.08
8.001 - 8.500................                 148                    20,060,234.20                    3.52
8.501 - 9.000................                 148                    16,487,478.93                    2.89
9.001 - 9.500................                 126                    10,695,498.36                    1.88
9.501 - 10.000...............                 231                    15,243,718.37                    2.67
10.001 - 10.500..............                 114                     7,274,277.16                    1.28
10.501 - 11.000..............                 206                    12,432,109.40                    2.18
11.001 - 11.500..............                  44                     2,154,936.90                    0.38
11.501 - 12.000..............                  39                     2,075,196.47                    0.36
12.001 - 12.500..............                   9                       416,708.27                    0.07
12.501 - 13.000..............                  27                       975,373.80                    0.17
                                 --------------------------  --------------------------  ---------------------------
TOTAL:.......................               3,058                  $570,174,209.52                  100.00%
                                 ==========================  ==========================  ===========================

--------------------
*    The weighted average Loan Rate of the WMC Mortgage Loans as of the Cut-off
     Date was approximately 6.995% per annum.


                                      S-66



                  MAXIMUM LOAN RATES OF THE WMC MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL        WMC MORTGAGE LOANS
                                   NUMBER OF WMC MORTGAGE      BALANCE OF WMC MORTGAGE           OUTSTANDING
   MAXIMUM LOAN RATE (%)                    LOANS                       LOANS                 AS OF CUT-OFF DATE
-------------------------------- -------------------------  -----------------------------  -------------------------

Not Applicable...............               1,249                  $123,447,141.18                   21.65%
11.001 - 11.500..............                  17                     6,703,386.15                    1.18
11.501 - 12.000..............                 112                    36,401,649.92                    6.38
12.001 - 12.500..............                 332                    92,939,185.04                   16.30
12.501 - 13.000..............                 376                    96,849,187.41                   16.99
13.001 - 13.500..............                 388                    94,478,428.21                   16.57
13.501 - 14.000..............                 195                    46,437,999.47                    8.14
14.001 - 14.500..............                 217                    43,952,328.45                    7.71
14.501 - 15.000..............                  76                    14,619,466.15                    2.56
15.001 - 15.500..............                  58                     9,176,451.29                    1.61
15.501 - 16.000..............                  28                     4,369,042.60                    0.77
16.001 - 16.500..............                   6                       457,901.22                    0.08
16.501 - 17.000..............                   2                       227,195.02                    0.04
17.001 - 17.500..............                   2                       114,847.41                    0.02
                                 --------------------------  --------------------------  ---------------------------
TOTAL:.......................               3,058                  $570,174,209.52                  100.00%
                                 ==========================  ==========================  ===========================

--------------------
*    The weighted average Maximum Loan Rate of the WMC Mortgage Loans that are
     adjustable-rate mortgage loans as of the Cut-off Date was approximately
     13.132% per annum.


                    GROSS MARGINS OF THE WMC MORTGAGE LOANS*



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL        WMC MORTGAGE LOANS
                                   NUMBER OF WMC MORTGAGE      BALANCE OF WMC MORTGAGE           OUTSTANDING
       GROSS MARGINS (%)                    LOANS                       LOANS                 AS OF CUT-OFF DATE
-------------------------------- -------------------------  -----------------------------  -------------------------

Not Applicable...............               1,249                  $123,447,141.18                   21.65%
2.501 - 3.000................                   1                       157,387.38                    0.03
3.001 - 3.500................                   1                        78,814.30                    0.01
4.001 - 4.500................                   6                     1,778,249.12                    0.31
4.501 - 5.000................                 187                    53,436,235.28                    9.37
5.001 - 5.500................                 312                    79,305,306.17                   13.91
5.501 - 6.000................                 372                    96,336,953.86                   16.90
6.001 - 6.500................                 407                   100,304,914.42                   17.59
6.501 - 7.000................                 238                    55,888,099.19                    9.80
7.001 - 7.500................                 144                    30,831,394.46                    5.41
7.501 - 8.000................                 128                    26,249,244.45                    4.60
8.001 - 8.500................                   9                     1,731,694.93                    0.30
8.501 - 9.000................                   2                       201,969.75                    0.04
9.001 - 9.500................                   2                       426,805.03                    0.07
                                 --------------------------  --------------------------  ---------------------------
TOTAL:.......................               3,058                  $570,174,209.52                  100.00%
                                 ==========================  ==========================  ===========================

--------------------
*    The weighted average Gross Margin of the WMC Mortgage Loans that are
     adjustable-rate mortgage loans as of the Cut-off Date was approximately
     6.076%.

                                      S-67





                 NEXT ADJUSTMENT DATE FOR THE WMC MORTGAGE LOANS



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL        WMC MORTGAGE LOANS
                                   NUMBER OF WMC MORTGAGE      BALANCE OF WMC MORTGAGE           OUTSTANDING
        RATE CHANGE DATE                    LOANS                       LOANS                 AS OF CUT-OFF DATE
-------------------------------- -------------------------  -----------------------------  -------------------------

Not Applicable...............               1,249                  $123,447,141.18                   21.65%
June 2005....................                   2                       338,751.12                    0.06
June 2006....................                   1                       102,595.55                    0.02
August 2006..................                   3                       510,585.12                    0.09
September 2006...............                  15                     3,296,686.90                    0.58
October 2006.................                  52                    12,804,660.75                    2.25
November 2006................                 408                   100,066,674.45                   17.55
December 2006................               1,149                   283,083,097.67                   49.65
January 2007.................                  21                     5,931,943.84                    1.04
September 2007...............                   1                       323,351.27                    0.06
October 2007.................                   2                       329,370.38                    0.06
November 2007................                  22                     4,166,458.72                    0.73
December 2007................                  44                     9,261,774.12                    1.62
January 2008.................                   3                     1,239,606.93                    0.22
February 2008................                   1                       208,000.00                    0.04
November 2009................                  21                     5,900,574.65                    1.03
December 2009................                  64                    19,162,936.87                    3.36
                                 --------------------------  --------------------------  ---------------------------
TOTAL:.......................               3,058                  $570,174,209.52                  100.00%
                                 ==========================  ==========================  ===========================



                                      S-68




                     PRODUCT TYPE OF THE WMC MORTGAGE LOANS



                                                                                                    % OF AGGREGATE
                                                                                                 PRINCIPAL BALANCE OF
                                                                    CUT-OFF DATE PRINCIPAL        WMC MORTGAGE LOANS
                                              NUMBER OF WMC        BALANCE OF WMC MORTGAGE           OUTSTANDING
              PRODUCT TYPE                   MORTGAGE LOANS                 LOANS                 AS OF CUT-OFF DATE
--------------------------------      --------------------  -----------------------------  -------------------------

2/28 ARM(1).........................              1,246                $282,185,058.10                    49.49%
2/28 Interest Only ARM - 5 Year IO(2)               400                 123,171,837.91                    21.60
3/27 ARM(3).........................                 70                  14,325,439.74                     2.51
3/27 Interest Only ARM - 5Year IO(4)                  2                     401,102.68                     0.07
5/25 ARM(5).........................                 26                   7,071,885.87                     1.24
5/25 Interest Only ARM - 5 Year IO(6)                63                  19,232,992.92                     3.37
30 Year ARM(7)......................                  2                     338,751.12                     0.06
Balloon 30/15.......................                865                  54,460,893.40                     9.55
Fixed - 10 Year.....................                  1                      49,209.19                     0.01
Fixed - 15 Year.....................                 53                   4,371,976.66                     0.77
Fixed - 20 Year.....................                 10                   1,424,256.77                     0.25
Fixed - 25 Year.....................                  1                     139,140.71                     0.02
Fixed - 30 Year.....................                319                  63,001,664.45                    11.05
                                      ---------------------  --------------------------  ---------------------------
TOTAL:..............................              3,058                $570,174,209.52                   100.00%

                                      =====================  ==========================  ===========================

--------------------
(1)      2/28 ARM refers to a Mortgage Loan for which the Loan Rate is fixed for
         two years after the origination of that Mortgage Loan. Thereafter, the
         Loan Rate on that Mortgage Loan adjusts semi-annually based upon the
         six-month LIBOR index.

(2)      2/28 Interest Only ARM - 5 Year IO refers to a Mortgage Loan that pays
         interest only for five years after the origination of that Mortgage
         Loan and becomes fully amortizing thereafter. The Loan Rate on that
         Mortgage Loan is fixed for the first two years and then adjusts
         semi-annually based upon the six-month LIBOR index.

(3)      3/27 ARM refers to a Mortgage Loan for which the Loan Rate is fixed for
         three years after the origination of that Mortgage Loan. Thereafter,
         the Loan Rate on that Mortgage Loan adjusts semi-annually based upon
         the six-month LIBOR index.

(4)      3/27 Interest Only ARM - 5 Year IO refers to a Mortgage Loan that pays
         interest only for five years after the origination of that Mortgage
         Loan and becomes fully amortizing thereafter. The Loan Rate on that
         Mortgage Loan is fixed for the first three years and then adjusts
         semi-annually based upon the six-month LIBOR index.

(5)      5/25 ARM refers to a Mortgage Loan for which the Loan Rate is fixed for
         five years after the origination of that Mortgage Loan. Thereafter, the
         Loan Rate on that Mortgage Loan adjusts semi-annually based upon the
         six-month LIBOR index.

(6)      5/25 Interest Only ARM - 5 Year IO refers to a Mortgage Loan that pays
         interest only for five years after the origination of that Mortgage
         Loan and becomes fully amortizing thereafter. The Loan Rate on that
         Mortgage Loan is fixed for the first five years and then adjusts
         semi-annually based upon the six-month LIBOR index.

(7)      30 Year ARM refers to a Mortgage Loan that adjusts semi-annually based
         upon the six-month LIBOR index.


                                      S-69






   ORIGINAL TERM TO EXPIRATION OF PREPAYMENT PENALTY OF THE WMC MORTGAGE LOANS



                                                                                                % OF AGGREGATE
                                                                                             PRINCIPAL BALANCE OF
                                                                CUT-OFF DATE PRINCIPAL        WMC MORTGAGE LOANS
  ORIGINAL NUMBER OF MONTHS TO     NUMBER OF WMC MORTGAGE      BALANCE OF WMC MORTGAGE           OUTSTANDING
           EXPIRATION                       LOANS                       LOANS                 AS OF CUT-OFF DATE
-------------------------------- -------------------------  -----------------------------  -------------------------

Not Applicable...............                 905                  $150,417,351.87                   26.38%
7 - 12.......................                 122                    31,655,517.32                    5.55
13 - 24......................               1,517                   316,387,323.44                   55.49
25 - 36......................                 514                    71,714,016.89                   12.58
                                 --------------------------  --------------------------  ---------------------------
TOTAL:.......................               3,058                  $570,174,209.52                  100.00%
                                 ==========================  ==========================  ===========================



                     CREDIT GRADE OF THE WMC MORTGAGE LOANS*



                                                                                                 % OF AGGREGATE
                                                                                            PRINCIPAL BALANCE OF WMC
                                                                  CUT-OFF DATE PRINCIPAL         MORTGAGE LOANS
                                          NUMBER OF WMC           BALANCE OF WMC MORTGAGE          OUTSTANDING
          CREDIT GRADE                   MORTGAGE LOANS                    LOANS               AS OF CUT-OFF DATE
-------------------------------- -------------------------  -----------------------------  -------------------------

AA...........................               1,506                     $290,463,614.70                  50.94%
A............................                 818                      143,383,895.63                  25.15
A-...........................                 303                       51,475,517.14                   9.03
B+...........................                 192                       39,429,099.81                   6.92
B............................                 213                       40,056,570.16                   7.03
C............................                  26                        5,365,512.08                   0.94
                                 --------------------------  --------------------------  ---------------------------
TOTAL:.......................               3,058                     $570,174,209.52                 100.00%
                                 ==========================  ==========================  ===========================

--------------------
*    For a description of each credit grade, see "The Originators--WMC Mortgage
     Corp." in this prospectus supplement.



                     LIEN POSITION OF THE WMC MORTGAGE LOANS



                                                                                                 % OF AGGREGATE
                                                                                            PRINCIPAL BALANCE OF WMC
                                                                       CUT-OFF DATE              MORTGAGE LOANS
                                            NUMBER OF            PRINCIPAL BALANCE OF WMC          OUTSTANDING
         LIEN POSITION                 WMC MORTGAGE LOANS             MORTGAGE LOANS           AS OF CUT-OFF DATE
-------------------------------- -------------------------  -----------------------------  -------------------------

First Lien...................               2,170                     $514,472,182.10                  90.23%
Second Lien..................                 888                       55,702,027.42                   9.77
                                 --------------------------  --------------------------  ---------------------------
TOTAL:.......................               3,058                     $570,174,209.52                 100.00%
                                 ==========================  ==========================  ===========================


                                      S-70





THE INDEX

         The index with respect to the adjustable-rate Mortgage Loans is the
average of interbank offered rates for (i) one-month U.S. dollar deposits in the
London market based on quotations of major banks, and most recently available as
of a day specified in the related quote as published by The Wall Street Journal
(the "One-Month LIBOR Index") or (ii) six-month U.S. dollar deposits in the
London market based on quotations of major banks, and most recently available as
of a day specified in the related note as published by The Wall Street Journal
(the "Six-Month LIBOR Index," and together with the One-Month LIBOR Index, the
"Index"). If the related Index becomes unpublished or is otherwise unavailable,
the Servicer will select an alternative index that is based upon comparable
information.

         Listed below are historical values of certain average yields, which are
related to each Index. The monthly averages shown are intended only to provide
an historical summary of the movements in each Index and may not be indicative
of future rates. The values shown below have been obtained from Bloomberg L.P.
and may not be identical to the related Index as published by a different source
for the same period.



                                              ONE-MONTH LIBOR INDEX
-------------------------------------------------------------------------------------------------------------------
MONTH                                  2004              2003             2002             2001             2000
-----                           -----------------  ----------------  ---------------  --------------  -------------

January......................... 1.10429%          1.36153%          1.80398%         5.87341%         5.80881%
February........................ 1.09522           1.33894           1.84931          5.52178          5.88970
March........................... 1.09228           1.30330           1.89313          5.12983          6.05065
April........................... 1.09900           1.31277           1.85702          4.80454          6.14958
May............................. 1.10125           1.31503           1.84034          4.15744          6.54405
June............................ 1.25023           1.16202           1.83969          3.91185          6.64926
July............................ 1.41227           1.10554           1.83318          3.81599          6.62688
August.......................... 1.59583           1.11084           1.79786          3.63597          6.62063
September....................... 1.78443           1.12000           1.81640          3.15491          6.62101
October......................... 1.90074           1.12000           1.80375          2.47976          6.61986
November........................ 2.12980           1.12463           1.43869          2.12528          6.63618
December........................ 2.38949           1.15313           1.42022          1.95362          6.69053





                                              SIX-MONTH LIBOR INDEX
-------------------------------------------------------------------------------------------------------------------
MONTH                                  2004              2003             2002             2001             2000
-----                           -----------------  ----------------  ---------------  --------------  -------------

January......................... 1.18801%          1.37293%          1.93418%         5.53091%         6.21497%
February........................ 1.18575           1.34338           2.03559          5.20247          6.32988
March........................... 1.15853           1.26429           2.23531          4.80858          6.41109
April........................... 1.28028           1.27931           2.20696          4.47553          6.53573
May............................. 1.52145           1.23334           2.10051          4.08448          6.97661
June............................ 1.81122           1.08146           2.00177          3.83006          6.96932
July............................ 1.89381           1.12332           1.90524          3.79111          6.91917
August.......................... 1.94065           1.19525           1.76385          3.57105          6.84009
September....................... 2.08716           1.18557           1.77994          3.00113          6.76557
October......................... 2.22685           1.20399           1.73677          2.34255          6.72617
November........................ 2.50011           1.24331           1.46164          2.10651          6.70534
December........................ 2.71039           1.23503           1.42222          1.98829          6.39865



                                      S-71


                                 THE ORIGINATORS

GENERAL

         The Mortgage Loans were previously purchased by the Seller from (i) NC
Capital, which acquired the New Century Mortgage Loans from New Century in the
ordinary course of business and (ii) WMC, which originated or acquired the WMC
Mortgage Loans in the ordinary course of business. The Mortgage Loans will be
serviced by Saxon Mortgage Services, Inc.

NEW CENTURY MORTGAGE CORPORATION

         The information set forth in this section of the prospectus supplement
has been provided by NC Capital. None of the Depositor, the Underwriter, the
Seller, the Trustee, the Servicer, WMC or any of their respective affiliates or
any other person has made or will make any representation as to the accuracy or
completeness of such information.

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

         New Century originates and purchases loans through its wholesale
network of 21,600 independent mortgage brokers and through its retail network of
74 sales offices operating in 29 states and 27 regional processing centers
operating in 15 states. For the nine months ending September 30, 2004, New
Century's wholesale division originated $9.0 billion in mortgage loans and its
retail division originated $1.0 billion in mortgage loans. As of September 30,
2004, New Century and its affiliates employed 4,889 associates nationwide.

         Underwriting Standards. The New Century Mortgage Loans were originated
in accordance with the underwriting guidelines established by New Century
(collectively, the "New Century Underwriting Guidelines"). The following is a
general summary of the New Century Underwriting Guidelines believed by the
Depositor to have been generally applied, with some variation, by New Century.
The New Century Underwriting Guidelines are modified from time to time and
certain of the New Century Mortgage Loans may have been originated in accordance
with guidelines that are not currently in effect. This summary does not purport
to be a complete description of the underwriting standards of New Century.

         The New Century Underwriting Guidelines are primarily intended to
assess the borrower's ability to repay the related New Century Mortgage Loan, to
assess the value of the mortgaged property and to evaluate the adequacy of the
property as collateral for the New Century Mortgage Loan. All of the New Century
Mortgage Loans were also underwritten with a view toward the resale of the New
Century Mortgage Loans in the secondary mortgage market. While New Century's
primary consideration in underwriting a mortgage loan is the value of the
mortgaged property, New Century also considers, among other things, a
mortgagor's credit history, repayment ability and debt service-to-income ratio,
as well as the type and use of the mortgaged property. The New Century Mortgage
Loans, in most cases, bear higher rates of interest than mortgage loans that are
originated in accordance with Fannie Mae and Freddie Mac standards, which is
likely to result in rates of delinquencies and foreclosures that are higher,


                                      S-72


and that may be substantially higher, than those experienced by portfolios of
mortgage loans underwritten in a more traditional manner. As a result of New
Century's underwriting criteria, changes in the values of the related Mortgaged
Properties may have a greater effect on the delinquency, foreclosure and loss
experience on the New Century Mortgage Loans than these changes would be
expected to have on mortgage loans that are originated in a more traditional
manner. No assurance can be given that the values of the related Mortgaged
Properties have remained or will remain at the levels in effect on the dates of
origination of the related New Century Mortgage Loans. In addition, there can be
no assurance that the value of the related Mortgaged Property estimated in any
appraisal or review is equal to the actual value of that Mortgaged Property at
the time of that appraisal or review.

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

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

         The New Century Mortgage Loans were originated consistent with and
generally conform to the New Century Underwriting Guidelines' full
documentation, limited documentation and stated income documentation residential
loan programs. Under each of the programs, New Century reviews the applicant's
source of income, calculates the amount of income from sources indicated on the
loan application or similar documentation, reviews the credit history of the
applicant, calculates the debt service-to-income ratio to determine the
applicant's ability to repay the loan, reviews the type and use of the property
being financed, and reviews the property. In determining the ability of the
applicant to repay the loan, a qualifying rate has been created under the New
Century Underwriting Guidelines that generally is equal to the interest rate on
that loan. The New Century Underwriting Guidelines require that mortgage loans
be underwritten in a standardized procedure which complies with applicable
federal and state laws and regulations and requires New Century's underwriters
to be satisfied that the value of the property being financed, as indicated by
an appraisal and a review of the appraisal, currently supports the outstanding
loan balance. In general, the maximum loan amount for mortgage loans originated
under the programs is $500,000. The New Century Underwriting Guidelines
generally permit loans on one- to four-family residential properties to have a
loan-to-value ratio at origination of up to 95% with respect to first liens
loans. The maximum loan-to-value ratio depends on, among other things, the
purpose of the


                                      S-73


mortgage loan, a borrower's credit history, home ownership history, mortgage
payment history or rental payment history, repayment ability and debt
service-to-income ratio, as well as the type and use of the property. With
respect to mortgage loans secured by mortgaged properties acquired by a
mortgagor under a "lease option purchase," the loan-to-value ratio of the
related mortgage loan is based on the lower of the appraised value at the time
of origination of the mortgage loan or the sale price of the related mortgaged
property if the "lease option purchase price" was set less than 12 months prior
to origination and is based on the appraised value at the time of origination if
the "lease option purchase price" was set 12 months or more prior to
origination.

         The New Century Underwriting Guidelines require that the income of each
applicant for a mortgage loan under the full documentation program be verified.
The specific income documentation required for New Century's various programs is
as follows: under the full documentation program, applicants usually are
required to submit one written form of verification of stable income for at
least 12 months from the applicant's employer for salaried employees and 24
months for self-employed applicants or for any special program applicant with a
FICO score of less than 640; under the limited documentation program, applicants
usually are required to submit verification of stable income for at least 12
months, such as 12 consecutive months of complete personal checking account bank
statements, and under the stated income documentation program, an applicant may
be qualified based upon monthly income as stated on the mortgage loan
application if the applicant meets certain criteria. All the foregoing programs
require that, with respect to salaried employees, there be a telephone
verification of the applicant's employment. Verification of the source of funds,
if any, required to be deposited by the applicant into escrow in the case of a
purchase money loan is required.

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

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

         "AA" Risk. Under the "AA" risk category, the applicant must have a FICO
score of 500, or greater, based on loan-to-value ratio and loan amount. Two or
more tradelines with 24 months history and no late payments, are required for
loan-to-value ratios above 90%. The borrower must have no late mortgage payments
within the last 12 months on an existing mortgage loan. No bankruptcy may have
occurred during the preceding two years. No notice of default filings may have
occurred during the preceding three years. The mortgaged property must be in at
least average condition. A maximum loan-to-value ratio of 95% is permitted for a
mortgage loan on a single-family owner occupied or two-unit property. A maximum
loan-to-value ratio of 90% is permitted for a mortgage loan on a non-owner
occupied property, an owner occupied condominium or a three- to four-family
residential property. The maximum loan-to-value ratio for rural, remote or
unique properties is 85%. The maximum combined loan-to-value ratio, including
any related subordinate lien, is 100% for either a refinance loan or a purchase
money loan. The maximum debt service to income ratio is usually 50% unless the
loan-to-value ratio is reduced.

         "A+" Risk. Under the "A+" risk category, the applicant must have a FICO
score of 500, or greater, based on loan-to-value ratio and loan amount. Two or
more tradelines with 24 months history and no late payments, are required for
loan-to-value ratios above 90%. A maximum of one 30 day late payment and no 60
day late payments within the last 12 months is acceptable on an existing
mortgage loan. No bankruptcy may have occurred during the preceding two years.
No notice of default filings may have occurred during the preceding three years.
The mortgaged property must be in at least average condition. A maximum
loan-to-value ratio of 95% is permitted for a mortgage loan on a single-family


                                      S-74


owner occupied or two-unit property. A maximum loan-to-value ratio of 90% is
permitted for a mortgage loan on a non-owner occupied property, an owner
occupied condominium or a three- to four-family residential property. The
maximum loan-to-value ratio for rural, remote or unique properties is 85%. The
maximum combined loan-to-value ratio, including any related subordinate lien, is
100% for either a refinance loan or a purchase money loan. The maximum debt
service to income ratio is usually 50% unless the loan-to-value ratio is
reduced.

         "A-" Risk. Under the "A-" risk category, an applicant must have a FICO
score of 500, or greater, based on loan-to-value ratio and loan amount. A
maximum of three 30 day late payment and no 60 day late payments within the last
12 months is acceptable on an existing mortgage loan. No bankruptcy may have
been filed during the preceding two years. No notice of default filings may have
occurred during the preceding three years. The mortgaged property must be in at
least average condition. A maximum loan-to-value ratio of 90% (or 80% for
mortgage loans originated under the stated income documentation program), is
permitted for a mortgage loan on a single family owner occupied or two-unit
property. A maximum loan-to-value ratio of 85% (or 75% for mortgage loans
originated under the stated income documentation program), is permitted for a
mortgage loan on a non-owner occupied property. A maximum loan-to-value ratio of
85% (or 75% for mortgage loans originated under the stated income documentation
program), is permitted for a mortgage loan on an owner occupied condominium or a
three- to four-family residential property. The maximum loan-to-value ratio for
rural, remote, or unique properties is 80%. The maximum combined loan-to-value
ratio, including any related subordinate lien, is 100% for a refinance loan and
100% for a purchase money loan. The maximum debt service to income ratio is
usually 50% unless the loan-to-value ratio is reduced.

         "B" Risk. Under the "B" risk category, an applicant must have a FICO
score of 500, or greater, based on loan-to-value ratio and loan amount.
Unlimited 30 day late payments and a maximum of one 60 day late payment within
the last 12 months is acceptable on an existing mortgage loan. An existing
mortgage loan must be less than 90 days late at the time of funding of the loan.
No bankruptcy filing within the past 18 months or notice of default filings
within the last two years by the applicant may have occurred. The mortgaged
property must be in at least average condition. A maximum loan-to-value ratio of
85% (or 75% for mortgage loans originated under the stated income documentation
program), is permitted for a mortgage loan on an owner occupied detached
property originated under the full documentation program. A maximum
loan-to-value ratio of 80% is permitted for a mortgage loan on a non-owner
occupied property, an owner occupied condominium or a three- to four-family
residential property (70% for a mortgage loan on a nonowner occupied property
and 70% for a mortgage loan on an owner occupied condominium or a three to four
family residential property originated under the stated income documentation
program). The maximum loan-to-value ratio for rural, remote or unique properties
is 70%. The maximum combined loan-to-value ratio, including any related
subordinate lien, is 100% for a refinance loan and for a purchase money loan.
The maximum debt service to income ratio is usually 50% - 55% unless the
loan-to-value ratio is reduced.

         "C" Risk. Under the "C" risk category, an applicant must have a FICO
score of 500, or greater, based on loan-to-value ratio and loan amount.
Unlimited 30 day and 60 day late payments and a maximum of one 90 day late
payment within the last 12 months is acceptable on an existing mortgage loan. An
existing mortgage loan must be less than 120 days late at the time of funding of
the loan. No bankruptcy or notice of default filings by the applicant may have
occurred during the preceding 12 months. The mortgaged property must be in
average condition. In most cases, a maximum loan-to-value ratio of 80% for a
mortgage loan on a single family, owner occupied or two-unit property for a full
documentation program (70% for mortgage loans originated under the stated income
documentation program), is permitted. A maximum loan-to-value ratio of 75% is
permitted for a mortgage loan on a non-owner occupied property. A maximum
loan-to-value ratio of 75% is permitted for an owner occupied condominium or a
three- to four-family residential property (70% for a mortgage loan on a
nonowner


                                      S-75


occupied property and 65% for a mortgage loan on an owner occupied condominium
or a three to four family residential property originated under the stated
income documentation program). Rural, remote or unique properties are not
allowed. The maximum combined loan-to-value ratio, including any related
subordinate lien, is 85% for a refinance loan and for a purchase money loan. The
maximum debt service to income ratio is usually 55% unless the loan-to-value
ratio is reduced.

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

         Special Programs. New Century originates loans which it calls "special
programs" to enable borrowers with higher FICO scores and good mortgage
histories the ability to obtain larger loan amounts or higher loan-to-value
ratios. Special programs extend loan-to-value ratios to a maximum of 100% and
combined 80/20 (first/second) loan to 100% CLTV and loan amounts to $1,000,000
with higher minimum FICO scores and paid-as-agreed minimum tradeline
requirements. No bankruptcy filing may have occurred during the preceding two
years. No notice of default filings may have occurred during the preceding three
years. The mortgaged property must be in at least average condition. The maximum
combined loan-to-value ratio, including any related subordinate lien, is 100%
for either a refinance loan or a purchase money loan. The maximum debt service
to income ratio is usually 55%.

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

WMC MORTGAGE CORP.

         The information set forth in this section of the prospectus supplement
has been provided by WMC Mortgage Corp. None of the Depositor, the Underwriter,
the Seller, the Trustee, the Servicer, the New Century Entities or any of their
respective affiliates or any other person has made or will make any
representation as to the accuracy or completeness of such information.


                                      S-76


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

         Until March 2000, WMC originated mortgage loans through both wholesale
and retail channels, with wholesale originations accounting for approximately
85% of total origination volume prior to March 2000. As of March 2000, WMC
changed its business model to underwrite and process 100% of its loans on the
internet via "WMC Direct" resulting in a substantial reduction in employees,
underwriting centers and closing centers, and the elimination of all retail
branches. WMC's headquarters are currently located in Woodland Hills,
California, where a majority of its business operations are presently conducted.
WMC also has regional offices in Dallas, Texas, Orangeburg, New York, Orange
County and San Ramon, California, Jacksonville, Florida, and Woburn,
Massachusetts. WMC's originations come primarily through its broker
relationships. As of January 15, 2005, WMC had approximately 2,086 employees,
including approximately 484 business development representatives and associates
who are responsible for recruiting and managing the independent broker network.

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

         WMC Mortgage Loans will fall within the following documentation
categories established by WMC: Full Documentation, Full-Alternative
Documentation, Limited Documentation, Lite Documentation, Stated Income
Documentation and Stated Income/Verified Assets (Streamlined) Documentation. In
addition to single-family residences, certain of the WMC Mortgage Loans will
have been underwritten (in many cases, as described above, subject to exceptions
for compensating factors) in accordance with programs established by WMC for the
origination of mortgage loans secured by mortgages on condominiums, vacation and
second homes, manufactured housing, two- to four-family properties and other
property types. In addition, WMC has established specific parameters for jumbo
loans, which are designated in the WMC Guidelines as mortgage loans with
original principal balances in excess of $500,000, however WMC sometimes has
special loan programs which increase the original principal balance limit if
borrowers meet other compensating credit factors.

         Under the WMC Guidelines, WMC verifies the loan applicant's eligible
sources of income for all products, calculates the amount of income from
eligible sources indicated on the loan application, reviews the credit and
mortgage payment history of the applicant and calculates the Debt Ratio to
determine the


                                      S-77


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

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

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

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


                                      S-78


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

         The WMC Guidelines are less stringent than the standards generally
acceptable to Fannie Mae and Freddie Mac with regard to the mortgagor's credit
standing, Debt Ratios, documentation programs, and in certain other respects.
Mortgagors who qualify under the WMC Guidelines generally have payment histories
and Debt Ratios that would not satisfy Fannie Mae and Freddie Mac underwriting
guidelines and may have a record of major derogatory credit items such as
outstanding judgments or prior bankruptcies. The WMC Guidelines establish the
maximum permitted LTV for each loan type based upon these and other risk
factors.

         WMC requires that all mortgage loans have title insurance and be
secured by liens on real property. WMC also requires that fire and extended
coverage casualty insurance be maintained on the mortgaged property in an amount
equal to the greater of full replacement or the amount of all liens on such
mortgaged property. In addition, flood insurance is obtained where applicable
and a tax service is used to monitor the payment of property taxes on all loans.

         Risk Categories. Under the WMC Guidelines, various risk categories are
used to grade the likelihood that the mortgagor will satisfy the repayment
conditions of the mortgage loan. These risk categories establish the maximum
permitted LTV, maximum loan amount and the allowed use of loan proceeds given
the borrower's mortgage payment history, the borrower's consumer credit history,
the borrower's liens/charge-offs/bankruptcy history, the borrower's Debt Ratio,
the borrower's use of proceeds (purchase or refinance), the documentation type
and other factors. In general, higher credit risk mortgage loans are graded in
categories that require lower Debt Ratios and permit more (or more recent) major
derogatory credit items such as outstanding judgments or prior bankruptcies. Tax
liens are not considered in determining risk category (but must be paid off or
subordinated by the taxing authority in all circumstances); and derogatory
medical collections are not considered in determining risk category and are not
required to be paid off. The WMC Guidelines specify the following risk
categories and associated criteria for grading the potential likelihood that an
applicant will satisfy the repayment obligations of a mortgage loan. However, as
described above, the following are guidelines only, and exceptions are made on a
case-specific basis. In addition, variations of the following criteria are
applicable under the programs established by WMC for the origination of jumbo
loans in excess of $500,000 and for the origination of mortgage loans secured by
mortgages on condominiums, vacation and second homes, manufactured housing and
two- to four-family properties. Jumbo loans are originated under all
documentation programs to borrowers with minimum credit scores of 620, a maximum
Debt Ratio of 45% and who satisfy other requirements as set forth in the WMC
Guidelines. WMC sometimes has special loan programs which increase the maximum
principal balance limit for jumbo loans provided the borrowers meet other
compensating credit criteria.

         Risk Category "AA".

         o        Maximum loan amount: $500,000 for Full Documentation,
                  Full-Alternative Documentation, Limited Documentation and Lite
                  Documentation; $400,000 for Stated Income Documentation and
                  Stated Income/Verified Asset (Streamlined) Documentation;


                                      S-79


                  $400,000 for Full Documentation, Full-Alternative
                  Documentation, Limited Documentation and Lite Documentation,
                  non-owner-occupied mortgaged property; $300,000 for Stated
                  Income Documentation and Stated Income/Verified Assets
                  (Streamlined) Documentation, non-owner-occupied mortgaged
                  property.

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

         o        Consumer credit history: Minimum Credit Score of 620, minimum
                  2 year credit history with activity on at least one trade
                  account in the last 12 months.

         o        Liens/charge-offs: All state and federal liens must be paid,
                  up to $5,000 in collections and charge-offs in the last 24
                  months (or $10,000 with a Credit Score of 660 or above) are
                  allowed.

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

         o        Notice of default ("NOD")/foreclosures: Permitted if
                  discharged or cured two years or more prior to loan
                  application.

         o        Maximum LTV:  100% for Full Documentation and Full-Alternative
                  Documentation, owner-occupied mortgaged property with a
                  maximum loan amount of $500,000 and a Credit Score of 620 and
                  above; 100% for Limited Documentation, Lite Documentation and
                  Express Documentation, owner-occupied mortgaged property with
                  a maximum loan amount of $300,000 and a Credit Score of 640
                  and above; 100% for Stated Income Documentation and Stated
                  Income/Verified Assets (Streamlined) Documentation
                  owner-occupied mortgaged property with a maximum loan amount
                  of $300,000 and a Credit Score of 660 and above; 95% for Full
                  Documentation, Full-Alternative Documentation, Limited
                  Documentation and Lite Documentation, owner-occupied mortgaged
                  property with a maximum loan amount of $500,000 and a minimum
                  Credit Score of 640; 95% for Stated Income Documentation and
                  Stated Income/Verified Assets (Streamlined) Documentation,
                  owner-occupied mortgaged property with a maximum loan amount
                  of $400,000 and a minimum Credit Score of 640; 90% for Full
                  Documentation and Full-Alternative Documentation
                  non-owner-occupied mortgaged property; 85% for Limited
                  Documentation non-owner-occupied mortgaged property; 80% for
                  Lite Documentation, Stated Income Documentation and Stated
                  Income/Verified Assets (Streamlined) Documentation
                  non-owner-occupied mortgaged property.

         o        Maximum debt ratio: Limited to 55% for all documentation types
                  except Stated Income Documentation and Stated Income/Verified
                  Assets (Streamlined) Documentation, which are limited to 50%.

         Risk Category "A".

         o        Maximum loan amount: $500,000 for Full Documentation and
                  Full-Alternative Documentation; $400,000 for Limited
                  Documentation and Lite Documentation; $350,000 for Stated
                  Income Documentation and Stated Income/Verified Assets
                  (Streamlined) Documentation; $300,000 for Full Documentation
                  and Full-Alternative Documentation, non-owner-occupied
                  mortgaged property; $250,000 for Lite Documentation and
                  Limited Documentation, non-owner-occupied mortgaged property;
                  $200,000 for Stated Income


                                      S-80


                  Documentation and Stated Income/Verified Assets (Streamlined)
                  Documentation, non-owner-occupied mortgaged property.

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

         o        Consumer credit history: Minimum Credit Score of 600, minimum
                  2 year credit history with activity on at least one trade
                  account in the last 12 months.

         o        Liens/charge-offs: All state and federal liens must be paid,
                  up to $5,000 in collections and charge-offs in the last 24
                  months ($10,000 with a Credit Score of 660 or higher) are
                  allowed.

         o        Bankruptcy:  Permitted if discharged two years or more prior
                  to loan application.

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

         o        Maximum LTV: 95% for Full Documentation, Full-Alternative
                  Documentation and Limited Documentation, owner-occupied
                  mortgaged property; 90% for Lite Documentation, Stated Income
                  Documentation and Stated Income/Verified Assets (Streamlined)
                  Documentation, owner-occupied mortgaged property; 85% for Full
                  Documentation, Express Documentation, Full-Alternative
                  Documentation and Limited Documentation non-owner-occupied
                  mortgaged property; 80% for Lite Documentation,
                  non-owner-occupied mortgaged property; 75% for Stated Income
                  Documentation and Stated Income/Verified Assets (Streamlined)
                  Documentation, non-owner-occupied mortgaged property.

         o        Maximum debt ratio: Limited to 55% (50% for Stated Income
                  Documentation or Stated Income/Verified Assets (Streamlined)
                  Documentation).

         Risk Category "A-".

         o        Maximum loan amount: $400,000 for Full Documentation,
                  Full-Alternative Documentation, Lite Documentation and Limited
                  Documentation; $350,000 for Stated Income Documentation and
                  Stated Income/Verified Assets (Streamlined) Documentation;
                  $300,000 for non-owner-occupied mortgaged property Full
                  Documentation and Full-Alternative Documentation, $250,000 for
                  non-owner-occupied mortgaged property Lite Documentation and
                  Limited Documentation, and $200,000 for non-owner-occupied
                  Stated Income Documentation and Stated Income/Verified Assets
                  (Streamlined) Documentation.

         o        Mortgage payment history: Not more than two 30-day
                  delinquencies during the preceding 12 months (a rolling 30-day
                  delinquency counts as only one such delinquency) and no 60-day
                  delinquencies during the preceding 12 months; no 30-day
                  delinquencies permitted for LTV of 90% or higher.

         o        Consumer credit history: Minimum Credit Score of 580; minimum
                  2 year credit history with activity on at least one trade
                  account in the last 12 months.


                                      S-81


         o        Liens/charge-offs: All state and federal liens must be paid,
                  up to $5,000 in collections and charge-offs in the last 12
                  months (or $10,000 with a Credit Score of 660 or greater)
                  months are allowed.

         o        Bankruptcy:  Permitted if discharged two years or more prior
                  to loan application.

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

         o        Maximum LTV:  95% for Full Documentation and Full-Alternative
                  Documentation, owner-occupied mortgaged property; 90% for
                  Limited Documentation and Lite Documentation owner-occupied
                  mortgaged property; 80% for Stated Income Documentation and
                  Stated Income/Verified Assets (Streamlined) Documentation,
                  owner-occupied mortgaged property; 85% for Full Documentation,
                  Full-Alternative Documentation and Limited Documentation,
                  non-owner-occupied mortgaged property; 80% for Lite
                  Documentation non-owner-occupied mortgaged property; 75% for
                  Stated Income Documentation and Stated Income/Verified Assets
                  (Streamlined) Documentation and non-owner-occupied mortgaged
                  property.

         o        Maximum debt ratio: Limited to 50% (45% for LTV above 90% or
                  Stated Income Documentation or Stated Income/Verified Assets
                  (Streamlined) Documentation.

         Risk Category "B+".

         o        Maximum loan amount: $400,000 for Full Documentation, Express
                  Documentation, Full-Alternative Documentation and Limited
                  Documentation; $350,000 for Lite Documentation; $300,700 for
                  Stated Income Documentation and Stated Income/Verified Assets
                  (Streamlined) Documentation; $250,000 for non-owner-occupied
                  Full Documentation and Full-Alternative Documentation;
                  $200,000 for non-owner-occupied Limited Documentation, Lite
                  Documentation, Stated Income Documentation and Stated
                  Income/Verified Assets (Streamlined) Documentation.

         o        Mortgage payment history: Not more than three (two for an LTV
                  of 90% or greater) 30-day delinquencies during the preceding
                  12 months (a rolling 30-day delinquency counts as only one
                  such delinquency) and no 60-day delinquencies during the
                  preceding 12 months.

         o        Consumer credit history: Minimum Credit Score of 550, minimum
                  2 year credit history with activity on at least one trade
                  account in the last 12 months.

         o        Liens/charge-offs: All state and federal liens must be paid,
                  up to $5,000 in collections and charge-offs in the last 24
                  months are allowed; any item in excess of $1,000 in the last
                  12 months is reviewed on case by case basis.

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

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

         o        Maximum LTV: 90% for Full Documentation, Full-Alternative
                  Documentation, and Limited Documentation owner-occupied
                  mortgaged property; 80% for Lite Documentation owner-occupied
                  mortgaged property; 75% for Stated Income Documentation and
                  Stated Income/Verified Assets (Streamlined) Documentation
                  owner-occupied mortgaged property; 75% for Full Documentation,
                  Full-Alternative Documentation and Limited Documentation,


                                      S-82


                  non-owner-occupied mortgaged property; 70% for Lite
                  Documentation and non-owner-occupied mortgaged property; 65%
                  for Stated Income Documentation, Stated Income/Verified Assets
                  (Streamlined) Documentation and non-owner-occupied mortgaged
                  property.

         o        Maximum debt ratio:  Limited to 50%.

         Risk Category "B".

         o        Maximum loan amount: $400,000 for Full Documentation and
                  Full-Alternative Documentation; $350,000 for Limited
                  Documentation; $300,700 for Lite Documentation, Stated Income
                  Documentation, Stated Income/Verified Assets (Streamlined)
                  Documentation; $250,000 for non-owner-occupied Full
                  Documentation and Full-Alternative Documentation; $200,000 for
                  non-owner-occupied Limited Documentation, Lite Documentation,
                  Stated Income Documentation and Stated Income/Verified Assets
                  (Streamlined) Documentation.

         o        Mortgage payment history: One 60-day delinquency during the
                  preceding 12 months.

         o        Consumer credit history: Minimum Credit Score of 500 with a
                  minimum credit history of 2 years and minimum of one reported
                  trade account with activity in last 12 months (minimum score
                  of 520 required for LTV of 85%).

         o        Liens/charge-offs: All state and federal liens must be paid,
                  up to $5,000 in collections and charge-offs in the last 24
                  months are allowed; any item in excess of $1,000 in the last
                  12 months is reviewed on case by case basis.

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

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

         o        Maximum LTV:  80% for Full Documentation, Full-Alternative
                  Documentation and Limited Documentation, owner-occupied
                  mortgaged property (85% maximum LTV if the borrower has no
                  60-day late payments on a mortgage loan in the preceding 12
                  months and a minimum Credit Score of 520); 75% for Lite
                  Documentation owner-occupied mortgaged property; 70% for
                  Stated Income Documentation and Stated Income/Verified Assets
                  (Streamlined) Documentation owner-occupied mortgaged property;
                  70% for Full Documentation, Full-Alternative Documentation and
                  Limited Documentation non-owner-occupied mortgaged property;
                  65% for Lite Documentation, Stated Income Documentation and
                  Stated Income/Verified Assets (Streamlined) Documentation
                  non-owner-occupied mortgaged property.

         o        Maximum debt ratio:  Limited to 50%.

         Risk Category "C".

         o        Maximum Loan Amount: $300,700 for all documentation types
                  (owner-occupied); $250,000 for non-owner-occupied Full
                  Documentation and Full-Alternative Documentation; $200,000 for
                  Limited Documentation, Lite Documentation, Stated Income
                  Documentation and Stated Income/Verified Assets (Streamlined)
                  Documentation.


                                 S-83


         o        Mortgage payment history: No more than two 60-day and one
                  90-day delinquencies are allowed in the preceding 12 months
                  (rolling 30-day lates are accepted).

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

         o        Liens/charge-offs: All state and federal liens must be paid,
                  up to $5,000 in collections and charge-offs in the last 24
                  months are allowed; any item in excess of $1,000 in the last
                  12 months is reviewed on case by case basis.

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

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

         o        Maximum LTV:  75% for Full Documentation, Full-Alternative
                  Documentation and Limited Documentation owner-occupied
                  mortgaged property (80% maximum LTV if the borrower has no
                  90-day late payments and no more than two 60-day late payments
                  on a mortgage loan in the preceding 12 months); 70% for Lite
                  Documentation, Stated Income Documentation and Stated
                  Income/Verified Assets (Streamlined) Documentation
                  owner-occupied mortgaged property; 70% for Full Documentation,
                  Full-Alternative Documentation and Limited Documentation
                  non-owner-occupied mortgaged property; 60% for Lite
                  Documentation non-owner-occupied mortgaged property. No
                  non-owner-occupied Stated Income Documentation or Stated
                  Income/Verified Assets (Streamlined) Documentation program is
                  available.

         o        Maximum debt ratio:  Limited to 50%.

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


                                    SERVICER

SAXON MORTGAGE SERVICES, INC.

         General. Saxon Mortgage Services, Inc. ("Saxon" or the "Servicer") will
service the mortgage loans. The principal offices of the Servicer are located in
Fort Worth, Texas. The Servicer is a HUD/FHA-approved mortgagee and is approved
by Fannie Mae and Freddie Mac. The Servicer will provide customary servicing
functions with respect to the mortgage loans. Among other things, the Servicer
is obligated under some circumstances to advance delinquent payments of
principal and interest with respect to the mortgage loans and to pay
compensating interest with respect to mortgage loans serviced by it. In managing
the liquidation of defaulted mortgage loans, the Servicer will have sole
discretion to take such action in maximizing recoveries to the securityholders
including, without limitation, selling defaulted mortgage loans and REO
properties.

         The Servicer may convert its corporate form from a corporation
organized under the laws of the State of Texas to a limited partnership
organized under the laws of the State of Texas or another state to be determined
by the Servicer (without any approval required from securityholders). We cannot
assure you whether such a conversion will take place or, if so, when.

         As of September 30, 2004, the Servicer serviced a portfolio of
approximately 112,501 one- to four-family conventional residential mortgage
loans totaling approximately $16,098,212 thousand.


                                      S-84


         Delinquency and Foreclosure Experience. The following tables set forth
the delinquency and foreclosure experience of the mortgage loans serviced by the
Servicer at the end of the indicated periods. The indicated periods of
delinquency are based on the number of days past due on a contractual basis. No
mortgage loan is considered delinquent for these purposes until it has not been
paid by the next scheduled due date. The Servicer's portfolio may differ
significantly from the Mortgage Loans in the Mortgage Pool in terms of interest
rates, principal balances, geographic distribution, types of properties, lien
priority, origination and underwriting criteria, prior Servicer performance and
other possibly relevant characteristics. There can be no assurance, and no
representation is made, that the delinquency and foreclosure experience with
respect to the Mortgage Loans in the Mortgage Pool will be similar to that
reflected in the table below, nor is any representation made as to the rate at
which losses may be experienced on liquidation of defaulted Mortgage Loans in
the Mortgage Pool. The actual delinquency experience on the Mortgage Loans in
the Mortgage Pool will depend, among other things, upon the value of the real
estate securing such Mortgage Loans in the Mortgage Pool and the ability of the
related borrower to make required payments. It should be noted that if the
residential real estate market should experience an overall decline in property
values, the actual rates of delinquencies and foreclosures could be higher than
those previously experienced by the Servicer. In addition, adverse economic
conditions may affect the timely payment by borrowers of scheduled payments of
principal and interest on the Mortgage Loans in the Mortgage Pool and,
accordingly, the actual rates of delinquencies and foreclosures with respect to
the Mortgage Pool. Finally, the statistics shown below represent the delinquency
experience for the Servicer's mortgage servicing portfolio only for the periods
presented, whereas the aggregate delinquency experience on the Mortgage Loans
comprising the Mortgage Pool will depend on the results obtained over the life
of the Mortgage Pool. These statistics were derived by using one generally
accepted method of calculating and reporting delinquency. The Servicer may
change its method of reporting delinquency experience to another generally
accepted method. Such a change may affect these statistics.


                                      S-85




                                                                 DECEMBER 31,                          SEPTEMBER 30
                                            -----------------------------------------------------     ---------------
                                                  2003               2002               2001               2004
                                            TOTAL SERVICING    TOTAL SERVICING    TOTAL SERVICING     TOTAL SERVICING
                                               PORTFOLIO          PORTFOLIO          PORTFOLIO           PORTFOLIO
                                            ----------------   ---------------    ---------------     ---------------
                                                                         ($ IN THOUSANDS)
                                            -------------------------------------------------------------------------

Total outstanding principal balance (at        $9,899,523         $7,575,560         $6,483,482         $16,098,212
period end)

Delinquency (at period end):

      30-59 days:
         Principal balance                      $605,980           $504,229           $648,986           $796,261

         Delinquency percentage                  6.12%              6.66%              10.01%              4.95%

      60-89 days:
         Principal balance                      $138,253           $160,058           $126,723           $223,377

         Delinquency percentage                  1.40%              2.11%              1.95%               1.39%

      90 days or more:
         Principal balance                      $96,388            $110,260           $78,121            $112,732

         Delinquency percentage                  0.97%              1.46%              1.21%               0.70%

Bankruptcies (1):
         Principal balance                      $300,282           $277,447           $215,213           $261,979

         Delinquency percentage                  3.03%              3.66%              3.32%               1.63%

Foreclosures:
         Principal balance                      $298,658           $245,069           $277,742           $286,823

         Delinquency percentage                  3.02%              3.23%              4.28%               1.78%

Real Estate Owned:
         Principal balance                      $107,202           $118,960           $116,252            $99,032

         Delinquency percentage                  1.08%              1.57%              1.80%               0.62%


Total Seriously Delinquent including real
estate owned (2)                                 8.89%              11.25%             11.95%              5.83%

Total Seriously Delinquent excluding real
estate owned                                     7.81%              9.68%              10.15%              5.22%

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

(1)  Bankruptcies include both non-performing and performing loans in which the
     related borrower is in bankruptcy. Amounts included for contractually
     current bankruptcies for the total servicing portfolio for December 31,
     2003, 2002, and 2001 and September 30, 2004 are $43,655, $46,591, $31,641
     and $32,148, respectively.


(2)  Seriously delinquent is defined as loans that are 60 or more days
     delinquent, foreclosed, REO, or held by a borrower who has declared
     bankruptcy and is 60 or more days contractually delinquent.


                                      S-86


         These statistics represent the recent experience of the Servicer. There
can be no assurance that the delinquency and foreclosure experience of the
mortgage loans included in the trust estate will be comparable. In addition,
these statistics are based on all of the one- to four-family residential
mortgage loans in the Servicer's servicing portfolio, including mortgage loans
with a variety of payment and other characteristics, including geographic
locations and underwriting standards. Not all the mortgage loans in the
Servicer's servicing portfolio constitute non-conforming credits. Accordingly,
there can be no assurance that the delinquency and foreclosure experience of the
Mortgage Loans in the future will correspond to the future delinquency and
foreclosure experience of the Servicer's one- to four-family conventional
residential mortgage loan servicing portfolio. The actual delinquency and
foreclosure experience of the mortgage loans will depend, among other things,
upon:

         o        the value of real estate securing the mortgage loans; and

         o        the ability of borrowers to make required payments.

         Recent Developments With Respect to Saxon Capital, Inc. On September
24, 2004, Saxon REIT, Inc. ("Saxon REIT") announced that the company completed
its restructuring to qualify as a real estate investment trust ("REIT") and its
initial public offering of its common stock. In addition, as part of the REIT
conversion, Saxon REIT completed the previously announced merger of Saxon
Capital, Inc., the parent company of the Servicer, and Saxon REIT. Saxon REIT
subsequently filed Articles of Amendment to change its name to Saxon Capital,
Inc.


                         DESCRIPTION OF THE CERTIFICATES

GENERAL

         The Asset Backed Pass-Through Certificates, Series 2005-HE1 will be
issued pursuant to the Pooling Agreement. Set forth below are summaries of the
specific terms and provisions pursuant to which the Offered Certificates will be
issued. The following summaries do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, the provisions of the
Pooling Agreement. When particular provisions or terms used in the Pooling
Agreement are referred to, the actual provisions (including definitions of
terms) are incorporated by reference.

         The Trust will issue

         o        the Class A1 Certificates,
         o        the Class A2 Certificates,
         o        the Class A3 Certificates,
         o        the Class A4 Certificates,
         o        the Class A5 Certificates,
         o        the Class A6 Certificates,
         o        the Class M1 Certificates,
         o        the Class M2 Certificates,
         o        the Class M3 Certificates,
         o        the Class M4 Certificates,
         o        the Class M5 Certificates,
         o        the Class M6 Certificates,
         o        the Class M7 Certificates,
         o        the Class M8 Certificates,
         o        the Class M9 Certificates,


                                      S-87



         o        the Class M10 Certificates,
         o        the Class M11 Certificates,
         o        the Class X Certificates,
         o        the Class P Certificates, and
         o        the Class R Certificates.



         The Class A1 Certificates, Class A2 Certificates, Class A3
Certificates, Class A4 Certificates, Class A5 Certificates and Class A6
Certificates are referred to as the "Class A Certificates" or the "Senior
Certificates." The Class M1 Certificates, Class M2 Certificates, Class M3
Certificates, Class M4 Certificates, Class M5 Certificates, Class M6
Certificates, Class M7 Certificates, Class M8 Certificates, Class M9
Certificates, Class M10 Certificates and Class M11 Certificates are referred to
as the "Mezzanine Certificates." The Mezzanine Certificates, other than the
Class M11 Certificates, are referred to as the "Offered Mezzanine Certificates."
The Class R Certificates are referred to as the "Residual Certificates." The
Class X Certificates, Class P Certificates and Residual Certificates are
referred to as the "Physical Certificates." The Mezzanine Certificates and the
Physical Certificates, other than the Class P Certificates, are referred to as
the "Subordinate Certificates." The Class A Certificates and the Mezzanine
Certificates are referred to as the "LIBOR Certificates." Only the Class A
Certificates and the Offered Mezzanine Certificates are offered hereby (the
"Offered Certificates").

         The LIBOR Certificates will have the initial Certificate Principal
Balances specified in the table beginning on page S-6, subject to a permitted
variance of plus or minus five percent. The Class P Certificates will have an
initial Certificate Principal Balance of $100 and will not bear interest. The
Class P Certificates will be entitled to all prepayment premiums received in
respect of the Mortgage Loans, and such amounts will not be available for
distribution to the holders of the Offered Certificates. The Class R
Certificates will not have an initial Certificate Principal Balance and will not
bear interest.

         The Offered Certificates will be issued in book-entry form as described
below. All classes of Offered Certificates will be issued in minimum
denominations of $25,000 original principal amount and integral multiples of $1
in excess thereof. The assumed final maturity date (the "Assumed Final
Distribution Date") for the Offered Certificates is the Distribution Date in
March 2035, which is the Distribution Date one month after the date of the
latest maturing Mortgage Loan in any subgroup.

         Distributions on the Offered Certificates will be made by the Trustee
on the 25th day of each month, or if such day is not a business day, on the
first business day thereafter, commencing in March 2005 (each, a "Distribution
Date"), to the persons in whose names such certificates are registered at the
close of business on the Record Date. The "Record Date" for any certificate
issued in book-entry form is the business day immediately preceding such
Distribution Date and the "Record Date" for any Physical Certificate or any
Book-entry Certificate that becomes a Definitive Certificate (as defined
herein), will be the last business day of the month immediately preceding the
month in which the related Distribution Date occurs.

BOOK-ENTRY CERTIFICATES

         The Class A Certificates and the Mezzanine Certificates will be
book-entry certificates (the "Book-Entry Certificates"). Persons acquiring
beneficial ownership interests in the Book-Entry Certificates ("Certificate
Owner") will hold such certificates through The Depository Trust Company ("DTC")
in the United States, or Clearstream Banking societe anonyme ("Clearstream") or
the Euroclear System ("Euroclear") (in Europe) if they are participants of such
systems, or indirectly through organizations which are participants in such
systems. The Book-Entry Certificates will be issued in one


                                      S-88


or more certificates that equal the aggregate Certificate Principal Balance of
such certificates and will initially be registered in the name of Cede & Co.,
the nominee of DTC. Clearstream and Euroclear will hold omnibus positions on
behalf of their participants through customers' securities accounts in
Clearstream's and Euroclear's names on the books of their respective
depositaries which in turn will hold such positions in customers' securities
accounts in the depositaries' names on the books of DTC. Generally, Citibank,
N.A. will act as depositary for Clearstream and JPMorgan Chase Bank will act as
depositary for Euroclear (in such capacities, individually the "Relevant
Depositary" and collectively the "European Depositaries"). Investors may hold
such beneficial interests in the Book-Entry Certificates in the minimum
denominations described above under "--General." Except as described below, no
person acquiring a Book-Entry Certificate (each, a "beneficial owner") will be
entitled to receive a physical certificate representing such certificate (a
"Definitive Certificate"). Unless and until Definitive Certificates are issued,
it is anticipated that the only certificateholder of the Offered Certificates
will be Cede & Co., as nominee of DTC. Certificate Owners will not be
certificateholders as that term is used in the Pooling Agreement. Certificate
Owners are only permitted to exercise their rights indirectly through
Participants and DTC.

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

         Certificate Owners will receive all distributions of principal of and
interest on the Book-Entry Certificates from the Trustee through DTC and DTC
participants. While the Book-Entry Certificates are outstanding (except under
the circumstances described below), under the rules, regulations and procedures
creating and affecting DTC and its operations (the "Rules"), DTC is required to
make book-entry transfers among Participants on whose behalf it acts with
respect to the Book-Entry Certificates and is required to receive and transmit
distributions of principal of, and interest on, the Book-Entry Certificates.
Participants and indirect participants with whom Certificate Owners have
accounts with respect to Book-Entry Certificates are similarly required to make
book-entry transfers and receive and transmit such distributions on behalf of
their respective Certificate Owners. Accordingly, although Certificate Owners
will not possess certificates representing their respective interests in the
Book-Entry Certificates, the Rules provide a mechanism by which Certificate
Owners will receive distributions and will be able to transfer their interest.

         Certificateholders will not receive or be entitled to receive
certificates representing their respective interests in the Book-Entry
Certificates, except under the limited circumstances described below. Unless and
until Definitive Certificates are issued, certificateholders who are not
Participants may transfer ownership of Book-Entry Certificates only through
Participants and indirect participants by instructing such Participants and
indirect participants to transfer Book-Entry Certificates, by book-entry
transfer, through DTC for the account of the purchasers of such Book-Entry
Certificates, which account is maintained with their respective Participants.
Under the Rules and in accordance with DTC's normal procedures, transfers of
ownership of Book-Entry Certificates will be executed through DTC and the
accounts of the respective Participants at DTC will be debited and credited.
Similarly, the Participants and indirect participants will make debits or
credits, as the case may be, on their records on behalf of the selling and
purchasing certificateholders.

         Because of time zone differences, credits of securities received in
Clearstream or Euroclear as a result of a transaction with a Participant will be
made during subsequent securities settlement processing


                                      S-89


and dated the business day following the DTC settlement date. Such credits or
any transactions in such securities settled during such processing will be
reported to the relevant Euroclear or Clearstream Participants on such business
day. Cash received in Clearstream or Euroclear as a result of sales of
securities by or through a Clearstream Participant (as defined below) or
Euroclear Participant (as defined below) to a DTC Participant will be received
with value on the DTC settlement date but will be available in the relevant
Clearstream or Euroclear cash account only as of the business day following
settlement in DTC.

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

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

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

         Clearstream, 42 Avenue J.F. Kennedy, L-2967 Luxembourg, is a limited
liability company incorporated under the laws of the Grand Duchy of Luxembourg.
Clearstream is a subsidiary of Clearstream International societe anonyme
("Clearstream International"), which was formed in January 2000 through the
merger of Cedel International and Deutsche Boerse Clearing, a subsidiary of
Deutsche Boerse AG. In July 2002 Deutsche Boerse AG acquired Cedel International
and its 50 percent interest in Clearstream International stock.

         Clearstream is registered as a bank in Luxembourg, and as such is
subject to regulation by the Banque central du Luxembourg, Luxembourg Central
Bank, and the Commission de Surveillance de Secteur Financier, the Luxembourg
Commission for the Supervision of the Financial Sector.

         Clearstream holds securities for its customers ("Clearstream
Participants") and facilitates the clearance and settlement of securities
transactions by electronic book-entry transfers between their accounts.
Clearstream provides various services, including safekeeping, administration,
clearance and settlement of internationally traded securities and securities
lending and borrowing. Clearstream also deals with domestic securities markets
in several countries through established depository and custodial relationships.
Clearstream has established an electronic bridge with the Euroclear Operator in
Brussels to facilitate settlement of trades between systems.

         Clearstream's customers are worldwide financial institutions including
underwriters, securities brokers and dealers, banks, trust companies and
clearing corporations. Clearstream's United States


                                      S-90


customers are limited to securities brokers and dealers and banks. Currently,
Clearstream has over 2,500 customers located in approximately 94 countries,
including all major European countries, Canada, and the United States. Indirect
access to Clearstream is available to other institutions which clear through or
maintain a custodial relationship with an account holder of Clearstream.

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

         The Euroclear Operator is registered as a bank in Belgium, and as such
is subject to the supervision of the National Bank of Belgium and the Belgian
Banking and Finance Commission.

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

         Distributions on the Book-Entry Certificates will be made on each
Distribution Date by the Trustee to DTC. DTC will be responsible for crediting
the amount of such payments to the accounts of the applicable DTC participants
in accordance with DTC's normal procedures. Each DTC participant will be
responsible for disbursing such payments to the beneficial owners of the
Book-Entry Certificates that it represents and to each Financial Intermediary
for which it acts as agent. Each such Financial Intermediary will be responsible
for disbursing funds to the beneficial owners of the Book-Entry Certificates
that it represents.

         Under a book-entry format, beneficial owners of the Book-Entry
Certificates may experience some delay in their receipt of payments, since such
payments will be forwarded by the Trustee to Cede & Co. Distributions with
respect to certificates held through Clearstream or Euroclear will be credited
to the cash accounts of Clearstream Participants or Euroclear Participants in
accordance with the relevant system's rules and procedures, to the extent
received by the Relevant Depositary. Such distributions will be subject to tax
reporting in accordance with relevant United States tax laws and regulations.
Because DTC can only act on behalf of Financial Intermediaries, the ability of a
beneficial owner to pledge Book-Entry Certificates to persons or entities that
do not participate in the Depository system, or otherwise take actions in
respect of such Book-Entry Certificates, may be limited due to the lack of
physical certificates


                                      S-91


for such Book-Entry Certificates. In addition, issuance of the Book-Entry
Certificates in book-entry form may reduce the liquidity of such certificates in
the secondary market since certain potential investors may be unwilling to
purchase certificates for which they cannot obtain physical certificates.

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

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

         Definitive Certificates will be issued to beneficial owners of the
Book-Entry Certificates, or their nominees, rather than to DTC, only if (a) DTC
advises the Trustee in writing that DTC is no longer willing, qualified or able
to discharge properly its responsibilities as nominee and depository with
respect to the Book Entry Certificates and the Trustee is unable to locate a
qualified successor, (b) the Depositor, with the consent of the applicable DTC
participants, elects to terminate a book entry system through DTC or (c) after
the occurrence of an Event of Default, beneficial owners having Percentage
Interests aggregating not less than 51% of the Book-Entry Certificates advise
the Trustee and DTC through the Financial Intermediaries and the DTC
participants in writing that the continuation of a book-entry system through DTC
(or a successor thereto) is no longer in the best interests of beneficial owners
and the DTC participants consent to the termination of the book-entry system
through DTC.

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

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

         None of the Depositor, the Underwriter, the Seller, the Trustee, the
Servicer or the Originators will have any responsibility for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Book-Entry Certificates held by Cede & Co., as nominee for DTC,
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.


                                      S-92


GLOSSARY

         The "Accrual Period" for the LIBOR Certificates for any Distribution
Date will be the actual number of days (based on a 360-day year) included in the
period commencing on the immediately preceding Distribution Date (or, in the
case of the first such Accrual Period, commencing on the Closing Date) and
ending on the day immediately preceding such Distribution Date.

         The "Aggregate Strip Amount" means, with respect to any Distribution
Date, the sum of the Subgroup 1 Strip Amount, the Subgroup 2 Strip Amount and
the Subordinate Strip Amount for such Distribution Date.

         An "Allocated Realized Loss Amount" with respect to any class of
Mezzanine Certificates or the Class A2 Certificates, as applicable, and any
Distribution Date, is an amount equal to the sum of (i) any Realized Loss
allocated to that class of certificates on that Distribution Date and (ii) any
Allocated Realized Loss Amount for that class of certificates from the previous
Distribution Date that has not been reimbursed less any increases to the
Certificate Principal Balance of that class as a result of Recoveries.

         The "Basic Principal Distribution Amount" means with respect to any
Distribution Date the amounts in clauses (b)(i) - (iv) of the definition of
Principal Distribution Amount.

         The "Certificate Principal Balance" of any LIBOR Certificate or Class P
Certificate immediately prior to any Distribution Date will be equal to the
Certificate Principal Balance thereof on the Closing Date (the "Original
Certificate Principal Balance") reduced by the sum of (a) all amounts actually
distributed in respect of principal of such class and (b) with respect to the
Mezzanine Certificates and the Class A2 Certificates, any reductions in the
Certificate Principal Balance thereof deemed to have occurred in connection with
allocations of Realized Losses on all prior Distribution Dates; provided,
however, that the Certificate Principal Balance of each class of certificates to
which Realized Losses have been allocated (including any such class of
certificates for which the Certificate Principal Balance has been reduced to
zero) will be increased in an aggregate amount equal to the Recoveries received
in respect of any Distribution Date in order of seniority up to the amount of
the Allocated Realized Loss Amount owed to that class.

         The "Class A Principal Distribution Amount," means, for any
Distribution Date (a) prior to the Stepdown Date or (b) on which a Trigger Event
is in effect, an amount equal to the Principal Distribution Amount for such
Distribution Date. For any Distribution Date (a) on or after the Stepdown Date
or (b) on which a Trigger Event is not in effect, an amount equal to the excess,
if any, of (x) the aggregate Certificate Principal Balance of the Class A
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (1) approximately 58.40% and (2) the aggregate Principal
Balance of the Mortgage Loans as of the last day of the related Due Period and
(B) the aggregate Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $5,699,128.

         The "Class M1 Principal Distribution Amount" is an amount equal to,
with respect to any Distribution Date, the excess, if any, of (x) the sum of (1)
the aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount on
such Distribution Date) and (2) the Certificate Principal Balance of the Class
M1 Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (1) approximately 66.50% and (2) the aggregate Principal
Balance of the Mortgage Loans as of the last day of the related Due Period and
(B) the aggregate Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $5,699,128.


                                      S-93


         The "Class M2 Principal Distribution Amount" is an amount equal to,
with respect to any Distribution Date, the excess, if any, of (x) the sum of (1)
the aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount on
such Distribution Date), (2) the Certificate Principal Balance of the Class M1
Certificates (after taking into account the payment of the Class M1 Principal
Distribution Amount on such Distribution Date) and (3) the Certificate Principal
Balance of the Class M2 Certificates immediately prior to such Distribution Date
over (y) the lesser of (A) the product of (1) approximately 72.70% and (2) the
aggregate Principal Balance of the Mortgage Loans as of the last day of the
related Due Period and (B) the aggregate Principal Balance of the Mortgage Loans
as of the last day of the related Due Period minus $5,699,128.

         The "Class M3 Principal Distribution Amount" is an amount equal to,
with respect to any Distribution Date, the excess, if any, of (x) the sum of (1)
the aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount on
such Distribution Date), (2) the Certificate Principal Balance of the Class M1
Certificates (after taking into account the payment of the Class M1 Principal
Distribution Amount on such Distribution Date), (3) the Certificate Principal
Balance of the Class M2 Certificates (after taking into account the payment of
the Class M2 Principal Distribution Amount on such Distribution Date) and (4)
the Certificate Principal Balance of the Class M3 Certificates immediately prior
to such Distribution Date over (y) the lesser of (A) the product of (1)
approximately 76.50% and (2) the aggregate Principal Balance of the Mortgage
Loans as of the last day of the related Due Period and (B) the aggregate
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period minus $5,699,128.

         The "Class M4 Principal Distribution Amount" is an amount equal to,
with respect to any Distribution Date, the excess, if any, of (x) the sum of (1)
the aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount on
such Distribution Date), (2) the Certificate Principal Balance of the Class M1
Certificates (after taking into account the payment of the Class M1 Principal
Distribution Amount on such Distribution Date), (3) the Certificate Principal
Balance of the Class M2 Certificates (after taking into account the payment of
the Class M2 Principal Distribution Amount on such Distribution Date), (4) the
Certificate Principal Balance of the Class M3 Certificates (after taking into
account the payment of the Class M3 Principal Distribution Amount on such
Distribution Date) and (5) the Certificate Principal Balance of the Class M4
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (1) approximately 79.90% and (2) the aggregate Principal
Balance of the Mortgage Loans as of the last day of the related Due Period and
(B) the aggregate Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $5,699,128.

         The "Class M5 Principal Distribution Amount" is an amount equal to,
with respect to any Distribution Date, the excess, if any, of (x) the sum of (1)
the aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount on
such Distribution Date), (2) the Certificate Principal Balance of the Class M1
Certificates (after taking into account the payment of the Class M1 Principal
Distribution Amount on such Distribution Date), (3) the Certificate Principal
Balance of the Class M2 Certificates (after taking into account the payment of
the Class M2 Principal Distribution Amount on such Distribution Date), (4) the
Certificate Principal Balance of the Class M3 Certificates (after taking into
account the payment of the Class M3 Principal Distribution Amount on such
Distribution Date), (5) the Certificate Principal Balance of the Class M4
Certificates (after taking into account the payment of the Class M4 Principal
Distribution Amount on such Distribution Date) and (6) the Certificate Principal
Balances of the Class M5 Certificates immediately prior to such Distribution
Date over (y) the lesser of (A) the product of (1) approximately 83.10% and (2)
the aggregate Principal Balance of the Mortgage Loans as of the last day of the
related


                                      S-94


Due Period and (B) the aggregate Principal Balance of the Mortgage Loans as of
the last day of the related Due Period minus $5,699,128.

         The "Class M6 Principal Distribution Amount" is an amount equal to,
with respect to any Distribution Date, the excess, if any, of (x) the sum of (1)
the aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount on
such Distribution Date), (2) the Certificate Principal Balance of the Class M1
Certificates (after taking into account the payment of the Class M1 Principal
Distribution Amount on such Distribution Date), (3) the Certificate Principal
Balance of the Class M2 Certificates (after taking into account the payment of
the Class M2 Principal Distribution Amount on such Distribution Date), (4) the
Certificate Principal Balance of the Class M3 Certificates (after taking into
account the payment of the Class M3 Principal Distribution Amount on such
Distribution Date), (5) the Certificate Principal Balance of the Class M4
Certificates (after taking into account the payment of the Class M4 Principal
Distribution Amount on such Distribution Date), (6) the Certificate Principal
Balances of the Class M5 Certificates (after taking into account the payment of
the Class M5 Principal Distribution Amount on such Distribution Date) and (7)
the Certificate Principal Balance of the Class M6 Certificates immediately prior
to such Distribution Date over (y) the lesser of (A) the product of (1)
approximately 86.20% and (2) the aggregate Principal Balance of the Mortgage
Loans as of the last day of the related Due Period and (B) the aggregate
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period minus $5,699,128.

         The "Class M7 Principal Distribution Amount" is an amount equal to,
with respect to any Distribution Date, the excess, if any, of (x) the sum of (1)
the aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount on
such Distribution Date), (2) the Certificate Principal Balance of the Class M1
Certificates (after taking into account the payment of the Class M1 Principal
Distribution Amount on such Distribution Date), (3) the Certificate Principal
Balance of the Class M2 Certificates (after taking into account the payment of
the Class M2 Principal Distribution Amount on such Distribution Date), (4) the
Certificate Principal Balance of the Class M3 Certificates (after taking into
account the payment of the Class M3 Principal Distribution Amount on such
Distribution Date), (5) the Certificate Principal Balance of the Class M4
Certificates (after taking into account the payment of the Class M4 Principal
Distribution Amount on such Distribution Date), (6) the Certificate Principal
Balance of the Class M5 Certificates (after taking into account the payment of
the Class M5 Principal Distribution Amount on such Distribution Date), (7) the
Certificate Principal Balance of the Class M6 Certificates (after taking into
account the payment of the Class M6 Principal Distribution Amount on such
Distribution Date) and (8) the Certificate Principal Balance of the Class M7
Certificates immediately prior to such Distribution Date over (y) the lesser of
(A) the product of (1) approximately 88.70% and (2) the aggregate Principal
Balance of the Mortgage Loans as of the last day of the related Due Period and
(B) the aggregate Principal Balance of the Mortgage Loans as of the last day of
the related Due Period minus $5,699,128.

         The "Class M8 Principal Distribution Amount" is an amount equal to,
with respect to any Distribution Date, the excess, if any, of (x) the sum of (1)
the aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount on
such Distribution Date), (2) the Certificate Principal Balance of the Class M1
Certificates (after taking into account the payment of the Class M1 Principal
Distribution Amount on such Distribution Date), (3) the Certificate Principal
Balance of the Class M2 Certificates (after taking into account the payment of
the Class M2 Principal Distribution Amount on such Distribution Date), (4) the
Certificate Principal Balance of the Class M3 Certificates (after taking into
account the payment of the Class M3 Principal Distribution Amount on such
Distribution Date), (5) the Certificate Principal Balance of the Class M4
Certificates (after taking into account the payment of the Class M4 Principal
Distribution Amount on such Distribution Date), (6) the Certificate Principal
Balance of the Class M5 Certificates


                                      S-95


(after taking into account the payment of the Class M5 Principal Distribution
Amount on such Distribution Date), (7) the Certificate Principal Balance of the
Class M6 Certificates (after taking into account the payment of the Class M6
Principal Distribution Amount on such Distribution Date), (8) the Certificate
Principal Balance of the Class M7 Certificates (after taking into account the
payment of the Class M7 Principal Distribution Amount on such Distribution Date)
and (9) the Certificate Principal Balance of the Class M8 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (1) approximately 90.90% and (2) the aggregate Principal Balance of
the Mortgage Loans as of the last day of the related Due Period and (B) the
aggregate Principal Balance of the Mortgage Loans as of the last day of the
related Due Period minus $5,699,128.

         The "Class M9 Principal Distribution Amount" is an amount equal to,
with respect to any Distribution Date, the excess, if any, of (x) the sum of (1)
the aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount on
such Distribution Date), (2) the Certificate Principal Balance of the Class M1
Certificates (after taking into account the payment of the Class M1 Principal
Distribution Amount on such Distribution Date), (3) the Certificate Principal
Balance of the Class M2 Certificates (after taking into account the payment of
the Class M2 Principal Distribution Amount on such Distribution Date), (4) the
Certificate Principal Balance of the Class M3 Certificates (after taking into
account the payment of the Class M3 Principal Distribution Amount on such
Distribution Date), (5) the Certificate Principal Balance of the Class M4
Certificates (after taking into account the payment of the Class M4 Principal
Distribution Amount on such Distribution Date), (6) the Certificate Principal
Balance of the Class M5 Certificates (after taking into account the payment of
the Class M5 Principal Distribution Amount on such Distribution Date), (7) the
Certificate Principal Balance of the Class M6 Certificates (after taking into
account the payment of the Class M6 Principal Distribution Amount on such
Distribution Date), (8) the Certificate Principal Balance of the Class M7
Certificates (after taking into account the payment of the Class M7 Principal
Distribution Amount on such Distribution Date), (9) the Certificate Principal
Balance of the Class M8 Certificates (after taking into account the payment of
the Class M8 Principal Distribution Amount on such Distribution Date) and (10)
the Certificate Principal Balance of the Class M9 Certificates immediately prior
to such Distribution Date over (y) the lesser of (A) the product of (1)
approximately 93.00% and (2) the aggregate Principal Balance of the Mortgage
Loans as of the last day of the related Due Period and (B) the aggregate
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period minus $5,699,128.

         The "Class M10 Principal Distribution Amount" is an amount equal to,
with respect to any Distribution Date, the excess, if any, of (x) the sum of (1)
the aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount on
such Distribution Date), (2) the Certificate Principal Balance of the Class M1
Certificates (after taking into account the payment of the Class M1 Principal
Distribution Amount on such Distribution Date), (3) the Certificate Principal
Balance of the Class M2 Certificates (after taking into account the payment of
the Class M2 Principal Distribution Amount on such Distribution Date), (4) the
Certificate Principal Balance of the Class M3 Certificates (after taking into
account the payment of the Class M3 Principal Distribution Amount on such
Distribution Date), (5) the Certificate Principal Balance of the Class M4
Certificates (after taking into account the payment of the Class M4 Principal
Distribution Amount on such Distribution Date), (6) the Certificate Principal
Balance of the Class M5 Certificates (after taking into account the payment of
the Class M5 Principal Distribution Amount on such Distribution Date), (7) the
Certificate Principal Balance of the Class M6 Certificates (after taking into
account the payment of the Class M6 Principal Distribution Amount on such
Distribution Date), (8) the Certificate Principal Balance of the Class M7
Certificates (after taking into account the payment of the Class M7 Principal
Distribution Amount on such Distribution Date), (9) the Certificate Principal
Balance of the Class M8 Certificates (after taking into account the payment of
the Class M8 Principal Distribution Amount on such Distribution Date), (10) the
Certificate Principal Balance of the Class M9 Certificates


                                      S-96


(after taking into account the payment of the Class M9 Principal Distribution
Amount on such Distribution Date) and (11) the Certificate Principal Balance of
the Class M10 Certificates immediately prior to such Distribution Date over (y)
the lesser of (A) the product of (1) approximately 94.60% and (2) the aggregate
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period and (B) the aggregate Principal Balance of the Mortgage Loans as of the
last day of the related Due Period minus $5,699,128.

         The "Class M11 Principal Distribution Amount" is an amount equal to,
with respect to any Distribution Date, the excess, if any, of (x) the sum of (1)
the aggregate Certificate Principal Balance of the Class A Certificates (after
taking into account the payment of the Class A Principal Distribution Amount on
such Distribution Date), (2) the Certificate Principal Balance of the Class M1
Certificates (after taking into account the payment of the Class M1 Principal
Distribution Amount on such Distribution Date), (3) the Certificate Principal
Balance of the Class M2 Certificates (after taking into account the payment of
the Class M2 Principal Distribution Amount on such Distribution Date), (4) the
Certificate Principal Balance of the Class M3 Certificates (after taking into
account the payment of the Class M3 Principal Distribution Amount on such
Distribution Date), (5) the Certificate Principal Balance of the Class M4
Certificates (after taking into account the payment of the Class M4 Principal
Distribution Amount on such Distribution Date), (6) the Certificate Principal
Balance of the Class M5 Certificates (after taking into account the payment of
the Class M5 Principal Distribution Amount on such Distribution Date), (7) the
Certificate Principal Balance of the Class M6 Certificates (after taking into
account the payment of the Class M6 Principal Distribution Amount on such
Distribution Date), (8) the Certificate Principal Balance of the Class M7
Certificates (after taking into account the payment of the Class M7 Principal
Distribution Amount on such Distribution Date), (9) the Certificate Principal
Balance of the Class M8 Certificates (after taking into account the payment of
the Class M8 Principal Distribution Amount on such Distribution Date), (10) the
Certificate Principal Balance of the Class M9 Certificates (after taking into
account the payment of the Class M9 Principal Distribution Amount on such
Distribution Date), (11) the Certificate Principal Balance of the Class M10
Certificates (after taking into account the payment of the Class M10 Principal
Distribution Amount on such Distribution Date) and (12) the Certificate
Principal Balance of the Class M11 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (1) approximately
97.00% and (2) the aggregate Principal Balance of the Mortgage Loans as of the
last day of the related Due Period and (B) the aggregate Principal Balance of
the Mortgage Loans as of the last day of the related Due Period minus
$5,699,128.

         The "Credit Enhancement Percentage" for any Distribution Date is the
percentage obtained by dividing (x) the sum of (i) the aggregate Certificate
Principal Balance of the Mezzanine Certificates (after giving effect to the
distribution of the Principal Distribution Amount on such Distribution Date) and
(ii) the Overcollateralization Amount which for the purposes of this definition
will not be less than zero (after giving effect to the distribution of the
Principal Distribution Amount on such Distribution Date) by (y) the aggregate
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period.

         A Mortgage Loan is "Delinquent" if any monthly payment due on a Due
Date is not made by the close of business on the next scheduled Due Date for
such Mortgage Loan. A Mortgage Loan is "30 days Delinquent" if such monthly
payment has not been received by the close of business on the corresponding day
of the month immediately succeeding the month in which such monthly payment was
due or, if there was no such corresponding day (e.g., as when a 30-day month
follows a 31-day month in which a payment was due on the 31st day of such
month), then on the last day of such immediately succeeding month; and similarly
for "60 days Delinquent" and "90 days Delinquent" etc.

         A "Due Period" with respect to any Distribution Date is the period
commencing on the second day of the month immediately preceding the month in
which such Distribution Date occurs and ending on the first day of the month in
which such Distribution Date occurs.


                                      S-97


         The "Interest Remittance Amount" with respect to any Distribution Date
is that portion of the Available Funds for such Distribution Date attributable
to interest received or advanced with respect to the Mortgage Loans and
Compensating Interest paid by the Servicer with respect to the Mortgage Loans.

         The "Monthly Interest Distributable Amount" for any Distribution Date
and each class of LIBOR Certificates will equal the amount of interest accrued
during the related Accrual Period at the related Pass-Through Rate on the
Certificate Principal Balance for such Distribution Date, in each case, reduced
by any Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls
allocated to such class (allocated to each class based on its respective
entitlements to interest irrespective of any Net Prepayment Interest Shortfalls
or Relief Act Interest Shortfalls for such Distribution Date).

         The "Net Monthly Excess Cashflow" for any Distribution Date is equal to
the sum of (a) any Overcollateralization Release Amount and (b) the excess of
(x) the Available Funds for such Distribution Date over (y) the sum for such
Distribution Date of (A) the Monthly Interest Distributable Amounts for the
LIBOR Certificates, (B) the Unpaid Interest Shortfall Amounts for the Class A
Certificates, (C) the Principal Remittance Amount and (D) the Aggregate Strip
Amount.

         The "Overcollateralization Amount" for any Distribution Date is the
amount, if any, by which (x) the aggregate Principal Balance of the Mortgage
Loans as of the last day of the related Due Period exceeds (y) the aggregate
Certificate Principal Balance of the LIBOR Certificates and the Class P
Certificates as of such Distribution Date (after giving effect to the
distribution of Basic Principal Distribution Amount on such Distribution Date).

         An "Overcollateralization Deficiency Amount" with respect to any
Distribution Date equals the amount, if any, by which the Overcollateralization
Target Amount exceeds the Overcollateralization Amount on such Distribution
Date.

         The "Overcollateralization Increase Amount" for any Distribution Date
is the lesser of (x) the Net Monthly Excess Cashflow for such Distribution Date
and (y) the Overcollateralization Deficiency Amount for such Distribution Date.

         The "Overcollateralization Release Amount" means, with respect to any
Distribution Date, the lesser of (x) the Basic Principal Distribution Amount for
such Distribution Date and (y) the excess, if any, of (1) the
Overcollateralization Amount for such Distribution Date (assuming that 100% of
the Basic Principal Distribution Amount is applied as a principal payment on
such Distribution Date) over (2) the Overcollateralization Target Amount for
such Distribution Date.

         The "Overcollateralization Target Amount" means with respect to any
Distribution Date (1) prior to the Stepdown Date, approximately 1.50% of the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date, (2) on
or after the Stepdown Date provided a Trigger Event is not in effect, the
greater of (x) 3.00% of the aggregate Principal Balance of the Mortgage Loans as
of the last day of the related Due Period and (y) $5,699,128, and (3) on or
after the Stepdown Date if a Trigger Event is in effect, the
Overcollateralization Target Amount for the immediately preceding Distribution
Date.

         The "Percentage Interest" means, as to any certificate, either the
percentage set forth on the face thereof or the percentage obtained by dividing
the initial Certificate Principal Balance represented by such certificate by the
aggregate initial Certificate Principal Balance of all of the certificates of
such class.

         The "Prepayment Period" for any Distribution Date is, (i) with respect
to principal prepayments in full, the period beginning on the sixteenth day of
the calendar month preceding the month of such Distribution Date and ending on
the fifteenth day of the month of such Distribution Date and (ii) with


                                      S-98


respect to principal prepayments in part, the calendar month preceding the month
of such Distribution Date, except with respect to the first Distribution Date,
the Prepayment Period for all prepayments will commence on January 22, 2005 with
respect to the New Century Mortgage Loans and January 26, 2005 with respect to
the WMC Mortgage Loans.

         The "Principal Distribution Amount" for any Distribution Date is the
lesser of:

         (a)      the excess of Available Funds after distribution of
                  interest on the Class A and Mezzanine Certificates,
                  including, with respect to the Class A Certificates,
                  any Unpaid Interest Shortfall Amounts and the
                  Aggregate Strip Amount; and

         (b)      the sum of:

                  (i) the principal portion of all scheduled monthly payments on
                  the Mortgage Loans due during the related Due Period, whether
                  or not received on or prior to the related Determination Date;

                  (ii) the principal portion of all proceeds received in respect
                  of the repurchase of a Mortgage Loan (or, in the case of a
                  substitution, certain amounts representing a principal
                  adjustment) as required by the Pooling Agreement during the
                  calendar month preceding the month of such Distribution Date;

                  (iii) the principal portion of all unscheduled collections in
                  respect of insurance proceeds, condemnation proceeds,
                  liquidation proceeds and Recoveries received during the
                  calendar month preceding the month of such Distribution Date,
                  to the extent applied as recoveries of principal on the
                  Mortgage Loans;

                  (iv) the principal portion of all unscheduled collections in
                  respect of full and partial principal prepayments received
                  during the related Prepayment Period; and

                  (v) the amount of any Overcollateralization Increase Amount
                  for such Distribution Date;

                  minus

                  (vi) the amount of any Overcollateralization Release Amount
                  for such Distribution Date.

         In no event will the Principal Distribution Amount with respect to any
Distribution Date be (x) less than zero or (y) greater than the outstanding
Certificate Principal Balance of the LIBOR Certificates.

         The "Principal Remittance Amount" means with respect to any
Distribution Date, that portion of Available Funds equal to the sum of (i) all
scheduled payments of principal collected or advanced on the Mortgage Loans by
the Servicer that were due during the related Due Period, (ii) the principal
portion of all partial and full principal prepayments of the Mortgage Loans
applied by the Servicer during the related Prepayment Period, (iii) the
principal portion of all related Net Liquidation Proceeds, condemnation
proceeds, insurance proceeds and Recoveries received during the calendar month
preceding the month of such Distribution Date, (iv) that portion of the Purchase
Price, representing principal of any repurchased Mortgage Loan, deposited to the
Collection Account during the calendar month preceding the month of such
Distribution Date, (v) the principal portion of any related Substitution
Adjustments deposited in the


                                      S-99


Collection Account during the calendar month preceding the month of such
Distribution Date, and (vi) on the Distribution Date on which the Trust is to be
terminated in accordance with the Pooling Agreement, that portion of the
Termination Price, in respect of principal.

         A "Realized Loss" means, with respect to any defaulted Mortgage Loan
that is finally liquidated or charged off (a "Liquidated Mortgage Loan"), the
amount of loss realized equal to the portion of the Principal Balance remaining
unpaid after application of all liquidation proceeds net of amounts reimbursable
to the Servicer for related Advances, Servicing Advances, Servicing Fees and
liquidation expenses (such amount, the "Net Liquidation Proceeds") in respect of
such Mortgage Loan.

         A "Recovery" means, with respect to any Distribution Date and any
Mortgage Loan that was determined to be a Liquidated Mortgage Loan in any month
prior to the month preceding that Distribution Date, an amount received in
respect of such Liquidated Mortgage Loan during the calendar month prior to that
Distribution Date, net of reimbursable expenses.

         The "Stepdown Date" means the earlier to occur of (1) the Distribution
Date on which the aggregate Certificate Principal Balance of the Class A
Certificates has been reduced to zero and (2) the later to occur of (x) the
Distribution Date occurring in March 2008 and (y) the first Distribution Date on
which the Credit Enhancement Percentage is greater than or equal to 41.60% (for
the purpose of this definition only, Credit Enhancement Percentage shall be
calculated prior to the distribution of Principal Distribution Amounts on the
Mezzanine Certificates).

         The "Strip Amount" means the Subgroup 1 Strip Amount, the Subgroup 2
Strip Amount or the Subordinate Strip Amount, as applicable.

         The "Subgroup 1 Interest Remittance Amount" with respect to any
Distribution Date is that portion of the Available Funds for such Distribution
Date attributable to interest received or advanced with respect to the Subgroup
1 Mortgage Loans and Compensating Interest paid by the Servicer with respect to
the Subgroup 1 Mortgage Loans.

         The "Subgroup 1 Percentage" with respect to any Distribution Date, is
the percentage equivalent of a fraction, the numerator of which is the Subgroup
1 Principal Remittance Amount for such Distribution Date and the denominator of
which is the Principal Remittance Amount for such Distribution Date.

         The "Subgroup 1 Principal Distribution Amount" is an amount equal to,
with respect to any Distribution Date, the product of (i) the Subgroup 1
Percentage for such Distribution Date and (ii) the Class A Principal
Distribution Amount for such Distribution Date.

         The "Subgroup 1 Principal Remittance Amount" means, with respect to any
Distribution Date, the portion of the Principal Remittance Amount for such
Distribution Date derived from the Subgroup 1 Mortgage Loans.

         The "Subgroup 1 Strip Amount" means, with respect to the Subgroup 1
Yield Maintenance Agreement and any Distribution Date on or after the
Distribution Date in April 2005 to and including the Distribution Date in
September 2007, the product of approximately 0.0180% per annum and the related
Scheduled Notional Amount (as defined below under "The Yield Maintenance
Agreements") for that Distribution Date, and after the Distribution Date in
September 2007, zero.

         The "Subgroup 2 Interest Remittance Amount" with respect to any
Distribution Date is that portion of the Available Funds for such Distribution
Date attributable to interest received or advanced


                                     S-100


with respect to the Subgroup 2 Mortgage Loans and Compensating Interest paid by
the Servicer with respect to the Subgroup 2 Mortgage Loans.

         The "Subgroup 2 Percentage" with respect to any Distribution Date, is
the percentage equivalent of a fraction, the numerator of which is the Subgroup
2 Principal Remittance Amount for such Distribution Date and the denominator of
which is the Principal Remittance Amount for such Distribution Date.

         The "Subgroup 2 Principal Distribution Amount" is an amount equal to,
with respect to any Distribution Date, the product of (i) the Subgroup 2
Percentage for such Distribution Date and (ii) the Class A Principal
Distribution Date for such Distribution Date.

         The "Subgroup 2 Principal Remittance Amount" means, with respect to any
Distribution Date, the portion of the Principal Remittance Amount for such
Distribution Date derived from the Subgroup 2 Mortgage Loans.

         The "Subgroup 2 Strip Amount" means, with respect to the Subgroup 2
Yield Maintenance Agreement and any Distribution Date on or after the
Distribution Date in April 2005 to and including the Distribution Date in
September 2007, the product of approximately 0.0138% per annum and the related
Scheduled Notional Amount (as defined below under "The Yield Maintenance
Agreements") for that Distribution Date, and after the Distribution Date in
September 2007, zero.

         The "Subordinate Strip Amount" means, with respect to the Subordinate
Yield Maintenance Agreement and any Distribution Date on or after the
Distribution Date in April 2005 to and including the Distribution Date in
September 2007, the product of approximately 0.0240% per annum and the related
Scheduled Notional Amount (as defined below under "The Yield Maintenance
Agreements") for that Distribution Date, and after the Distribution Date in
September 2007, zero.

         A "Trigger Event" is in effect with respect to any Distribution Date on
or after the Stepdown Date if either (i) the percentage obtained by dividing (x)
the aggregate Principal Balance of the Mortgage Loans that are 60 days or more
Delinquent, are in foreclosure, have been converted to REO Properties or have
been discharged by reason of bankruptcy, as of the last day of the prior
calendar month by (y) the aggregate Principal Balance of the Mortgage Loans as
of the last day of the previous calendar month exceeds 38% of the Credit
Enhancement Percentage for such Distribution Date or (ii) the cumulative
Realized Losses as a percentage of the original aggregate Principal Balance of
the Mortgage Loans as of the Cut-off Date is greater than the percentage set
forth in the following table:

      ------------------------------------ --------------------------------
      Range of Distribution Dates                    Percentage*
      ------------------------------------ --------------------------------
           March 2008 - February 2009                   3.00%
      ------------------------------------ --------------------------------
           March 2009 - February 2010                   4.75%
      ------------------------------------ --------------------------------
           March 2010 - February 2011                   6.25%
      ------------------------------------ --------------------------------
           March 2011 and thereafter                    7.00%
      ------------------------------------ --------------------------------

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

         *    The percentages indicated are the percentages applicable for the
              first Distribution Date in the corresponding range of Distribution
              Dates. The percentage for each succeeding Distribution Date in a
              range increases incrementally by 1/12th of the positive difference
              between the percentage applicable to the first Distribution Date
              in that range and the percentage applicable to the first
              Distribution Date in the succeeding range.

         The "Unpaid Interest Shortfall Amount" means (i) for the first
Distribution Date and with respect to the LIBOR Certificates, zero, and (ii) for
such class of certificates and any Distribution Date after the first
Distribution Date, the amount, if any, by which (a) the sum of (1) the Monthly
Interest Distributable Amount for such class of certificates for the immediately
preceding Distribution Date and (2) the


                                     S-101


outstanding Unpaid Interest Shortfall Amount, if any, for such class of
certificates for such preceding Distribution Date exceeds (b) the aggregate
amount distributed on such class of certificates in respect of interest on such
preceding Distribution Date, plus interest on the amount of interest due but not
paid on the class of certificates on such preceding Distribution Date, to the
extent permitted by law, at the Pass-Through Rate on such Distribution Date for
such class of certificates for the related Accrual Period.

ALLOCATION OF AVAILABLE FUNDS

         Distributions to holders of each class of LIBOR Certificates will be
made on each Distribution Date from Available Funds. With respect to any
Distribution Date, "Available Funds" will be equal to the sum of the following
amounts with respect to the Mortgage Loans, net of amounts reimbursable
therefrom to the Servicer and the Trustee:

         1. the aggregate amount of scheduled monthly payments on the Mortgage
         Loans due during the related Due Period and received by the related
         Determination Date, after deduction of the Servicing Fee for such
         Distribution Date and any accrued and unpaid Servicing Fees in respect
         of any prior Distribution Dates;

         2. unscheduled payments in respect of the Mortgage Loans, including
         full and partial prepayments for such Mortgage Loans occurring during
         the related Prepayment Period (excluding prepayment premiums and
         amounts representing interest on prepayments received during the first
         Prepayment Period representing interest accruals thereon on or prior to
         the Closing Date) and insurance proceeds, condemnation proceeds, Net
         Liquidation Proceeds and Recoveries received during the calendar month
         preceding the month of such Distribution Date and proceeds from
         repurchases of and substitutions for such Mortgage Loans occurring
         during the calendar month preceding the month of such Distribution
         Date; and

         3. payments from the Servicer in connection with Advances and
         Prepayment Interest Shortfalls for such Distribution Date.

         Generally, distributions with respect to the Class A1 Certificates and
the Class A2 Certificates will be made from Available Funds from amounts
collected on the Subgroup 1 Mortgage Loans. Distributions with respect to the
Class A3 Certificates, the Class A4 Certificates, the Class A5 Certificates and
the Class A6 Certificates, in general, will be made from Available Funds from
amounts collected on the Subgroup 2 Mortgage Loans. Distributions with respect
to the Mezzanine Certificates will be made from Available Funds from amounts
collected on the Subgroup 1 and Subgroup 2 Mortgage Loans.

         The holders of the Class P Certificates will be entitled to all
prepayment premiums received on the Mortgage Loans and such amounts will not be
available for distribution to the holders of the Offered Certificates.

         Interest Distributions on the LIBOR Certificates

         On each Distribution Date the Trustee will withdraw from the
Distribution Account that portion of Available Funds for such Distribution Date
consisting of the Interest Remittance Amount for such Distribution Date, and
make the following disbursements and transfers in the order of priority
described below, in each case to the extent of the Interest Remittance Amount
remaining for such Distribution Date.

         1. to the Counterparty, the Aggregate Strip Amount for that
         Distribution Date and any unpaid Aggregate Strip Amount due from
         preceding Distribution Dates;


                                     S-102


         2. concurrently, to the holders of the Senior Certificates, the related
         Monthly Interest Distributable Amount for each such class for such
         Distribution Date, on a pro rata basis, based on the entitlement of
         each such class pursuant to this clause 2. and applied in accordance
         with the allocation rules set forth below;

         3. concurrently, to the holders of the Senior Certificates, the related
         Unpaid Interest Shortfall Amount, if any, for each such class for each
         such Distribution Date, on a pro rata basis based on the entitlement of
         each such class pursuant to this clause 3. and applied in accordance
         with the allocation rules set forth below;

         4. to the holders of the Class M1 Certificates, the Monthly Interest
         Distributable Amount allocable to such certificates;

         5. to the holders of the Class M2 Certificates, the Monthly Interest
         Distributable Amount allocable to such certificates;

         6. to the holders of the Class M3 Certificates, the Monthly Interest
         Distributable Amount allocable to such certificates;

         7. to the holders of the Class M4 Certificates, the Monthly Interest
         Distributable Amount allocable to such certificates;

         8. to the holders of the Class M5 Certificates, the Monthly Interest
         Distributable Amount allocable to such certificates;

         9. to the holders of the Class M6 Certificates, the Monthly Interest
         Distributable Amount allocable to such certificates;

         10. to the holders of the Class M7 Certificates, the Monthly Interest
         Distributable Amount allocable to such certificates;

         11. to the holders of the Class M8 Certificates, the Monthly Interest
         Distributable Amount allocable to such certificates;

         12. to the holders of the Class M9 Certificates, the Monthly Interest
         Distributable Amount allocable to such certificates;

         13. to the holders of the Class M10 Certificates, the Monthly Interest
         Distributable Amount allocable to such certificates; and

         14. to the holders of the Class M11 Certificates, the Monthly Interest
         Distributable Amount allocable to such certificates.

         The Interest Remittance Amount distributed pursuant to clauses 2. and
3. above will be applied to the Senior Certificates as follows: amounts
distributed to the Class A1, Class A2, Class A3, Class A4, Class A5 and Class A6
Certificates will first reduce the Interest Remittance Amount of the related
subgroup. Reductions in the Subgroup 1 Interest Remittance Amount will be
applied to the Class A1 and Class A2 Certificates, pro rata, based on the amount
of interest due to each such class. Reductions in the Subgroup 2 Interest
Remittance Amount will be applied to the Class A3, Class A4, Class A5 and Class
A6 Certificates, pro rata, based on the amount of interest due to each such
class. If the related


                                     S-103


Interest Remittance Amount is insufficient, additional amounts will reduce the
remaining Interest Remittance Amount of the other subgroup after giving effect
to the foregoing allocations.

         Any Interest Remittance Amounts remaining undistributed following these
distributions will be used in determining the amount of Net Monthly Excess
Cashflow, if any, for such Distribution Date. On any Distribution Date, any
Relief Act Interest Shortfalls and any Prepayment Interest Shortfalls to the
extent not covered by Compensating Interest paid by the Servicer will first
reduce Net Monthly Excess Cashflow and then reduce the Monthly Interest
Distributable Amounts with respect to the LIBOR Certificates on a pro rata basis
based on the respective amounts of interest accrued on such certificates for
such Distribution Date.

         Principal Distributions on the LIBOR Certificates

         On each Distribution Date (a) prior to the Stepdown Date or (b) on
which a Trigger Event is in effect, the Trustee will withdraw from the
Distribution Account that portion of Available Funds equal to the Principal
Distribution Amount for such Distribution Date, and make the following
disbursements and transfers in the order of priority described below, in each
case to the extent of the Principal Distribution Amount remaining for such
Distribution Date:

         1. Concurrently:

                  a. to the holders of the Class A1 and Class A2 Certificates,
                  pro rata based on Certificate Principal Balances, the Subgroup
                  1 Principal Distribution Amount for such Distribution Date,
                  until the respective Certificate Principal Balances have been
                  reduced to zero; provided however, that beginning on the first
                  Distribution Date on or after which the Mezzanine Certificates
                  have been paid in full and the Net Monthly Excess Cashflow and
                  Overcollateralization Amount for such Distribution Date are
                  insufficient to cover Realized Losses on the Subgroup 1
                  Mortgage Loans, sequentially to the Class A1 and Class A2
                  Certificates, in that order, the Subgroup 1 Principal
                  Distribution Amount, until the respective Certificate
                  Principal Balances have been reduced to zero; and

                  b. to the holders of the Class A3, Class A4, Class A5 and
                  Class A6 Certificates, pro rata based on Certificate Principal
                  Balances, the Subgroup 2 Principal Distribution Amount for
                  such Distribution Date, until the respective Certificate
                  Principal Balances have been reduced to zero; provided
                  however, that the portions allocable to the Class A4, Class A5
                  and Class A6 Certificates will be paid sequentially to the
                  Class A4, Class A5 and Class A6 Certificates, in that order,
                  until the respective Certificate Principal Balances have been
                  reduced to zero;

provided, after the aggregate Certificate Principal Balance of the classes of
Class A Certificates related to a subgroup is reduced to zero, any amounts
remaining available to be distributed to such classes pursuant to the applicable
subclause above will be distributed to the other classes of Class A
Certificates, in accordance with the distribution rules set forth in the related
subclause;

         2. to the holders of the Class M1 Certificates, until the Certificate
         Principal Balance thereof has been reduced to zero;

         3. to the holders of the Class M2 Certificates, until the Certificate
         Principal Balance thereof has been reduced to zero;


                                     S-104


         4. to the holders of the Class M3 Certificates, until the Certificate
         Principal Balance thereof has been reduced to zero;

         5. to the holders of the Class M4 Certificates, until the Certificate
         Principal Balance thereof has been reduced to zero;

         6. to the holders of the Class M5 Certificates, until the Certificate
         Principal Balance thereof has been reduced to zero;

         7. to the holders of the Class M6 Certificates, until the Certificate
         Principal Balance thereof has been reduced to zero;

         8. to the holders of the Class M7 Certificates, until the Certificate
         Principal Balance thereof has been reduced to zero;

         9. to the holders of the Class M8 Certificates, until the Certificate
         Principal Balance thereof has been reduced to zero;

         10. to the holders of the Class M9 Certificates, until the Certificate
         Principal Balance thereof has been reduced to zero;

         11. to the holders of the Class M10 Certificates, until the Certificate
         Principal Balance thereof has been reduced to zero; and

         12. to the holders of the Class M11 Certificates, until the Certificate
         Principal Balance thereof has been reduced to zero.

         On each Distribution Date (a) on or after the Stepdown Date and (b) on
which a Trigger Event is not in effect, the holders of each class of LIBOR
Certificates will be entitled to receive distributions in respect of principal
to the extent of the Principal Distribution Amount in the following amounts and
order of priority:

         1. Concurrently:

                  a. to the holders of the Class A1 and Class A2 Certificates,
                  pro rata based on Certificate Principal Balances, the Subgroup
                  1 Principal Distribution Amount for such Distribution Date,
                  until the respective Certificate Principal Balances have been
                  reduced to zero; provided however, that beginning on the first
                  Distribution Date on or after which the Mezzanine Certificates
                  have been paid in full and the Net Monthly Excess Cashflow and
                  Overcollateralization Amount for such Distribution Date are
                  insufficient to cover Realized Losses on the Subgroup 1
                  Mortgage Loans, sequentially to the Class A1 and Class A2
                  Certificates, in that order, the Subgroup 1 Principal
                  Distribution Amount, until the respective Certificate
                  Principal Balances have been reduced to zero; and

                  b. to the holders of the Class A3, Class A4, Class A5 and
                  Class A6 Certificates, pro rata based on Certificate Principal
                  Balances, the Subgroup 2 Principal Distribution Amount for
                  such Distribution Date, until the respective Certificate
                  Principal Balances have been reduced to zero; provided
                  however, that the portions allocable to the Class A4, Class A5
                  and Class A6 Certificates will be paid sequentially to the
                  Class A4, Class A5 and Class A6 Certificates, in that order,
                  until the respective Certificate Principal Balances have been
                  reduced to zero;

                                     S-105


provided, after the aggregate Certificate Principal Balance of the classes of
Class A Certificates related to a subgroup is reduced to zero, any amounts
remaining available to be distributed to such classes pursuant to the applicable
subclause above will be distributed to the other Classes of Class A
Certificates, in accordance with the distribution rules set forth in the related
subclause;

         2. to the holders of the Class M1 Certificates, the Class M1 Principal
         Distribution Amount for such Distribution Date, until the Certificate
         Principal Balance thereof has been reduced to zero;

         3. to the holders of the Class M2 Certificates, the Class M2 Principal
         Distribution Amount for such Distribution Date, until the Certificate
         Principal Balance thereof has been reduced to zero;

         4. to the holders of the Class M3 Certificates, the Class M3 Principal
         Distribution Amount for such Distribution Date, until the Certificate
         Principal Balance thereof has been reduced to zero;

         5. to the holders of the Class M4 Certificates, the Class M4 Principal
         Distribution Amount for such Distribution Date, until the Certificate
         Principal Balance thereof has been reduced to zero;

         6. to the holders of the Class M5 Certificates, the Class M5 Principal
         Distribution Amount for such Distribution Date, until the Certificate
         Principal Balance thereof has been reduced to zero;

         7. to the holders of the Class M6 Certificates, the Class M6 Principal
         Distribution Amount for such Distribution Date until the Certificate
         Principal Balance thereof has been reduced to zero;

         8. to the holders of the Class M7 Certificates, the Class M7 Principal
         Distribution Amount for such Distribution Date until the Certificate
         Principal Balance thereof has been reduced to zero;

         9. to the holders of the Class M8 Certificates, the Class M8 Principal
         Distribution Amount for such Distribution Date until the Certificate
         Principal Balance thereof has been reduced to zero;

         10. to the holders of the Class M9 Certificates, the Class M9 Principal
         Distribution Amount for such Distribution Date until the Certificate
         Principal Balance thereof has been reduced to zero;

         11. to the holders of the Class M10 Certificates, the Class M10
         Principal Distribution Amount for such Distribution Date until the
         Certificate Principal Balance thereof has been reduced to zero; and

         12. to the holders of the Class M11 Certificates, the Class M11
         Principal Distribution Amount for such Distribution Date until the
         Certificate Principal Balance thereof has been reduced to zero.

CREDIT ENHANCEMENT

         The credit enhancement provided for the benefit of the holders of the
Offered Certificates consists of subordination, overcollateralization and excess
interest.

         The rights of the holders of the Subordinate Certificates to receive
distributions will be subordinated, to the extent described in this prospectus
supplement, to the rights of the holders of the Senior Certificates. This
subordination is intended to enhance the likelihood of regular receipt by the
holders of the Senior Certificates of the full amount of their scheduled monthly
payments of interest and principal, as applicable, and to afford such holders
protection against Realized Losses.


                                     S-106


         The protection afforded to the holders of the Class A Certificates by
means of the subordination of the Subordinate Certificates will be accomplished
by the preferential right of the holders of the Senior Certificates to receive
on any Distribution Date, prior to distribution on the Subordinate Certificates,
distributions in respect of interest and principal, as applicable.

         In addition, the rights of the holders of the Mezzanine Certificates
with lower payment priorities will be junior to the rights of holders of the
Mezzanine Certificates with higher payment priorities, and the rights of the
holders of the Mezzanine Certificates to receive distributions in respect of the
Mortgage Loans will be senior to the rights of the holders of the Class X
Certificates to the extent described in this prospectus supplement. This
subordination is intended to enhance the likelihood of regular receipt by the
more senior classes of certificates of distributions in respect of interest and
principal and to afford such classes protection against Realized Losses.

OVERCOLLATERALIZATION PROVISIONS

         As of the closing date, the Cut-off Date Pool Principal Balance will
exceed the aggregate Certificate Principal Balance of the LIBOR Certificates in
an amount equal to approximately 1.50% of the Cut-off Date Pool Principal
Balance. This feature is referred to as overcollateralization. The weighted
average net Loan Rate for the Mortgage Loans is generally expected to be higher
than the weighted average of the Pass-Through Rates on the LIBOR Certificates
and the weighted average rate at which the Strip Amounts are calculated. As a
result, interest collections on the Mortgage Loans are expected to be generated
in excess of the amount of interest payable to the LIBOR Certificates and the
Aggregate Strip Amount and the fees and expenses payable by the Trust. The
Pooling Agreement requires that on each Distribution Date, the Net Monthly
Excess Cashflow, if any, be applied on such Distribution Date as an accelerated
payment of principal on the class or classes of LIBOR Certificates then entitled
to receive distributions in respect of principal, but only to the extent
necessary to maintain the required level of overcollateralization.

         With respect to any Distribution Date, any Net Monthly Excess Cashflow
will be paid as follows:

         1. to the holders of the class or classes of LIBOR Certificates then
         entitled to receive distributions in respect of principal, in an amount
         equal to any Overcollateralization Increase Amount, payable to such
         holders as part of the Principal Distribution Amount as described under
         "--Allocation of Available Funds--Principal Distributions on the LIBOR
         Certificates" above;

         2. to the holders of the Class A2 Certificates, in an amount equal to
         the Allocated Realized Loss Amount allocable to such class;

         3. to the holders of the Class M1 Certificates, in an amount equal to
         the Unpaid Interest Shortfall Amount allocable to such class;

         4. to the holders of the Class M1 Certificates, in an amount equal to
         the Allocated Realized Loss Amount allocable to such class;

         5. to the holders of the Class M2 Certificates, in an amount equal to
         the Unpaid Interest Shortfall Amount allocable to such class;

         6. to the holders of the Class M2 Certificates, in an amount equal to
         the Allocated Realized Loss Amount allocable to such class;


                                     S-107


         7. to the holders of the Class M3 Certificates, in an amount equal to
         the Unpaid Interest Shortfall Amount allocable to such class;

         8. to the holders of the Class M3 Certificates, in an amount equal to
         the Allocated Realized Loss Amount allocable to such class;

         9. to the holders of the Class M4 Certificates, in an amount equal to
         the Unpaid Interest Shortfall Amount allocable to such class;

         10. to the holders of the Class M4 Certificates, in an amount equal to
         the Allocated Realized Loss Amount allocable to such class;

         11. to the holders of the Class M5 Certificates, in an amount equal to
         the Unpaid Interest Shortfall Amount allocable to such class;

         12. to the holders of the Class M5 Certificates, in an amount equal to
         the Allocated Realized Loss Amount allocable to such class;

         13. to the holders of the Class M6 Certificates, in an amount equal to
         the Unpaid Interest Shortfall Amount allocable to such class;

         14. to the holders of the Class M6 Certificates, in an amount equal to
         the Allocated Realized Loss Amount allocable to such class;

         15. to the holders of the Class M7 Certificates, in an amount equal to
         the Unpaid Interest Shortfall Amount allocable to such class;

         16. to the holders of the Class M7 Certificates, in an amount equal to
         the Allocated Realized Loss Amount allocable to such class;

         17. to the holders of the Class M8 Certificates, in an amount equal to
         the Unpaid Interest Shortfall Amount allocable to such class;

         18. to the holders of the Class M8 Certificates, in an amount equal to
         the Allocated Realized Loss Amount allocable to such class;

         19. to the holders of the Class M9 Certificates, in an amount equal to
         the Unpaid Interest Shortfall Amount allocable to such class;

         20. to the holders of the Class M9 Certificates, in an amount equal to
         the Allocated Realized Loss Amount allocable to such class;

         21. to the holders of the Class M10 Certificates, in an amount equal to
         the Unpaid Interest Shortfall Amount allocable to such class;

         22. to the holders of the Class M10 Certificates, in an amount equal to
         the Allocated Realized Loss Amount allocable to such class;

         23. to the holders of the Class M11 Certificates, in an amount equal to
         the Unpaid Interest Shortfall Amount allocable to such class;


                                     S-108


         24. to the holders of the Class M11 Certificates, in an amount equal to
         the Allocated Realized Loss Amount allocable to such class;

         25. to the holders of the Senior Certificates, pro rata based on the
         entitlement of each such class pursuant to this clause, in an amount
         equal to each such class' previously allocated and not reimbursed share
         of Net Prepayment Interest Shortfalls and Relief Act Interest
         Shortfalls, if any;

         26. to the holders of the Class M1 Certificates, in an amount equal to
         such class' previously allocated and not reimbursed share of Net
         Prepayment Interest Shortfalls and Relief Act Interest Shortfalls, if
         any;

         27. to the holders of the Class M2 Certificates, in an amount equal to
         such class' previously allocated and not reimbursed share of Net
         Prepayment Interest Shortfalls and Relief Act Interest Shortfalls, if
         any;

         28. to the holders of the Class M3 Certificates, in an amount equal to
         such class' previously allocated and not reimbursed share of Net
         Prepayment Interest Shortfalls and Relief Act Interest Shortfalls, if
         any;

         29. to the holders of the Class M4 Certificates, in an amount equal to
         such class' previously allocated and not reimbursed share of Net
         Prepayment Interest Shortfalls and Relief Act Interest Shortfalls, if
         any;

         30. to the holders of the Class M5 Certificates, in an amount equal to
         such class' previously allocated and not reimbursed share of Net
         Prepayment Interest Shortfalls and Relief Act Interest Shortfalls, if
         any;

         31. to the holders of the Class M6 Certificates, in an amount equal to
         such class' previously allocated and not reimbursed share of Net
         Prepayment Interest Shortfalls and Relief Act Interest Shortfalls, if
         any;

         32. to the holders of the Class M7 Certificates, in an amount equal to
         such class' previously allocated and not reimbursed share of Net
         Prepayment Interest Shortfalls and Relief Act Interest Shortfalls, if
         any;

         33. to the holders of the Class M8 Certificates, in an amount equal to
         such class' previously allocated and not reimbursed share of Net
         Prepayment Interest Shortfalls and Relief Act Interest Shortfalls, if
         any;

         34. to the holders of the Class M9 Certificates, in an amount equal to
         such class' previously allocated and not reimbursed share of Net
         Prepayment Interest Shortfalls and Relief Act Interest Shortfalls, if
         any;

         35. to the holders of the Class M10 Certificates, in an amount equal to
         such class' previously allocated and not reimbursed share of Net
         Prepayment Interest Shortfalls and Relief Act Interest Shortfalls, if
         any;


                                     S-109


         36. to the holders of the Class M11 Certificates, in an amount equal to
         such class' previously allocated and not reimbursed share of Net
         Prepayment Interest Shortfalls and Relief Act Interest Shortfalls, if
         any;

         37. to the Net WAC Reserve Fund for distribution to the LIBOR
         Certificates, an amount equal to any Net WAC Rate Carryover Amount for
         the LIBOR Certificates for such Distribution Date (after giving effect
         to any amounts paid under each Yield Maintenance Agreement on such
         Distribution Date);

         38. to the holders of the Class X Certificates as provided in the
         Pooling Agreement;

         39. to the Counterparty, any termination payments required to be made
         by the Trust as described below under "--Yield Maintenance Agreements";
         and

         40. to the holders of the Residual Certificates, any remaining amounts.
         It is not anticipated that any amounts will be distributed to the Class
         R Certificates under this subclause 40.

         On each Distribution Date, after making the distributions of the
Available Funds as described above, the Trustee will withdraw from the Net WAC
Reserve Fund the amount deposited therein pursuant to subclause 37 above and
will distribute the Net WAC Rate Carryover Amount, if any, to the classes of
LIBOR Certificates in the order of priority specified herein under "--Net WAC
Reserve Fund".

         On each Distribution Date, the Trustee will withdraw from the
Distribution Account all amounts representing prepayment premiums in respect of
the Mortgage Loans received during the related Prepayment Period and will
distribute these amounts to the holders of the Class P Certificates. On the
first Distribution Date following the expiration of the latest prepayment
premium term with respect to the related Mortgage Loans and if funds are
available on such date, the Class P Certificates shall be entitled to its
outstanding Certificate Principal Balance prior to any distributions of Net
Monthly Excess Cashflow on such Distribution Date.

ALLOCATION OF LOSSES; SUBORDINATION

         If on any Distribution Date, after giving effect to all distributions
of principal as described above, the aggregate Certificate Principal Balance of
the LIBOR Certificates exceeds the aggregate Principal Balance of the Mortgage
Loans, then the Certificate Principal Balance of the class of Mezzanine
Certificates then outstanding with the lowest priority of payment will be
reduced by an amount equal to that excess. In addition, after the aggregate
Certificate Principal Balance of the Mezzanine Certificates is reduced to zero
and after giving effect to the distributions as described above, if the
aggregate Certificate Principal Balance of the Class A1 and Class A2
Certificates exceeds the aggregate Principal Balance of the Subgroup 1 Mortgage
Loans, then the Certificate Principal Balance of the Class A2 Certificates will
be reduced by the amount of that excess.

         The Pooling Agreement does not permit the allocation of Realized Losses
to the Class A1, Class A3, Class A4, Class A5, Class A6 or Class P Certificates.
Investors in the Class A Certificates should note that although Realized Losses
cannot be allocated to the Class A Certificates (other than the Class A2
Certificates), under certain loss scenarios there will not be enough principal
and interest on the Mortgage Loans on a Distribution Date to pay the Class A
Certificates all interest and principal amounts, as applicable, to which they
are then entitled.

PASS-THROUGH RATES

         The "Pass-Through Rate" on any Distribution Date with respect to any
class of LIBOR Certificates will equal the lesser of (a) the related Formula
Rate and (b) the Net WAC Rate for such Distribution Date. With respect to the
LIBOR Certificates, interest in respect of any Distribution Date


                                     S-110


will accrue during the related Accrual Period on the basis of a 360-day year and
the actual number of days elapsed.

         The "Subgroup 1 Net WAC Rate" for any Distribution Date with respect to
the Class A1 and Class A2 Certificates will be a per annum rate (subject to
adjustment based on the actual number of days elapsed in the related Accrual
Period) equal to the difference between (A) the weighted average of the Loan
Rates of the Subgroup 1 Mortgage Loans as of the first day of the month
preceding the month of such Distribution Date, weighted on the basis of the
related Principal Balances as of such date (subject to adjustment for
prepayments received and distributed in the month prior to that Distribution
Date) and (B) the sum of (1) the Servicing Fee Rate for the Subgroup 1 Mortgage
Loans and (2) the Subgroup 1 Strip Amount, multiplied by a fraction, the
numerator of which is twelve and the denominator of which is the aggregate
outstanding Principal Balance of the Subgroup 1 Mortgage Loans as of the first
day of the month preceding the month of such Distribution Date (subject to
adjustment for prepayments received and distributed in the month prior to that
Distribution Date) (expressed as a percentage).

         The "Subgroup 2 Net WAC Rate" for any Distribution Date with respect to
the Class A3, Class A4, Class A5 and Class A6 Certificates will be a per annum
rate (subject to adjustment based on the actual number of days elapsed in the
related Accrual Period) equal to the difference between (A) the weighted average
of the Loan Rates of the Subgroup 2 Mortgage Loans as of the first day of the
month preceding the month of such Distribution Date, weighted on the basis of
the related Principal Balances as of such date (subject to adjustment for
prepayments received and distributed in the month prior to that Distribution
Date) and (B) the sum of (1) the Servicing Fee Rate for the Subgroup 2 Mortgage
Loans and (2) the Subgroup 2 Strip Amount, multiplied by a fraction, the
numerator of which is twelve and the denominator of which is the aggregate
outstanding Principal Balance of the Subgroup 2 Mortgage Loans as of the first
day of the month preceding the month of such Distribution Date (subject to
adjustment for prepayments received and distributed in the month prior to that
Distribution Date) (expressed as a percentage).

         The "Subordinate Net WAC Rate" for any Distribution Date with respect
to the Mezzanine Certificates will be a per annum rate (subject to adjustment
based on the actual number of days elapsed in the related Accrual Period) equal
to the excess of (i) the weighted average of the Subgroup 1 Net WAC Rate and the
Subgroup 2 Net WAC Rate, weighted in proportion to the results from subtracting
from the aggregate Scheduled Principal Balance of each Subgroup as of the first
day of the month preceding the month of such Distribution Date (subject to
adjustment for prepayments received and distributed in the month prior to that
Distribution Date), the aggregate Certificate Principal Balance of the related
Class A Certificates (such amount, the "Subgroup Subordinate Amount") over (ii)
the Subordinate Strip Amount for such Distribution Date, multiplied by a
fraction, the numerator of which is twelve and the denominator of which is the
aggregate of the Subgroup Subordinate Amounts for each Subgroup as of the first
day of the month preceding the month of such Distribution Date (subject to
adjustment for prepayments received and distributed in the month prior to that
Distribution Date) (expressed as a percentage).

         The "Net WAC Rate" means the Subgroup 1 Net WAC Rate, the Subgroup 2
Net WAC Rate or the Subordinate Net WAC Rate, as applicable.

         If on any Distribution Date, the Pass-Through Rate for any class of
LIBOR Certificates is the related Net WAC Rate, then the "Net WAC Rate Carryover
Amount" for such class for such Distribution Date is an amount equal to the sum
of (i) the excess of (x) the amount of interest such class of LIBOR Certificates
accrued on such Distribution Date at the related Formula Rate, over (y) the
amount of interest such class of certificates accrued for such Distribution Date
at the related Net WAC Rate and (ii) the unpaid portion of any related Net WAC
Rate Carryover Amount from the prior Distribution Date together with interest
accrued on such unpaid portion for the most recently ended Accrual Period at the
Formula Rate applicable for such class of LIBOR Certificates for such Accrual
Period. Any Net WAC Rate


                                     S-111


Carryover Amount on the LIBOR Certificates will be paid on that Distribution
Date from payments available under the Yield Maintenance Agreements and on that
and future Distribution Dates from and to the extent of Available Funds therefor
in accordance with the priorities described above.

         The "Formula Rate" for any class of LIBOR Certificates is the sum of
(i) the interbank offered rate for one-month United States dollar deposits in
the London market as of the related LIBOR Determination Date (the "Certificate
Index") and (ii) a related margin (the "Certificate Margin"). The Certificate
Margins with respect to the LIBOR Certificates on each Distribution Date will be
as follows:

                      Certificate Margin
Class of LIBOR          to and Including              Certificate Margin after
 Certificates     the Optional Termination Date    the Optional Termination Date
--------------   -------------------------------   -----------------------------
   Class A1              0.3025%                             0.6050%
   Class A2              0.3400%                             0.6800%
   Class A3              0.2900%                             0.5800%
   Class A4              0.1500%                             0.3000%
   Class A5              0.2800%                             0.5600%
   Class A6              0.3700%                             0.7400%
   Class M1              0.5000%                             0.7500%
   Class M2              0.5300%                             0.7950%
   Class M3              0.5800%                             0.8700%
   Class M4              0.8500%                             1.2750%
   Class M5              0.9000%                             1.3500%
   Class M6              1.0000%                             1.5000%
   Class M7              1.5500%                             2.3250%
   Class M8              1.6500%                             2.4750%
   Class M9              2.3500%                             3.5250%
   Class M10             3.0000%                             4.5000%
   Class M11             3.0000%                             4.5000%

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

NET WAC RESERVE FUND

         On the Closing Date, the Trustee will establish a reserve fund account
(the "Net WAC Reserve Fund") from which payments in respect of Net WAC Rate
Carryover Amounts on the LIBOR Certificates will be made. The Net WAC Reserve
Fund will be an asset of the Trust but not of any REMIC. On each Distribution
Date, to the extent required following the distribution of Available Funds as
described under "--Allocation of Available Funds" above and any payments under
the Yield Maintenance Agreements, the Trustee will withdraw from amounts in the
Net WAC Reserve Fund to pay the LIBOR Certificates any Net WAC Rate Carryover
Amounts in the following order of priority, in each case to the extent of
amounts remaining in the Net WAC Reserve Fund:

         (i)   from amounts paid under the Yield Maintenance Agreements, as
               follows:


                                     S-112


                  (a) from and to the extent of amounts in respect of the
                      Subgroup 1 Yield Maintenance Agreement, to the Class A1
                      and Class A2 Certificates, pro rata, any related Net WAC
                      Rate Carryover Amount for such classes;

                  (b) from and to the extent of amounts in respect of the
                      Subgroup 2 Yield Maintenance Agreement, to the Class A3,
                      Class A4, Class A5 and Class A6 Certificates, pro rata,
                      any related Net WAC Rate Carryover Amount for such
                      classes;

                  (c) from and to the extent of amounts in respect of the
                      Subordinate Yield Maintenance Agreement, sequentially, to
                      the Class M1 Certificates, the Class M2 Certificates, the
                      Class M3 Certificates, the Class M4 Certificates, the
                      Class M5 Certificates, the Class M6 Certificates, the
                      Class M7 Certificates, the Class M8 Certificates, the
                      Class M9 Certificates, the Class M10 Certificates and the
                      Class M11 Certificates, in that order, any related Net WAC
                      Rate Carryover Amounts for such classes; and

         (ii)  from and to the extent of amounts remaining in the Net WAC
               Reserve Fund on such Distribution Date after giving effect to the
               distributions in clause (i) above, as follows:

                  (a) to the Class A Certificates, pro rata, any remaining
                      unpaid Net WAC Rate Carryover Amounts;

                  (b) sequentially, to the Class M1 Certificates, the Class M2
                      Certificates, the Class M3 Certificates, the Class M4
                      Certificates, the Class M5 Certificates, the Class M6
                      Certificates, the Class M7 Certificates, the Class M8
                      Certificates, the Class M9 Certificates, the Class M10
                      Certificates and the Class M11 Certificates, in that
                      order, any related remaining unpaid Net WAC Rate Carryover
                      Amounts for such classes; and

         (iii) to the Class X Certificates, amounts in excess of the amount
               required to remain on deposit in the Net WAC Reserve Fund, as
               specified in the Pooling Agreement.


                                     S-113


THE YIELD MAINTENANCE AGREEMENTS

         The Trust will have the benefit of three interest rate yield
maintenance agreements each entered into on or prior to the Closing Date by the
Counterparty and the Trustee, acting solely on behalf of the Trust, and
documented by a 1992 ISDA Master Agreement (Multicurrency-Cross Border),
together with a Schedule and Confirmations (the "Subgroup 1 Yield Maintenance
Agreement," the "Subgroup 2 Yield Maintenance Agreement" and the "Subordinate
Yield Maintenance Agreement," collectively, the "Yield Maintenance Agreements")
from Credit Suisse First Boston International ("CSFBi") (together with any
successor, the "Counterparty"). Under each Yield Maintenance Agreement, the
Counterparty will agree to pay to the Trust on each Distribution Date on or
after the Distribution Date in April 2005 to and including the Distribution Date
in June 2008, an amount equal to the product of:

         (1) with respect to each Yield Maintenance Agreement, the excess, if
any, of one-month LIBOR (determined in accordance with the related Yield
Maintenance Agreement) (which is subject to a maximum rate of (i) 10.00% in the
case of the Subgroup 1 Yield Maintenance Agreement, (ii) 9.50% in the case of
the Subgroup 2 Yield Maintenance Agreement and (iii) 9.50% in the case of the
Subordinate Yield Maintenance Agreement), in each case over the rate for the
related Yield Maintenance Agreement specified in this prospectus supplement
under "Annex II Yield Maintenance Agreement Schedules; Strike Rate" for that
Distribution Date;

         (2) the Scheduled Notional Amount for that Distribution Date for the
related Yield Maintenance Agreement specified in this prospectus supplement
under "Annex II Yield Maintenance Agreement Schedules; Scheduled Notional
Amount" for that Distribution Date; and

         (3) a fraction, the numerator of which is the actual number of days
elapsed from and including the previous Distribution Date to but excluding the
current Distribution Date and the denominator of which is 360.

         The Yield Maintenance Agreements and any payments made by the
Counterparty thereunder will generally be assets of the Trust but will not be
assets of any REMIC.

         The "Scheduled Notional Amount" for any applicable Distribution Date is
the applicable scheduled amount set forth with respect to each Distribution Date
in "Annex II Yield Maintenance Agreement Schedules; Scheduled Notional Amount"
relating to the applicable Yield Maintenance Agreement. The initial Scheduled
Notional Amount for the Subgroup 1 Yield Maintenance Agreement, the Subgroup 2
Yield Maintenance Agreement and the Subordinate Yield Maintenance Agreement will
be $485,851,390, $407,901,617 and $219,987,000, respectively. The related
Scheduled Notional Amount declines in accordance with the expected amortization
of the related Mortgage Loans. The Subgroup 1 Yield Maintenance Agreement,
Subgroup 2 Yield Maintenance Agreement and the Subordinate Yield Maintenance
Agreement will terminate immediately following the Distribution Date in June
2008.

         Each Yield Maintenance Agreement will be governed by and construed in
accordance with the law of the State of New York and will be documented under
the 1992 ISDA Master Agreement, as supplemented by the related Schedule and
Confirmations. The obligations of the Counterparty are limited to those
specifically set forth in each Yield Maintenance Agreement.

         CSFBi was incorporated in England and Wales under the Companies Act
1985 on May 9, 1990 with registered no. 2500199 and was re-registered as an
unlimited liability company under the name "Credit Suisse Financial Products" on
July 6, 1990. Its registered office and principal place of business is at One
Cabot Square, London E14 4QJ. CSFBi is an English bank and is regulated as a
European Union credit institution by The Financial Services Authority under the
Financial Services and Markets Act 2000.


                                     S-114


The Financial Services Authority has issued a scope of permission notice
authorizing CSFBi to carry out specified regulated investment activities.
Effective as of March 27, 2000, Credit Suisse Financial Products was renamed
"Credit Suisse First Boston International". This change was a renaming only.

         CSFBi is an unlimited liability company and, as such, its shareholders
have a joint, several and unlimited obligation to meet any insufficiency in the
assets of CSFBi in the event of its liquidation. CSFBi's ordinary voting shares
are owned, as to 56%, by Credit Suisse First Boston, as to 24%, by Credit Suisse
First Boston (International) Holding AG, a wholly owned subsidiary of Credit
Suisse First Boston, and, as to 20%, by Credit Suisse Group. CSFBi commenced
business on July 16, 1990. Its principal business is banking, including the
trading of derivative products linked to interest rates, equities, foreign
exchange, commodities and credit.

         CSFBi has been assigned a senior unsecured debt rating of "A+" by
Standard and Poor's Ratings Services, a division of the McGraw Hill Companies,
Inc. ("S&P"), a senior debt rating of "Aa3 (stable outlook)" by Moody's
Investors Service, Inc. ("Moody's") and a long-term rating of "AA- (stable
outlook)" by Fitch, Inc. ("Fitch").

         CSFBi is an affiliate of Credit Suisse First Boston LLC, the Seller and
the Depositor.

         The Pooling Agreement will contain provisions permitting the Trustee to
enter into any amendment to a Yield Maintenance Agreement requested by the
Counterparty to cure any ambiguity in, or correct or supplement any provision
of, a Yield Maintenance Agreement, so long as the Trustee determines that the
amendment will not adversely affect the interests of the related
certificateholders.

         The respective obligations of the Counterparty and the Trust to pay
specified amounts due under each Yield Maintenance Agreement will be subject to
the following conditions precedent: (1) no Cap Default or event that with the
giving of notice or lapse of time or both would become a Cap Default shall have
occurred and be continuing with respect to such Yield Maintenance Agreement; and
(2) no Termination Event has occurred or been effectively designated with
respect to such Yield Maintenance Agreement.

         "Events of Default" under each Yield Maintenance Agreement (each a "Cap
Default") includes the following standard events of default under the 1992 ISDA
Master Agreement:

         o        "Failure to Pay or Deliver,"

         o        "Breach of Agreement,"

         o        "Misrepresentation,"

         o        "Cross Default,"

         o        "Bankruptcy," and

         o        "Merger without Assumption,"

as described in Sections 5(a)(i), 5(a)(ii), 5(a)(iv), 5(a)(vi), 5(a)(vii), and
5(a)(viii) of the 1992 ISDA Master Agreement.

         "Termination Events" under each Yield Maintenance Agreement consist of
the following standard events under the 1992 ISDA Master Agreement:


                                     S-115


         o        "Illegality" (which generally relates to changes in law
                  causing it to become unlawful for either party to perform its
                  obligations under such Yield Maintenance Agreement);

         o        "Tax Event" (which generally relates to either party to a
                  Yield Maintenance Agreement receiving a payment under such
                  Yield Maintenance Agreement from which an amount has been
                  deducted or withheld for or on account of taxes);

         o        "Tax Event Upon Merger" (which generally relates to either
                  party to a Yield Maintenance Agreement receiving a payment
                  under such Yield Maintenance Agreement from which an amount
                  has been deducted or withheld for or on account of taxes
                  resulting from a merger); and

         o        "Credit Event Upon Merger" (which generally relates to the
                  Trust or the Counterparty and an entity providing credit
                  support for it becoming weaker as a result of a merger),

as described in Sections 5(b)(i), 5(b)(ii), 5(b)(iii) and 5(b)(iv) of the 1992
ISDA Master Agreement. In addition, there are additional Termination Events
relating to the Trust if the Trust should terminate or if the Pooling Agreement
or other transaction documents are amended in a manner adverse to the
Counterparty without the consent of the Counterparty.

         If the Trust fails to pay a cap premium for a Yield Maintenance
Agreement on any Distribution Date, the Counterparty, in addition to the other
remedies available to it under the related Yield Maintenance Agreement, can set
off the amount of such cap premium against the Counterparty's obligations under
the related Yield Maintenance Agreement.

         Upon the occurrence of any Cap Default under a Yield Maintenance
Agreement, the non-defaulting party will have the right to designate an Early
Termination Date (as defined in the 1992 ISDA Master Agreement) with respect to
such Yield Maintenance Agreement. The Trust may not designate an Early
Termination Date with respect to a Yield Maintenance Agreement without the
consent of the controlling party specified in the Pooling Agreement. With
respect to Termination Events, an Early Termination Date may be designated by
one of the parties (as specified in each Yield Maintenance Agreement) and will
occur only upon notice and, in some circumstances, after any affected party has
used reasonable efforts to transfer its rights and obligations under such Yield
Maintenance Agreement to a related entity within a limited period after notice
has been given of the Termination Event, all as set forth in such Yield
Maintenance Agreement. The occurrence of an Early Termination Date under each
Yield Maintenance Agreement will constitute a "Cap Early Termination."

         Upon any Cap Early Termination of a Yield Maintenance Agreement, the
Trust or the Counterparty may be liable to make a termination payment to the
other (regardless, if applicable, of which of the parties has caused the
termination). The amount of the termination payment will be based on the value
of such Yield Maintenance Agreement computed in accordance with the procedures
set forth in the related Yield Maintenance Agreement taking into account the
present value of the unpaid cap premiums that would have been owed by the Trust
under the remaining scheduled term of such Yield Maintenance Agreement. In the
event that the Trust is required to make a termination payment, that termination
payment will be subordinate to the right of the certificateholders.

         If the Counterparty no longer has a long-term credit rating of at least
A (or its equivalent) from at least one of the Rating Agencies (a "Counterparty
Rating Agency Downgrade"), the Counterparty shall, no later than the 30th day
following the Counterparty Rating Agency Downgrade: (i) obtain a substitute
counterparty that is a bank or other financial institution that has a rating
that is in one of the three highest long-term credit rating categories from at
least one of the Rating Agencies rating the LIBOR Certificates; (ii) obtain a
guaranty of or a contingent agreement of another person with a long-term credit
rating of at


                                     S-116


least A (or its equivalent) from at least one of the Rating Agencies to honor
the Counterparty's obligations under the related Yield Maintenance Agreement;
(iii) post mark-to-market collateral with the Trustee in an amount sufficient to
restore the immediately prior ratings of the LIBOR Certificates; (iv) establish
any other arrangement satisfactory to the Rating Agencies to restore the ratings
of the LIBOR Certificates; or (v) terminate the related Yield Maintenance
Agreement in accordance with its terms.

CALCULATION OF CERTIFICATE INDEX

         On the second LIBOR Business Day preceding the commencement of each
Accrual Period for the LIBOR Certificates (each such date, a "LIBOR
Determination Date"), the Trustee will determine the Certificate Index for such
Accrual Period for the LIBOR Certificates on the basis of the London interbank
offered rate ("LIBOR") for one-month United States dollar deposits, as such
rates appear on the Telerate Page 3750, as of 11:00 a.m. (London time) on such
related LIBOR Determination Date. If such rate does not appear on Telerate Page
3750, the rate for that day will be determined on the basis of the offered rates
of the Reference Banks for one-month United States dollar deposits, as of 11:00
a.m. (London time) on such related LIBOR Determination Date. The Trustee will
request the principal London office of each of the Reference Banks to provide a
quotation of its rate. If on such related LIBOR Determination Date two or more
Reference Banks provide such offered quotations, the Certificate Index for the
related Accrual Period will be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole multiple of 0.0625%). If on
such related LIBOR Determination Date fewer than two Reference Banks provide
such offered quotations, the Certificate Index for the related Accrual Period
shall be the higher of (x) the Certificate Index as determined on the previous
related LIBOR Determination Date and (y) the Reserve Interest Rate.

         As used in this section, "LIBOR Business Day" means a day on which
banks are open for dealing in foreign currency and exchange in London; "Telerate
Page 3750" means the display page currently so designated on the Dow Jones
Telerate Capital Markets Report (or such other page as may replace that page on
that service for the purpose of displaying comparable rates or prices);
"Reference Banks" means leading banks selected by the Trustee and engaged in
transactions in Eurodollar deposits in the international Eurocurrency market (1)
with an established place of business in London, (2) which have been designated
as such by the Trustee and (3) not controlling, controlled by or under common
control with, the Depositor, the Servicer or any successor servicer or the
Originators; and "Reserve Interest Rate" shall be the rate per annum that the
Trustee determines to be either (x) the arithmetic mean (rounded upwards if
necessary to the nearest whole multiple of 0.0625%) of the one-month United
States dollar lending rates which New York City banks selected by the Trustee
are quoting on the relevant LIBOR Determination Date to the principal London
offices of leading banks in the London interbank market or (y) in the event that
the Trustee can determine no such arithmetic mean, the lowest one-month United
States dollar lending rate which New York City banks selected by the Trustee are
quoting on such related LIBOR Determination Date to leading European banks.

         The establishment of the Certificate Index on each related LIBOR
Determination Date by the Trustee and its calculation of the rates of interest
applicable to the LIBOR Certificates for the related Accrual Period will (in the
absence of manifest error) be final and binding.

REPORTS TO CERTIFICATEHOLDERS

         On each Distribution Date, the Trustee will provide or make available
to each holder of a certificate, the Rating Agencies and the Counterparty a
statement (based solely on information received from the Servicer and the
Counterparty) setting forth, among other things, the information set forth in
the prospectus under "Description of the Certificates--Reports to
Securityholders." The Trustee will make the statement (and, at its option, any
additional files containing the same information in an alternative


                                     S-117


format) available each month via the Trustee's website. The Trustee's website
will initially be located at "http://www.usbank.abs". Assistance in using the
website can be obtained by calling the Trustee's customer service desk at (651)
495-7320. Parties that are unable to use the above distribution option are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and so indicating. The Trustee shall have the right to
change the way statements are distributed in order to make such distribution
more convenient and/or more accessible to the above parties, and the Trustee
shall provide timely and adequate notification to all above parties regarding
any such changes.

         In addition, within a reasonable period of time after the end of each
calendar year, the Trustee will prepare and deliver to each holder of a
certificate of record during the previous calendar year who has requested such a
statement in writing a statement containing information necessary to enable
holders of the certificates to prepare their tax returns. Such statements will
not have been examined and reported upon by an independent public accountant.


                              THE POOLING AGREEMENT

GENERAL

         The Offered Certificates will be issued pursuant to the Pooling
Agreement. The assets of the Trust created under the Pooling Agreement will
consist of (i) all of the Depositor's right, title and interest in the Mortgage
Loans, the related mortgage notes, mortgages and other related documents, (ii)
all payments on or collections in respect of the Mortgage Loans due after the
Cut-off Date, and any principal prepayments received after January 21, 2005 with
respect to the New Century Mortgage Loans and January 25, 2005 with respect to
the WMC Mortgage Loans together with any proceeds thereof, (iii) any Mortgaged
Properties acquired on behalf of certificateholders by foreclosure or by deed in
lieu of foreclosure, and any revenues received thereon, (iv) the rights of the
Trustee under all insurance policies required to be maintained pursuant to the
Pooling Agreement, (v) the Net WAC Reserve Fund, (vi) the rights of the Trustee
under each Yield Maintenance Agreement and (vii) the rights of the Seller under
the Mortgage Loan Purchase Agreement. The Offered Certificates will be
transferable and exchangeable at the corporate trust offices of the Trustee.

ASSIGNMENT OF THE MORTGAGE LOANS

         On the Closing Date, the Depositor will transfer to the Trust all of
its right, title and interest in and to each Mortgage Loan, the related mortgage
note, mortgage, assignment of mortgage in recordable form to the Trustee and
other related documents (collectively, the "Mortgage Loan Documents"), including
all scheduled payments with respect to each such Mortgage Loan due after the
Cut-off Date. The Trustee, concurrently with each such transfer, will deliver
the Offered Certificates to the Depositor. Each Mortgage Loan transferred to the
Trust will be identified on a schedule (the "Mortgage Loan Schedule") delivered
to the Trustee pursuant to the Pooling Agreement. Such schedule will include
information such as the Principal Balance of each Mortgage Loan as of the
Cut-off Date and its Loan Rate as well as other information.

         The Pooling Agreement will require that, within the time period
specified therein, the Depositor will deliver or cause to be delivered to the
Trustee (or a custodian, as the Trustee's agent for such purpose) the Mortgage
Loan Documents and the mortgage notes endorsed in blank or to the Trustee. In
lieu of delivery of original mortgages or mortgage notes, if such original is
not available or lost, the Depositor may deliver or cause to be delivered true
and correct copies thereof, or, with respect to a lost mortgage note, a lost
note affidavit executed by the related Originator. The assignments of mortgage
are generally required to be recorded by or on behalf of the Trust in the
appropriate offices for real property


                                     S-118


records. Any cost associated with the recording of such assignments of mortgage
will not be an expense of the Trust or the Trustee.

         The Trustee (or a custodian) will review the Mortgage Loan Documents
pursuant to the Pooling Agreement and if any Mortgage Loan Document is found to
be defective in any material respect and such defect is not cured within 90 days
following notification thereof to the related Originator by the Trustee (or a
custodian), the related Originator will be obligated to repurchase the related
Mortgage Loan at a price equal to the outstanding Principal Balance of such
Mortgage Loan as of the date of purchase, plus all accrued and unpaid interest
thereon, computed at the Loan Rate through the end of the calendar month in
which the repurchase is effected, plus the amount of any unreimbursed Advances
and Servicing Advances made by the Servicer (the "Purchase Price"). Rather than
repurchase the related Mortgage Loan, the related Originator may remove such
Mortgage Loan (a "Deleted Mortgage Loan") from the Trust and substitute in its
place a Qualified Substitute Mortgage Loan (as defined below). However, such
substitution is permitted only within two years of the Closing Date and may not
be made unless an opinion of counsel is provided to the effect that such
substitution will not disqualify any REMIC or result in a prohibited transaction
tax under the Internal Revenue Code. This cure, repurchase or substitution
obligation constitutes the sole remedy available to certificateholders or the
Trustee for the omission of, or a material defect in, a Mortgage Loan Document.

         A "Qualified Substitute Mortgage Loan" is a mortgage loan substituted
by an Originator or the Seller, as applicable, for a Deleted Mortgage Loan which
must, on the date of such substitution, (i) have an outstanding Principal
Balance (or in the case of a substitution of more than one Mortgage Loan for a
Deleted Mortgage Loan, an aggregate Principal Balance), not in excess of, and
not more than 5% less than, the Principal Balance of the Deleted Mortgage Loan;
(ii) have a Loan Rate not less than the Loan Rate of the Deleted Mortgage Loan
and not more than 1% in excess of the Loan Rate of such Deleted Mortgage Loan;
(iii) if an adjustable-rate mortgage loan, have a Maximum Loan Rate and Minimum
Loan Rate not less than the respective Maximum Loan Rate and Minimum Loan Rate
for the Deleted Mortgage Loan and have a Gross Margin equal to or greater than
the Deleted Mortgage Loan, and have the same Index and Adjustment Date frequency
as the Deleted Mortgage Loan; (iv) have the same Due Date as the Deleted
Mortgage Loan; (v) have a remaining term to maturity not more than one year
earlier and not later than the remaining term to maturity of the Deleted
Mortgage Loan; (vi) comply with each representation and warranty as to the
Mortgage Loans set forth in the related Mortgage Loan Purchase Agreement and the
related Reconstitution Agreement (in each case, deemed to be made as of the date
of substitution); (vii) have been underwritten or reunderwritten by the related
Originator in accordance with the same underwriting criteria and guidelines as
the Mortgage Loans being replaced; (viii) be of the same or better credit
quality as the Mortgage Loan being replaced; and (ix) satisfy certain other
conditions specified in the Pooling Agreement.

         In connection with the substitution of a Qualified Substitute Mortgage
Loan, an Originator or the Seller, as applicable, will be required to deposit or
cause to be deposited in the Collection Account on or prior to the next
succeeding Determination Date after such obligation arises an amount (the
"Substitution Adjustment") equal to the excess of the Principal Balance of the
related Deleted Mortgage Loan over the Principal Balance of such Qualified
Substitute Mortgage Loan plus any costs, indemnities and damages incurred by the
Trust in connection with any violations of any predatory or abusive lending laws
with respect to a related Mortgage Loan.

         Under each Reconstitution Agreement, NC Capital and WMC, as applicable,
will make certain representations and warranties as to the accuracy in all
material respects of certain information furnished to the Trustee with respect
to each related Mortgage Loan (e.g., Cut-off Date Principal Balance and the Loan
Rate). In addition, NC Capital and WMC, as applicable, will make certain other
representations and warranties with respect to each related Mortgage Loan,
including, but not limited to, the following: (i) no


                                     S-119


Mortgage Loan will be subject to the Home Ownership and Equity Protection Act of
1994 or any comparable local, state or federal law; (ii) no Mortgage Loan
originated on or after October 1, 2002 through March 6, 2003 is governed by the
Georgia Fair Lending Act; (iii) no related Mortgage Loan is a "high cost"
mortgage loan as defined under any applicable state, local or federal predatory
or abusive lending laws including the Georgia Fair Lending Act; and (iv) no
Mortgage Loan originated on or after November 27, 2003 and before July 6, 2004
is a "covered home loan" under the New Jersey Home Ownership Security Act of
2002. Furthermore, NC Capital and WMC will represent and warrant with respect to
each related Mortgage Loan as of the Closing Date that, among other things, at
the time of transfer to the Seller, NC Capital and WMC, as applicable, has
transferred and assigned all of its right, title and interest in each related
Mortgage Loan and the Mortgage Loan Documents, free of any lien. The Seller will
represent and warrant in the Pooling Agreement that (i) each Mortgage Loan at
the time is was made complied in all material respects with applicable federal,
state or local law including, without limitation, usury, truth-in-lending, real
estate settlement procedures, consumer credit protection, equal credit
opportunity, disclosure and predatory and abusive lending laws applicable to the
Mortgage Loan and (ii) none of the Mortgage Loans included in the transaction
are "high cost", "covered" or similarly classified loans as defined by the
applicable federal, state or local predatory and abusive lending laws nor is any
loan a High Cost Loan or Covered Loan, as applicable (as such terms are defined
in the then current Standard & Poor's LEVELS(R) Glossary which is now Version
5.6 Revised, Appendix E) and no mortgage loan originated on or after October 1,
2002 through March 6, 2003 is governed by the Georgia Fair Lending Act.

         Upon discovery of a breach of any such representation and warranty
which materially and adversely affects the interests of the certificateholders
in the related Mortgage Loan and Mortgage Loan Documents, NC Capital, WMC or the
Seller, as applicable, will have a period of 90 days after discovery or notice
of the breach to effect a cure. If the breach cannot be cured within the 90-day
period, NC Capital, WMC or the Seller, as applicable, will be obligated to (x)
substitute for such Mortgage Loan a Qualified Substitute Mortgage Loan or (y)
purchase such Mortgage Loan from the Trust at the Purchase Price, plus any costs
and damages incurred by the Trust in connection with any violation of any
predatory or abusive lending law with respect to such Mortgage Loan. However, a
substitution of the related Mortgage Loan is permitted only within two years of
the Closing Date and may not be made unless an opinion of counsel is provided to
the effect that such substitution will not disqualify any REMIC or result in a
prohibited transaction tax under the Internal Revenue Code.

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

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

         The Servicer shall establish and maintain or cause to be maintained a
separate trust account (the "Collection Account") for the benefit of the
certificateholders. The Collection Account will be an Eligible Account (as
defined in the Pooling Agreement) of the Trust. Upon receipt by the Servicer of
amounts in respect of the Mortgage Loans (excluding amounts representing the
Servicing Fee or other servicing compensation, permitted reimbursements for
Advances and Servicing Advances (each, as defined below), condemnation proceeds
required to be released to a mortgagor, insurance proceeds to be applied to the
restoration or repair of a Mortgaged Property or similar items), the Servicer
will deposit such amounts in the Collection Account. Amounts so deposited may be
invested in Permitted Investments (as described in the Pooling Agreement)
maturing no later than one business day prior to the date on which the amount on
deposit therein is required to be deposited in the Distribution Account. The
Trustee will establish an account (the "Distribution Account") into which will
be deposited amounts withdrawn from the Collection Account on the Servicer
Remittance Date (as defined below) and deposited to the Distribution Account for
distribution to certificateholders on a Distribution Date. The


                                     S-120


Distribution Account will be an Eligible Account, and amounts on deposit therein
may be invested in Permitted Investments (as described in the Pooling Agreement)
maturing no later than the related Distribution Date.

ADVANCES

         Subject to the following limitations, the Servicer will be obligated to
advance or cause to be advanced on or before each Servicer Remittance Date its
own funds, or funds in the Collection Account that are not included in the
Available Funds for such Distribution Date, or both (each, an "Advance"), in an
amount equal to the aggregate of all payments of principal and interest (net of
Servicing Fees) that were due during the related Due Period on the Mortgage
Loans and that were delinquent on the related Determination Date, plus certain
amounts representing assumed payments not covered by any current net income on
the Mortgaged Properties acquired by foreclosure or deed in lieu of foreclosure.
In the event the Servicer fails in its obligation to make any required Advance,
the Trustee, in its capacity as successor servicer, will be obligated to make
any such Advance, to the extent required in the Pooling Agreement.

         In the event that a Balloon Loan is not paid in full on its maturity
date, the Servicer will also be obligated to make Advances with respect to the
assumed monthly payments that would have been due on such Balloon Loan based
upon the original amortization schedule for the Mortgage Loan, unless the
Servicer determines that the Advance would not be recoverable. In no event will
the Servicer be obligated to advance the balloon payment due on any Balloon
Loan.

         Advances are required to be made only to the extent they are deemed by
the Servicer to be recoverable from related late collections, insurance
proceeds, condemnation proceeds or liquidation proceeds. The purpose of making
such Advances is to maintain a regular cash flow to the certificateholders,
rather than to guarantee or insure against losses. The Servicer will not be
required, however, to make any Advances with respect to reductions in the amount
of the monthly payments on the Mortgage Loans due to bankruptcy proceedings or
the application of the Relief Act. Subject to the recoverability standard below,
the Servicer's obligation to make Advances as to any Mortgage Loan will continue
until the Mortgage Loan is paid in full or until the recovery of all liquidation
proceeds thereon.

         All Advances will be reimbursable to the Servicer from late
collections, insurance proceeds, condemnation proceeds, liquidation proceeds and
Recoveries from the Mortgage Loan as to which such unreimbursed Advance was
made, unless such amounts are deemed to be nonrecoverable by the Servicer in
which case reimbursement will be made to the Servicer from the general funds in
the Collection Account. The Servicer may recover from amounts in the Collection
Account the amount of any Advance that remains unreimbursed to the Servicer from
the related liquidation proceeds after the final liquidation of the related
Mortgage Loan, and such reimbursement amount will not be available for
remittance to the Trustee for distribution on the Offered Certificates.

         In the course of performing its servicing obligations, the Servicer
will pay all reasonable and customary "out-of-pocket" costs and expenses
(including reasonable attorneys' fees and disbursements) incurred in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration, inspection and protection of the
Mortgaged Properties, (ii) any enforcement or judicial proceedings, including
foreclosures, and (iii) the management and liquidation of Mortgaged Properties
acquired in satisfaction of the related mortgage. Each such expenditure will
constitute a "Servicing Advance." The Servicer is obligated to pay certain
insurance premiums and certain ongoing expenses associated with the Mortgage
Loans and incurred by the Servicer in connection with its responsibilities under
the Pooling Agreement and is entitled to reimbursement therefor as provided in
the Pooling Agreement. The Servicer is required to make a Servicing Advance only
to the extent it is deemed


                                     S-121


by the Servicer to be recoverable from related late collections, insurance
proceeds, condemnation proceeds or liquidation proceeds.

         The Servicer is also obligated to accurately and fully report its
borrower credit files to all three credit repositories in a timely manner.

         The Servicer's right to reimbursement for Servicing Advances is limited
to late collections, liquidation proceeds, Recoveries, condemnation proceeds,
released Mortgaged Property proceeds, insurance proceeds and such other amounts
as may be collected by the Servicer from the related Mortgagor or otherwise
relating to the Mortgage Loan in respect of which such unreimbursed amounts are
owed, unless such amounts are deemed to be nonrecoverable by the Servicer in
which event reimbursement will be made to the Servicer from general funds in the
Collection Account.

SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES

         The principal compensation to be paid to the Servicer in respect of its
servicing activities (the "Servicing Fee") will be at the "Servicing Fee Rate"
of 0.50% per annum on the Principal Balance of each Mortgage Loan collected from
interest collections on such Mortgage Loan. As additional servicing
compensation, the Servicer is entitled to retain all servicing-related fees,
including assumption fees, modification fees, extension fees, late payment
charges and other ancillary fees (but not prepayment premiums, which will be
distributed to the holders of the Class P Certificates), to the extent collected
from mortgagors and non-sufficient fund fees, together with any interest or
other income earned on funds held in the Collection Account. The Servicer is
obligated to deposit into the Collection Account the amount of any Prepayment
Interest Shortfall resulting from prepayments in full (payments made by the
Servicer in satisfaction of such obligation, "Compensating Interest") but only
in an amount up to its Servicing Fee for the related Distribution Date.

         The Counterparty will receive the Aggregate Strip Amount on each
Distribution Date in accordance with the priority of payments.

         The "Servicer Remittance Date" is the 21st day of each month or, if
such 21st day is not a business day, the business day immediately following such
21st day. The "Determination Date" with respect to any Distribution Date, will
be the 15th day of the calendar month in which such Distribution Date occurs or,
if such 15th day is not a Business Day, the Business Day immediately preceding
such 15th day.

         With respect to any Distribution Date and each Mortgage Loan as to
which a voluntary principal prepayment was applied during the related Prepayment
Period (other than prepayments received in the month of such Distribution Date),
the "Prepayment Interest Shortfall" is an amount equal to the interest at the
applicable Loan Rate (net of the Servicing Fee) on the amount of such principal
prepayment for the number of days from the date on which the principal
prepayment is applied through the last day of the calendar month preceding such
Distribution Date.

         A "Net Prepayment Interest Shortfall", with respect to any Distribution
Date, is the excess of Prepayment Interest Shortfalls over the amount the
Servicer is obligated to remit as Compensating Interest. The Servicer shall not
be obligated to pay Compensating Interest with respect to any interest
shortfalls due to application of the Relief Act.

OPTIONAL PURCHASE OF DEFAULTED LOANS

         Pursuant to the terms and conditions set forth in the Pooling
Agreement, the Servicer or the holder of the Class X Certificates, as the case
may be, may, at its option, purchase any Mortgage Loan


                                     S-122


from the Trust that is delinquent in payment by 90 days or more at the Purchase
Price for such Mortgage Loan; provided, however, that the Servicer or holder of
the Class X Certificates, as applicable, must first purchase such Mortgage Loan
that, as of the time of such purchase, has been delinquent for the greatest
period before purchasing Mortgage Loans that have been delinquent for lesser
periods.

THE TRUSTEE

         U.S. Bank National Association will be the Trustee under the Pooling
Agreement. The Depositor and the Servicer may maintain other banking
relationships in the ordinary course of business with the Trustee and its
affiliates. Offered Certificates may be surrendered at the corporate trust
office of the Trustee located at 60 Livingston Avenue, Saint Paul, Minnesota
55107, Attention: Corporate Trust Structured Finance, Ref: Asset Backed
Securities Corporation Home Equity Loan Trust, Series 2005-HE1, or at such other
addresses as the Trustee may designate from time to time. In the event the
Trustee advises the Depositor and the Servicer that it is unable to continue to
perform its obligations under the terms of the Pooling Agreement prior to the
appointment of a successor, the Trustee is obligated to perform these
obligations until a new trustee is appointed.

CERTAIN MATTERS REGARDING THE TRUSTEE

         The principal compensation to be paid to the Trustee in respect of its
respective obligations under the Pooling Agreement will be equal to certain
investment earnings on the amounts on deposit in the Distribution Account. The
Pooling Agreement will provide that each of the Trustee and any director,
officer, employee or agent of the Trustee will be indemnified by the Trust up to
the level specified in the Pooling Agreement and will be held harmless against
any loss, liability or expense (not including expenses, disbursements and
advances incurred or made by the Trustee, including the compensation and the
expenses and disbursements of its agents and counsel, in the ordinary course of
its performance in accordance with the provisions of the Pooling Agreement)
incurred by the Trustee arising out of or in connection with the acceptance or
administration of its obligations and duties under the Pooling Agreement, other
than any loss, liability or expense (x) that constitutes a specific liability of
the Trustee under the Pooling Agreement or (y) incurred by reason of willful
misfeasance, bad faith or negligence in the performance of its respective duties
under the Pooling Agreement or as a result of a breach, or by reason of reckless
disregard, of its respective obligations and duties under the Pooling Agreement.
The Pooling Agreement will provide that the Trustee may withdraw amounts owing
to it under the Pooling Agreement prior to distributions to certificateholders.

VOTING RIGHTS

         At all times 97% of all voting rights will be allocated among the
holders of the LIBOR Certificates in proportion to the then outstanding
Certificate Principal Balances of their respective certificates. At all times 1%
of all voting rights will be allocated to the holders of the Class X
Certificates, 1% of all voting rights will be allocated to the holders of the
Class P Certificates and 1% of all voting rights will be allocated to the
holders of the Class R Certificates. The voting rights allocated to any class of
certificates will be allocated among all holders of the certificates of such
class in proportion to the outstanding Percentage Interests.

SERVICER EVENTS OF DEFAULT

         As provided in the Pooling Agreement, the Servicer may be removed as
the servicer of the mortgage loans if there is a Servicer Event of Default. The
Servicer Events of Default include the following events with respect to the
Servicer:


                                     S-123


                  1. any failure by the Servicer to remit to the Trustee for
         distribution to the certificateholders any payment (other than Advances
         that are required to be made from its own funds) which continues
         unremedied for a period of two business days after the earlier of (x)
         the date upon which written notice of such failure, requiring the same
         to be remedied, shall have been given to the Servicer by the Depositor
         or the Trustee, or to the Servicer, the Depositor and the Trustee by
         the holders of certificates entitled to at least 25% of the voting
         rights and (y) actual knowledge of such failure by a servicing officer
         of the Servicer; or

                  2. any failure on the part of the Servicer duly to observe or
         perform in any material respect any of the covenants or agreements on
         the part of the Servicer contained in the Pooling Agreement which
         continues unremedied for a period of 45 days after the date on which
         written notice of such failure, requiring the same to be remedied,
         shall have been given to the Servicer by the Depositor or the Trustee,
         or to the Servicer, the Depositor and the Trustee by the holders of
         certificates entitled to at least 25% of the voting rights; or

                  3. a decree or order of a court or agency or supervisory
         authority having jurisdiction in the premises in an involuntary case
         under any present or future federal or state bankruptcy, insolvency or
         similar law or the appointment of a conservator or receiver or
         liquidator in any insolvency, readjustment of debt, including
         bankruptcy, marshaling of assets and liabilities or similar proceeding,
         or for the winding-up or liquidation of its affairs, shall have been
         entered against the Servicer and if such proceeding is being contested
         by the Servicer in good faith, such decree or order shall have remained
         in force undischarged or unstayed for a period of 60 days or results in
         the entry of an order for relief or any such adjudication or
         appointment; or

                  4. the Servicer 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 it or of or relating to all or substantially all of its
         property; or

                  5. the Servicer 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 or reorganization statute, make
         an assignment for the benefit of its creditors, or voluntarily suspend
         payment of its obligations; or

                  6. any failure by the Servicer of the Servicer Termination
         Test (as set forth in the Pooling Agreement); or

                  7. any failure of the Servicer to make any Advances when due
         and that continue unremedied until 3:00 p.m. New York time on the
         second business day after the date upon which written notice of such
         failure, requiring the same to be remedied, shall have been given to
         the Servicer by the Depositor or the Trustee.

         If a Servicer Event of Default described in clauses 1. through 6.
occurs, then, so long as the Servicer Event of Default shall not have been
remedied, the Depositor or the Trustee may, and at the written direction of the
holders of certificates entitled to at least 51% of voting rights, the Trustee
shall, by notice in writing to the Servicer (and to the Depositor if given by
the Trustee or to the Trustee if given by the Depositor), terminate all of the
rights and obligations of the Servicer in its capacity as the Servicer under the
Pooling Agreement. If the Servicer Event of Default described in clause 7.
occurs, the Trustee shall, by notice in writing to the Servicer, the Seller and
the Depositor, terminate all of the rights and obligations of the Servicer in
its capacity as the servicer under the Pooling Agreement.


                                     S-124


         The Servicer Termination Test for the Servicer is set forth in the
Pooling Agreement. The Servicer will fail the Servicer Termination Test if loss
amounts with respect to the Mortgage Loans exceed certain parameters as set
forth in the Pooling Agreement.

         No assurance can be given that termination of the rights and
obligations of the Servicer under the Pooling Agreement would not adversely
affect the servicing of the Mortgage Loans, including the delinquency experience
of the Mortgage Loans. In the event the Trustee is required to act as successor
servicer, it will act to become the successor servicer within 90 days of the
Servicer's termination. During this 90-day period, the terminated Servicer will
continue to (a) service the Mortgage Loans, although the Trustee, in its
capacity as successor servicer, will be obligated to make all Advances and remit
all Compensating Interest required in respect of the Mortgage Loans, and (b)
receive or retain all Servicing Fees and other servicing compensation.

TERMINATION

         The Servicer will have the right to purchase all of the Mortgage Loans
and thereby effect the early retirement of the certificates, on any Distribution
Date on which the aggregate Principal Balance of the Mortgage Loans in the Trust
is equal to or less than 10% of the aggregate Principal Balance of the Mortgage
Loans as of the Cut-off Date. The first Distribution Date on which such option
could be exercised is referred to herein as the "Optional Termination Date." In
the event that the option is exercised, the purchase will be made at a price
(the "Termination Price") generally equal to the sum of (i) 100% of the
aggregate outstanding Principal Balance of the Mortgage Loans plus accrued
interest thereon at the applicable Loan Rate to the date of purchase, (ii) the
fair market value of all other property of the Trust and (iii) any unreimbursed
Advances, Servicing Advances and Servicing Fees and other amounts payable to the
Servicer and the Trustee. If such option is exercised by the Servicer, the Trust
will be terminated effecting an early retirement of the certificates.
Distributions on the certificates relating to any optional termination will
first be paid to the Class A Certificates and then to the Mezzanine
Certificates. The proceeds from that distribution may not be sufficient to
distribute the full amount to which each class of Offered Certificates is
entitled.

AMENDMENT

         The Pooling Agreement may be amended by the Depositor, the Seller, the
Servicer and the Trustee without the consent of any of the certificateholders to
cure any ambiguity, to correct, modify or supplement any provision in the
Pooling Agreement, to make any other provisions with respect to matters or
questions arising under the Pooling Agreement which are not inconsistent with
the provisions of the Pooling Agreement, or to maintain the qualification of the
Trust as a REMIC, provided that the action will not adversely affect in any
material respect the interests of any certificateholder. The Pooling Agreement
may also be amended by the Depositor, the Seller, the Servicer and the Trustee
with the consent of the holders of certificates evidencing not less than 66% of
the voting rights for any purpose, but that no amendment may:

         o        reduce in any manner the amount of or delay the timing of,
                  payments received on the Mortgage Loans which are required to
                  be distributed on any certificate without the consent of the
                  holder of the certificate,

         o        adversely affect in any material respect the interests of the
                  holders of any class of certificates in a manner other than as
                  described in the preceding bullet point, without the consent
                  of the holders of certificates of that class evidencing not
                  less than 66% of the aggregate voting rights of that class, or


                                     S-125


         o        reduce the percentage of voting rights required by the
                  preceding bullet point for the consent to any amendment
                  without the consent of the holders of all certificates covered
                  by the Pooling Agreement then outstanding.

However, the Trustee need not consent to any amendment of the Pooling Agreement
unless it shall first have received an opinion of counsel to the effect that the
amendment will not cause the Trust to fail to qualify as a REMIC at any time
that the related certificates are outstanding. In addition to the conditions
described above, the consent of the Counterparty will also be necessary for
certain amendments of the Pooling Agreement that materially affect the
Counterparty's rights thereunder, as more fully described in the Pooling
Agreement.

         Additionally, the written consent of the Counterparty shall be required
to amend, supplement or otherwise modify the Pooling Agreement if, in each case,
as determined in the Counterparty's sole discretion, such amendment, supplement
or modification would (i) adversely affect the ability of the Trust to perform
its obligations under any of the Yield Maintenance Agreements; (ii) affect the
rights or obligations of the Counterparty under any of the Yield Maintenance
Agreements; or (iii) modify the meaning of any term used in the Yield
Maintenance Agreements and defined in the Pooling Agreement.

SERVICER ALTERNATIVES TO FORECLOSURE

         The Servicer may foreclose on any delinquent Mortgage Loan or, subject
to certain limitations set forth in the Pooling Agreement, work out an agreement
with the mortgagor, which may involve waiving or modifying any term of the
Mortgage Loan; provided that in the judgment of the Servicer, any such
modification or waiver could reasonably be expected to result in collections and
other recoveries in respect of such Mortgage Loan in excess of Net Liquidation
Proceeds that would reasonably be expected to be recovered upon the foreclosure
of, or other realization upon, such Mortgage Loan. If the Servicer extends the
payment period or accepts a lesser amount than stated in the mortgage note in
satisfaction of the mortgage note, your yield may be reduced.

SPECIAL SERVICING AGREEMENTS

         The Pooling Agreement will permit the Servicer to enter into a special
servicing agreement with an unaffiliated holder of the most junior class of
subordinate certificates then outstanding. Under that agreement, that
unaffiliated holder may instruct the Servicer to commence or delay foreclosure
proceedings for delinquent mortgage loans, subject to confirmation from each
Rating Agency that such agreement would not lead to a qualification, downgrade
or withdrawal of the ratings then assigned to the Offered Certificates. The
commencement or delay at that holder's direction will be taken by the Servicer
only after that holder deposits a specified amount of cash with the Servicer.
That cash will be available for payment to related certificateholders if
liquidation proceeds are less than they otherwise may have been had the Servicer
acted using its normal servicing procedures.

ADVANCE FACILITY

         The Pooling Agreement will provide that (i) the Servicer may enter into
a facility with any person which provides that such person may fund Advances
and/or servicing advances, although no such facility will reduce or otherwise
affect the Servicer's obligation to fund such Advances and/or servicing advances
and (ii) the Pooling Agreement may be amended by the parties thereto without the
consent of the certificateholders as necessary or appropriate to effect the
terms of such a facility.


                                     S-126


                  YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS

     The yields to maturity of the Offered Certificates will be sensitive to
defaults on the Mortgage Loans. If a purchaser of an Offered Certificate
calculates its anticipated yield based on an assumed rate of default and amount
of losses that is lower than the default rate and amount of losses actually
incurred, its actual yield to maturity will be lower than that so calculated. In
general, the earlier a loss occurs, the greater is the effect on an investor's
yield to maturity. There can be no assurance as to the delinquency, foreclosure
or loss experience with respect to the Mortgage Loans. Because the Mortgage
Loans were underwritten in accordance with standards less stringent than those
generally acceptable to Fannie Mae and Freddie Mac with regard to a borrower's
credit standing and repayment ability, the risk of delinquencies with respect
to, and losses on, the Mortgage Loans will be greater than that of mortgage
loans underwritten in accordance with Fannie Mae and Freddie Mac standards.

     The rate of principal payments, the aggregate amount of distributions and
the yields to maturity of the Offered Certificates will be affected by the rate
and timing of payments of principal on the Mortgage Loans. In particular, the
yields to maturity of each class of Class A Certificates will be most affected
by the rate and timing of payments of principal on the Mortgage Loans in the
related Subgroup. The rate of principal payments on the Mortgage Loans will in
turn be affected by the amortization schedules of the Mortgage Loans and by the
rate of principal prepayments (including for this purpose prepayments resulting
from refinancing, liquidations of the Mortgage Loans due to defaults, casualties
or condemnations and purchases by the Originators or the Servicer). Because
certain of the Mortgage Loans contain prepayment premiums, the rate of principal
payments may be less than the rate of principal payments for Mortgage Loans that
did not have prepayment premiums. The Mortgage Loans are subject to the
"due-on-sale" provisions included therein that provide that the Mortgage Loan is
assumable by a creditworthy purchaser of the related Mortgaged Property. See
"The Mortgage Pool" herein.

     Prepayments, liquidations and purchases of the Mortgage Loans (including
any optional purchase) will result in distributions on the Offered Certificates
of principal amounts that would otherwise be distributed over the remaining
terms of the Mortgage Loans. Since the rate of payment of principal on the
Mortgage Loans will depend on future events and a variety of other factors, no
assurance can be given as to such rate or the rate of principal prepayments. The
extent to which the yield to maturity of a class of Offered Certificates may
vary from the anticipated yield will depend upon the degree to which such class
of Offered Certificates is purchased at a discount or premium. Further, an
investor should consider the risk that, in the case of any Offered Certificate
purchased at a discount, a slower than anticipated rate of principal payments
(including prepayments) on the Mortgage Loans could result in an actual yield to
such investor that is lower than the anticipated yield and, in the case of any
Offered Certificate purchased at a premium, a faster than anticipated rate of
principal payments on the Mortgage Loans could result in an actual yield to such
investor that is lower than the anticipated yield.

     The rate of principal payments (including prepayments) on pools of mortgage
loans may vary significantly over time and may be influenced by a variety of
economic, geographic, social and other factors, including changes in mortgagors'
housing needs, job transfers, unemployment, mortgagors' net equity in the
mortgaged properties and servicing decisions. In general, if prevailing interest
rates were to fall significantly below the Loan Rates on the Mortgage Loans,
such Mortgage Loans could be subject to higher prepayment rates than if
prevailing interest rates were to remain at or above the Loan Rates on such
Mortgage Loans. Conversely, if prevailing interest rates were to rise
significantly, the rate of prepayments on such Mortgage Loans would generally be
expected to decrease. The Mortgage Loans may be subject to a greater rate of
principal prepayments in a low interest rate environment. For example, if
prevailing interest rates were to fall, mortgagors may be inclined to refinance
their Mortgage Loans with a fixed-rate loan to "lock in" a lower interest rate
or to refinance their Mortgage Loans with other more competitive adjustable-rate
mortgage loans. The existence of the applicable Periodic Rate Cap and


                                     S-127



Maximum Rate with respect to the adjustable-rate Mortgage Loans also may affect
the likelihood of prepayments resulting from refinancings. No assurances can be
given as to the rate of prepayments on the Mortgage Loans in stable or changing
interest rate environments. In addition, substantially all of the
adjustable-rate Mortgage Loans will not have their initial Adjustment Date for
two, three or five years after the origination thereof. The prepayment
experience of these delayed first adjustment Mortgage Loans may differ from that
of the other Mortgage Loans. The delayed first adjustment Mortgage Loans may be
subject to greater rates of prepayments as they approach their initial
Adjustment Dates even if market interest rates are only slightly higher or lower
than the Loan Rates on such Mortgage Loans as borrowers seek to avoid changes in
their monthly payments.

     Approximately 72.82% of the Mortgage Loans (by aggregate Cut-off Date
Principal Balance) provide for payment by the borrower of a prepayment premium
in limited circumstances on certain prepayments. The holders of the Class P
Certificates will be entitled to all prepayment premiums received on the
Mortgage Loans, and such amounts will not be available for distribution on the
other classes of certificates. Under certain circumstances, as described in the
Pooling Agreement, the Servicer may waive the payment of any otherwise
applicable prepayment premium. Investors should conduct their own analysis of
the effect, if any, that the prepayment premiums, and decisions by the Servicer
with respect to the waiver thereof, may have on the prepayment performance of
the Mortgage Loans. The Depositor makes no representations as to the effect that
the prepayment premiums, and decisions by the Servicer with respect to the
waiver thereof, may have on the prepayment performance of the Mortgage Loans.

     To the extent the related Net WAC Rate is paid on the LIBOR Certificates,
certificateholders will be entitled to the related Net WAC Rate Carryover
Amount. Any Net WAC Rate Carryover Amount will only be payable from amounts paid
under the Yield Maintenance Agreements and the Net Monthly Excess Cashflow, but
with respect to amounts in respect of Net Monthly Excess Cashflow, only to the
extent that the Overcollateralization Target Amount has been maintained and
certain other amounts have been paid. See "Description of the
Certificates--Overcollateralization Provisions" in this prospectus supplement.

ADDITIONAL INFORMATION

     The Depositor will file certain yield tables and other computational
materials with respect to the Offered Certificates with the Securities and
Exchange Commission (the "Commission") in a report on Form 8-K and may file
certain additional yield tables and other computational materials with respect
to the Offered Certificates with the Commission in a report on Form 8-K. Such
tables and materials were prepared by the underwriter at the request of certain
prospective investors, based on assumptions provided by, and satisfying the
special requirements of, such prospective investors. Such tables and assumptions
may be based on assumptions that differ from the Structuring Assumptions (as
defined herein). Accordingly, such tables and other materials may not be
relevant to or appropriate for investors other than those specifically
requesting them.

WEIGHTED AVERAGE LIVES

     The timing of changes in the rate of principal prepayments on the Mortgage
Loans may significantly affect an investor's actual yield to maturity, even if
the average rate of principal prepayments is consistent with such investor's
expectation. In general, the earlier a principal prepayment on the Mortgage
Loans occurs, the greater the effect of such principal prepayment on an
investor's yield to maturity. The effect on an investor's yield of principal
prepayments occurring at a rate higher (or lower) than the rate anticipated by
the investor during the period immediately following the issuance of the


                                     S-128



Offered Certificates may not be offset by a subsequent like decrease (or
increase) in the rate of principal prepayments.

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

     The Assumed Final Distribution Date for the Offered Certificates is as set
forth in this prospectus supplement under "Description of the
Certificates--General." The weighted average lives of the Offered Certificates
are likely to be shorter than would be the case if payments actually made on the
Mortgage Loans conformed to the foregoing assumptions, and the actual final
Distribution Date with respect to the Offered Certificates could occur
significantly earlier than the Assumed Final Distribution Date because

     o    prepayments are likely to occur,

     o    excess cashflow, if any, will be applied as principal of the Class A
          Certificates and the Mezzanine Certificates as described herein,

     o    the Overcollateralization Target Amount may change as described in the
          Pooling Agreement, and

     o    the Servicer may cause a termination of the Trust as provided herein.

     Prepayments of mortgage loans are commonly measured relative to a
prepayment standard or model. The model used in this prospectus supplement (the
"Prepayment Assumption") assumes:

     (i)  in the case of the fixed-rate Mortgage Loans, 115% Fixed-rate PPC. A
          100% "Fixed-rate PPC" means a constant prepayment rate ("CPR") of
          4.00% per annum of the then unpaid principal balance of such Mortgage
          Loans in the first month of the life of such Mortgage Loans and an
          additional approximately 1.4545% (precisely 16/11 expressed as a
          percentage) per annum in each month thereafter until the 12th month,
          and then beginning in the 12th month and in each month thereafter
          during the life of such Mortgage Loans, a CPR of 20% per annum; and

     (ii) in the case of the adjustable-rate Mortgage Loans 100% Adjustable-rate
          PPC. A 100% "Adjustable-rate PPC" means a CPR of 4.00% per annum of
          the then unpaid principal balance of such Mortgage Loans in the first
          month of the life of such Mortgage Loans and an additional
          approximately 2.1818% (precisely 24/11 expressed as a percentage) per
          annum in each month thereafter until the 12th month, remaining at 28%
          per annum in each month thereafter until the 24th month, then
          beginning in the 25th month, remaining at 55% per annum in each month
          thereafter until the 28th month and in each month thereafter during
          the life of such Mortgage Loans, a CPR of 35% per annum.

     CPR is a prepayment assumption that represents a constant assumed rate of
prepayment each month relative to the then outstanding principal balance of a
pool of mortgage loans for the life of such mortgage loans. The model does not
purport to be either an historical description of the prepayment experience of
any pool of mortgage loans or a prediction of the anticipated rate of prepayment
of any


                                     S-129



mortgage loans, including the Mortgage Loans to be included in the Trust. Each
of the "Prepayment Scenarios" in the table below assumes the respective
percentages of PPC indicated for such scenario.

     The table entitled "Percent of Original Certificate Principal Balance
Outstanding" was prepared on the basis of the assumptions in the following
paragraph and the table set forth below. There are certain differences between
the loan characteristics included in such assumptions and the characteristics of
the actual Mortgage Loans. Any such discrepancy may have an effect upon the
percentages of Original Certificate Principal Balances outstanding and weighted
average lives of the Offered Certificates set forth in that table. In addition,
since the actual Mortgage Loans in the Trust will have characteristics that
differ from those assumed in preparing the tables set forth below, the
distributions of principal of the Offered Certificates may be made earlier or
later than indicated in the table.

     The percentages and weighted average lives in the table entitled "Percent
of Original Certificate Principal Balance Outstanding" were determined assuming
that (the "Structuring Assumptions"):

     o    the Mortgage Loans have the characteristics set forth in the tables
          below,

     o    the closing date for the Offered Certificates occurs on February 4,
          2005 and the Offered Certificates were sold to investors on such date,

     o    distributions on the Offered Certificates are made on the 25th day of
          each month regardless of the day on which the Distribution Date
          actually occurs, commencing in March 2005, in accordance with the
          allocation of Available Funds set forth above under "Description of
          the Certificates--Allocation of Available Funds,"

     o    the prepayment rates are those indicated in the "Prepayment Scenarios"
          table below,

     o    no Originator is required to substitute or repurchase any or all of
          the Mortgage Loans pursuant to the Pooling Agreement and no optional
          termination is exercised, except with respect to the entries
          identified by the row captioned "Weighted Average Life to Optional
          Termination (in years)" in the tables below,

     o    scheduled payments for all Mortgage Loans are received on the first
          day of each month commencing in March 2005, the principal portion of
          such payments is computed prior to giving effect to prepayments
          received in such month and there are no losses or delinquencies with
          respect to such Mortgage Loans,

     o    all related Mortgage Loans prepay at the same rate and all such
          payments are treated as prepayments in full of individual Mortgage
          Loans, with no shortfalls in collection of interest,

     o    such prepayments are received on the last day of each month commencing
          in the month of the Closing Date,

     o    one-month LIBOR is at all times equal to 2.60%, 15. six-month LIBOR is
          at all times equal to 2.95%,

     o    the Loan Rate for each adjustable-rate Mortgage Loan is adjusted on
          its next Adjustment Date (and on subsequent Adjustment Dates, if
          necessary) to equal the sum of (a) the assumed level of the Index and
          (b) the respective Gross Margin (such sum being subject to the
          applicable Periodic Rate Caps, Minimum Loan Rates and Maximum Loan
          Rates),


                                     S-130



     o    The Servicing Fee Rate is equal to 0.50% per annum of the outstanding
          Principal Balance of each Mortgage Loan, and

     o    the Original Principal Balance of the Class P Certificates is equal to
          zero.

     Nothing contained in the foregoing assumptions should be construed as a
representation that the Mortgage Loans will not experience delinquencies or
losses.

     Based on the foregoing assumptions, the following table entitled "Percent
of Original Certificate Principal Balance Outstanding" indicates the percentages
of the Original Certificate Principal Balance of the Offered Certificates that
would be outstanding after each of the Distribution Dates shown at various
Prepayment Scenarios and the corresponding weighted average lives.




                                                     PREPAYMENT SCENARIOS

                                  SCENARIO I   SCENARIO II   SCENARIO III  SCENARIO IV    SCENARIO V     SCENARIO VI   SCENARIO VII
                                  ----------   -----------   ------------  -----------    ----------     -----------   ------------

Fixed-Rate Mortgage Loans(1)........  0%           50%           85%           115%           150%           175%           200%
Adjustable-Rate Mortgage Loans(2)...  0%           50%           85%           100%           150%           175%           200%


----------
(1) Percentage per annum (Fixed-rate PPC).

(2) Percentage per annum (Adjustable-rate PPC).


                                     S-131




                                                ASSUMED MORTGAGE LOAN CHARACTERISTICS

                                                             SUBGROUP 1

                                              ORIGINAL   REMAINING
                                              TERM TO    TERM TO                                                MONTHS TO  ORIGINAL
                                      GROSS    STATED     STATED      GROSS   MIN.   MAX.   INITIAL                NEXT     INTEREST
                      LOAN BALANCE    LOAN    MATURITY   MATURITY    MARGIN  RATE   RATE   PERIODIC  PERIODIC  ADJUSTMENT  ONLY TERM
    DESCRIPTION            ($)       RATE (%) (MONTHS)    (MONTHS)    (%)    (%)    (%)    CAP (%)    CAP (%)     DATE      (MONTHS)
------------------   ------------    -------- --------    --------    ---    ---    ---    -------    -------  ----------  ---------

Fixed-Rate 15-Year   2,152,911.54     6.824      180        178       N/A    N/A    N/A      N/A        N/A        N/A        N/A
Fixed-Rate 15-Year   1,272,718.31     6.439      180        178       N/A    N/A    N/A      N/A        N/A        N/A        N/A
Fixed-Rate 15-Year     290,589.80     7.051      180        177       N/A    N/A    N/A      N/A        N/A        N/A        N/A
Fixed-Rate 15-Year   2,065,977.44     7.771      180        178       N/A    N/A    N/A      N/A        N/A        N/A        N/A
Fixed-Rate 20-Year     766,577.97     7.506      240        238       N/A    N/A    N/A      N/A        N/A        N/A        N/A
Fixed-Rate 20-Year     432,621.70     6.537      240        238       N/A    N/A    N/A      N/A        N/A        N/A        N/A
Fixed-Rate 20-Year      84,500.16     6.875      240        237       N/A    N/A    N/A      N/A        N/A        N/A        N/A
Fixed-Rate 20-Year   1,531,694.88     6.290      240        238       N/A    N/A    N/A      N/A        N/A        N/A        N/A
Fixed-Rate 25-Year     441,806.50     7.133      300        298       N/A    N/A    N/A      N/A        N/A        N/A        N/A
Fixed-Rate 25-Year     898,383.27     6.677      300        298       N/A    N/A    N/A      N/A        N/A        N/A        N/A
Fixed-Rate 30-Year  14,988,732.13     7.328      360        358       N/A    N/A    N/A      N/A        N/A        N/A        N/A
Fixed-Rate 30-Year  11,383,763.66     6.636      360        358       N/A    N/A    N/A      N/A        N/A        N/A        N/A
Fixed-Rate 30-Year   4,098,595.36     6.932      360        357       N/A    N/A    N/A      N/A        N/A        N/A        N/A
Fixed-Rate 30 Year  53,050,245.29     6.847      360        358       N/A    N/A    N/A      N/A        N/A        N/A        N/A





                                              ORIGINAL  REMAINING
                                              TERM TO   TERM TO                                               MONTHS TO   ORIGINAL
                                              STATED    STATED     GROSS   MIN.   MAX.   INITIAL                NEXT      INTEREST
                    LOAN BALANCE  GROSS LOAN  MATURITY  MATURITY   MARGIN  RATE   RATE   PERIODIC  PERIODIC  ADJUSTMENT   ONLY TERM
     DESCRIPTION         ($)       RATE (%)   (MONTHS)   (MONTHS)   (%)     (%)    (%)    CAP (%)   CAP (%)     DATE       (MONTHS)
------------------   ------------    -------- --------    --------  ---     ---    ---    -------    -------  ----------  ---------

6-Month LIBOR ARM*   338,751.12     6.661        360       358     6.417   6.292  13.161   1.000     1.000        4          N/A





                                               ORIGINAL  REMAINING
                                               TERM TO   TERM TO                                               MONTHS TO  ORIGINAL
                                               STATED    STATED     GROSS   MIN.   MAX.   INITIAL                NEXT     INTEREST
                      LOAN BALANCE  GROSS LOAN MATURITY  MATURITY   MARGIN  RATE   RATE   PERIODIC  PERIODIC  ADJUSTMENT  ONLY TERM
     DESCRIPTION          ($)         RATE (%) (MONTHS)  (MONTHS)    (%)     (%)    (%)    CAP (%)   CAP (%)     DATE      (MONTHS)
-------------------- ------------  ---------- --------  --------    ---     ---    ---    -------    -------  ----------  ---------

Adjustable-Rate 2/28*  139,334,523.18  7.295      360        358    5.769  7.317  14.102    1.508     1.310       22         N/A
Adjustable-Rate 2/28*   10,379,786.89  7.167      360        358    5.647  7.182  13.987    1.511     1.353       22         N/A
Adjustable-Rate 2/28*  289,869,806.20  6.842      360        358    5.861  6.861  13.622    1.528     1.284       22         N/A
Adjustable-Rate 2/28*    3,304,320.89  6.949      360        358    6.569  7.056  13.449    1.542     1.000       22         N/A





                                               ORIGINAL  REMAINING
                                               TERM TO   TERM TO                                               MONTHS TO  ORIGINAL
                                               STATED    STATED     GROSS   MIN.   MAX.    INITIAL                NEXT     INTEREST
                      LOAN BALANCE  GROSS LOAN MATURITY  MATURITY   MARGIN  RATE   RATE   PERIODIC  PERIODIC  ADJUSTMENT  ONLY TERM
     DESCRIPTION          ($)         RATE (%) (MONTHS)  (MONTHS)    (%)     (%)    (%)    CAP (%)   CAP (%)     DATE      (MONTHS)
-------------------- ------------  ---------- --------  --------    ---     ---    -----  -------    -------  ----------  ---------

Adjustable-Rate 3/27*  6,349,791.10     6.676    360     358       5.861   6.735   13.354  2.373    1.191        34          N/A
Adjustable-Rate 3/27*    632,915.09     6.250    360     358       5.879   6.328   12.937  2.440    1.187        34          N/A
Adjustable-Rate 3/27*  1,587,861.61     7.028    360     358       6.746   7.157   13.565  2.887    1.038        34          N/A
Adjustable-Rate 3/27*  8,652,733.43     6.210    360     358       5.962   6.249   12.952  2.280    1.234        34          N/A




                                     S-132





                                               ORIGINAL  REMAINING
                                               TERM TO   TERM TO                                               MONTHS TO  ORIGINAL
                                               STATED    STATED     GROSS   MIN.   MAX.   INITIAL                NEXT     INTEREST
                      LOAN BALANCE  GROSS LOAN MATURITY  MATURITY   MARGIN  RATE   RATE   PERIODIC  PERIODIC  ADJUSTMENT  ONLY TERM
     DESCRIPTION          ($)         RATE (%) (MONTHS)  (MONTHS)    (%)     (%)    (%)    CAP (%)   CAP (%)     DATE      (MONTHS)
-------------------- ------------  ---------- --------  --------    ---     ---    ---    -------    -------  ----------  ---------

Adjustable-Rate 5/25*    363,372.51   6.445      360     357        6.389   6.259  12.945    3.000  1.000      57          N/A
Adjustable-Rate 5/25*    188,578.40   5.500      360     358        6.375   6.000  12.000    3.000  1.000      58          N/A
Adjustable-Rate 5/25*  1,236,280.83   6.298      360     358        5.656   6.381  12.798    2.833  1.000      58          N/A
Adjustable-Rate 5/25*  2,181,026.71   6.528      360     358        6.025   6.577  13.028    3.000  1.000      58          N/A





                                               ORIGINAL  REMAINING
                                               TERM TO   TERM TO                                               MONTHS TO  ORIGINAL
                                               STATED    STATED     GROSS   MIN.   MAX.   INITIAL                NEXT     INTEREST
                      LOAN BALANCE  GROSS LOAN MATURITY  MATURITY   MARGIN  RATE   RATE   PERIODIC  PERIODIC  ADJUSTMENT  ONLY TERM
     DESCRIPTION          ($)         RATE (%) (MONTHS)  (MONTHS)    (%)     (%)    (%)    CAP (%)   CAP (%)     DATE      (MONTHS)
-------------------- ------------  ---------- --------  --------    ---     ---    ---    -------    -------  ----------  ---------

Interest-Only
25-Year**              1,029,848.22      5.604     300    298      3.535    5.525   12.000   3.000   3.000      1           120





                                               ORIGINAL  REMAINING
                                               TERM TO   TERM TO                                               MONTHS TO  ORIGINAL
                                               STATED    STATED     GROSS   MIN.   MAX.   INITIAL                NEXT     INTEREST
                      LOAN BALANCE  GROSS LOAN MATURITY  MATURITY   MARGIN  RATE   RATE   PERIODIC  PERIODIC  ADJUSTMENT  ONLY TERM
     DESCRIPTION          ($)         RATE (%) (MONTHS)  (MONTHS)    (%)     (%)    (%)    CAP (%)   CAP (%)     DATE      (MONTHS)
-------------------- ------------  ---------- --------  --------    ---     ---    ---    -------    -------  ----------  ---------

Interest Only 2/28
2-Year*                 2,714,699.13    6.893      360    358      5.576     6.894  13.894  1.500    1.500        22         24
Interest Only 2/28
2-Year*                 1,173,999.98    7.015      360    358      5.617     7.016  14.016  1.500    1.500        22         24
Interest Only 2/28
2-Year*                13,537,103.29    6.274      360    358      5.571     6.270  13.270  1.500    1.500        22         24
Interest Only 2/28
5-Year*                 6,099,643.14    6.704      360    358      6.042     6.830  13.204  3.061    1.000        22         60
Interest Only 2/28
5-Year*                   948,014.00    6.060      360    358      5.684     6.169  12.560  3.000    1.000        22         60
Interest Only 2/28
5-Year*                29,019,392.65    6.067      360    358      5.787     6.154  12.567  2.978    1.000        22         60




                                               ORIGINAL  REMAINING
                                               TERM TO   TERM TO                                               MONTHS TO  ORIGINAL
                                               STATED    STATED     GROSS   MIN.   MAX.   INITIAL               NEXT     INTEREST
                      LOAN BALANCE  GROSS LOAN MATURITY  MATURITY   MARGIN  RATE   RATE   PERIODIC  PERIODIC  ADJUSTMENT  ONLY TERM
     DESCRIPTION          ($)         RATE (%) (MONTHS)  (MONTHS)    (%)     (%)    (%)    CAP (%)   CAP (%)     DATE      (MONTHS)
-------------------- ------------  ---------- --------  --------    ---     ---    ---    -------    -------  ----------  ---------

Interest Only 3/27*    1,199,549.98     6.153    360     358         5.526  6.153   13.153   1.500    1.500       34          36





                                               ORIGINAL  REMAINING
                                               TERM TO   TERM TO                                               MONTHS TO  ORIGINAL
                                               STATED    STATED     GROSS   MIN.   MAX.   INITIAL                NEXT     INTEREST
                      LOAN BALANCE  GROSS LOAN MATURITY  MATURITY   MARGIN  RATE   RATE   PERIODIC  PERIODIC  ADJUSTMENT  ONLY TERM
     DESCRIPTION          ($)         RATE (%) (MONTHS)  (MONTHS)    (%)     (%)    (%)    CAP (%)   CAP (%)     DATE      (MONTHS)
-------------------- ------------  ---------- --------  --------    ---     ---    ---    -------    -------  ----------  ---------

Interest Only 5/25*    2,426,320.00    6.412     360      358       6.147    6.500  12.912  4.839     1.000         58           60
Interest Only 5/25*      350,000.00    6.375     360      358       6.375    6.000  12.875  5.000     1.000         58           60
Interest Only 5/25*      479,998.99    5.699     360      358       5.469    5.475  12.199  5.000     1.000         58           60
Interest Only 5/25*    2,857,516.33    5.963     360      358       5.803    6.185  12.445  4.874     1.000         58           60


----------
*    These Mortgage Loans have Loan Rates that adjust based upon the six-month
     LIBOR index.

**   These Mortgage Loans have Loan Rates that adjust based upon the one-month
     LIBOR index.


                                     S-133




                                                             SUBGROUP 2





                                               ORIGINAL  REMAINING
                                               TERM TO   TERM TO                                               MONTHS TO  ORIGINAL
                                               STATED    STATED     GROSS   MIN.   MAX.   INITIAL                 NEXT     INTEREST
                      LOAN BALANCE  GROSS LOAN MATURITY  MATURITY   MARGIN  RATE   RATE   PERIODIC  PERIODIC  ADJUSTMENT  ONLY TERM
     DESCRIPTION          ($)         RATE (%) (MONTHS)  (MONTHS)    (%)     (%)    (%)    CAP (%)   CAP (%)     DATE      (MONTHS)
-------------------- ------------  ---------- --------  --------    ---     ---    ---    -------    -------  ----------  ---------

Balloon (30/15)***    20,629,410.99   10.349      180      178       N/A     N/A    N/A     N/A        N/A        N/A        N/A
Balloon (30/15)***     1,582,853.81    9.802      180      178       N/A     N/A    N/A     N/A        N/A        N/A        N/A
Balloon (30/15)***    20,352,214.26    9.745      180      178       N/A     N/A    N/A     N/A        N/A        N/A        N/A
Balloon (30/15)***    11,896,414.34   10.164      180      178       N/A     N/A    N/A     N/A        N/A        N/A        N/A
Fixed-Rate 10-Year        49,209.19    8.775      120      117       N/A     N/A    N/A     N/A        N/A        N/A        N/A
Fixed-Rate 10-Year        54,287.07    5.990      120      118       N/A     N/A    N/A     N/A        N/A        N/A        N/A
Fixed-Rate 15-Year     1,105,176.04    9.534      180      177       N/A     N/A    N/A     N/A        N/A        N/A        N/A
Fixed-Rate 15-Year       246,487.21    8.850      180      178       N/A     N/A    N/A     N/A        N/A        N/A        N/A
Fixed-Rate 15-Year       420,602.94    9.374      180      178       N/A     N/A    N/A     N/A        N/A        N/A        N/A
Fixed-Rate 15-Year     1,872,141.13    7.264      180      178       N/A     N/A    N/A     N/A        N/A        N/A        N/A
Fixed-Rate 20-Year     2,166,095.97   10.222      240      238       N/A     N/A    N/A     N/A        N/A        N/A        N/A
Fixed-Rate 20-Year        74,270.58    9.985      240      238       N/A     N/A    N/A     N/A        N/A        N/A        N/A
Fixed-Rate 20-Year     2,890,510.33   10.148      240      238       N/A     N/A    N/A     N/A        N/A        N/A        N/A
Fixed-Rate 20-Year       901,379.04    8.075      240      238       N/A     N/A    N/A     N/A        N/A        N/A        N/A
Fixed-Rate 30-Year     7,521,641.33    8.626      360      358       N/A     N/A    N/A     N/A        N/A        N/A        N/A
Fixed-Rate 30-Year     7,610,442.33    7.594      360      358       N/A     N/A    N/A     N/A        N/A        N/A        N/A
Fixed-Rate 30-Year    11,749,930.15    9.462      360      358       N/A     N/A    N/A     N/A        N/A        N/A        N/A
Fixed-Rate 30-Year    21,020,555.42    7.062      360      358       N/A     N/A    N/A     N/A        N/A        N/A        N/A





                                               ORIGINAL  REMAINING
                                               TERM TO   TERM TO                                               MONTHS TO  ORIGINAL
                                               STATED    STATED     GROSS   MIN.   MAX.   INITIAL                NEXT     INTEREST
                      LOAN BALANCE  GROSS LOAN MATURITY  MATURITY   MARGIN  RATE   RATE   PERIODIC  PERIODIC  ADJUSTMENT  ONLY TERM
     DESCRIPTION          ($)         RATE (%) (MONTHS)  (MONTHS)    (%)     (%)    (%)    CAP (%)   CAP (%)     DATE      (MONTHS)
-------------------- ------------  ---------- --------  --------    ---     ---    ---    -------    -------  ----------  ---------

Adjustable-Rate 2/28*  69,208,677.21  7.080     360        358      5.945   7.078  13.847    1.504    1.268        22         N/A
Adjustable-Rate 2/28*   9,632,141.14  7.340     360        358      5.929   7.296  14.129    1.500    1.290        22         N/A
Adjustable-Rate 2/28* 143,986,336.49  6.749     360        358      5.954   6.787  13.544    1.520    1.296        22         N/A
Adjustable-Rate 2/28*     962,823.47  7.694     360        357      7.637   7.753  14.194    1.416    1.000        21         N/A





                                               ORIGINAL  REMAINING
                                               TERM TO   TERM TO                                               MONTHS TO  ORIGINAL
                                               STATED    STATED     GROSS   MIN.   MAX.   INITIAL                NEXT     INTEREST
                      LOAN BALANCE  GROSS LOAN MATURITY  MATURITY   MARGIN  RATE   RATE   PERIODIC  PERIODIC  ADJUSTMENT  ONLY TERM
     DESCRIPTION          ($)         RATE (%) (MONTHS)  (MONTHS)    (%)     (%)    (%)    CAP (%)   CAP (%)     DATE      (MONTHS)
-------------------- ------------  ---------- --------  --------    ---     ---    ---    -------    -------  ----------  ---------

Adjustable-Rate 3/27*  3,942,872.26    6.115      360       358     6.011    6.013  12.733   2.314     1.166       34         N/A
Adjustable-Rate 3/27*    360,153.15    6.300      360       358     6.000    6.000  12.800   3.000     1.000       34         N/A
Adjustable-Rate 3/27*    337,154.25    5.850      360       359     5.750    5.850  12.850   1.500     1.500       35         N/A
Adjustable-Rate 3/27*  3,697,980.70    6.494      360       358     5.927    6.509  13.293   2.103     1.299       34         N/A





                                               ORIGINAL  REMAINING
                                               TERM TO   TERM TO                                               MONTHS TO  ORIGINAL
                                               STATED    STATED     GROSS   MIN.   MAX.   INITIAL                NEXT     INTEREST
                      LOAN BALANCE  GROSS LOAN MATURITY  MATURITY   MARGIN  RATE   RATE   PERIODIC  PERIODIC  ADJUSTMENT  ONLY TERM
     DESCRIPTION          ($)         RATE (%) (MONTHS)  (MONTHS)    (%)     (%)    (%)    CAP (%)   CAP (%)     DATE      (MONTHS)
-------------------- ------------  ---------- --------  --------    ---     ---    ---    -------    -------  ----------  ---------

Adjustable-Rate 5/25*    414,566.74    5.375    360        358      6.000   6.000  11.875    3.000     1.000      58          N/A
Adjustable-Rate 5/25*    643,772.80    6.250    360        358      5.875   6.000  12.750    3.000     1.000      58          N/A
Adjustable-Rate 5/25*  2,044,287.88    5.645    360        358      6.257   5.664  12.145    3.000     1.000      58          N/A




                                     S-134






                                               ORIGINAL  REMAINING
                                               TERM TO   TERM TO                                               MONTHS TO  ORIGINAL
                                               STATED    STATED     GROSS   MIN.   MAX.   INITIAL                NEXT     INTEREST
                      LOAN BALANCE  GROSS LOAN MATURITY  MATURITY   MARGIN  RATE   RATE   PERIODIC  PERIODIC  ADJUSTMENT  ONLY TERM
     DESCRIPTION          ($)         RATE (%) (MONTHS)  (MONTHS)    (%)     (%)    (%)    CAP (%)   CAP (%)     DATE      (MONTHS)
-------------------- ------------  ---------- --------  --------    ---     ---    ---    -------    -------  ----------  ---------

Interest-Only 25-Year**  2,371,902.40  5.289     300        298     3.167   5.199  12.000  3.000      3.000       1          120





                                               ORIGINAL  REMAINING
                                               TERM TO   TERM TO                                               MONTHS TO  ORIGINAL
                                               STATED    STATED     GROSS   MIN.   MAX.   INITIAL                NEXT     INTEREST
                      LOAN BALANCE  GROSS LOAN MATURITY  MATURITY   MARGIN  RATE   RATE   PERIODIC  PERIODIC  ADJUSTMENT  ONLY TERM
     DESCRIPTION          ($)         RATE (%) (MONTHS)  (MONTHS)    (%)     (%)    (%)    CAP (%)   CAP (%)     DATE      (MONTHS)
-------------------- ------------  ---------- --------  --------    ---     ---    ---    -------    -------  ----------  ---------

Interest Only 2/28
2-Year*                 9,999,700.61   7.204     360      358      5.582    7.204   14.204  1.500     1.500       22         24
Interest Only 2/28
2-Year*                 2,728,100.02   6.969     360      358      5.537    6.969   13.969  1.500     1.500       22         24
Interest Only 2/28
2-Year*                51,677,194.81   6.368     360      358      5.533    6.368   13.368  1.500     1.500       22         24
Interest Only 2/28
5-Year*                14,701,706.28   6.669     360      357      5.921    6.703   13.190  2.844     1.000       21         60
Interest Only 2/28
5-Year*                 7,054,315.99   6.388     360      358      5.788    6.344   12.888  3.000     1.000       22         60
Interest Only 2/28
5-Year*                65,348,765.85   6.035     360      358      5.606    6.097   12.534  2.995     1.002       22         60





                                               ORIGINAL  REMAINING
                                               TERM TO   TERM TO                                               MONTHS TO  ORIGINAL
                                               STATED    STATED     GROSS   MIN.   MAX.   INITIAL                NEXT     INTEREST
                      LOAN BALANCE  GROSS LOAN MATURITY  MATURITY   MARGIN  RATE   RATE   PERIODIC  PERIODIC  ADJUSTMENT  ONLY TERM
     DESCRIPTION          ($)         RATE (%) (MONTHS)  (MONTHS)    (%)     (%)    (%)    CAP (%)   CAP (%)     DATE      (MONTHS)
-------------------- ------------  ---------- --------  --------    ---     ---    ---    -------    -------  ----------  ---------

Interest Only 3/27
3-Year*                  108,000.00    7.550    360       357       5.300   7.550  14.550   1.500     1.500       33          36
Interest Only 3/27
3-Year*                5,226,367.61    5.983    360       358       5.461   5.984  12.984   1.500     1.500       34          36
Interest Only 3/27
5-Year*                  277,200.00    8.700    360       357       8.000   9.000  15.200   3.000     1.000       33          60
Interest Only 3/27
5-Year*                  123,902.68    7.250    360       357       6.250   7.000  13.750   3.000     1.000       33          60





                                               ORIGINAL  REMAINING
                                               TERM TO   TERM TO                                               MONTHS TO  ORIGINAL
                                               STATED    STATED     GROSS   MIN.   MAX.   INITIAL                NEXT     INTEREST
                      LOAN BALANCE  GROSS LOAN MATURITY  MATURITY   MARGIN  RATE   RATE   PERIODIC  PERIODIC  ADJUSTMENT  ONLY TERM
     DESCRIPTION          ($)         RATE (%) (MONTHS)  (MONTHS)    (%)     (%)    (%)    CAP (%)   CAP (%)     DATE      (MONTHS)
-------------------- ------------  ---------- --------  --------    ---     ---    ---    -------    -------  ----------  ---------

Interest Only 5/25*     867,750.00    5.728       360      358      5.586   5.562   12.228   5.000     1.000      58          60
Interest Only 5/25*     279,300.00    6.250       360      357      6.000   6.000   12.750   5.000     1.000      57          60
Interest Only 5/25*   4,280,156.56    5.992       360      358      5.725   6.047   12.492   5.000     1.000      58          60
Interest Only 5/25*   7,691,951.04    6.227       360      358      6.013   6.262   12.727   4.855     1.018      58          60


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

*    These Mortgage Loans have Loan Rates that adjust based upon the six-month
     LIBOR index.

**   These Mortgage Loans have Loan Rates that adjust based upon the one-month
     LIBOR index.

***  The original amortization term for these Mortgage Loans is equal to 360
     months.


                                                               S-135




                          PERCENT OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING(1)

                                                              CLASS A1
                                                         PREPAYMENT SCENARIO
                         -------------------------------------------------------------------------------------------------------
                          SCENARIO I     SCENARIO II   SCENARIO III   SCENARIO IV     SCENARIO V    SCENARIO VI   SCENARIO VII
                         -----------     -----------   ------------   -----------     ----------    -----------   --------------
   DISTRIBUTION DATE

Initial Percentage.....       100%           100%           100%          100%            100%           100%          100%
February 25, 2006......        99             87             78            74              62             56            49
February 25, 2007......        97             68             50            42              19              9             3
February 25, 2008......        96             51             26            17               0              0             0
February 25, 2009......        95             38             22            16               0              0             0
February 25, 2010......        94             31             16            11               0              0             0
February 25, 2011......        92             25             11             7               0              0             0
February 25, 2012......        91             21              8             5               0              0             0
February 25, 2013......        89             17              6             3               0              0             0
February 25, 2014......        87             14              4             2               0              0             0
February 25, 2015......        85             12              3             1               0              0             0
February 25, 2016......        82             10              2             1               0              0             0
February 25, 2017......        80              8              1             *               0              0             0
February 25, 2018......        77              6              1             *               0              0             0
February 25, 2019......        74              5              1             0               0              0             0
February 25, 2020......        71              4              *             0               0              0             0
February 25, 2021......        67              3              *             0               0              0             0
February 25, 2022......        63              3              0             0               0              0             0
February 25, 2023......        59              2              0             0               0              0             0
February 25, 2024......        55              2              0             0               0              0             0
February 25, 2025......        50              1              0             0               0              0             0
February 25, 2026......        45              1              0             0               0              0             0
February 25, 2027......        39              1              0             0               0              0             0
February 25, 2028......        36              *              0             0               0              0             0
February 25, 2029......        32              0              0             0               0              0             0
February 25, 2030......        28              0              0             0               0              0             0
February 25, 2031......        23              0              0             0               0              0             0
February 25, 2032......        18              0              0             0               0              0             0
February 25, 2033......        13              0              0             0               0              0             0
February 25, 2034......         7              0              0             0               0              0             0
February 25, 2035......         0              0              0             0               0              0             0
Weighted Average
    Life to Maturity
    (in years)(2)......      19.02          4.69           2.92           2.40           1.41           1.26          1.15
Weighted Average
    Life to Optional
    Termination
    (in years)(2)(3)...      18.96          4.43           2.74           2.26           1.41           1.26          1.15


----------------
* Greater than zero but less than 0.5%.

(1)  Rounded to the nearest whole percentage.

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

(3)  Calculated pursuant to footnote (2) but assumes the Optional Termination is
     exercised on the earliest possible Distribution Date on which the Servicer
     is permitted to exercise such option.



                                                               S-136






                          PERCENT OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING(1)

                                                              CLASS A2
                                                         PREPAYMENT SCENARIO

                         ------------------------------------------------------------------------------------------------------
                          SCENARIO I     SCENARIO II   SCENARIO III   SCENARIO IV     SCENARIO V    SCENARIO VI   SCENARIO VII
                         ------------    -----------   ------------   -----------     ----------    -----------   -------------
   DISTRIBUTION DATE

Initial Percentage.....       100%           100%           100%          100%            100%           100%          100%
February 25, 2006......        99             87             78            74              62             56            49
February 25, 2007......        97             68             50            42              19              9             3
February 25, 2008......        96             51             26            17               0              0             0
February 25, 2009......        95             38             22            16               0              0             0
February 25, 2010......        94             31             16            11               0              0             0
February 25, 2011......        92             25             11             7               0              0             0
February 25, 2012......        91             21              8             5               0              0             0
February 25, 2013......        89             17              6             3               0              0             0
February 25, 2014......        87             14              4             2               0              0             0
February 25, 2015......        85             12              3             1               0              0             0
February 25, 2016......        82             10              2             1               0              0             0
February 25, 2017......        80              8              1             *               0              0             0
February 25, 2018......        77              6              1             *               0              0             0
February 25, 2019......        74              5              1             0               0              0             0
February 25, 2020......        71              4              *             0               0              0             0
February 25, 2021......        67              3              *             0               0              0             0
February 25, 2022......        63              3              0             0               0              0             0
February 25, 2023......        59              2              0             0               0              0             0
February 25, 2024......        55              2              0             0               0              0             0
February 25, 2025......        50              1              0             0               0              0             0
February 25, 2026......        45              1              0             0               0              0             0
February 25, 2027......        39              1              0             0               0              0             0
February 25, 2028......        36              *              0             0               0              0             0
February 25, 2029......        32              0              0             0               0              0             0
February 25, 2030......        28              0              0             0               0              0             0
February 25, 2031......        23              0              0             0               0              0             0
February 25, 2032......        18              0              0             0               0              0             0
February 25, 2033......        13              0              0             0               0              0             0
February 25, 2034......         7              0              0             0               0              0             0
February 25, 2035......         0              0              0             0               0              0             0
Weighted Average
    Life to Maturity
    (in years)(2)......      19.02          4.69           2.92           2.40           1.41           1.26          1.15
Weighted Average
    Life to Optional
    Termination
    (in years)(2)(3)...      18.96          4.43           2.74           2.26           1.41           1.26          1.15


----------------
* Greater than zero but less than 0.5%.

(1)  Rounded to the nearest whole percentage.

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

(3)  Calculated pursuant to footnote (2) but assumes the Optional Termination is
     exercised on the earliest possible Distribution Date on which the Servicer
     is permitted to exercise such option.


                                                               S-137




                          PERCENT OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING(1)

                                                              CLASS A3
                                                         PREPAYMENT SCENARIO

                         ------------------------------------------------------------------------------------------------------
                          SCENARIO I     SCENARIO II   SCENARIO III   SCENARIO IV     SCENARIO V    SCENARIO VI   SCENARIO VII
                         -----------     -----------   ------------   -----------     ----------    -----------   -------------
   DISTRIBUTION DATE

Initial Percentage.....       100%           100%           100%          100%            100%           100%          100%
February 25, 2006......        99             87             79            75              63             57            51
February 25, 2007......        98             70             51            43              20             11             5
February 25, 2008......        97             53             28            18               0              0             0
February 25, 2009......        96             40             24            18               0              0             0
February 25, 2010......        95             33             18            12               0              0             0
February 25, 2011......        94             27             13             9               0              0             0
February 25, 2012......        92             23             10             6               0              0             0
February 25, 2013......        90             19              8             4               0              0             0
February 25, 2014......        88             16              6             3               0              0             0
February 25, 2015......        86             14              4             2               0              0             0
February 25, 2016......        84             11              3             2               0              0             0
February 25, 2017......        81             10              3             1               0              0             0
February 25, 2018......        79              8              2             1               0              0             0
February 25, 2019......        76              7              2             *               0              0             0
February 25, 2020......        62              4              1             0               0              0             0
February 25, 2021......        58              4              1             0               0              0             0
February 25, 2022......        55              3              *             0               0              0             0
February 25, 2023......        51              3              0             0               0              0             0
February 25, 2024......        47              2              0             0               0              0             0
February 25, 2025......        43              2              0             0               0              0             0
February 25, 2026......        38              2              0             0               0              0             0
February 25, 2027......        33              1              0             0               0              0             0
February 25, 2028......        30              1              0             0               0              0             0
February 25, 2029......        26              1              0             0               0              0             0
February 25, 2030......        23              *              0             0               0              0             0
February 25, 2031......        18              0              0             0               0              0             0
February 25, 2032......        14              0              0             0               0              0             0
February 25, 2033......         9              0              0             0               0              0             0
February 25, 2034......         3              0              0             0               0              0             0
February 25, 2035......         0              0              0             0               0              0             0
Weighted Average
    Life to Maturity
    (in years)(2)......      18.31          5.00           3.14           2.56           1.44           1.28          1.17
Weighted Average
    Life to Optional
    Termination
    (in years)(2)(3)...      18.28          4.66           2.86           2.33           1.44           1.28          1.17


* Greater than zero but less than 0.5%.

(1)  Rounded to the nearest whole percentage.

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

(3)  Calculated pursuant to footnote (2) but assumes the Optional Termination is
     exercised on the earliest possible Distribution Date on which the Servicer
     is permitted to exercise such option.


                                                               S-138





                                  PERCENT OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING(1)

                                                              CLASS A4
                                                         PREPAYMENT SCENARIO
                         -------------------------------------------------------------------------------------------------------
                          SCENARIO I     SCENARIO II   SCENARIO III   SCENARIO IV     SCENARIO V    SCENARIO VI   SCENARIO VII
                         -----------     -----------   ------------   -----------     ----------    -----------   --------------
   DISTRIBUTION DATE

Initial Percentage.....       100%           100%           100%          100%            100%           100%          100%
February 25, 2006......        98             71             53            43              17              3             0
February 25, 2007......        96             31              0             0               0              0             0
February 25, 2008......        94              0              0             0               0              0             0
February 25, 2009......        92              0              0             0               0              0             0
February 25, 2010......        89              0              0             0               0              0             0
February 25, 2011......        86              0              0             0               0              0             0
February 25, 2012......        82              0              0             0               0              0             0
February 25, 2013......        78              0              0             0               0              0             0
February 25, 2014......        74              0              0             0               0              0             0
February 25, 2015......        69              0              0             0               0              0             0
February 25, 2016......        64              0              0             0               0              0             0
February 25, 2017......        58              0              0             0               0              0             0
February 25, 2018......        52              0              0             0               0              0             0
February 25, 2019......        45              0              0             0               0              0             0
February 25, 2020......        14              0              0             0               0              0             0
February 25, 2021......         6              0              0             0               0              0             0
February 25, 2022......         0              0              0             0               0              0             0
February 25, 2023......         0              0              0             0               0              0             0
February 25, 2024......         0              0              0             0               0              0             0
February 25, 2025......         0              0              0             0               0              0             0
February 25, 2026......         0              0              0             0               0              0             0
February 25, 2027......         0              0              0             0               0              0             0
February 25, 2028......         0              0              0             0               0              0             0
February 25, 2029......         0              0              0             0               0              0             0
February 25, 2030......         0              0              0             0               0              0             0
February 25, 2031......         0              0              0             0               0              0             0
February 25, 2032......         0              0              0             0               0              0             0
February 25, 2033......         0              0              0             0               0              0             0
February 25, 2034......         0              0              0             0               0              0             0
February 25, 2035......         0              0              0             0               0              0             0
Weighted Average
    Life to Maturity
    (in years)(2)......      11.64          1.62           1.15           1.00           0.77           0.69          0.64
Weighted Average
    Life to Optional
    Termination
    (in years)(2)(3)...      11.64          1.62           1.15           1.00           0.77           0.69          0.64



----------------
(1)  Rounded to the nearest whole percentage.

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

(3)  Calculated pursuant to footnote (2) but assumes the Optional Termination is
     exercised on the earliest possible Distribution Date on which the Servicer
     is permitted to exercise such option.


                                                               S-139




                                  PERCENT OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING(1)

                                                              CLASS A5
                                                         PREPAYMENT SCENARIO
                         ------------------------------------------------------------------------------------------------------
                          SCENARIO I     SCENARIO II   SCENARIO III   SCENARIO IV     SCENARIO V    SCENARIO VI   SCENARIO VII
                          ----------     -----------   ------------   -----------     ----------    -----------   ------------
   DISTRIBUTION DATE

Initial Percentage.....       100%           100%           100%          100%            100%           100%          100%
February 25, 2006......       100            100            100           100             100            100            90
February 25, 2007......       100            100             91            74              28              9             0
February 25, 2008......       100             94             44            24               0              0             0
February 25, 2009......       100             68             35            23               0              0             0
February 25, 2010......       100             53             23            12               0              0             0
February 25, 2011......       100             42             13             4               0              0             0
February 25, 2012......       100             33              7             0               0              0             0
February 25, 2013......       100             26              2             0               0              0             0
February 25, 2014......       100             19              0             0               0              0             0
February 25, 2015......       100             14              0             0               0              0             0
February 25, 2016......       100             10              0             0               0              0             0
February 25, 2017......       100              6              0             0               0              0             0
February 25, 2018......       100              3              0             0               0              0             0
February 25, 2019......       100              *              0             0               0              0             0
February 25, 2020......       100              0              0             0               0              0             0
February 25, 2021......       100              0              0             0               0              0             0
February 25, 2022......        99              0              0             0               0              0             0
February 25, 2023......        91              0              0             0               0              0             0
February 25, 2024......        83              0              0             0               0              0             0
February 25, 2025......        74              0              0             0               0              0             0
February 25, 2026......        64              0              0             0               0              0             0
February 25, 2027......        54              0              0             0               0              0             0
February 25, 2028......        48              0              0             0               0              0             0
February 25, 2029......        40              0              0             0               0              0             0
February 25, 2030......        32              0              0             0               0              0             0
February 25, 2031......        24              0              0             0               0              0             0
February 25, 2032......        15              0              0             0               0              0             0
February 25, 2033......         4              0              0             0               0              0             0
February 25, 2034......         0              0              0             0               0              0             0
February 25, 2035......         0              0              0             0               0              0             0
Weighted Average
    Life to Maturity
    (in years)(2)......      22.88          6.29           3.76           3.01           1.88           1.68          1.52
Weighted Average
    Life to Optional
    Termination
    (in years)(2)(3)...      22.88          6.27           3.75           3.00           1.88           1.68          1.52



----------------
* Greater than zero but less than 0.5%.

(1)  Rounded to the nearest whole percentage.

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

(3)  Calculated pursuant to footnote (2) but assumes the Optional Termination is
     exercised on the earliest possible Distribution Date on which the Servicer
     is permitted to exercise such option.



                                      S-140





                                  PERCENT OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING(1)

                                                              CLASS A6
                                                         PREPAYMENT SCENARIO
                          ----------------------------------------------------------------------------------------------------
                          SCENARIO I     SCENARIO II   SCENARIO III   SCENARIO IV     SCENARIO V    SCENARIO VI   SCENARIO VII
                          ----------     -----------   ------------   -----------     ----------    -----------   ------------
   DISTRIBUTION DATE

Initial Percentage.....       100%           100%           100%          100%            100%           100%          100%
February 25, 2006......       100            100            100           100             100            100           100
February 25, 2007......       100            100            100           100             100            100            70
February 25, 2008......       100            100            100           100               0              0             0
February 25, 2009......       100            100            100           100               0              0             0
February 25, 2010......       100            100            100           100               0              0             0
February 25, 2011......       100            100            100           100               0              0             0
February 25, 2012......       100            100            100            91               0              0             0
February 25, 2013......       100            100            100            65               0              0             0
February 25, 2014......       100            100             86            47               0              0             0
February 25, 2015......       100            100             67            35               0              0             0
February 25, 2016......       100            100             52            26               0              0             0
February 25, 2017......       100            100             41            20               0              0             0
February 25, 2018......       100            100             33            13               0              0             0
February 25, 2019......       100            100             27             3               0              0             0
February 25, 2020......       100             66             12             0               0              0             0
February 25, 2021......       100             55              8             0               0              0             0
February 25, 2022......       100             46              1             0               0              0             0
February 25, 2023......       100             38              0             0               0              0             0
February 25, 2024......       100             32              0             0               0              0             0
February 25, 2025......       100             27              0             0               0              0             0
February 25, 2026......       100             23              0             0               0              0             0
February 25, 2027......       100             20              0             0               0              0             0
February 25, 2028......       100             15              0             0               0              0             0
February 25, 2029......       100             10              0             0               0              0             0
February 25, 2030......       100              2              0             0               0              0             0
February 25, 2031......       100              0              0             0               0              0             0
February 25, 2032......       100              0              0             0               0              0             0
February 25, 2033......       100              0              0             0               0              0             0
February 25, 2034......        52              0              0             0               0              0             0
February 25, 2035......         0              0              0             0               0              0             0
Weighted Average
    Life to Maturity
    (in years)(2)......      29.11          18.00         11.91           9.58           2.66           2.25          2.12
Weighted Average
    Life to Optional
    Termination
    (in years)(2)(3)...      28.71          12.98          7.73           6.31           2.66           2.25          2.12



----------------
(1)  Rounded to the nearest whole percentage.

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

(3)  Calculated pursuant to footnote (2) but assumes the Optional Termination is
     exercised on the earliest possible Distribution Date on which the Servicer
     is permitted to exercise such option.


                                     S-141





                                  PERCENT OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING(1)


                                                              CLASS M1
                                                         PREPAYMENT SCENARIO
                         ------------------------------------------------------------------------------------------------------
                          SCENARIO I     SCENARIO II   SCENARIO III   SCENARIO IV     SCENARIO V    SCENARIO VI   SCENARIO VII
                          ----------     -----------   ------------   -----------     ----------    -----------   ------------
   DISTRIBUTION DATE

Initial Percentage.....       100%           100%           100%          100%            100%           100%          100%
February 25, 2006......       100            100            100           100             100            100           100
February 25, 2007......       100            100            100           100             100            100           100
February 25, 2008......       100            100            100           100              83             86            94
February 25, 2009......       100            100             62            47              83             86            63
February 25, 2010......       100             86             45            31              83             52            31
February 25, 2011......       100             71             33            21              54             29            13
February 25, 2012......       100             59             24            15              33             13             2
February 25, 2013......       100             49             18            10              19              3             0
February 25, 2014......       100             41             13             7               8              0             0
February 25, 2015......       100             34             10             5               1              0             0
February 25, 2016......       100             28              7             3               0              0             0
February 25, 2017......       100             23              6             0               0              0             0
February 25, 2018......       100             19              4             0               0              0             0
February 25, 2019......       100             16              3             0               0              0             0
February 25, 2020......       100             12              0             0               0              0             0
February 25, 2021......       100              9              0             0               0              0             0
February 25, 2022......       100              8              0             0               0              0             0
February 25, 2023......       100              6              0             0               0              0             0
February 25, 2024......       100              5              0             0               0              0             0
February 25, 2025......       100              4              0             0               0              0             0
February 25, 2026......       100              3              0             0               0              0             0
February 25, 2027......        99              1              0             0               0              0             0
February 25, 2028......        90              0              0             0               0              0             0
February 25, 2029......        80              0              0             0               0              0             0
February 25, 2030......        69              0              0             0               0              0             0
February 25, 2031......        57              0              0             0               0              0             0
February 25, 2032......        44              0              0             0               0              0             0
February 25, 2033......        29              0              0             0               0              0             0
February 25, 2034......        14              0              0             0               0              0             0
February 25, 2035......         0              0              0             0               0              0             0
Weighted Average
    Life to Maturity
    (in years)(2)......      26.41          9.36           5.83           5.14           6.27           5.25          4.62
Weighted Average
    Life to Optional
    Termination
    (in years)(2)(3)...      26.29          8.60           5.23           4.68           3.85           3.17          2.84


----------------
(1) Rounded to the nearest whole percentage.

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

(3)  Calculated pursuant to footnote (2) but assumes the Optional Termination is
     exercised on the earliest possible Distribution Date on which the Servicer
     is permitted to exercise such option.



                                     S-142





                                  Percent of Original Certificate Principal Balance Outstanding(1)

                                                              CLASS M2
                                                         PREPAYMENT SCENARIO

                          ----------------------------------------------------------------------------------------------------
                          SCENARIO I     SCENARIO II   SCENARIO III   SCENARIO IV     SCENARIO V    SCENARIO VI   SCENARIO VII
                          ----------     -----------   ------------   -----------     ----------    -----------   ------------
   DISTRIBUTION DATE

Initial Percentage.....       100%           100%           100%          100%            100%           100%          100%
February 25, 2006......       100            100            100           100             100            100           100
February 25, 2007......       100            100            100           100             100            100           100
February 25, 2008......       100            100            100           100             100            100            76
February 25, 2009......       100            100             62            47             100             25             8
February 25, 2010......       100             86             45            31              21              6             4
February 25, 2011......       100             71             33            21               7              3             0
February 25, 2012......       100             59             24            15               4              0             0
February 25, 2013......       100             49             18            10               0              0             0
February 25, 2014......       100             41             13             7               0              0             0
February 25, 2015......       100             34             10             5               0              0             0
February 25, 2016......       100             28              7             2               0              0             0
February 25, 2017......       100             23              6             0               0              0             0
February 25, 2018......       100             19              4             0               0              0             0
February 25, 2019......       100             16              1             0               0              0             0
February 25, 2020......       100             12              0             0               0              0             0
February 25, 2021......       100              9              0             0               0              0             0
February 25, 2022......       100              8              0             0               0              0             0
February 25, 2023......       100              6              0             0               0              0             0
February 25, 2024......       100              5              0             0               0              0             0
February 25, 2025......       100              4              0             0               0              0             0
February 25, 2026......       100              1              0             0               0              0             0
February 25, 2027......        99              0              0             0               0              0             0
February 25, 2028......        90              0              0             0               0              0             0
February 25, 2029......        80              0              0             0               0              0             0
February 25, 2030......        69              0              0             0               0              0             0
February 25, 2031......        57              0              0             0               0              0             0
February 25, 2032......        44              0              0             0               0              0             0
February 25, 2033......        29              0              0             0               0              0             0
February 25, 2034......        14              0              0             0               0              0             0
February 25, 2035......         0              0              0             0               0              0             0
Weighted Average
    Life to Maturity
    (in years)(2)......      26.41          9.33           5.79           5.00           4.89           3.99          3.39
Weighted Average
    Life to Optional
    Termination
    (in years)(2)(3)...      26.29          8.60           5.21           4.57           4.06           3.31          2.89


----------------
(1) Rounded to the nearest whole percentage.

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

(3)  Calculated pursuant to footnote (2) but assumes the Optional Termination is
     exercised on the earliest possible Distribution Date on which the Servicer
     is permitted to exercise such option.



                                     S-143





                                  PERCENT OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING(1)

                                                              CLASS M3
                                                         PREPAYMENT SCENARIO

                         -----------------------------------------------------------------------------------------------------------
                          SCENARIO I     SCENARIO II   SCENARIO III   SCENARIO IV     SCENARIO V    SCENARIO VI   SCENARIO VII
                          ----------     -----------   ------------   -----------     ----------    -----------   ------------
   DISTRIBUTION DATE

Initial Percentage.....       100%           100%           100%          100%            100%           100%          100%
February 25, 2006......       100            100            100           100             100            100           100
February 25, 2007......       100            100            100           100             100            100           100
February 25, 2008......       100            100            100           100             100            100            17
February 25, 2009......       100            100             62            47              46             12             8
February 25, 2010......       100             86             45            31              11              6             1
February 25, 2011......       100             71             33            21               7              0             0
February 25, 2012......       100             59             24            15               3              0             0
February 25, 2013......       100             49             18            10               0              0             0
February 25, 2014......       100             41             13             7               0              0             0
February 25, 2015......       100             34             10             5               0              0             0
February 25, 2016......       100             28              7             0               0              0             0
February 25, 2017......       100             23              6             0               0              0             0
February 25, 2018......       100             19              4             0               0              0             0
February 25, 2019......       100             16              0             0               0              0             0
February 25, 2020......       100             12              0             0               0              0             0
February 25, 2021......       100              9              0             0               0              0             0
February 25, 2022......       100              8              0             0               0              0             0
February 25, 2023......       100              6              0             0               0              0             0
February 25, 2024......       100              5              0             0               0              0             0
February 25, 2025......       100              3              0             0               0              0             0
February 25, 2026......       100              0              0             0               0              0             0
February 25, 2027......        99              0              0             0               0              0             0
February 25, 2028......        90              0              0             0               0              0             0
February 25, 2029......        80              0              0             0               0              0             0
February 25, 2030......        69              0              0             0               0              0             0
February 25, 2031......        57              0              0             0               0              0             0
February 25, 2032......        44              0              0             0               0              0             0
February 25, 2033......        29              0              0             0               0              0             0
February 25, 2034......        14              0              0             0               0              0             0
February 25, 2035......         0              0              0             0               0              0             0
Weighted Average
    Life to Maturity
    (in years)(2)......      26.41          9.31           5.75           4.93           4.34           3.55          3.07
Weighted Average
    Life to Optional
    Termination
    (in years)(2)(3)...      26.29          8.60           5.20           4.51           4.02           3.28          2.85


----------------
 (1) Rounded to the nearest whole percentage.

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

(3)  Calculated pursuant to footnote (2) but assumes the Optional Termination is
     exercised on the earliest possible Distribution Date on which the Servicer
     is permitted to exercise such option.



                                     S-144





                                  PERCENT OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING(1)

                                                              CLASS M4
                                                         PREPAYMENT SCENARIO

                         -----------------------------------------------------------------------------------------------------
                          SCENARIO I     SCENARIO II   SCENARIO III   SCENARIO IV     SCENARIO V    SCENARIO VI   SCENARIO VII
                          ----------     -----------   ------------   -----------     ----------    -----------   ------------
   DISTRIBUTION DATE

Initial Percentage.....       100%           100%           100%          100%            100%           100%          100%
February 25, 2006......       100            100            100           100             100            100           100
February 25, 2007......       100            100            100           100             100            100           100
February 25, 2008......       100            100            100           100             100             47            17
February 25, 2009......       100            100             62            47              19             12             8
February 25, 2010......       100             86             45            31              11              6             0
February 25, 2011......       100             71             33            21               7              0             0
February 25, 2012......       100             59             24            15               0              0             0
February 25, 2013......       100             49             18            10               0              0             0
February 25, 2014......       100             41             13             7               0              0             0
February 25, 2015......       100             34             10             3               0              0             0
February 25, 2016......       100             28              7             0               0              0             0
February 25, 2017......       100             23              6             0               0              0             0
February 25, 2018......       100             19              0             0               0              0             0
February 25, 2019......       100             16              0             0               0              0             0
February 25, 2020......       100             12              0             0               0              0             0
February 25, 2021......       100              9              0             0               0              0             0
February 25, 2022......       100              8              0             0               0              0             0
February 25, 2023......       100              6              0             0               0              0             0
February 25, 2024......       100              5              0             0               0              0             0
February 25, 2025......       100              0              0             0               0              0             0
February 25, 2026......       100              0              0             0               0              0             0
February 25, 2027......        99              0              0             0               0              0             0
February 25, 2028......        90              0              0             0               0              0             0
February 25, 2029......        80              0              0             0               0              0             0
February 25, 2030......        69              0              0             0               0              0             0
February 25, 2031......        57              0              0             0               0              0             0
February 25, 2032......        44              0              0             0               0              0             0
February 25, 2033......        29              0              0             0               0              0             0
February 25, 2034......        14              0              0             0               0              0             0
February 25, 2035......         0              0              0             0               0              0             0
Weighted Average
    Life to Maturity
    (in years)(2)......      26.40          9.28           5.72           4.88           4.09           3.35          2.92
Weighted Average
    Life to Optional
    Termination
    (in years)(2)(3)...      26.29          8.60           5.19           4.48           3.81           3.12          2.72


----------------
 (1) Rounded to the nearest whole percentage.

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

(3)  Calculated pursuant to footnote (2) but assumes the Optional Termination is
     exercised on the earliest possible Distribution Date on which the Servicer
     is permitted to exercise such option.


                                     S-145






                                  PERCENT OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING(1)

                                                              CLASS M5
                                                         PREPAYMENT SCENARIO

                          ----------------------------------------------------------------------------------------------------
                          SCENARIO I     SCENARIO II   SCENARIO III   SCENARIO IV     SCENARIO V    SCENARIO VI   SCENARIO VII
                          ----------     -----------   ------------   -----------     ----------    -----------   ------------
   DISTRIBUTION DATE

Initial Percentage.....       100%           100%           100%          100%            100%           100%          100%
February 25, 2006......       100            100            100           100             100            100           100
February 25, 2007......       100            100            100           100             100            100           100
February 25, 2008......       100            100            100           100             100             23            17
February 25, 2009......       100            100             62            47              19             12             8
February 25, 2010......       100             86             45            31              11              6             0
February 25, 2011......       100             71             33            21               7              0             0
February 25, 2012......       100             59             24            15               0              0             0
February 25, 2013......       100             49             18            10               0              0             0
February 25, 2014......       100             41             13             7               0              0             0
February 25, 2015......       100             34             10             0               0              0             0
February 25, 2016......       100             28              7             0               0              0             0
February 25, 2017......       100             23              4             0               0              0             0
February 25, 2018......       100             19              0             0               0              0             0
February 25, 2019......       100             16              0             0               0              0             0
February 25, 2020......       100             12              0             0               0              0             0
February 25, 2021......       100              9              0             0               0              0             0
February 25, 2022......       100              8              0             0               0              0             0
February 25, 2023......       100              6              0             0               0              0             0
February 25, 2024......       100              *              0             0               0              0             0
February 25, 2025......       100              0              0             0               0              0             0
February 25, 2026......       100              0              0             0               0              0             0
February 25, 2027......        99              0              0             0               0              0             0
February 25, 2028......        90              0              0             0               0              0             0
February 25, 2029......        80              0              0             0               0              0             0
February 25, 2030......        69              0              0             0               0              0             0
February 25, 2031......        57              0              0             0               0              0             0
February 25, 2032......        44              0              0             0               0              0             0
February 25, 2033......        29              0              0             0               0              0             0
February 25, 2034......        14              0              0             0               0              0             0
February 25, 2035......         0              0              0             0               0              0             0
Weighted Average
    Life to Maturity
    (in years)(2)......      26.40          9.24           5.68           4.83           3.92           3.22          2.80
Weighted Average
    Life to Optional
    Termination
    (in years)(2)(3)...      26.29          8.60           5.19           4.46           3.66           2.99          2.62


----------------
* Greater than zero but less than 0.5%.

(1)  Rounded to the nearest whole percentage.

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

(3)  Calculated pursuant to footnote (2) but assumes the Optional Termination is
     exercised on the earliest possible Distribution Date on which the Servicer
     is permitted to exercise such option.



                                     S-146






                                  PERCENT OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING(1)

                                                              CLASS M6
                                                         PREPAYMENT SCENARIO

                          ----------------------------------------------------------------------------------------------------
                          SCENARIO I     SCENARIO II   SCENARIO III   SCENARIO IV     SCENARIO V    SCENARIO VI   SCENARIO VII
                          ----------     -----------   ------------   -----------     ----------    -----------   ------------
   DISTRIBUTION DATE

Initial Percentage.....       100%           100%           100%          100%            100%           100%          100%
February 25, 2006......       100            100            100           100             100            100           100
February 25, 2007......       100            100            100           100             100            100           100
February 25, 2008......       100            100            100           100             100             23            17
February 25, 2009......       100            100             62            47              19             12             8
February 25, 2010......       100             86             45            31              11              2             0
February 25, 2011......       100             71             33            21               4              0             0
February 25, 2012......       100             59             24            15               0              0             0
February 25, 2013......       100             49             18            10               0              0             0
February 25, 2014......       100             41             13             5               0              0             0
February 25, 2015......       100             34             10             0               0              0             0
February 25, 2016......       100             28              7             0               0              0             0
February 25, 2017......       100             23              0             0               0              0             0
February 25, 2018......       100             19              0             0               0              0             0
February 25, 2019......       100             16              0             0               0              0             0
February 25, 2020......       100             12              0             0               0              0             0
February 25, 2021......       100              9              0             0               0              0             0
February 25, 2022......       100              8              0             0               0              0             0
February 25, 2023......       100              2              0             0               0              0             0
February 25, 2024......       100              0              0             0               0              0             0
February 25, 2025......       100              0              0             0               0              0             0
February 25, 2026......       100              0              0             0               0              0             0
February 25, 2027......        99              0              0             0               0              0             0
February 25, 2028......        90              0              0             0               0              0             0
February 25, 2029......        80              0              0             0               0              0             0
February 25, 2030......        69              0              0             0               0              0             0
February 25, 2031......        57              0              0             0               0              0             0
February 25, 2032......        44              0              0             0               0              0             0
February 25, 2033......        29              0              0             0               0              0             0
February 25, 2034......        14              0              0             0               0              0             0
February 25, 2035......         0              0              0             0               0              0             0
Weighted Average
    Life to Maturity
    (in years)(2)......      26.40          9.19           5.65           4.78           3.78           3.10          2.72
Weighted Average
    Life to Optional
    Termination
    (in years)(2)(3)...      26.29          8.60           5.19           4.43           3.53           2.90          2.55


----------------
(1)  Rounded to the nearest whole percentage.

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

(3)  Calculated pursuant to footnote (2) but assumes the Optional Termination is
     exercised on the earliest possible Distribution Date on which the Servicer
     is permitted to exercise such option.


                                     S-147




                          PERCENT OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING(1)

                                                                        CLASS M7
                                                                  PREPAYMENT SCENARIO

                          ----------------------------------------------------------------------------------------------------
                          SCENARIO I     SCENARIO II   SCENARIO III   SCENARIO IV     SCENARIO V    SCENARIO VI   SCENARIO VII
                          ----------     -----------   ------------   -----------     ----------    -----------   ------------
   DISTRIBUTION DATE

Initial Percentage.....       100%           100%           100%          100%            100%           100%          100%
February 25, 2006......       100            100            100           100             100            100           100
February 25, 2007......       100            100            100           100             100            100           100
February 25, 2008......       100            100            100           100             100             23            17
February 25, 2009......       100            100             62            47              19             12             2
February 25, 2010......       100             86             45            31              11              0             0
February 25, 2011......       100             71             33            21               0              0             0
February 25, 2012......       100             59             24            15               0              0             0
February 25, 2013......       100             49             18            10               0              0             0
February 25, 2014......       100             41             13             0               0              0             0
February 25, 2015......       100             34             10             0               0              0             0
February 25, 2016......       100             28              1             0               0              0             0
February 25, 2017......       100             23              0             0               0              0             0
February 25, 2018......       100             19              0             0               0              0             0
February 25, 2019......       100             16              0             0               0              0             0
February 25, 2020......       100             12              0             0               0              0             0
February 25, 2021......       100              9              0             0               0              0             0
February 25, 2022......       100              3              0             0               0              0             0
February 25, 2023......       100              0              0             0               0              0             0
February 25, 2024......       100              0              0             0               0              0             0
February 25, 2025......       100              0              0             0               0              0             0
February 25, 2026......       100              0              0             0               0              0             0
February 25, 2027......        99              0              0             0               0              0             0
February 25, 2028......        90              0              0             0               0              0             0
February 25, 2029......        80              0              0             0               0              0             0
February 25, 2030......        69              0              0             0               0              0             0
February 25, 2031......        57              0              0             0               0              0             0
February 25, 2032......        44              0              0             0               0              0             0
February 25, 2033......        29              0              0             0               0              0             0
February 25, 2034......        14              0              0             0               0              0             0
February 25, 2035......         0              0              0             0               0              0             0
Weighted Average
    Life to Maturity
    (in years)(2)......      26.39          9.12           5.59           4.72           3.67           3.01          2.65
Weighted Average
    Life to Optional
    Termination
    (in years)(2)(3)...      26.29          8.60           5.18           4.41           3.45           2.83          2.51


----------------
(1)  Rounded to the nearest whole percentage.

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

(3)  Calculated pursuant to footnote (2) but assumes the Optional Termination is
     exercised on the earliest possible Distribution Date on which the Servicer
     is permitted to exercise such option.



                                     S-148





                                  PERCENT OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING(1)

                                                              CLASS M8
                                                         PREPAYMENT SCENARIO

                          ----------------------------------------------------------------------------------------------------
                          SCENARIO I     SCENARIO II   SCENARIO III   SCENARIO IV     SCENARIO V    SCENARIO VI   SCENARIO VII
                          ----------     -----------   ------------   -----------     ----------    -----------   ------------
   DISTRIBUTION DATE

Initial Percentage.....       100%           100%           100%          100%            100%           100%          100%
February 25, 2006......       100            100            100           100             100            100           100
February 25, 2007......       100            100            100           100             100            100           100
February 25, 2008......       100            100            100           100             100             23            17
February 25, 2009......       100            100             62            47              19             12             0
February 25, 2010......       100             86             45            31              11              0             0
February 25, 2011......       100             71             33            21               0              0             0
February 25, 2012......       100             59             24            15               0              0             0
February 25, 2013......       100             49             18             6               0              0             0
February 25, 2014......       100             41             13             0               0              0             0
February 25, 2015......       100             34              6             0               0              0             0
February 25, 2016......       100             28              0             0               0              0             0
February 25, 2017......       100             23              0             0               0              0             0
February 25, 2018......       100             19              0             0               0              0             0
February 25, 2019......       100             16              0             0               0              0             0
February 25, 2020......       100             12              0             0               0              0             0
February 25, 2021......       100              3              0             0               0              0             0
February 25, 2022......       100              0              0             0               0              0             0
February 25, 2023......       100              0              0             0               0              0             0
February 25, 2024......       100              0              0             0               0              0             0
February 25, 2025......       100              0              0             0               0              0             0
February 25, 2026......       100              0              0             0               0              0             0
February 25, 2027......        99              0              0             0               0              0             0
February 25, 2028......        90              0              0             0               0              0             0
February 25, 2029......        80              0              0             0               0              0             0
February 25, 2030......        69              0              0             0               0              0             0
February 25, 2031......        57              0              0             0               0              0             0
February 25, 2032......        44              0              0             0               0              0             0
February 25, 2033......        29              0              0             0               0              0             0
February 25, 2034......        14              0              0             0               0              0             0
February 25, 2035......         0              0              0             0               0              0             0
Weighted Average
    Life to Maturity
    (in years)(2)......      26.38          9.03           5.52           4.66           3.57           2.93          2.59
Weighted Average
    Life to Optional
    Termination
    (in years)(2)(3)...      26.29          8.60           5.17           4.40           3.39           2.78          2.46


----------------
(1)  Rounded to the nearest whole percentage.

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

(3)  Calculated pursuant to footnote (2) but assumes the Optional Termination is
     exercised on the earliest possible Distribution Date on which the Servicer
     is permitted to exercise such option.



                                     S-149





                                  PERCENT OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING(1)

                                                              CLASS M9
                                                         PREPAYMENT SCENARIO

                          ----------------------------------------------------------------------------------------------------
                          SCENARIO I     SCENARIO II   SCENARIO III   SCENARIO IV     SCENARIO V    SCENARIO VI   SCENARIO VII
                          ----------     -----------   ------------   -----------     ----------    -----------   ------------
   DISTRIBUTION DATE

Initial Percentage.....       100%           100%           100%          100%            100%           100%          100%
February 25, 2006......       100            100            100           100             100            100           100
February 25, 2007......       100            100            100           100             100            100           100
February 25, 2008......       100            100            100           100              48             23            17
February 25, 2009......       100            100             62            47              19              3             0
February 25, 2010......       100             86             45            31               *              0             0
February 25, 2011......       100             71             33            21               0              0             0
February 25, 2012......       100             59             24            15               0              0             0
February 25, 2013......       100             49             18             0               0              0             0
February 25, 2014......       100             41             10             0               0              0             0
February 25, 2015......       100             34              0             0               0              0             0
February 25, 2016......       100             28              0             0               0              0             0
February 25, 2017......       100             23              0             0               0              0             0
February 25, 2018......       100             19              0             0               0              0             0
February 25, 2019......       100             16              0             0               0              0             0
February 25, 2020......       100              3              0             0               0              0             0
February 25, 2021......       100              0              0             0               0              0             0
February 25, 2022......       100              0              0             0               0              0             0
February 25, 2023......       100              0              0             0               0              0             0
February 25, 2024......       100              0              0             0               0              0             0
February 25, 2025......       100              0              0             0               0              0             0
February 25, 2026......       100              0              0             0               0              0             0
February 25, 2027......        99              0              0             0               0              0             0
February 25, 2028......        90              0              0             0               0              0             0
February 25, 2029......        80              0              0             0               0              0             0
February 25, 2030......        69              0              0             0               0              0             0
February 25, 2031......        57              0              0             0               0              0             0
February 25, 2032......        44              0              0             0               0              0             0
February 25, 2033......        29              0              0             0               0              0             0
February 25, 2034......        13              0              0             0               0              0             0
February 25, 2035......         0              0              0             0               0              0             0
Weighted Average
    Life to Maturity
    (in years)(2)......      26.36          8.92           5.43           4.59           3.46           2.86          2.52
Weighted Average
    Life to Optional
    Termination
    (in years)(2)(3)...      26.29          8.60           5.17           4.40           3.34           2.75          2.43


----------------
* Greater than zero but less than 0.5%.

(1)  Rounded to the nearest whole percentage.

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

(3)  Calculated pursuant to footnote (2) but assumes the Optional Termination is
     exercised on the earliest possible Distribution Date on which the Servicer
     is permitted to exercise such option.



                                     S-150





                                  PERCENT OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE OUTSTANDING(1)

                                                              CLASS M10
                                                         PREPAYMENT SCENARIO

                          ----------------------------------------------------------------------------------------------------
                          SCENARIO I     SCENARIO II   SCENARIO III   SCENARIO IV     SCENARIO V    SCENARIO VI   SCENARIO VII
                          ----------     -----------   ------------   -----------     ----------    -----------   ------------
   DISTRIBUTION DATE

Initial Percentage.....       100%           100%           100%          100%            100%           100%          100%
February 25, 2006......       100            100            100           100             100            100           100
February 25, 2007......       100            100            100           100             100            100           100
February 25, 2008......       100            100            100           100              35             23            11
February 25, 2009......       100            100             62            47              19              0             0
February 25, 2010......       100             86             45            31               0              0             0
February 25, 2011......       100             71             33            21               0              0             0
February 25, 2012......       100             59             24             1               0              0             0
February 25, 2013......       100             49             16             0               0              0             0
February 25, 2014......       100             41              0             0               0              0             0
February 25, 2015......       100             34              0             0               0              0             0
February 25, 2016......       100             28              0             0               0              0             0
February 25, 2017......       100             23              0             0               0              0             0
February 25, 2018......       100             19              0             0               0              0             0
February 25, 2019......       100              8              0             0               0              0             0
February 25, 2020......       100              0              0             0               0              0             0
February 25, 2021......       100              0              0             0               0              0             0
February 25, 2022......       100              0              0             0               0              0             0
February 25, 2023......       100              0              0             0               0              0             0
February 25, 2024......       100              0              0             0               0              0             0
February 25, 2025......       100              0              0             0               0              0             0
February 25, 2026......       100              0              0             0               0              0             0
February 25, 2027......        99              0              0             0               0              0             0
February 25, 2028......        90              0              0             0               0              0             0
February 25, 2029......        80              0              0             0               0              0             0
February 25, 2030......        69              0              0             0               0              0             0
February 25, 2031......        57              0              0             0               0              0             0
February 25, 2032......        44              0              0             0               0              0             0
February 25, 2033......        29              0              0             0               0              0             0
February 25, 2034......         0              0              0             0               0              0             0
February 25, 2035......         0              0              0             0               0              0             0
Weighted Average
    Life to Maturity
    (in years)(2)......      26.33          8.79           5.30           4.47           3.36           2.76          2.46
Weighted Average
    Life to Optional
    Termination
    (in years)(2)(3)...      26.29          8.59           5.17           4.38           3.30           2.70          2.41


----------------
(1)  Rounded to the nearest whole percentage.

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

(3)  Calculated pursuant to footnote (2) but assumes the Optional Termination is
     exercised on the earliest possible Distribution Date on which the Servicer
     is permitted to exercise such option.




                                     S-151




YIELD SENSITIVITY OF THE MEZZANINE CERTIFICATES

         With respect to each Class of Mezzanine Certificates, if the
Certificate Principal Balances of the Class or Classes of Mezzanine Certificates
having a higher numerical designation have each been reduced to zero, the yield
to maturity on that Class of Mezzanine Certificates will become extremely
sensitive to losses on the Mortgage Loans (and the timing thereof), because the
entire amount of any Realized Losses (to the extent not covered by Net Monthly
Excess Cashflow or overcollateralization) will be allocated to such Class of
Mezzanine Certificates. The initial undivided interests in the Trust evidenced
by the Mezzanine Certificates are as follows:

                    ------------------- -------------------
                                             PERCENTAGE
                           CLASS            (APPROXIMATE)
                    ------------------- -------------------
                            M1                4.05%
                    ------------------- -------------------
                            M2                3.10%
                    ------------------- -------------------
                            M3                1.90%
                    ------------------- -------------------
                            M4                1.70%
                    ------------------- -------------------
                            M5                1.60%
                    ------------------- -------------------
                            M6                1.55%
                    ------------------- -------------------
                            M7                1.25%
                    ------------------- -------------------
                            M8                1.10%
                    ------------------- -------------------
                            M9                1.05%
                    ------------------- -------------------
                           M10                0.80%
                    ------------------- -------------------
                           M11                1.20%
                    ------------------- -------------------


         Investors in the Mezzanine Certificates should fully consider the risk
that Realized Losses on the Mortgage Loans could result in the failure of such
investors to fully recover their investments. In addition, once Realized Losses
have been allocated to the Mezzanine Certificates, such amounts with respect to
such Mezzanine Certificates will no longer accrue interest and will not be
reinstated thereafter and no amounts in respect thereof will be distributed to
such Mezzanine Certificates unless Recoveries are received. However, Allocated
Realized Loss Amounts may be paid to the holders of the Mezzanine Certificates
from Net Monthly Excess Cashflow in the priorities set forth under "Description
of the Certificates --Overcollateralization Provisions" in this prospectus
supplement.

         Unless the aggregate Certificate Principal Balance of the Class A
Certificates has been reduced to zero, the Mezzanine Certificates will not be
entitled to any principal distributions until the Stepdown Date or during any
period in which a Trigger Event is in effect. As a result, the weighted average
lives of the Mezzanine Certificates will be longer than would otherwise be the
case if distributions of principal were allocated on a pro rata basis among the
Class A Certificates and the Mezzanine Certificates. As a result of the longer
weighted average lives of the Mezzanine Certificates, the holders of such
Mezzanine Certificates have a greater risk of suffering a loss on their
investments. Further, because a Trigger Event may occur as a result of
delinquencies and not losses on the Mortgage Loans, it is possible for the
Mezzanine Certificates to receive no principal distributions (unless the
aggregate Certificate Principal Balance of the Class A Certificates has been
reduced to zero) on and after the Stepdown Date even if no losses have occurred
on the Mortgage Pool.


                                 USE OF PROCEEDS

         The Depositor will apply the net proceeds of the sale of the Offered
Certificates against the purchase price of the Mortgage Loans transferred to the
Trust on the Closing Date.


                                     S-152


                         FEDERAL INCOME TAX CONSEQUENCES

         Multiple elections will be made to treat designated portions of the
Trust (exclusive of each Yield Maintenance Agreement and the Net WAC Reserve
Fund) as real estate mortgage investment conduits ("REMICs") for federal income
tax purposes. Upon the issuance of the Offered Certificates, McKee Nelson LLP,
special counsel to the Depositor, will deliver its opinion generally to the
effect that, assuming compliance with all provisions of the Pooling Agreement,
for federal income tax purposes, each REMIC elected by the Trust will qualify as
a REMIC under Sections 860A through 860G of the Internal Revenue Code of 1986
(the "Code").

         For federal income tax purposes, (i) the Residual Certificates will
consist of components, each of which will represent the sole class of "residual
interests" in a REMIC elected by the Trust and (ii) the LIBOR Certificates
(exclusive of any right of the holder of such LIBOR Certificates to receive any
payments from the Net WAC Reserve Fund in respect of the Net WAC Rate Carryover
Amount) and the Class X and the Class P Certificates will represent the "regular
interests" in, and generally will be treated as debt instruments of, a REMIC.

         Subject to the discussion under the caption "Potential Alternative
Treatment of Net WAC Rate Carryover Amounts," each holder of a LIBOR Certificate
will be deemed to own an undivided beneficial ownership interest in two assets,
a REMIC regular interest and the right to receive payments from the Net WAC
Reserve Fund in respect of the Net WAC Rate Carryover Amount. The Net WAC
Reserve Fund is not an asset of any REMIC. The treatment of amounts received by
a holder of a LIBOR Certificate under such certificateholder's right to receive
the Net WAC Rate Carryover Amount will depend on the portion, if any, of such
certificateholder's purchase price allocable thereto.

         Under the REMIC Regulations, each holder of a LIBOR Certificate must
allocate its purchase price for the LIBOR Certificate between its undivided
interest in the regular interest of the related REMIC and its undivided interest
in the right to receive payments from the Net WAC Reserve Fund in respect of the
Net WAC Rate Carryover Amount in accordance with the relative fair market values
of each property right. The OID Regulations provide that the Trust's allocation
of the issue price is binding on all holders unless the holder explicitly
discloses on its tax return that its allocation is different from the Trust's
allocation. For tax reporting purposes, the Trustee intends to treat the right
to receive payments from the Net WAC Reserve Fund in respect of Net WAC Rate
Carryover Amounts as having a nominal value. The right to receive Net WAC Rate
Carryover Amounts is difficult to value, and the Internal Revenue Service
("IRS") could assert that the value of such rights as of the closing date is
greater than the value used for information reporting purposes. Prospective
investors should consider the tax consequences to them if the IRS were to assert
a different value for the right to receive Net WAC Rate Carryover Amounts.

         Under the REMIC Regulations, the Trustee is required to account for the
REMIC regular interest and the right to receive payments from the Net WAC
Reserve Fund in respect of the Net WAC Rate Carryover Amount as discrete
property rights. The Trustee intends to treat payments made to the holders of
the LIBOR Certificates with respect to the Net WAC Rate Carryover Amount as
payments under a "notional principal contract," as defined in the notional
principal contracts regulations (the "Notional Principal Contract Regulations").
If the Trustee's treatment of payments of the Net WAC Rate Carryover Amount is
respected, ownership of the right to the Net WAC Rate Carryover Amount will
entitle the owner to amortize the separate price paid for the right to the Net
WAC Rate Carryover Amount under the Notional Principal Contract Regulations.

         If a holder of a LIBOR Certificate is an individual, amortization of
the price paid for the Net WAC Rate Carryover Amount may be treated as a
miscellaneous itemized deduction. In computing

                                     S-153


taxable income, an individual is allowed to deduct miscellaneous itemized
deductions only to the extent the sum of such deductions exceeds two percent of
the individual's adjusted gross income. Further, an individual is not allowed a
deduction for miscellaneous itemized deductions in computing alternative minimum
taxable income.

         Upon the sale of a LIBOR Certificate, the amount of the sale price
allocated to the selling certificateholder's right to receive payments from the
Net WAC Reserve Fund in respect of the Net WAC Rate Carryover Amount would be
considered a "termination payment" under the Notional Principal Contract
Regulations. A holder of a LIBOR Certificate will have gain or loss from such a
termination of the right to receive payments from the Net WAC Reserve Fund in
respect of the Net WAC Rate Carryover Amount equal to (i) any termination
payment it received or is deemed to have received minus (ii) the unamortized
portion of any amount paid (or deemed paid) by the certificateholder upon
entering into or acquiring its interest in the right to receive payments from
the Net WAC Reserve Fund in respect of the Net WAC Rate Carryover Amount.

         Gain or loss realized upon the termination of the right to receive
payments from the Net WAC Reserve Fund in respect of the Net WAC Rate Cap
Carryover Amount will generally be treated as capital gain or loss. Moreover, in
the case of a bank or thrift institution, Code Section 582(c) would likely not
apply to treat such gain or loss as ordinary.

         In addition, for federal income tax purposes, the Net WAC Reserve Fund
is an "outside reserve fund" that is beneficially owned by the holders of the
Class X Certificates. The rights of the holders of the LIBOR Certificates to
receive payments from the Net WAC Reserve Fund represent, for federal income tax
purposes, contractual rights that are separate from their regular interests
within the meaning of Treasury regulations Section 1.860G-2(i).

POTENTIAL ALTERNATIVE TREATMENT OF NET WAC RATE CARRYOVER AMOUNTS

         The right to receive Net WAC Rate Carryover Amounts may be treated as a
partnership between the holders of the LIBOR Certificates and the holders of the
Class X Certificates in respect of the Class X certificateholders' entitlement
to distributions from the upper-tier REMIC, in which case a holder of a LIBOR
Certificate will be subject to potentially different timing of income and a
foreign holder of a LIBOR Certificate may be subject to withholding in respect
of any Net WAC Carryover Amounts. Also, Treasury regulations have been
promulgated under Section 1275 of the Code generally providing for the
integration of a "qualifying debt instrument" with a hedge if the combined cash
flows of the components are substantially equivalent to the cash flows on a
variable rate debt instrument. However, such regulations specifically disallow
integration of debt instruments subject to Section 1272(a)(6) of the Code.
Therefore, a holder of a LIBOR Certificate will be unable to use the integration
method provided for under such regulations with respect to that certificate.

         Holders of the LIBOR Certificates are advised to consult their own tax
advisors regarding the allocation of issue price and the timing, character and
source of income and deductions resulting from the ownership of such
certificates.

ORIGINAL ISSUE DISCOUNT

         Subject to the discussion under the caption "Potential Alternative
Treatment of LIBOR Certificates for OID Purposes," for federal income tax
reporting purposes, certain classes of the LIBOR Certificates may, depending
upon their issue prices, not be treated as having been issued with original
issue discount. The holders of the LIBOR Certificates, however, will be required
to include in income interest on such LIBOR Certificates in accordance with the
accrual method of accounting.

                                     S-154


         The IRS has issued regulations (the "OID Regulations") under Sections
1271 to 1275 of the Code generally addressing the treatment of debt instruments
issued with original issue discount. Purchasers of the LIBOR Certificates should
be aware that the OID Regulations do not adequately address certain issues
relevant to, or are not applicable to, prepayable securities such as the LIBOR
Certificates. The rate at which OID will accrue (and be includible in income) on
any Class of LIBOR Certificates issued with OID, will have to be determined
based on an assumption regarding how fast the assets in the pool will pay-down
(the "prepayment assumption"). Under the legislative history accompanying
enactment of the OID provisions, the prepayment assumption used to price a debt
instrument (such as the LIBOR Certificates) should also be used to calculate OID
on the debt instrument, as well as the accrual of any market discount and the
amortization of premium. Accordingly, the Depositor intends to assume the LIBOR
Certificates will be retired based on an assumed prepayment scenario. No
representation is made that the LIBOR Certificates will be retired based on such
prepayment scenario or based on any other prepayment assumption.

POTENTIAL ALTERNATIVE TREATMENT OF LIBOR CERTIFICATES FOR OID PURPOSES

         In addition, there is considerable uncertainty concerning the
application of the OID Regulations to REMIC regular interests that provide for
payments based on an adjustable-rate such as the LIBOR Certificates. Because of
the uncertainty concerning the application of Section 1272(a)(6) of the Code to
such certificates and because the rules of the OID Regulations relating to debt
instruments having an adjustable-rate of interest are limited in their
application in ways that could preclude their application to such certificates
even in the absence of Section 1272(a)(6) of the Code, the IRS could assert that
the LIBOR Certificates should be treated as issued with original issue discount
or should be governed by the rules applicable to debt instruments having
contingent payments or by some other method not yet set forth in regulations.
Prospective purchasers of the Offered Certificates are advised to consult their
tax advisors concerning the tax treatment of such certificates.

         It appears that a reasonable method of reporting original issue
discount with respect to the LIBOR Certificates, if such certificates are
required to be treated as issued with original issue discount, generally would
be to report all income with respect to such certificates as original issue
discount for each period, computing such original issue discount (i) by assuming
that the value of the applicable index will remain constant for purposes of
determining the original yield to maturity of, and projecting future
distributions on such certificates, thereby treating such certificates as
fixed-rate instruments to which the original issue discount computation rules
described in the prospectus can be applied, and (ii) by accounting for any
positive or negative variation in the actual value of the applicable index in
any period from its assumed value as a current adjustment to original issue
discount with respect to such period.

PREMIUM INSTRUMENTS

         Certain of the certificates may be treated for federal income tax
purposes as having been issued at a premium. Whether any holder of a certificate
will be treated as holding such certificate with amortizable bond premium will
depend on such certificateholder's purchase price and the distributions
remaining to be made on such certificate at the time of its acquisition by such
certificateholder. Holders of such certificates should consult their own tax
advisors regarding the possibility of making an election to amortize such
premium.

TREATMENT OF LIBOR CERTIFICATES AS REAL ESTATE ASSETS

         With respect to the LIBOR Certificates, this paragraph is relevant to
such certificates exclusive of the rights of the holders of such certificates to
receive certain payments in respect of the Net WAC Rate Carryover Amount. The
LIBOR Certificates will represent "real estate assets" under Section

                                     S-155


856(c)(5)(B) of the Code and qualifying assets under Section 7701(a)(19)(C) in
the same proportion that the assets of the Trust would be so treated, and income
on the LIBOR Certificates will represent "interest on obligations secured by
mortgages on real property or on interests in real property" under Section
856(c)(3)(B) in the same proportion that the income on the assets of the Trust
would be so treated. Because the Net WAC Rate Carryover Amount is treated as a
separate right of the LIBOR Certificates not payable by any REMIC elected by the
Trust, such right will not be treated as a qualifying asset for any
certificateholder that is a mutual savings bank, domestic building and loan
association, real estate investment trust, or real estate mortgage investment
conduit and any amounts received from the Net WAC Reserve Fund will not be
qualifying real estate income for real estate investment trusts.

PROHIBITED TRANSACTIONS AND REMIC REPORTING

         It is not anticipated that any REMIC elected by the Trust will engage
in any transactions that would subject it to the prohibited transactions tax as
defined in Section 860F(a)(2) of the Code, the contributions tax as defined in
Section 860G(d) of the Code or the tax on net income from foreclosure property
as defined in Section 860G(c) of the Code. However, in the event that any such
tax is imposed on any REMIC elected by the Trust, such tax will be borne (i) by
the Trustee, if the Trustee has breached its obligations with respect to REMIC
compliance under the Pooling Agreement, (ii) by a Servicer, if that Servicer has
breached its obligations with respect to REMIC compliance under the Pooling
Agreement and (iii) otherwise by the Trust, with a resulting reduction in
amounts otherwise distributable to the holders of the LIBOR Certificates.

         The responsibility for filing annual federal information returns and
other reports will be borne by the Trustee.

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


                              ERISA CONSIDERATIONS

         A fiduciary of any employee benefit plan or other plan or arrangement
subject to ERISA or Section 4975 of the Code (a "Plan"), or any other person
investing plan assets of a Plan, including an insurance company, whether
investing through its general or separate accounts, should carefully review with
its legal advisors whether the purchase or holding of Offered Certificates could
give rise to a transaction prohibited or not otherwise permissible under ERISA
or Section 4975 of the Code. The purchase or holding of the Offered Certificates
by or on behalf of, or with plan assets of, a Plan may qualify for exemptive
relief under Credit Suisse First Boston LLC's Underwriter Exemption, as
described under "ERISA Considerations--ERISA Considerations Relating to
Certificates--Underwriter Exemption" in the prospectus. The Underwriter
Exemption relevant to the Offered Certificates was granted by the Department of
Labor as Prohibited Transaction Exemption ("PTE") 89-90, as amended by PTE
97-34, PTE 2000-58 and PTE 2002-41. The Underwriter Exemption permits Offered
Certificates, whether or not subordinated, to be purchased by Plans, provided
such certificates are backed by fully-secured mortgage loans and are rated at
least "BBB-" by S&P or Fitch or "Baa3" by Moody's at the time of their
acquisition. The Underwriter Exemption, as amended, contains a number of other
conditions which must be met for the exemption to apply as described in the
prospectus, including the requirement that the investing Plan must be an
"accredited investor" as defined in Rule 501(a)(1) of Regulation D of the
Securities and Exchange Commission under the Securities Act.

         The purchase or sale of an Offered Certificate by, on behalf of, or
with plan assets of any Plan may result in prohibited transactions or the
imposition of excise taxes or civil penalties if the rating of that class of
certificates has declined below the minimum rating permitted under the
Underwriter Exemption

                                     S-156


at the time of acquisition by a Plan (although a Plan holding an Offered
Certificate whose rating declines below the minimum permitted ratings would not
be required to dispose of it). For this reason, the Pooling Agreement provides
that transfers of Offered Certificates to a Plan, a trustee or other person
acting on behalf of any Plan or to any person using plan assets to effect such
acquisition will not be registered by the Trustee unless the purchaser thereof
provides the Trustee with a certification (which the purchaser of an Offered
Certificate in book-entry form will be deemed to have provided) substantially to
the effect that if an Offered Certificate is rated below "BBB-" by S&P or Fitch
or "Baa3" by Moody's at the time of acquisition, the source of funds used to
purchase such Certificates is an "insurance company general account" (as such
term is defined in PTCE 95-60), and the conditions of Sections I and III set
forth in PTCE 95-60 have been satisfied.

         Any fiduciary or other investor of plan assets that proposes to acquire
or hold the Offered Certificates on behalf of or with plan assets of any Plan
should consult with its counsel with respect to (i) whether the specific and
general conditions and the other requirements in the Underwriter Exemption would
be satisfied, or whether any other prohibited transaction exemption would apply,
and (ii) whether the general fiduciary responsibility provisions of ERISA and
the prohibited transaction provisions of ERISA and Section 4975 of the Internal
Revenue Code apply to the proposed investment. See "ERISA Considerations--ERISA
Considerations Relating to Certificates" in the prospectus.

         The sale of any of the Offered Certificates to a Plan is in no respect
a representation by the Depositor or the Underwriter that an investment in the
Offered Certificates meets all relevant legal requirements relating to
investments by Plans generally or any particular Plan, or that an investment in
the Offered Certificates is appropriate for Plans generally or any particular
Plan.


                         LEGAL INVESTMENT CONSIDERATIONS

         The Offered Certificates will not constitute "mortgage related
securities" for purposes of the Secondary Mortgage Market Enhancement Act of
1984, as amended because certain of the Mortgage Loans are secured by second
liens on the related Mortgage Property.

         The Depositor makes no representations as to the proper
characterization of any class of Offered Certificates for legal investment or
other purposes, or as to the ability of particular investors to purchase any
class of Offered Certificates under applicable legal investment restrictions.
These uncertainties may adversely affect the liquidity of any class of Offered
Certificates. Accordingly, all institutions whose investment activities are
subject to legal investment laws and regulations, regulatory capital
requirements or review by regulatory authorities should consult with their legal
advisors in determining whether and to what extent any class of Offered
Certificates constitutes a legal investment or is subject to investment, capital
or other restrictions.

         See "Legal Investment" in the prospectus.


                             METHOD OF DISTRIBUTION

         Subject to the terms and conditions set forth in the Underwriting
Agreement between the Depositor and Credit Suisse First Boston LLC (the
"Underwriter"), an affiliate of the Depositor and the Seller, the Depositor has
agreed to sell to the Underwriter, and the Underwriter has agreed to purchase
from the Depositor all of the Offered Certificates.

         Distribution of the Offered Certificates will be made by the
Underwriter from time to time in negotiated transactions or otherwise at varying
prices to be determined at the time of sale. The

                                     S-157


Underwriter may effect such transactions by selling Offered Certificates to or
through dealers and such dealers may receive from the Underwriter, for which
they act as agent, compensation in the form of underwriting discounts,
concessions or commissions. The Underwriter and any dealers that participate
with the Underwriter in the distribution of such Offered Certificates may be
deemed to be Underwriter, and any discounts, commissions or concessions received
by them, and any profits on resale of the classes of certificates purchased by
them, may be deemed to be underwriting discounts and commissions under the
Securities Act of 1933, as amended (the "Act"). Proceeds to the Depositor from
the sale of the Offered Certificates, before deducting expenses payable by the
Depositor, will be 99.75% of the aggregate Certificate Principal Balance of the
Offered Certificates.

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

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


                                  LEGAL MATTERS

         Certain legal matters with respect to the Offered Certificates will be
passed upon for the Depositor and the Underwriter by McKee Nelson LLP, New York,
New York.


                                     RATINGS

         It is a condition to the issuance of the LIBOR Certificates that they
be assigned ratings not lower than those indicated below by S&P, Moody's, Fitch
and Dominion Bond Rating Service, Inc. ("DBRS" and collectively with S&P,
Moody's and Fitch, the "Rating Agencies"):



----------------------------------------------------------------------------------------------------------------------
   CLASS OF
 CERTIFICATES                    S&P RATING           FITCH RATING          MOODY'S RATING           DBRS RATING
----------------------------------------------------------------------------------------------------------------------

Class A1 Certificates               AAA                    AAA                    Aaa                    AAA
----------------------------------------------------------------------------------------------------------------------
Class A2 Certificates               AAA                    AAA                    Aaa                    AAA
----------------------------------------------------------------------------------------------------------------------
Class A3 Certificates               AAA                    AAA                    Aaa                    AAA
----------------------------------------------------------------------------------------------------------------------
Class A4 Certificates               AAA                    AAA                    Aaa                    AAA
----------------------------------------------------------------------------------------------------------------------
Class A5 Certificates               AAA                    AAA                    Aaa                    AAA
----------------------------------------------------------------------------------------------------------------------
Class A6 Certificates               AAA                    AAA                    Aaa                    AAA
----------------------------------------------------------------------------------------------------------------------
Class M1 Certificates               AA+                    AA+                    Aa1                 AA (high)
----------------------------------------------------------------------------------------------------------------------
Class M2 Certificates                AA                    AA                     Aa2                    AA
----------------------------------------------------------------------------------------------------------------------
Class M3 Certificates               AA-                    AA-                    Aa3                 AA (low)
----------------------------------------------------------------------------------------------------------------------
Class M4 Certificates                A+                    A+                     A1                  A (high)
----------------------------------------------------------------------------------------------------------------------
Class M5 Certificates                A                      A                     A2                      A
----------------------------------------------------------------------------------------------------------------------
Class M6 Certificates                A-                    A-                     A3                   A (low)
----------------------------------------------------------------------------------------------------------------------
Class M7 Certificates               BBB+                  BBB+                   Baa1                 BBB (high)
----------------------------------------------------------------------------------------------------------------------
Class M8 Certificates               BBB                    BBB                   Baa2                    BBB
----------------------------------------------------------------------------------------------------------------------
Class M9 Certificates               BBB-                  BBB-                   Baa3                  BBB (low)
----------------------------------------------------------------------------------------------------------------------
Class M10 Certificates              BBB-                  BBB-                 Not Rated               BBB (low)
----------------------------------------------------------------------------------------------------------------------
Class M11 Certificates              BB+                    BB+                 Not Rated               BB (high)
----------------------------------------------------------------------------------------------------------------------


                                     S-158


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

         The Depositor has not engaged any rating agency other than the Rating
Agencies to provide ratings on the LIBOR Certificates. However, there can be no
assurance as to whether any other rating agency will rate the LIBOR
Certificates, or, if it does, what rating would be assigned by any such other
rating agency. Any rating on the LIBOR Certificates by another rating agency, if
assigned at all, may be lower than the ratings assigned to the LIBOR
Certificates by the Rating Agencies.

         A security rating is not a recommendation to buy, sell or hold
securities and may be subject to revision or withdrawal at any time by the
assigning rating organization. Each security rating should be evaluated
independently of any other security rating. In the event that the ratings
initially assigned to any of the LIBOR Certificates by the Rating Agencies are
subsequently lowered for any reason, no person or entity is obligated to provide
any additional support or credit enhancement with respect to such LIBOR
Certificates.



                                     S-159


                             INDEX OF DEFINED TERMS


30 days Delinquent...............................S-97
60 days Delinquent...............................S-97
90 days Delinquent...............................S-97
accredited investor.............................S-156
Accrual Period...................................S-93
Act.............................................S-158
Adjustable-rate PPC.............................S-129
Adjustment Date..................................S-25
Advance.........................................S-121
Aggregate Strip Amount...........................S-93
Allocated Realized Loss Amount...................S-93
Assumed Final Distribution Date..................S-88
Available Funds.................................S-102
Balloon Loan.....................................S-25
Basic Principal Distribution Amount..............S-93
beneficial owner.................................S-89
Book-Entry Certificates..........................S-88
Cap Default.....................................S-115
Cap Early Termination...........................S-116
Certificate Index...............................S-112
Certificate Margin..............................S-112
Certificate Owner................................S-88
Certificate Principal Balance....................S-93
Class A Certificates.............................S-88
Class A Principal Distribution Amount............S-93
Class M1 Principal Distribution Amount...........S-93
Class M10 Principal Distribution Amount..........S-96
Class M11 Principal Distribution Amount..........S-97
Class M2 Principal Distribution Amount...........S-94
Class M3 Principal Distribution Amount...........S-94
Class M4 Principal Distribution Amount...........S-94
Class M5 Principal Distribution Amount...........S-94
Class M6 Principal Distribution Amount...........S-95
Class M7 Principal Distribution Amount...........S-95
Class M8 Principal Distribution Amount...........S-95
Class M9 Principal Distribution Amount...........S-96
Clearstream......................................S-88
Clearstream International........................S-90
Clearstream Participants.........................S-90
Closing Date.....................................S-23
Code............................................S-153
Collection Account..............................S-120
Commission......................................S-128
Compensating Interest...........................S-122
Counterparty....................................S-114
Counterparty Rating Agency Downgrade............S-116
CPR.............................................S-129
Credit Enhancement Percentage....................S-97
CSFBi...........................................S-114
Cut-off Date.....................................S-23
Cut-off Date Pool Principal Balance..............S-23
Cut-off Date Principal Balance...................S-23
DBRS............................................S-158
Debt Ratio.......................................S-77
Definitive Certificate...........................S-89
Deleted Mortgage Loan...........................S-119
Delinquent.......................................S-97
Determination Date..............................S-122
Distribution Account............................S-120
Distribution Date................................S-88
DTC..............................................S-88
Due Date.........................................S-23
Due Period.......................................S-97
Euroclear........................................S-88
Euroclear Clearance System.......................S-91
Euroclear Operator...............................S-91
Euroclear Participants...........................S-91
European Depositaries............................S-89
Events of Default...............................S-115
Financial Intermediary...........................S-89
Fitch...........................................S-115
Fixed-rate PPC..................................S-129
Formula Rate....................................S-112
Global Securities.................................I-1
Gross Margin.....................................S-25
Index............................................S-71
Initial Periodic Rate Cap........................S-25
Interest Only Mortgage Loans.....................S-26
Interest Remittance Amount.......................S-98
IRS.............................................S-153
LIBOR...........................................S-117
LIBOR Business Day..............................S-117
LIBOR Certificates...............................S-88
LIBOR Determination Date........................S-117
Liquidated Mortgage Loan........................S-100
Loan Rate........................................S-25
LTV..............................................S-26
Maximum Loan Rate................................S-25
Mezzanine Certificates...........................S-88
Minimum Loan Rate................................S-25
Monthly Interest Distributable Amount............S-98
Moody's.........................................S-115
Mortgage.........................................S-25
Mortgage Loan Documents.........................S-118
Mortgage Loan Purchase Agreements................S-24
Mortgage Loan Schedule..........................S-118

                                     S-160


Mortgage Loans...................................S-23
Mortgage Pool....................................S-23
Mortgaged Property...............................S-25
NC Capital.......................................S-23
Net Liquidation Proceeds........................S-100
Net Monthly Excess Cashflow......................S-98
Net Prepayment Interest Shortfall...............S-122
Net WAC Rate....................................S-111
Net WAC Rate Carryover Amount...................S-111
Net WAC Reserve Fund............................S-112
New Century......................................S-23
New Century Entities.............................S-23
New Century Mortgage Loan Purchase Agreement.....S-24
New Century Mortgage Loans.......................S-23
New Century Reconstitution Agreement.............S-24
New Century Underwriting Guidelines..............S-72
NOD..............................................S-80
Notional Principal Contract Regulations.........S-153
Offered Certificates.............................S-88
Offered Mezzanine Certificates...................S-88
OID Regulations.................................S-155
One-Month LIBOR Index............................S-71
Optional Termination Date.......................S-125
Original Certificate Principal Balance...........S-93
Originator.......................................S-23
Originators......................................S-24
Overcollateralization Amount.....................S-98
Overcollateralization Deficiency Amount..........S-98
Overcollateralization Increase Amount............S-98
Overcollateralization Release Amount.............S-98
Overcollateralization Target Amount..............S-98
Pass-Through Rate...............................S-110
Percentage Interest..............................S-98
Periodic Rate Cap................................S-25
Physical Certificates............................S-88
Plan............................................S-156
Pool Balance.....................................S-23
Pooling Agreement................................S-24
prepayment assumption...........................S-155
Prepayment Assumption...........................S-129
Prepayment Interest Shortfall...................S-122
Prepayment Period................................S-98
Prepayment Scenarios............................S-130
Principal Balance................................S-23
Principal Distribution Amount....................S-99
Principal Remittance Amount......................S-99
PTE.............................................S-156
Purchase Price..................................S-119
Qualified Substitute Mortgage Loan..............S-119
qualifying debt instrument......................S-154
Rating Agencies.................................S-158
real estate assets..............................S-155
Realized Loss...................................S-100
Reconstitution Agreements........................S-24
Record Date......................................S-88
Recovery........................................S-100
Reference Banks.................................S-117
REIT.............................................S-87
Relevant Depositary..............................S-89
Relief Act.......................................S-17
Relief Act Interest Shortfalls...................S-17
REMICs..........................................S-153
Reserve Interest Rate...........................S-117
Residual Certificates............................S-88
residual interests..............................S-153
Rules............................................S-89
S&P.............................................S-115
Saxon............................................S-84
Saxon REIT.......................................S-87
Scheduled Notional Amount.......................S-114
Senior Certificates..............................S-88
Servicer.........................................S-84
Servicer Remittance Date........................S-122
Servicing Advance...............................S-121
Servicing Fee...................................S-122
Servicing Fee Rate..............................S-122
Six-Month LIBOR Index............................S-71
Stepdown Date...................................S-100
Strip Amount....................................S-100
Structuring Assumptions.........................S-130
Subgroup 1.......................................S-23
Subgroup 1 Interest Remittance Amount...........S-100
Subgroup 1 Net WAC Rate.........................S-111
Subgroup 1 Percentage...........................S-100
Subgroup 1 Principal Distribution Amount........S-100
Subgroup 1 Principal Remittance Amount..........S-100
Subgroup 1 Strip Amount.........................S-100
Subgroup 1 Yield Maintenance Agreement..........S-114
Subgroup 2.......................................S-23
Subgroup 2 Interest Remittance Amount...........S-100
Subgroup 2 Net WAC Rate.........................S-111
Subgroup 2 Percentage...........................S-101
Subgroup 2 Principal Distribution Amount........S-101
Subgroup 2 Principal Remittance Amount..........S-101
Subgroup 2 Strip Amount.........................S-101
Subgroup 2 Yield Maintenance Agreement..........S-114
Subgroup Subordinate Amount.....................S-111
Subordinate Certificates.........................S-88
Subordinate Net WAC Rate........................S-111

                                     S-161


Subordinate Strip Amount........................S-101
Subordinate Yield Maintenance Agreement.........S-114
Substitution Adjustment.........................S-119
Telerate Page 3750..............................S-117
Termination Events..............................S-115
termination payment.............................S-154
Termination Price...............................S-125
Terms and Conditions.............................S-91
Trigger Event...................................S-101
Trust............................................S-23
U.S. Person.......................................I-4
Underwriter.....................................S-157
Unpaid Interest Shortfall Amount................S-101
WMC..............................................S-23
WMC Guidelines...................................S-77
WMC Mortgage Loan Purchase Agreement.............S-24
WMC Mortgage Loans...............................S-24
WMC Reconstitution Agreement.....................S-24
Yield Maintenance Agreements....................S-114






                                     S-162


                                     ANNEX I

                        GLOBAL CLEARANCE, SETTLEMENT AND
                          TAX DOCUMENTATION PROCEDURES

         Except in certain limited circumstances, the Offered Certificates will
be offered globally (the "Global Securities") and will be available only in
book-entry form. Investors in the Global Securities may hold such Global
Securities through any of DTC, Clearstream or Euroclear. The Global Securities
will be tradable as home market instruments in both the European and U.S.
domestic markets. Initial settlement and all secondary trades will settle in
same-day funds.

         Secondary market trading between investors holding Global Securities
through Clearstream and Euroclear will be conducted in the ordinary way in
accordance with their normal rules and operating procedures and in accordance
with conventional eurobond practice (i.e., seven calendar day settlement).

         Secondary market trading between investors holding Global Securities
through DTC will be conducted according to the rules and procedures applicable
to U.S. corporate debt obligations.

         Secondary cross-market trading between Clearstream or Euroclear and DTC
Participants holding Certificates will be effected on a delivery-against-payment
basis through the respective Depositaries of Clearstream and Euroclear (in such
capacity) and as DTC Participants.

         Non-U.S. holders (as described below) of Global Securities will be
Subject to U.S. withholding taxes unless such holders meet certain requirements
and deliver appropriate U.S. tax documents to the securities clearing
organizations or their participants.

INITIAL SETTLEMENT

         All Global Securities will be held in book-entry form by DTC in the
name of Cede & Co. as nominee of DTC. Investors' interests in the Global
Securities will be represented through financial institutions acting on their
behalf as direct and indirect Participants in DTC. As a result, Clearstream and
Euroclear will hold positions on behalf of their participants through their
respective Depositaries, which in turn will hold such positions in accounts as
DTC Participants.

         Investors electing to hold their Global Securities through DTC will
follow the settlement practices applicable to conventional eurobonds, except
that there will be no temporary global Security and no "lock-up" or restricted
period. Investor securities custody accounts will be credited with their
holdings against payment in same-day funds on the settlement date.

         Investors electing to hold their Global Securities through Clearstream
or Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global security
and no "lock-up" or restricted period. Global Securities will be credited to the
securities custody accounts on the settlement date against payment in same-day
funds.

SECONDARY MARKET TRADING

         Since the purchaser determines the place of delivery, it is important
to establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.

                                      I-1


         Trading between DTC Participants. Secondary market trading between DTC
Participants will be settled using the procedures applicable to prior mortgage
loan asset-backed certificates issues in same-day funds.

         Trading between Clearstream and/or Euroclear Participants. Secondary
market trading between Clearstream Participants or Euroclear Participants will
be settled using the procedures applicable to conventional eurobonds in same-day
funds.

         Trading between DTC Seller and Clearstream or Euroclear purchaser. When
Global Securities are to be transferred from the account of a DTC Participant to
the account of a Clearstream Participant or a Euroclear Participant, the
purchaser will send instructions to Clearstream or Euroclear through a
Clearstream Participant or Euroclear Participant at least one business day prior
to settlement. Clearstream or Euroclear will instruct the respective Depositary,
as the case may be, to receive the Global Securities against payment. Payment
will include interest accrued on the Global Securities from and including the
last coupon payment date to and excluding the settlement date, on the basis of
the actual number of days in such accrual period, and a year assumed to consist
of 360 days. For transactions settling on the 31st of the month, payment will
include interest accrued to and excluding the first day of the following month.
Payment will then be made by the respective Depositary of the DTC Participant's
account against delivery of the Global Securities. After settlement has been
completed, the Global Securities will be credited to the respective clearing
system and by the clearing system, in accordance with its usual procedures, to
the Clearstream Participant's or Euroclear Participant's account. The Securities
credit will appear the next day (European time) and the cash debt will be
back-valued to, and the interest on the Global Securities will accrue from, the
value date (which would be the preceding day when settlement occurred in New
York). If settlement is not completed on the intended value date (i.e., the
trade fails), the Clearstream or Euroclear cash debt will be valued instead as
of the actual settlement date.

         Clearstream Participants and Euroclear Participants will need to make
available to the respective clearing systems the funds necessary to process
same-day funds settlement. The most direct means of doing so is to preposition
funds for settlement, either from cash on hand or existing lines of credit, as
they would for any settlement occurring within Clearstream or Euroclear. Under
this approach, they may take on credit exposure to Clearstream or Euroclear
until the Global Securities are credited to their accounts one day later.

         As an alternative, if Clearstream or Euroclear has extended at line of
credit to them, Clearstream Participants or Euroclear Participants can elect not
to preposition funds and allow that credit line to be drawn upon the finance
settlement. Under this procedure, Clearstream Participants or Euroclear
Participants purchasing Global Securities would incur overdraft charges for one
day, assuming they cleared the overdraft when the Global Securities were
credited to their accounts. However, interest on the Global Securities would
accrue from the value date. Therefore, in many cases the investment income on
the Global Securities earned during that one-day period may substantially reduce
or offset the amount of such overdraft charges, although this result will depend
on each Clearstream Participant's or Euroclear Participant's particular cost of
funds.

         Since the settlement is taking place during New York business hours,
DTC Participants can employ their usual procedures for sending Global Securities
to the respective European Depositary for the benefit of Clearstream
Participants or Euroclear Participants. The sale proceeds will be available to
the DTC seller on the settlement date. Thus, to the DTC Participants a
cross-market transaction will settle no differently than a trade between two DTC
Participants.

                                      I-2


         Trading between Clearstream or Euroclear Seller and DTC Purchaser. Due
to time zone differences in their favor, Clearstream Participants and Euroclear
Participants may employ their customary procedures for transactions in which
Global Securities are to be transferred by the respective clearing system,
through the respective Depositary, to a DTC Participant. The seller will send
instructions to Clearstream or Euroclear through a Clearstream Participant or
Euroclear Participant at least one business day prior to settlement. In these
cases Clearstream or Euroclear will instruct the respective Depositary, as
appropriate, to deliver the Global Securities to the DTC Participant's account
against payment. Payment will include interest accrued on the Global Securities
from and including the last Coupon payment to and excluding the settlement date
on the basis of the actual number of days in such accrual period and a year
assumed to consist of 360 days. For transactions settling on the 31st of the
month, payment will include interest accrued to and excluding the first day of
the following month. The payment will then be reflected in the account of the
Clearstream Participant or Euroclear Participant the following day, and receipt
of the cash proceeds in the Clearstream Participant's or Euroclear Participant's
account would be back-valued to the value date (which would be the preceding
day, when settlement occurred in New York). Should the Clearstream Participant
or Euroclear Participant have a line of credit with its respective clearing
system and elect to be in debt in anticipation of receipt of the sale proceeds
in its account, the back-valuation will extinguish any overdraft incurred over
that one-day period. If settlement is not completed on the intended value date
(i.e., the trade fails), receipt of the cash proceeds in the Clearstream
Participant's or Euroclear Participant's account would instead be valued as of
the actual settlement date.

         Finally, day traders that use Clearstream or Euroclear and that
purchase Global Securities from DTC Participants for delivery to Clearstream
Participants or Euroclear Participants should note that these trades would
automatically fail on the sale side unless affirmative action were taken. At
least three techniques should be readily available to eliminate this potential
problem:

                  a. borrowing through Clearstream or Euroclear for one day
                  (until the purchase side of the day trade is reflected in
                  their Clearstream or Euroclear accounts) in accordance with
                  the clearing System's Customary procedures;

                  b. borrowing the Global Securities in the U.S. from a DTC
                  Participant no later than one day prior to settlement, which
                  would give the Global Securities sufficient time to be
                  reflected in their Clearstream or Euroclear account in order
                  to settle the sale side of the trade; or

                  c. staggering the value dates for the buy and sell sides of
                  the trade so that the value date for the purchase from the DTC
                  Participant is at least one day prior to the value date for
                  the sale to the Clearstream Participant or Euroclear
                  Participant.

CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS

         A beneficial owner of Global Securities holding Securities through
Clearstream or Euroclear (or through DTC if the holder has an address outside
the U.S.) will be subject to the 30% U.S. back-up withholding tax that generally
applies to payments of interest (including original issue discount) on
registered debt issued by U.S. Persons, unless (i) each clearing system, bank or
other financial institution that holds customers' securities in the ordinary
course of its trade or business in the chain of intermediaries between such
beneficial owner and the U.S. entity required to withhold tax complies with
applicable certification requirements and (ii) such beneficial owner takes one
of the following steps to obtain an exemption or reduced tax rate:

                                      I-3


         Exemption for non-U.S. Persons (Form W-8BEN). Beneficial owners of
Global Securities that are non-U.S. Persons, either individuals or entities
treated as corporations, can obtain a complete exemption from the withholding
tax by filing a signed Form W-8BEN (Certificate of Foreign Status of Beneficial
Owner for United States Tax Withholding). Non-U.S. Persons that are Certificate
Owners residing in a country that has a tax treaty with the United States can
obtain an exemption or reduced tax rate (depending on the treaty terms) by
filing Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United
States Tax Withholding). If the information shown on Form W-8BEN changes, a new
Form W-8BEN must be filed within 30 days of such change.

         Exemption for non-U.S. Persons with effectively connected income (Form
W-8ECI). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S.
branch, for which the interest income is effectively connected with its conduct
of a trade or business in the United States, can obtain an exemption from the
withholding tax by filing Form W-8ECI (Certificate of Foreign Person's Claim for
Exemption from Withholding on Income Effectively Connected with the Conduct of a
Trade or Business in the United States).

         Exemptions for U.S. Persons (Form W-9). U.S. Persons can obtain a
complete exemption from the withholding tax by filing Form W-9 (Payer's Request
for Taxpayer Identification Number and Certification),

         U.S. Federal Income Tax Reporting Procedure. The Certificate Owner of a
Global Security files by submitting the appropriate form to the person through
whom it holds (the clearing agency, in the case of persons holding directly on
the books of the clearing agency). Form W-8BEN and Form W-8ECI are effective
until the third succeeding calendar year from the date such form is signed.

         The term "U.S. Person" means (i) a citizen or resident of the United
States, (ii) a corporation, partnership or other entity treated as a corporation
or partnership for United States federal income tax purposes organized in or
under the laws of the United States or any state thereof or the District of
Columbia (unless, in the case of a partnership, Treasury regulations provide
otherwise) or (iii) an estate the income of which is includible in gross income
for United States tax purposes, regardless of its source, or (iv) a trust if a
court within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have authority
to control all substantial decisions of the trust. Notwithstanding the preceding
sentence, to the extent provided in Treasury regulations, certain trusts in
existence on August 20, 1996, and treated as United States persons prior to such
date, that elect to continue to be treated as United States persons will also be
a U.S. Person. This summary does not deal with all aspects of U.S. Federal
incoI-4 me tax withholding that may be relevant to foreign holders of the Global
Securities. Investors are advised to consult their own tax advisors for specific
tax advice concerning their holding and disposing of the Global Securities.

                                      I-4


                                    ANNEX II

                      YIELD MAINTENANCE AGREEMENT SCHEDULES

                 SUBGROUP I YIELD MAINTENANCE AGREEMENT SCHEDULE



----------------------------------------------------------------------------------------------
                                                      SCHEDULED
                                                      NOTIONAL
               DISTRIBUTION DATE                      AMOUNT ($)          STRIKE RATE (%)
----------------------------------------------------------------------------------------------

April 2005......................................      485,851,390              6.28
May 2005........................................      479,760,037              6.37
June 2005.......................................      472,532,484              6.28
July 2005.......................................      464,181,950              6.37
August 2005.....................................      454,728,095              6.29
September 2005..................................      444,196,929              6.29
October 2005....................................      432,620,976              6.37
November 2005...................................      420,039,180              6.29
December 2005...................................      406,496,797              6.37
January 2006....................................      392,052,911              6.29
February 2006...................................      377,997,753              6.29
March 2006......................................      364,320,834              6.60
April 2006......................................      351,011,984              6.29
May 2006........................................      338,061,308              6.37
June 2006.......................................      325,459,175              6.29
July 2006.......................................      313,196,216              6.37
August 2006.....................................      301,263,330              6.29
September 2006..................................      289,651,624              6.29
October 2006....................................      278,352,461              6.37
November 2006...................................      267,357,438              6.29
December 2006...................................      256,658,379              6.37
January 2007....................................      246,239,194              7.53
February 2007...................................      224,424,373              7.52
March 2007......................................      203,967,422              8.10
April 2007......................................      184,781,559              7.51
May 2007........................................      166,790,432              7.66
June 2007.......................................      156,894,794              7.50
July 2007.......................................      147,336,490              8.63
August 2007.....................................      138,111,954              8.40
September 2007..................................      129,201,294              8.40
October 2007....................................      120,593,680              8.64
November 2007...................................      112,278,659              8.41
December 2007...................................      104,246,142              8.63
January 2008....................................       96,486,392              9.35
February 2008...................................       88,991,755              9.35
March 2008......................................       81,751,292              9.96
April 2008......................................       81,751,292              9.33
May 2008........................................       81,751,292              9.61
June 2008.......................................       81,751,292              9.31
----------------------------------------------------------------------------------------------



                                      II-1


                SUBGROUP II YIELD MAINTENANCE AGREEMENT SCHEDULE



----------------------------------------------------------------------------------------------
                                                      SCHEDULED
                                                      NOTIONAL
               DISTRIBUTION DATE                      AMOUNT ($)          STRIKE RATE (%)
----------------------------------------------------------------------------------------------

April 2005......................................      407,901,617              6.56
May 2005........................................      402,916,008              6.69
June 2005.......................................      396,990,196              6.58
July 2005.......................................      390,134,654              6.70
August 2005.....................................      382,365,072              6.58
September 2005..................................      373,702,418              6.58
October 2005....................................      364,172,942              6.70
November 2005...................................      353,808,149              6.59
December 2005...................................      342,644,712              6.71
January 2006....................................      330,760,934              6.59
February 2006...................................      319,190,204              6.59
March 2006......................................      307,924,951              7.03
April 2006......................................      296,957,089              6.60
May 2006........................................      286,278,748              6.72
June 2006.......................................      275,882,264              6.60
July 2006.......................................      265,760,180              6.73
August 2006.....................................      255,905,233              6.61
September 2006..................................      246,310,357              6.61
October 2006....................................      236,968,670              6.73
November 2006...................................      227,873,475              6.62
December 2006...................................      219,018,250              6.74
January 2007....................................      210,020,779              7.81
February 2007...................................      192,514,032              7.82
March 2007......................................      176,064,454              8.54
April 2007......................................      160,612,738              7.83
May 2007........................................      146,320,167              8.04
June 2007.......................................      138,104,875              7.85
July 2007.......................................      130,167,181              8.88
August 2007.....................................      122,501,264              8.62
September 2007..................................      115,089,239              8.62
October 2007....................................      107,922,504              8.91
November 2007...................................      100,992,757              8.65
December 2007...................................       94,291,978              8.91
January 2008....................................       87,812,410              9.45
February 2008...................................       81,545,896              9.45
March 2008......................................       75,485,983              9.50
April 2008......................................       75,485,983              9.44
May 2008........................................       75,485,983              9.50
June 2008.......................................       75,485,983              9.43
----------------------------------------------------------------------------------------------


                                      II-2



                SUBORDINATE YIELD MAINTENANCE AGREEMENT SCHEDULE



----------------------------------------------------------------------------------------------
                                                      SCHEDULED
                                                      NOTIONAL
               DISTRIBUTION DATE                      AMOUNT ($)          STRIKE RATE (%)
----------------------------------------------------------------------------------------------

April 2005......................................      219,987,000              6.35
May 2005........................................      219,987,000              6.47
June 2005.......................................      219,987,000              6.36
July 2005.......................................      219,987,000              6.47
August 2005.....................................      219,987,000              6.37
September 2005..................................      219,987,000              6.37
October 2005....................................      219,987,000              6.47
November 2005...................................      219,987,000              6.37
December 2005...................................      219,987,000              6.47
January 2006....................................      219,987,000              6.37
February 2006...................................      219,987,000              6.37
March 2006......................................      219,987,000              6.76
April 2006......................................      219,987,000              6.37
May 2006........................................      219,987,000              6.48
June 2006.......................................      219,987,000              6.38
July 2006.......................................      219,987,000              6.48
August 2006.....................................      219,987,000              6.38
September 2006..................................      219,987,000              6.38
October 2006....................................      219,987,000              6.49
November 2006...................................      219,987,000              6.38
December 2006...................................      219,987,000              6.49
January 2007....................................      219,987,000              7.60
February 2007...................................      219,987,000              7.60
March 2007......................................      219,987,000              8.26
April 2007......................................      219,987,000              7.60
May 2007........................................      219,987,000              7.79
June 2007.......................................      219,987,000              7.60
July 2007.......................................      219,987,000              8.70
August 2007.....................................      219,987,000              8.45
September 2007..................................      219,987,000              8.45
October 2007....................................      219,987,000              8.76
November 2007...................................      219,987,000              8.51
December 2007...................................      219,987,000              8.75
January 2008....................................      219,987,000              9.39
February 2008...................................      219,987,000              9.38
March 2008......................................      219,987,000              9.50
April 2008......................................      212,785,038              9.37
May 2008........................................      200,732,283              9.50
June 2008.......................................      189,082,257              9.36
----------------------------------------------------------------------------------------------






                                      II-3


PROSPECTUS

                       ASSET BACKED SECURITIES CORPORATION
                                    DEPOSITOR

                 ABS MORTGAGE AND MANUFACTURED HOUSING CONTRACT
      ASSET-BACKED CERTIFICATES AND ASSET-BACKED NOTES (ISSUABLE IN SERIES)

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

Asset Backed Securities Corporation, as depositor, may offer from time to time
under this prospectus and related prospectus supplements notes or certificates
that are either asset-backed notes or asset-backed certificates which may be
sold from time to time in one or more series. Each series of notes or
certificates, as applicable, will be issued in one or more classes.

The related prospectus supplement will set forth the specific assets of the
trust fund and the seller or sellers from whom the assets are acquired. The
assets may include:

     1.   One or more pools of

          o    closed-end and/or revolving home equity loans or manufactured
               housing contracts or specified balances of these loans or
               contracts and/or loans of which the proceeds have been applied to
               the purchase of the related mortgaged property, secured by
               mortgages primarily on one- to four-family residential
               properties,

          o    loans made to finance the purchase of rights relating to
               cooperatively owned properties secured by a pledge of shares of a
               cooperative corporation and an assignment of a proprietary lease
               or occupancy agreement on a cooperative dwelling,

          o    loans made to finance the origination of the loans and contracts
               described above and secured by the related loans or contracts,

          o    mortgage participation certificates evidencing participation
               interests in loans that are acceptable to the nationally
               recognized statistical rating agencies rating a series of
               securities,

          o    private securities evidencing ownership interests in or secured
               by loans similar to the types of loans described above;

     2.   All monies due under the above assets, which may be net of amounts
          payable to the servicer or servicers; and

     3.   Funds or accounts established for the related trust fund, or one or
          more forms of enhancement.

The related prospectus supplement will state if the trust fund will make one or
more REMIC elections for federal income tax purposes.

FOR A DISCUSSION OF RISKS ASSOCIATED WITH AN INVESTMENT IN THE NOTES OR
CERTIFICATES, SEE RISK FACTORS ON PAGE 1.

NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
THE OFFERED SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE.
MAKING ANY CONTRARY REPRESENTATION IS A CRIMINAL OFFENSE.

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

                           CREDIT SUISSE FIRST BOSTON

               The date of this Prospectus is November 22, 2004.






                                TABLE OF CONTENTS


Risk Factors.................................................................1

The Trust Fund...............................................................5

The Depositor...............................................................23

Use of Proceeds.............................................................23

Maturity, Prepayment and Yield Considerations...............................24

Description of the Securities...............................................29

Certain Information Regarding the Securities................................70

Credit Support..............................................................73

Description of Insurance....................................................80

Certain Legal Aspects of the Mortgage Loans and Contracts...................91

Material Federal Income Tax Considerations.................................105

State and Other Tax Considerations.........................................153

ERISA Considerations.......................................................153

Legal Investment...........................................................162

Plan of Distribution.......................................................163

Legal Matters..............................................................164

Prospectus Supplement......................................................164

Additional Information.....................................................165

Incorporation of Certain Information by Reference..........................166

Index of Terms.............................................................167


                                       i





                                  RISK FACTORS

         You should carefully consider the following risk factors prior to any
purchase of the notes or certificates.




LIMITED LIQUIDITY MAY RESULT IN DELAYS IN YOUR         There will be no market for the notes or certificates,
ABILITY TO SELL SECURITIES OR LOWER RETURNS......      as applicable, of any series prior to their issuance,
                                                       and there can be no assurance that a secondary market
                                                       will develop. If a secondary market does develop, there
                                                       can be no assurance that it will provide holders with
                                                       liquidity of investment or that the market will
                                                       continue for the life of the notes or certificates, as
                                                       applicable, of the related series. Credit Suisse First
                                                       Boston LLC presently expects to make a secondary market
                                                       in the notes or certificates, as applicable, but has no
                                                       obligation to do so. Absent a secondary market for the
                                                       notes or certificates, as applicable, you may
                                                       experience a delay if you choose to sell your notes or
                                                       certificates, as applicable, or the price you receive
                                                       may be less than you would receive for a comparable
                                                       liquid security.

LIMITED ASSETS FOR PAYMENTS - NO RECOURSE TO           The depositor does not have, nor is it expected to
DEPOSITOR, UNAFFILIATED SELLER, MASTER SERVICER OR     have, any significant assets. The notes or
SERVICER.........................................      certificates, as applicable, of a series will be
                                                       payable solely from the assets of the trust fund for
                                                       that series. Except for any related insurance policies
                                                       or credit support, there will be no recourse to the
                                                       depositor or any other person for any default on the
                                                       notes or any failure to receive distributions on the
                                                       certificates with respect to any series. Consequently,
                                                       holders of notes or certificates, as applicable, of
                                                       each series must rely solely upon payments with respect
                                                       to the assets constituting the trust fund for a series
                                                       of notes or certificates, as applicable, including, if
                                                       applicable, any amounts available pursuant to any
                                                       enhancement for that series, for the payment of
                                                       principal of and interest on the notes or certificates,
                                                       as applicable, of that series.

                                                       The only obligations, if any, of the depositor with
                                                       respect to the notes or certificates, as applicable, of
                                                       any series will be with respect to its breach of
                                                       specific representations and warranties. The depositor
                                                       does not have, and is not expected in the future to
                                                       have, any significant assets with which to




                                                       meet any obligation to repurchase assets with respect
                                                       to which there has been a breach of any representation
                                                       or warranty. If, for example, the depositor were
                                                       required to repurchase a mortgage loan, its only
                                                       sources of funds to make the repurchase would be from
                                                       funds obtained from the enforcement of a corresponding
                                                       obligation, if any, on the part of the originator of
                                                       the mortgage loan, the master servicer, the servicer or
                                                       the unaffiliated seller, as the case may be, or from a
                                                       reserve fund established to provide funds for
                                                       repurchases. If the depositor does not have sufficient
                                                       assets and no other party is obligated to repurchase
                                                       defective assets, you may experience a loss.

LIMITS ON ENHANCEMENT MAY RESULT IN LOSSES TO YOU      Although we intend the enhancement for the notes or
                                                       certificates, as applicable, to reduce the risk of
                                                       delinquent payments or losses to holders of a series of
                                                       notes or certificates, as applicable, entitled to the
                                                       benefit of the notes or certificates, the amount of the
                                                       enhancement will be limited, as set forth in the
                                                       related prospectus supplement. In addition, the amount
                                                       available will decline and could be depleted prior to
                                                       the payment in full of the related series of notes or
                                                       certificates, as applicable, and losses on the primary
                                                       assets could result in losses to holders of those notes
                                                       or certificates, as applicable.

DECREASE IN VALUE OF MORTGAGED PROPERTY--RISK OF LOSS  There are several factors that could adversely affect
                                                       the value of mortgaged properties and cause the
                                                       outstanding balance of the related mortgage loan,
                                                       contract, loan secured by a mortgage loan or contract
                                                       or of an underlying loan relating to the private
                                                       securities, together with any senior financing, to
                                                       equal or exceed the value of the mortgaged properties.
                                                       Among the factors that could adversely affect the value
                                                       of the mortgaged properties are

                                                       o an overall decline in the residential real estate
                                                         market in the areas in which the mortgaged properties
                                                         are located;

                                                       o a decline in the general condition of the mortgaged
                                                         properties as a result of failure of borrowers to
                                                         maintain adequately the mortgaged properties; or

                                                      2


                                                       o natural disasters that are not necessarily covered by
                                                         insurance, including earthquakes and floods.

                                                       Any decline in the value of a mortgaged property could
                                                       extinguish the value of a junior interest in that
                                                       mortgaged property before having any effect on the
                                                       related senior interest. If a decline in the value of
                                                       the related mortgaged properties occurs, the actual
                                                       rates of delinquencies, foreclosure and losses on the
                                                       mortgage loans could be higher than those currently
                                                       experienced in the mortgage lending industry in general
                                                       and you could suffer a loss.

TIMING AND RATE OF PREPAYMENTS MAY RESULT IN LOWER     The yield to maturity experienced by a holder of notes
YIELD............................................      or certificates, as applicable, may be affected by the
                                                       rate and timing of payments of principal of the
                                                       mortgage loans, contracts, loans secured by mortgage
                                                       loans or contracts or of the underlying loans relating
                                                       to the private securities. The rate and timing of
                                                       principal payments of the notes or certificates, as
                                                       applicable, of a series will be affected by a number of
                                                       factors, including the following:

                                                       o the extent of prepayments, which may be influenced by
                                                         a variety of factors,

                                                       o the manner of allocating principal payments among the
                                                         classes of notes or certificates, as applicable, of a
                                                         series as specified in the related prospectus
                                                         supplement, and

                                                       o the exercise of any right of optional termination.

                                                       Prepayments may also result from repurchases of
                                                       mortgage loans or underlying loans, as applicable, due
                                                       to material breaches of the unaffiliated seller's or
                                                       the depositor's representations or warranties.

                                                       Interest payable on the notes or certificates, as
                                                       applicable, of a series on a distribution date will
                                                       include all interest accrued during the period
                                                       specified in the related prospectus supplement. In the
                                                       event interest accrues during the calendar month prior
                                                       to a distribution date, the effective yield to holders
                                                       will be reduced from the yield that would otherwise be
                                                       obtainable if interest payable on the security were to
                                                       accrue through the day immediately preceding each
                                                       distribution date, and the effective yield at par to
                                                       holders will be less than the indicated coupon rate.



                                                      3


RISKS OF SUBORDINATED SECURITIES.................      To the extent specified in the applicable prospectus
                                                       supplement, distributions of interest on and principal
                                                       of one or more classes of notes or certificates, as
                                                       applicable, of a series may be subordinated in priority
                                                       of payment to interest and principal due on one or more
                                                       other classes of notes or certificates, as applicable,
                                                       of the related series. Any subordinated securities will
                                                       be affected to a greater degree by any losses on the
                                                       mortgage loans, contracts, loans secured by mortgage
                                                       loans or contracts or of the underlying loans relating
                                                       to the private securities.

BOOK-ENTRY REGISTRATION--BENEFICIAL OWNERS NOT         Issuance of the notes or certificates, as applicable,
RECOGNIZED BY TRUST..............................      in book-entry form may reduce the liquidity of these
                                                       notes or certificates, as applicable, in the secondary
                                                       trading market since investors may be unwilling to
                                                       purchase notes or certificates, as applicable, for
                                                       which they cannot obtain physical certificates. Since
                                                       transactions in the notes or certificates, as
                                                       applicable, can be effected only through The Depository
                                                       Trust Company and any other entities set forth in the
                                                       related prospectus supplement, your ability to pledge a
                                                       security to persons or entities that do not participate
                                                       in The Depository Trust Company or any other entities
                                                       or otherwise to take actions in respect of the related
                                                       notes or certificates, as applicable, may be limited
                                                       due to lack of a physical certificate representing the
                                                       notes or certificates, as applicable.

                                                       You may experience some delay in the receipt of
                                                       distributions of interest and principal on the notes or
                                                       certificates, as applicable, since the distributions
                                                       will be forwarded by the trustee to The Depository
                                                       Trust Company and The Depository Trust Company will
                                                       credit the distributions to the accounts of its
                                                       participants which will then credit them to your
                                                       account either directly or indirectly through indirect
                                                       participants.



                                                      4



                                 THE TRUST FUND

         The Depositor may offer from time to time the ABS Mortgage and
Manufactured Housing Contract Asset-Backed Certificates (the "Certificates") or
the ABS Mortgage and Manufactured Housing Contract Asset-Backed Notes (the
"Notes" and, together with the Certificates, the "Securities") offered by this
prospectus and by the related prospectus supplements which may be sold from time
to time in one or more series (each, a "Series") in amounts, at prices and on
terms to be determined at the time of sale and to be set forth in the related
prospectus supplement. Each Series of Notes or Certificates, as applicable, may
include one or more separate classes (each, a "Class") of Notes and/or
Certificates, which may be divided into one or more subclasses (each, a
"Subclass"). The Certificates will be issued by a trust (the "Trust") to be
formed by the Depositor with respect to a Series pursuant to either a Trust
Agreement (each, a "Trust Agreement") to be entered into between the Depositor
and the trustee specified in the related prospectus supplement (the "Trustee")
or a Pooling and Servicing Agreement (each, a "Pooling and Servicing Agreement")
among the Depositor, the Master Servicer and the Trustee. If a Series of
Securities includes Notes, the Notes will be issued and secured pursuant to an
Indenture (each, an "Indenture") to be entered into between any of (1) the Trust
or (2) a partnership, corporation, limited liability company or other entity
formed by the Depositor solely for the purpose of issuing Notes of a related
Series and incidental matters, as issuer (the "Issuer"), and the indenture
trustee specified in the related prospectus supplement (the "Indenture
Trustee"). The related Trust Fund will be serviced by the Master Servicer
pursuant to a Sale and Servicing Agreement (the "Sale and Servicing Agreement")
among the Depositor, the Master Servicer and the Indenture Trustee. The
Certificates represent interests in specified percentages of principal and
interest (a "Percentage Interest") with respect to the related Mortgage Pool,
Warehouse Loan Pool or Contract Pool, or have been assigned a Stated Principal
Balance and an Interest Rate, as more fully set forth in this prospectus, and
will evidence the undivided interest, beneficial interest or notional amount
specified in the related prospectus supplement in one of a number of Trusts,
each to be created by the Depositor from time to time. If a Series of Securities
includes Notes, the Notes will represent indebtedness of the related Trust Fund.
The trust property of each Trust (the "Trust Fund") will consist of the assets
described below.

         Ownership of the Mortgage, Warehouse Loan or Contract Pool or Pools
included in the Trust Fund for a Series of Certificates may consist of one or
more Subclasses, as specified in the prospectus supplement for the Series. Each
Certificate will evidence the undivided interest, beneficial interest or
notional amount specified in the related prospectus supplement in one or more
Mortgage Pools containing one or more Mortgage Loans or Mortgage Certificates,
Warehouse Loan Pools or Contract Pools containing Contracts, having an aggregate
principal balance of not less than approximately $50,000,000 as of the first day
of the month of its creation (the "Cut-off Date"), unless otherwise specified in
the applicable prospectus supplement. If so specified in the related prospectus
supplement, each Class or Subclass of the Certificates of a Series will evidence
the percentage interest specified in the prospectus supplement in the payments
of principal of and interest on the Mortgage Loans or Mortgage Certificates in
the related Mortgage Pool or Pools, Warehouse Loans in the related Warehouse
Loan Pool or Pools or on the Contracts in the related Contract Pool or Pools (a
"Percentage Interest"). To the extent specified in the related prospectus
supplement, each Mortgage Pool, Warehouse Loan Pool or



                                       5


Contract Pool with respect to a Series will be covered by one or more
irrevocable letters of credit (a "Letter of Credit"), a policy of mortgage pool
insurance (a "Pool Insurance Policy"), a bond or similar form of insurance
coverage against particular losses in the event of the bankruptcy of a Mortgagor
(a "Mortgagor Bankruptcy Bond"), an insurance policy (the "Special Hazard
Insurance Policy") covering losses that result from other physical risks that
are not otherwise insured against, including earthquakes and mudflows, by the
subordination of the rights of the holders of the one or more subordinate
Classes or Subclasses (the "Subordinate Notes" or the "Subordinate
Certificates," and collectively, the "Subordinate Securities") to the rights of
the holders of one or more senior Classes or Subclasses (the "Senior Notes" or
the "Senior Certificates," and collectively, the "Senior Securities") to the
extent specified in the related prospectus supplement (the "Subordinated Amount"
which, if so specified in the related prospectus supplement, may include
Subordinate Notes or Subordinate Certificates, as applicable, of one or more
Class or Subclass (a "Subordinated Class" or "Subordinated Subclass,"
respectively) and the establishment of a reserve fund (a "Reserve Fund"), by the
right of one or more Classes or Subclasses of Notes or Certificates, as
applicable, to receive a disproportionate amount of particular distributions of
principal, by an insurance policy (the "Security Guarantee Insurance") issued by
one or more insurance companies or another form or forms of additional or
alternative forms of credit support, including a guarantee or surety bond
("Alternative Credit Support") acceptable to the Rating Agency rating the Notes
or Certificates, as applicable, of a Series or by any combination of the
foregoing. See "Description of Insurance" and "Credit Support."

         THE MORTGAGE POOLS

         If so specified in the prospectus supplement with respect to a Series,
the Trust Fund for each Series may include

1.       one or more pools ("Mortgage Pools") containing

         o    conventional one-to four-family residential, first and/or second
              mortgage loans,

         o    closed-end loans (the "Closed-End Loans") and/or revolving home
              equity loans or specific balances of those loans (the "Revolving
              Credit Line Loans" and, together with the Closed-End Loans, the
              "Home Equity Loans") secured by mortgages or deeds of trust on
              residential one-to-four family properties, including townhouses
              and individual units in condominiums and planned unit
              developments,

         o    loans ("Cooperative Loans") made to finance the purchase of
              particular rights relating to cooperatively owned properties
              secured by the pledge of shares issued by a cooperative
              corporation (the "Cooperative") and the assignment of a
              proprietary lease or occupancy agreement providing the exclusive
              right to occupy a particular dwelling unit (a "Cooperative
              Dwelling" and, together with one- to four-family residential
              properties, "Single Family Property"),

         o    mortgage loans secured by multifamily residential rental
              properties consisting of five or more dwelling units or apartment
              buildings owned by cooperative housing corporations ("Multifamily
              Property"); provided that no more than 5% of the



                                       6


              principal balance of loans in a Mortgage Pool may consist of
              loans backed by Multifamily Property,

         o    mortgage participation securities evidencing participation
              interests in loans that are acceptable to the nationally
              recognized statistical rating agency or agencies rating the
              related Series of Notes or Certificates, as applicable,
              (collectively, the "Rating Agency") in one of the four highest
              rating categories of each Rating Agency (all the loans described
              above and participation certificates being referred to
              collectively in this prospectus as the "Mortgage Loans"),
              acceptable to the nationally recognized Rating Agency rating the
              Notes or Certificates, as applicable, of the Series for a rating
              in one of the four highest rating categories of the Rating
              Agency; or

         o    conventional mortgage pass-through certificates, collateralized
              mortgage bonds or other indebtedness secured by mortgage loans or
              manufactured housing contracts (the "Mortgage Certificates"), in
              each case together with specific and related property issued by
              one or more trusts established by one or more private entities,

2.       one or more Contract Pools containing Contracts or participation Notes
         or Certificates, as applicable, representing participation interests in
         the Contracts purchased by the Depositor either directly or through one
         or more affiliates or Unaffiliated Sellers, and related property
         conveyed to the trust by the Depositor or

3.       one or more Warehouse Loan Pools containing Warehouse Loans or
         participation Securities representing participation interests in the
         Warehouse Loans purchased by the Depositor either directly or through
         one or more affiliates or Unaffiliated Sellers, and related property
         conveyed to the trust by the Depositor or

         A Mortgage Pool may include Mortgage Loans insured by the FHA ("FHA
Loans") and/or Mortgage Loans partially guaranteed by the Veterans
Administration (the "VA", and mortgage loans are referred to in this prospectus
as "VA Loans"). All Mortgage Loans will be evidenced by promissory notes or
other evidence of indebtedness (the "Mortgage Notes") secured by first mortgages
or first or second deeds of trust or other similar security instruments creating
a first lien or second lien, as applicable, on the Mortgaged Properties. Single
Family Property and Multifamily Property will consist of single family detached
homes, attached homes, single family units having a common wall, individual
units located in condominiums, townhouses, planned unit developments,
multifamily residential rental properties, apartment buildings owned by
cooperative housing corporations and the other types of homes or units as are
set forth in the related prospectus supplement. Unless otherwise specified in
the applicable prospectus supplement, each detached or attached home or
multifamily property will be constructed on land owned in fee simple by the
borrower (the "Mortgagor"). or on land leased by the Mortgagor for a term at
least two years greater than the term of the applicable Mortgage Loan. Attached
homes may consist of duplexes, triplexes and fourplexes, multifamily structures
where each Mortgagor owns the land upon which the unit is built with the
remaining adjacent land owned in common. Multifamily Property may include mixed
commercial and residential buildings. The Mortgaged Properties may include
investment properties and vacation and second homes. Mortgage Loans secured by
Multifamily Property may also be secured by an


                                       7


assignment of leases and rents and operating or other cash flow guarantees
relating to the Mortgaged Properties to the extent specified in the related
prospectus supplement.

         Unless otherwise specified below or in the applicable prospectus
supplement, each Mortgage Loan in a Mortgage Pool will

o    have an individual principal balance at origination of not less than
     $25,000 nor more than $500,000,

o    have monthly payments due on the first day of each month (the "Due Date"),

o    be secured by Mortgaged Properties or relate to Cooperative Loans located
     in any of the 50 states or the District of Columbia, and

o    consist of fully-amortizing Mortgage Loans, each with a 10 to 40 year term
     at origination, a fixed or variable rate of interest and level or variable
     monthly payments over the term of the Mortgage Loan.

         Unless otherwise specified in the related prospectus supplement, the
Loan-to-Value Ratio of the Mortgage Loans at origination will not exceed the
percentages set forth below.

o    95% on any Mortgage Loan with an original principal balance of $150,000 or
     less,

o    90% on any Mortgage Loan with an original principal balance of $150,001
     through $200,000,

o    85% on any Mortgage Loan with an original principal balance of $200,001
     through $300,000, and

o    80% on any Mortgage Loan with an original principal balance exceeding
     $300,000.

         If so specified in the related prospectus supplement, a Mortgage Pool
may also include fully amortizing, adjustable rate Mortgage Loans ("ARM Loans")
with, unless otherwise specified in the related prospectus supplement, 30-year
terms at origination and mortgage interest rates adjusted periodically, with
corresponding adjustments in the amount of monthly payments, to equal the sum,
which may be rounded, of a fixed margin and an index described in the related
prospectus supplement, subject to any applicable restrictions on adjustments.
The Mortgage Pools may also include other types of Mortgage Loans to the extent
set forth in the applicable prospectus supplement.

         Unless otherwise specified in the applicable prospectus supplement, no
Mortgage Loan will have a Loan-to-Value Ratio at origination in excess of 95%,
regardless of its original principal balance. Except as otherwise provided in
the related prospectus supplement, the Loan-to-Value Ratio will be the ratio,
expressed as a percentage, of the principal amount of the Mortgage Loan at the
date of determination to the lesser of (1) the appraised value determined in an
appraisal obtained by the originator and (2) the sales price for the property
(the "Original Value"). Unless otherwise specified in the related prospectus
supplement, with respect to a Mortgage Loan secured by a mortgage on a vacation
or second home or an investment property, other than Multifamily Property, no
income derived from the property will be considered for underwriting purposes,
the Loan-to-Value Ratio, taking into account any secondary financing, may not
exceed 80% and the original principal balance may not exceed $250,000.

                                       8


         If so specified in the related prospectus supplement, a Mortgage Pool
may contain Mortgage Loans with fluctuating interest rates (the "Mortgage
Rates"). These Mortgage Loan may provide that on the day on which the Mortgage
Rate adjusts, the amount of the monthly payments on the Mortgage Loan will be
adjusted to provide for the payment of the remaining principal amount of the
Mortgage Loan with level monthly payments of principal and interest at the new
Mortgage Rate to the maturity date of the Mortgage Loan. Alternatively, the
Mortgage Loan may provide that the Mortgage Rate adjusts more frequently than
the monthly payment. As a result, a greater or lesser portion of the monthly
payment will be applied to the payment of principal of the Mortgage Loan, thus
increasing or decreasing the rate at which the Mortgage Loan is repaid. See
"Maturity, Prepayment and Yield Considerations." In the event that an adjustment
to the Mortgage Rate causes the amount of interest accrued in any month to
exceed the amount of the monthly payment on the Mortgage Loan, the excess (the
"Deferred Interest") will be added to the principal balance of the Mortgage
Loan, unless otherwise paid by the Mortgagor, and will bear interest at the
Mortgage Rate in effect from time to time. The amount by which the Mortgage Rate
or monthly payment may increase or decrease and the aggregate amount of Deferred
Interest on any Mortgage Loan may be subject to limitations, as described in the
related prospectus supplement.

         If so specified in the prospectus supplement for the related Series,
the Mortgage Rate on some of the ARM Loans will be convertible from an
adjustable rate to a fixed rate at the option of the Mortgagor under some
circumstances. Unless otherwise specified in the related prospectus supplement,
the Agreement will provide that the Unaffiliated Seller from which convertible
ARM Loans were acquired will be obligated to repurchase from the Trust Fund any
ARM Loan as to which the conversion option has been exercised (a "Converted
Mortgage Loan"), at a purchase price set forth in the related prospectus
supplement. The amount of the purchase price will be required to be deposited in
the Certificate Account and will be distributed to the Securityholders on the
Distribution Date in the month following the month of the exercise of the
conversion option. The obligation of the Unaffiliated Seller to repurchase
Converted Mortgage Loans may or may not be supported by cash, letters of credit,
third party guarantees or other similar arrangements.

         If provided for in the applicable prospectus supplement, a Mortgage
Pool may contain Mortgage Loans pursuant to which the monthly payments made by
the Mortgagor during the early years of the Mortgage Loan will be less than the
scheduled monthly payments on the Mortgage Loan ("Buy-Down Loans"). The
resulting difference in payment shall be compensated for from an amount
contributed by the Depositor, the seller of the related Mortgaged Property, the
Servicer or another source and placed in a custodial account (the "Buy-Down
Fund") by the Servicer, or if so specified in the related prospectus supplement,
with the Trustee. In lieu of a cash deposit, if so specified in the related
prospectus supplement, a letter of credit or guaranteed investment contract may
be delivered to the Trustee to fund the Buy-Down Fund. See "Description of the
Securities--Payments on Mortgage Loans." Buy-Down Loans included in a Mortgage
Pool will provide for a reduction in monthly interest payments by the Mortgagor
for a period of up to the first four years of the term of the Mortgage Loans.

         If provided for in the applicable prospectus supplement, a Mortgage
Pool may contain Mortgage Loans pursuant to which the monthly payments by the
Mortgagor during the early years of the related Mortgage Note are less than the
amount of interest that would otherwise be



                                       9


payable on the Mortgage Note, with the interest not so paid added to the
outstanding principal balance of the Mortgage Loan ("GPM Loans"). If so
specified in the related prospectus supplement, the resulting difference in
payment shall be compensated for from an amount contributed by the Depositor or
another source and delivered to the Trustee (the "GPM Fund"). In lieu of a cash
deposit, the Depositor may deliver to the Trustee a letter of credit, guaranteed
investment contract or another instrument acceptable to the Rating Agency rating
the related Series to fund the GPM Fund.

         If provided for in the applicable prospectus supplement, a Mortgage
Pool may contain Mortgage Loans which are Home Equity Loans pursuant to which
the full principal amount of the Mortgage Loan is advanced at origination of the
loan and generally is repayable in equal, or substantially equal, installments
of an amount sufficient to fully amortize the loan at its stated maturity.
Interest on each Home Equity Loan may be calculated on the basis of the
outstanding principal balance of the loan multiplied by the Mortgage Rate on
each Home Equity Loan and further multiplied by a fraction, the numerator of
which is the number of days in the period elapsed since the preceding payment of
interest was made and the denominator is the number of days in the annual period
for which interest accrues on the loan. Under some circumstances, under a Home
Equity Loan, a borrower may choose an interest only payment option and is
obligated to pay only the amount of interest which accrues on the loan during
the billing cycle. Generally, an interest only payment option may be available
for a specified period before the borrower must begin paying at least the
minimum monthly payment of a specified percentage of the average outstanding
balance of the loan.

         FHA Loans will be insured by the Federal Housing Administration (the
"FHA") as authorized under the National Housing Act, as amended, and the United
States Housing Act of 1937, as amended. FHA loans will be insured under various
FHA programs including the standard FHA 203-b programs to finance the
acquisition of one- to four-family housing units, the FHA 245 graduated payment
mortgage program and the FHA 221 and 223 programs to finance particular
multifamily residential rental properties. FHA Loans generally require a minimum
down payment of approximately 5% of the original principal amount of the FHA
Loan. No FHA Loan may have an interest rate or original principal amount
exceeding the applicable FHA limits at the time of origination of FHA Loan.

         VA Loans will be partially guaranteed by the VA under the Servicemen's
Readjustment Act of 1944, as amended (the "Servicemen's Readjustment Act"). The
Servicemen's Readjustment Act permits a veteran, or in some instances the spouse
of a veteran, to obtain a mortgage loan guarantee by the VA covering mortgage
financing of the purchase of a one- to four-family dwelling unit at interest
rates permitted by the VA. The program has no mortgage loan limits, requires no
down payment from the purchasers and permits the guarantee of mortgage loans of
up to 30 years' duration. However, no VA Loan will have an original principal
amount greater than five times the partial VA guarantee for the VA Loan. The
maximum guarantee that may be issued by VA under this program is

o    50% of the principal amount of the Mortgage Loan if the principal amount of
     the Mortgage Loan is $45,000 or less,



                                       10


o    the lesser of $36,000 and 40% of the principal amount of the Mortgage Loan
     if the principal amount of the Mortgage Loan is greater than $45,000 but
     less than or equal to $144,000,

o    and the lesser of $46,000 and 25% of the principal amount of the Mortgage
     Loan if the principal amount of the Mortgage Loan is greater than $144,000.

         Unless otherwise specified in the related prospectus supplement,
interest on each Revolving Credit Line Loan, excluding introduction rates
offered from time to time during promotional periods, is computed and payable
monthly on the average daily outstanding principal balance of the Loan.
Principal amounts on a Revolving Credit Line Loan may be drawn down, up to a
maximum amount as set forth in the related prospectus supplement, or repaid
under each Revolving Credit Line Loan from time to time, but may be subject to a
minimum periodic payment. To the extent and accordingly under the terms provided
in the related prospectus supplement, the Trust Fund may include amounts
borrowed under a Revolving Credit Line Loan after the Cut-off Date. The full
amount of a Closed-End Loan is advanced at the inception of the Loan and
generally is repayable in equal, or substantially equal, installments of an
amount to fully amortize the Loan at its stated maturity. Except to the extent
provided in the related prospectus supplement, the original terms to stated
maturity of Closed-End Loans will not exceed 360 months. Under some
circumstances, under either a Revolving Credit Line Loan or a Closed-End Loan, a
borrower may choose an interest only payment option and is obligated to pay only
the amount of interest which accrues on the Loan during the billing cycle. An
interest only payment option may be available for a specified period before the
borrower must begin paying at least the minimum monthly payment of a specified
percentage of the average outstanding balance of the Loan.

         The prospectus supplement, or, if information is not available in
advance of the date of the related prospectus supplement, a Current Report on
Form 8-K to be filed with the Commission, for each Series of Notes or
Certificates, as applicable, the Trust Fund with respect to which contains
Mortgage Loans will contain information as to the type of Mortgage Loans that
will comprise the related Mortgage Pool or Pools and information as to

o    the aggregate principal balance of the Mortgage Loans as of the applicable
     Cut-off Date,

o    the type of Mortgaged Properties securing the Mortgage Loans,

o    the original terms to maturity of the Mortgage Loans,

o    the largest in principal balance of the Mortgage Loans,

o    the earliest origination date and latest maturity date of the Mortgage
     Loans,

o    the aggregate principal balance of Mortgage Loans having Loan-to-Value
     Ratios at origination exceeding 80%,

o    the interest rate or range of interest rates borne by the Mortgage Loans,

o    the average outstanding principal balance of the Mortgage Loans,

o    the geographical distribution of the Mortgage Loans,

o    the number and aggregate principal balance of Buy-Down Loans or GPM Loans,
     if applicable,



                                       11


o    with respect to ARM Loans, the adjustment dates, the highest, lowest and
     weighted average margin, and the maximum Mortgage Rate variation at the
     time of any periodic adjustment and over the life of ARM Loans, and

o    with respect to Mortgage Loans secured by Multifamily Property or the other
     Mortgage Loans as are specified in the prospectus supplement, whether the
     Mortgage Loan provides for an interest only period and whether the
     principal amount of the Mortgage Loan is amortized on the basis of a period
     of time that extends beyond the maturity date of the Mortgage Loan.

         No assurance can be given that values of the Mortgaged Properties in a
Mortgage Pool have remained or will remain at their levels on the dates of
origination of the related Mortgage Loans. If the real estate market should
experience an overall decline in property values causing the outstanding
balances of the Mortgage Loans and any secondary financing on the Mortgaged
Properties in a particular Mortgage Pool to become equal to or greater than the
value of the Mortgaged Properties, the actual rates of delinquencies,
foreclosures and losses could be higher than those now generally experienced in
the mortgage lending industry. In addition, the value of property securing
Cooperative Loans and the delinquency rate with respect to Cooperative Loans
could be adversely affected if the current favorable tax treatment of
cooperative stockholders were to become less favorable. See "Certain Legal
Aspects of the Mortgage Loans and Contracts--The Mortgage Loans." To the extent
that any of these losses are not covered by the methods of credit support or the
insurance policies described in this prospectus or by Alternative Credit
Support, they will be borne by holders of the Notes or Certificates, as
applicable, of the Series evidencing interests in, or secured by, the Mortgage
Pool.

         Multifamily lending is generally viewed as exposing the lender to a
greater risk of loss than one- to four-family residential lending. Multifamily
lending typically involves larger loans to single borrowers or groups of related
borrowers than residential one- to four-family mortgage loans. Furthermore, the
repayment of loans secured by income producing properties is typically dependent
upon the successful operation of the related real estate project. If the cash
flow from the project is reduced, for example, if leases are not obtained or
renewed, the borrower's ability to repay the loan may be impaired. Multifamily
real estate can be affected significantly by supply and demand in the market for
the type of property securing the loan and, therefore, may be subject to adverse
economic conditions. Market values may vary as a result of economic events or
governmental regulations outside the control of the borrower or lender,
including rent control laws, which impact the future cash flow of the property.
Corresponding to the greater lending risk is a generally higher interest rate
applicable to multifamily mortgage loans.

         The Depositor will cause the Mortgage Loans constituting each Mortgage
Pool to be assigned to the Trustee named in the applicable prospectus
supplement, for the benefit of the holders of the Certificates of the related
Series (the "Certificateholders") and, if a Series of Securities includes Notes,
the Depositor will cause the Mortgage Loans constituting the Mortgage Pool to be
pledged to the Indenture Trustee, for the benefit of the holders of the Notes of
the related Series (the "Noteholders" and, together with the Certificateholders,
the "Securityholders"). The Master Servicer, if any, named in the related
prospectus supplement will service the Mortgage Loans, either by itself or
through other mortgage servicing institutions, if any (each, a "Servicer"),
pursuant to a Pooling and Servicing Agreement or a Sale and Servicing Agreement,
as described in this prospectus, and will receive a fee as compensation. See
"--Mortgage Loan Program" and "Description of the Securities." As used in this
prospectus,



                                       12


"Agreement" means, with respect to a Series that only includes Certificates, the
Pooling and Servicing Agreement, and with respect to a Series that includes
Notes, the Indenture, the Trust Agreement and the Sale and Servicing Agreement,
as the context requires. Unless otherwise specified in the applicable prospectus
supplement, with respect to those Mortgage Loans serviced by a Servicer, the
Servicer will be required to service the related Mortgage Loans in accordance
with the Pooling and Servicing Agreement, Sale and Servicing Agreement or
Seller's Warranty and Servicing Agreement between the Servicer and the Depositor
(each, a "Servicing Agreement"), as applicable, and will receive as
compensation, the fee specified in the related Servicing Agreement; however, any
Master Servicer will remain liable for its servicing obligations under the
applicable Agreement as if the Master Servicer alone were servicing the Mortgage
Loans.

         The Depositor will make representations and warranties regarding the
Mortgage Loans, but its assignment of the Mortgage Loans to the Trustee will be
without recourse. See "Description of the Securities--Assignment of Mortgage
Loans." The Master Servicer's obligations with respect to the Mortgage Loans
will consist principally of its contractual servicing obligations under the
Servicing Agreement, including its obligation to enforce particular types of
purchase and other obligations of Servicers and/or Unaffiliated Sellers, as more
fully described in this prospectus under "--Mortgage Loan Program" and
"--Representations by Unaffiliated Sellers; Repurchases" and "Description of the
Securities--Assignment of Mortgage Loans" and "--Servicing by Unaffiliated
Sellers", and its obligations to make Advances in the event of delinquencies in
payments on or with respect to the Mortgage Loans or in connection with
prepayments and liquidations of the Mortgage Loans, in amounts described in this
prospectus under "Description of the Securities--Advances." Unless otherwise
specified in the related prospectus supplement, Advances with respect to
delinquencies will be limited to amounts that the Master Servicer believes
ultimately would be reimbursable under any applicable Letter of Credit, Pool
Insurance Policy, Special Hazard Insurance Policy, Mortgagor Bankruptcy Bond or
other policy of insurance, from amounts in the Reserve Fund, under any
Alternative Credit Support or out of the proceeds of liquidation of the Mortgage
Loans, cash in the Certificate Account or otherwise. See "Description of the
Securities--Advances," "Credit Support" and "Description of Insurance."

         MORTGAGE LOAN PROGRAM

         The Mortgage Loans will have been purchased by the Depositor either
directly or through affiliates or by the Trust formed by the Depositor, from one
or more affiliates or from sellers unaffiliated with the Depositor
("Unaffiliated Sellers"). Mortgage Loans acquired by the Depositor will have
been originated in accordance with the underwriting criteria specified below
under "Underwriting Standards" or as otherwise described in a related prospectus
supplement.

         UNDERWRITING STANDARDS

         Except in the case of particular Mortgage Loans originated by
Unaffiliated Sellers in accordance with their own underwriting criteria ("Closed
Loans") or other standards as may be described in the applicable prospectus
supplement, all prospective Mortgage Loans will be subject to the underwriting
standards adopted by the Depositor. See "--Closed Loan Program" below for a
description of underwriting standards applicable to Closed Loans. Unaffiliated



                                       13


Sellers will represent and warrant that Mortgage Loans originated by them and
purchased by the Depositor have been originated in accordance with the
applicable underwriting standards established by the Depositor or other
standards as may be described in the applicable prospectus supplement. The
following discussion describes the underwriting standards of the Depositor with
respect to any Mortgage Loan that it purchases.

         The mortgage credit approval process for one- to four-family
residential loans follows a standard procedure that generally complies with the
regulations and guidelines of both the Federal Home Loan Mortgage Corporation
("FHLMC"), a corporate instrumentality of the United States created under Title
III of the Emergency Home Finance Act of 1970, as amended, and the Federal
National Mortgage Association ("FNMA"), a federally chartered and privately
owned corporation organized and existing under the Federal National Mortgage
Association Charter Act (12 U.S.C. ss. 1716 et seq.), except that some Mortgage
Loans may have higher loan amount and qualifying ratios, as well as applicable
federal and state laws and regulations. The credit approval process for
Cooperative Loans follows a procedure that generally complies with applicable
FNMA regulations and guidelines, except for the loan amounts and qualifying
ratios, and applicable federal and state laws and regulations. The originator of
a Mortgage Loan (the "Originator") generally will review a detailed credit
application by the prospective mortgagor designed to provide pertinent credit
information, including a current balance sheet describing assets and liabilities
and a statement of income and expenses, as well as an authorization to apply for
a credit report that summarizes the prospective mortgagor's credit history with
local merchants and lenders and any record of bankruptcy. In addition, an
employment verification is obtained from the prospective mortgagor's employer in
which the employer reports the length of employment with that organization, the
current salary, and gives an indication as to whether it is expected that the
prospective mortgagor will continue the employment in the future. If the
prospective mortgagor is self-employed, he or she is required to submit copies
of signed tax returns. The prospective mortgagor may also be required to
authorize verification of deposits at financial institutions. In some
circumstances, other credit considerations may cause the Originator or Depositor
not to require some of the above documents, statements or proofs in connection
with the origination or purchase of particular Mortgage Loans.

         Unless otherwise specified in the applicable prospectus supplement, an
appraisal generally will be required to be made on each residence to be
financed. The appraisal generally will be made by an appraiser who meets FNMA
requirements as an appraiser of one- to four-family residential properties. The
appraiser is required to inspect the property and verify that it is in good
condition and that, if new, construction has been completed. The appraisal
generally will be based on the appraiser's judgment of value, giving appropriate
weight to both the market value of comparable homes and the cost of replacing
the residence. These underwriting standards also require a search of the public
records relating to a mortgaged property for any liens and judgments.

         Based on the data provided, particular verifications and the appraisal,
a determination is made by the Originator as to whether the prospective
mortgagor has sufficient monthly income available to meet the prospective
mortgagor's monthly obligations on the proposed loan and other expenses related
to the residence, including property taxes, hazard and primary mortgage
insurance and, if applicable, maintenance, and other financial obligations and
monthly living



                                       14


expenses. Except as may be provided in the related prospectus supplement, each
Originator's lending guidelines for conventional mortgage loans generally will
specify that mortgage payments plus taxes and insurance and all monthly payments
extending beyond one year, including those mentioned above and other fixed
obligations, or car payments, would equal no more than specified percentages of
the prospective mortgagor's gross income. These guidelines will be applied only
to the payments to be made during the first year of the loan. For FHA and VA
Loans, the Originator's lending guidelines will follow HUD and VA guidelines,
respectively. Other credit considerations may cause an Originator to depart from
these guidelines. For example, when two individuals co-sign the loan documents,
the incomes and expenses of both individuals may be included in the computation.

         The Mortgaged Properties may be located in states where, in general, a
lender providing credit on a single-family property may not seek a deficiency
judgment against the Mortgagor but rather must look solely to the property for
repayment in the event of foreclosure. The Depositor's underwriting standards
applicable to all states, including anti-deficiency states, require that the
value of the property being financed, as indicated by the appraisal, currently
supports and is anticipated to support in the future the outstanding loan
balance. Some of the types of Mortgage Loans that may be included in the
Mortgage Pools or Trust Funds may involve additional uncertainties not present
in traditional types of loans. For example, Buy-Down Loans and GPM Loans provide
for escalating or variable payments by the Mortgagor. These types of Mortgage
Loans are underwritten on the basis of a judgment that the Mortgagor will have
the ability to make larger monthly payments in subsequent years. In some
instances the Mortgagor's income may not be sufficient to enable it to continue
to make scheduled loan payments as the payments increase.

         To the extent specified in the related prospectus supplement, the
Depositor may purchase or cause the Trust to purchase Mortgage Loans for
inclusion in a Trust Fund that are underwritten under standards and procedures
which vary from and are less stringent than those described in this prospectus.
For instance, Mortgage Loans may be underwritten under a "limited documentation"
program if so specified in the related prospectus supplement. For limited
documentation Mortgage Loans, minimal investigation into the borrowers' credit
history and income profile is undertaken by the originator and the Mortgage
Loans may be underwritten primarily on the basis of an appraisal of the
Mortgaged Property or Cooperative Dwelling and the Loan-to-Value Ratio at
origination. Thus, if the Loan-to-Value Ratio is less than a percentage
specified in the related prospectus supplement, the originator may forego some
aspects of the review relating to monthly income, and traditional ratios of
monthly or total expenses to gross income may not be considered.

         The underwriting standards for Mortgage Loans secured by Multifamily
Property will be described in the related prospectus supplement.

         QUALIFICATIONS OF UNAFFILIATED SELLERS

         Unless otherwise specified in the applicable prospectus supplement with
respect to an Unaffiliated Seller of Closed Loans secured by residential
properties, each Unaffiliated Seller must be an institution experienced in
originating conventional mortgage loans and/or FHA Loans or VA Loans in
accordance with accepted practices and prudent guidelines, and must maintain




                                       15


satisfactory facilities to originate those loans. In addition, except as
otherwise specified, the Depositor requires adequate financial stability and
adequate servicing experience, where appropriate, as well as satisfaction of
other criteria.

         REPRESENTATIONS BY UNAFFILIATED SELLERS; REPURCHASES

         Unless otherwise specified in the related prospectus supplement, each
Unaffiliated Seller, or the Master Servicer, if the Unaffiliated Seller is also
the Master Servicer under the Agreement, will have made representations and
warranties in respect of the Mortgage Loans sold by the Unaffiliated Seller to
the Depositor. These representations and warranties will generally include,
among other things:

o    with respect to each Mortgaged Property, that title insurance, or in the
     case of Mortgaged Properties located in areas where policies are generally
     not available, an attorney's certificate of title, and any required hazard
     and primary mortgage insurance was effective at the origination of each
     Mortgage Loan, and that each policy, or certificate of title, remained in
     effect on the date of purchase of the Mortgage Loan from the Unaffiliated
     Seller;

o    that the Unaffiliated Seller had good and marketable title to each Mortgage
     Loan it sold;

o    with respect to each Mortgaged Property, that each mortgage constituted a
     valid first lien on the Mortgaged Property, subject only to permissible
     title insurance exceptions;

o    that there were no delinquent tax or assessment liens against the Mortgaged
     Property; and

o    that each Mortgage Loan was current as to all required payments, unless
     otherwise specified in the related prospectus supplement.

         With respect to a Cooperative Loan, the Unaffiliated Seller will
represent and warrant that (1) the security interest created by the cooperative
security agreements constituted a valid first lien on the collateral securing
the Cooperative Loan, subject to the right of the related Cooperative to cancel
shares and terminate the proprietary lease for unpaid assessments and to the
lien of the related Cooperative for unpaid assessments representing the
Mortgagor's pro rata share of the Cooperative's payments for its mortgage,
current and future real property taxes, maintenance charges and other
assessments to which like collateral is commonly subject, and (2) the related
cooperative apartment was free from damage and was in good repair.

         All of the representations and warranties of an Unaffiliated Seller in
respect of a Mortgage Loan will have been made as of the date on which the
related Unaffiliated Seller sold the Mortgage Loan to the Depositor or its
affiliate. A substantial period of time may have elapsed between the date of
sale and the date of initial issuance of the Series of Notes or Certificates, as
applicable, evidencing an interest in, or secured by, the related Mortgage Loan.
Since the representations and warranties of an Unaffiliated Seller do not
address events that may occur following the sale of a Mortgage Loan by an
Unaffiliated Seller, the repurchase obligation described below will not arise
if, during the period commencing on the date of sale of a Mortgage Loan by the
Unaffiliated Seller to or on behalf of the Depositor, the relevant event occurs
that would have given rise to the obligation had the event occurred prior to
sale of the affected Mortgage Loan. However, the Depositor will not include any
Mortgage Loan in the Trust Fund for any Series of Notes or Certificates, as
applicable, if anything has come to the



                                       16


Depositor's attention that would cause it to believe that the representations
and warranties of an Unaffiliated Seller will not be accurate and complete in
all material respects in respect of the related Mortgage Loan as of the related
Cut-off Date.

         The only representations and warranties to be made for the benefit of
holders of Notes or Certificates, as applicable, of a Series in respect of any
Mortgage Loan relating to the period commencing on the date of sale of the
Mortgage Loan to the Depositor or its affiliates will be limited representations
of the Depositor and of the Master Servicer described below under "Description
of the Securities--Assignment of Mortgage Loans." If the Master Servicer is also
an Unaffiliated Seller of Mortgage Loans with respect to a particular Series,
the representations will be in addition to the representations and warranties
made in its capacity as an Unaffiliated Seller.

         Upon the discovery of the breach of any representation or warranty made
by an Unaffiliated Seller in respect of a Mortgage Loan that materially and
adversely affects the interests of the Securityholders of the related Series,
the related Unaffiliated Seller or the Servicer of the Mortgage Loan will be
obligated to repurchase the Mortgage Loan at a purchase price equal to 100% of
the unpaid principal balance of the Mortgage Loan at the date of repurchase or,
in the case of a Series of Notes or Certificates, as applicable, as to which the
Depositor has elected to treat the related Trust Fund as a REMIC, at that price
or such other price as may be indicated in the related prospectus supplement, in
each case together with accrued interest at the Mortgage Rate for the related
Mortgage Loan to the first day of the month following the repurchase and the
amount of any unreimbursed Advances made by the Master Servicer or the Servicer,
as applicable, in respect of the Mortgage Loan. The Master Servicer will be
required to enforce this obligation for the benefit of the Trustee and the
Securityholders, following the practices it would employ in its good faith
business judgment were it the owner of the Mortgage Loan. Unless otherwise
specified in the applicable prospectus supplement, and subject to the ability of
the Depositor, the Unaffiliated Seller or the Servicer to substitute for some of
the Mortgage Loans as described below, this repurchase obligation constitutes
the sole remedy available to the Securityholders of the related Series for a
breach of representation or warranty by an Unaffiliated Seller.

         The obligation of the Master Servicer to purchase a Mortgage Loan if an
Unaffiliated Seller or a Servicer defaults on its obligation to do so is subject
to limitations, and no assurance can be given that Unaffiliated Sellers will
carry out their respective repurchase obligations with respect to Mortgage
Loans. However, to the extent that a breach of the representations and
warranties of an Unaffiliated Seller may also constitute a breach of the
representations and warranties made by the Depositor or by the Master Servicer
with respect to the insurability of the Mortgage Loans, the Depositor may have a
repurchase obligation, and the Master Servicer may have the limited purchase
obligation, in each case as described below under "Description of the
Securities--Assignment of Mortgage Loans."

         CLOSED LOAN PROGRAM

         The Depositor may also acquire Closed Loans that have been originated
by Unaffiliated Sellers in accordance with underwriting standards acceptable to
the Depositor. Unless otherwise specified in the applicable prospectus
supplement, Closed Loans for which 11 or fewer monthly



                                       17


payments have been received will be further subject to the Depositor's customary
underwriting standards. Unless otherwise specified in the applicable prospectus
supplement, Closed Loans for which 12 to 60 monthly payments have been received
will be subject to a review of payment history and will conform to the
Depositor's guidelines for the related mortgage program. In the event one or two
payments were over 30 days delinquent, a letter explaining the delinquencies
will be required of the Mortgagor. Unless otherwise specified in the applicable
prospectus supplement, the Depositor will not purchase for inclusion in a
Mortgage Pool a Closed Loan for which

         (1) more than two monthly payments were over 30 days delinquent,

         (2) one payment was over 60 days delinquent, or

         (3) more than 60 monthly payments were received.

         MORTGAGE CERTIFICATES

         If so specified in the prospectus supplement with respect to a Series,
the Trust Fund for the Series may include conventional mortgage pass-through
certificates, collateralized mortgage bonds or other indebtedness secured by
mortgage loans or manufactured housing contracts (the "Mortgage Certificates")
issued by one or more trusts established by one or more private entities and
evidencing, unless otherwise specified in the related prospectus supplement, the
entire interest in a pool of mortgage loans. A description of the mortgage loans
and/or manufactured housing contracts underlying the Mortgage Certificates, the
related pooling and servicing arrangements and the insurance arrangements in
respect of the mortgage loans will be set forth in the applicable prospectus
supplement or in the Current Report on Form 8-K referred to below. That
prospectus supplement, or, if the applicable information is not available in
advance of the date of the prospectus supplement, a Current Report on Form 8-K
to be filed by the Depositor with the Commission within 15 days of the issuance
of the Notes or Certificates, as applicable, of the related Series, will also
set forth information with respect to the entity or entities forming the related
mortgage pool, the issuer of any credit support with respect to the Mortgage
Certificates and the aggregate outstanding principal balance and the
pass-through rate borne by each Mortgage Certificate included in the Trust Fund,
together with some additional information with respect to the Mortgage
Certificates. The inclusion of Mortgage Certificates in a Trust Fund with
respect to a Series of Notes or Certificates, as applicable, is conditioned upon
their characteristics being in form and substance satisfactory to the Rating
Agency rating the related Series of Notes or Certificates, as applicable.
Mortgage Certificates, together with the Mortgage Loans, Warehouse Loans and
Contracts, are referred to in this prospectus as the "Trust Assets."

         THE CONTRACT POOLS

         If so specified in the prospectus supplement with respect to a Series,
the Trust Fund for the Series may include a pool of manufactured housing
installment or conditional sales contracts and installment loan agreements (the
"Contracts") or participation certificates representing participation interests
in the Contracts and related property (the "Contract Pool") conveyed to the
Trust by the Depositor, evidencing interests in manufactured housing installment
or conditional sales contracts and installment loan agreements originated by a
manufactured housing dealer in



                                       18


the ordinary course of business and purchased by the Depositor. The Contracts
may be conventional manufactured housing contracts or contracts insured by the
FHA or partially guaranteed by the VA. Each Contract will be secured by a new or
used unit of manufactured housing (a "Manufactured Home"). Unless otherwise
specified in the related prospectus supplement, the Contracts will be fully
amortizing and will bear interest at the fixed annual percentage rates ("APRs")
specified in the related prospectus supplement.

         The Manufactured Homes securing the Contracts consist of manufactured
homes within the meaning of 42 United States Code, Section 5402(6), which
defines a "manufactured home" as "a structure, transportable in one or more
sections, which in the traveling mode, is eight body feet or more in width or
forty body feet or more in length, or, when erected on site, is three hundred
twenty or more square feet, and which is built on a permanent chassis and
designed to be used as a dwelling with or without a permanent foundation when
connected to the required utilities, and includes the plumbing, heating, air
conditioning, and electrical systems contained therein; except that the term
shall include any structure which meets all the requirements of [this] paragraph
except the size requirements and with respect to which the manufacturer
voluntarily files a certification required by the Secretary of Housing and Urban
Development and complies with the standards established under [this] chapter."

         The Depositor will cause the Contracts constituting each Contract Pool
to be assigned and/or pledged to the related Trustee named in the related
prospectus supplement for the benefit of the related Securityholders. The Master
Servicer specified in the related prospectus supplement will service the
Contracts, either by itself or through other Servicers, pursuant to the
Agreement. See "Description of the Securities--Servicing by Unaffiliated
Sellers." With respect to those Contracts serviced by the Master Servicer
through a Servicer, the Master Servicer will remain liable for its servicing
obligations under the Agreement as if the Master Servicer alone were servicing
the Contracts. The Contract documents, if so specified in the related prospectus
supplement, may be held for the benefit of the Trustee by a Custodian (the
"Custodian") appointed pursuant to the related Pooling and Servicing Agreement
or a Custodial Agreement (the "Custodial Agreement") among the Depositor, the
Trustee and the Custodian.

         Unless otherwise specified in the related prospectus supplement, each
registered holder of a Security will be entitled to receive periodic
distributions, which will be monthly unless otherwise specified in the related
prospectus supplement, of all or a portion of principal of the underlying
Contracts or interest on the principal balance of the Security at the Interest
Rate, or both.
See "Description of the Securities--Payments on Contracts."

         Except as otherwise specified in the related prospectus supplement, the
related prospectus supplement, or, if the information is not available in
advance of the date of the related prospectus supplement, a Current Report on
Form 8-K to be filed with the Commission, will specify, for the Contracts
contained in the related Contract Pool, among other things:

o    the dates of origination of the Contracts;

o    the weighted average APR on the Contracts;

o    the range of outstanding principal balances as of the Cut-off Date;

o    the average outstanding principal balance of the Contracts as of the
     Cut-off Date;



                                       19


o    the weighted average term to maturity as of the Cut-off Date; and

o    the range of original maturities of the Contracts.

         With respect to the Contracts included in the Contract Pool, the
Depositor, the Master Servicer or any other party specified in the related
prospectus supplement, will make or cause to be made representations and
warranties as to the types and geographical distribution of the Contracts and as
to the accuracy in all material respects of information furnished to the Trustee
in respect of each Contract. In addition, the Master Servicer or the
Unaffiliated Seller of the Contracts will represent and warrant that, as of the
Cut-off Date, unless otherwise specified in the related prospectus supplement,
no Contract was more than 30 days delinquent as to payment of principal and
interest. Upon a breach of any representation that materially and adversely
affects the interest of the related Securityholders in a Contract, the Master
Servicer, the Unaffiliated Seller or another party, as appropriate, will be
obligated either to cure the breach in all material respects or to purchase the
Contract or, if so specified in the related prospectus supplement, to substitute
another Contract as described below. This repurchase or substitution obligation
constitutes the sole remedy available to the Securityholders or the Trustee for
a breach of a representation by the Master Servicer, the Unaffiliated Seller or
another party.

         If so specified in the related prospectus supplement, in addition to
making particular representations and warranties regarding its authority to
enter into, and its ability to perform its obligations under, the Agreement, the
Master Servicer will make other representations and warranties, except to the
extent that another party specified in the prospectus supplement makes any
representations, to the Trustee with respect to the enforceability of coverage
under any applicable insurance policy or hazard insurance policy. See
"Description of Insurance" for information regarding the extent of coverage
under the insurance policies. Upon a breach of the insurability representation
that materially and adversely affects the interests of the Securityholders in a
Contract, the Master Servicer, the Unaffiliated Seller or any other party, as
appropriate, will be obligated either to cure the breach in all material
respects or, unless otherwise specified in the related prospectus supplement, to
purchase the Contract at a price equal to the principal balance of the Contract
as of the date of purchase plus accrued interest at the related Pass-Through
Rate to the first day of the month following the month of purchase. The Master
Servicer, if required by the Rating Agency rating the Notes or Certificates, as
applicable, will procure a surety bond, guaranty, letter of credit or other
instrument (the "Performance Bond") acceptable to the Rating Agency to support
this purchase obligation. See "Credit Support--Performance Bond." The purchase
obligation will constitute the sole remedy available to the Securityholders or
the Trustee for a breach of the Master Servicer's or seller's insurability
representation.

         If provided in the related prospectus supplement, if the Depositor
discovers or receives notice of any breach of its representations and warranties
relating to a Contract within two years or another period specified in the
related prospectus supplement of the date of the initial issuance of the Notes
or Certificates, as applicable, the Depositor may remove the Contract from the
Trust Fund (each, a "Deleted Contract"), rather than repurchase the Contract as
provided above, and substitute in its place another Contract (each, a
"Substitute Contract"). Any Substitute Contract, on the date of substitution,
will



                                       20


o    have an outstanding principal balance, after deduction of all scheduled
     payments due in the month of substitution, not in excess of the outstanding
     principal balance of the Deleted Contract, the amount of any shortfall to
     be distributed to Securityholders in the month of substitution,

o    have an APR not less than, and not more than 1% greater than, the APR of
     the Deleted Contract,

o    have a remaining term to maturity not greater than, and not more than one
     year less than, that of the Deleted Contract, and

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

This repurchase or substitution obligation constitutes the sole remedy available
to the Securityholders or the Trustee for any breach.

         UNDERWRITING POLICIES

         Conventional Contracts will comply with the underwriting policies of
the Originator or Unaffiliated Seller of the Contracts described in the related
prospectus supplement. Except as described below or in the related prospectus
supplement, the Depositor believes that these policies were consistent with
those utilized by mortgage lenders or manufactured home lenders generally during
the period of origination.

         With respect to a Contract made in connection with the Obligor's
purchase of a Manufactured Home, the "appraised value" is the amount determined
by a professional appraiser. The appraiser must personally inspect the
Manufactured Home and prepare a report which includes market data based on
recent sales of comparable Manufactured Homes and, when deemed applicable, a
replacement cost analysis based on the current cost of a similar Manufactured
Home. Unless otherwise specified in the related prospectus supplement, the
"Contract Loan-to-Value Ratio" will be equal to the original principal amount of
the Contract divided by the lesser of the "appraised value" or the sales price
for the Manufactured Home.

         THE FINANCING LOAN POOLS

         If so specified in the prospectus supplement with respect to a Series,
the Trust Fund for the Series may include a pool of loans made to finance the
origination of Home Equity Loans or Contracts (the "Warehouse Loans") and
secured by Home Equity Loans or Contracts or participation certificates
representing participation interests in the Warehouse Loans and related property
(the "Warehouse Loan Pool") conveyed to the Trust by the Depositor, evidencing
interests in Warehouse Loans originated in the ordinary course of business and
purchased by the Depositor. Unless otherwise specified in the related prospectus
supplement, the Warehouse Loans will be fully amortizing and will bear interest
at the interest rates specified in the related prospectus supplement.

         The Depositor will cause the Warehouse Loans constituting each
Warehouse Loan Pool to be assigned and/or pledged to the related Trustee named
in the related prospectus supplement for the benefit of the related
Securityholders. The Master Servicer specified in the related



                                       21


prospectus supplement will service the Warehouse Loans, either by itself or
through other Servicers, pursuant to the Agreement. See "Description of the
Securities--Servicing by Unaffiliated Sellers." With respect to those Warehouse
Loans serviced by the Master Servicer through a Servicer, the Master Servicer
will remain liable for its servicing obligations under the Agreement as if the
Master Servicer alone were servicing the Warehouse Loans. The Warehouse Loan
documents, if so specified in the related prospectus supplement, may be held for
the benefit of the Trustee by a Custodian appointed pursuant to the related
Pooling and Servicing Agreement or a Custodial Agreement.

         Except as otherwise specified in the related prospectus supplement, the
related prospectus supplement, or, if the information is not available in
advance of the date of the related prospectus supplement, a Current Report on
Form 8-K to be filed with the Commission, will specify, for the Warehouse Loans
contained in the related Warehouse Loan Pool, among other things:

o    the dates of origination of the Warehouse Loans;

o    the weighted average APR on the Warehouse Loans;

o    the range of outstanding principal balances as of the Cut-off Date;

o    the average outstanding principal balance of the Warehouse Loans as of the
     Cut-off Date;

o    the weighted average term to maturity as of the Cut-off Date; and

o    the range of original maturities of the Warehouse Loans.

         With respect to the Warehouse Loans included in the Warehouse Loan
Pool, the Depositor, the Master Servicer or any other party specified in the
related prospectus supplement, will make or cause to be made representations and
warranties as to the types and geographical distribution of the Warehouse Loans
and as to the accuracy in all material respects of information furnished to the
Trustee in respect of each Warehouse Loan. In addition, the Master Servicer or
the Unaffiliated Seller of the Warehouse Loans will represent and warrant that,
as of the Cut-off Date, unless otherwise specified in the related prospectus
supplement, no Warehouse Loan was more than 30 days delinquent as to payment of
principal and interest. Upon a breach of any representation that materially and
adversely affects the interest of the related Securityholders in a Warehouse
Loan, the Master Servicer, the Unaffiliated Seller or another party, as
appropriate, will be obligated either to cure the breach in all material
respects or to purchase the Warehouse Loan or, if so specified in the related
prospectus supplement, to substitute another Warehouse Loan. This repurchase or
substitution obligation constitutes the sole remedy available to the
Securityholders or the Trustee for a breach of a representation by the Master
Servicer, the Unaffiliated Seller or another party.

         If provided in the related prospectus supplement, if the Depositor
discovers or receives notice of any breach of its representations and warranties
relating to a Warehouse Loan within two years or another period specified in the
related prospectus supplement of the date of the initial issuance of the Notes
or Certificates, as applicable, the Depositor may remove the Warehouse Loan from
the Trust Fund (each, a "Deleted Warehouse Loan"), rather than repurchase the
Warehouse Loan as provided above, and substitute in its place another Warehouse
Loan (each, a "Substitute Warehouse Loan"). Any Substitute Warehouse Loan, on
the date of substitution, will



                                       22


o    have an outstanding principal balance, after deduction of all scheduled
     payments due in the month of substitution, not in excess of the outstanding
     principal balance of the Deleted Warehouse Loan, the amount of any
     shortfall to be distributed to Securityholders in the month of
     substitution,

o    have an APR not less than, and not more than 1% greater than, the APR of
     the Deleted Warehouse Loan,

o    have a remaining term to maturity not greater than, and not more than one
     year less than, that of the Deleted Warehouse Loan, and

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

This repurchase or substitution obligation constitutes the sole remedy available
to the Securityholders or the Trustee for any breach.

         UNDERWRITING POLICIES

         Warehouse Loans will comply with the underwriting policies of the
Originator or Unaffiliated Seller of the Warehouse Loans described in the
related prospectus supplement. Except as described below or in the related
prospectus supplement.

                                  THE DEPOSITOR

         Asset Backed Securities Corporation (the "Depositor") was incorporated
in the State of Delaware on December 31, 1985, and is an indirect, wholly owned
subsidiary of Credit Suisse First Boston, Inc. Credit Suisse First Boston LLC,
which may act as an underwriter in offerings made by this prospectus, as
described in "Plan of Distribution" below, is also a wholly owned subsidiary of
Credit Suisse First Boston, Inc. The principal executive offices of the
Depositor are located at Eleven Madison Avenue, New York, NY 10010. Its
telephone number is (212) 325-2000.

         The Depositor was organized, among other things, for the purposes of
establishing trusts, selling beneficial interests in those trusts and acquiring
and selling mortgage assets to trusts. Neither the Depositor, its parent nor any
of the Depositor's affiliates will ensure or guarantee distributions on the
Notes or Certificates, as applicable, of any Series.

         Trust Assets will be acquired by the Depositor directly or through one
or more affiliates.

                                 USE OF PROCEEDS

         Except as otherwise provided in the related prospectus supplement, the
Depositor will apply all or substantially all of the net proceeds from the sale
of each Series offered by this prospectus and by the related prospectus
supplement to purchase the Trust Assets, to repay indebtedness which has been
incurred to obtain funds to acquire the Trust Assets, to establish the Reserve
Funds or Pre-Funding Accounts, if any, for the Series and to pay costs of
structuring and issuing the Notes or Certificates, as applicable. If so
specified in the related prospectus supplement, Notes or Certificates, as
applicable, may be exchanged by the Depositor for Trust Assets. Unless otherwise
specified in the related prospectus supplement, the Trust Assets for

                                       23


each Series of Notes or Certificates, as applicable, will be acquired by the
Depositor either directly, or through one or more affiliates which will have
acquired Trust Assets from time to time either in the open market or in
privately negotiated transactions.

                  MATURITY, PREPAYMENT AND YIELD CONSIDERATIONS

         Unless otherwise specified in the related prospectus supplement, the
scheduled maturities of all of the Mortgage Loans, or the mortgage loans
underlying the Mortgage Certificates, at origination will not be less than
approximately 10 years or exceed 40 years and all the Contracts will have
maturities at origination of not more than 20 years, but the Mortgage Loans, or
the underlying mortgage loans, or Contracts may be prepaid in full or in part at
any time. Unless otherwise specified in the applicable prospectus supplement, no
Mortgage Loan, or mortgage loan, or Contract will provide for a prepayment
penalty and each will contain, except in the case of FHA and VA Loans,
due-on-sale clauses permitting the mortgagee or obligee to accelerate maturity
upon conveyance of the related Mortgaged Property, Cooperative Dwelling or
Manufactured Home.

         The FHA has compiled statistics relating to one- to four-family, level
payment mortgage loans insured by the FHA under the National Housing Act of
1934, as amended, at various interest rates, all of which permit assumption by
the new buyer if the home is sold. The statistics indicate that while some
mortgage loans remain outstanding until their scheduled maturities, a
substantial number are paid prior to their respective stated maturities. The
Actuarial Division of HUD has prepared tables which, assuming full mortgage
prepayments at the rates experienced by FHA, set forth the percentages of the
original number of FHA Loans in pools of level payment mortgage loans of varying
maturities that will remain outstanding on each anniversary of the original date
of the mortgage loans, assuming they all have the same origination date, ("FHA
Experience"). Published information with respect to conventional residential
mortgage loans indicates that the mortgage loans have historically been prepaid
at higher rates than government-insured loans because, unlike government insured
mortgage loans, conventional mortgage loans may contain due-on-sale clauses that
allow the holder of the loans to demand payment in full of the remaining
principal balance of the mortgage loans upon sales or particular transfers of
the mortgaged property. There are no similar statistics with respect to the
prepayment rates of cooperative loans or loans secured by multifamily
properties.

         It is customary in the residential mortgage industry in quoting yields
on a pool of (1) 30-year fixed-rate, level payment mortgages, to compute the
yield as if the pool were a single loan that is amortized according to a 30-year
schedule and is then prepaid in full at the end of the twelfth year and (2)
15-year fixed-rate, level payment mortgages, to compute the yield as if the pool
were a single loan that is amortized according to a 15-year schedule and then is
prepaid in full at the end of the seventh year.

         Prepayments on residential mortgage loans are also commonly measured
relative to a prepayment standard or model. If so specified in the prospectus
supplement relating to a Series of Notes or Certificates, as applicable, the
model used in a prospectus supplement will be the Standard Prepayment Assumption
("SPA"). SPA represents an assumed rate of prepayment relative to the then
outstanding principal balance of a pool of mortgages. A prepayment assumption of
100% of SPA assumes prepayment rates of 0.2% per annum of the then



                                       24


outstanding principal balance of the mortgages in the first month of the life of
the mortgages and an additional 0.2% per annum in each subsequent month until
the thirtieth month and in each subsequent month during the life of the
mortgages, 100% of SPA assumes a constant prepayment rate of 6% per annum each
month.

         Information regarding FHA Experience, other published information, SPA
or any other rate of assumed prepayments, as applicable, will be set forth in
the prospectus supplement with respect to a Series of Notes or Certificates, as
applicable. There is, however, no assurance that prepayment of the Mortgage
Loans underlying a Series of Notes or Certificates, as applicable, will conform
to FHA Experience, mortgage industry custom, any level of SPA, or any other rate
specified in the related prospectus supplement. A number of factors, including
homeowner mobility, economic conditions, enforceability of due-on-sale clauses,
mortgage market interest rates, mortgage recording taxes and the availability of
mortgage funds, may affect prepayment experience on residential mortgage loans.

         The terms of the Servicing Agreement will require the Servicer or the
Master Servicer to enforce any due-on-sale clause to the extent it has knowledge
of the conveyance or the proposed conveyance of the underlying Mortgaged
Property or Cooperative Dwelling; provided, however, that any enforcement action
that would impair or threaten to impair any recovery under any related Insurance
Policy will not be required or permitted. See "Description of the
Securities--Enforcement of 'Due-On-Sale' Clauses; Realization Upon Defaulted
Mortgage Loans" and "Certain Legal Aspects of the Mortgage Loans and
Contracts--The Mortgage Loans for a description of particular provisions of each
Agreement and related legal developments that may affect the prepayment
experience on the Mortgage Loans.

         At the request of the Mortgagor, the Servicer may refinance the
Mortgage Loans in any Mortgage Pool by accepting prepayments on the Mortgage
Loans and making new loans secured by a mortgage on the same property. Upon any
refinancing, the new loans will not be included in the Mortgage Pool and the
related Servicer will be required to repurchase the affected Mortgage Loan. A
Mortgagor may be legally entitled to require the Servicer to allow a
refinancing. Any repurchase will have the same effect as a prepayment in full of
the related Mortgage Loan.

         There are no uniform statistics compiled for prepayments of contracts
relating to Manufactured Homes. Prepayments on the Contracts may be influenced
by a variety of economic, geographic, social and other factors, including
repossessions, aging, seasonality and interest rate fluctuations. Other factors
affecting prepayment of mortgage loans or Contracts include changes in housing
needs, job transfers, unemployment and servicing decisions. An investment in
Notes or Certificates, as applicable, evidencing interests in, or secured by,
Contracts may be affected by, among other things, a downturn in regional or
local economic conditions. These regional or local economic conditions are often
volatile, and historically have affected the delinquency, loan loss and
repossession experience of the Contracts. To the extent that losses on the
Contracts are not covered by the Subordinated Amount, if any, Letters of Credit,
applicable Insurance Policies, if any, or by any Alternative Credit Support,
holders of the Notes or Certificates, as applicable, of a Series evidencing
interests in, or secured by, Contracts will bear all risk of loss resulting from
default by Obligors and will have to look primarily to the value of the
Manufactured Homes, which generally depreciate in value, for recovery of the



                                       25


outstanding principal of and unpaid interest on the defaulted Contracts. See
"The Trust Fund--The Contract Pools."

         While most Contracts will contain "due-on-sale" provisions permitting
the holder of the Contract to accelerate the maturity of the Contract upon
conveyance by the borrower, to the extent provided in the related prospectus
supplement, the Master Servicer may permit proposed assumptions of Contracts
where the proposed buyer meets the underwriting standards described above. Any
assumption would have the effect of extending the average life of the Contracts.
FHA Mortgage Loans and Contracts and VA Mortgage Loans and Contracts are not
permitted to contain "due-on-sale" clauses, and are freely assumable.

         Mortgage Loans made with respect to Multifamily Property may have
provisions that prevent prepayment for a number of years and may provide for
payments of interest only during a specific period followed by amortization of
principal on the basis of a schedule extending beyond the maturity of the
related Mortgage Loans. Prepayments of Mortgage Loans secured by Multifamily
Property may be affected by these and other factors, including changes in
interest rates and the relative tax benefits associated with ownership of
Multifamily Property.

         If set forth in the applicable prospectus supplement, the Depositor or
other specified entity will have the option to repurchase the Trust Assets
included in the related Trust Fund under the conditions stated in the related
prospectus supplement. For any Series of Notes or Certificates, as applicable,
for which the Depositor has elected to treat the Trust Fund or particular assets
of the Trust Fund as a REMIC pursuant to the provisions or the Code, any
repurchase will be effected in compliance with the requirements of Section
860F(a)(4) of the Code so as to constitute a "qualified liquidation" under the
Code. In addition, the Depositor will be obligated, under some circumstances, to
repurchase some of the Trust Assets. The Master Servicer and Unaffiliated
Sellers will also have repurchase obligations, as more fully described in this
prospectus and in the related prospectus supplement. In addition, the mortgage
loans underlying the Mortgage Certificates may be subject to repurchase under
circumstances similar to those described above. Repurchases will have the same
effect as prepayments in full. See "The Trust Fund--Mortgage Loan Program" and
"--Representations by Unaffiliated Sellers; Repurchases," "Description of the
Securities--Assignment of Mortgage Loans," "-- Assignment of Mortgage
Certificates," "-- Assignment of Contracts" and "--Termination."

         If so specified in the related prospectus supplement, a Mortgage Pool
may contain Mortgage Loans with fluctuating Mortgage Rates that adjust more
frequently than the monthly payment with respect to the Mortgage Loans. As a
result, the portion of each monthly payment allocated to principal may vary from
month to month. Negative amortization with respect to a Mortgage Loan will occur
if an adjustment to the Mortgage Rate causes the amount of interest accrued in
any month, calculated at the new Mortgage Rate for the period, to exceed the
amount of the monthly payment or if the allowable increase in any monthly
payment is limited to an amount that is less than the amount of interest accrued
in any month. The amount of any resulting Deferred Interest will be added to the
principal balance of the Mortgage Loan and will bear interest at the Mortgage
Rate in effect from time to time. To the extent that, as a result of the
addition of any Deferred Interest, the Mortgage Loan negatively amortizes over
its term, the weighted average life of the Notes or Certificates, as applicable,
of the related Series will be greater than would otherwise be the case. As a
result, the yield on any Mortgage Loan at any



                                       26


time may be less than the yields on similar adjustable rate mortgage loans, and
the rate of prepayment may be lower or higher than would otherwise be
anticipated.

         Generally, when a full prepayment is made on a Mortgage Loan, Warehouse
Loan or Contract, the Mortgagor or the borrower under a Contract (the
"Obligor"), is charged interest for the number of days actually elapsed from the
due date of the preceding monthly payment up to the date of prepayment, at a
daily interest rate determined by dividing the Mortgage Rate or APR by 365 or as
otherwise specified in the related Mortgage Note. Full prepayments will reduce
the amount of interest paid by the Mortgagor or the Obligor because interest on
the principal amount of any Mortgage Loan, Warehouse Loan or Contract so prepaid
will be paid only to the date of prepayment instead of for a full month;
however, unless otherwise provided in the applicable prospectus supplement, the
Master Servicer with respect to a Series will be required to advance from its
own funds the portion of any interest at the related Mortgage Rate that is not
so received. Partial prepayments generally are applied on the first day of the
month following receipt, with no resulting reduction in interest payable for the
period in which the partial prepayment is made. Unless otherwise specified in
the related prospectus supplement, full and partial prepayments, together with
interest on the full and partial prepayments at the Mortgage Rate or APR for the
related Mortgage Loan, Warehouse Loan or Contract to the last day of the month
in which the prepayments occur, will be deposited in the Certificate Account and
will be available for distribution to Securityholders on the next succeeding
Distribution Date in the manner specified in the related prospectus supplement.

         Generally, the effective yield to holders of Notes or Certificates, as
applicable, having a monthly Distribution Date will be lower than the yield
otherwise produced because, while interest will accrue on each Mortgage Loan,
Warehouse Loan or Contract, or mortgage loan underlying a Mortgage Certificate,
to the first day of the month, the distribution of interest to holders of Notes
or Certificates, as applicable, will be made no earlier than the 25th day of the
month following the month of the accrual, unless otherwise provided in the
applicable prospectus supplement. The adverse effect on yield will intensify
with any increase in the period of time by which the Distribution Date with
respect to a Series of Notes or Certificates, as applicable, succeeds the 25th
day. If so specified in the related prospectus supplement, one or more Classes
or Subclasses of Certificates within a Series (the "Multi-Class Securities") may
be assigned a principal balance (a "Stated Principal Balance" or a "Certificate
Principal Balance") based on the cash flow from the Mortgage Loans, Mortgage
Certificates, the Warehouse Loans, the Contracts and/or the other assets in the
Trust Fund if specified in the related prospectus supplement and a stated annual
interest rate, determined in the manner set forth in the related prospectus
supplement, which may be fixed or variable (an "Interest Rate"). With respect to
the Multi-Class Securities of a Series having other than monthly Distribution
Dates, the yield to holders of the Certificates will also be adversely affected
by any increase in the period of time from the date to which interest accrues on
the Certificate to the Distribution Date on which interest is distributed.

         If so specified in the related prospectus supplement, one or more
Classes or Subclasses of Notes and/or Certificates may receive unequal amounts
of the distributions of principal of and interest on the Mortgage Loans, the
Warehouse Loans, the Contracts and the Mortgage Certificates included in the
related Trust Fund, as specified in the related prospectus supplement (any Class
or Subclass receiving the higher proportion of principal distributions being
referred to in this prospectus after as a "Principal Weighted Class" or
"Principal Weighted Subclass,"



                                       27


respectively, and any Class or Subclass receiving the higher proportion of
interest distributions being referred to in this prospectus as an "Interest
Weighted Class" or an "Interest Weighted Subclass," respectively). If so
specified in the related prospectus supplement, the allocation of the principal
and interest distributions may involve as much as 100% of each distribution of
principal or interest being allocated to one or more Classes or Subclasses and
0% to another. If so specified in the related prospectus supplement, one or more
Classes or Subclasses may receive disproportionate amounts of distributions of
principal, which proportions may change over time subject to specific
conditions. Payments may be applied to any one or more Classes or Subclasses on
a sequential or pro rata basis, or otherwise, as specified in the related
prospectus supplement.

         In the event that the Notes or Certificates, as applicable, of a Series
are divided into two or more Classes or Subclasses and that a Class or Subclass
is an Interest Weighted Class, in the event that a Series includes Classes or
Subclasses of Certificates of a Series which evidence a residual interest in the
related Trust Fund (the "Residual Certificates"), the prospectus supplement for
the Series will indicate the manner in which the yield to Securityholders will
be affected by different rates of prepayments on the Mortgage Loans, on the
Warehouse Loans, on the Contracts or on the mortgage loans underlying the
Mortgage Certificates. In general, the yield on Notes or Certificates, as
applicable, that are offered at a premium to their principal or notional amount
("Premium Securities") is likely to be adversely affected by a higher than
anticipated level of principal prepayments on the Mortgage Loans, on the
Warehouse Loans, on the Contracts or on the mortgage loans underlying the
Mortgage Certificates. This relationship will become more sensitive as the
amount by which the Percentage Interest of the Class in each Interest
Distribution is greater than the corresponding Percentage Interest of the Class
in each Principal Distribution. If the differential is particularly wide, e.g.,
the Interest Distribution is allocated primarily or exclusively to one Class or
Subclass and the Principal Distribution primarily or exclusively to another, and
a high level of prepayments occurs, there is a possibility that Securityholders
of Premium Securities will not only suffer a lower than anticipated yield but,
in extreme cases, will fail to recoup fully their initial investment.
Conversely, a lower than anticipated level of principal prepayments, which can
be anticipated to increase the expected yield to holders of Notes or
Certificates, as applicable, that are Premium Securities, will likely result in
a lower than anticipated yield to holders of Notes or Certificates, as
applicable, that are offered at a discount to their principal amount ("Discount
Securities"). If so specified in the applicable prospectus supplement, a
disproportionately large amount of principal prepayments or other recoveries of
principal specified in the related prospectus supplement on a Mortgage Loan,
Warehouse Loan or Contract that are received in advance of their scheduled Due
Dates and are not accompanied by an amount as to interest representing scheduled
interest due on any date or dates in any month or months subsequent to the month
of prepayment (the "Principal Prepayments") may be distributed to the holders of
the Senior Notes or Senior Certificates, as applicable, at the times and under
the circumstances described in the prospectus supplement.

         In the event that the Notes or Certificates, as applicable, of a Series
include one or more Classes or Subclasses of Multi-Class Securities, the
prospectus supplement for the Series will set forth information, measured
relative to a prepayment standard or model specified in the prospectus
supplement, with respect to the projected weighted average life of each the
Class or Subclass and the percentage of the initial Stated Principal Balance of
each Subclass that would be outstanding on special Distribution Dates for the
related Series based on the assumptions



                                       28


stated in the prospectus supplement, including assumptions that prepayments on
the Mortgage Loans, Warehouse Loans or Contracts or on the mortgage loans
underlying the Mortgage Certificates in the related Trust Fund are made at rates
corresponding to the various percentages of the prepayment standard or model.

                          DESCRIPTION OF THE SECURITIES

         Each Series of Notes or Certificates, as applicable, will be issued
pursuant to either:

         (1) an agreement consisting of either,

             (a)  a Pooling and Servicing Agreement, or

             (b)  a Reference Agreement (the "Reference Agreement") and the
                  Standard Terms and Provisions of Pooling and Servicing
                  Agreement (the "Standard Terms"), (either the Standard Terms
                  together with the Reference Agreement or the Pooling and
                  Servicing Agreement referred to in this prospectus as the
                  "Pooling and Servicing Agreement") among the Depositor, the
                  Master Servicer, if any, and the Trustee, or

         (2) if a Series of Securities includes Notes, a Trust Agreement or an
             Indenture.

Forms of the Pooling and Servicing Agreement and the Trust Agreement have been
filed as exhibits to the Registration Statement of which this prospectus is a
part. If a Series of Securities includes Notes, the Notes will be issued and
secured pursuant to an Indenture to be entered into between the related Issuer
and the Indenture Trustee, and the related Trust Fund will be serviced by the
Master Servicer pursuant to a Sale and Servicing Agreement. Forms of the
Indenture and the Sale and Servicing Agreement have been filed as exhibits to
the Registration Statement of which this prospectus is a part. In addition, a
Series of Notes or Certificates, as applicable, may include a Warranty and
Servicing Agreement between the Master Servicer and the Servicer (the "Warranty
and Servicing Agreement"). As used in this prospectus, "Agreement" means, with
respect to a Series that only includes Certificates, the Pooling and Servicing
Agreement and, if applicable, the Warranty and Servicing Agreement, and with
respect to a Series that includes Notes, the Indenture, the Trust Agreement and
the Sale and Servicing Agreement and, if applicable, the Warranty and Servicing
Agreement, as the context requires.

         The following summaries describe provisions common to each Agreement.
The summaries do not purport to be complete and are subject to, and are
qualified in their entirety by reference to, all of the provisions of the
Agreement for the applicable Series and the related prospectus supplement.
Wherever defined terms of the Agreement are referred to, the defined terms are
incorporated in this prospectus by reference.

         Unless otherwise specified in the prospectus supplement with respect to
a Series, each Note or Certificate, as applicable, offered by the prospectus
supplement and by means of the related prospectus supplement will be issued in
fully registered form. Notes or Certificates, as applicable, will represent the
undivided interest or beneficial interest attributable to a Class or Subclass
in, and Notes will be secured by, the Trust Fund. The Trust Fund with respect to
a Series will consist of:

                                       29



o    the Mortgage Loans, Warehouse Loans, Contracts and Mortgage Certificates
     and distributions on the Mortgage Loans, Warehouse Loans, Contracts and
     Mortgage Certificates as from time to time are subject to the applicable
     Agreement;

o    the assets as from time to time are identified as deposited in the
     Certificate Account referred to below;

o    property acquired by foreclosure of Mortgage Loans or deed in lieu of
     foreclosure, or Manufactured Homes acquired by repossession;

o    the Letter of Credit, if any, with respect to the related Series;

o    the Pool Insurance Policy, if any, with respect to the related Series
     (described below under "Description of Insurance");

o    the Special Hazard Insurance Policy, if any, with respect to the related
     Series (described below under "Description of Insurance");

o    the Mortgagor Bankruptcy Bond and proceeds of the Mortgagor Bankruptcy
     Bond, if any, with respect to the related Series (as described below under
     "Description of Insurance");

o    the Performance Bond and proceeds of the Performance Bond, if any, with
     respect to the related Series;

o    the Primary Mortgage Insurance Policies, if any, with respect to the
     related Series (as described below under "Description of Insurance");

o    the Security Guarantee Insurance, if any, with respect to the related
     Series;

o    the Depositor's rights under the Servicing Agreement with respect to the
     Mortgage Loans, Warehouse Loans or Contracts, if any, with respect to the
     related Series; and

o    the GPM and Buy-Down Funds, if any, with respect to the related Series; or,
     in lieu of some or all of the foregoing, the Alternative Credit Support
     described in the applicable prospectus supplement.

         Upon the original issuance of a Series of Notes or Certificates, as
applicable, Certificates representing the minimum undivided interest or
beneficial ownership interest in the related Trust Fund or the minimum notional
amount allocable to each Class will evidence the undivided interest, beneficial
ownership interest or percentage ownership interest specified in the related
prospectus supplement.

         If so specified in the related prospectus supplement, one or more
Servicers or the Depositor may directly perform some or all of the duties of a
Master Servicer with respect to a Series.

         If so specified in the prospectus supplement for a Series with respect
to which the Depositor has elected to treat the Trust Fund as a REMIC under the
Code, ownership of the Trust Fund for a Series may be evidenced by Multi-Class
Certificates and/or Notes and Residual Certificates. Distributions of principal
and interest with respect to Multi-Class Securities may be made on a sequential
or concurrent basis, as specified in the related prospectus supplement. If so
specified in the related prospectus supplement, one or more Classes or
Subclasses may be Compound Interest Securities.



                                       30


         The Residual Certificates, if any, included in a Series will be
designated by the Depositor as the "residual interest" in the related REMIC for
purposes of Section 860G(a)(2) of the Code, and will represent the right to
receive distributions as specified in the prospectus supplement for the Series.
All other Classes of Notes or Certificates, as applicable, of the Series will
constitute "regular interests" in the related REMIC. If so specified in the
related prospectus supplement, the Residual Certificates may be offered by this
prospectus and by means of the related prospectus supplement. See "Material
Federal Income Tax Considerations."

         If so specified in the prospectus supplement for a Series which
includes Multi-Class Securities, each Trust Asset in the related Trust Fund will
be assigned an initial "Asset Value." Unless otherwise specified in the related
prospectus supplement, the Asset Value of each Trust Asset in the related Trust
Fund will be the Stated Principal Balance of each Class or Classes of Notes or
Certificates, as applicable, of the Series that, based upon specific
assumptions, can be supported by distributions on the Trust Assets allocable to
a Class or Subclass, together with reinvestment income on the Trust Assets, to
the extent specified in the related prospectus supplement, and amounts available
to be withdrawn from any Buy-Down, GPM Fund or Reserve Fund for the Series. The
method of determining the Asset Value of the Trust Assets in the Trust Fund for
a Series that includes Multi-Class Securities will be specified in the related
prospectus supplement.

         If so specified in the prospectus supplement with respect to a Series,
ownership of the Trust Fund for a Series may be evidenced by one or more Classes
or Subclasses of Certificates that are Senior Certificates and one or more
Classes or Subclasses of Certificates that are Subordinated Certificates, each
representing the undivided interests in the Trust Fund specified in the related
prospectus supplement. If so specified in the related prospectus supplement, one
or more Classes or Subclasses or Subordinated Notes or Subordinated
Certificates, as applicable, of a Series may be subordinated to the right of the
holders of Notes or Certificates, as applicable, of one or more Classes or
Subclasses within a Series to receive distributions with respect to the Mortgage
Loans, Warehouse Loans, Mortgage Certificates or Contracts in the related Trust
Fund, in the manner and to the extent specified in the related prospectus
supplement. If so specified in the related prospectus supplement, the holders of
each Subclass of Senior Notes or Senior Certificates, as applicable, will be
entitled to the Percentage Interests in the principal and/or interest payments
on the underlying Mortgage Loans, Warehouse Loans or Contracts specified in the
related prospectus supplement. If so specified in the related prospectus
supplement, the Subordinated Notes or Subordinated Certificates, as applicable,
of a Series will evidence the right to receive distributions with respect to a
specific pool of Mortgage Loans, Warehouse Loans, Mortgage Certificates or
Contracts, which right will be subordinated to the right of the holders of the
Senior Notes or Senior Certificates, as applicable, of the Series to receive
distributions with respect to a specific pool of Mortgage Loans, Warehouse
Loans, Mortgage Certificates or Contracts, as more fully set forth in the
related prospectus supplement. If so specified in the related prospectus
supplement, the holders of the Senior Notes or Senior Certificates, as
applicable, may have the right to receive a greater than pro rata percentage of
Principal Prepayments in the manner and under the circumstances described in the
prospectus supplement. If so specified in the related prospectus supplement, if
a Series of Securities includes Notes, one more Classes or Subclasses of Notes
may be subordinated to another Class or Subclasses of Notes in the manner and
under the circumstances described in the prospectus supplement.



                                       31


         If so specified in the related prospectus supplement, the Depositor may
sell some Classes or Subclasses of the Notes or Certificates, as applicable, of
a Series, including one or more Classes or Subclasses of Subordinated or
Residual Certificates, in privately negotiated transactions exempt from
registration under the Securities Act of 1933, as amended (the "Securities
Act"). These Notes or Certificates, as applicable, will be transferable only
pursuant to an effective registration statement or an applicable exemption under
the Securities Act and pursuant to any applicable state law. Alternatively, if
so specified in the related prospectus supplement, the Depositor may offer one
or more Classes or Subclasses of the Subordinated or Residual Certificates of a
Series by means of this prospectus and the related prospectus supplement.

         The Notes or Certificates, as applicable, of a Series offered by this
prospectus and by means of the related prospectus supplements will be
transferable and exchangeable at the office or agency maintained by the Trustee
for the purpose set forth in the related prospectus supplement, unless the
related prospectus supplement provides otherwise. No service charge will be made
for any transfer or exchange of Notes or Certificates, as applicable, but the
Trustee may require payment of a sum sufficient to cover any tax or other
governmental charge in connection with a transfer or exchange.

         DISTRIBUTIONS OF PRINCIPAL AND INTEREST

         Beginning on the date specified in the related prospectus supplement,
distributions of principal of and interest on the Notes or Certificates, as
applicable, of a Series will be made by the Master Servicer or Trustee, if so
specified in the prospectus supplement, on each Distribution Date to persons in
whose name the Notes or Certificates, as applicable, are registered at the close
of business on the day specified in the related prospectus supplement (the
"Record Date"). The "Distribution Date" will be the day specified in the
prospectus supplement with respect to each Class or Subclass of Notes or
Certificates, as applicable, of a Series, or if the day specified is not a
business day, the next succeeding business day. Distributions of interest will
be made periodically at the intervals, in the manner and at the per annum rate
specified in the related prospectus supplement, which rate may be fixed or
variable. Interest on the Notes or Certificates, as applicable, will be
calculated on the basis of a 360-day year consisting of twelve 30-day months,
unless otherwise specified in the related prospectus supplement. Distributions
of principal of the Notes or Certificates, as applicable, will be made in the
priority and manner and in the amounts specified in the related prospectus
supplement.

         If so specified in the prospectus supplement with respect to a Series
of Notes or Certificates, as applicable, distributions of interest and principal
to a Certificateholder will be equal to the product of the undivided interest
evidenced by a Certificate and the payments of principal and interest, adjusted
as set forth in the prospectus supplement, on or with respect to the Mortgage
Loans, Warehouse Loans or Contracts, including any Advances, or the Mortgage
Certificates included in the Trust Fund with respect to a Series.

         If so specified in the related prospectus supplement, distributions on
a Class or Subclass of Notes or Certificates, as applicable, of a Series may be
based on the Percentage Interest evidenced by a Note or a Certificate, as
applicable, of a Class or Subclass in the distributions, including any Advances,
of principal (the "Principal Distribution") and interest, adjusted as set



                                       32


forth in the prospectus supplement, (the "Interest Distribution") on or with
respect to the Mortgage Loans, Warehouse Loans, the Contracts or the Mortgage
Certificates in the related Trust Fund. Unless otherwise specified in the
related prospectus supplement, on each Distribution Date, the Trustee will
distribute to each holder of a Note or Certificate, as applicable, of a Class or
Subclass an amount equal to the product of the Percentage Interest evidenced by
the Note or Certificate, as applicable, and the interest of a Class or Subclass
in the Principal Distribution and the Interest Distribution. A Note or
Certificate, as applicable, of a Class or Subclass may represent a right to
receive a percentage of both the Principal Distribution and the Interest
Distribution or a percentage of either the Principal Distribution or the
Interest Distribution, as specified in the related prospectus supplement.

         If so specified in the related prospectus supplement, the holders of
the Senior Notes or Senior Certificates, as applicable, may have the right to
receive a percentage of Principal Prepayments that is greater than the
percentage of regularly scheduled payments of principal the holder is entitled
to receive. The percentages may vary from time to time, subject to the terms and
conditions specified in the prospectus supplement.

         Unless otherwise specified in the prospectus supplement relating to a
Series of Notes or Certificates, as applicable, that includes Multi-Class
Securities, distributions of interest on each Class or Subclass will be made on
the Distribution Dates, and at the Interest Rates, specified in the related
prospectus supplement. Unless otherwise specified in the prospectus supplement
relating to a Series of Notes or Certificates, as applicable, distributions of
interest on each Class or Subclass of Compound Interest Securities of the Series
will be made on each Distribution Date after the Stated Principal Balance of all
Certificates and/or Notes of the Series having a Final Scheduled Distribution
Date prior to that of a Class or Subclass of Compound Interest Securities has
been reduced to zero. Prior to that time, interest on each Class or Subclass of
Compound Interest Securities will be added to the Stated Principal Balance of
each Class or Subclass on each Distribution Date for the Series.

         Unless otherwise specified in the prospectus supplement relating to a
Series of Notes or Certificates, as applicable, that includes Multi-Class
Securities, distributions in reduction of the Stated Principal Balance of the
Notes or Certificates, as applicable, will be made as described in this
prospectus. Distributions in reduction of the Stated Principal Balance of the
Notes or Certificates, as applicable, will be made on each Distribution Date for
the Series to the holders of the Notes or Certificates, as applicable, of the
Class or Subclass then entitled to receive distributions until the aggregate
amount of distributions have reduced the Stated Principal Balance of the Notes
or Certificates, as applicable, to zero. Allocation of distributions in
reduction of Stated Principal Balance will be made to each Class or Subclass of
the Notes or Certificates, as applicable, in the order specified in the related
prospectus supplement, which, if so specified in the related prospectus
supplement, may be concurrently. Unless otherwise specified in the related
prospectus supplement, distributions in reduction of the Stated Principal
Balance of each Note or Certificate, as applicable, of a Class or Subclass then
entitled to receive distributions will be made pro rata among the Notes or
Certificates, as applicable, of the Class or Subclass.

         Unless otherwise specified in the prospectus supplement relating to a
Series of Notes or Certificates, as applicable, that includes Multi-Class
Securities, the maximum amount which will



                                       33


be distributed in reduction of Stated Principal Balance to holders of Notes or
Certificates, as applicable, of a Class or Subclass then entitled to
distribution on any Distribution Date will equal, to the extent funds are
available in the Certificate Account, the sum of

1.       the amount of the interest, if any, that has accrued but is not yet
         payable on the Compound Interest Securities of a Series since the prior
         Distribution Date, or since the date specified in the related
         prospectus supplement in the case of the first Distribution Date, (the
         "Accrual Distribution Amount");

2.       the Stated Principal Distribution Amount; and

3.       to the extent specified in the related prospectus supplement, the
         applicable percentage of the Excess Cash Flow specified in the related
         prospectus supplement.

         Unless otherwise specified in the prospectus supplement relating to a
Series of Notes or Certificates, as applicable, that includes Multi-Class
Securities, the "Stated Principal Distribution Amount" with respect to a
Distribution Date will equal the sum of the Accrual Distribution Amount, if any,
and the amount, if any, by which the then outstanding Stated Principal Balance
of the Multi-Class Securities of a Series, before taking into account the amount
of interest accrued on any Class of Compound Interest Securities of the Series
to be added to the Stated Principal Balance of the Class on each Distribution
Date, exceeds the Asset Value of the Trust Assets in the Trust Fund underlying
the Series as of the end of a period (a "Due Period") specified in the related
prospectus supplement. For purposes of determining the Stated Principal
Distribution Amount with respect to a Distribution Date, the Asset Value of the
Trust Assets will be reduced to take into account the interest evidenced by
Classes or Subclasses of Notes or Certificates, as applicable, in the principal
distributions on or with respect of Trust Assets received by the Trustee during
the preceding Due Period.

         Unless otherwise specified in the prospectus supplement relating to a
Series of Notes or Certificates, as applicable, that includes Multi-Class
Securities, Excess Cash Flow represents the excess of

1.       the interest evidenced by Multi-Class Securities in the distributions
         received on the Mortgage Loans, Warehouse Loans or Contracts underlying
         a Series in the Due Period preceding a Distribution Date for the
         Series, and, in the case of the first Due Period, the amount deposited
         in the Certificate Account on the closing day for the sale of the Notes
         or Certificates, as applicable, together with income from its
         reinvestment, and, to the extent specified in the related prospectus
         supplement, the amount of cash withdrawn from any Reserve, GPM or
         Buy-Down Fund for the Series in the Due Period preceding the
         Distribution Date, over

2.       the sum of all interest accrued, whether or not then distributable, on
         the Multi-Class Securities since the preceding Distribution Date, or
         since the date specified in the related prospectus supplement in the
         case of the first Distribution Date, the Stated Principal Distribution
         Amount for the then current Distribution Date and, if applicable, any
         payments made on any Notes or Certificates, as applicable, of a Class
         or Subclass



                                       34


         pursuant to any special distributions in reduction of Stated Principal
         Balance during the related Due Period.

         The Stated Principal Balance of a Multi-Class Certificate of a Series
at any time represents the maximum specified dollar amount, exclusive of
interest at the related Interest Rate, to which the holder is entitled from the
cash flow on the Trust Assets in the Trust Fund for the Series, and will decline
to the extent distributions in reduction of Stated Principal Balance are
received by the holder. The Initial Stated Principal Balance of each Class or
Subclass within a Series that has been assigned a Stated Principal Balance will
be specified in the related prospectus supplement.

         Distributions, other than the final distribution in retirement of the
Notes or Certificates, as applicable, will be made by check mailed to the
address of the person entitled to the distribution as it appears on the
registers maintained for holders of Notes (the "Note Register") or holders of
Certificates (the "Certificate Register"), as applicable, except that, with
respect to any holder of a Note or Certificate, as applicable, meeting the
requirements specified in the applicable prospectus supplement, except as
otherwise provided in the related prospectus supplement, distributions shall be
made by wire transfer in immediately available funds, provided that the Trustee
shall have been furnished with appropriate wiring instructions not less than two
Business Days prior to the related Distribution Date. The final distribution in
retirement of Notes or Certificates, as applicable, will be made only upon
presentation and surrender of the Notes or Certificates, as applicable, at the
office or agency designated by the Master Servicer, as specified in the final
distribution notice to Securityholders.

         If specified in the related prospectus supplement, the Trust may issue
notes or certificates from time to time and use the proceeds of this issuance to
make principal payments with respect to a Series.

         ASSIGNMENT OF MORTGAGE CERTIFICATES

         Pursuant to the applicable Agreement for a Series of Notes or
Certificates, as applicable, that includes Mortgage Certificates in the related
Trust Fund, the Depositor will cause the Mortgage Certificates to be transferred
to the Trustee together with all principal and interest distributed on the
Mortgage Certificates after the Cut-off Date. Each Mortgage Certificate included
in a Trust Fund will be identified in a schedule appearing as an exhibit to the
applicable Agreement. The schedule will include information as to the principal
balance of each Mortgage Certificate as of the date of issuance of the Notes or
Certificates, as applicable, and its coupon rate, maturity and original
principal balance. In addition, necessary steps will be taken by the Depositor
or other specified entity to cause the Trustee to become the registered owner of
each Mortgage Certificate which is included in a Trust Fund and to provide for
all distributions on each Mortgage Certificate to be made directly to the
Trustee.

         In connection with each assignment, the Depositor will make particular
representations and warranties in the Agreement as to, among other things, its
ownership of the Mortgage Certificates. In the event that these representations
and warranties are breached, and the breach or breaches adversely affect the
interests of the Securityholders in the Mortgage Certificates, the Depositor
will be required to repurchase the affected Mortgage Certificates at a price
equal to the



                                       35


principal balance of the Mortgage Certificates as of the date of purchase
together with accrued and unpaid interest on the Mortgage Certificates at the
related pass-through rate to the distribution date for the Mortgage Certificates
or, in the case of a Series in which an election has been made to treat the
related Trust Fund as a REMIC, at the price set forth above or such other price
as may be set forth in the related prospectus supplement. The Mortgage
Certificates with respect to a Series may also be subject to repurchase, in
whole but not in part, under the circumstances and in the manner described in
the related prospectus supplement. Any amounts received in respect of any
repurchases will be distributed to Securityholders on the immediately succeeding
Distribution Date.

         If so specified in the related prospectus supplement, within the
specified period following the date of issuance of a Series of Notes or
Certificates, as applicable, the Depositor may, in lieu of the repurchase
obligation set forth above, and in other circumstances, deliver to the Trustee
Mortgage Certificates ("Substitute Mortgage Certificates") in substitution for
any one or more of the Mortgage Certificates ("Deleted Mortgage Certificates")
initially included in the Trust Fund. The required characteristics of any
Substitute Mortgage Certificates and any additional restrictions relating to the
substitution of Mortgage Certificates will be set forth in the related
prospectus supplement.

         ASSIGNMENT OF MORTGAGE LOANS

         The Depositor will cause the Mortgage Loans constituting a Mortgage
Pool to be assigned to the Trustee, together with all principal and interest
received on or with respect to the Mortgage Loans after the Cut-off Date, but
not including principal and interest due on or before the Cut-off Date. The
Trustee will, concurrently with each assignment, either deliver the Notes or
Certificates, as applicable, to the Depositor in exchange for the Mortgage Loans
or apply the proceeds from the sale of the Notes or Certificates, as applicable,
to the purchase price for the Mortgage Loans. If a Series of Notes or
Certificates, as applicable, includes Notes, the Trust Fund will be pledged by
the Issuer to the Indenture Trustee as security for the Notes. Each Mortgage
Loan will be identified in a schedule appearing as an exhibit to the related
Agreement. The schedule will include information as to the adjusted principal
balance of each Mortgage Loan as of the Cut-off Date, as well as information
respecting the Mortgage Rate, the currently scheduled monthly payment of
principal and interest, the maturity of the Mortgage Note and the Loan-to-Value
Ratio at origination.

         In addition, the Depositor will, as to each Mortgage Loan that is not a
Cooperative Loan, deliver or cause to be delivered to the Trustee, or to the
custodian in this prospectus after referred to, the Mortgage Note endorsed to
the order of the Trustee, the Mortgage with evidence of recording indicated on
it, except for any Mortgage not returned from the public recording office, in
which case the Depositor will deliver a copy of the Mortgage together with its
certificate that the original of the Mortgage was delivered to the recording
office, and, unless otherwise specified in the related prospectus supplement, an
assignment of the Mortgage in recordable form. Assignments of the Mortgage Loans
to the Trustee will be recorded in the appropriate public office for real
property records, except in states where, in the opinion of counsel acceptable
to the Trustee, the recording is not required to protect the Trustee's interest
in the Mortgage Loan against the claim of any subsequent transferee or any
successor to or creditor of the Depositor or the Originator of the Mortgage
Loan.



                                       36


         The Depositor will cause to be delivered to the Trustee, its agent, or
a custodian, with respect to any Cooperative Loan, the related original security
agreement, the proprietary lease or occupancy agreement, the recognition
agreement, an executed financing statement and the relevant stock certificate
and related blank stock powers. The Master Servicer will file in the appropriate
office a financing statement evidencing the Trustee's security interest in each
Cooperative Loan.

         The Trustee, or the custodian in this prospectus referred to, will,
generally within 60 days after receipt of the documents, review and hold the
documents in trust for the benefit of the Securityholders. Unless otherwise
specified in the applicable prospectus supplement, if any document is found to
be defective in any material respect, the Trustee will promptly notify the
Master Servicer and the Depositor, and the Master Servicer will notify the
related Servicer. If the Servicer cannot cure the defect within 60 days after
notice is given to the Master Servicer, the Servicer will be obligated either to
substitute for the related Mortgage Loan a Replacement Mortgage Loan or Loans,
or to purchase, within 90 days of the Trustee's discovery of the defect, the
related Mortgage Loan from the Trustee at a price equal to the principal balance
of the related Mortgage Loan as of the date of purchase or, in the case of a
Series as to which an election has been made to treat the related Trust Fund as
a REMIC, at that price or another price as may be set forth in the related
prospectus supplement, in each case together with accrued interest at the
applicable Mortgage Rate to the first day of the month following the repurchase,
plus the amount of any unreimbursed Advances made by the Master Servicer or the
Servicer, as applicable, in respect of the Mortgage Loan. The Master Servicer is
obligated to enforce the repurchase obligation of the Servicer, to the extent
described above under "The Trust Fund--Mortgage Loan Program" and
"--Representations by Unaffiliated Sellers; Repurchases." Unless otherwise
specified in the applicable prospectus supplement, this purchase obligation
constitutes the sole remedy available to the Securityholders or the Trustee for
a material defect in a constituent document.

         Unless otherwise specified in the applicable prospectus supplement,
with respect to the Mortgage Loans in a Mortgage Pool, the Depositor will make
representations and warranties as to the types and geographical distribution of
the Mortgage Loans and as to the accuracy in all material respects of particular
information furnished to the Trustee in respect of each Mortgage Loan. In
addition, unless otherwise specified in the related prospectus supplement, the
Depositor will represent and warrant that, as of the Cut-off Date for the
related Series of Notes or Certificates, as applicable, no Mortgage Loan is more
than 30 days delinquent as to payment of principal and interest. Upon a breach
of any representation or warranty by the Depositor that materially and adversely
affects the interest of the Securityholders, the Depositor will be obligated
either to cure the breach in all material respects or to purchase the Mortgage
Loan at the purchase price set forth above. Unless otherwise specified in the
applicable prospectus supplement and subject to the ability of the Depositor, if
so specified in the applicable prospectus supplement, to substitute for specific
Mortgage Loans as described below, this repurchase obligation constitutes the
sole remedy available to the Securityholders or the Trustee for a breach of a
representation or warranty by the Depositor.

         Within the period specified in the related prospectus supplement,
following the date of issuance of a Series of Notes or Certificates, as
applicable, the Depositor, the Master Servicer or the related Servicer, as the
case may be, may deliver to the Trustee Mortgage Loans ("Substitute



                                       37


Mortgage Loans") in substitution for any one or more of the Mortgage Loans
("Deleted Mortgage Loans") initially included in the Trust Fund but which do not
conform in one or more respects to the description of the Mortgage Loans
contained in the related prospectus supplement, or as to which a breach of a
representation or warranty is discovered, which breach materially and adversely
affects the interests of the Securityholders. The required characteristics of
any Substitute Mortgage Loan and any additional restrictions relating to the
substitution of Mortgage Loans will generally be as described under "The Trust
Fund--The Contract Pools" with respect to the substitution of Contracts.

         In addition to making specific representations and warranties regarding
its authority to enter into, and its ability to perform its obligations under
the Agreement relating to a Series of Notes or Certificates, as applicable, the
Master Servicer may make representations and warranties to the Trustee in the
Agreement with respect to the enforceability of coverage under any applicable
Primary Insurance Policy, Pool Insurance Policy, Special Hazard Insurance Policy
or Mortgagor Bankruptcy Bond. See "Description of Insurance" for information
regarding the extent of coverage under some of the aforementioned insurance
policies. Unless otherwise specified in the applicable prospectus supplement,
upon a breach of any representation or warranty that materially and adversely
affects the interests of the Securityholders of a Series in a Mortgage Loan, the
Master Servicer will be obligated either to cure the breach in all material
respects or to purchase the Mortgage Loan at the price calculated as set forth
above.

         To the extent described in the related prospectus supplement, the
Master Servicer will procure a surety bond, corporate guaranty or another
similar form of insurance coverage acceptable to the Rating Agency rating the
related Series of Notes or Certificates, as applicable, to support, among other
things, this purchase obligation. Unless otherwise stated in the applicable
prospectus supplement, the aforementioned purchase obligation constitutes the
sole remedy available to the Securityholders or the Trustee for a breach of the
Master Servicer's insurability representation. The Master Servicer's obligation
to purchase Mortgage Loans upon a breach is subject to limitations.

         The Trustee will be authorized, with the consent of the Depositor and
the Master Servicer, to appoint a custodian pursuant to a custodial agreement to
maintain possession of documents relating to the Mortgage Loans as the agent of
the Trustee.

         Pursuant to each Agreement, the Master Servicer, either directly or
through Servicers, will service and administer the Mortgage Loans assigned to
the Trustee as more fully set forth below.

         ASSIGNMENT OF CONTRACTS

         The Depositor will cause the Contracts constituting the Contract Pool
to be assigned to the Trustee, together with principal and interest due on or
with respect to the Contracts after the Cut-off Date, but not including
principal and interest due on or before the Cut-off Date. If the Depositor is
unable to obtain a perfected security interest in a Contract prior to transfer
and assignment to the Trustee, the Unaffiliated Seller will be obligated to
repurchase the Contract. The Trustee, concurrently with each assignment, will
authenticate and deliver the Notes or Certificates, as applicable. If a Series
of Notes or Certificates, as applicable, includes Notes, the



                                       38


Trust fund will be pledged by the Issuer to the Indenture Trustee as security
for the Notes. Each Contract will be identified in a schedule appearing as an
exhibit to the Agreement (the "Contract Schedule"). The Contract Schedule will
specify, with respect to each Contract, among other things: the original
principal amount and the adjusted principal balance as of the close of business
on the Cut-off Date, the APR, the current scheduled monthly level payment of
principal and interest and the maturity of the Contract.

         In addition, the Depositor, as to each Contract, will deliver or cause
to be delivered to the Trustee, or, as specified in the related prospectus
supplement, the Custodian, the original Contract and copies of documents and
instruments related to each Contract and the security interest in the
Manufactured Home securing each Contract. In order to give notice of the right,
title and interest of the Certificateholders to the Contracts, the Depositor
will cause a UCC-1 financing statement to be executed by the Depositor
identifying the Trustee as the secured party and identifying all Contracts as
collateral. Unless otherwise specified in the related prospectus supplement, the
Contracts will not be stamped or otherwise marked to reflect their assignment
from the Depositor to the Trust Fund. Therefore, if a subsequent purchaser were
able to take physical possession of the Contracts without notice of an
assignment, the interest of the Certificateholders in the Contracts could be
defeated. See "Certain Legal Aspects of Mortgage Loans and Contracts--The
Contracts."

         The Trustee, or the Custodian, will review and hold the documents in
trust for the benefit of the Securityholders. Unless otherwise provided in the
related prospectus supplement, if any document is found to be defective in any
material respect, the Unaffiliated Seller must cure the defect within 60 days,
or within another period specified in the related prospectus supplement, the
Unaffiliated Seller, not later than 90 days or within another period specified
in the related prospectus supplement, after the Trustee's discovery of the
defect. If the defect is not cured, the Unaffiliated Seller will repurchase the
related Contract or any property acquired in respect of the Contract from the
Trustee at a price equal to the remaining unpaid principal balance of the
Contract, or, in the case of a repossessed Manufactured Home, the unpaid
principal balance of the Contract immediately prior to the repossession, or, in
the case of a Series as to which an election has been made to treat the related
Trust Fund as a REMIC, at such price or another price as may be set forth in the
related prospectus supplement, in each case together with accrued but unpaid
interest to the first day of the month following repurchase at the related APR,
plus any unreimbursed Advances with respect to the Contract. Unless otherwise
specified in the related prospectus supplement, the repurchase obligation will
constitute the sole remedy available to the Securityholders or the Trustee for a
material defect in a Contract document.

         Unless otherwise specified in the related prospectus supplement, each
Unaffiliated Seller of Contracts will have represented, among other things, that

o    immediately prior to the transfer and assignment of the Contracts, the
     Unaffiliated Seller had good title to, and was the sole owner of each
     Contract and there had been no other sale or assignment of the relevant
     Contract,

o    as of the date of transfer, the Contracts are subject to no offsets,
     defenses or counterclaims,

o    each Contract at the time it was made complied in all material respects
     with applicable state and federal laws, including usury, equal credit
     opportunity and disclosure laws,



                                       39


o    as of the date of transfer, each Contract is a valid first lien on the
     related Manufactured Home and the Manufactured Home is free of material
     damage and is in good repair,

o    as of the date of transfer, no Contract is more than 30 days delinquent in
     payment and there are no delinquent tax or assessment liens against the
     related Manufactured Home, and

o    with respect to each Contract, the Manufactured Home securing the Contract
     is covered by a Standard Hazard Insurance Policy in the amount required in
     the Agreement and that all premiums now due on insurance have been paid in
     full.

         All of the representations and warranties of an Unaffiliated Seller in
respect of a Contract will have been made as of the date on which the
Unaffiliated Seller sold the Contract to the Depositor or its affiliate; the
date the representations and warranties were made may be a date prior to the
date of initial issuance of the related series of Notes or Certificates, as
applicable. A substantial period of time may have elapsed between the date as of
which the representations and warranties were made and the date of initial
issuance of the related Series of Notes or Certificates, as applicable. Since
the representations and warranties referred to in the preceding paragraph are
the only representations and warranties that will be made by an Unaffiliated
Seller, the Unaffiliated Seller's repurchase obligation described below will not
arise if, during the period commencing on the date of sale of a Contract by the
Unaffiliated Seller to the Depositor or its affiliate, the relevant event occurs
that would have given rise to the obligation had the event occurred prior to
sale of the affected Contract. Nothing, however, has come to the Depositor's
attention that would cause it to believe that the representations and warranties
referred to in the preceding paragraph will not be accurate and complete in all
material respects in respect of Contracts as of the date of initial issuance of
the related Series of Notes or Certificates, as applicable.

         The only representations and warranties to be made for the benefit of
Securityholders in respect of any Contract relating to the period commencing on
the date of sale of the Contract to the Depositor or its affiliate will be
limited representations of the Depositor and of the Master Servicer described
above under "The Trust Fund--The Contract Pools."

         If an Unaffiliated Seller cannot cure a breach of any representation or
warranty made by it in respect of a Contract that materially and adversely
affects the interest of the Securityholders in the Contract within 90 days, or
another period specified in the related prospectus supplement, after notice from
the Master Servicer, the Unaffiliated Seller will be obligated to repurchase the
Contract at a price equal to, unless otherwise specified in the related
prospectus supplement, the principal balance of the Contract as of the date of
the repurchase or, in the case of a Series as to which an election has been made
to treat the related Trust Fund as a REMIC, at that price or such other price as
may be set forth in the related prospectus supplement, in each case together
with accrued and unpaid interest to the first day of the month following
repurchase at the related APR, plus the amount of any unreimbursed Advances in
respect of the Contract (the "Purchase Price"). The Master Servicer will be
required under the applicable Agreement to enforce this obligation for the
benefit of the Trustee and the Securityholders, following the practices it would
employ in its good faith business judgment were it the owner of the Contract.
Except as otherwise set forth in the related prospectus supplement, this
repurchase obligation will constitute the sole remedy available to
Securityholders or the Trustee for a breach of representation by an Unaffiliated
Seller.



                                       40


         Neither the Depositor nor the Master Servicer will be obligated to
purchase a Contract if an Unaffiliated Seller defaults on its obligation to do
so, and no assurance can be given that sellers will carry out their respective
repurchase obligations with respect to Contracts. However, to the extent that a
breach of the representations and warranties of an Unaffiliated Seller may also
constitute a breach of a representation made by the Depositor or the Master
Servicer, the Depositor or the Master Servicer may have a purchase obligation as
described above under "The Trust Fund--The Contract Pools."

         PRE-FUNDING

         If so specified in the related prospectus supplement, a portion of the
issuance proceeds of the Notes or Certificates, as applicable, of a particular
Series (the "Pre-Funded Amount") will be deposited in an account (the
"Pre-Funding Account") to be established with the Trustee, which will be used to
acquire additional Mortgage Loans, Warehouse Loans, Contracts or Mortgage
Certificates from time to time during the time period specified in the related
prospectus supplement (the "Pre-Funding Period"). Prior to the investment of the
Pre-Funded Amount in additional Mortgage Loans, Warehouse Loans, Contracts or
Mortgage Certificates, the Pre-Funded Amount may be invested in one or more
Eligible Investments. Except as otherwise provided in the applicable Agreement,
an "Eligible Investment" will be any of the following, in each case as
determined at the time of the investment or contractual commitment to invest, to
the extent the investments would not require registration of the Trust Fund as
an investment company pursuant to the Investment Company Act of 1940:

         (1) negotiable instruments or securities represented by instruments in
             bearer or registered or book-entry form which evidence:

             (a)  obligations which have the benefit of the full faith and
                  credit of the United States of America, including depository
                  receipts issued by a bank as custodian with respect to any
                  instrument or security held by the custodian for the benefit
                  of the holder of the depository receipt,

             (b)  demand deposits or time deposits in, or bankers' acceptances
                  issued by, any depositary institution or trust company
                  incorporated under the laws of the United States of America
                  or any state of the United States of America and subject to
                  supervision and examination by Federal or state banking or
                  depositary institution authorities; provided that at the
                  time of the Trustee's investment or contractual commitment
                  to invest, the certificates of deposit or short-term
                  deposits, if any, or long-term unsecured debt obligations,
                  other than obligations the rating of which is based on
                  collateral or on the credit of a Person other than any
                  depositary institution or trust company, of the depositary
                  institution or trust company has a credit rating in the
                  highest rating category from the Rating Agency rating the
                  Notes or Certificates, as applicable,

             (c)  certificates of deposit having a rating in the highest
                  rating category from the Rating Agency, or

                                       41


             (d)  investments in money market funds which are, or which are
                  composed of instruments or other investments which are,
                  rated in the highest category from the Rating Agency;

         (2) demand deposits in the name of the Trustee in any depositary
             institution or trust company referred to in clause (a)(2) above;

         (3) commercial paper, having original or remaining maturities of no
             more than 270 days, having a credit rating in the highest rating
             category from the Rating Agency;

        (4)  Eurodollar time deposits that are obligations of institutions the
             time deposits of which carry a credit rating in the highest
             rating category from the Rating Agency;

        (5)  repurchase agreements involving any Eligible Investment described
             in any of clauses (a)(1), (a)(3) or (d) above, so long as the
             other party to the repurchase agreement has its long-term
             unsecured debt obligations rated in the highest rating category
             from the Rating Agency; and

        (6)  any other investment with respect to which the Rating Agency
             indicates will not result in the reduction or withdrawal of its
             then existing rating of the Notes or Certificates, as applicable.

Except as otherwise provided in the applicable Agreement, any Eligible
Investment must mature no later than the Business Day prior to the next
Distribution Date.

         During any Pre-Funding Period, the Depositor will be obligated, subject
only to their availability, to transfer to the related Trust Fund additional
Mortgage Loans, Warehouse Loans, Contracts and/or Mortgage Certificates from
time to time during the Pre-Funding Period. The additional Mortgage Loans,
Warehouse Loans or Contracts will be required to satisfy particular eligibility
criteria more fully set forth in the related prospectus supplement which
eligibility criteria will be consistent with the eligibility criteria of the
Mortgage Loans, Warehouse Loans or Contracts included in the Trust Fund as of
the Closing Date subject to exceptions as are expressly stated in the related
prospectus supplement.

         Although the specific parameters of the Pre-Funding Account with
respect to any issuance of Notes or Certificates, as applicable, will be
specified in the related prospectus supplement, it is anticipated that:

o    the Pre-Funding Period will not exceed 120 days from the related Closing
     Date,

o    that the additional loans to be acquired during the Pre-Funding Period will
     be subject to the same representations and warranties as the Mortgage
     Loans, Warehouse Loans, Contracts and/or Mortgage Certificates included in
     the related Trust Fund on the Closing Date, although additional criteria
     may also be required to be satisfied, as described in the related
     prospectus supplement, and

o    that the Pre-Funded Amount will not exceed 25% of the principal amount of
     Notes or Certificates, as applicable, issued pursuant to a particular
     offering.

                                       42


     SERVICING BY UNAFFILIATED SELLERS

         Each Unaffiliated Seller of a Mortgage Loan, Warehouse Loan or a
Contract may have the option to act as the Servicer, or Master Servicer, for a
Mortgage Loan, Warehouse Loan or Contract pursuant to a Servicing Agreement. A
representative form of Servicing Agreement has been filed as an exhibit to the
Registration Statement of which this prospectus is a part. The following
description does not purport to be complete and is qualified in its entirety by
reference to the form of Servicing Agreement and by the discretion of the Master
Servicer or Depositor to modify the Servicing Agreement and to enter into
different Servicing Agreements. The Agreement provides that, if for any reason
the Master Servicer for a Series of Notes or Certificates, as applicable, is no
longer the Master Servicer of the related Mortgage Loans, Warehouse Loans or
Contracts, the Trustee or any successor master servicer must recognize the
Servicer's rights and obligations under the Servicing Agreement.

         A Servicer may delegate its servicing obligations to third-party
servicers, but continue to act as Servicer under the related Servicing
Agreement. The Servicer will be required to perform the customary functions of a
servicer, including collection of payments from Mortgagors and Obligors and
remittance of collections to the Master Servicer, maintenance of primary
mortgage, hazard insurance, FHA insurance and VA guarantees and filing and
settlement of claims under the FHA insurance and VA guarantees, subject in some
cases to

o    the right of the Master Servicer to approve in advance any settlement;

o    maintenance of escrow accounts of Mortgagors and Obligors for payment of
     taxes, insurance and other items required to be paid by the Mortgagor
     pursuant to the terms of the related Mortgage Loan or the Obligor pursuant
     to the related Warehouse Loan or Contract;

o    processing of assumptions or substitutions;

o    attempting to cure delinquencies;

o    supervising foreclosures or repossessions;

o    inspection and management of Mortgaged Properties, Cooperative Dwellings or
     Manufactured Homes under some circumstances; and

o    maintaining accounting records relating to the Mortgage Loans, Warehouse
     Loans and Contracts.

Except as otherwise provided in the related prospectus supplement, the Servicer
will also be obligated to make Advances in respect of delinquent installments of
principal and interest on Mortgage Loans, Warehouse Loans and Contracts (as
described more fully below under "--Payments on Mortgage Loans" and "--Payments
on Contracts"), and in respect of particular taxes and insurance premiums not
paid on a timely basis by Mortgagors and Obligors.

         As compensation for its servicing duties, a Servicer will be entitled
to amounts from payments with respect to the Mortgage Loans, Warehouse Loans and
Contracts serviced by it. The Servicer will also be entitled to collect and
retain, as part of its servicing compensation, specific fees and late charges
provided in the Mortgage Notes or related instruments. The Servicer will be
reimbursed by the Master Servicer for some of the expenditures that it makes,




                                       43


generally to the same extent that the Master Servicer would be reimbursed under
the applicable Agreement.

         Each Servicer will be required to agree to indemnify the Master
Servicer for any liability or obligation sustained by the Master Servicer in
connection with any act or failure to act by the Servicer in its servicing
capacity.

         Each Servicer will be required to service each Mortgage Loan, Warehouse
Loan or Contract pursuant to the terms of the Servicing Agreement for the entire
term of the Mortgage Loan, Warehouse Loan or Contract, unless the Servicing
Agreement is earlier terminated by the Master Servicer or unless servicing is
released to the Master Servicer. Unless otherwise set forth in the prospectus
supplement, the Master Servicer may terminate a Servicing Agreement upon 30
days' written notice to the Servicer, without cause, upon payment of an amount
equal to the fair market value of the right to service the Mortgage Loans,
Warehouse Loans or Contracts serviced by any the Servicer under the Servicing
Agreement, or if the fair market value cannot be determined, a specified
percentage of the aggregate outstanding principal balance of all the Mortgage
Loans, Warehouse Loans or Contracts, or immediately upon the giving of notice
upon particular stated events, including the violation of the Servicing
Agreement by the Servicer.

         The Master Servicer may agree with a Servicer to amend a Servicing
Agreement. The Master Servicer may also, at any time and from time to time,
release servicing to third-party servicers, but continue to act as Master
Servicer under the related Agreement. Upon termination of a Servicing Agreement,
the Master Servicer or Trustee may act as servicer of the related Mortgage
Loans, Warehouse Loans or Contracts or the Master Servicer may enter into one or
more new Servicing Agreements. If the Master Servicer acts as servicer, it will
not assume liability for the representations and warranties of the Servicer that
it replaces. If the Master Servicer enters into a new Servicing Agreement, each
new Servicer must be an Unaffiliated Seller or meet the standards for becoming
an Unaffiliated Seller or have servicing experience that is otherwise
satisfactory to the Master Servicer. The Master Servicer will make reasonable
efforts to have the new Servicer assume liability for the representations and
warranties of the terminated Servicer, but no assurance can be given that an
assumption will occur. In the event of an assumption, the Master Servicer may,
in the exercise of its business judgment, release the terminated Servicer from
liability in respect of the representations and warranties. Any amendments to a
Servicing Agreement or new Servicing Agreements may contain provisions different
from those described above that are in effect in the original Servicing
Agreements. However, the related Agreement will provide that any amendment or
new agreement may not be inconsistent with or violate the Agreement.

         PAYMENTS ON MORTGAGE LOANS

         The Master Servicer will, unless otherwise specified in the prospectus
supplement with respect to a Series of Notes or Certificates, as applicable,
establish and maintain a separate account or accounts in the name of the
applicable Trustee (the "Certificate Account"), which must be maintained with a
depository institution and in a manner acceptable to the Rating Agency rating
the Notes or Certificates, as applicable, of a Series. If a Series of Notes or
Certificates, as applicable, includes Notes, the Master Servicer may establish
and maintain a separate account or accounts in the name of the applicable
Trustee (the "Collection Account")



                                       44


into which amounts received in respect of the Trust Assets are required to be
deposited and a separate account or accounts in the name of the applicable
Trustee from which distributions in respect of the Notes (the "Note Distribution
Account") and/or the Certificates (the "Certificate Distribution Account") may
be made. The Collection Account, Note Distribution Account and Certificate
Distribution Account must be established with a depositary institution and in a
manner acceptable to the Rating Agencies rating the Notes or Certificates, as
applicable, of a Series. For ease of reference, references in this prospectus to
the Certificate Account shall be deemed to refer to the Collection Account, Note
Distribution Account and Certificate Distribution Account, as applicable.

         If so specified in the applicable prospectus supplement, the Master
Servicer, in lieu of establishing a Certificate Account, may establish a
separate account or accounts in the name of the Trustee (the "Custodial
Account") meeting the requirements set forth in this prospectus for the
Certificate Account. Amounts in the Custodial Account, after making the required
deposits and withdrawals specified below, shall be remitted to the Certificate
Account maintained by the Trustee for distribution to Securityholders in the
manner set forth in this prospectus and in the related prospectus supplement.

         In those cases where a Servicer is servicing a Mortgage Loan pursuant
to a Servicing Agreement, the Servicer will establish and maintain an account
(the "Servicing Account") that will comply with either the standards set forth
above or, subject to the conditions set forth in the Servicing Agreement, be
maintained with a depository, meeting the requirements of the Rating Agency
rating the Notes or Certificates, as applicable, of the related Series, and that
is otherwise acceptable to the Master Servicer. Unless otherwise specified in
the related prospectus supplement, the Servicer will be required to deposit into
the Servicing Account on a daily basis all amounts enumerated in the following
paragraph in respect of the Mortgage Loans received by the Servicer, less its
servicing compensation. On the date specified in the Servicing Agreement, the
Servicer shall remit to the Master Servicer all funds held in the Servicing
Account with respect to each Mortgage Loan. Except as otherwise provided in the
related prospectus supplement, the Servicer will also be required to advance any
monthly installment of principal and interest that was not timely received, less
its servicing fee, provided that, unless otherwise specified in the related
prospectus supplement, the requirement shall only apply to the extent the
Servicer determines in good faith any advance will be recoverable out of
Insurance Proceeds, proceeds of the liquidation of the related Mortgage Loans or
otherwise.

         The Certificate Account may be maintained with a depository institution
that is an affiliate of the Master Servicer. Unless otherwise specified in the
related prospectus supplement, the Master Servicer will deposit in the
Certificate Account for each Series of Notes or Certificates, as applicable, on
a daily basis the following payments and collections received or made by it
subsequent to the Cut-off Date, other than payments due on or before the Cut-off
Date, in the manner set forth in the related prospectus supplement:

         (1) all payments on account of principal, including principal
             prepayments, of the Mortgage Loans, net of any portion of the
             payments that represent unreimbursed or unrecoverable Advances made
             by the related Servicer;

                                       45



         (2) all payments on account of interest on the Mortgage Loans, net of
             any portion retained by the Servicer, if any, as its servicing fee;

         (3) all proceeds of:

             (a) any Special Hazard Insurance Policy, Primary Mortgage Insurance
                 Policy, FHA Insurance, VA Guarantee, Mortgagor Bankruptcy Bond
                 or Pool Insurance Policy with respect to a Series of Notes or
                 Certificates, as applicable, and any title, hazard or other
                 insurance policy covering any of the Mortgage Loans included in
                 the related Mortgage Pool, to the extent the proceeds are not
                 applied to the restoration of the related property or released
                 to the Mortgagor in accordance with customary servicing
                 procedures, (collectively, "Insurance Proceeds") or any
                 Alternative Credit Support established in lieu of the insurance
                 and described in the applicable prospectus supplement; and

             (b) all other cash amounts received and retained in connection with
                 the liquidation of defaulted Mortgage Loans, by foreclosure or
                 otherwise, other than Insurance Proceeds, payments under the
                 Letter of Credit or proceeds of any Alternative Credit Support,
                 if any, with respect to the Series ("Liquidation Proceeds"),
                 net of expenses of liquidation, unpaid servicing compensation
                 with respect to the Mortgage Loans and unreimbursed or
                 unrecoverable Advances made by the Servicers of the related
                 Mortgage Loans;

         (4) all payments under the Letter of Credit, if any, with respect to
             the Series;

         (5) all amounts required to be deposited in the Certificate Account
             from the Reserve Fund, if any, for the Series;

         (6) any Advances made by a Servicer or the Master Servicer (as
             described in this prospectus under "--Advances");

         (7) any Buy-Down Funds, and, if applicable, investment earnings on the
             Buy-Down Funds, required to be deposited in the Certificate
             Account, as described below; and

         (8) all proceeds of any Mortgage Loan repurchased by the Master
             Servicer, the Depositor, any Servicer or any Unaffiliated Seller
             (as described under "The Trust Fund--Mortgage Loan Program," "--
             Representations by Unaffiliated Sellers; Repurchases" or
             "--Assignment of Mortgage Loans" above) or repurchased by the
             Depositor (as described under "--Termination" below).

         With respect to each Buy-Down Loan, if so specified in the related
prospectus supplement, the Master Servicer or the related Servicer will deposit
the Buy-Down Funds with respect to each Buy-Down Loan in a custodial account
complying with the requirements set forth above for the Certificate Account,
which, unless otherwise specified in the related prospectus supplement, may be
an interest-bearing account. The amount of required deposits, together with


                                       46


investment earnings on the deposits at the rate specified in the applicable
prospectus supplement, will provide sufficient funds to support the full monthly
payments due on each Buy-Down Loan on a level debt service basis. Neither the
Master Servicer nor the Depositor will be obligated to add to the Buy-Down Fund
should investment earnings prove insufficient to maintain the scheduled level of
payments on the Buy-Down Loans. To the extent that any insufficiency is not
recoverable from the Mortgagor under the terms of the related Mortgage Note,
distributions to Securityholders will be affected. With respect to each Buy-Down
Loan, the Master Servicer will withdraw from the Buy-Down Fund and deposit in
the Certificate Account on or before each Distribution Date the amount, if any,
for each Buy-Down Loan that, when added to the amount due on that date from the
Mortgagor on the Buy-Down Loan, equals the full monthly payment that would be
due on the Buy-Down Loan if it were not subject to the buy-down plan.

         If the Mortgagor on a Buy-Down Loan prepays the loan in its entirety,
or defaults on the loan and the Mortgaged Property is sold in liquidation of the
Mortgaged Property, during the period when the Mortgagor is not obligated, on
account of the buy-down plan, to pay the full monthly payment otherwise due on
the loan, the related Servicer will withdraw from the Buy-Down Fund and deposit
in the Certificate Account the amounts remaining in the Buy-Down Fund with
respect to the Buy-Down Loan. In the event of a default with respect to which a
claim, including accrued interest supplemented by amounts in the Buy-Down Fund
with respect to the related Buy-Down Loan, has been made, the Master Servicer or
the related Servicer will pay an amount equal to the remaining amounts in the
Buy-Down Fund with respect to the related Buy-Down Loan, to the extent the claim
includes accrued interest supplemented by amounts in the Buy-Down Fund, to the
related Pool Insurer or the insurer under the related Primary Insurance Policy
(the "Primary Insurer") if the Mortgaged Property is transferred to the Pool
Insurer or the Primary Insurer, as the case may be, which pays 100% of the
related claim, including accrued interest and expenses, in respect of a default,
to the L/C Bank in consideration of the payment under the related Letter of
Credit, or to the guarantor or other person which pays the same pursuant to
Alternative Credit Support described in the applicable prospectus supplement. In
the case of any prepaid or defaulted Buy-Down Loan the amounts in the Buy-Down
Fund in respect of which were supplemented by investment earnings, the Master
Servicer will withdraw from the Buy-Down Fund and remit to the Depositor or the
Mortgagor, depending on the terms of the related buy-down plan, any investment
earnings remaining in the related Buy-Down Fund.

         If so specified in the prospectus supplement with respect to a Series,
in lieu of, or in addition to the foregoing, the Depositor may deliver cash, a
letter of credit or a guaranteed investment contract to the Trustee to fund the
Buy-Down Fund for the Series, which shall be drawn upon by the Trustee in the
manner and at the times specified in the related prospectus supplement.

             PAYMENTS ON CONTRACTS

         A Certificate Account meeting the requirements set forth under
"--Description of the Securities--Payments on Mortgage Loans" will be
established in the name of the Trustee.

                                       47


         Except as otherwise provided in the related prospectus supplement,
there will be deposited in the Certificate Account on a daily basis the
following payments and collections received or made by it on or after the
Cut-off Date:

         (1) all Obligor payments on account of principal, including principal
             prepayments, of the Contracts;

         (2) all Obligor payments on account of interest on the Contracts;

         (3) all Liquidation Proceeds received with respect to Contracts or
             property acquired in respect of the Contracts by foreclosure or
             otherwise;

         (4) all Insurance Proceeds received with respect to any Contract, other
             than proceeds to be applied to the restoration or repair of the
             Manufactured Home or released to the Obligor;

         (5) any Advances made as described under "--Advances" and other amounts
             required under the related Agreement to be deposited in the
             Certificate Account;

         (6) all amounts received from Credit Support provided with respect to a
             Series of Notes or Certificates, as applicable;

         (7) all proceeds of any Contract or property acquired in respect of the
             Contract repurchased by the Master Servicer, the Depositor or
             otherwise as described above or under "--Termination" below; and

         (8) all amounts, if any, required to be transferred to the Certificate
             Account from the Reserve Fund.

         COLLECTION OF PAYMENTS ON MORTGAGE CERTIFICATES

         The Mortgage Certificates included in the Trust Fund with respect to a
Series of Notes or Certificates, as applicable, will be registered in the name
of the Trustee so that all distributions on the Mortgage Certificates will be
made directly to the Trustee. The related Agreement will require the Trustee, if
it has not received a distribution with respect to any Mortgage Certificate by
the second business day after the date on which a distribution was due and
payable pursuant to the terms of the Mortgage Certificate, to request the issuer
or guarantor, if any, of the Mortgage Certificate to make the payment as
promptly as possible and legally permitted and to take the legal action against
the issuer or guarantor as the Trustee deems appropriate under the
circumstances, including the prosecution of any related claims. The reasonable
legal fees and expenses incurred by the Trustee in connection with the
prosecution of any the legal action will be reimbursable to the Trustee out of
the proceeds of any action and will be retained by the Trustee prior to the
deposit of any remaining proceeds in the Certificate Account pending
distribution of the proceeds to Securityholders of the affected Series. In the
event that the Trustee has reason to believe that the proceeds of any legal
action may be insufficient to reimburse it for its projected legal fees and
expenses, the Trustee will notify the Securityholders that it is not obligated
to pursue any available remedies unless adequate indemnity for its legal fees
and expenses is provided by the Securityholders.

                                       48


         DISTRIBUTIONS ON SECURITIES

         On each Distribution Date with respect to a Series of Notes or
Certificates, as applicable, as to which credit support is provided by means
other than the creation of a Subordinated Class or Subclasses and the
establishment of a Reserve Fund, the Master Servicer will withdraw from the
applicable Certificate Account funds on deposit in the Certificate Account and
distribute, or, if so specified in the applicable prospectus supplement, will
withdraw from the Custodial Account, funds on deposit in the Custodial Account
and remit to the Trustee, who will distribute the funds to Securityholders of
record on the applicable Record Date. The distributions shall occur in the
manner described in this prospectus under "--Description of the
Securities--Distributions of Principal and Interest" and in the related
prospectus supplement. If so specified in the applicable prospectus supplement,
the Master Servicer will withdraw from the applicable Certificate Account funds
on deposit in the Certificate Account and distribute them to the Trustee. The
funds shall consist of the aggregate of all previously undistributed payments on
account of principal, including principal prepayments, if any, and interest
received after the Cut-off Date and on or prior to the 20th day, or if the 20th
day is not a business day, the next preceding business day, of the month of the
distribution or another day specified in the related prospectus supplement (in
either case, the "Determination Date"), except:

         (1) all payments that were due on or before the Cut-off Date;

         (2) all principal prepayments received during the month of distribution
             and all payments of interest representing interest for the month of
             distribution or any portion of the these payments;

         (3) all payments which represent early receipt, other than prepayments,
             of scheduled payments of principal and interest due on a date or
             dates subsequent to the first day of the month of distribution;

         (4) amounts received on particular Mortgage Loans, Warehouse Loans or
             Contracts as late payments of principal or interest and respecting
             which the Master Servicer has made an unreimbursed Advance;

         (5) amounts representing reimbursement for other Advances which the
             Master Servicer has determined to be otherwise nonrecoverable and
             amounts representing reimbursement for particular losses and
             expenses incurred or Advances made by the Master Servicer and
             discussed below; and

         (6) that portion of each collection of interest on a particular
             Mortgage Loan in the Mortgage Pool, a particular Warehouse Loan in
             the Warehouse Loan Pool or on a particular Contract in the Contract
             Pool that represents

             (a) servicing compensation to the Master Servicer,

             (b) amounts payable to the entity or entities specified in the
                 applicable prospectus supplement or permitted withdrawals from
                 the Certificate Account out of payments under the Letter of
                 Credit, if any, with respect to the Series,

                                       49


             (c) related Insurance Proceeds or Liquidation Proceeds,

             (d) amounts in the Reserve Fund, if any, with respect to the
                 Series, or

             (e) proceeds of any Alternative Credit Support, each deposited in
                 the Certificate Account to the extent described under
                 "Description of the Securities--Maintenance of Insurance
                 Policies," "-- Presentation of Claims," "-- Enforcement of
                 'Due-on-Sale' Clauses; Realization Upon Defaulted Mortgage
                 Loans" and "--Enforcement of 'Due-on-Sale' Clauses; Realization
                 Upon Defaulted Contracts" or in the applicable prospectus
                 supplement.

         Except as otherwise specified in the related prospectus supplement, no
later than the Business Day immediately preceding the Distribution Date for a
Series of Notes or Certificates, as applicable, the Master Servicer will furnish
a statement to the Trustee setting forth the amount to be distributed on the
next succeeding Distribution Date on account of principal of and interest on the
Mortgage Loans, Warehouse Loans or Contracts, stated separately or the
information enabling the Trustee to determine the amount of distribution to be
made on the Notes or Certificates, as applicable, and a statement setting forth
information with respect to the Mortgage Loans, Warehouse Loans or Contracts.

         If so specified in the applicable prospectus supplement, the Trustee
will establish and maintain the Certificate Account for the benefit of the
holders of the Notes or Certificates, as applicable, of the related Series in
which the Trustee shall deposit, as soon as practicable after receipt, each
distribution made to the Trustee by the Master Servicer, as set forth above,
with respect to the Mortgage Loans, Warehouse Loans or Contracts, any
distribution received by the Trustee with respect to the Mortgage Certificates,
if any, included in the Trust Fund and deposits from any Reserve Fund or GPM
Fund. If so specified in the applicable prospectus supplement, prior to making
any distributions to Securityholders, any portion of the distribution on the
Mortgage Certificates that represents servicing compensation, if any, payable to
the Trustee shall be deducted and paid to the Trustee.

         Funds on deposit in the Certificate Account may be invested in Eligible
Investments maturing in general not later than the Business Day preceding the
next Distribution Date. Unless otherwise provided in the prospectus supplement,
all income and gain realized from this investment will be for the benefit of the
Master Servicer. The Master Servicer will be required to deposit the amount of
any losses incurred with respect to these investments out of its own funds, when
realized. Unless otherwise provided in the prospectus supplement, the
Certificate Account established pursuant to the Trust Agreement shall be a
non-interest bearing account or accounts.

         The timing and method of distribution of funds in the Certificate
Account to Classes or Subclasses of Notes or Certificates, as applicable, having
differing terms, whether subordinated or not, to the extent not described in
this prospectus, shall be set forth in the related prospectus supplement.

                                       50


         REVOLVING PERIOD

         The applicable prospectus supplement may provide that all or a portion
of the principal collections on any Revolving Credit Line Loans may be applied
by the Trustee to the acquisition of subsequent Revolving Credit Line Loans
during a specified period rather than used to distribute payments of principal
to Securityholders during that period. These Notes or Certificates, as
applicable, would then possess an interest only period, also commonly referred
to as a "Revolving Period", which will be followed by an "Amortization Period",
during which principal will be paid. Any interest only or revolving period may
terminate prior to the end of the specified period and result in the earlier
than expected principal repayment of the Notes or Certificates, as applicable.

         SPECIAL DISTRIBUTIONS

         To the extent specified in the prospectus supplement relating to a
Series of Notes or Certificates, as applicable, one or more Classes of
Multi-Class Securities that do not provide for monthly Distribution Dates may
receive Special Distributions in reduction of Stated Principal Balance ("Special
Distributions") in any month, other than a month in which a Distribution Date
occurs, if, as a result of principal prepayments on the Trust Assets in the
related Trust Fund and/or low reinvestment yields, the Trustee determines, based
on assumptions specified in the related Agreement, that the amount of cash
anticipated to be on deposit in the Certificate Account on the next Distribution
Date for the Series and available to be distributed to the holders of the Notes
or Certificates, as applicable, of a Classes or Subclasses may be less than the
sum of (1) the interest scheduled to be distributed to holders of the Notes or
Certificates, as applicable, of the Classes or Subclasses and (2) the amount to
be distributed in reduction of Stated Principal Balance or the Notes or
Certificates, as applicable, on the Distribution Date. Any Special Distributions
will be made in the same priority and manner as distributions in reduction of
Stated Principal Balance would be made on the next Distribution Date.

         REPORTS TO SECURITYHOLDERS

         Unless otherwise specified or modified in the related prospectus
supplement for each Series, the Master Servicer or the Trustee will include with
each distribution to Securityholders of record of the Series, or within a
reasonable time afterward, a statement generally setting forth, among other
things, the following information, if applicable, per each Security, as to (1)
through (3) or (4) through (6) below, as applicable:

         (1) to each holder of a Security, other than a Multi-Class Certificate
             or Residual Certificate, the amount of the distribution allocable
             to principal of the Trust Assets, separately identifying the
             aggregate amount of any Principal Prepayments included in the
             amount, and the portion, if any, advanced by a Servicer or the
             Master Servicer;

         (2) to each holder of a Security, other than a Multi-Class Certificate
             or Residual Certificate, the amount of the distribution allocable
             to interest on the related Trust Assets and the portion, if any,
             advanced by a Servicer or the Master Servicer;

                                       51



         (3) to each holder of a Security, the amount of servicing compensation
             with respect to the related Trust Assets and other customary
             information as the Master Servicer deems necessary or desirable to
             enable Securityholders to prepare their tax returns;

         (4) to each holder of a Multi-Class Certificate on which an interest
             distribution and a distribution in reduction of Stated Principal
             Balance are then being made, the amount of the interest
             distribution and distribution in reduction of Stated Principal
             Balance, and the Stated Principal Balance of each Class after
             giving effect to the distribution in reduction of Stated Principal
             Balance made on the Distribution Date or on any Special
             Distribution Date occurring subsequent to the last report;

         (5) to each holder of a Multi-Class Certificate on which a distribution
             of interest only is then being made, the aggregate Stated Principal
             Balance of Notes or Certificates, as applicable, outstanding of
             each Class or Subclass after giving effect to the distribution in
             reduction of Stated Principal Balance made on the Distribution Date
             and on any Special Distribution Date occurring subsequent to the
             last report and after including in the aggregate Stated Principal
             Balance the Stated Principal Balance of the Compound Interest
             Securities, if any, outstanding and the amount of any accrued
             interest added to the Compound Value of the Compound Interest
             Securities on the Distribution Date;

         (6) to each holder of a Compound Interest Security, but only if the
             holder shall not have received a distribution of interest on the
             Distribution Date equal to the entire amount of interest accrued on
             the Certificate with respect to the Distribution Date:

             (a) the information contained in the report delivered pursuant to
                 clause (5) above;

             (b) the interest accrued on the Class or Subclass of Compound
                 Interest Securities with respect to the Distribution Date and
                 added to the Compound Value of the Compound Interest Security;
                 and

             (c) the Stated Principal Balance of the Class or Subclass of
                 Compound Interest Securities after giving effect to the
                 addition of all interest accrued;

         (7) in the case of a series of Notes or Certificates, as applicable,
             with a variable Interest Rate, the Interest Rate applicable to the
             distribution in question;

         (8) the amount or the remaining obligations of an L/C Bank with respect
             to a Letter of Credit, after giving effect to the declining amount
             available and any payments and other amounts charged on the
             applicable Distribution Date, expressed as a percentage of the
             amount reported pursuant to (x) below, and the amount of coverage
             remaining under the Pool Insurance Policy, Special Hazard Insurance
             Policy, Mortgagor Bankruptcy Bond or Reserve Fund, as applicable,
             in each case as of the applicable Determination Date, after giving
             effect to any amounts with respect to them to be distributed to
             Securityholders on the Distribution Date;

                                       52


         (9) in the case of a Series of Notes or Certificates, as applicable,
             benefiting from the Alternative Credit Support described in the
             related prospectus supplement, the amount of coverage under the
             Alternative Credit Support as of the close of business on the
             applicable Determination Date, after giving effect to any amounts
             with respect to the Alternative Credit Support distributed to
             Securityholders on the Distribution Date;

        (10) the aggregate scheduled principal balance of the Trust Assets as
             of a date not earlier than the Distribution Date after giving
             effect to payments of principal distributed to Securityholders on
             the Distribution Date;

        (11) the book value of any collateral acquired by the Mortgage Pool,
             Warehouse Loan Pool or Contract Pool through foreclosure,
             repossession or otherwise; and

        (12) the number and aggregate principal amount of Mortgage Loans,
             Warehouse Loans or Contracts one month and two months delinquent.

         In addition, within a reasonable period of time after the end of each
calendar year, the Master Servicer, or the Trustee, if specified in the
applicable prospectus supplement, will cause to be furnished to each
Securityholder of record at any time during the calendar year a report as to the
aggregate of amounts reported pursuant to (1) through (3) or (4) through (6)
above and other information as in the judgment of the Master Servicer or the
Trustee, as the case may be, is needed for the Securityholder to prepare its tax
return, as applicable, for the calendar year or, in the event the person was a
Securityholder of record during a portion of the calendar year, for the
applicable portion of the year.

         ADVANCES

         Unless otherwise stated in the related prospectus supplement, each
Servicer and the Master Servicer, with respect to Mortgage Loans, Warehouse
Loans or Contracts serviced by it and with respect to advance delinquent
installments of principal of and interest on the Mortgage Loans, Warehouse Loans
and Contracts (the "Advances") required to be made by the Servicers that were
not so made, will be obligated to advance funds in an amount equal to the
aggregate scheduled installments of payments of principal and interest that were
due on the Due Date with respect to a Mortgage Loan, Warehouse Loan or Contract
and that were delinquent, including any payments that have been deferred by the
Servicer or the Master Servicer, as of the close of business on the date
specified in the related Servicing Agreement, to be remitted no later than the
close of business on the business day immediately preceding the Distribution
Date, subject to, unless otherwise provided in the applicable prospectus
supplement, their respective determinations that the advances are reimbursable
under any Letter of Credit, Pool Insurance Policy, Primary Mortgage Insurance
Policy, Mortgagor Bankruptcy Bond, from the proceeds of Alternative Credit
Support, from cash in the Reserve Fund, the Servicing or Certificate Accounts or
otherwise. In making the Advances, the Servicers and Master Servicer will
endeavor to maintain a regular flow of scheduled interest and principal payments
to the Securityholders, rather than to guarantee or insure against losses. Any
of these Advances are reimbursable to the Servicer or Master Servicer out of
related recoveries on the Mortgage Loans with respect to which amounts were
advanced. In addition, Advances are reimbursable from cash in the Reserve



                                       53


Fund, the Servicing or Certificate Accounts to the extent that the Servicer or
the Master Servicer, as the case may be, shall determine that any Advances
previously made are not ultimately recoverable. The Servicers and the Master
Servicer generally will also be obligated to make advances in respect of
particular taxes and insurance premiums not paid by Mortgagors or Obligors on a
timely basis and, to the extent deemed recoverable, foreclosure costs, including
reasonable attorney's fees. These funds so advanced are reimbursable out of
recoveries on the related Mortgage Loans. This right of reimbursement for any
Advance will be prior to the rights of the Securityholders to receive any
amounts recovered with respect to Mortgage Loans, Warehouse Loans or Contracts.
Unless otherwise provided in the applicable prospectus supplement, the Servicers
and the Master Servicer will also be required to advance an amount necessary to
provide a full month's interest in connection with full or partial prepayments,
liquidations, defaults and repurchases of the Mortgage Loans, Warehouse Loans or
Contracts. Any of these Advances will not be reimbursable to the Servicers or
the Master Servicer.

         COLLECTION AND OTHER SERVICING PROCEDURES

         The Master Servicer, directly or through the Servicers, as the case may
be, will make reasonable efforts to collect all payments called for under the
Mortgage Loans or Contracts and will, consistent with the applicable Servicing
Agreement and any applicable Letter of Credit, Pool Insurance Policy, Special
Hazard Insurance Policy, Primary Mortgage Insurance Policy, Mortgagor Bankruptcy
Bond or Alternative Credit Support, follow collection procedures as it follows
with respect to mortgage loans or contracts serviced by it that are comparable
to the Mortgage Loans or Contracts, except when, in the case of FHA or VA Loans,
applicable regulations require otherwise. Consistent with the above, if so
provided in the related prospectus supplement, the Master Servicer may, in its
discretion, waive any late payment charge or any prepayment charge or penalty
interest in connection with the prepayment of a Mortgage Loan or Contract or
extend the due dates for payments due on a Mortgage Note or Contract for a
period of not greater than 270 days, provided that the insurance coverage for
the Mortgage Loan or Contract or the coverage provided by any Letter of Credit
or any Alternative Credit Support, will not be adversely affected.

         If specified in the related prospectus supplement, under the applicable
Servicing Agreement, the Master Servicer, either directly or through Servicers,
to the extent permitted by law, may establish and maintain an escrow account
(the "Escrow Account") in which Mortgages or Obligors will be required to
deposit amounts sufficient to pay taxes, assessments, mortgage and hazard
insurance premiums and other comparable items. This obligation may be satisfied
by the provision of insurance coverage against loss occasioned by the failure to
escrow insurance premiums rather than causing escrows to be made. Withdrawals
from the Escrow Account may be made to effect timely payment of taxes,
assessments, mortgage and hazard insurance, to refund to Mortgagors or Obligors
amounts determined to be overages, to pay interest to Mortgagors or Obligors on
balances in the Escrow Account, if required, and to clear and terminate the
account. The Master Servicer will be responsible for the administration of each
Escrow Account and will be obliged to make advances to the accounts when a
deficiency exists in the Escrow Account. Alternatively, in lieu of establishing
an Escrow Account, the Servicer may procure a performance bond or other form of
insurance coverage, in an amount acceptable to the Rating Agency rating the
related Series of Notes or Certificates, as applicable, covering loss occasioned
by the failure to escrow required amounts.

                                       54


         MAINTENANCE OF INSURANCE POLICIES

         To the extent that the applicable prospectus supplement does not
expressly provide for a method of credit support described below under "Credit
Support" or for Alternative Credit Support in lieu of some or all of the
insurance coverage set forth below, the following paragraphs on insurance shall
apply.

         STANDARD HAZARD INSURANCE

         To the extent specified in a related prospectus supplement, the terms
of each Servicing Agreement will require the Servicer to cause to be maintained
for each Mortgage Loan or Contract that it services, and the Master Servicer
will be required to maintain for each Mortgage Loan or Contract serviced by it
directly, a policy of standard hazard insurance (a "Standard Hazard Insurance
Policy") covering the Mortgaged Property underlying the Mortgage Loan or
Manufactured Home underlying the Contract in an amount equal to the lesser of
the maximum insurable value of the improvements securing the Mortgage Loan or
Contract or the principal balance of the Mortgage Loan or Contract. Each
Servicer or the Master Servicer, as the case may be, shall also maintain on
property acquired upon foreclosure, or deed in lieu of foreclosure, of any
Mortgage Loan or Contract, a Standard Hazard Insurance Policy in an amount that
is at least equal to the maximum insurable value of the improvements that are a
part of the Mortgaged Property or Manufactured Home. Any amounts collected by
the Servicer or the Master Servicer under any the policies, other than amounts
to be applied to the restoration or repair of the Mortgaged Property or
Manufactured Home or released to the borrower in accordance with normal
servicing procedures, shall be deposited in the related Servicing Account for
deposit in the Certificate Account or, in the case of the Master Servicer, shall
be deposited directly into the Certificate Account. Any cost incurred in
maintaining any insurance shall not, for the purpose of calculating monthly
distributions to Securityholders, be added to the amount owing under the
Mortgage Loan or Contract, notwithstanding that the terms of the Mortgage Loan
or Contract may so permit. The cost shall be recoverable by the Servicer only by
withdrawal of funds from the Servicing Account or by the Master Servicer only by
withdrawal from the Certificate Account, as described in the applicable
Servicing Agreement. No earthquake or other additional insurance is to be
required of any borrower or maintained on property acquired in respect of a
Mortgage Loan or Contract, other than pursuant to applicable laws and
regulations as shall at any time be in force and as shall require additional
insurance. When the Mortgaged Property or Manufactured Home is located at the
time of origination of the Mortgage Loan or Contract in a federally designated
flood area, the related Servicer, or the Master Servicer, in the case of each
Mortgage Loan or Contract serviced by it directly, will cause flood insurance to
be maintained, to the extent available, in those areas where flood insurance is
required under the National Flood Insurance Act of 1968, as amended.

         The Depositor will not require that a standard hazard or flood
insurance policy be maintained on the Cooperative Dwelling relating to any
Cooperative Loan. Generally, the cooperative corporation itself is responsible
for maintenance of hazard insurance for the property owned by the cooperative
and the tenant-stockholders of that cooperative do not maintain individual
hazard insurance policies. To the extent, however, that a Cooperative and the
related borrower on a Cooperative Loan do not maintain insurance or do not
maintain adequate coverage or any insurance proceeds are not applied to the
restoration of damaged property, any damage to



                                       55


the borrower's Cooperative Dwelling or the Cooperative's building could
significantly reduce the value of the collateral securing the Cooperative Loan
to the extent not covered by other credit support.

         The applicable Servicing Agreement will require the Master Servicer to
perform the aforementioned obligations of the Servicer in the event the Servicer
fails to do so. In the event that the Master Servicer obtains and maintains a
blanket policy insuring against hazard losses on all of the related Mortgage
Loans or Contracts, it will conclusively be deemed to have satisfied its
obligations to cause to be maintained a Standard Hazard Insurance Policy for
each Mortgage Loan or Contract that it services. This blanket policy may contain
a deductible clause, in which case the Master Servicer will, in the event that
there has been a loss that would have been covered by the policy absent the
deductible, deposit in the Certificate Account the amount not otherwise payable
under the blanket policy because of the application of the deductible clause.

         Since the amount of hazard insurance to be maintained on the
improvements securing the Mortgage Loans or Contracts may decline as the
principal balances owing on the Mortgage Loans or Contracts decrease, and since
residential properties have historically appreciated in value over time, in the
event of partial loss, hazard insurance proceeds may be insufficient to fully
restore the damaged Mortgaged Property or Manufactured Home. See "Description of
Insurance--Special Hazard Insurance Policies" for a description of the limited
protection afforded by a Special Hazard Insurance Policy against losses
occasioned by specific hazards that are otherwise uninsured against as well as
against losses caused by the application of the coinsurance provisions contained
in the Standard Hazard Insurance Policies.

         SPECIAL HAZARD INSURANCE

         If so specified in the related prospectus supplement, the Master
Servicer will be required to exercise its best reasonable efforts to maintain
the Special Hazard Insurance Policy, if any, with respect to a Series of Notes
or Certificates, as applicable, in full force and effect, unless coverage under
the policy has been exhausted through payment of claims, and will pay the
premium for the Special Hazard Insurance Policy on a timely basis; provided,
however, that the Master Servicer shall be under no obligation if coverage under
the Pool Insurance Policy with respect to the Series has been exhausted. In the
event that the Special Hazard Insurance Policy is cancelled or terminated for
any reason, other than the exhaustion of total policy coverage, the Master
Servicer will exercise its best reasonable efforts to obtain from another
insurer a replacement policy comparable to the Special Hazard Insurance Policy
with a total coverage that is equal to the then existing coverage of the Special
Hazard Insurance Policy; provided that if the cost of any replacement policy is
greater than the cost of the terminated Special Hazard Insurance Policy, the
amount of coverage under the replacement Special Hazard Insurance Policy may be
reduced to a level so that the applicable premium will not exceed the cost of
the Special Hazard Insurance Policy that was replaced. Some of the
characteristics of the Special Hazard Insurance Policy are described under
"Description of Insurance--Special Hazard Insurance Policies."



                                       56


         POOL INSURANCE

         To the extent specified in a related prospectus supplement, the Master
Servicer will exercise its best reasonable efforts to maintain a Pool Insurance
Policy with respect to a Series of Notes or Certificates, as applicable, in
effect throughout the term of the applicable Agreement, unless coverage under
the policy has been exhausted through payment of claims, and will pay the
premiums for the Pool Insurance Policy on a timely basis. In the event that the
Pool Insurer ceases to be a qualified insurer because it is not qualified to
transact a mortgage guaranty insurance business under the laws of the state of
its principal place of business or any other state which has jurisdiction over
the Pool Insurer in connection with the Pool Insurance Policy, or if the Pool
Insurance Policy is cancelled or terminated for any reason, other than the
exhaustion of total policy coverage, the Master Servicer will exercise its best
reasonable efforts to obtain a replacement policy of pool insurance comparable
to the Pool Insurance Policy and may obtain, under the circumstances described
above with respect to the Special Hazard Insurance Policy, a replacement policy
with reduced coverage. In the event the Pool Insurer ceases to be a qualified
insurer because it is not approved as an insurer by FHLMC, FNMA or any
successors to FNMA, the Master Servicer will agree to review, not less often
than monthly, the financial condition of the Pool Insurer with a view towards
determining whether recoveries under the Pool Insurance Policy are jeopardized
and, if so, will exercise its best reasonable efforts to obtain from another
qualified insurer a replacement insurance policy under the above-stated
limitations. Some of the characteristics of the Pool Insurance Policy are
described under "Description of Insurance--Pool Insurance Policies."

         PRIMARY MORTGAGE INSURANCE

         To the extent specified in the related prospectus supplement, the
Master Servicer will be required to keep in force and effect for each Mortgage
Loan secured by Single Family Property serviced by it directly, and each
Servicer of a Mortgage Loan secured by Single Family Property will be required
to keep in full force and effect with respect to each Mortgage Loan serviced by
it, in each case to the extent required by the underwriting standards of the
Depositor, a Pool Insurance Policy to cover any loss, subject to the limitations
described below, by reason of default by the Mortgagors on the related Mortgage
Loans to the extent not covered by any policy of primary mortgage insurance (a
"Primary Mortgage Insurance Policy") issued by a qualified insurer (the "Primary
Mortgage Insurer") with regard to each Mortgage Loan for which coverage is
required pursuant to the applicable Servicing Agreement and Agreement and to act
on behalf of the Trustee (the "Insured") under each Primary Mortgage Insurance
Policy. Neither the Servicer nor the Master Servicer will cancel or refuse to
renew any Primary Mortgage Insurance Policy in effect at the date of the initial
issuance of a Series of Notes or Certificates, as applicable, that is required
to be kept in force under the applicable Agreement or Servicing Agreement unless
the replacement Primary Mortgage Insurance Policy for the cancelled or
non-renewed policy is maintained with an insurer whose claims-paying ability is
acceptable to the Rating Agency rating the Notes or Certificates, as applicable.
See "Description of Insurance--Primary Mortgage Insurance Policies." The Master
Servicer, if any, or the Depositor or the applicable Servicer will be required
to use its best reasonable efforts to maintain the Pool Insurance Policy for
each related Mortgage Pool and to present claims under the policy to the issuer
of the Pool Insurance Policy (the "Pool Insurer") on behalf of the Trustee and
the Securityholders. See "Description of the Securities--Presentation of
Claims."



                                       57


         MORTGAGOR BANKRUPTCY BOND

         If so specified in the related prospectus supplement, the Master
Servicer will exercise its best reasonable efforts to maintain a Mortgagor
Bankruptcy Bond for a Series of Notes or Certificates, as applicable, in full
force and effect throughout the term of the applicable Agreement, unless
coverage under the Mortgagor Bankruptcy Bond has been exhausted through payment
of claims, and will pay the premiums for the Mortgagor Bankruptcy Bond on a
timely basis. At the request of the Depositor, coverage under a Mortgagor
Bankruptcy Bond will be cancelled or reduced by the Master Servicer to the
extent permitted by the Rating Agency rating the related Series of Notes or
Certificates, as applicable, provided that the cancellation or reduction does
not adversely affect the then current rating of the Series. See "Description of
Insurance--Mortgagor Bankruptcy Bond."

         PRESENTATION OF CLAIMS

         The Master Servicer, on behalf of itself, the Trustee and the
Securityholders, will present claims to HUD, the VA, the Pool Insurer, the
Special Hazard Insurer, the issuer of the Mortgagor Bankruptcy Bond, and each
Primary Mortgage Insurer, as applicable, and take reasonable steps necessary to
permit recovery under the insurance policies or Mortgagor Bankruptcy Bond, if
any, with respect to a Series concerning defaulted Mortgage Loans or Contracts
or Mortgage Loans or Contracts that are the subject of a bankruptcy proceeding.
All collections by the Master Servicer under any FHA insurance or VA guarantee,
any Pool Insurance Policy, any Primary Mortgage Insurance Policy or any
Mortgagor Bankruptcy Bond and, where the related property has not been restored,
any Special Hazard Insurance Policy, are to be deposited in the Certificate
Account, subject to withdrawal as previously described. In those cases in which
a Mortgage Loan or Contract is serviced by a Servicer, the Servicer, on behalf
of itself, the Trustee and the Securityholders, will present claims to the
applicable Primary Mortgage Insurer and to the FHA and the VA, as applicable,
and all collections shall be deposited in the Servicing Account, subject to
withdrawal, as set forth above, for deposit in the Certificate Account.

         If any property securing a defaulted Mortgage Loan or Contract is
damaged and proceeds, if any, from the related Standard Hazard Insurance Policy
or the applicable Special Hazard Insurance Policy are insufficient to restore
the damaged property to a condition sufficient to permit recovery under any Pool
Insurance Policy or any Primary Mortgage Insurance Policy, neither the related
Servicer nor the Master Servicer, as the case may be, will be required to expend
its own funds to restore the damaged property unless it determines, and, in the
case of a determination by a Servicer, the Master Servicer agrees, (1) that the
restoration will increase the proceeds to Securityholders on liquidation of the
Mortgage Loan or Contract after reimbursement of the expenses incurred by the
Servicer or the Master Servicer, as the case may be, and (2) that the expenses
will be recoverable through proceeds of the sale of the Mortgaged Property or
proceeds of any related Pool Insurance Policy, any related Primary Mortgage
Insurance Policy or otherwise.

         If recovery under a Pool Insurance Policy or any related Primary
Mortgage Insurance Policy is not available because the related Servicer or the
Master Servicer has been unable to make the above determinations or otherwise,
the Servicer or the Master Servicer is nevertheless obligated to follow the
normal practices and procedures deemed necessary or advisable to realize



                                       58


upon the defaulted Mortgage Loan. If the proceeds of any liquidation of the
Mortgaged Property or Manufactured Home are less than the principal balance of
the defaulted Mortgage Loan or Contract, respectively, plus interest accrued on
the proceeds at the Mortgage Rate, and if coverage under any other method of
credit support with respect to the Series is exhausted, the related Trust Fund
will realize a loss in the amount of the difference plus the aggregate of
expenses incurred by the Servicer or the Master Servicer in connection with the
proceedings and which are reimbursable under the related Servicing Agreement or
Agreement. In the event that any proceedings result in a total recovery that is,
after reimbursement to the Servicer or the Master Servicer of its expenses, in
excess of the principal balance of the related Mortgage Loan or Contract,
together with accrued and unpaid interest at the applicable Mortgage Rate or
APR, as the case may be, the Servicer and the Master Servicer will be entitled
to withdraw amounts representing normal servicing compensation on the Mortgage
Loan or Contract from the Servicing Account or the Certificate Account, as the
case may be.

         ENFORCEMENT OF "DUE-ON-SALE" CLAUSES; REALIZATION UPON DEFAULTED
         MORTGAGE LOANS

         Each Servicing Agreement and the applicable Agreement with respect to
Notes or Certificates, as applicable, representing interests in or secured by a
Mortgage Pool will provide that, when any Mortgaged Property has been conveyed
by the borrower, the Servicer or the Master Servicer, as the case may be, will,
to the extent it has knowledge of the conveyance, exercise its rights to
accelerate the maturity of the Mortgage Loan under any applicable "due-on-sale"
clause, if any, unless it reasonably believes that the enforcement is not
exercisable under applicable law or regulations or if the exercise would result
in loss of insurance coverage with respect to the Mortgage Loan. In either case,
where the due-on-sale clause will not be exercised, the Servicer or the Master
Servicer is authorized to take or enter into an assumption and modification
agreement from or with the person to whom the Mortgaged Property has been or is
about to be conveyed, pursuant to which the person becomes liable under the
Mortgage Note and, unless prohibited by applicable state law, the Mortgagor
remains liable on the Mortgage Note, provided that the Mortgage Loan will
continue to be covered by any Pool Insurance Policy and any related Primary
Mortgage Insurance Policy. In the case of an FHA Loan, an assumption can occur
only with HUD approval of the substitute Mortgagor. Each Servicer and the Master
Servicer will also be authorized, with the prior approval of the Insurer under
any required insurance policies, to enter into a substitution of liability
agreement with the person, pursuant to which the original Mortgagor is released
from liability and the person is substituted as Mortgagor and becomes liable
under the Mortgage Note.

         Under the Servicing Agreements and the applicable Agreement, the
Servicer or the Master Servicer, as the case may be, will foreclose upon or
otherwise comparably convert the ownership of properties securing the related
Mortgage Loans that come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with foreclosure or other conversion, the Servicer or the Master
Servicer will follow practices and procedures deemed necessary or advisable and
as shall be normal and usual in its general mortgage servicing activities and in
accordance with FNMA guidelines, except when, in the case of FHA or VA Loans,
applicable regulations require otherwise. However, neither the Servicer nor the
Master Servicer will be required to expend its own funds in connection with any
foreclosure or towards the restoration of any property unless it



                                       59


determines and, in the case of a determination by a Servicer, the Master
Servicer agrees (1) that restoration and/or foreclosure will increase the
proceeds of liquidation of the related Mortgage Loan to Securityholders after
reimbursement to itself for expenses and (2) that expenses will be recoverable
to it either through Liquidation Proceeds, Insurance Proceeds, payments under
the Letter of Credit, or amounts in the Reserve Fund, if any, with respect to
the related Series, or otherwise.

         Any prospective purchaser of a Cooperative Dwelling will generally be
required to obtain the approval of the board of directors of the related
Cooperative before purchasing the shares and acquiring rights under the
proprietary lease or occupancy agreement securing the Cooperative Loan. See
"Certain Legal Aspects of the Mortgage Loans and Contracts--The Mortgage
Loans--Foreclosure" in this prospectus. This approval is usually based on the
purchaser's income and net worth and numerous other factors. Although the
Cooperative's approval is unlikely to be unreasonably withheld or delayed, the
necessity of acquiring approval could limit the number of potential purchasers
for those shares and otherwise limit the Trust Fund's ability to sell and
realize the value of those shares.

         The market value of any Multifamily Property obtained in foreclosure or
by deed in lieu of foreclosure will be based substantially on the operating
income obtained from renting the dwelling units. Since a default on a Mortgage
Loan secured by Multifamily Property is likely to have occurred because
operating income, net of expenses, is insufficient to make debt service payments
on the related Mortgage Loan, it can be anticipated that the market value of the
property will be less than was anticipated when the Mortgage Loan was
originated. To the extent that the equity in the property does not absorb the
loss in market value and the loss is not covered by other credit support, a loss
may be experienced by the related Trust Fund. With respect to Multifamily
Property consisting of an apartment building owned by a Cooperative, the
Cooperative's ability to meet debt service obligations on the Mortgage Loan, as
well as all other operating expenses, will be dependent in large part on the
receipt of maintenance payments from the tenant-stockholders, as well as any
rental income from units or commercial areas the Cooperative might control.
Unanticipated expenditures may in some cases have to be paid by special
assessments of the tenant-stockholders. The Cooperative's ability to pay the
principal amount of the Mortgage Loan at maturity may depend on its ability to
refinance the Mortgage Loan. The Depositor, the Unaffiliated Seller and the
Master Servicer will have no obligation to provide refinancing for any Mortgage
Loan.

         ENFORCEMENT OF 'DUE-ON-SALE' CLAUSES; REALIZATION UPON DEFAULTED
CONTRACTS

         Each applicable Agreement and Servicing Agreement with respect to Notes
or Certificates, as applicable, representing interests in or secured by a
Contract Pool will provide that, when any Manufactured Home securing a Contract
is about to be conveyed by the Obligor, the Master Servicer, to the extent it
has knowledge of a prospective conveyance and prior to the time of the
consummation of the conveyance, may exercise its rights to accelerate the
maturity of the Contract under the applicable "due-on-sale" clause, if any,
unless it is not exercisable under applicable law. In that case, the Master
Servicer is authorized to take or enter into an assumption agreement from or
with the person to whom the Manufactured Home has been or is about to be
conveyed, pursuant to which the person becomes liable under the Contract and,
unless determined to be materially adverse to the interests of Securityholders,
with the prior approval of



                                       60


the Pool Insurer, if any, to enter into a substitution of liability agreement
with the person, pursuant to which the original Obligor is released from
liability and the person is substituted as Obligor and becomes liable under the
Contract. Where authorized by the Contract, the APR may be increased, upon
assumption, to the then-prevailing market rate, but shall not be decreased.

         Under the Servicing Agreement or the applicable Agreement, the Master
Servicer will repossess or otherwise comparably convert the ownership of
properties securing the related Manufactured Homes that come into and continue
in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments. In connection with repossession or other
conversion, the Servicer or Master Servicer will follow practices and procedures
it deems necessary or advisable and as are normal and usual in its general
Contract servicing activities. The Servicer or Master Servicer, however, will
not be required to expend its own funds in connection with any repossession or
towards the restoration of any property unless it determines (1) that the
restoration or repossession will increase the proceeds of liquidation of the
related Contract to the Certificateholders after reimbursement to itself for the
expenses and (2) that the expenses will be recoverable to it either through
liquidation proceeds or through insurance proceeds.

         SERVICING COMPENSATION AND PAYMENT OF EXPENSES

         Under the applicable Agreement for a Series of Notes or Certificates,
as applicable, the Depositor or the person or entity specified in the related
prospectus supplement and any Master Servicer will be entitled to receive an
amount described in the related prospectus supplement. As compensation for its
servicing duties, a Servicer will be entitled to receive a monthly servicing fee
in the amount specified in the related Servicing Agreement. The servicing
compensation shall be payable by withdrawal from the related Servicing Account
prior to deposit in the Certificate Account. Each Servicer, with respect to the
Mortgage Loans or Contracts serviced by it, and the Master Servicer will be
entitled to servicing compensation out of Insurance Proceeds, Liquidation
Proceeds, or Letter of Credit payments. Additional servicing compensation in the
form of prepayment charges, assumption fees, late payment charges or otherwise
may be retained by the Servicers and the Master Servicer to the extent not
required to be deposited in the Certificate Account.

         The Servicers and the Master Servicer, unless otherwise specified in
the related prospectus supplement, will pay from their servicing compensation
some of the expenses incurred in connection with the servicing of the Mortgage
Loans or Contracts, including, without limitation, payment of the Insurance
Policy premiums and, in the case of the Master Servicer, fees or other amounts
payable for any Alternative Credit Support, payment of the fees and
disbursements of the Trustee, and any custodian selected by the Trustee, the
Note Register, the Certificate Register and independent accountants and payment
of expenses incurred in enforcing the obligations of Servicers and Unaffiliated
Sellers. Some of these expenses may be reimbursable by the Depositor pursuant to
the terms of the applicable Agreement. In addition, the Master Servicer will be
entitled to reimbursement of expenses incurred in enforcing the obligations of
Servicers and Unaffiliated Sellers under limited circumstances.

         As set forth in the preceding section, the Servicers and the Master
Servicer will be entitled to reimbursement for some of the expenses incurred by
them in connection with the



                                       61


liquidation of defaulted Mortgage Loans or Contracts. The related Trust Fund
will suffer no loss by reason of these expenses to the extent claims are fully
paid under the Letter of Credit, if any, the related insurance policies, from
amounts in the Reserve Fund or under any applicable Alternative Credit Support
described in a prospectus supplement. In the event, however, that claims are
either not made or fully paid under the Letter of Credit, Insurance Policies or
Alternative Credit Support, or if coverage has ceased, or if amounts in the
Reserve Fund are not sufficient to fully pay the losses, the related Trust Fund
will suffer a loss to the extent that the proceeds of the liquidation
proceedings, after reimbursement of the expenses of the Servicers or the Master
Servicer, as the case may be, are less than the principal balance of the related
Mortgage Loan or Contract. In addition, the Servicers and the Master Servicer
will be entitled to reimbursement of expenditures incurred by them in connection
with the restoration of a Mortgaged Property, Cooperative Dwelling or
Manufactured Home, the right of reimbursement being prior to the rights of the
Securityholders to receive any payments under the Letter of Credit, or from any
related Insurance Proceeds, Liquidation Proceeds, amounts in the Reserve Fund or
any proceeds of Alternative Credit Support.

         Under the Trust Agreement, the Trustee will be entitled to deduct, from
distributions of interest with respect to the Mortgage Certificates, a specified
percentage of the unpaid principal balance of each Mortgage Certificate as
servicing compensation. The Trustee shall be required to pay all expenses,
except as expressly provided in the Trust Agreement, subject to limited
reimbursement as provided in the Trust Agreement.

         EVIDENCE AS TO COMPLIANCE

         The Master Servicer will deliver to the Depositor and the Trustee, on
or before the date specified in the applicable Agreement or Servicing Agreement,
an Officer's Certificate stating that (1) a review of the activities of the
Master Servicer and the Servicers during the preceding calendar year and of its
performance under the Agreement or Servicing Agreement has been made under the
supervision of the officer, and (2) to the best of the officer's knowledge,
based on the review, the Master Servicer and each Servicer has fulfilled all its
obligations under the Agreement or Servicing Agreement and the applicable
Servicing Agreement throughout the year, or, if there has been a default in the
fulfillment of any obligation, specifying each default known to the officer and
the nature and status of the default. The Officer's Certificate shall be
accompanied by a statement of a firm of independent public accountants to the
effect that, on the basis of an examination of particular documents and records
relating to servicing of the Mortgage Loans or Contract, conducted in accordance
with generally accepted accounting principles in the mortgage banking industry,
the servicing of the Mortgage Loans or Contract was conducted in compliance with
the provisions of the Agreement and/or the Servicing Agreements, except for any
exceptions as the firm believes it is required to report.

         CERTAIN MATTERS REGARDING THE MASTER SERVICER, THE DEPOSITOR AND THE
         TRUSTEE AND THE INDENTURE TRUSTEE

         The Master Servicer under each Agreement will be named in the
applicable prospectus supplement. The entity acting as Master Servicer may be an
Unaffiliated Seller and have other normal business relationships with the
Depositor and/or affiliates of the Depositor and may be an affiliate of the
Depositor. In the event there is no Master Servicer under an Agreement, all




                                       62


servicing of Mortgage Loans or Contracts will be performed by a Servicer
pursuant to a Servicing Agreement.

         The Master Servicer may not resign from its obligations and duties
under the applicable Agreement except upon a determination that its duties under
the relevant Agreement are no longer permissible under applicable law. No the
resignation will become effective until the Trustee or a successor servicer has
assumed the Master Servicer's obligations and duties under the Agreement.

         The Trustee under each Pooling and Servicing Agreement or Trust
Agreement will be named in the applicable prospectus supplement. The commercial
bank or trust company serving as Trustee may have normal banking relationships
with the Depositor and/or its affiliates and with the Master Servicer and/or its
affiliates.

         The Trustee may resign from its obligations under the Pooling and
Servicing Agreement at any time, in which event a successor trustee will be
appointed. In addition, the Depositor may remove the Trustee if the Trustee
ceases to be eligible to act as Trustee under the Pooling and Servicing
Agreement or if the Trustee becomes insolvent, at which time the Depositor will
become obligated to appoint a successor Trustee. The Trustee may also be removed
at any time by the holders of Certificates evidencing voting rights aggregating
not less than 50% of the voting rights evidenced by the Certificates of the
Series. Any resignation and removal of the Trustee, and the appointment of a
successor trustee, will not become effective until acceptance of the appointment
by the successor Trustee.

         The Trustee may resign at any time from its obligations and duties
under the Trust Agreement by executing an instrument in writing resigning as
Trustee, filing the same with the Depositor, mailing a copy of a notice of
resignation to all Certificateholders then of record, and appointing a qualified
successor trustee. No resignation will become effective until the successor
trustee has assumed the Trustee's obligations and duties under the Trust
Agreement.

         The Indenture Trustee under the Indenture will be named in the
applicable prospectus supplement. The commercial bank or trust company serving
as Indenture Trustee may have normal banking relationships with the Depositor
and/or its affiliates and with the Master Servicer and/or its affiliates.

         The Indenture Trustee may resign from its obligations under the
Indenture at any time, in which event a successor trustee will be appointed. In
addition, the Depositor may remove the Indenture Trustee if the Indenture
Trustee ceases to be eligible to act as Indenture Trustee under the Indenture or
if the Indenture Trustee becomes insolvent, at which time the Depositor will
become obligated to appoint a successor Indenture Trustee. Unless otherwise
specified in the related prospectus supplement, the Indenture Trustee may also
be removed at any time by the holders of Notes evidencing voting rights
aggregating not less than 50% of the voting rights evidenced by the Notes of the
Series. Any resignation and removal of the Trustee, and the appointment of a
successor trustee, will not become effective until acceptance of the appointment
by the successor Trustee.

                                       63


         Each Pooling and Servicing Agreement and Trust Agreement will also
provide that neither the Depositor nor any director, officer, employee or agent
of the Depositor or the Trustee, or any responsible officers of the Trustee will
be under any liability to the Certificateholders, for the taking of any action
or for refraining from the taking of any action in good faith pursuant to the
Pooling and Servicing Agreement, or for errors in judgment; provided, however,
that none of the Depositor or the Trustee nor any other person will be protected
against, in the case of the Depositor, any breach of representations or
warranties made by them, and in the case of the Depositor and the Trustee,
against any liability that would otherwise be imposed by reason of willful
misfeasance, bad faith or negligence in the performance of its duties or by
reason of reckless disregard of its obligations and duties under the related
Agreement. Each Pooling and Servicing Agreement and Trust Agreement will further
provide that the Depositor and the Trustee and any director, officer and
employee or agent of the Depositor or the Trustee shall be entitled to
indemnification, by the Trust Fund in the case of the Depositor and by the
Master Servicer in the case of the Trustee and will be held harmless against any
loss, liability or expense incurred in connection with any legal action relating
to the applicable Agreement or the Certificates and in the case of the Trustee,
resulting from any error in any tax or information return prepared by the Master
Servicer or from the exercise of any power of attorney granted pursuant to the
Pooling and Servicing Agreement, other than any loss, liability or expense
related to any specific Mortgage Loan, Contract or Mortgage Certificate, except
any loss, liability or expense otherwise reimbursable pursuant to the applicable
Agreement, and any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of their duties under
the related Agreement or by reason of reckless disregard of their obligations
and duties under the related Agreement. In addition, each Agreement will provide
that neither the Depositor nor the Master Servicer, as the case may be, will be
under any obligation to appear in, prosecute or defend any legal action that is
not incidental to its duties under the Agreement and that in its opinion may
involve it in any expense or liability. The Depositor or the Master Servicer
may, however, in their discretion, undertake any action deemed by them necessary
or desirable with respect to the applicable Agreement and the rights and duties
of the parties to the applicable Agreement and the interests of the
Securityholders under the applicable Agreement. In this event, the legal
expenses and costs of the action and any liability resulting from the action
will be expenses, costs and liabilities of the Trust Fund, and the Master
Servicer or the Depositor, as the case may be, will be entitled to be reimbursed
for the action out of the Certificate Account.

         DEFICIENCY EVENT

         To the extent a deficiency event is specified in the prospectus
supplement, a deficiency event (a "Deficiency Event") with respect to the Notes
or Certificates, as applicable, of each Series may be defined in the applicable
Agreement as being the inability of the Trustee to distribute to holders of one
or more Classes of Notes or Certificates, as applicable, of the Series, in
accordance with the terms of the Notes or Certificates, as applicable, and the
Agreement, any distribution of principal or interest on the Notes or
Certificates, as applicable, when and as distributable, in each case because of
the insufficiency for the purpose of the funds then held in the related Trust
Fund.

         Except as otherwise provided in the related prospectus supplement, to
the extent a deficiency event is specified in the related prospectus supplement,
upon the occurrence of a



                                       64


Deficiency Event, the Trustee is required to determine whether or not the
application on a monthly basis, regardless of the frequency of regular
Distribution Dates, of all future scheduled payments on the Mortgage Loans,
Contracts and Mortgage Certificates included in the related Trust Fund and other
amount receivable with respect to the Trust Fund towards payments on the Notes
or Certificates, as applicable, in accordance with the priorities as to
distributions of principal and interest set forth in the Notes or Certificates,
as applicable, will be sufficient to make distributions of interest at the
applicable Interest Rates and to distribute in full the principal balance of
each Note or Certificate, as applicable, on or before the latest Final
Distribution Date of any outstanding Notes or Certificates, as applicable, of
the Series.

         Except as otherwise provided in the related prospectus supplement, to
the extent a deficiency event is specified in the related prospectus supplement,
the Trustee will obtain and rely upon an opinion or report of a firm of
independent accountants of recognized national reputation as to the sufficiency
of the amounts receivable with respect to the Trust Fund to make distributions
on the Notes or Certificates, as applicable, which opinion or report will be
conclusive evidence as to the sufficiency. Pending the making of any
determination, distributions on the Notes or Certificates, as applicable, shall
continue to be made in accordance with their terms.

         Except as otherwise provided in the related prospectus supplement, to
the extent a deficiency event is specified in the related prospectus supplement,
in the event that the Trustee makes a positive determination, the Trustee will
apply all amounts received in respect of the related Trust Fund, after payment
of fees and expenses of the Trustee and accountants for the Trust Fund, to
distributions on the Notes or Certificates, as applicable, of the Series in
accordance with their terms, except that the distributions shall be made on each
Distribution Date or on more frequent dates as specified in the related
prospectus supplement and without regard to the amount of principal that would
otherwise be distributable on the related Distribution Date. Under some
circumstances following any positive determination, the Trustee may resume
making distributions on the Notes or Certificates, as applicable, expressly in
accordance with their terms.

         Except as otherwise provided in the related prospectus supplement, to
the extent a deficiency event is specified in the related prospectus supplement,
if the Trustee is unable to make the positive determination described above, the
applicable Trustee will apply all amounts received in respect of the related
Trust Fund, after payment of Trustee and accountants' fees and expenses, to
monthly distributions on Notes or Certificates, as applicable, of the Series or
on all Senior Notes or Senior Certificates, as applicable, of the Series pro
rata, without regard to the priorities as to distribution of principal set forth
in the Notes or Certificates, as applicable, and the Notes or Certificates, as
applicable, will, to the extent permitted by applicable law and specified in the
related prospectus Statement, accrue interest at the highest Interest Rate borne
by any Note or Certificate Notes or Certificates, as applicable, with the same
credit rating by the Rating Agencies of the Series, or in the event any Class of
the Series shall accrue interest at a floating rate, at the weighted average
Interest Rate, calculated on the basis of the maximum interest rate applicable
to the Class having a floating interest rate and on the original principal
amount of the Notes or Certificates, as applicable, of that Class. In this
event, the holders of a majority in outstanding principal balance of the Notes
or Certificates, as applicable, may direct the Trustee to sell the related Trust
Fund, any direction being irrevocable and binding upon the



                                       65


holders of all Notes or Certificates, as applicable, of the Series and upon the
owners of the residual interests in the Trust Fund. In the absence of a
direction, the Trustee may not sell all or any portion of the Trust Fund.

         EVENTS OF DEFAULT

         Except as otherwise provided in the related prospectus supplement,
Events of Default under the related Pooling and Servicing Agreement or Sale and
Servicing will consist of:

o    any failure to make a specified payment which continues unremedied, in most
     cases, for five business days after the giving of written notice;

o    any failure by the Trustee, the Servicer or the Master Servicer, as
     applicable, duly to observe or perform in any material respect any other of
     its covenants or agreements in the applicable Agreement which failure shall
     continue for the number of days specified in the related prospectus
     supplement or any breach of any representation and warranty made by the
     Master Servicer or the Servicer, if applicable, which continues unremedied
     for the number of days specified in the related prospectus supplement after
     the giving of written notice of the failure or breach;

o    particular events of insolvency, readjustment of debt, marshalling of
     assets and liabilities or similar proceedings regarding the Master Servicer
     or a Servicer, as applicable; and

o    any lowering, withdrawal or notice of an intended or potential lowering, of
     the outstanding rating of the Notes or Certificates, as applicable, by the
     Rating Agency rating the Notes or Certificates, as applicable, because the
     existing or prospective financial condition or mortgage loan servicing
     capability of the Master Servicer is insufficient to maintain the rating.

         Unless otherwise specified in the related prospectus supplement, Events
of Default under the Indenture for each Series of Notes include:

o    a default of five days or more in the payment of any principal of or
     interest on any Note of the Series;

o    failure to perform any other covenant of the Depositor or the Trust Fund in
     the Indenture which continues for a period of thirty days after notice is
     given in accordance with the procedures described in the related prospectus
     supplement;

o    any representation or warranty made by the Depositor or the Trust Fund in
     the Indenture or in any certificate or other writing delivered or in
     connection with the Indenture with respect to or affecting the Series
     having been incorrect in a material respect as of the time made, and the
     breach is not cured within thirty days after notice is given in accordance
     with the procedures described in the related prospectus supplement;

o    particular events of bankruptcy, insolvency, receivership or liquidation of
     the Depositor or the Trust Fund; or

o    any other Event of Default provided with respect to Notes of that Series.



                                       66


         RIGHTS UPON EVENT OF DEFAULT

         If an Event of Default with respect to the Notes of any Series at the
time outstanding occurs and is continuing, either the Indenture Trustee or the
Noteholders of a majority of the then aggregate outstanding amount of the Notes
of the Series may declare the principal amount of all the Notes of the Series to
be due and payable immediately. The declaration may, under some circumstances,
be rescinded and annulled by the Noteholders of a majority in aggregate
outstanding amount of the Notes of the Series.

         If, following an Event of Default with respect to any Series of Notes,
the Notes of the Series have been declared to be due and payable, the Indenture
Trustee may, in its discretion, notwithstanding the acceleration, elect to
maintain possession of the collateral securing the Notes of the Series and to
continue to apply distributions on the collateral as if there had been no
declaration of acceleration if the collateral continues to provide sufficient
funds for the payment of principal of and interest on the Notes of the Series as
they would have become due if there had not been a declaration. In addition, the
Indenture Trustee may not sell or otherwise liquidate the collateral securing
the Notes of a Series following an Event of Default other than a default in the
payment of any principal of or interest on any Note of the Series for thirty
days or more, unless

o    the Noteholders of 100% of the then aggregate outstanding amount of the
     Notes of the Series consent to the sale,

o    the proceeds of the sale or liquidation are sufficient to pay in full the
     principal of and accrued interest due and unpaid on the outstanding Notes
     of the Series at the date of the sale, or

o    the Indenture Trustee determines that the collateral would not be
     sufficient on an ongoing basis to make all payments on the Notes as the
     payments would have become due if the Notes had not been declared due and
     payable, and the Indenture Trustee obtains the consent of the Holders of
     66 2/3% of the then aggregate outstanding amount of the Notes of the
     Series.

         In the event that the Indenture Trustee liquidates the collateral in
connection with an Event of Default involving a default for thirty days or more
in the payment of principal of or interest on the Notes of a Series, the
Indenture provides that the Indenture Trustee will have a prior lien on the
proceeds of any liquidation for unpaid fees and expenses. As a result, upon the
occurrence of this Event of Default, the amount available for distribution to
the Noteholders may be less than would otherwise be the case. However, the
Indenture Trustee may not institute a proceeding for the enforcement of its lien
except in connection with a proceeding for the enforcement of the lien of the
Indenture for the benefit of the Noteholders after the occurrence of this Event
of Default.

         Unless otherwise specified in the related prospectus supplement, in the
event the principal of the Notes of a Series is declared due and payable, as
described above, the Noteholders of these Notes issued at a discount from par
may be entitled to receive no more than an amount equal to the unpaid principal
amount of the Notes less the amount of the discount which is unamortized.

         Except as otherwise provided in the related prospectus supplement, so
long as an Event of Default with respect to a Series of Notes or Certificates,
as applicable, remains unremedied,



                                       67


the Depositor, the Trustee or the holders of Notes of the Series, or, if no
Notes are issued as part of the Series, Certificate, evidencing not less than
25% of the principal amount of the Notes or Certificates, as applicable, of the
Series may terminate all of the rights and obligations of the Master Servicer
under the applicable Agreement and/or Servicing Agreement and in and to the
Mortgage Loans and Contracts and their proceeds, whereupon, subject to
applicable law regarding the Trustee's ability to make advances, the Trustee or,
if the Depositor so notifies the Trustee and the Master Servicer, the Depositor
or its designee, will succeed to all the responsibilities, duties and
liabilities of the Master Servicer under the Agreement and will be entitled to
similar compensation arrangements. In the event that the Trustee would be
obligated to succeed the Master Servicer but is unwilling or unable so to act,
it may appoint, or petition to a court of competent jurisdiction for the
appointment of, a successor master servicer. Pending an appointment, the
Trustee, unless prohibited by law from so acting, shall be obligated to act in
this capacity. The Trustee and the successor master servicer may agree upon the
servicing compensation to be paid to the successor, which in no event may be
greater than the compensation to the Master Servicer under the applicable
Agreement.

         AMENDMENT

         Except as otherwise provided in the related prospectus supplement, the
Pooling and Servicing Agreement or Sale and Servicing Agreement, as applicable,
for each Series of Notes or Certificates, as applicable, may be amended by the
Depositor, the Master Servicer and the Trustee, without the consent of the
Securityholders,

o    to cure any ambiguity,

o    to correct or supplement any provision in the Pooling and Servicing
     Agreement or Sale and Servicing Agreement, as applicable, that may be
     inconsistent with any other provision in these agreements, or

o    to make any other provisions with respect to matters or questions arising
     under the Agreement that are not inconsistent with the provisions of these
     Agreements, provided that the action will not adversely affect in any
     material respect the interests of any Securityholder of the related Series.

         Except as otherwise provided in the related prospectus supplement, the
Pooling and Servicing Agreement or Sale and Servicing Agreement, as applicable,
for each Series of Notes or Certificates, as applicable, may also be amended by
the Depositor, the Master Servicer and the Trustee with the consent of holders
of Notes or Certificates, as applicable, evidencing not less than 66 2/3% of the
aggregate outstanding principal amount of the Notes or Certificates, as
applicable, of the Series, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of the Agreement or
of modifying in any manner the rights of the Securityholders; provided, however,
that no the amendment may

(1)  reduce in any manner the amount of, delay the timing of or change the
     manner in which payments received on or with respect to Mortgage Loans and
     Contracts are required to be distributed with respect to any Note or
     Certificate, as applicable, without the consent of the holder of the
     Security,



                                       68


(2)  adversely affect in any material respect the interests of the holders of a
     Class or Subclass of the Senior Notes or Senior Certificates, as
     applicable, if any, of a Series in a manner other than that set forth in
     (1) above without the consent of the holders of the Senior Notes or Senior
     Certificates, as applicable, of the Subclass evidencing not less than
     66 2/3% of the Class or Subclass,

(3)  adversely affect in any material respect the interests of the holders of
     the Subordinated Notes or Subordinated Certificates, as applicable, of a
     Series in a manner other than that set forth in (1) above without the
     consent of the holders of Subordinated Notes or Subordinated Certificates,
     as applicable, evidencing not less than 66 2/3% of the Class or Subclass or

(4)  reduce the aforesaid percentage of the Notes or Certificates, as
     applicable, the holders of which are required to consent to the amendment,
     without the consent of the holders of the Class affected by the amendment.

         The Trust Agreement for a Series may be amended by the Trustee and the
Depositor without Certificateholder consent, to cure any ambiguity, to correct
or supplement any provision in the Trust Agreement that may be inconsistent with
any other provision in the Trust Agreement, or to make any other provisions with
respect to matters or questions arising under the Trust Agreement that are not
inconsistent with any other provisions of the Trust Agreement, provided that the
action will not, as evidenced by an opinion of counsel, adversely affect the
interests of any Certificateholders of that Series in any material respect. The
Trust Agreement for each Series may also be amended by the Trustee and the
Depositor with the consent of the Holders of Notes or Certificates, as
applicable, evidencing Percentage Interests aggregating not less than 66 2/3% of
each Class of the Notes or Certificates, as applicable, of the Series affected
by the amendment for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Agreement or modifying in any
manner the rights of Certificateholders of that Series; provided, however, that
no amendment may (1) reduce in any manner the amount of, or delay the timing of,
or change the manner in which payments received on Mortgage Certificates are
required to be distributed in respect of any Certificate, without the consent of
the Holder of the Certificate or (2) reduce the aforesaid percentage of Notes or
Certificates, as applicable, the Holders of which are required to consent to any
amendment, without the consent of the Holders of all Notes or Certificates, as
applicable, of the Series then outstanding.

         TERMINATION

         Except as otherwise provided in the related prospectus supplement, the
obligations created by the Pooling and Servicing Agreement or Sale and Servicing
Agreement, as applicable, for a Series of Notes or Certificates, as applicable,
will terminate upon the earlier of

         (1) the repurchase of all Mortgage Loans or Contracts and all property
             acquired by foreclosure of the Mortgage Loan or Contract, and

         (2) the later of


                                       69



             (a) the maturity or other liquidation of the last Mortgage Loan or
                 Contract subject to the obligations and the disposition of all
                 property acquired upon foreclosure of the Mortgage Loan or
                 Contract, and

             (b) the payment to the Securityholders of all amounts held by the
                 Master Servicer and required to be paid to them pursuant to the
                 applicable Agreement.

The obligations created by the Trust Agreement for a Series of Certificates will
terminate upon the distribution to Certificateholders of all amounts required to
be distributed to them pursuant to the Trust Agreement. In no event, however,
will the Trust created by either the Agreement continue beyond the expiration of
21 years from the death of the last survivor of specific persons identified in
it. For each Series of Notes or Certificates, as applicable, the Master Servicer
will give written notice of termination of the applicable Agreement of each
Securityholder, and the final distribution will be made only upon surrender and
cancellation of the Notes or Certificates, as applicable, at an office or agency
specified in the notice of termination.

         If so provided in the related prospectus supplement, the Pooling and
Servicing Agreement or Sale and Servicing Agreement for each Series of Notes or
Certificates, as applicable, will permit, but not require, the Depositor or
another person specified in the prospectus supplement to repurchase from the
Trust Fund for the Series all remaining Mortgage Loans or Contracts subject to
the applicable Agreement at a price specified in the related prospectus
supplement. In the event that the Depositor elects to treat the related Trust
Fund as a REMIC under the Code, the repurchase will be effected in compliance
with the requirements of Section 860F(a)(4) of the Code, in order to constitute
a "qualified liquidation" under the Code. The exercise of the right will effect
early retirement of the Notes or Certificates, as applicable, of that Series,
but the right so to repurchase may be effected only on or after the aggregate
principal balance of the Mortgage Loans or Contracts for the Series at the time
of repurchase is less than a specified percentage of the aggregate principal
balance at the Cut-off Date for the Series, or on or after the date set forth in
the related prospectus supplement.

         The Indenture will be discharged with respect to a Series of Notes,
except with respect to the continuing rights specified in the Indenture, upon
the delivery to the Indenture Trustee for cancellation of all the Notes of the
Series or, with some limitations, upon deposit with the Indenture Trustee of
funds sufficient for the payment in full of all the Notes of the Series.

                  CERTAIN INFORMATION REGARDING THE SECURITIES

         BOOK-ENTRY REGISTRATION

         If so specified in the related prospectus supplement, DTC will act as
securities company for each class of notes or certificates offered by this
prospectus. Each class of notes or certificates, as applicable, initially will
be represented by one or more certificates registered in the name of Cede, the
nominee of DTC. As the nominee of DTC, it is anticipated that the only
"noteholder" and/or "certificateholder" with respect to a series of notes or
certificates, as applicable, will be Cede. Beneficial owners of the notes or
certificates, as applicable ("Security Owners") will not be recognized as
"noteholders" by the related indenture trustee, as the term is



                                       70


used in each Indenture, or as "certificateholders" by the related trustee, as
the term is used in each Trust Agreement or Pooling and Servicing Agreement, as
applicable, and Security Owners will be permitted to exercise the rights of
noteholders or certificateholders only indirectly through DTC and its
participating members ("Participants").

         DTC is a limited purpose trust company organized under the laws of the
State of New York, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the Uniform Commercial Code (the "UCC") in effect in the
State of New York, and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Exchange Act. DTC was created to hold securities for the
Participants and to facilitate the clearance and settlement of securities
transactions between Participants through electronic book-entries, thus
eliminating the need for physical movement of certificates. Participants include
securities brokers and dealers, banks, trust companies and clearing
corporations. Indirect access to the DTC system also is available to banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly (the "Indirect
Participants").

         Security Owners that are not Participants or Indirect Participants but
desire to purchase, sell or otherwise transfer ownership of, or an interest in,
the securities may do so only through Participants and Indirect Participants. In
addition, all Security Owners will receive all distributions of principal and
interest from the related indenture trustee or the related trustee, as
applicable, through Participants or Indirect Participants. Under a book-entry
format, Security Owners may experience some delay in their receipt of payments,
since these payments will be forwarded by the applicable trustee or indenture
trustee to DTC's nominee. DTC will then forward the payments to the
Participants, which will then forward them to Indirect Participants or Security
Owners.

         Under the rules, regulations and procedures creating and affecting DTC
and its operations (the "Rules"), DTC is required to make book-entry transfers
among Participants on whose behalf it acts with respect to the securities and to
receive and transmit distributions of principal of and interest on the
securities. Participants and Indirect Participants with which Security Owners
have accounts with respect to the securities similarly are required to make
book-entry transfers and to receive and transmit the payments on behalf of their
respective Security Owners. Accordingly, although Security Owners will not
possess physical certificates representing the securities, the Rules provide a
mechanism by which Participants and Indirect Participants will receive payments
and transfer or exchange interests, directly or indirectly, on behalf of
Security Owners.

         Because DTC can act only on behalf of Participants, who in turn may act
on behalf of Indirect Participants, the ability of a Security Owner to pledge
securities to persons or entities that do not participate in the DTC system, or
otherwise take actions with respect to the securities, may be limited due to the
lack of a physical certificate representing the securities.

         DTC has advised the company that it will take any action permitted to
be taken by a Security Owner under the Indenture, Trust Agreement or Pooling and
Servicing Agreement, as applicable, only at the direction of one or more
Participants to whose account with DTC the securities are credited. DTC may take
conflicting actions with respect to other undivided



                                       71


interests to the extent that these actions are taken on behalf of Participants
whose holdings include the undivided interests.

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

         Further to the merger, the Board of Directors of New Cedel
International decided to rename the companies in the group in order to give them
a cohesive brand name. The new brand name that was chosen is "Clearstream". With
effect from January 14, 2000 New CI has been renamed "Clearstream International,
societe anonyme". On January 18, 2000, Cedelbank was renamed "Clearstream
Banking, societe anonyme", and Cedel Global Services was renamed "Clearstream
Services, societe anonyme".

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

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



                                       72


electronic bridge with Morgan Guaranty Trust Company of New York as the Operator
of the Euroclear System (MGT/EOC) in Brussels to facilitate settlement of trades
between Clearstream, Luxembourg and MGT/EOC.

         Except as required by law, none of Credit Suisse First Boston LLC, the
company, the related seller, the related servicer, or related indenture trustee,
if any, or the related trustee will have any liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of securities of any series held by DTC's nominee, or for maintaining,
supervising or reviewing any records relating to the beneficial ownership
interests.

                                 CREDIT SUPPORT

         Credit support for a Series of Notes or Certificates, as applicable,
may be provided by one or more Letters of Credit, the issuance of Subordinated
Classes or Subclasses of Notes or Certificates, as applicable, which may, if so
specified in the related prospectus supplement, be issued in notional amounts,
the issuance of subordinated Classes or Subclasses of Notes, the provision for
shifting interest credit enhancement, the establishment of a Reserve Fund, the
method of Alternative Credit Support specified in the applicable prospectus
supplement, or any combination of the foregoing, in addition to, or in lieu of,
the insurance arrangements set forth below under "Description of Insurance." The
amount and method of credit support will be set forth in the prospectus
supplement with respect to a Series of Notes or Certificates, as applicable.

         LETTERS OF CREDIT

         The Letters of Credit, if any, with respect to a Series of Notes or
Certificates, as applicable, will be issued by the bank or financial institution
specified in the related prospectus supplement (the "L/C Bank"). The maximum
obligation of the L/C Bank under the Letter of Credit will be to honor requests
for payment in an aggregate fixed dollar amount, net of unreimbursed payments,
equal to the percentage of the aggregate principal balance on the related
Cut-off Date of the Mortgage Loans or Contracts evidenced by each Series (the
"L/C Percentage") specified in the prospectus supplement for the Series. The
duration of coverage and the amount and frequency of any reduction in coverage
provided by the Letter of Credit with respect to a Series of Notes or
Certificates, as applicable, will be in compliance with the requirements
established by the Rating Agency rating the Series and will be set forth in the
prospectus supplement relating to the Series of Notes or Certificates, as
applicable. The amount available under the Letter of Credit in all cases shall
be reduced to the extent of the unreimbursed payments under the Letter of
Credit. The obligations of the L/C Bank under the Letter of Credit for each
Series of Notes or Certificates, as applicable, will expire a specified number
of days after the latest of the scheduled final maturity dates of the Mortgage
Loans or Contracts in the related Mortgage Pool or Contract Pool or the
repurchase of all Mortgage Loans or Contracts in the Mortgage Pool or Contract
Pool in the circumstances specified above. See "Description of the
Securities--Termination."

         Unless otherwise specified in the applicable prospectus supplement,
under the applicable Agreement and/or Servicing Agreement, the Master Servicer
will be required not later than three business days prior to each Distribution
Date to determine whether a payment under the Letter of Credit will be necessary
on the Distribution Date and will, no later than the third business day



                                       73


prior to the Distribution Date, advise the L/C Bank and the Trustee of its
determination, setting forth the amount of any required payment. On the
Distribution Date, the L/C Bank will be required to honor the Trustee's request
for payment in an amount equal to the lesser of (A) the remaining amount
available under the Letter of Credit and (B) the outstanding principal balances
of any Liquidating Loans to be assigned on the Distribution Date, together with
accrued and unpaid interest on the Liquidating Loans at the related Mortgage
Rate or APR to the related Due Date. The proceeds of payments under the Letter
of Credit will be deposited into the Certificate Account and will be distributed
to Securityholders, in the manner specified in the related prospectus
supplement, on the Distribution Date, except to the extent of any unreimbursed
Advances, servicing compensation due to the Servicers and the Master Servicer
and other amounts payable to the Depositor or the person or entity named in the
applicable prospectus supplement. Unless otherwise provided in the related
prospectus supplement, the term "Liquidating Loan" means:

         (1) each Mortgage Loan with respect to which foreclosure proceedings
             have been commenced, and the Mortgagor's right of reinstatement has
             expired,

         (2) each Mortgage Loan with respect to which the Servicer or the Master
             Servicer has agreed to accept a deed to the property in lieu of
             foreclosure,

         (3) each Cooperative Loan as to which the shares of the related
             Cooperative and the related proprietary lease or occupancy
             agreement have been sold or offered for sale, or

         (4) each Contract with respect to which repossession proceedings have
             been commenced.

         If at any time the L/C Bank makes a payment in the amount of the full
outstanding principal balance and accrued interest on a Liquidating Loan, it
will be entitled to receive an assignment by the Trustee of the Liquidating
Loan, and the L/C Bank will then own the Liquidating Loan free of any further
obligation to the Trustee or the Securityholders with respect to the Liquidating
Loan. Payments made to the Certificate Account by the L/C Bank under the Letter
of Credit with respect to a Liquidating Loan will be reimbursed to the L/C Bank
only from the proceeds, net of liquidation costs, of the Liquidating Loan. The
amount available under the Letter of Credit will be increased to the extent it
is reimbursed for the payments.

         To the extent the proceeds of liquidation of a Liquidating Loan
acquired by the L/C Bank in the manner described in the preceding paragraph
exceed the amount of payments made with respect to the Liquidating Loan, the L/C
Bank will be entitled to retain the proceeds as additional compensation for
issuance of the Letter of Credit.

         Prospective purchasers of Notes or Certificates, as applicable, of a
Series with respect to which credit support is provided by a Letter of Credit
must look to the credit of the L/C Bank, to the extent of its obligations under
the Letter of Credit, in the event of default by Mortgagors or Obligors. If the
amount available under the Letter of Credit is exhausted, or the L/C Bank
becomes insolvent, and amounts in the Reserve Fund, if any, with respect to the
Series are insufficient to pay the entire amount of the loss and still be
maintained at the Required Reserve,



                                       74


the Securityholders, in the priority specified in the related prospectus
supplement, will subsequently bear all risks of loss resulting from default by
Mortgagors or Obligors, including losses not covered by insurance or Alternative
Credit Support, and must look primarily to the value of the properties securing
defaulted Mortgage Loans or Contracts for recovery of the outstanding principal
and unpaid interest.

         If so specified in the related prospectus supplement, the Reserve Fund
may be created by the deposit, in escrow, by the Depositor, of a separate pool
of Mortgage Loans or Contracts (the "Subordinated Pool"), with the aggregate
principal balance specified in the related prospectus supplement, or by the
deposit of cash in the amount specified in the related prospectus supplement
(the "Initial Deposit"). The Reserve Fund will be funded by the retention of
specified distributions on the Trust Assets of the related Mortgage Pool or
Contract Pool, and/or on the mortgage loans, cooperative loans or Contracts in
the Subordinated Pool, until the Reserve Fund, without taking into account the
amount of any Initial Deposit, except as otherwise provided in the related
prospectus supplement, reaches an amount (the "Required Reserve") set forth in
the related prospectus supplement. Subsequently, specified distributions on the
Trust Assets of the related Mortgage Pool or Contract Pool, and/or on the
Mortgage Loans or Contracts in the Subordinated Pool, will be retained to the
extent necessary to maintain the Reserve Fund, without, except as otherwise
provided in the related prospectus supplement, taking into account the amount of
any Initial Deposit, at the related Required Reserve.

         In the event that a Subordinated Class or Subclass of a Series of Notes
or Certificates, as applicable, is issued with a notional amount, the coverage
provided by the Letter of Credit with respect to the Series, and the terms and
conditions of the coverage, will be set forth in the related prospectus
supplement.

         SUBORDINATED SECURITIES

         To the extent specified in the prospectus supplement with respect to a
Series of Notes or Certificates, as applicable, credit support may be provided
by the subordination of the rights of the holders of one or more Classes or
Subclasses of Notes or Certificates, as applicable, to receive distributions
with respect to the Mortgage Loans or Mortgage Certificates in the Mortgage Pool
or Contracts in the Contract Pool underlying the Series, or with respect to a
Subordinated Pool of mortgage loans or contracts, to the rights of the Senior
Securityholders or holders of one or more Classes or Subclasses of Subordinated
Notes or Subordinated Certificates, as applicable, of the Series to receive
distributions, to the extent of the applicable Subordinated Amount or as
otherwise specified in the related prospectus supplement. In this case, credit
support may also be provided by the establishment of a Reserve Fund, as
described below. Except as otherwise provided in the related prospectus
supplement, the Subordinated Amount, as described below, will be reduced by an
amount equal to Aggregate Losses. Aggregate Losses will be defined in the
related Agreement for any given period as the aggregate amount of delinquencies,
losses and other deficiencies in the amounts due to the holders of the Notes or
Certificates, as applicable, of one or more Classes or Subclasses of the Series
paid or borne by the holders of one or more Classes or Subclasses of
Subordinated Notes or Subordinated Certificates, as applicable, of the Series
("payment deficiencies"), but excluding any payments of interest on any amounts
originally due to the holders of the Notes or Certificates, as applicable, of a
Class or Subclass to which the applicable Class or Subclass of



                                       75


Subordinated Notes or Subordinated Certificates, as applicable, are subordinated
on a previous Distribution Date, but not paid as due, whether by way of
withdrawal from the Reserve Fund, including, prior to the time that the
Subordinated Amount is reduced to zero, any withdrawal of amounts attributable
to the Initial Deposit, if any, reduction in amounts otherwise distributable to
the Subordinated Securityholders on any Distribution Date or otherwise, less the
aggregate amount of previous payment deficiencies recovered by the related Trust
Fund during any period in respect of the Mortgage Loans or Contracts giving rise
to previous payment deficiencies, including, without limitation, recoveries
resulting from the receipt of delinquent principal and/or interest payments,
Liquidation Proceeds or Insurance Proceeds, net, in each case, of servicing
compensation, foreclosure costs and other servicing costs, expenses and
unreimbursed Advances relating to the Mortgage Loans or Contracts. The
prospectus supplement for each Series of Notes or Certificates, as applicable,
with respect to which credit support will be provided by one or more Classes or
Subclasses of Subordinated Notes or Subordinated Certificates, as applicable,
will set forth the Subordinated Amount for the Series and/or the manner by which
one or more Classes or Subclasses of Notes or Certificates, as applicable, may
be subordinated to other Classes or Subclasses or Notes or Certificates, as
applicable. If specified in the related prospectus supplement, the Subordinated
Amount will decline over time in accordance with a schedule which will also be
set forth in the related prospectus supplement.

         In addition, if so specified in the related prospectus supplement, if a
Series of Notes or Certificates, as applicable, includes Notes, one more Classes
or Subclasses of Notes may be subordinated to another Class or Subclasses of
Notes and may be entitled to receive disproportionate amounts of distributions
in respect of principal and all the Certificates of the Series will be
subordinated to all the Notes.

         SHIFTING INTEREST

         If specified in the prospectus supplement for a Series of Notes or
Certificates, as applicable, for which credit enhancement is provided by
shifting interest as described in this prospectus, the rights of the holders of
the Subordinated Notes or Subordinated Certificates, as applicable, of a Series
to receive distributions with respect to the Mortgage Loans, Mortgage
Certificates or Contracts in the related Trust Fund or Subsidiary Trust will be
subordinated to the right of the holders of the Senior Notes or Senior
Certificates, as applicable, of the same Series to the extent described in the
related prospectus supplement. This subordination feature is intended to enhance
the likelihood of regular receipt by holders of Senior Notes or Senior
Certificates, as applicable, of the full amount of scheduled monthly payments of
principal and interest due them and to provide limited protection to the holders
of the Senior Notes or Senior Certificates, as applicable, against losses due to
mortgagor defaults.

         The protection afforded to the holders of Senior Notes or Senior
Certificates, as applicable, of a Series by the shifting interest subordination
feature will be effected by distributing to the holders of the Senior Notes or
Senior Certificates, as applicable, a disproportionately greater percentage (the
"Senior Prepayment Percentage") of Principal Prepayments. The initial Senior
Prepayment Percentage will be the percentage specified in the related prospectus
supplement and will decrease in accordance with the schedule and subject to the
conditions set forth in the prospectus supplement. This disproportionate
distribution of Principal Prepayments will have the effect of accelerating the
amortization of the Senior Notes or



                                       76


Senior Certificates, as applicable, while increasing the respective interest of
the Subordinated Notes or Subordinated Certificates, as applicable, in the
Mortgage Pool or Contract Pool. Increasing the respective interest of the
Subordinated Notes or Subordinated Certificates, as applicable, relative to that
of the Senior Notes or Senior Certificates, as applicable, is intended to
preserve the availability of the benefits of the subordination provided by the
Subordinated Notes or Subordinated Certificates, as applicable.

         SWAP AGREEMENT

         If so specified in the prospectus supplement relating to a Series of
Notes or Certificates, as applicable, the related Trust will enter into or
obtain an assignment of a swap agreement or other similar agreement pursuant to
which the trust will have the right to receive particular payments of interest,
or other payments, as set forth or determined as described in the agreement or
agreements. The prospectus supplement relating to a Series of Notes or
Certificates, as applicable, having the benefit of an interest rate or currency
rate swap, cap or floor agreement will describe the material terms of the
agreement and the particular risks associated with the interest rate swap
feature, including market and credit risk, the effect of counterparty defaults
and other risks, if any, addressed by the rating. The prospectus supplement
relating to the Series of Notes or Certificates, as applicable, also will set
forth information relating to the corporate status, ownership and credit quality
of the counterparty or counterparties to the swap agreement in accordance with
applicable rules and regulations of the Commission.

         RESERVE FUND

         If so specified in the related prospectus supplement, credit support
with respect to one or more Classes or Subclasses of Notes or Certificates, as
applicable, of a Series may be provided by the establishment and maintenance
with the Trustee for the Series of Notes or Certificates, as applicable, in
trust, of a Reserve Fund for the Series. Unless otherwise specified in the
applicable prospectus supplement, the Reserve Fund for a Series will not be
included in the Trust Fund for the Series. The Reserve Fund for each Series will
be created by the Depositor and shall be funded by the retention by the Master
Servicer of particular payments on the Mortgage Loans or Contracts, by the
deposit with the Trustee, in escrow, by the Depositor of a Subordinated Pool of
mortgage loans or Contracts with the aggregate principal balance, as of the
related Cut-off Date, set forth in the related prospectus supplement, by any
combination of the foregoing, or in another manner specified in the related
prospectus supplement. Except as otherwise provided in the related prospectus
supplement, following the initial issuance of the Notes or Certificates, as
applicable, of a Series and until the balance of the Reserve Fund first equals
or exceeds the Required Reserve, the Master Servicer will retain specified
distributions on the related Mortgage Loans or Contracts and/or on the Contracts
in the Subordinated Pool otherwise distributable to the holders of the
applicable Class or Subclasses of Subordinated Notes or Subordinated
Certificates, as applicable, and deposit the amounts in the Reserve Fund. After
the amounts in the Reserve Fund for a Series first equal or exceed the
applicable Required Reserve, the Master Servicer will retain the distributions
and deposit so much of the amounts in the Reserve Fund as may be necessary,
after the application of distributions to amounts due and unpaid on the Notes or
Certificates, as applicable, or on the Notes or Certificates, as applicable, of
the Series to which the applicable Class or Subclass of Subordinated Notes or
Subordinated Certificates, as applicable, are subordinated and the reimbursement
of unreimbursed Advances and liquidation



                                       77


expenses, to maintain the Reserve Fund at the Required Reserve. Except as
otherwise provided in the related prospectus supplement, the balance in the
Reserve Fund in excess of the Required Reserve shall be paid to the applicable
Class or Subclass of Subordinated Notes or Subordinated Certificates, as
applicable, or to another specified person or entity, as set forth in the
related prospectus supplement, and shall subsequently be unavailable for future
distribution to Certificateholders of either Class. The prospectus supplement
for each Series will set forth the amount of the Required Reserve applicable
from time to time. The Required Reserve may decline over time in accordance with
a schedule which will also be set forth in the related prospectus supplement.

         Except as otherwise provided in the related prospectus supplement,
amounts held in the Reserve Fund for a Series from time to time will continue to
be the property of the Subordinated Securityholders of the Classes or Subclasses
specified in the related prospectus supplement until withdrawn from the Reserve
Fund and transferred to the Certificate Account as described below. Except as
otherwise provided in the related prospectus supplement, if on any Distribution
Date the amount in the Certificate Account available to be applied to
distributions on the applicable Senior Notes or Senior Certificates, as
applicable, of the Series, after giving effect to any Advances made by the
Servicers or the Master Servicer on the Distribution Date, is less than the
amount required to be distributed to the Senior Securityholders (the "Required
Distribution") on the Distribution Date, the Master Servicer will withdraw from
the Reserve Fund and deposit into the Certificate Account the lesser of (1) the
entire amount on deposit in the Reserve Fund available for distribution to the
Senior Securityholders, which amount will not in any event exceed the Required
Reserve, or (2) the amount necessary to increase the funds in the Certificate
Account eligible for distribution to the Senior Securityholders on the
Distribution Date to the Required Distribution; provided, however, that unless
specified in the related prospectus supplement no amount representing investment
earnings on amounts held in the Reserve Fund be transferred into the Certificate
Account or otherwise used in any manner for the benefit of the Senior
Securityholders. If so specified in the applicable prospectus supplement, the
balance, if any, in the Reserve Fund in excess of the Required Reserve shall be
released to the applicable Subordinated Securityholders. Unless otherwise
specified in the related prospectus supplement, whenever the Reserve Fund is
less than the Required Reserve, holders of the Subordinated Notes or
Subordinated Certificates, as applicable, of the applicable Class or Subclass
will not receive any distributions with respect to the Mortgage Loans, Mortgage
Certificates or Contracts other than amounts attributable to interest on the
Mortgage Loans, Mortgage Certificates or Contracts after the initial Required
Reserve has been attained and amounts attributable to any income resulting from
investment of the Reserve Fund as described below. Except as otherwise provided
in the related prospectus supplement, whether or not the amount of the Reserve
Fund exceeds the Required Reserve on any Distribution Date, the holders of the
Subordinated Notes or Subordinated Certificates, as applicable, of the
applicable Class or Subclass are entitled to receive from the Certificate
Account their share of the proceeds of any Mortgage Loan, Mortgage Certificates
or Contract, or any property acquired for them, repurchased by reason of
defective documentation or the breach of a representation or warranty pursuant
to the Pooling and Servicing Agreement. Except as otherwise provided in the
related prospectus supplement, amounts in the Reserve Fund shall be applied in
the following order:

         (1) to the reimbursement of Advances determined by the Master Servicer
             and the Servicers to be otherwise unrecoverable, other than
             Advances of interest in



                                       78


             connection with prepayments in full, repurchases and
             liquidations, and the reimbursement of liquidation expenses
             incurred by the Servicers and the Master Servicer if sufficient
             funds for reimbursement are not otherwise available in the
             related Servicing Accounts and Certificate Account;

         (2) to the payment to the holders of the applicable Senior Notes or
             Senior Certificates, as applicable, of the Series of amounts
             distributable to them on the related Distribution Date in respect
             of scheduled payments of principal and interest due on the related
             Due Date to the extent that sufficient funds in the Certificate
             Account are not available; and

         (3) to the payment to the holders of the Senior Notes or Senior
             Certificates, as applicable, of the Series of the principal balance
             or purchase price, as applicable, of Mortgage Loans or Contracts
             repurchased, liquidated or foreclosed during the period ending on
             the day prior to the Due Date to which the distribution relates and
             interest on these Mortgage Loans or Contracts at the related
             Mortgage Rate or APR, as applicable, to the extent that sufficient
             funds in the Certificate Account are not available.

         Except as otherwise provided in the related prospectus supplement,
amounts in the Reserve Fund in excess of the Required Reserve, including any
investment income on amounts in the Reserve Fund, as set forth below, shall then
be released to the holders of the Subordinated Notes or Subordinated
Certificates, as applicable, or to another person specified in the applicable
prospectus supplement, as set forth above.

         Funds in the Reserve Fund for a Series shall be invested as provided in
the related Agreement and/or Indenture in specific types of eligible
investments. The earnings on these investments will be withdrawn and paid to the
holders of the applicable Class or Subclass of Subordinated Notes or
Subordinated Certificates, as applicable, in accordance with their respective
interests in the Reserve Fund in the priority specified in the related
prospectus supplement. Unless otherwise specified in the related prospectus
supplement, investment income in the Reserve Fund is not available for
distribution to the holders of the Senior Notes or Senior Certificates, as
applicable, of the Series or otherwise subject to any claims or rights of the
holders of the applicable Class or Subclass of Senior Notes or Senior
Certificates, as applicable. Eligible investments for monies deposited in the
Reserve Fund will be specified in the applicable Agreement and/or Indenture for
a Series of Notes or Certificates, as applicable, for which a Reserve Fund is
established and in some instances will be limited to investments acceptable to
the Rating Agency rating the Notes or Certificates, as applicable, of the Series
from time to time as being consistent with its outstanding rating of the Notes
or Certificates, as applicable. These eligible investments will be limited,
however, to obligations or securities that mature at various time periods up to
30 days according to a schedule in the applicable Agreement based on the current
balance of the Reserve Fund at the time of the investment or the contractual
commitment providing for the investment.

         The time necessary for the Reserve Fund of a Series to reach and
maintain the applicable Required Reserve at any time after the initial issuance
of the Notes or Certificates, as applicable, of the Series and the availability
of amounts in the Reserve Fund for distributions on the Notes or


                                       79


Certificates, as applicable, will be affected by the delinquency, foreclosure
and prepayment experience of the Mortgage Loans or Contracts in the related
Trust Fund and/or in the Subordinated Pool and therefore cannot be accurately
predicted.

         SECURITY GUARANTEE INSURANCE

         If so specified in the related prospectus supplement, Security
Guarantee Insurance, if any, with respect to a Series of Notes or Certificates,
as applicable, may be provided by one or more insurance companies. The Security
Guarantee Insurance will guarantee, with respect to one or more Classes of Notes
or Certificates, as applicable, of the related Series, timely distributions of
interest and full distributions of principal on the basis of a schedule of
principal distributions set forth in or determined in the manner specified in
the related prospectus supplement. If so specified, in the related prospectus
supplement, the Security Guarantee Insurance will also guarantee against any
payment made to a Series of Notes or Certificates, as applicable, which is
subsequently recovered as a "voidable preference" payment under the Bankruptcy
Code. A copy of the Security Guarantee Insurance for a Series, if any, will be
filed with the Commission as an exhibit to a Current Report on Form 8-K to be
filed with the Commission within 15 days of issuance of the Notes or
Certificates, as applicable, of the related Series.

         PERFORMANCE BOND

         If so specified in the related prospectus supplement, the Master
Servicer may be required to obtain a Performance Bond that would provide a
guarantee of the performance by the Master Servicer of one or more of its
obligations under the applicable Agreement and/or Servicing Agreement, including
its obligation to make Advances and its obligation to repurchase Mortgage Loans
or Contracts in the event of a breach by the Master Servicer of a representation
or warranty contained in the applicable Agreement. In the event that the
outstanding credit rating of the obligor of the Performance Bond is lowered by
the Rating Agency, with the result that the outstanding rating on any Class or
Subclass of Notes or Certificates, as applicable, would be reduced by the Rating
Agency, the Master Servicer will be required to secure a substitute Performance
Bond issued by an entity with a rating sufficient to maintain the outstanding
rating on the Notes or Certificates, as applicable, or to deposit and maintain
with the Trustee cash in the amount specified in the applicable prospectus
supplement.

                            DESCRIPTION OF INSURANCE

         To the extent that the applicable prospectus supplement does not
expressly provide for a form of credit support specified above or for
Alternative Credit Support in lieu of some or all of the insurance mentioned
below, the following paragraphs on insurance shall apply with respect to the
Mortgage Loans included in the related Trust Fund. To the extent specified in
the related prospectus supplement, each Manufactured Home that secures a
Contract will be covered by a standard hazard insurance policy and other
insurance policies to the extent described in the related prospectus supplement.
Any material changes in the insurance from the description that follows or the
description of any Alternative Credit Support will be set forth in the
applicable prospectus supplement.



                                       80


         PRIMARY MORTGAGE INSURANCE POLICIES

         To the extent specified in the related prospectus supplement, each
Servicing Agreement will require the Servicer to cause a Primary Mortgage
Insurance Policy to be maintained in full force and effect with respect to each
Mortgage Loan that is secured by a Single Family Property covered by the
Servicing Agreement requiring the insurance and to act on behalf of the Insured
with respect to all actions required to be taken by the Insured under each
Primary Mortgage Insurance Policy. Any primary mortgage insurance or primary
credit insurance policies relating to the Contracts underlying a Series of Notes
or Certificates, as applicable, will be described in the related prospectus
supplement.

         Unless otherwise specified in the related prospectus supplement, the
amount of a claim for benefits under a Primary Mortgage Insurance Policy
covering a Mortgage Loan in the related Mortgage Pool (referred to in this
prospectus as the "Loss") will consist of the insured portion of the unpaid
principal amount of the covered Mortgage Loan, as described in this prospectus,
and accrued and unpaid interest on the Mortgage Loan and reimbursement of
particular types of expenses, less

o    all rents or other payments collected or received by the Insured, other
     than the proceeds of hazard insurance, that are derived from or in any way
     related to the Mortgaged Property,

o    hazard insurance proceeds in excess of the amount required to restore the
     Mortgaged Property and which have not been applied to the payment of the
     Mortgage Loan,

o    amounts expended but not approved by the Primary Mortgage Insurer,

o    claim payments previously made by the Primary Mortgage Insurer, and

o    unpaid premiums.

         Unless otherwise specified in the related prospectus supplement, as
conditions precedent to the filing of or payment of a claim under a Primary
Mortgage Insurance Policy covering a Mortgage Loan in the related Mortgage Pool,
the Insured will be required to, in the event of default by the Mortgagor:

         (1) advance or discharge;

             (a) all hazard insurance premiums and

             (b) as necessary and approved in advance by the Primary Mortgage
                 Insurer,

o    real estate property taxes,

o    all expenses required to preserve, repair and prevent waste to the
     Mortgaged Property so as to maintain the Mortgaged Property in at least as
     good a condition as existed at the effective date of the Primary Mortgage
     Insurance Policy, ordinary wear and tear excepted,

o    property sales expenses,

o    any outstanding liens (as defined in the Primary Mortgage Insurance Policy)
     on the Mortgaged Property, and

                                       81


o    foreclosure costs, including court costs and reasonable attorneys' fees;

         (2) in the event of a physical loss or damage to the Mortgaged
             Property, have restored and repaired the Mortgaged Property to at
             least as good a condition as existed at the effective date of the
             Primary Mortgage Insurance Policy, ordinary wear and tear excepted;
             and

         (3) tender to the Primary Mortgage Insurer good and merchantable title
             to and possession of the mortgaged property.

         Unless otherwise specified in the related prospectus supplement, other
provisions and conditions of each Primary Mortgage Insurance Policy covering a
Mortgage Loan in the related Mortgage Pool generally will provide that:

         (1) no change may be made in the terms of the Mortgage Loan without the
             consent of the Primary Mortgage Insurer;

         (2) written notice must be given to the Primary Mortgage Insurer within
             10 days after the Insured becomes aware that a Mortgagor is
             delinquent in the payment of a sum equal to the aggregate of two
             scheduled monthly payments due under the Mortgage Loan or that any
             proceedings affecting the Mortgagor's interest in the Mortgaged
             Property securing the Mortgage Loan have commenced, and afterward
             the Insured must report monthly to the Primary Mortgage Insurer the
             status of any the Mortgage Loan until the Mortgage Loan is brought
             current, the proceedings are terminated or a claim is filed;

         (3) the Primary Mortgage Insurer will have the right to purchase the
             Mortgage Loan, at any time subsequent to the 10 days' notice
             described in (2) above and prior to the commencement of foreclosure
             proceedings, at a price equal to the unpaid principal amount of the
             Mortgage Loan, plus accrued and unpaid interest on the Mortgage
             Loan and reimbursable amounts expended by the Insured for the real
             estate taxes and fire and extended coverage insurance on the
             Mortgaged Property for a period not exceeding 12 months, and less
             the sum of any claim previously paid under the Primary Mortgage
             Insurance Policy and any due and unpaid premiums with respect to
             the policy;

         (4) the Insured must commence proceedings at the times specified in the
             Primary Mortgage Insurance Policy and diligently proceed to obtain
             good and merchantable title to and possession of the Mortgaged
             Property;

         (5) the Insured must notify the Primary Mortgage Insurer of the price
             specified in (3) above at least 15 days prior to the sale of the
             Mortgaged Property by foreclosure, and bid the amount unless the
             Mortgage Insurer specifies a lower or higher amount; and

         (6) the Insured may accept a conveyance of the Mortgaged Property in
             lieu of foreclosure with written approval of the Mortgage Insurer
             provided the ability of the Insured to assign specified rights to
             the Primary Mortgage Insurer are not



                                       82



             impaired by a conveyance or the specified rights of the Primary
             Mortgage Insurer are not adversely affected by a conveyance.

         Unless otherwise specified in the related prospectus supplement, the
Primary Mortgage Insurer will be required to pay to the Insured either: (1) the
insured percentage of the Loss; or (2) at its option under some of the Primary
Mortgage Insurance Policies, the sum of the delinquent monthly payments plus any
advances made by the Insured, both to the date of the claim payment, and
afterward, monthly payments in the amount that would have become due under the
Mortgage Loan if it had not been discharged plus any advances made by the
Insured until the earlier of (A) the date the Mortgage Loan would have been
discharged in full if the default had not occurred or (B) an approved sale. Any
rents or other payments collected or received by the Insured which are derived
from or are in any way related to the Mortgaged Property will be deducted from
any claim payment.

         FHA INSURANCE AND VA GUARANTEES

         The FHA is responsible for administering various federal programs,
including mortgage insurance, authorized under the National Housing Act, as
amended, and the United States Housing Act of 1937, as amended. Any FHA
Insurance or VA Guarantees relating to Contracts underlying a Series of Notes or
Certificates, as applicable, will be described in the related prospectus
supplement.

         The insurance premiums for FHA Loans are collected by HUD approved
lenders or by the Servicers of FHA Loans and are paid to the FHA. The
regulations governing FHA single-family mortgage insurance programs provide that
insurance benefits are payable either upon foreclosure, or other acquisition of
possession, and conveyance of the mortgaged premises to HUD or upon assignment
of the defaulted FHA Loan to HUD. With respect to a defaulted FHA Loan, the
Servicer of the FHA Loan will be limited in its ability to initiate foreclosure
proceedings. When it is determined, either by the Servicer or HUD, that default
was caused by circumstances beyond the Mortgagor's control, the Servicer will be
expected to make an effort to avoid foreclosure by entering, if feasible, into
one of a number of available forms of forbearance plans with the Mortgagor. The
plans may involve the reduction or suspension of scheduled mortgage payments for
a specified period, with the payments to be made upon or before the maturity
date of the mortgage, or the recasting of payments due under the mortgage up to
or beyond the scheduled maturity date. In addition, when a default caused by
this circumstance is accompanied by other criteria, HUD may provide relief by
making payments to the Servicer of the Mortgage Loan in partial or full
satisfaction of amounts due, which payments are to be repaid by the Mortgagor to
HUD, or by accepting assignment of the Mortgage Loan from the Servicer. With
some exceptions, at least three full monthly installments must be due and unpaid
under the Mortgage Loan, and HUD must have rejected any request for relief from
the Mortgagor before the Servicer may initiate foreclosure proceedings.

         HUD has the option, in most cases, to pay insurance claims in cash or
in debentures issued by HUD. Presently, claims are being paid in cash, and
claims have not been paid in debentures since 1965. HUD debentures issued in
satisfaction of FHA insurance claims bear interest at the applicable HUD
debenture interest rate. The Servicer of each FHA Loan in a



                                       83


Mortgage Pool will be obligated to purchase any debenture issued in satisfaction
of a defaulted FHA Loan serviced by it for an amount equal to the principal
amount of the FHA Loan.

         The amount of insurance benefits generally paid by the FHA is equal to
the entire unpaid principal balance of the defaulted FHA Loan, adjusted to
reimburse the Servicer of the FHA Loan for particular costs and expenses and to
deduct specific amounts received or retained by the Servicer after default. When
entitlement to insurance benefits results from foreclosure, or other acquisition
of possession, and conveyance to HUD, the Servicer is compensated for no more
than two-thirds of its foreclosure costs, and is compensated for interest
accrued and unpaid prior to this date in general only to the extent it was
allowed pursuant to a forbearance plan approved by HUD. When entitlement to
insurance benefits results from assignment of the FHA Loan to HUD, the insurance
payment includes full compensation for interest accrued and unpaid to the
assignment date. The insurance payment itself, upon foreclosure of an FHA Loan,
bears interest from a date 30 days after the mortgagor's first uncorrected
failure to perform any obligation or make any payment due under the Mortgage
Loan and, upon assignment, from the date of assignment, to the date of payment
of the claim, in each case at the same interest rate as the applicable HUD
debenture interest rate as described above.

         The maximum guarantee that may be issued by the VA under a VA Loan is

o    50% of the principal amount of the VA Loan if the principal amount of the
     Mortgage Loan is $45,000 or less,

o    the lesser of $36,000 and 40% if the principal amount of the VA Loan if the
     principal amount of the VA Loan is greater than $45,000 but less than or
     equal to $144,000, and

o    the lesser of $46,000 and 25% of the principal amount of the Mortgage Loan
     if the principal amount of the Mortgage Loan is greater than $144,000.

The liability on the guarantee is reduced or increased pro rata with any
reduction or increase in the amount of indebtedness, but in no event will the
amount payable on the guarantee exceed the amount of the original guarantee. The
VA may, at its option and without regard to the guarantee, make full payment to
a mortgage holder of unsatisfied indebtedness on a Mortgage upon its assignment
to the VA.

         With respect to a defaulted VA Loan, the Servicer is, absent
exceptional circumstances, authorized to announce its intention to foreclose
only when the default has continued for three months. Generally, a claim for the
guarantee is submitted after liquidation of the Mortgaged Property.

         The amount payable under the guarantee will be the percentage of the VA
Loan originally guaranteed applied to indebtedness outstanding as of the
applicable date of computation specified in the VA regulations. Payments under
the guarantee will be equal to the unpaid principal amount of the VA Loan,
interest accrued on the unpaid balance of the VA Loan to the appropriate date of
computation and limited expenses of the mortgagee, but in each case only to the
extent that the amounts have not been recovered through liquidation of the
Mortgaged Property. The amount payable under the guarantee may in no event
exceed the amount of the original guarantee.



                                       84


         STANDARD HAZARD INSURANCE POLICIES ON MORTGAGE LOANS

         Unless otherwise specified in the related prospectus supplement, any
Standard Hazard Insurance Policies covering the Mortgage Loans in a Mortgage
Pool will provide for coverage at least equal to the applicable state standard
form of fire insurance policy with extended coverage. In general, the standard
form of fire and extended coverage policy will cover physical damage to, or
destruction of, the improvements on the Mortgaged Property caused by fire,
lightning, explosion, smoke, windstorm, hail, riot, strike and civil commotion,
subject to the conditions and exclusions particularized in each policy. Because
the Standard Hazard Insurance Policies relating to the Mortgage Loans will be
underwritten by different insurers and will cover Mortgaged Properties located
in various states, the policies will not contain identical terms and conditions.
The most significant terms of the policies, however, generally will be
determined by state law and generally will be similar. Most policies typically
will not cover any physical damage resulting from the following: war,
revolution, governmental actions, floods and other water-related causes, earth
movement, including earthquakes, landslides and mudflows, nuclear reaction, wet
or dry rot, vermin, rodents, insects or domestic animals, theft and, in some
cases, vandalism. The foregoing list is merely indicative of specific kinds of
uninsured risks and is not intended to be all-inclusive.

         The Standard Hazard Insurance Policies covering Mortgaged Properties
securing Mortgage Loans typically will contain a "coinsurance" clause which, in
effect, will require the insured at all times to carry insurance of a specified
percentage, generally 80% to 90%, of the full replacement value of the
dwellings, structures and other improvements on the Mortgaged Property in order
to recover the full amount of any partial loss. If the insured's coverage falls
below this specified percentage, the clause will provide that the insurer's
liability in the event of partial loss will not exceed the greater of (1) the
actual cash value, the replacement cost less physical depreciation, of the
dwellings, structures and other improvements damaged or destroyed or (2) the
proportion of the loss, without deduction for depreciation, as the amount of
insurance carried bears to the specified percentage of the full replacement cost
of the dwellings, structures and other improvements.

         The Depositor will not require that a standard hazard or flood
insurance policy be maintained on the Cooperative Dwelling relating to any
Cooperative Loan. Generally, the cooperative corporation itself is responsible
for maintenance of hazard insurance for the property owned by the cooperative
and the tenant-stockholders of that cooperative do not maintain individual
hazard insurance policies. To the extent, however, that a Cooperative and the
related borrower on a Cooperative Loan do not maintain the insurance or do not
maintain adequate coverage or any insurance proceeds are not applied to the
restoration of damaged property, any damage to the borrower's Cooperative
Dwelling or the Cooperative's building could significantly reduce the value of
the collateral securing the Cooperative Loan to the extent not covered by other
credit support.

         Any losses incurred with respect to Mortgage Loans due to uninsured
risks, including earthquakes, mudflows and, with respect to Mortgaged Properties
located other than in HUD designated flood areas, floods, or insufficient hazard
insurance proceeds and any hazard losses incurred with respect to Cooperative
Loans could affect distributions to the Certificateholders.



                                       85


         With respect to Mortgage Loans secured by Multifamily Property,
additional insurance policies may be required with respect to the Multifamily
Property; for example, general liability insurance for bodily injury and
property damage, steam boiler coverage where a steam boiler or other pressure
vessel is in operation, and rent loss insurance to cover income losses following
damage or destruction of the Mortgaged Property. The related prospectus
supplement will specify the required types and amounts of additional insurance
that may be required in connection with Mortgage Loans secured by Multifamily
Property and will describe the general terms of the insurance and conditions to
payment.

         STANDARD HAZARD INSURANCE POLICIES ON THE MANUFACTURED HOMES

         The applicable Pooling and Servicing Agreement or Sale and Servicing
Agreement for each Series will require the Master Servicer to cause to be
maintained with respect to each Contract one or more Standard Hazard Insurance
Policies which provide, at a minimum, the same coverage as a standard form file
and extended coverage insurance policy that is customary for manufactured
housing, issued by a company authorized to issue policies in the state in which
the Manufactured Home is located, and in an amount which is not less than the
lesser of the maximum insurable value of the Manufactured Home or the principal
balance due from the Obligor on the related Contract; provided, however, that
the amount of coverage provided by each Standard Hazard Insurance Policy shall
be sufficient to avoid the application of any co-insurance clause contained in
the policy. When a Manufactured Home's location was, at the time of origination
of the related Contract, within a federally designated flood area, the Master
Servicer also shall cause flood insurance to be maintained, which coverage shall
be at least equal to the minimum amount specified in the preceding sentence or a
lesser amount as may be available under the federal flood insurance program.
Each Standard Hazard Insurance Policy caused to be maintained by the Master
Servicer shall contain a standard loss payee clause in favor of the Master
Servicer and its successors and assigns. If any Obligor is in default in the
payment of premiums on its Standard Hazard Insurance Policy or Policies, the
Master Servicer shall pay the premiums out of its own funds, and may add
separately the premium to the Obligor's obligation as provided by the Contract,
but may not add the premium to the remaining principal balance of the Contract.

         The Master Servicer may maintain, in lieu of causing individual
Standard Hazard Insurance Policies to be maintained with respect to each
Manufactured Home, and shall maintain, to the extent that the related Contract
does not require the Obligor to maintain a Standard Hazard Insurance Policy with
respect to the related Manufactured Home, one or more blanket insurance policies
covering losses on the Obligor's interest in the Contracts resulting from the
absence or insufficiency of individual Standard Hazard Insurance Policies. Any
blanket policy shall be substantially in the form and in the amount carried by
the Master Servicer as of the date of the Pooling and Servicing Agreement. The
Master Servicer shall pay the premium for the policy on the basis described in
the policy and shall pay any deductible amount with respect to claims under the
policy relating to the Contracts. If the insurer shall cease to be acceptable to
the Master Servicer, the Master Servicer shall use its best reasonable efforts
to obtain from another insurer a replacement policy comparable to the policy.

         If the Master Servicer shall have repossessed a Manufactured Home on
behalf of the Trustee, the Master Servicer shall either (1) maintain at its
expense hazard insurance with respect



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to the Manufactured Home or (2) indemnify the Trustee against any damage to the
Manufactured Home prior to resale or other disposition.

         POOL INSURANCE POLICIES

         If so specified in the related prospectus supplement, the Master
Servicer will obtain a Pool Insurance Policy for a Mortgage Pool underlying
Notes or Certificates, as applicable, of the Series. The Pool Insurance Policy
will be issued by the Pool Insurer named in the applicable prospectus
supplement. Any Pool Insurance Policy for a Contract Pool underlying a Series of
Notes or Certificates, as applicable, will be described in the related
prospectus supplement. Each Pool Insurance Policy will cover any loss, subject
to the limitations described below, by reason of default to the extent the
related Mortgage Loan is not covered by any Primary Mortgage Insurance Policy,
FHA insurance or VA guarantee. The amount of the Pool Insurance Policy, if any,
with respect to a Series will be specified in the related prospectus supplement.
A Pool Insurance Policy, however, will not be a blanket policy against loss,
because claims under a Pool Insurance Policy may only be made for particular
defaulted Mortgage Loans and only upon satisfaction of particular conditions
precedent described below. The prospectus supplement will contain the financial
information regarding the Pool Insurer required by the rules and regulations of
the Commission.

         Unless otherwise specified in the related prospectus supplement, the
Pool Insurance Policy will provide that as a condition precedent to the payment
of any claim the Insured will be required

         (1) to advance hazard insurance premiums on the Mortgaged Property
             securing the defaulted Mortgage Loan;

         (2) to advance, as necessary and approved in advance by the Pool
             Insurer,

             o   real estate property taxes,

             o   all expenses required to preserve and repair the Mortgaged
                 Property, to protect the Mortgaged Property from waste, so that
                 the Mortgaged Property is in at least as good a condition as
                 existed on the date upon which coverage under the Pool
                 Insurance Policy with respect to the Mortgaged Property first
                 became effective, ordinary wear and tear excepted,

             o   property sales expenses,

             o   any outstanding liens on the Mortgaged Property, and

             o   foreclosure costs including court costs and reasonable
                 attorneys' fees; and

         (3) if there has been physical loss or damage to the Mortgaged
             Property, to restore the Mortgaged Property to its condition,
             reasonable wear and tear excepted, as of the issue date of the Pool
             Insurance Policy.

It also will be a condition precedent to the payment of any claim under the Pool
Insurance Policy that the Insured maintain a Primary Mortgage Insurance Policy
that is acceptable to the Pool Insurer on all Mortgage Loans that have
Loan-to-Value Ratios at the time of origination in



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excess of 80%. FHA insurance and VA guarantees will be deemed to be an
acceptable Primary Mortgage Insurance Policy under the Pool Insurance Policy.
Assuming satisfaction of these conditions, the Pool Insurer will pay to the
Insured the amount of loss, determined as follows:

         (1) the amount of the unpaid principal balance of the Mortgage Loan
             immediately prior to the Approved Sale (as described below) of the
             Mortgaged Property,

         (2) the amount of the accumulated unpaid interest on the Mortgage Loan
             to the date of claim settlement at the applicable Mortgage Rate,
             and

         (3) advances as described above, less

             o   all rents or other payments, excluding proceeds of fire and
                 extended coverage insurance, collected or received by the
                 Insured, which are derived from or in any way related to the
                 Mortgaged Property,

             o   amounts paid under applicable fire and extended coverage
                 policies which are in excess of the cost of restoring and
                 repairing the Mortgaged Property and which have not been
                 applied to the payment of the Mortgage Loan,

             o   any claims payments previously made by the Pool Insurer on the
                 Mortgage Loan,

             o   due and unpaid premiums payable with respect to the Pool
                 Insurance Policy, and

             o   all claim payments received by the Insured pursuant to any
                 Primary Mortgage Insurance Policy.

An "Approved Sale" is

(1)  a sale of the Mortgaged Property acquired because of a default by the
     Mortgagor to which the Pool Insurer has given prior approval,

(2)  a foreclosure or trustee's sale of the Mortgaged Property at a price
     exceeding the maximum amount specified by the Pool Insurer,

(3)  the acquisition of the Mortgaged Property under the Primary Insurance
     Policy by the Primary Mortgage Insurer, or

(4)  the acquisition of the Mortgaged Property by the Pool Insurer.

The Pool Insurer must be provided with good and merchantable title to the
Mortgaged Property as a condition precedent to the payment of any Loss. If any
Mortgaged Property securing a defaulted Mortgage Loan is damaged and the
proceeds, if any, from the related Standard Hazard Insurance Policy or the
applicable Special Hazard Insurance Policy are insufficient to restore the
Mortgaged Property to a condition sufficient to permit recovery under the Pool
Insurance Policy, the Master Servicer or the Servicer of the related Mortgage
Loan will not be required to expend its own funds to restore the damaged
Mortgaged Property unless it is determined (1) that the restoration will
increase the proceeds to the Securityholders of the related Series on
liquidation



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of the Mortgage Loan, after reimbursement of the expenses of the Master Servicer
or the Servicer, as the case may be, and (2) that the expenses will be
recoverable by it through payments under the Letter of Credit, if any, with
respect to the Series, Liquidation Proceeds, Insurance Proceeds, amounts in the
Reserve Fund, if any, or payments under any Alternative Credit Support, if any,
with respect to the Series.

         No Pool Insurance Policy will insure, and many Primary Mortgage
Insurance Policies may not insure, against loss sustained by reason of a default
arising from, among other things,

(1)  fraud or negligence in the origination or servicing of a Mortgage Loan,
     including misrepresentation by the Mortgagor, the Unaffiliated Seller, the
     Originator or other persons involved in the origination of the Mortgage
     Loan,

(2)  the exercise by the Insured of its right to call the Mortgage Loan, or the
     term of the Mortgage Loan is shorter than the amortization period and the
     defaulted payment is for an amount more than twice the regular periodic
     payments of principal and interest for the Mortgage Loan, or

(3)  the exercise by the Insured of a "due-on-sale" clause or other similar
     provision in the Mortgage Loan; provided, in either case of clause (2) or
     (3), the exclusion shall not apply if the Insured offers a renewal or
     extension of the Mortgage Loan or a new Mortgage Loan at the market rate in
     an amount not less than the then outstanding principal balance with no
     decrease in the amortization period.

A failure of coverage attributable to one of the foregoing events might result
in a breach of the Master Servicer's insurability representation described under
"Description of the Securities--Assignment of Mortgage Loans," and in this
event, subject to the limitations described, might give rise to an obligation on
the part of the Master Servicer to purchase the defaulted Mortgage Loan if the
breach materially and adversely affects the interests of the Securityholders of
the related Series and cannot be cured by the Master Servicer. Depending upon
the nature of the event, a breach of representation made by the Depositor or an
Unaffiliated Seller may also have occurred. The breach, if it materially and
adversely affects the interests of the Securityholders of the Series and cannot
be cured, would give rise to a repurchase obligation on the part of the
Unaffiliated Seller as more fully described under "The Trust Fund--Mortgage Loan
Program" and "--Representations by Unaffiliated Sellers; Repurchases" and
"Description of the Securities--Assignment of Mortgage Loans."

         The original amount of coverage under the Pool Insurance Policy will be
reduced over the life of the Notes or Certificates, as applicable, of the
related Series by the aggregate dollar amount of claims paid less the aggregate
of the net amounts realized by the Pool Insurer upon disposition of all
foreclosed Mortgaged Properties covered by the policy. The amount of claims paid
will include some of the expenses incurred by the Master Servicer or by the
Servicer of the defaulted Mortgage Loan as well as accrued interest on
delinquent Mortgage Loans to the date of payment of the claim. Accordingly, if
aggregate net claims paid under a Pool Insurance Policy reach the original
policy limit, coverage under the Pool Insurance Policy will lapse and any
further losses will be borne by the holders of the Notes or Certificates, as
applicable, of the Series. In addition, unless the Master Servicer or the
related Servicer could determine that an Advance in respect of a delinquent
Mortgage Loan would be recoverable to it from the proceeds



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of the liquidation of the Mortgage Loan or otherwise, neither the Servicer nor
the Master Servicer would be obligated to make an Advance respecting any this
delinquency, since the Advance would not be ultimately recoverable to it from
either the Pool Insurance Policy or from any other related source. See
"Description of the Securities--Advances."

         SPECIAL HAZARD INSURANCE POLICIES

         If so specified in the related prospectus supplement, the Master
Servicer shall obtain a Special Hazard Insurance Policy for the Mortgage Pool
underlying a Series of Notes or Certificates, as applicable. Any Special Hazard
Insurance Policies for a Contract Pool underlying a Series of Notes or
Certificates, as applicable, will be described in the related prospectus
supplement. The Special Hazard Insurance Policy for the Mortgage Pool underlying
the Notes or Certificates, as applicable, of a Series will be issued by the
Special Hazard Insurer named in the applicable prospectus supplement. Each
Special Hazard Insurance Policy will, subject to the limitations described
below, protect against loss by reason of damage to Mortgaged Properties caused
by particular types of hazards, including vandalism and earthquakes and, except
where the Mortgagor is required to obtain flood insurance, floods and mudflows,
not insured against under the standard form of hazard insurance policy for the
respective states in which the Mortgaged Properties are located. See
"Description of the Securities--Maintenance of Insurance Policies" and
"--Standard Hazard Insurance." The Special Hazard Insurance Policy will not
cover losses occasioned by war, particular types of governmental actions,
nuclear reaction and other perils. Coverage under a Special Hazard Insurance
Policy will be at least equal to the amount set forth in the related prospectus
supplement.

         Subject to the foregoing limitations, each Special Hazard Insurance
Policy will provide that, when there has been damage to the Mortgaged Property
securing a defaulted Mortgage Loan and to the extent the damage is not covered
by the Standard Hazard Insurance Policy, if any, maintained by the Mortgagor,
the Master Servicer or the Servicer, the Special Hazard Insurer will pay the
lesser of (1) the cost of repair or replacement of the Mortgaged Property or (2)
upon transfer of the Mortgaged Property to the Special Hazard Insurer, the
unpaid balance of the Mortgage Loan at the time of acquisition of the Mortgaged
Property by foreclosure or deed in lieu of foreclosure, plus accrued interest to
the date of claim settlement, excluding late charges and penalty interest, and
particular expenses incurred in respect of the Mortgaged Property. No claim may
be validly presented under a Special Hazard Insurance Policy unless (1) hazard
insurance on the Mortgaged Property has been kept in force and other
reimbursable protection, preservation and foreclosure expenses have been paid,
all of which must be approved in advance as necessary by the insurer, and (2)
the insured has acquired title to the Mortgaged Property as a result of default
by the Mortgagor. If the sum of the unpaid principal balance plus accrued
interest and particular expenses is paid by the Special Hazard Insurer, the
amount of further coverage under the related Special Hazard Insurance Policy
will be reduced by the amount paid less any net proceeds from the sale of the
Mortgaged Property. Any amount paid as the cost of repair of the Mortgaged
Property will further reduce coverage.

         The terms of the applicable Agreement and/or Servicing Agreement will
require the Master Servicer to maintain the Special Hazard Insurance Policy in
full force and effect throughout the term of the Agreement. If a Pool Insurance
Policy is required to be maintained



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pursuant to the Agreement, the Special Hazard Insurance Policy will be designed
to permit full recoveries under the Pool Insurance Policy in circumstances where
recoveries would otherwise be unavailable because Mortgaged Property has been
damaged by a cause not insured against by a Standard Hazard Insurance Policy. In
this event, the Agreement and/or Servicing Agreement will provide that, if the
related Pool Insurance Policy shall have terminated or been exhausted through
payment of claims, the Master Servicer will be under no further obligation to
maintain the Special Hazard Insurance Policy.

         MORTGAGOR BANKRUPTCY BOND

         In the event of a personal bankruptcy of a Mortgagor, a bankruptcy
court may establish the value of the related Mortgaged Property or Cooperative
Dwelling at an amount less than the then outstanding principal balance of the
related Mortgage Loan. The amount of the secured debt could be reduced to this
value, and the holder of the Mortgage Loan thus would become an unsecured
creditor to the extent the outstanding principal balance of the Mortgage Loan
exceeds the value so assigned to the Mortgaged Property or Cooperative Dwelling
by the bankruptcy court. In addition, other modifications of the terms of a
Mortgage Loan can result from a bankruptcy proceeding. If so specified in the
related prospectus supplement, losses resulting from a bankruptcy proceeding
affecting the Mortgage Loans in a Mortgage Pool with respect to a Series of
Notes or Certificates, as applicable, will be covered under a Mortgagor
Bankruptcy Bond, or any other instrument that will not result in a downgrading
of the rating of the Notes or Certificates, as applicable, of a Series by the
Rating Agency that rated the Series. Any Mortgagor Bankruptcy Bond will provide
for coverage in an amount acceptable to the Rating Agency rating the Notes or
Certificates, as applicable, of the related Series, which will be set forth in
the related prospectus supplement. Subject to the terms of the Mortgagor
Bankruptcy Bond, the issuer of the Mortgagor Bankruptcy Bond may have the right
to purchase any Mortgage Loan with respect to which a payment or drawing has
been made or may be made for an amount equal to the outstanding principal amount
of the Mortgage Loan plus accrued and unpaid interest on the Mortgage Loan. The
coverage of the Mortgagor Bankruptcy Bond with respect to a Series of Notes or
Certificates, as applicable, may be reduced as long as any reduction will not
result in a reduction of the outstanding rating of the Notes or Certificates, as
applicable, of the Series by the Rating Agency rating the Series.

            CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS AND CONTRACTS

         The following discussion contains summaries of some of the legal
aspects of mortgage loans and manufactured housing installment or conditional
sales contracts and installment loan agreements which are general in nature.
Because these legal aspects are governed by applicable state law, which laws may
differ substantially, the summaries do not purport to be complete nor to reflect
the laws of any particular state, nor to encompass the laws of all states in
which the security for the Mortgage Loans or Contracts is situated. The
summaries are qualified in their entirety by reference to the applicable federal
and state laws governing the Mortgage Loans and Contracts.

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         THE MORTGAGE LOANS

         The Mortgage Loans, other than the Cooperative Loans, comprising or
underlying the Trust Assets for a Series will be secured by either first or
second mortgages or deeds of trust, depending upon the prevailing practice in
the state in which the underlying property is located. The filing of a mortgage,
deed of trust or deed to secure debt creates a lien or title interest upon the
real property covered by the instrument and represents the security for the
repayment of an obligation that is customarily evidenced by a promissory note.
It is not prior to the lien for real estate taxes and assessments or other
charges imposed under governmental police powers. Priority with respect to the
instruments depends on their terms, the knowledge of the parties to the mortgage
and generally on the order of recording with the applicable state, county or
municipal office. There are two parties to a mortgage: the mortgagor, who is the
borrower and homeowner, and the mortgagee, who is the lender. In a mortgage
state, the mortgagor delivers to the mortgagee a note or bond evidencing the
loan and the mortgage. Although a deed of trust is similar to a mortgage, a deed
of trust has three parties: the borrower-homeowner called the trustor, similar
to a mortgagor, a lender called the beneficiary, similar to a mortgagee, and a
third-party grantee called the trustee. Under a deed of trust, the borrower
grants the property, irrevocably until the debt is paid, in trust, generally
with a power of sale, to the trustee to secure payment of the loan. The
trustee's authority under a deed of trust and the mortgagee's authority under a
mortgage are governed by the express provisions of the deed of trust or
mortgage, applicable law and, in some cases, with respect to the deed of trust,
the directions of the beneficiary.

         FORECLOSURE

         Foreclosure of a mortgage is generally accomplished by judicial action.
Generally, the action is initiated by the service of legal pleadings upon all
parties having an interest of record in the real property. Delays in completion
of the foreclosure occasionally may result from difficulties in locating
necessary parties defendant. When the mortgagee's right to foreclosure is
contested, the legal proceedings necessary to resolve the issue can be
time-consuming. After the completion of a judicial foreclosure proceeding, the
court may issue a judgment of foreclosure and appoint a receiver or other
officer to conduct the sale of the property. In some states, mortgages may also
be foreclosed by advertisement, pursuant to a power of sale provided in the
mortgage. Foreclosure of a mortgage by advertisement is essentially similar to
foreclosure of a deed of trust by non-judicial power of sale.

         Though a deed of trust may also be foreclosed by judicial action,
foreclosure of a deed of trust is generally accomplished by a non-judicial
trustee's sale under a specific provision in the deed of trust that authorizes
the trustee to sell the property upon a default by the borrower under the terms
of the note or deed of trust. In some states, the trustee must record a notice
of default and send a copy to the borrower-trustor and to any person who has
recorded a request for a copy of a notice of default and notice of sale. In
addition, the trustee must provide notice in some states to any other individual
having an interest in the real property, including any junior lienholders. If
the loan is not reinstated within any applicable cure period, a notice of sale
must be posted in a public place and, in most states, published for a specified
period of time in one or more newspapers. In addition, some state laws require
that a copy of the notice of sale be posted on the property and sent to all
parties having an interest of record in the property.

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         In some states, the borrower-trustor has the right to reinstate the
loan at any time following default until shortly before the trustee's sale. In
general, the borrower, or any other person having a junior encumbrance on the
real estate, may, during a reinstatement period, cure the default by paying the
entire amount in arrears plus the costs and expenses incurred in enforcing the
obligation. Particular state laws control the amount of foreclosure expenses and
costs, including attorneys' fees, which may be recovered by a lender.

         In case of foreclosure under either a mortgage or a deed of trust, the
sale by the receiver or other designated officer, or by the trustee, is a public
sale. However, because of a number of factors, including the difficulty a
potential buyer at the sale would have in determining the exact status of title
and the fact that the physical condition of the property may have deteriorated
during the foreclosure proceedings, it is uncommon for a third party to purchase
the property at the foreclosure sale. Rather, it is common for the lender to
purchase the property from the trustee or receiver for a credit bid less than or
equal to the unpaid principal amount of the note, accrued and unpaid interest
and the expenses of foreclosure. Subsequently, subject to the right of the
borrower in some states to remain in possession during the redemption period,
the lender will assume the burdens of ownership, including obtaining hazard
insurance and making the repairs at its own expense as are necessary to render
the property suitable for sale. The lender commonly will obtain the services of
a real estate broker and pay the broker a commission in connection with the sale
of the property. Depending upon market conditions, the ultimate proceeds of the
sale of the property may not equal the lender's investment in the property. Any
loss may be reduced by the receipt of mortgage insurance proceeds.

         COOPERATIVE LOANS

         If specified in the prospectus supplement relating to a Series of Notes
or Certificates, as applicable, the Mortgage Loans may also contain Cooperative
Loans evidenced by promissory notes secured by security interests in shares
issued by private corporations which are entitled to be treated as housing
cooperatives under the Code and in the related proprietary leases or occupancy
agreements granting exclusive rights to occupy specific dwelling units in the
corporations' buildings. The security agreement will create a lien upon, or
grant a title interest in, the property that it covers, the priority of which
will depend on the terms of the particular security agreement as well as the
order of recordation of the agreement in the appropriate recording office. This
lien or title interest is not prior to the lien for real estate taxes and
assessments and other charges imposed under governmental police powers.

         A corporation that is entitled to be treated as a housing cooperative
under the Code owns all the real property or some interest sufficient to permit
it to own the building and all separate dwelling units in the real property. The
cooperative is directly responsible for property management and, in most cases,
payment of real estate taxes and hazard and liability insurance. If there is a
blanket mortgage or mortgages on the cooperative apartment building and/or
underlying land, as is generally the case, or an underlying lease of the land,
as is the case in some instances, the cooperative, as property mortgagor, is
also responsible for meeting these mortgage or rental obligations. The interest
of the occupancy under proprietary leases or occupancy agreements as to which
that cooperative is the landlord are generally subordinate to the interest of
the holder of a blanket mortgage and to the interest of the holder of a land
lease. If the cooperative is unable to meet the payment obligations (1) arising
under a blanket mortgage, the



                                       93


mortgagee holding a blanket mortgage could foreclose on that mortgage and
terminate all subordinate proprietary leases and occupancy agreements or (2)
arising under its land lease, the holder of the land lease could terminate it
and all subordinate proprietary leases and occupancy agreements. Also, a blanket
mortgage on a cooperative may provide financing in the form of a mortgage that
does not fully amortize, with a significant portion of principal being due in
one final payment at maturity. The inability of the cooperative to refinance a
mortgage and its consequent inability to make the final payment could lead to
foreclosure by the mortgagee. Similarly, a land lease has an expiration date and
the inability of the cooperative to extend its term or, in the alternative, to
purchase the land could lead to termination of the cooperative's interest in the
property and termination of all proprietary leases and occupancy agreements. A
foreclosure by the holder of a blanket mortgage could eliminate or significantly
diminish the value of any collateral held by the lender who financed an
individual tenant-stockholder of cooperative shares including, in the case of
the Cooperative Loans, the collateral securing the Cooperative Loans. Similarly,
the termination of the land lease by its holder could eliminate or significantly
diminish the value of any collateral held by the lender who financed an
individual tenant-stockholder of the cooperative shares or, in the case of the
Cooperative Loans, the collateral securing the Cooperative Loans.

         Each cooperative is owned by tenant-stockholders who, through ownership
of stock or shares in the corporation, receive proprietary leases or occupancy
agreements which confer exclusive rights to occupy specific units. Generally, a
tenant-stockholder of a cooperative must make a monthly payment to the
cooperative representing the tenant-stockholder's pro rata share of the
cooperative's payments for its blanket mortgage, real property taxes,
maintenance expenses and other capital or ordinary expenses. An ownership
interest in a cooperative and accompanying occupancy rights are financed through
a cooperative share loan evidenced by a promissory note and secured by a
security interest in the occupancy agreement or proprietary lease and in the
related cooperative shares. The lender takes possession of the share certificate
and a counterpart of the proprietary lease or occupancy agreement, and a
financing statement covering the proprietary lease or occupancy agreement and
the cooperative shares is filed in the appropriate state and local offices to
perfect the lender's interest in its collateral. Subject to the limitations
discussed below, upon default of the tenant-stockholder, the lender may sue for
judgment on the promissory note, dispose of the collateral at a public or
private sale or otherwise proceed against the collateral or tenant-stockholder
as an individual as provided in the security agreement covering the assignment
of the proprietary lease or occupancy agreement and the pledge of cooperative
shares. See "--Realizing upon Cooperative Loan Security" below.

         TAX ASPECTS OF COOPERATIVE LOANS

         In general, a "tenant-stockholder" (as defined in Section 216(b)(2) of
the Code) of a corporation that qualifies as a "cooperative housing corporation"
within the meaning of Section 216(b)(1) of the Code is allowed a deduction for
amounts paid or accrued within his taxable year to the corporation representing
his proportionate share of particular interest expenses and real estate taxes
allowable as a deduction under Section 216(a) of the Code to the corporation
under Sections 163 and 164 of the Code. In order for a corporation to qualify
under Section 216(b)(1) of the Code for its taxable year in which the items are
allowable as a deduction to the corporation, the section requires, among other
things, that at least 80% of the gross income of the corporation be derived from
its tenant-stockholder. By virtue of this requirement the status of a


                                       94


corporation for purposes of Section 216(b)(1) of the Code must be determined on
a year-to-year basis. Consequently, there can be no assurance that cooperatives
relating to the Cooperative Loans will qualify under the section for any
particular year. In the event that a cooperative fails to qualify for one or
more years, the value of the collateral securing any related Cooperative Loans
could be significantly impaired because no deduction would be allowable to
tenant-stockholders under Section 216(a) of the Code with respect to those
years. In view of the significance of the tax benefits accorded
tenant-stockholders of a corporation that qualifies under Section 216(b)(1) of
the Code, the likelihood that a failure would be permitted to continue over a
period of years appears remote.

         REALIZING UPON COOPERATIVE LOAN SECURITY

         The cooperative shares and proprietary lease or occupancy agreement
owned by the tenant-stockholder and pledged to the lender are, in almost all
cases, subject to restrictions on transfer as set forth in the cooperative's
certificate of incorporation and by-laws, as well as in the proprietary lease or
occupancy agreement. The proprietary lease or occupancy agreement, even while
pledged, may be cancelled by the cooperative for failure by the
tenant-stockholder to pay rent or other obligations or charges owed by the
tenant-stockholder, including mechanics' liens against the cooperative apartment
building incurred by the tenant-stockholder. Commonly, rent and other
obligations and charges arising under a proprietary lease or occupancy agreement
which are owed to the cooperative are made liens upon the shares to which the
proprietary lease or occupancy agreement relates. In addition, the proprietary
lease or occupancy agreement generally permits the cooperative to terminate the
lease or agreement in the event the borrower defaults in the performance of
covenants under the lease or agreement. The lender and the cooperative will
typically enter into a recognition agreement which establishes the rights and
obligations of both parties in the event of a default by the tenant-stockholder
on its obligations under the proprietary lease or occupancy agreement. A default
by the tenant-stockholder under the proprietary lease or occupancy agreement
will usually constitute a default under the security agreement between the
lender and the tenant-stockholder.

         The recognition agreement generally provides that, in the event that
the tenant-stockholder has defaulted under the proprietary lease or occupancy
agreement, the cooperative will take no action to terminate the lease or
agreement until the lender has been provided with an opportunity to cure the
default. The recognition agreement typically provides that if the proprietary
lease or occupancy agreement is terminated, the cooperative will recognize the
lender's lien against proceeds from a sale of the cooperative apartment subject,
however, to the cooperative's right to sums due under the proprietary lease or
occupancy agreement or that have become liens on the shares relating to the
proprietary lease or occupancy agreement. The total amount owed to the
cooperative by the tenant-stockholder, which the lender generally cannot
restrict and does not monitor, could reduce the value of the collateral below
the outstanding principal balance of the cooperative loan and accrued and unpaid
interest on the cooperative loan.

         Recognition agreements also provide that in the event the lender
succeeds to the tenant-shareholder's shares and proprietary lease or occupancy
agreement as the result of realizing upon the collateral for a cooperative loan,
the lender must obtain the approval or consent of the cooperative as required by
the proprietary lease before transferring the cooperative shares or



                                       95


assigning the proprietary lease. The approval or consent is usually based on the
prospective purchaser's income and net worth, among other factors, and may
significantly reduce the number of potential purchasers, which could limit the
ability of the lender to sell and realize upon the value of the collateral.
Generally, the lender is not limited in any rights it may have to dispossess the
tenant- shareholders.

         The terms of the Cooperative Loans do not require either the Mortgagor
or the Cooperative to obtain title insurance of any type. Consequently, the
existence of any prior liens or other imperfections of title also may adversely
affect the marketability of the Cooperative Dwelling in the event of
foreclosure.

         In New York, lenders generally realize upon the pledged shares and
proprietary lease or occupancy agreement given to secure a cooperative loan by
public sale in accordance with the provisions of Article 9 of the Uniform
Commercial Code (the "UCC") and the security agreement relating to those shares.
Article 9 of the UCC requires that a sale be conducted in a "commercially
reasonable" manner. Whether a sale has been conducted in a "commercially
reasonable" manner will depend on the facts in each case. In determining
commercial reasonableness, a court will look to the notice given the debtor and
the method, manner, time, place and terms of the sale. Generally, a sale
conducted according to the usual practice of banks selling similar collateral
will be considered reasonably conducted.

         Article 9 of the UCC provides that the proceeds of the sale will be
applied first to pay the costs and expenses of the sale and then to satisfy the
indebtedness secured by the lender's security interest. The recognition
agreement, however, generally provides that the lender's right to reimbursement
is subject to the right of the cooperative corporation to receive sums due under
the proprietary lease or occupancy agreement. If there are proceeds remaining,
the lender must account to the tenant-stockholder for the surplus. Conversely,
if a portion of the indebtedness remains unpaid, the tenant-stockholder is
generally responsible for the deficiency. See "--Anti-Deficiency Legislation and
Other Limitations on Lenders" below.

         In the case of foreclosure on a Multifamily Property that was converted
from a rental building to a building owned by a cooperative housing corporation
under a non-eviction plan, some states require that a purchaser at a foreclosure
sale take the property subject to rent control and rent stabilization laws which
apply to particular tenants who elected to remain in the building but not to
purchase shares in the cooperative when the building was so converted. Any
restrictions could adversely affect the number of potential purchasers for and
the value of the property.

         RIGHTS OF REDEMPTION

         In some states, after a sale pursuant to a deed of trust or foreclosure
of a mortgage, the borrower and particular foreclosed junior lienors are given a
statutory period in which to redeem the property from the foreclosure sale. In
other states, this right of redemption applies only to a sale following judicial
foreclosure, and not a sale pursuant to a non-judicial power of sale. In most
states where the right of redemption is available, statutory redemption may
occur upon payment of the foreclosure purchase price, accrued interest and
taxes. In some states, the right to redeem is an equitable right. The effect of
a statutory right of redemption is to diminish the



                                       96


ability of the lender to sell the foreclosed property. The exercise of a right
of redemption would defeat the title of any purchaser from the lender subsequent
to foreclosure or sale under a deed of trust. Consequently, the practical effect
of the redemption right is to force the lender to retain the property and pay
the expenses of ownership until the redemption period has run.

         ANTI-DEFICIENCY LEGISLATION AND OTHER LIMITATIONS ON LENDERS

         Some states have imposed statutory restrictions that limit the remedies
of a beneficiary under a deed of trust or a mortgagee under a mortgage. In some
states, statutes limit the right of the beneficiary or mortgagee to obtain a
deficiency judgment against the borrower following foreclosure or a non-judicial
sale under a deed of trust. A deficiency judgment is a personal judgment against
the former borrower equal in most cases to the difference between the amount due
to the lender and the net amount realized upon the foreclosure sale. Other
statutes prohibit a deficiency judgment where the loan proceeds were used to
purchase a dwelling occupied by the borrower.

         Some state statutes may require the beneficiary or mortgagee to exhaust
the security afforded under a deed of trust or mortgage by foreclosure in an
attempt to satisfy the full debt before bringing a personal action against the
borrower. In other states, the lender has the option of bringing a personal
action against the borrower on the debt without first exhausting the security;
however, in some of these states, the lender, following judgment on the personal
action, may be deemed to have elected a remedy and may be precluded from
exercising remedies with respect to the security. Consequently, the practical
effect of the election requirement, when applicable, is that lenders will
usually proceed first against the security rather than bringing a personal
action against the borrower.

         Other statutory provisions may limit any deficiency judgment against
the former borrower following a foreclosure sale to the excess of the
outstanding debt over the fair market value of the property at the time of the
sale. The purpose of these statutes is to prevent a beneficiary or a mortgagee
from obtaining a large deficiency judgment against the former borrower as a
result of low or no bids at the foreclosure sale.

         In some states, exceptions to the anti-deficiency statutes are provided
for in some instances where the value of the lender's security has been impaired
by acts or omissions of the borrower, for example, in the event of waste of the
property.

         In the case of cooperative loans, lenders generally realize on
cooperative shares and the accompanying proprietary lease or occupancy agreement
given to secure a cooperative loan under Article 9 of the UCC. Some courts have
interpreted Section 9-504 of the UCC to prohibit a deficiency award unless the
creditor establishes that the sale of the collateral, which, in the case of a
Cooperative Loan, would be the shares of the Cooperative and the related
proprietary lease or occupancy agreement, was conducted in a commercially
reasonable manner.

         In addition to anti-deficiency and related legislation, numerous other
federal and state statutory provisions, including the federal bankruptcy laws,
the federal Servicemembers Civil Relief Act and state laws affording relief to
debtors, may interfere with or affect the ability of a secured mortgage lender
to realize upon its security. For example, in a Chapter 13 proceeding



                                       97


under the federal Bankruptcy Code, when a court determines that the value of a
home is less than the principal balance of the loan, the court may prevent a
lender from foreclosing on the home, and, as part of the rehabilitation plan,
reduce the amount of the secured indebtedness to the value of the home as it
exists at the time of the proceeding, leaving the lender as a general unsecured
creditor for the difference between that value and the amount of outstanding
indebtedness. A bankruptcy court may grant the debtor a reasonable time to cure
a payment default, and in the case of a mortgage loan not secured by the
debtor's principal residence, also may reduce the monthly payments due under the
mortgage loan, change the rate of interest and alter the mortgage loan repayment
schedule. Particular court decisions have applied the relief to claims secured
by the debtor's principal residence.

         The Code provides priority to particular tax liens over the lien of the
mortgage or deed of trust. The laws of some states provide priority to
particular tax liens over the lien of the mortgage or deed of trust. Numerous
federal and some state consumer protection laws impose substantive requirements
upon mortgage lenders in connection with the origination, servicing and the
enforcement of mortgage loans. These laws include the federal Truth in Lending
Act, Real Estate Settlement Procedures Act, Equal Credit Opportunity Act, Fair
Credit Billing Act, Fair Credit Reporting Act, and related statutes and
regulations. These federal laws and state laws impose specific statutory
liabilities upon lenders who originate or service mortgage loans and who fail to
comply with the provisions of the law. In some cases, this liability may affect
assignees of the mortgage loans.

         Unless otherwise specified in the related prospectus supplement, each
Mortgage Loan secured by Multifamily Property will be a non-recourse loan to the
Mortgagor. As a result, the Mortgagor's obligation to repay the Mortgage Loan
can be enforced only against the Mortgaged Property regardless of whether the
Mortgagor has other assets from which it could repay the loan.

         Unless otherwise specified in the related prospectus supplement, the
mortgage securing each Mortgage Loan relating to Multifamily Property will
contain an assignment of rents and an assignment of leases, pursuant to which
the borrower assigns its right, title and interest as landlord under each lease
and the income derived from each lease to the Depositor, while retaining a
license to collect the rents so long as there is no default. In the event the
borrower defaults, the license terminates and the Trustee, as the assignee of
the assignment, is entitled to collect the rents. The Trustee may enforce its
right to the rents by seeking the appointment of a receiver to collect the rents
immediately after giving notice to the borrower of the default.

         "DUE-ON-SALE" CLAUSES

         The forms of note, mortgage and deed of trust relating to conventional
Mortgage Loans may contain a "due-on-sale" clause permitting acceleration of the
maturity of a loan if the borrower transfers its interest in the property. The
enforceability of these clauses has been subject of legislation or litigation in
many states, and in some cases the enforceability of these clauses was limited
or denied. However, the Garn-St Germain Depository Institutions Act of 1982 (the
"Garn-St Germain Act") preempts state constitutional, statutory and case law
that prohibits the enforcement of due-on-sale clauses and permits lenders to
enforce these clauses in accordance with their terms, subject to limited
exceptions. The Garn-St Germain Act does



                                       98


"encourage" lenders to permit assumption of loans at the original rate of
interest or at some other rate less than the average of the original rate and
the market rate.

         The Garn-St Germain Act also sets forth nine specific instances in
which a mortgage lender covered by the Garn-St Germain Act may not exercise a
due-on-sale clause, notwithstanding the fact that a transfer of the property may
have occurred. These include intra-family transfers, particular transfers by
operation of law, leases of fewer than three years and the creation of a junior
encumbrance. Regulations promulgated under the Garn-St Germain Act also prohibit
the imposition of prepayment penalty upon the acceleration of a loan pursuant to
a due-on-sale clause.

         The inability to enforce a due-on-sale clause may result in a mortgage
loan bearing an interest rate below the current market rate being assumed by a
new home buyer rather than being paid off, which may have an impact upon the
average life of the Mortgage Loans and the number of Mortgage Loans which may be
outstanding until maturity.

         ENFORCEABILITY OF CERTAIN PROVISIONS

         Standard forms of note, mortgage and deed of trust generally contain
provisions obligating the borrower to pay a late charge if payments are not
timely made and in some circumstances may provide for prepayment fees or
penalties if the obligation is paid prior to maturity. In some states, there are
or may be specific limitations upon late charges which a lender may collect from
a borrower for delinquent payments. State and federal statutes or regulations
may also limit a lender's right to collect a prepayment penalty when the
prepayment is caused by the lender's acceleration of the loan pursuant to a
due-on-sale clause. Some states also limit the amounts that a lender may collect
from a borrower as an additional charge if the loan is prepaid. Under the
Servicing Agreements and the applicable Agreement, late charges and prepayment
fees, to the extent permitted by law and not waived by the Servicers, will be
retained by the Servicers or Master Servicer as additional servicing
compensation.

         Courts have imposed general equitable principles upon foreclosure.
These equitable principles are generally designed to relieve the borrower from
the legal effect of defaults under the loan documents. Examples of judicial
remedies that may be fashioned include judicial requirements that the lender
undertake affirmative and sometimes expensive actions to determine the causes
for the borrower's default and the likelihood that the borrower will be able to
reinstate the loan. In some cases, courts have substituted their judgment for
the lender's judgment and have required lenders to reinstate loans or recast
payment schedules to accommodate borrowers who are suffering from temporary
financial disability. In some cases, courts have limited the right of lenders to
foreclose if the default under the mortgage instrument is not monetary, for
example, the borrower failing to adequately maintain or insure the property or
the borrower executing a second mortgage or deed of trust affecting the
property. In other cases, some courts have been faced with the issue whether
federal or state constitutional provisions reflecting due process concerns for
adequate notice require that borrowers under the deeds of trust receive notices
in addition to the statutorily-prescribed minimum requirements. For the most
part, these cases have upheld the notice provisions as being reasonable or have
found that the sale by a trustee under a deed of trust or under a mortgage
having a power of sale does not involve sufficient state action to afford
constitutional protections to the borrower.



                                       99


         ENVIRONMENTAL CONSIDERATIONS

         Under the federal Comprehensive Environmental Response Compensation and
Liability Act, as amended, a secured party which takes a deed in lieu of
foreclosure or purchases a mortgaged property at a foreclosure sale may become
liable in some circumstances for the costs of remedial action ("Cleanup Costs")
if hazardous wastes or hazardous substances have been released or disposed of on
the property. The Cleanup Costs may be substantial. It is possible that the
costs could become a liability of the Trust Fund and reduce the amounts
otherwise distributable to the Securityholders if a Mortgaged Property securing
a Mortgage Loan became the property of the Trust Fund in some circumstances and
if the Cleanup Costs were incurred.

         Except as otherwise specified in the related prospectus supplement,
each Unaffiliated Seller will represent, as of the date of delivery of the
related Series of Notes or Certificates, as applicable, that to the best of its
knowledge no Mortgaged Property secured by Multifamily Property is subject to an
environmental hazard that would have to be eliminated under applicable law
before the sale of, or which could otherwise affect the marketability of, the
Mortgaged Property or which would subject the owner or operator of the Mortgaged
Property or a lender secured by the Mortgaged Property to liability under law,
and that there are no liens which relate to the existence of any clean-up of a
hazardous substance, and to the best of its knowledge no circumstances are
existing that under law would give rise to any lien, affecting the Mortgaged
Property which are or may be liens prior to or on a parity with the lien of the
related mortgage. The applicable Agreement and/or Servicing Agreement will
further provide that the Master Servicer, acting on behalf of the Trust Fund,
may not acquire title to a Mortgaged Property or take over its operation unless
the Master Servicer has received a report from a qualified independent person
selected by the Master Servicer setting forth whether the Mortgaged Property is
subject to or presents any toxic wastes or environmental hazards and an estimate
of the cost of curing or cleaning up the hazard.

         THE CONTRACTS

         As a result of the Depositor's assignment of the Contract to the
Trustee, the Certificateholders will succeed collectively to all of the rights,
including the right to receive payment on the Contracts, and will assume
particular obligations of the Depositor. Each Contract evidences both (1) the
obligation of the Obligor to repay the loan and (2) the grant of a security
interest in the Manufactured Home to secure repayment of the loan. Some of the
aspects of both features of the Contracts are described more fully below.

         The Contracts generally are "chattel paper" as defined in the Uniform
Commercial Code in effect in the states in which the Manufactured Homes
initially were registered. Pursuant to the UCC, the sale of chattel paper is
treated in a manner similar to perfection of a security interest in chattel
paper. Under the applicable Agreement and/or Servicing Agreement, the Master
Servicer or the Depositor, as the case may be, will transfer physical possession
of the Contracts to the Trustee or Indenture Trustee, or their respective
custodian, as the case may be. In addition, the Master Servicer will make an
appropriate filing of a UCC-1 financing statement in the appropriate states to
give notice of the Trustee's ownership of the Contracts or the Indenture
Trustee's security interest in the Contracts, as the case may be. Unless
otherwise specified in the related prospectus supplement, the Contracts will not
be stamped or marked otherwise to reflect



                                      100


their assignment from the Depositor to the Trustee or their pledge to the
Indenture Trustee. Therefore, if a subsequent purchaser were able to take
physical possession of the Contracts without notice of the assignment or pledge,
the respective Trustees' interest in the Contracts could be defeated.

         SECURITY INTERESTS IN THE MANUFACTURED HOMES

         The law governing perfection of a security interest in a Manufactured
Home varies from state to state. Security interests in manufactured homes may be
perfected either by notation of the secured party's lien on the certificate of
title or by delivery of the required documents and payment of a fee to the state
motor vehicle authority, depending on state law. In some nontitle states,
perfection pursuant to the provisions of the UCC is required. The lender or
Master Servicer may effect the notation or delivery of the required documents
and fees, and obtain possession of the certificate of title, as appropriate
under the laws of the state in which any manufactured home securing a
manufactured housing conditional sales contract is registered. In the event the
Master Servicer or the lender fails, due to clerical errors, to effect the
notation or delivery, or files the security interest under the wrong law, for
example, under a motor vehicle title statute rather than under the UCC, in a few
states, the Securityholders may not have a first priority security interest in
the Manufactured Home securing a Contract. As manufactured homes have become
larger and often have been attached their sites without any apparent intention
to move them, courts in many states have held that manufactured homes, under
some circumstances, may become subject to real estate title and recording laws.
As a result, a security interest in a manufactured home could be rendered
subordinate to the interests of other parties claiming an interest in the home
under applicable state real estate law. In order to perfect a security interest
in a manufactured home under real estate laws, the holder of the security
interest must file either a "fixture filing" under the provisions of the UCC or
a real estate mortgage under the real estate laws of the state where the
manufactured home is located. These filings must be made in the real estate
records office of the county where the manufactured home is located.
Substantially all of the Contracts will contain provisions prohibiting the
borrower from permanently attaching the Manufactured Home to its site. So long
as the Obligor does not violate this agreement, a security interest in the
Manufactured Home will be governed by the certificate of title laws or the UCC,
and the notation of the security interest on the certificate of title or the
filing of a UCC financing statement will be effective to maintain the priority
of the seller's security interest in the Manufactured Home. If, however, a
Manufactured Home is permanently attached to its site, other parties could
obtain an interest in the Manufactured Home which is prior to the security
interest originally retained by the Unaffiliated Seller and transferred to the
Depositor. With respect to a Series of Notes or Certificates, as applicable, and
as described in the related prospectus supplement, the Master Servicer may be
required to perfect a security interest in the Manufactured Home under
applicable real estate laws. If the real estate filings are not required and if
any of the foregoing events were to occur, the only recourse of the
Securityholders would be against the Unaffiliated Seller pursuant to its
repurchase obligation for breach of warranties. Based on the representations of
the Unaffiliated Seller, the Depositor, however, believes that it has obtained a
perfected first priority security interest by proper notation or delivery of the
required documents and fees with respect to substantially all of the
Manufactured Homes securing the Contracts.

                                      101


         The Depositor will assign its security interests in the Manufactured
Homes to the Trustee on behalf of the Certificateholders and, if a Series of
Securities includes Notes, the security interest will be pledged to the
Indenture Trustee on behalf of the Noteholders. Unless otherwise specified in
the related prospectus supplement, neither the Depositor nor the Trustee or
Indenture Trustee will amend the certificates of title to identify the Trustee
or the Indenture Trustee, as applicable, as the new secured party. Accordingly,
the Depositor or another entity specified in the prospectus supplement will
continue to be named as the secured party on the certificates of title relating
to the Manufactured Homes. In most states, the assignment is an effective
conveyance of the security interest without amendment of any lien noted on the
related certificate of title and the new secured party succeeds to the
assignor's rights as the secured party. However, in some states there exists a
risk that, in the absence of an amendment to the certificate of title, the
assignment of the security interest might not be held effective against
creditors of the assignor.

         In the absence of fraud, forgery or permanent affixation of the
Manufactured Home to its site by the Manufactured Home owner, or administrative
error by state recording officials, the notation of the lien of the Depositor on
the certificate of title or delivery of the required documents and fees will be
sufficient to protect the Securityholders against the rights of subsequent
purchasers of a Manufactured Home or subsequent lenders who take a security
interest in the Manufactured Home. If there are any Manufactured Homes as to
which the security interest assigned to the Depositor and the Certificateholders
and pledged to the Noteholders, if any, is not perfected, the security interest
would be subordinate to, among others, subsequent purchasers for value of
Manufactured Homes and holders of perfected security interests. There also
exists a risk in not identifying the applicable Securityholders as the new
secured party on the certificate of title that, through fraud or negligence, the
security interest of the Securityholders could be released.

         In the event that the owner of a Manufactured Home moves it to a state
other than the state in which the Manufactured Home initially is registered,
under the laws of most states the perfected security interest in the
Manufactured Home would continue for four months after the relocation and after
that time only if and after the owner re-registers the Manufactured Home in the
state. If the owner were to relocate a Manufactured Home to another state and
not re-register the Manufactured Home in the state, and if steps are not taken
to re-perfect the Trustee's security interest in the state, the security
interest in the Manufactured Home would cease to be perfected. A majority of
states generally require surrender of a certificate of title to re-register a
Manufactured Home; accordingly, the Trustee or the Indenture Trustee, or the
Master Servicer as custodian for the Trustee and/or Indenture Trustee, must
surrender possession if it holds the certificate of title to the Manufactured
Home or, in the case of Manufactured Homes registered in states which provide
for notation of lien on the certificate of title, the applicable Trustee would
receive notice of surrender if the security interest in the Manufactured Home is
noted on the certificate of title. Accordingly, the Trustee and Indenture
Trustee would have the opportunity to re-perfect its security interest in the
Manufactured Home in the state of relocation. In states which do not require a
certificate of title for registration of a Manufactured Home, re-registration
could defeat perfection. In the ordinary course of servicing manufactured
housing installment or conditional sales contracts and installment loan
agreements, the Master Servicer takes steps to effect the re-perfection upon
receipt of notice of re-registration or information from the Obligor as to
relocation. Similarly, when an Obligor under a Contract sells a Manufactured
Home, the



                                      102


Trustee or the Indenture Trustee, or the Master Servicer as custodian for the
Trustee or Indenture Trustee, must surrender possession of the certificate of
title or will receive notice as a result of its lien noted on the certificate of
title and accordingly will have an opportunity to require satisfaction of the
related Contract before release of the lien. Under the applicable Agreement, the
Master Servicer, on behalf of the Depositor, will be obligated to take the
steps, at the Master Servicer's expense, as are necessary to maintain perfection
of security interests in the Manufactured Homes.

         Under the laws of most states, liens for repairs performed on a
Manufactured Home take priority even over a perfected security interest. The
Depositor will represent in the applicable Agreement that it has no knowledge of
any liens with respect to any Manufactured Home securing payment on any
Contract. However, liens could arise at any time during the term of a Contract.
No notice will be given to the Trustee, Indenture Trustee or Securityholders in
the event a lien arises and the lien would not give rise to a repurchase
obligation on the part of the party specified in the applicable Agreement.

         ENFORCEMENT OF SECURITY INTERESTS IN MANUFACTURED HOMES

         The Master Servicer on behalf of the Trustee or the Indenture Trustee,
to the extent required by the related Agreement and/or Indenture, may take
action to enforce the applicable Trustee's security interest with respect to
Contracts in default by repossession and resale of the Manufactured Homes
securing the Defaulted Contracts. Except in Louisiana, so long as the
Manufactured Home has not become subject to the real estate law, a creditor can
repossess a Manufactured Home securing a Contract by voluntary surrender, by
"self-help" repossession that is "peaceful" (i.e., without breach of the peace)
or, in the absence of voluntary surrender and the ability to repossess without
breach of the peace, by judicial process. The holder of a Contract must give the
debtor a number of days notice, which varies from 10 to 30 days depending on the
state, prior to commencement of any repossession. The UCC and consumer
protection laws in most states place restrictions on repossession sales,
including requiring prior notice to the debtor and commercial reasonableness in
effecting a sale. The law in most states also requires that the debtor be given
notice of any sale prior to resale of the unit so that the debtor may redeem at
or before a resale. In the event of a repossession and resale of a Manufactured
Home, the Trustee and/or Indenture Trustee would be entitled to be paid out of
the sale proceeds before the proceeds could be applied to the payment of the
claims of unsecured creditors or the holders of subsequently perfected security
interests or, afterward, to the debtor.

         Under the laws applicable in most states, a creditor is entitled to
obtain a deficiency judgment from a debtor for any deficiency on repossession
and resale of the Manufactured Home securing the debtor's loan. However, some
states impose prohibitions or limitations on deficiency judgments.

         Under other statutory provisions, including federal and state
bankruptcy and insolvency laws and general equitable principles, may limit or
delay the ability of a lender to repossess and resell collateral or enforce a
deficiency judgment.

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         CONSUMER PROTECTION LAWS

         The so-called "Holder-in-Due-Course" rule of the Federal Trade
Commission is intended to defeat the ability of the transferor of a consumer
credit contract which is the seller of goods which gave rise to the transaction,
and particular related lenders and assignees, to transfer the contract free of
notice of claims by the debtor under the contract. The effect of this rule is to
subject the assignee of a contract to all claims and defenses which the debtor
could assert against the seller of goods. Liability under this rule is limited
to amounts paid under a Contract; however, the Obligor also may be able to
assert the rule to set off remaining amounts due as a defense against a claim
brought against the Obligor. Numerous other federal and state consumer
protection laws impose requirements applicable to the origination and lending
pursuant to the Contracts, including the Truth in Lending Act, the Federal Trade
Commission Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the
Equal Credit Opportunity Act, the Fair Debt Collection Practices Act and the
Uniform Consumer Credit Code. In the case of some of these laws, the failure to
comply with their provisions may affect the enforceability of the related
Contract.

         TRANSFERS OF MANUFACTURED HOMES; ENFORCEABILITY OF "DUE-ON-SALE"
CLAUSES

         The Contracts, in general, prohibit the sale or transfer of the related
Manufactured Homes without the consent of the Depositor or the Master Servicer
and permit the acceleration of the maturity of the Contracts by the Depositor or
the Master Servicer upon any sale or transfer that is not consented to. Unless
otherwise specified in the related prospectus supplement, the Depositor or the
Master Servicer expects that it will permit most transfers of Manufactured Homes
and not accelerate the maturity of the related Contracts. In some cases, the
transfer may be made by a delinquent Obligor in order to avoid a repossession
proceeding with respect to a Manufactured Home.

         In the case of a transfer of a Manufactured Home after which the
Depositor desires to accelerate the maturity of the related Contract, the
Depositor's ability to do so will depend on the enforceability under state law
of the "due-on-sale" clause. The Garn-St Germain Act preempts, subject to
exceptions and conditions, state laws prohibiting enforcement of "due-on-sale"
clauses applicable to the Manufactured Homes. In some states the Depositor or
the Master Servicer may be prohibited from enforcing a "due-on-sale" clause in
respect of particular Manufactured Homes.

         APPLICABILITY OF USURY LAWS

         Title V of the Depository Institutions Deregulation and Monetary
Control Act of 1980, as amended ("Title V"), provides that, subject to the
following conditions, state usury limitations shall not apply to any loan that
is secured by a first lien on some kinds of manufactured housing. The Contracts
would be covered if they satisfy particular conditions, among other things,
governing the terms of any prepayments, late charges and deferral fees and
requiring a 30-day notice period prior to instituting any action leading to
repossession of or foreclosure with respect to the related unit.

                                      104


         Title V authorized any state to reimpose limitations on interest rates
and finance charges by adopting before April 1, 1983 a law or constitutional
provision that expressly rejects application of the federal law. Fifteen states
adopted a law prior to the April 1, 1983 deadline. In addition, even where Title
V was not so rejected, any state is authorized by the law to adopt a provision
limiting discount points or other charges on loans covered by Title V. In any
state in which application of Title V was expressly rejected or a provision
limiting discount points or other charges has been adopted, no Contract which
imposes finance charges or provides for discount points or charges in excess of
permitted levels has been included in the Trust Assets or Fund. The Depositor,
or the party specified in the related Agreement will represent that all of the
Contracts comply with applicable usury laws.

         MATERIAL FEDERAL INCOME TAX CONSIDERATIONS

         GENERAL

         The following discussion represents the opinion of McKee Nelson LLP, or
other counsel specified in the related prospectus supplement ("Federal Tax
Counsel") as to the material federal income tax consequences of the purchase,
ownership and disposition of the Notes or Certificates, as applicable, offered
under this prospectus. This opinion assumes compliance with all provisions of
the Agreements pursuant to which the Securities are issued. This discussion is
directed solely to securityholders that hold the Securities as capital assets
within the meaning of Section 1221 of the Internal Revenue Code of 1986, as
amended (the "Code"), and does not purport to discuss all federal income tax
consequences that may be applicable to particular categories of investors, some
of which (such as banks, insurance companies and foreign investors) may be
subject to special rules. Further, the authorities on which this discussion, and
the opinions referred to below, are based are subject to change or differing
interpretations, which could apply retroactively.

         In addition to the federal income tax consequences described in this
prospectus, potential investors should consider the state, local and foreign tax
consequences, if any, of the purchase, ownership and disposition of the
Securities. See "State and Other Tax Considerations." The Depositor recommends
that securityholders consult their own tax advisors concerning the federal,
state, local, foreign or other tax consequences to them of the purchase,
ownership and disposition of the Securities offered under this prospectus.

         The following discussion addresses securities of five general types:

         o    securities ("REMIC Securities") representing interests in a Trust
              Fund, or a portion of a Trust Fund, that the trustee will elect
              to have treated as a real estate mortgage investment conduit
              ("REMIC") under Sections 860A through 860G (the "REMIC
              Provisions") of the Code;

         o    securities ("Grantor Trust Securities") representing interests in
              a Trust Fund (a "Grantor Trust Fund") as to which no election
              will be made;

                                      105


         o    securities ("Partnership Certificates") representing equity
              interests in a Trust Fund (a "Partnership Trust Fund") which is
              treated as a partnership for federal income tax purposes;

         o    securities in the form of Notes ("Debt Securities") representing
              indebtedness of a Partnership Trust Fund or a Trust Fund which is
              disregarded as a separate entity for federal income tax purposes;
              and

         o    securities in the form of Certificates that, despite their form,
              are intended to be treated as indebtedness for federal income tax
              purposes.

         The prospectus supplement for each Series of Securities will indicate
which of the foregoing treatments will apply to that Series and, if a REMIC
election (or elections) will be made for the related Trust Fund, will identify
all "regular interests" and "residual interests" in the REMIC. For purposes of
this tax discussion:

         (1)  references to a "securityholder" or a "holder" are to the
              beneficial owner of a Security,

         (2)  references to "REMIC Pool" are to an entity or portion thereof as
              to which a REMIC election will be made, and

         (3)  to the extent specified in the prospectus supplement, references
              to "mortgage loans" include Contracts.

         The following discussion is based in part upon the rules governing
original issue discount that are set forth in Sections 1271 through 1275 of the
Code and in the Treasury regulations promulgated thereunder (the "OID
Regulations"), and in part upon the REMIC Provisions and the Treasury
regulations promulgated thereunder (the "REMIC Regulations"). Investors should
be aware that the OID Regulations do not adequately address some issues relevant
to, and in some instances provide that they are not applicable to, instruments
such as Securities.

         Taxable Mortgage Pools

         Corporate income tax can be imposed on the net income of some entities
issuing non-REMIC debt obligations secured by real estate mortgages ("Taxable
Mortgage Pools"). Any entity other than a REMIC will be considered a Taxable
Mortgage Pool if

         (1)  substantially all of the assets of the entity consist of debt
              obligations and more than 50% of those obligations consist of
              "real estate mortgages,"

         (2)  that entity is the borrower under debt obligations with two or
              more maturities, and

         (3)  under the terms of the debt obligations on which the entity is
              the borrower, payments on those obligations bear a relationship
              to payments on the obligations held by the entity.

                                      106


Furthermore, a group of assets held by an entity can be treated as a separate
Taxable Mortgage Pool if the assets are expected to produce significant cash
flow that will support one or more of the entity's issues of debt obligations.
The Depositor generally will structure offerings of non-REMIC Securities to
avoid the application of the Taxable Mortgage Pool rules.

         REMICS

         Classification of REMICs

         For each Series of REMIC Securities, assuming compliance with all
provisions of the related pooling and servicing agreement, in the opinion of
Federal Tax Counsel, the related Trust Fund (or each applicable portion of the
Trust Fund) will qualify as a REMIC and the REMIC Securities offered with
respect thereto will be considered to evidence ownership of "regular interests"
("Regular Securities") or "residual interests" ("Residual Securities") in the
REMIC within the meaning of the REMIC Provisions.

         In order for the REMIC Pool to qualify as a REMIC, there must be
ongoing compliance on the part of the REMIC Pool with the requirements set forth
in the Code. The REMIC Pool must fulfill an asset test, which requires that no
more than a de minimis portion of the assets of the REMIC Pool, as of the close
of the third calendar month beginning after the "Startup Day" (which for
purposes of this discussion is the date of issuance of the REMIC Securities) and
at all times thereafter, may consist of assets other than "qualified mortgages"
and "permitted investments." The REMIC Regulations provide a safe harbor
pursuant to which the de minimis requirement will be met if at all times the
total adjusted basis of the nonqualified assets is less than 1% of the total
adjusted basis of all the REMIC Pool's assets. An entity that fails to meet the
safe harbor may nevertheless demonstrate that it holds no more than a de minimis
amount of nonqualified assets. A REMIC Pool also must provide "reasonable
arrangements" to prevent its residual interests from being held by "disqualified
organizations" or agents of "disqualified organizations" and must furnish
applicable tax information to transferors or agents that violate this
requirement. The pooling and servicing agreement for each Series of REMIC
Securities will contain provisions meeting these requirements. See "--Taxation
of Owners of Residual Securities--Tax-Related Restrictions on Transfer of
Residual Securities--Disqualified Organizations" below.

         A qualified mortgage is any obligation that is principally secured by
an interest in real property and that is either transferred to the REMIC Pool on
the Startup Day or is purchased by the REMIC Pool within a three-month period
thereafter pursuant to a fixed price contract in effect on the Startup Day.
Qualified mortgages include whole mortgage loans and, generally, certificates of
beneficial interest in a grantor trust that holds mortgage loans and regular
interests in another REMIC, such as lower-tier regular interests in a tiered
REMIC. The REMIC Regulations specify that loans secured by timeshare interests,
shares held by a tenant stockholder in a cooperative housing corporation, and
manufactured housing that qualifies as a "single family residence" under Code
Section 25(e)(10) can be qualified mortgages. A qualified mortgage includes a
qualified replacement mortgage, which is any property that would have been
treated as a qualified mortgage if it were transferred to the REMIC Pool on the
Startup Day and that is received either:

                                      107


         (1) in exchange for any qualified mortgage within a three-month period
             from the Startup Day; or

         (2) in exchange for a "defective obligation" within a two-year period
             from the Startup Day.

         A "defective obligation" includes:

         (1) a mortgage in default or as to which default is reasonably
             foreseeable;

         (2) a mortgage as to which a customary representation or warranty made
             at the time of transfer to the REMIC Pool has been breached;

         (3) a mortgage that was fraudulently procured by the borrower; and

         (4) a mortgage that was not in fact principally secured by real
             property (but only if the mortgage is disposed of within 90 days of
             discovery).

A mortgage loan that is "defective" as described in clause (4) above that is not
sold or, if within two years of the Startup Day, exchanged, within 90 days of
discovery, ceases to be a qualified mortgage after that 90-day period.

         Permitted investments include cash flow investments, qualified reserve
assets, and foreclosure property. A cash flow investment is an investment,
earning a return in the nature of interest, of amounts received on or with
respect to qualified mortgages for a temporary period, not exceeding 13 months,
until the next scheduled distribution to holders of interests in the REMIC Pool.
A qualified reserve asset is any intangible property held for investment that is
part of any reasonably required reserve maintained by the REMIC Pool to provide
for payments of expenses of the REMIC Pool or amounts due on the regular or
residual interests in the event of defaults (including delinquencies) on the
qualified mortgages, lower than expected reinvestment returns, prepayment
interest shortfalls and other contingencies. The reserve fund will be
disqualified if more than 30% of the gross income from the assets in that fund
for the year is derived from the sale or other disposition of property held for
less than three months, unless required to prevent a default on the regular
interests caused by a default on one or more qualified mortgages. A reserve fund
must be reduced "promptly and appropriately" as payments on the mortgage loans
are received. Foreclosure property is real property acquired by the REMIC Pool
in connection with the default or imminent default of a qualified mortgage and
generally may not be held for more than three taxable years after the taxable
year of acquisition unless extensions are granted by the Secretary of the
Treasury.

         In addition to the foregoing requirements, the various interests in a
REMIC Pool also must meet specific requirements. All of the interests in a REMIC
Pool must be either of the following: (1) one or more classes of regular
interests or (2) a single class of residual interests on which distributions, if
any, are made pro rata.

         o   A regular interest is an interest in a REMIC Pool that is issued on
             the Startup Day with fixed terms, is designated as a regular
             interest, and unconditionally entitles the holder to receive a
             specified principal amount (or other similar amount), and provides


                                      108


             that interest payments (or other similar amounts), if any, at or
             before maturity either are payable based on a fixed rate or a
             qualified variable rate, or consist of a specified, nonvarying
             portion of the interest payments on qualified mortgages. That
             specified portion may consist of a fixed number of basis points, a
             fixed percentage of the total interest, or a qualified variable
             rate, inverse variable rate or difference between two fixed or
             qualified variable rates on some or all of the qualified mortgages.
             The specified principal amount of a regular interest that provides
             for interest payments consisting of a specified, nonvarying portion
             of interest payments on qualified mortgages may be zero.

         o   A residual interest is an interest in a REMIC Pool other than a
             regular interest that is issued on the Startup Day and that is
             designated as a residual interest.

         An interest in a REMIC Pool may be treated as a regular interest even
if payments of principal for that interest are subordinated to payments on other
regular interests or the residual interest in the REMIC Pool, and are dependent
on the absence of defaults or delinquencies on qualified mortgages or permitted
investments, lower than reasonably expected returns on permitted investments,
unanticipated expenses incurred by the REMIC Pool or prepayment interest
shortfalls. Accordingly, in the opinion of Federal Tax Counsel, the Regular
Securities of a Series will constitute one or more classes of regular interests,
and the Residual Securities for that Series will constitute a single class of
residual interests for each REMIC Pool.

         If an entity electing to be treated as a REMIC fails to comply with one
or more of the ongoing requirements of the Code for that status during any
taxable year, the Code provides that the entity will not be treated as a REMIC
for that year and thereafter. In that event, that entity may be taxable as a
corporation under Treasury regulations, and the related REMIC Securities may not
be accorded the status or given the tax treatment described below. Although the
Code authorizes the Treasury Department to issue regulations providing relief in
the event of an inadvertent termination of REMIC status, none of these
regulations have been issued. Any relief provided, moreover, may be accompanied
by sanctions, such as the imposition of a corporate tax on all or a portion of
the Trust Fund's income for the period in which the requirements for that status
are not satisfied. The pooling and servicing agreement for each REMIC Pool will
include provisions designed to maintain the Trust Fund's status as a REMIC under
the REMIC Provisions. It is not anticipated that the status of any Trust Fund as
a REMIC will be terminated.

         Characterization of Investments in REMIC Securities

         The REMIC Securities will be treated as "real estate assets" within the
meaning of Section 856(c)(4)(A) of the Code and assets described in Section
7701(a)(19)(C) of the Code in the same proportion that the assets of the REMIC
Pool underlying these Securities would be so treated. Moreover, if 95% or more
of the assets of the REMIC Pool qualify for either of the foregoing treatments
at all times during a calendar year, the REMIC Securities will qualify for the
corresponding status in their entirety for that calendar year.

         If the assets of the REMIC Pool include Buy-Down Loans, it is possible
that the percentage of those assets constituting "loans . . . secured by an
interest in real property which is . . . residential real property" for purposes
of Code Section 7701(a)(19)(C)(v) may be



                                      109


required to be reduced by the amount of the related funds from the Buy-Down
Fund. No opinion is expressed as to the treatment of those Buy-Down Funds
because the law is unclear as to whether the Buy-Down Funds represent an account
held by the lender that reduces the lender's investment in the mortgage loan.
This reduction of a holder's investment may reduce the assets qualifying for the
60% of assets test for meeting the definition of a "domestic building and loan
association." Interest (including original issue discount) on the Regular
Securities and income allocated to the class of Residual Securities will be
interest described in Section 856(c)(3)(B) of the Code to the extent that the
Notes or Certificates, as applicable, are treated as "real estate assets" within
the meaning of Section 856(c)(4)(A) of the Code. In addition, the Regular
Securities generally will be "qualified mortgages" within the meaning of Section
860G(a)(3) of the Code if transferred to another REMIC on its Startup Day in
exchange for regular or residual interests in the REMIC.

         The assets of the REMIC Pool will include, in addition to mortgage
loans, payments on mortgage loans held pending distribution on the REMIC
Securities and property acquired by foreclosure held pending sale, and may
include amounts in reserve accounts. It is unclear whether property acquired by
foreclosure held pending sale and amounts in reserve accounts would be
considered to be part of the mortgage loans, or whether those assets (to the
extent not invested in assets described in the foregoing sections) otherwise
would receive the same treatment as the mortgage loans for purposes of all of
the foregoing sections. The REMIC Regulations do provide, however, that payments
on mortgage loans held pending distribution are considered part of the mortgage
loans for purposes of Section 856(c)(4)(A) of the Code. Furthermore, foreclosure
property generally will qualify as "real estate assets" under Section
856(c)(4)(A) of the Code.

         Tiered REMIC Structures

         For some Series of REMIC Securities, two or more separate elections may
be made to treat designated portions of the related Trust Fund as REMICs
("Tiered REMICs") for federal income tax purposes. Upon the issuance of any of
these Series of REMIC Securities, Federal Tax Counsel will deliver its opinion
that, assuming compliance with all provisions of the related pooling and
servicing agreement, the Tiered REMICs will each qualify as a REMIC and the
respective REMIC Securities issued by each Tiered REMIC will be considered to
evidence ownership of Regular Securities or Residual Securities in the related
REMIC within the meaning of the REMIC Provisions.

         Solely for purposes of determining whether the REMIC Securities will be
"real estate assets" within the meaning of Section 856(c)(4)(A) of the Code and
"loans secured by an interest in real property" under Section 7701(a)(19)(C) of
the Code, and whether the income on those Securities is interest described in
Section 856(c)(3)(B) of the Code, the Tiered REMICs will be treated as one
REMIC.



                                      110


         Taxation of Owners of Regular Securities

         (1) General

         Except as otherwise indicated herein, the Regular Securities will be
treated for federal income tax purposes as debt instruments that are issued by
the REMIC and not as beneficial interests in the REMIC or the REMIC's assets. In
general, interest, original issue discount, and market discount on a Regular
Security will be treated as ordinary income to a holder of the Regular Security
(the "Regular Securityholder"), and principal payments on a Regular Security
will be treated as a return of capital to the extent of the Regular
Securityholder's basis in the Regular Security allocable thereto. Regular
Securityholders must use the accrual method of accounting with regard to Regular
Securities, regardless of the method of accounting otherwise used by that
Regular Securityholder.

         Payments of interest on Regular Securities may be based on a fixed
rate, a variable rate as permitted by the REMIC Regulations, or may consist of a
specified portion of the interest payments on qualified mortgages where such
portion does not vary during the period the Regular Security is outstanding. The
definition of a variable rate for purposes of the REMIC Regulations is based on
the definition of a qualified floating rate for purposes of the rules governing
original issue discount set forth in the OID Regulations, with certain
modifications and permissible variations. See "--Variable Rate Regular
Securities" below for a discussion of the definition of a qualified floating
rate for purposes of the OID Regulations. In contrast to the OID Regulations,
for purposes of the REMIC Regulations, a qualified floating rate does not
include any multiple of a qualified floating rate (also excluding multiples of
qualified floating rates that themselves would constitute qualified floating
rates under the OID Regulations), and the characterization of a variable rate
that is subject to a cap, floor or similar restriction as a qualified floating
rate for purposes of the REMIC Regulations will not depend upon the OID
Regulations relating to caps, floors, and similar restrictions. See "--Variable
Rate Regular Securities" below for discussion of the OID Regulations relating to
caps, floors and similar restrictions. A qualified floating rate, as defined
above for purposes of the REMIC Regulations (a "REMIC qualified floating rate"),
qualifies as a variable rate for purposes of the REMIC Regulations if such REMIC
qualified floating rate is set at a "current rate" as defined in the OID
Regulations. In addition, a rate equal to the highest, lowest or an average of
two or more REMIC qualified floating rates qualifies as a variable rate for
REMIC purposes. A Regular Security may also have a variable rate based on a
weighted average of the interest rates on some or all of the qualified mortgages
held by the REMIC where each qualified mortgage taken into account has a fixed
rate or a variable rate that is permissible under the REMIC Regulations.
Further, a Regular Security may have a rate that is the product of a REMIC
qualified floating rate or a weighted average rate and a fixed multiplier, is a
constant number of basis points more or less than a REMIC qualified floating
rate or a weighted average rate, or is the product, plus or minus a constant
number of basis points, of a REMIC qualified floating rate or a weighted average
rate and a fixed multiplier. An otherwise permissible variable rate for a
Regular Security, described above, will not lose its character as such because
it is subject to a floor or a cap, including a "funds available cap" as that
term is defined in the REMIC Regulations. Lastly, a Regular Security will be
considered as having a permissible variable rate if it has a fixed or otherwise
permissible variable rate during one or more payment or accrual periods and
different fixed or otherwise permissible variable rates during other payment or
accrual periods.



                                      111


         (2) Original Issue Discount

         Accrual Securities will be, and other classes of Regular Securities may
be, issued with "original issue discount" within the meaning of Code Section
1273(a). Holders of any Class or Subclass of Regular Securities having original
issue discount generally must include original issue discount in ordinary income
for federal income tax purposes as it accrues, in accordance with a constant
yield method that takes into account the compounding of interest, in advance of
the receipt of the cash attributable to that income. The following discussion is
based in part on the "OID Regulations" and in part on the provisions of the Tax
Reform Act of 1986 (the "1986 Act"). Regular Securityholders should be aware,
however, that the OID Regulations do not adequately address some of the issues
relevant to prepayable securities, such as the Regular Securities. To the extent
that those issues are not addressed in the regulations, the Trust Fund intends
to apply the methodology described in the Conference Committee Report to the
1986 Act. No assurance can be provided that the Internal Revenue Service will
not take a different position as to those matters not currently addressed by the
OID Regulations. Moreover, the OID Regulations include an anti-abuse rule
allowing the Internal Revenue Service to apply or depart from the OID
Regulations where necessary or appropriate to ensure a reasonable tax result
because of the applicable statutory provisions. A tax result will not be
considered unreasonable under the anti-abuse rule in the absence of a
substantial effect on the present value of a taxpayer's tax liability. Investors
are advised to consult their own tax advisors as to the discussion in the OID
Regulations and the appropriate method for reporting interest and original issue
discount for the Regular Securities.

         Each Regular Security will be treated as a single installment
obligation for purposes of determining the original issue discount includible in
a Regular Securityholder's income. The total amount of original issue discount
on a Regular Security is the excess of the "stated redemption price at maturity"
of the Regular Security over its "issue price." The issue price of a Class of
Regular Securities offered pursuant to this prospectus generally is the first
price at which a substantial amount of that Class is sold to the public
(excluding bond houses, brokers and underwriters). Although unclear under the
OID Regulations, it is anticipated that the trustee will treat the issue price
of a Class as to which there is no substantial sale as of the issue date or that
is retained by the Depositor as the fair market value of the Class as of the
issue date. The issue price of a Regular Security also includes any amount paid
by an initial Regular Securityholder for accrued interest that relates to a
period before the issue date of the Regular Security, unless the Regular
Securityholder elects on its federal income tax return to exclude that amount
from the issue price and to recover it on the first Distribution Date.

         The stated redemption price at maturity of a Regular Security always
includes the original principal amount of the Regular Security, but generally
will not include distributions of interest if those distributions constitute
"qualified stated interest." Under the OID Regulations, qualified stated
interest generally means interest payable at a single fixed rate or a qualified
variable rate (as described below), provided that the interest payments are
unconditionally payable at intervals of one year or less during the entire term
of the Regular Security. Because there is no penalty or default remedy in the
case of nonpayment of interest for a Regular Security, it is possible that no
interest on any Class of Regular Securities will be treated as qualified stated
interest. However, except as provided in the following three sentences or in the
prospectus supplement, because the underlying mortgage loans provide for
remedies in the event



                                      112


of default, it is anticipated that the trustee will treat interest for the
Regular Securities as qualified stated interest. Distributions of interest on an
Accrual Security, or on other Regular Securities for which deferred interest
will accrue, will not constitute qualified stated interest, in which case the
stated redemption price at maturity of those Regular Securities includes all
distributions of interest as well as principal on the Regular Securities.
Likewise, it is anticipated that the trustee will treat an interest-only Class
or a Class on which interest is substantially disproportionate to its principal
amount (a so-called "super-premium" Class) as having no qualified stated
interest. Where the interval between the issue date and the first Distribution
Date on a Regular Security is shorter than the interval between subsequent
Distribution Dates, the interest attributable to the additional days will be
included in the stated redemption price at maturity.

         Under a de minimis rule, original issue discount on a Regular Security
will be considered to be zero if the original issue discount is less than 0.25%
of the stated redemption price at maturity of the Regular Security multiplied by
the weighted average maturity of the Regular Security. For this purpose, the
weighted average maturity of the Regular Security is computed as the sum of the
amounts determined by multiplying the number of full years (i.e., rounding down
partial years) from the issue date until each distribution in reduction of
stated redemption price at maturity is scheduled to be made by a fraction, the
numerator of which is the amount of each distribution included in the stated
redemption price at maturity of the Regular Security and the denominator of
which is the stated redemption price at maturity of the Regular Security. The
Conference Committee Report to the 1986 Act provides that the schedule of those
distributions should be determined in accordance with the assumed rate of
prepayment of the mortgage loans (the "Prepayment Assumption") and the
anticipated reinvestment rate, if any, relating to the Regular Securities. The
Prepayment Assumption for a Series of Regular Securities will be set forth in
the prospectus supplement. Holders generally must report de minimis original
issue discount pro rata as principal payments are received, and that income will
generally be capital gain if the Regular Security is held as a capital asset.
Under the OID Regulations, however, Regular Securityholders may elect to accrue
all de minimis original issue discount as well as market discount and market
premium, under the constant yield method. See "-Election to Treat All Interest
Under the Constant Yield Method" below.

         A Regular Securityholder generally must include in gross income for any
taxable year the sum of the "daily portions," as defined below, of the original
issue discount on the Regular Security accrued during an accrual period for each
day on which it holds the Regular Security, including the date of purchase but
excluding the date of disposition. The trustee will treat the monthly period
ending on the day before each Distribution Date as the accrual period. For each
Regular Security, a calculation will be made of the original issue discount that
accrues during each successive full accrual period (or shorter period from the
date of original issue) that ends on the day before the related Distribution
Date on the Regular Security. The Conference Committee Report to the 1986 Act
states that the rate of accrual of original issue discount is intended to be
based on the Prepayment Assumption. The original issue discount accruing in a
full accrual period would be the excess, if any, of:

         (1) the sum of:



                                      113


             (a) the present value of all of the remaining distributions to be
                 made on the Regular Security as of the end of that accrual
                 period, and

             (b) the distributions made on the Regular Security during the
                 accrual period that are included in the Regular Security's
                 stated redemption price at maturity, over

         (2) the adjusted issue price of the Regular Security at the beginning
             of the accrual period.

The present value of the remaining distributions referred to in the preceding
sentence is calculated based on:

             (a) the yield to maturity of the Regular Security at the issue
                 date, and

             (b) the Prepayment Assumption.

For these purposes, the adjusted issue price of a Regular Security at the
beginning of any accrual period equals the issue price of the Regular Security,
increased by the total amount of original issue discount for the Regular
Security that accrued in all prior accrual periods and reduced by the amount of
distributions included in the Regular Security's stated redemption price at
maturity that were made on the Regular Security in those prior periods. The
original issue discount accruing during any accrual period (as determined in
this paragraph) will then be divided by the number of days in the period to
determine the daily portion of original issue discount for each day in the
period. For an initial accrual period shorter than a full accrual period, the
daily portions of original issue discount must be determined according to an
appropriate allocation under any reasonable method.

         Under the method described above, the daily portions of original issue
discount required to be included in income by a Regular Securityholder generally
will increase to take into account prepayments on the Regular Securities as a
result of prepayments on the mortgage loans that exceed the Prepayment
Assumption, and generally will decrease (but not below zero for any period) if
the prepayments are slower than the Prepayment Assumption. An increase in
prepayments on the mortgage loans for a Series of Regular Securities can result
in both a change in the priority of principal payments for some Classes of
Regular Securities and either an increase or decrease in the daily portions of
original issue discount for those Regular Securities.

         (3) Acquisition Premium

         A purchaser of a Regular Security having original issue discount at a
price greater than its adjusted issue price but less than its stated redemption
price at maturity will be required to include in gross income the daily portions
of the original issue discount on the Regular Security reduced pro rata by a
fraction, the numerator of which is the excess of its purchase price over the
adjusted issue price and the denominator of which is the excess of the remaining
stated redemption price at maturity over the adjusted issue price.
Alternatively, that purchaser may elect to treat all that acquisition premium
under the constant yield method, as described below under the heading
"--Election to Treat All Interest Under the Constant Yield Method" below.

                                      114


         (4) Variable Rate Regular Securities

         Regular Securities may provide for interest based on a variable rate.
Under the OID Regulations, interest is treated as payable at a qualified
variable rate if, generally, (1) the issue price does not exceed the original
principal balance by more than a specified amount, (2) it does not provide for
any principal payments that are contingent, within the meaning of the OID
Regulations, except as provided in (1), and (3) the interest compounds or is
payable at least annually at current values of;

             (a) one or more "qualified floating rates,"

             (b) a single fixed rate and one or more qualified floating rates,

             (c) a single "objective rate," or

             (d) a single fixed rate and a single objective rate that is a
                 "qualified inverse floating rate."

A floating rate is a qualified floating rate if variations can reasonably be
expected to measure contemporaneous variations in the cost of newly borrowed
funds. A multiple of a qualified floating rate is considered a qualified
floating rate only if the rate is equal to either (a) the product of a qualified
floating rate and a fixed multiple that is greater than 0.65 but not more than
1.35 or (b) the product of a qualified floating rate and a fixed multiple that
is greater than 0.65 but not more than 1.35, increased or decreased by a fixed
rate. That rate may also be subject to a fixed cap or floor, or a cap or floor
that is not reasonably expected as of the issue date to affect the yield of the
instrument significantly. An objective rate is any rate (other than a qualified
floating rate) that is determined using a single fixed formula and that is based
on objective financial or economic information, provided that the information is
not (1) within the control of the issuer or a related party or (2) unique to the
circumstances of the issuer or a related party. However, an objective rate does
not include a rate if it is reasonably expected that the average value of such
rate during the first half of the Regular Security's term will be either
significantly less than or significantly greater than the average value of the
rate during the final half of the Regular Security's term. A qualified inverse
floating rate is a rate equal to a fixed rate minus a qualified floating rate
that inversely reflects contemporaneous variations in the qualified floating
rate; an inverse floating rate that is not a qualified inverse floating rate may
nevertheless be an objective rate. A Class of Regular Securities may be issued
under this prospectus that does not have a qualified variable rate under the
foregoing rules, for example, a Class that bears different rates at different
times during the period it is outstanding that it is considered significantly
"front-loaded" or "back-loaded" within the meaning of the OID Regulations. It is
possible that a Class may be considered to bear "contingent interest" within the
meaning of the OID Regulations. The OID Regulations, as they relate to the
treatment of contingent interest, are by their terms not applicable to Regular
Securities. However, if final regulations dealing with contingent interest for
Regular Securities apply the same principles as the OID Regulations, those
regulations may lead to different timing of income inclusion than would be the
case under the OID Regulations. Furthermore, application of those principles
could lead to the characterization of gain on the sale of contingent interest
Regular Securities as ordinary income. Investors should consult their tax
advisors regarding the appropriate treatment of any Regular



                                      115


Security that does not pay interest at a fixed rate or qualified variable rate
as described in this paragraph.

         The amount of original issue discount for a Regular Security bearing a
qualified variable rate of interest will accrue in the manner described above
under "--Original Issue Discount," with the yield to maturity and future
payments on that Regular Security generally to be determined by assuming that
interest will be payable for the life of the Regular Security based on the
initial rate (or, if different, the value of the applicable variable rate as of
the pricing date) for the relevant Class, if the Class bears interest at a
qualified floating rate or qualified inverse floating rate, or based on a fixed
rate which reflects the reasonably expected yield for the relevant Class, if the
Class bears interest at an objective rate (other than a qualified inverse
floating rate). Unless required otherwise by applicable final regulations, it is
anticipated that the trustee will treat interest, other than variable interest
on an interest-only or super-premium Class, as qualified stated interest at the
qualified variable rate. However, the qualified stated interest allocable to an
accrual period will be increased (or decreased) if the interest actually paid
during the accrual period exceed (or is less than) the interest assumed to be
paid under the rate just described.

         (5) Market Discount

         A subsequent purchaser of a Regular Security also may be subject to the
market discount rules of Code Sections 1276 through 1278. Under these sections
and the principles applied by the OID Regulations in the context of original
issue discount, "market discount" is the amount by which the purchaser's
original basis in the Regular Security (1) is exceeded by the remaining
outstanding principal payments and interest payments other than qualified stated
interest payments due on a Regular Security, or (2) in the case of a Regular
Security having original issue discount, is exceeded by the adjusted issue price
of that Regular Security at the time of purchase. The purchaser generally will
be required to recognize ordinary income to the extent of accrued market
discount on that Regular Security as distributions includible in the stated
redemption price at maturity of the Regular Security are received, in an amount
not exceeding that distribution. The market discount would accrue in a manner to
be provided in Treasury regulations and should take into account the Prepayment
Assumption. The Conference Committee Report to the 1986 Act provides that until
these regulations are issued, the market discount would accrue either (1) on the
basis of a constant interest rate, or (2) in the ratio of stated interest
allocable to the relevant period to the sum of the interest for that period plus
the remaining interest as of the end of that period, or in the case of a Regular
Security issued with original issue discount, in the ratio of original issue
discount accrued for the relevant period to the sum of the original issue
discount accrued for that period plus the remaining original issue discount as
of the end of that period. The purchaser also generally will be required to
treat a portion of any gain on a sale or exchange of the Regular Security as
ordinary income to the extent of the market discount accrued to the date of
disposition under one of the foregoing methods, less any accrued market discount
previously reported as ordinary income as partial distributions in reduction of
the stated redemption price at maturity were received. The purchaser will be
required to defer deduction of a portion of the excess of the interest paid or
accrued on indebtedness incurred to purchase or carry a Regular Security over
the interest distributable on the Regular Security. The deferred portion of the
interest expense in any taxable year generally will not exceed the accrued
market discount on the Regular Security for that year.



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Any deferred interest expense is, in general, allowed as a deduction not later
than the year in which the related market discount income is recognized or the
Regular Security is disposed of.

         As an alternative to the inclusion of market discount in income on the
foregoing basis, the Regular Securityholder may elect to include market discount
in income currently as it accrues on all market discount instruments acquired by
the Regular Securityholder in that taxable year or thereafter, in which case the
interest deferral rule will not apply. See "--Election to Treat All Interest
Under the Constant Yield Method" below regarding an alternative manner in which
that election may be deemed to be made. A person who purchases a Regular
Security at a price lower than the remaining amounts includible in the stated
redemption price at maturity of the security, but higher than its adjusted issue
price, does not acquire the Regular Security with market discount, but will be
required to report original issue discount, appropriately adjusted to reflect
the excess of the price paid over the adjusted issue price.

         Market discount for a Regular Security will be considered to be zero if
the market discount is less than 0.25% of the remaining stated redemption price
at maturity of the Regular Security (or, in the case of a Regular Security
having original issue discount, the adjusted issue price of that Regular
Security) multiplied by the weighted average maturity of the Regular Security
(presumably determined as described above in the fourth paragraph under
"--Original Issue Discount" above) remaining after the date of purchase. It
appears that de minimis market discount would be reported in a manner similar to
de minimis original issue discount. See "--Original Issue Discount" above.

         Treasury regulations implementing the market discount rules have not
yet been issued, and uncertainty exists with respect to many aspects of those
rules. Due to the substantial lack of regulatory guidance with respect to the
market discount rules, it is unclear how those rules will affect any secondary
market that develops for a particular Class of Regular Securities. Prospective
investors in Regular Securities should consult their own tax advisors regarding
the application of the market discount rules to the Regular Securities and the
elections to include market discount in income currently and to accrue market
discount on the basis of the constant yield method.

         (6) Amortizable Premium

         A Regular Security purchased at a cost greater than its remaining
stated redemption price at maturity generally is considered to be purchased at a
premium. If the Regular Securityholder holds that Regular Security as a "capital
asset" within the meaning of Code Section 1221, the Regular Securityholder may
elect under Code Section 171 to amortize the premium under a constant yield
method that reflects compounding based on the interval between payments on the
Regular Security. The election will apply to all taxable debt obligations
(including REMIC regular interests) acquired by the Regular Securityholder at a
premium held in that taxable year or thereafter, unless revoked with the
permission of the Internal Revenue Service. The Conference Committee Report to
the 1986 Act indicates a Congressional intent that the same rules that apply to
the accrual of market discount on installment obligations will also apply to
amortizing bond premium under Code Section 171 on installment obligations as the
Regular Securities, although it is unclear whether the alternatives to the
constant interest method described above under "Market Discount" are available.
Amortizable bond premium generally



                                      117


will be treated as an offset to interest income on a Regular Security, rather
than as a separate deductible item. See "--Election to Treat All Interest Under
the Constant Yield Method" below regarding an alternative manner in which the
Code Section 171 election may be deemed to be made.

         (7) Election to Treat All Interest Under the Constant Yield Method

         A holder of a debt instrument such as a Regular Security may elect to
treat all interest that accrues on the instrument using the constant yield
method, with none of the interest being treated as qualified stated interest.
For purposes of applying the constant yield method to a debt instrument subject
to this election, (1) "interest" includes stated interest, original issue
discount, de minimis original issue discount, market discount and de minimis
market discount, as adjusted by any amortizable bond premium or acquisition
premium and (2) the debt instrument is treated as if the instrument were issued
on the holder's acquisition date in the amount of the holder's adjusted basis
immediately after acquisition. It is unclear whether, for this purpose, the
initial Prepayment Assumption would continue to apply or if a new prepayment
assumption as of the date of the holder's acquisition would apply. A holder
generally may make this election on an instrument by instrument basis or for a
class or group of debt instruments. However, if the holder makes this election
for a debt instrument with amortizable bond premium, the holder is deemed to
have made elections to amortize bond premium currently as it accrues under the
constant yield method for all premium bonds held by the holder in the same
taxable year or thereafter. Alternatively, if the holder makes this election for
a debt instrument with market discount, the holder is deemed to have made
elections to report market discount income currently as it accrues under the
constant yield method for all market discount bonds acquired by the holder in
the same taxable year or thereafter. The election is made on the holder's
federal income tax return for the year in which the debt instrument is acquired
and is irrevocable except with the approval of the Internal Revenue Service.
Investors should consult their own tax advisors regarding the advisability of
making this election.

         (8) Treatment of Losses

         Regular Securityholders will be required to report income for Regular
Securities on the accrual method of accounting, without giving effect to delays
or reductions in distributions attributable to defaults or delinquencies on the
mortgage loans, except to the extent it can be established that the losses are
uncollectible. Accordingly, the holder of a Regular Security, particularly a
Subordinate Security, may have income, or may incur a diminution in cash flow as
a result of a default or delinquency, but may not be able to take a deduction
(subject to the discussion below) for the corresponding loss until a subsequent
taxable year. In this regard, investors are cautioned that while they may
generally cease to accrue interest income if it reasonably appears that the
interest will be uncollectible, the Internal Revenue Service may take the
position that original issue discount must continue to be accrued in spite of
its uncollectibility until the debt instrument is disposed of in a taxable
transaction or becomes worthless in accordance with the rules of Code Section
166.

         To the extent the rules of Code Section 166 regarding bad debts are
applicable, it appears that Regular Securityholders that are corporations or
that otherwise hold the Regular Securities in connection with a trade or
business should in general be allowed to deduct as an ordinary loss



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that loss with respect to principal sustained during the taxable year on account
of any Regular Securities becoming wholly or partially worthless, and that, in
general, Regular Securityholders that are not corporations and do not hold the
Regular Securities in connection with a trade or business should be allowed to
deduct as a short-term capital loss any loss sustained during the taxable year
on account of a portion of any Regular Securities becoming wholly worthless.
Although the matter is not free from doubt, non-corporate Regular
Securityholders should be allowed a bad debt deduction at the time the principal
balance of the Regular Securities is reduced to reflect losses resulting from
any liquidated mortgage loans. The Internal Revenue Service, however, could take
the position that non-corporate holders will be allowed a bad debt deduction to
reflect those losses only after all the mortgage loans remaining in the Trust
Fund have been liquidated or the applicable Class of Regular Securities has been
otherwise retired. The Internal Revenue Service could also assert that losses on
the Regular Securities are deductible based on some other method that may defer
those deductions for all holders, such as reducing future cashflow for purposes
of computing original issue discount. This may have the effect of creating
"negative" original issue discount that may be deductible only against future
positive original issue discount or otherwise upon termination of the Class.

         Regular Securityholders are urged to consult their own tax advisors
regarding the appropriate timing, amount and character of any loss sustained for
their Regular Securities. While losses attributable to interest previously
reported as income should be deductible as ordinary losses by both corporate and
non-corporate holders, the Internal Revenue Service may take the position that
losses attributable to accrued original issue discount may only be deducted as
capital losses in the case of non-corporate holders who do not hold the Regular
Securities in connection with a trade or business. Special loss rules may be
applicable to banks and thrift institutions. These taxpayers are advised to
consult their tax advisors regarding the treatment of losses on Regular
Securities.

         (9) Sale or Exchange of Regular Securities

         If a Regular Securityholder sells or exchanges a Regular Security, the
Regular Securityholder will recognize gain or loss equal to the difference, if
any, between the amount received and its adjusted basis in the Regular Security.
The adjusted basis of a Regular Security generally will equal the original cost
of the Regular Security to the seller, increased by any original issue discount
or market discount previously included in the seller's gross income for the
Regular Security and reduced by amounts included in the stated redemption price
at maturity of the Regular Security that were previously received by the seller,
by any amortized premium, and by any recognized losses.

         Except as described above regarding market discount, and except as
provided in this paragraph, any gain or loss on the sale or exchange of a
Regular Security realized by an investor who holds the Regular Security as a
capital asset will be capital gain or loss. That gain will be treated as
ordinary income

             (1) if a Regular Security is held as part of a "conversion
         transaction" as defined in Code Section 1258(c), up to the amount of
         interest that would have accrued on the Regular Securityholder's net
         investment in the conversion transaction at 120% of the appropriate
         applicable federal rate in effect at the time the taxpayer entered into
         the

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         transaction minus any amount previously treated as ordinary income for
         for any prior disposition of property that was held as part of that
         transaction;

             (2) in the case of a non-corporate taxpayer, to the extent that the
         taxpayer has made an election under Code Section 163(d)(4) to have net
         capital gains taxed as investment income at ordinary income rates; or

             (3) to the extent that the gain does not exceed the excess, if any,
         of (a) the amount that would have been includible in the gross income
         of the holder if its yield on that Regular Security were 110% of the
         applicable federal rate as of the date of purchase, over (b) the amount
         of income actually includible in the gross income of the holder for
         that Regular Security (the "110% yield rule").

         In addition, gain or loss recognized from the sale of a Regular
Security by some banks or thrift institutions will be treated as ordinary income
or loss pursuant to Code Section 582(c). Long-term capital gains of noncorporate
taxpayers generally are subject to a lower maximum tax rate than ordinary income
of those taxpayers.

         Taxation of Owners of Residual Securities

1.       Taxation of REMIC Income

         Generally, the "daily portions" of REMIC taxable income or net loss
will be includible as ordinary income or loss in determining the federal taxable
income of holders of Residual Securities ("Residual Holders"), and will not be
taxed separately to the REMIC Pool. The daily portions of REMIC taxable income
or net loss of a Residual Holder are determined by allocating the REMIC Pool's
taxable income or net loss for each calendar quarter ratably to each day in that
quarter and by allocating that daily portion among the Residual Holders in
proportion to their respective holdings of Residual Securities in the REMIC Pool
on that day. REMIC taxable income is generally determined in the same manner as
the taxable income of an individual using the accrual method of accounting,
except that

             (1) the limitations on deductibility of investment interest expense
         and expenses for the production of income do not apply;

             (2) all bad loans will be deductible as business bad debts; and

             (3) the limitation on the deductibility of interest and expenses
         related to tax-exempt income will apply.

The REMIC Pool's gross income includes interest, original issue discount income
and market discount income, if any, on the mortgage loans, reduced by
amortization of any premium on the mortgage loans, plus income from amortization
of issue premium, if any, on the Regular Securities, plus income on reinvestment
of cash flows and reserve assets, plus any cancellation of indebtedness income
upon allocation of realized losses to the Regular Securities. The REMIC Pool's
deductions include interest and original issue discount expense on the Regular
Securities, servicing fees on the mortgage loans, other administrative expenses
of the REMIC Pool and realized losses on the mortgage loans. The requirement
that Residual Holders report their pro



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rata share of taxable income or net loss of the REMIC Pool will continue until
there are no Securities of any class of the related Series outstanding.

         The taxable income recognized by a Residual Holder in any taxable year
will be affected by, among other factors, the relationship between the timing of
recognition of interest, original issue discount or market discount income or
amortization of premium for the mortgage loans, on the one hand, and the timing
of deductions for interest (including original issue discount) or income from
amortization of issue premium on the Regular Securities, on the other hand. If
an interest in the mortgage loans is acquired by the REMIC Pool at a discount,
and one or more of these mortgage loans is prepaid, the prepayment may be used
in whole or in part to make distributions in reduction of principal on the
Regular Securities, and the discount on the mortgage loans that is includible in
income may exceed the original issue discount deductions allowed with respect to
the Regular Securities. When there is more than one Class of Regular Securities
that distribute principal sequentially, this mismatching of income and
deductions is particularly likely to occur in the early years following issuance
of the Regular Securities when distributions in reduction of principal are being
made in respect of earlier Classes of Regular Securities to the extent that
those Classes are not issued with substantial discount or are issued at a
premium. If taxable income attributable to that mismatching is realized, in
general, losses would be allowed in later years as distributions on the later
maturing Classes of Regular Securities are made.

         Taxable income may also be greater in earlier years than in later years
as a result of the fact that interest expense deductions, expressed as a
percentage of the outstanding principal amount of that Series of Regular
Securities, may increase over time as distributions in reduction of principal
are made on the lower yielding Classes of Regular Securities, whereas, to the
extent the REMIC Pool consists of fixed rate mortgage loans, interest income for
any particular mortgage loan will remain constant over time as a percentage of
the outstanding principal amount of that loan. Consequently, Residual Holders
must have sufficient other sources of cash to pay any federal, state, or local
income taxes due as a result of that mismatching or unrelated deductions against
which to offset that income, subject to the discussion of "excess inclusions"
below under "--Limitations on Offset or Exemption of REMIC Income." The timing
of mismatching of income and deductions described in this paragraph, if present
for a Series of Notes or Certificates, as applicable, may have a significant
adverse effect upon a Residual Holder's after-tax rate of return.

         A portion of the income of a Residual Holder may be treated unfavorably
in three contexts:

             (1) it may not be offset by current or net operating loss
         deductions;

             (2) it will be considered unrelated business taxable income to
         tax-exempt entities; and

             (3) it is ineligible for any statutory or treaty reduction in the
         30% withholding tax otherwise available to a foreign Residual Holder.

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See "--Limitations on Offset or Exemption of REMIC Income" below. In addition, a
Residual Holder's taxable income during some periods may exceed the income
reflected by those Residual Holders for those periods in accordance with
generally accepted accounting principles. Investors should consult their own
accountants concerning the accounting treatment of their investment in Residual
Securities.

2.       Basis and Losses

         The amount of any net loss of the REMIC Pool that may be taken into
account by the Residual Holder is limited to the adjusted basis of the Residual
Security as of the close of the quarter (or time of disposition of the Residual
Security if earlier), determined without taking into account the net loss for
the quarter. The initial adjusted basis of a purchaser of a Residual Security is
the amount paid for that Residual Security. The adjusted basis will be increased
by the amount of taxable income of the REMIC Pool reportable by the Residual
Holder and will be decreased (but not below zero), first, by a cash distribution
from the REMIC Pool and, second, by the amount of loss of the REMIC Pool
reportable by the Residual Holder. Any loss that is disallowed on account of
this limitation may be carried over indefinitely with respect to the Residual
Holder as to whom the loss was disallowed and may be used by the Residual Holder
only to offset any income generated by the same REMIC Pool.

         A Residual Holder will not be permitted to amortize directly the cost
of its Residual Security as an offset to its share of the taxable income of the
related REMIC Pool. However, if, in any year, cash distributions to a Residual
Holder exceed its share of the REMIC's taxable income, the excess will
constitute a return of capital to the extent of the holder's basis in its
Residual Security. A return of capital is not treated as income for federal
income tax purposes, but will reduce the tax basis of the Residual Holder (but
not below zero). If a Residual Security's basis is reduced to zero, any cash
distributions with respect to that Residual Security in any taxable year in
excess of its share of the REMIC's income would be taxable to the holder as gain
on the sale or exchange of its interest in the REMIC.

         A Residual Security may have a negative value if the net present value
of anticipated tax liabilities exceeds the present value of anticipated cash
flows. The REMIC Regulations appear to treat the issue price of the residual
interest as zero rather than the negative amount for purposes of determining the
REMIC Pool's basis in its assets.

         The IRS recently issued final regulations addressing the tax treatment
of payments made by a transferor of a non-economic REMIC residual interest to
induce the transferee to acquire that residual interest ("inducement fees"). The
regulations (i) require the transferee to recognize an inducement fee as income
over the expected remaining life of the REMIC in a manner that reasonably
reflects the after-tax costs and benefits of holding that residual interest and
(ii) specify that inducement fees constitute income from sources within the
United States. The regulations will apply to any inducement fee received in
connection with the acquisition of a Residual Security.

         Further, to the extent that the initial adjusted basis of a Residual
Holder (other than an original holder) in the Residual Security is greater than
the corresponding portion of the REMIC Pool's basis in the mortgage loans, the
Residual Holder will not recover a portion of the basis



                                      122


until termination of the REMIC Pool unless future Treasury regulations provide
for periodic adjustments to the REMIC income otherwise reportable by the holder.
The REMIC Regulations currently in effect do not so provide. See "--Treatment of
Certain Items of REMIC Income and Expense--Market Discount" below regarding the
basis of mortgage loans to the REMIC Pool and "--Sale or Exchange of a Residual
Security" below regarding possible treatment of a loss upon termination of the
REMIC Pool as a capital loss.

3.       Treatment of Certain Items of REMIC Income and Expense

         Although it is anticipated that the trustee will compute REMIC income
and expense in accordance with the Code and applicable regulations, the
authorities regarding the determination of specific items of income and expense
are subject to differing interpretations. The Depositor makes no representation
as to the specific method that will be used for reporting income with respect to
the mortgage loans and expenses for the Regular Securities, and different
methods could result in different timing or reporting of taxable income or net
loss to Residual Holders or differences in capital gain versus ordinary income.

         Original Issue Discount and Premium. Generally, the REMIC Pool's
deductions for original issue discount and income from amortization of premium
will be determined in the same manner as original issue discount income on
Regular Securities as described above under "--Taxation of Owners of Regular
Securities--Original Issue Discount" and "--Variable Rate Regular Securities,"
without regard to the de minimis rule described therein, and "--Amortizable
Premium."

         Market Discount. The REMIC Pool will have market discount income in
respect of mortgage loans if, in general, the basis of the REMIC Pool in those
mortgage loans is exceeded by their unpaid principal balances. The REMIC Pool's
basis in those mortgage loans is generally the fair market value of the mortgage
loans immediately after the transfer of the mortgage loans to the REMIC Pool.
The REMIC Regulations provide that the basis is equal to the total of the issue
prices of all regular and residual interests in the REMIC Pool. The market
discount must be recognized currently as an item of ordinary income as it
accrues, rather than being included in income upon the sale of mortgage loans or
as principal on the mortgage loans is paid. Market discount income generally
should accrue in the manner described above under "--Taxation of Owners of
Regular Securities--Market Discount."

         Premium. Generally, if the basis of the REMIC Pool in the mortgage
loans exceeds the unpaid principal balances of the mortgage loans, the REMIC
Pool will be considered to have acquired those mortgage loans at a premium equal
to the amount of that excess. As stated above, the REMIC Pool's basis in
mortgage loans is generally the fair market value of the mortgage loans and is
based on the total of the issue prices of the regular and residual interests in
the REMIC Pool immediately after the transfer of the mortgage loans to the REMIC
Pool. In a manner analogous to the discussion above under "--Taxation of Owners
of Regular Securities--Amortizable Premium," a person that holds a mortgage loan
as a capital asset under Code Section 1221 may elect under Code Section 171 to
amortize premium on mortgage loans originated after September 27, 1985, under
the constant yield method. Amortizable bond premium will be treated as an offset
to interest income on the mortgage loans, rather than as a separate deduction
item. Because substantially all of the borrowers on the mortgage loans are




                                      123


expected to be individuals, Code Section 171 will not be available for premium
on mortgage loans originated on or before September 27, 1985. Premium for those
mortgage loans may be deductible in accordance with a reasonable method
regularly employed by the holder of those mortgage loans. The allocation of that
premium pro rata among principal payments should be considered a reasonable
method; however, the Internal Revenue Service may argue that the premium should
be allocated in a different manner, such as allocating the premium entirely to
the final payment of principal.

4.       Limitations on Offset or Exemption of REMIC Income

         A portion (or all) of the REMIC taxable income includible in
determining the federal income tax liability of a Residual Holder will be
subject to special treatment. That portion, referred to as the "excess
inclusion," is equal to the excess of REMIC taxable income for the calendar
quarter allocable to a Residual Security over the daily accruals for that
quarterly period of (1) 120% of the long-term applicable federal rate that would
have applied to the Residual Security (if it were a debt instrument) on the
Startup Day under Code Section 1274(d), multiplied by (2) the adjusted issue
price of the Residual Security at the beginning of the quarterly period. For
this purpose, the adjusted issue price of a Residual Security at the beginning
of a quarter is the issue price of the Residual Security, plus the amount of
those daily accruals of REMIC income described in this paragraph for all prior
quarters, decreased by any distributions made with respect to the Residual
Security before the beginning of that quarterly period.

         The portion of a Residual Holder's REMIC taxable income consisting of
the excess inclusions generally may not be offset by other deductions, including
net operating loss carryforwards, on the Residual Holder's return. However, net
operating loss carryovers are determined without regard to excess inclusion
income. Further, if the Residual Holder is an organization subject to the tax on
unrelated business income imposed by Code Section 511, the Residual Holder's
excess inclusions will be treated as unrelated business taxable income of the
Residual Holder for purposes of Code Section 511. In addition, REMIC taxable
income is subject to 30% withholding tax for persons who are not U.S. Persons
(as defined below under "--Tax-Related Restrictions on Transfer of Residual
Securities--Foreign Investors"), and the portion thereof attributable to excess
inclusions is not eligible for any reduction in the rate of withholding tax (by
treaty or otherwise). See "--Taxation of Certain Foreign Investors--Residual
Securities" below. Finally, if a real estate investment trust or a regulated
investment company owns a Residual Security, a portion (allocated under Treasury
regulations yet to be issued) of dividends paid by the real estate investment
trust or regulated investment company could not be offset by net operating
losses of its shareholders, would constitute unrelated business taxable income
for tax-exempt shareholders, and would be ineligible for reduction of
withholding to persons who are not U.S. Persons.

         Provisions governing the relationship between excess inclusions and the
alternative minimum tax provide that (i) alternative minimum taxable income for
a Residual Holder is determined without regard to the special rule, discussed
above, that taxable income cannot be less than excess inclusions, (ii) a
Residual Holder's alternative minimum taxable income for a taxable year cannot
be less than the excess inclusions for the year, and (iii) the amount of any
alternative minimum tax net operating loss deduction must be computed without
regard to any excess inclusions.

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         The Internal Revenue Service has authority to promulgate regulations
providing that if the aggregate value of the Residual Securities is not
considered to be "significant," then the entire share of REMIC taxable income of
a Residual Holder may be treated as excess inclusions subject to the foregoing
limitations. This authority has not been exercised to date.

5.       Tax-Related Restrictions on Transfer of Residual Securities

         Disqualified Organizations. If any legal or beneficial interest in a
Residual Security is transferred to a Disqualified Organization (as defined
below), a tax would be imposed in an amount equal to the product of (1) the
present value of the total anticipated excess inclusions for that Residual
Security for periods after the transfer and (2) the highest marginal federal
income tax rate applicable to corporations. The REMIC Regulations provide that
the anticipated excess inclusions are based on actual prepayment experience to
the date of the transfer and projected payments based on the Prepayment
Assumption. The present value rate equals the applicable federal rate under Code
Section 1274(d) as of the date of the transfer for a term ending with the last
calendar quarter in which excess inclusions are expected to accrue. That rate is
applied to the anticipated excess inclusions from the end of the remaining
calendar quarters in which they arise to the date of the transfer. That tax
generally would be imposed on the transferor of the Residual Security, except
that where the transfer is through an agent (including a broker, nominee, or
other middleman) for a Disqualified Organization, the tax would instead be
imposed on the agent. However, a transferor of a Residual Security would in no
event be liable for the tax for a transfer if the transferee furnished to the
transferor an affidavit stating that the transferee is not a Disqualified
Organization and, as of the time of the transfer, the transferor does not have
actual knowledge that the affidavit is false. Under the REMIC Regulations, an
affidavit will be sufficient if the transferee furnishes (A) a social security
number, and states under penalties of perjury that the social security number is
that of the transferee, or (B) a statement under penalties of perjury that it is
not a disqualified organization.

         "Disqualified Organization" means the United States, any state or
political subdivision of the United States, any foreign government, any
international organization, any agency or instrumentality of any of the
foregoing (provided, that the term does not include an instrumentality if all of
its activities are subject to tax and a majority of its board of directors in
not selected by any governmental entity), any cooperative organization
furnishing electric energy or providing telephone service to persons in rural
areas as described in Code Section 1381(a)(2)(C), and any organization (other
than a farmers' cooperative described in Code Section 531) that is exempt from
taxation under the Code unless the organization is subject to the tax on
unrelated business income imposed by Code Section 511.

         In addition, if a "Pass-Through Entity" (as defined below) has excess
inclusion income for a Residual Security during a taxable year and a
Disqualified Organization is the record holder of an equity interest in that
entity, then a tax is imposed on the entity equal to the product of (1) the
amount of excess inclusions that are allocable to the interest in the
Pass-Through Entity during the period that interest is held by the Disqualified
Organization, and (2) the highest marginal federal corporate income tax rate.
That tax would be deductible from the ordinary gross income of the Pass-Through
Entity for the taxable year. The Pass-Through Entity would not be liable for the
tax if (1) it has received an affidavit from the record holder stating, under
penalties of perjury, that it is not a Disqualified Organization, or providing
the holder's taxpayer



                                      125


identification number and stating, under penalties of perjury, that the social
security number is that of the record owner, and (2) during the period that
person is the record holder of the Residual Security, the Pass-Through Entity
does not have actual knowledge that the affidavit is false.

         "Pass-Through Entity" means any regulated investment company, real
estate investment trust, common Trust Fund, partnership, trust or estate and
corporations operating on a cooperative basis. Except as may be provided in
Treasury regulations, any person holding an interest in a Pass-Through Entity as
a nominee for another will, with respect to that interest, be treated as a
Pass-Through Entity.

         If an "electing large partnership" holds a Residual Security, all
interests in the electing large partnership are treated as held by Disqualified
Organizations for purposes of the tax imposed upon a Pass-Through Entity by
Section 860E(c) of the Code. The exception to this tax, otherwise available to a
Pass-Through Entity that is furnished particular affidavits by record holders of
interests in the entity and that does not know those affidavits are false, is
not available to an electing large partnership.

         The pooling and servicing agreement for a Series will provide that no
legal or beneficial interest in a Residual Security may be transferred or
registered unless (1) the proposed transferee furnished to the transferor and
the trustee an affidavit providing its taxpayer identification number and
stating that the transferee is the beneficial owner of the Residual Security and
is not a Disqualified Organization and is not purchasing the Residual Security
on behalf of a Disqualified Organization (i.e., as a broker, nominee or
middleman) and (2) the transferor provides a statement in writing to the trustee
that it has no actual knowledge that the affidavit is false. Moreover, the
pooling and servicing agreement will provide that any attempted or purported
transfer in violation of these transfer restrictions will be null and void and
will vest no rights in any purported transferee. Each Residual Security for a
Series will bear a legend referring to those restrictions on transfer, and each
Residual Holder will be deemed to have agreed, as a condition of ownership of
the Residual Security, to any amendments to the related pooling and servicing
agreement required under the Code or applicable Treasury regulations to
effectuate the foregoing restrictions. Information necessary to compute an
applicable excise tax must be furnished to the Internal Revenue Service and to
the requesting party within 60 days of the request, and the requesting party may
be charged a fee for the computation and provision of that information.

         Noneconomic Residual Interests. The REMIC Regulations would disregard
some transfers of Residual Securities, in which case the transferor would
continue to be treated as the owner of the Residual Securities and thus would
continue to be subject to tax on its allocable portion of the net income of the
REMIC Pool. Under the REMIC Regulations, a transfer of a "noneconomic residual
interest" (as defined below) to a Residual Holder (other than a Residual Holder
who is not a U.S. Person as defined below under "--Foreign Investors") is
disregarded to all federal income tax purposes if a significant purpose of the
transfer is to impede the assessment or collection of tax. A residual interest
in a REMIC (including a residual interest with a positive value at issuance) is
a "noneconomic residual interest" unless, at the time of the transfer, (1) the
present value of the expected future distributions on the residual interest at
least equals the product of the present value of the anticipated excess
inclusions and the highest



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corporate income tax rate in effect for the year in which the transfer occurs,
and (2) the transferor reasonably expects that the transferee will receive
distributions from the REMIC at or after the time at which taxes accrue on the
anticipated excess inclusions in an amount sufficient to satisfy the accrued
taxes on each excess inclusion. The anticipated excess inclusions and the
present value rate are determined in the same manner as set forth above under
"--Disqualified Organizations." The REMIC Regulations explain that a significant
purpose to impede the assessment or collection of tax exists if the transferor,
at the time of the transfer, either knew or should have known that the
transferee would be unwilling or unable to pay taxes due on its share of the
taxable income of the REMIC. A safe harbor is provided if (1) the transferor
conducted, at the time of the transfer, a reasonable investigation of the
financial condition of the transferee and found that the transferee historically
had paid its debts as they came due and found no significant evidence to
indicate that the transferee would not continue to pay its debts as they came
due in the future, (2) the transferee represents to the transferor that it
understands that, as the holder of the non-economic residual interest, the
transferee may incur liabilities in excess of any cash flows generated by the
interest and that the transferee intends to pay taxes associated with holding
the residual interest as they become due, and (3) either the formula test or the
asset test (each as described below) is satisfied.

         The formula test is satisfied if the present value of the anticipated
tax liabilities associated with holding the Residual Security does not exceed
the sum of the present values of (1) any consideration given to the transferee
to the acquire the Residual Security, (2) the expected future distributions on
the Residual Security, and (3) the anticipated tax savings associated with
holding the Residual Security as the REMIC generates losses. For purposes of
this calculation, the present values generally are calculated using a discount
rate equal to the applicable federal rate, and the transferee is assumed to pay
tax at the highest corporate rate of tax.

         The asset test is satisfied if

         1.  at the time of the transfer of the Residual Security, and at the
             close of each of the transferee's two fiscal years preceding the
             year of transfer, the transferee's gross assets for financial
             reporting purposes exceed $100 million and its net assets for
             financial reporting purposes exceed $10 million,

         2.  the transferee is a taxable domestic C corporation, other than a
             RIC, REIT, REMIC or Subchapter T cooperative (an "Eligible
             Corporation"), that makes a written agreement that any subsequent
             transfer of the Residual Security will be to another Eligible
             Corporation in a transaction that satisfies the safe harbor
             described above, and the transferor does not know, or have reason
             to know, that the transferee will not honor such agreement, and

         3.  the facts and circumstances known to the transferor on or before
             the date of transfer do not reasonably indicate that the taxes
             associated with the Residual Security will not be paid.

For purposes of requirement (1), the gross and net assets of a transferee do not
include any obligations of a person related to the transferee or any other asset
if a principal purpose for holding or acquiring the asset is to permit the
transferee to satisfy the asset test. Further,


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requirement (2) will not be treated as satisfied in the case of any transfer or
assignment of the Residual Security to a foreign branch of an Eligible
Corporation or any other arrangement by which the Residual Security is at any
time subject to net tax by a foreign country or possession of the United States.

         Foreign Investors. The REMIC Regulations provide that the transfer of a
Residual Security that has "tax avoidance potential" to a "foreign person" will
be disregarded for all federal tax purposes. This rule appears intended to apply
to a transferee who is not a "U.S. Person" (as defined below), unless the
transferee's income is effectively connected with the conduct of a trade or
business within the United States. A Residual Security is deemed to have tax
avoidance potential unless, at the time of the transfer, the transferor
reasonably expects that (1) the future distributions on the Residual Security
will equal at least 30% of the anticipated excess inclusions after the transfer,
and (2) such amounts will be distributed at or after the time at which the
excess inclusions accrue and before the end of the next succeeding taxable year.
A safe harbor in the REMIC Regulations provides that the reasonable expectation
requirement will be satisfied if the above test would be met at all assumed
prepayment rates for the mortgage loans from 50 percent to 200 percent of the
Prepayment Assumption. If the non-U.S. Person transfers the Residual Security
back to a U.S. Person, the transfer will be disregarded and the foreign
transferor will continue to be treated as the owner unless arrangements are made
so that the transfer does not have the effect of allowing the transferor to
avoid tax on accrued excess inclusions.

         The prospectus supplement relating to the Certificates of a Series may
provide that a Residual Security may not be purchased by or transferred to any
person that is not a U.S. Person or may describe the circumstances and
restrictions pursuant to which the transfer may be made. The term "U.S. Person"
means a citizen or resident of the United States, a corporation or partnership
(or other entity properly treated as a partnership or as a corporation for
federal income tax purposes) created or organized in or under the laws of the
United States or of any state (including, for this purpose, the District of
Columbia), an estate that is subject to U.S. federal income tax regardless of
the source of its income, or a trust if a court within the United States is able
to exercise primary supervision over the administration of the trust and one or
more U.S. Persons have the authority to control all substantial decisions of the
trust (or, to the extent provided in applicable Treasury regulations, trusts in
existence on August 20, 1996, which are eligible to elect and do elect to be
treated as U.S. Persons).

6.       Sale or Exchange of a Residual Security

         Upon the sale or exchange of a Residual Security, the Residual Holder
will recognize gain or loss equal to the excess, if any, of the amount realized
over the adjusted basis (as described above under "--Taxation of Owners of
Residual Securities--Basis and Losses") of the Residual Holder in the Residual
Security at the time of the sale or exchange.

         Further, as described above under "--Taxation of Owners of Residual
Securities--Basis and Losses", if a Residual Security's basis is reduced to
zero, any cash distributions with respect to that Residual Security in any
taxable year in excess of its share of the REMIC's income for that year would be
taxable to the holder as gain on the sale or exchange of its interest in the
REMIC. If a Residual Holder has an adjusted basis in its Residual Security when
its interest in



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the REMIC Pool terminates, then it will recognize a capital loss (assuming the
Residual Security was held as a capital asset) at that time in an amount equal
to the remaining adjusted basis.

         Any gain on the sale of a Residual Security will be treated as ordinary
income (1) if a Residual Security is held as part of a "conversion transaction"
as defined in Code Section 1258(c), up to the amount of interest that would have
accrued on the Residual Holder's net investment in the conversion transaction at
120% of the appropriate applicable federal rate in effect at the time the
taxpayer entered into the transaction minus any amount previously treated as
ordinary income for any prior disposition of property that was held as a part of
that transaction or (2) in the case of a non-corporate taxpayer, to the extent
that the taxpayer has made an election under Code Section 163(d)(4) to have net
capital gains taxed as investment income at ordinary income rates. In addition,
gain or loss recognized from the sale of a Residual Security by some banks or
thrift institutions will be treated as ordinary income or loss pursuant to Code
Section 582(c).

         Except as provided in Treasury regulations yet to be issued, the wash
sale rules of Code Section 1091 will apply to dispositions of Residual
Securities where the seller of the Residual Security, during the period
beginning six months before the sale or disposition of the Residual Security and
ending six months after the sale or disposition, acquires (or enters into any
other transaction that results in the application of Code Section 1091) any
residual interest in any REMIC or any interest in a "taxable mortgage pool"
(such as a non-REMIC owner trust) that is economically comparable to a Residual
Security.

7.       Mark to Market Regulations

         Treasury regulations provide that a Residual Security acquired on or
after January 4, 1995 is not treated as a security and thus may not be marked to
market pursuant to Section 475 of the Code.

         Taxes That May Be Imposed on the REMIC Pool

1.       Prohibited Transactions

         Income from transactions by the REMIC Pool, called prohibited
transactions, will not be part of the calculation of income or loss includible
in the federal income tax returns of Residual Holders, but rather will be taxed
directly to the REMIC Pool at a 100% rate. Prohibited transactions generally
include:

         (1) the disposition of a qualified mortgages other than for

             (a) substitution for a defective (including a defaulted) obligation
                 within two years of the Startup Day (or repurchase in lieu of
                 substitution of a defective (including a defaulted) obligation
                 at any time) or for any qualified mortgage within three months
                 of the Startup Day;

             (b) foreclosure, default, or imminent default of a qualified
                 mortgage;

             (c) bankruptcy or insolvency of the REMIC Pool; or

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             (d) a qualified (complete) liquidation;

         (2) the receipt of income from assets that are not the type of
             mortgages or investments that the REMIC Pool is permitted to hold;

         (3) the receipt of compensation for services; or

         (4) the receipt of gain from disposition of cash flow investments other
             than pursuant to a qualified liquidation.

         Notwithstanding (1) and (4) above, it is not a prohibited transaction
to sell a qualified mortgage or cash flow investment held by a REMIC Pool to
prevent a default on Regular Securities as a result of a default on qualified
mortgages or to facilitate a clean-up call (generally, an optional termination
to save administrative costs when no more than a small percentage of the Notes
or Certificates, as applicable, is outstanding). The REMIC Regulations indicate
that the modification of a mortgage loan generally will not be treated as a
disposition if it is occasioned by a default or reasonably foreseeable default,
an assumption of the mortgage loan, the waiver of a due-on-sale or
due-on-encumbrance clause, or the conversion of an interest rate by a borrower
pursuant to the terms of a convertible adjustable rate mortgage loan.

2.       Contributions to the REMIC Pool After the Startup Day

         In general, the REMIC Pool will be subject to a tax at a 100% rate on
the value of any property contributed to the REMIC Pool after the Startup Day.
Exceptions are provided for cash contributions to the REMIC Pool

         (1) during the three months following the Startup Day,

         (2) made to a qualified reserve fund by a Residual Holder,

         (3) in the nature of a guarantee,

         (4) made to facilitate a qualified liquidation or clean-up call, and

         (5) as otherwise permitted in Treasury regulations yet to be issued.

It is not anticipated that there will be any contributions to the REMIC Pool
after the Startup Day.

3.       Net Income from Foreclosure Property

         The REMIC Pool will be subject of federal income tax at the highest
corporate rate on "net income from foreclosure property," determined by
reference to the rules applicable to real estate investment trusts. Generally,
property acquired by deed in lieu of foreclosure would be treated as
"foreclosure property" until the close of the third calendar year after the year
in which the REMIC Pool acquired that property, with possible extensions. Net
income from foreclosure property generally means gain from the sale of a
foreclosure property that is inventory property and gross income from
foreclosure property other than qualifying rents and other qualifying



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income for a real estate investment trust. It is not anticipated that the REMIC
Pool will have any taxable net income from foreclosure property.

4.       Liquidation of the REMIC Pool

         If a REMIC Pool adopts a plan of complete liquidation, within the
meaning of Code Section 860F(a)(4)(A)(i), which may be accomplished by
designating in the REMIC Pool's final tax return a date on which that adoption
is deemed to occur, and sells all of its assets (other than cash) within a
90-day period beginning on that date, the REMIC Pool will not be subject to the
prohibited transaction rules on the sale of its assets, provided that the REMIC
Pool credits or distributes in liquidation all of the sale proceeds plus its
cash (other than amounts retained to meet claims) to holders of Regular
Securities and Residual Holders within the 90-day period.

5.       Administrative Matters

         The REMIC Pool will be required to maintain its books on a calendar
year basis and to file federal income tax returns for federal income tax
purposes in a manner similar to a partnership. The form for the income tax
return is Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return. The trustee will be required to sign the REMIC Pool's returns. Treasury
regulations provide that, except where there is a single Residual Holder for an
entire taxable year, the REMIC Pool will be subject to the procedural and
administrative rules of the Code applicable to partnerships, including the
determination by the Internal Revenue Service of any adjustments to, among other
things, items of REMIC income, gain, loss, deduction, or credit in a unified
administrative proceeding. The master servicer will be obligated to act as "tax
matters person," as defined in applicable Treasury regulations, for the REMIC
Pool as agent of the Residual Holders holding the largest percentage interest in
the Residual Securities. If the Code or applicable Treasury regulations do not
permit the master servicer to act as tax matters person in its capacity as agent
of the Residual Holder, the Residual Holder or any other person specified
pursuant to Treasury regulations will be required to act as tax matters person.
The tax matters person generally has responsibility for overseeing and providing
notice to the other Residual Holders of administrative and judicial proceedings
regarding the REMIC Pool's tax affairs, although other holders of the Residual
Securities of the same Series would be able to participate in those proceedings
in appropriate circumstances.

6.       Limitations on Deduction of Certain Expenses

         An investor who is an individual, estate, or trust will be subject to
limitation with respect to some itemized deductions described in Code Section
67, to the extent that those itemized deductions, in total, do not exceed 2% of
the investor's adjusted gross income. In addition, Code Section 68 provides that
itemized deductions otherwise allowable for a taxable year of an individual
taxpayer will be reduced by the lesser or (1) 3% of the excess, if any, of
adjusted gross income over $100,000 ($50,000 in the case of a married individual
filing a separate return) (subject to adjustment for inflation), or (2) 80% of
the amount of itemized deductions otherwise allowable for that year (although
the reduction is scheduled to be gradually phased-out starting in 2006). In the
case of a REMIC Pool, those deductions may include deductions under Code Section
212 for the Servicing Fee and all administrative and other expenses relating to
the REMIC Pool, or any similar expenses allocated to the REMIC Pool for a
regular interest it holds



                                      131


in another REMIC. Those investors who hold REMIC Securities either directly or
indirectly through pass-through entities may have their pro rata share of those
expenses allocated to them as additional gross income, but may be subject to
that limitation on deductions. In addition, those expenses are not deductible at
all for purposes of computing the alternative minimum tax, and may cause those
investors to be subject to significant additional tax liability. Temporary
Treasury regulations provide that the additional gross income and corresponding
amount of expenses generally are to be allocated entirely to the holders of
Residual Securities in the case of a REMIC Pool that would not qualify as a
fixed investment trust in the absence of a REMIC election. For a REMIC Pool that
would be classified as an investment trust in the absence of a REMIC election or
that is substantially similar to an investment trust, any holder of a Regular
Security that is an individual, trust, estate, or pass-through entity also will
be allocated its pro rata share of those expenses and a corresponding amount of
income and will be subject to the limitations or deductions imposed by Code
Sections 67 and 68, as described above. The prospectus supplement will indicate
if all those expenses will not be allocable to the Residual Securities.

         Taxation of Certain Foreign Investors

1.       Regular Securities

         Interest, including original issue discount, distributable to Regular
Securityholders who are non-resident aliens, foreign corporations, or other
Non-U.S. Persons (as defined below), generally will be considered "portfolio
interest" and, therefore, generally will not be subject to 30% United States
withholding tax, provided that (1) the interest is not effectively connected
with the conduct of a trade or business in the United States of the
securityholder, (2) the Non-U.S. Person is not a "10-percent shareholder" within
the meaning of Code Section 871(h)(3)(B) or a controlled foreign corporation
described in Code Section 881(c)(3)(C) and (3) that Non-U.S. Person complies to
the extent necessary with certain certification requirements, which generally
relate to the identity of the beneficial owner and the status of the beneficial
owner as a person that is a Non-U.S. person. Each Regular Securityholder should
consult its tax advisors regarding the tax documentation and certifications that
must be provided to secure the exemption from United States withholding taxes
including certain more extensive documentation and certification requirements
which may apply to a beneficial owner claiming exemption through an
intermediary.

         Any capital gain realized on the sale, redemption, retirement or other
taxable disposition of a Regular Security by a Non-U.S. Person generally will be
exempt from United States federal income and withholding tax, provided that (i)
such gain is not effectively connected with the conduct of a trade or business
in the United States by the Non-U.S. Person and (ii) in the case of an
individual Non-U.S. Person, the Non-U.S. Person is not present in the United
States for 183 days or more in the taxable year.

         If the interest on the Regular Security is effectively connected with
the conduct of a trade or business within the United States by that Non-U.S.
Person, the Non-U.S. Person, although exempt from the withholding tax previously
discussed if the holder provides an appropriate statement establishing that such
income is so effectively connected, will be subject to United States federal
income tax at regular rates. Investors who are Non-U.S. Persons should consult



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their own tax advisors regarding the specific tax consequences to them of owning
a Regular Security. The term "Non-U.S. Person" means any person who is not a
U.S. Person.

2.       Residual Securities

         The Conference Committee Report to the 1986 Act indicates that amounts
paid to Residual Holders who are Non-U.S. Persons generally should be treated as
interest for purposes of the 30% (or lower treaty rate) United States
withholding tax. Treasury regulations provide that amount distributed to
Residual Holders may qualify as "portfolio interest," subject to the conditions
described in "Regular Securities" above, but only to the extent that (1) the
mortgage loans were issued after July 18, 1984, and (2) the Trust Fund or
segregated pool of assets in the Trust Fund (as to which a separate REMIC
election will be made), to which the Residual Security relates, consists of
obligations issued in "registered form" within the meaning of Code Section 163
(f) (1). Generally, mortgage loans will not be, but regular interests in another
REMIC Pool will be, considered obligations issued in registered form.
Furthermore, Residual Holders will not be entitled to any exemption from the 30%
withholding tax (or lower treaty rate) to the extent of that portion of REMIC
taxable income that constitutes an "excess inclusion." See "--Taxation of Owners
of Residual Securities--Limitations on Offset or Exemption of REMIC Income"
above. If the amounts paid to Residual Holders who are Non-U.S. Persons are
effectively connected with the conduct of a trade or business within the United
States by those Non-U.S. Persons, although exempt from the withholding tax
previously discussed if the holder provides an appropriate statement
establishing that such income is so effectively connected, the amounts paid to
those Non-U.S. Persons will be subject to United States federal income tax at
regular rates. See "--Tax-Related Restrictions on Transfer of Residual
Securities--Foreign Investors" above concerning the disregard of transfers
having "tax avoidance potential." Investors who are Non-U.S. Persons should
consult their own tax advisors regarding the specific tax consequences to them
of owning Residual Securities.

3.       Backup Withholding

         Distributions made on the REMIC Securities, and proceeds from the sale
of the REMIC Securities to or through certain brokers, may be subject to a
"backup" withholding tax under Code Section 3406 at a rate of up to 31% on
"reportable payments" (including interest distributions, original issue
discount, and, under some circumstances, principal distributions) if the Holder
fails to comply with certain identification procedures, unless the Holder is
otherwise an exempt recipient under applicable provisions of the Code, and, if
necessary, demonstrates such status. Any amounts to be withheld from
distribution on the REMIC Securities would be refunded by the Internal Revenue
Service or allowed as a credit against the Regular Holder's federal income tax
liability.

GRANTOR TRUST FUNDS

         Characterization. For each Series of Grantor Trust Securities, Federal
Tax Counsel will deliver its opinion that the Grantor Trust Fund will not be
classified as an association taxable as a corporation (or a taxable mortgage
pool) and that the Grantor Trust Fund will be classified as a grantor trust
under subpart E, Part I of subchapter J of the Code. In this case, beneficial
owners of Grantor Trust Securities (referred to in this prospectus as "Grantor
Trust Securityholders")



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will be treated for federal income tax purposes as owners of a portion of the
Grantor Trust Fund's assets as described below.

         Taxation of Grantor Trust Securityholders. Subject to the discussion
below under "Stripped Certificates" and "Subordinated Certificates," each
Grantor Trust Securityholder will be treated as the owner of a pro rata
undivided interest in the assets of the Grantor Trust Fund. Accordingly, and
subject to the discussion below of the recharacterization of the servicing fee,
each Grantor Trust Securityholder must include in income its pro rata share of
the interest and other income from the assets of the Grantor Trust Fund,
including any interest, original issue discount, market discount, prepayment
fees, assumption fees, and late payment charges with respect to the assets, and,
subject to limitations discussed below, may deduct its pro rata share of the
fees and other deductible expenses paid by the Grantor Trust Fund, at the same
time and to the same extent as these items would be included or deducted by the
Grantor Trust Securityholder if the Grantor Trust Securityholder held directly a
pro rata interest in the assets of the Grantor Trust Fund and received and paid
directly the amounts received and paid by the Grantor Trust Fund. Any amounts
received by a Grantor Trust Securityholder in lieu of amounts due with respect
to any asset of the Grantor Trust Fund because of a default or delinquency in
payment will be treated for federal income tax purposes as having the same
character as the payments they replace.

         Each Grantor Trust Securityholder will be entitled to deduct its pro
rata share of servicing fees, prepayment fees, assumption fees, any loss
recognized upon an assumption and late payment charges retained by the servicer,
provided that these amounts are reasonable compensation for services rendered to
the Grantor Trust Fund. Grantor Trust Securityholders that are individuals,
estates or trusts will be entitled to deduct their share of expenses only to the
extent these expenses plus all other miscellaneous itemized deductions exceed
two percent of the Grantor Trust Securityholder's adjusted gross income, and
will be allowed no deduction for these expenses in determining their liabilities
for alternative minimum tax. In addition, Section 68 of the Code provides that
the amount of itemized deductions otherwise allowable for the taxable year for
an individual whose adjusted gross income exceeds a prescribed threshold amount
will be reduced by the lesser of (1) 3% of the excess of adjusted gross income
over the specified threshold amount or (2) 80% of the amount of itemized
deductions otherwise allowable for the applicable taxable year (although the
reduction is scheduled to be gradually phased-out starting in 2006).

         The servicing compensation to be received by the servicer may be
questioned by the Internal Revenue Service as exceeding a reasonable fee for the
services being performed in exchange for the servicing compensation, and a
portion of the servicing compensation could be recharacterized as an ownership
interest retained by the servicer or other party in a portion of the interest
payments to be made with respect to the Grantor Trust Fund's assets. In this
event, a certificate might be treated as a Stripped Certificate subject to the
stripped bond rules of Section 1286 of the Code, and either the original issue
discount or market discount rules. See the discussion below under "--Stripped
Certificates". Except as discussed below under "Stripped Certificates" or
"--Subordinated Certificates," this discussion assumes that the servicing fees
paid to the servicer do not exceed reasonable servicing compensation.

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         A purchaser of a Grantor Trust Security will be treated as purchasing
an interest in each asset in the Grantor Trust Fund at a price determined by
allocating the purchase price paid for the certificate among all asset of the
Grantor Trust Fund in proportion to their fair market values at the time of the
purchase of the certificate. To the extent that the portion of the purchase
price of a Grantor Trust Security allocated to an asset of the Grantor Trust
Fund is less than or greater than the stated redemption price at maturity of the
asset, the interest in the asset will have been acquired at a discount or
premium. See "--Market Discount" and "--Premium," below.

         The treatment of any discount on an asset of the Grantor Trust Fund
will depend on whether the discount represents original issue discount or market
discount. Except as indicated otherwise in the applicable prospectus supplement,
it is not expected that any asset of the Grantor Trust Fund (other than an
instrument evidencing ownership of specific interest and/or principal of a
particular bond) will have original issue discount (except as discussed below
under "Stripped Certificates" or "Subordinated Certificates"). For the rules
governing original issue discount, see "REMICs--Taxation of Owners of Regular
Securities--Original Issue Discount" above.

         The information provided to Grantor Trust Securityholders will not
include information necessary to compute the amount of discount or premium, if
any, at which an interest in each asset of the Grantor Trust Fund is acquired.

         Market Discount. A Grantor Trust Securityholder that acquires an
undivided interest in the Grantor Trust Fund's assets may be subject to the
market discount rules of Sections 1276 through 1278 to the extent an undivided
interest in an asset of the Grantor Trust Fund is considered to have been
purchased at a "market discount". For a discussion of the market discount rules
under the Code, see "REMICs--Taxation of Owners of Regular Securities--Market
Discount" above. As discussed above, to the extent an asset of the Grantor Trust
Fund is an instrument evidencing ownership of specific interest and/or principal
of a particular bond, it will be subject to the rules relating to original issue
discount (in lieu of the rules relating to market discount). See
"REMICs--Taxation of Owners of Regular Securities--Original Issue Discount"
above.

         Premium. To the extent a Grantor Trust Securityholder is considered to
have purchased an undivided interest in an asset of the Grantor Trust Fund for
an amount that is greater than the stated redemption price at maturity of the
interest, the Grantor Trust Securityholder will be considered to have purchased
the interest in the asset with "amortizable bond premium" equal in amount to the
excess. For a discussion of the rules applicable to amortizable bond premium,
see "REMICs--Taxation of Owners of Regular Securities--Amortizable Premium"
above.

         Status of the Grantor Trust Securities. Except as qualified below, a
Grantor Trust Security owned by a:

         o   "domestic building and loan association" within the meaning of Code
             Section 7701(a)(19) will be considered to represent "loans . . .
             secured by an interest in real property" within the meaning of Code
             Section 7701(a)(19)(C)(v), provided that the real property securing
             the mortgage loans represented by that Grantor Trust Security is of
             the type described in that section of the Code.

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         o   real estate investment trust will be considered to represent "real
             estate assets" within the meaning of Code Section 856(c)(4)(A) to
             the extent that the assets of the related Grantor Trust Fund
             consist of qualified assets, and interest income on those assets
             will be considered "interest on obligations secured by mortgages on
             real property" to that extent within the meaning of Code Section
             856(c)(3)(B).

         o   REMIC will be considered to represent an "obligation (including any
             participation or certificate of beneficial ownership therein) which
             is principally secured by an interest in real property" within the
             meaning of Code Section 860G(a)(3)(A) to the extent that the assets
             of the related Grantor Trust Fund consist of "qualified mortgages"
             within the meaning of Code Section 860G(a)(3).

         An issue arises as to whether Buy-Down Loans may be characterized in
their entirety under the Code provisions cited in bullet points 1 and 2 of the
immediately preceding paragraph or whether the amount qualifying for that
treatment must be reduced by amounts contributed from the Buy-Down Fund.
Further, although it is not entirely clear, Grantor Trust Certificates that are
Stripped Certificates (as described below under "Stripped Certificates") should
be treated as qualifying under the Code provisions cited in the bullet points
above to the same extent as Grantor Trust Certificates that are not Stripped
Certificate. Grantor Trust Securityholders are urged to consult their own tax
advisors concerning the characterization of the securityholder's investment for
federal income tax purposes.

         Stripped Certificates. Some classes of certificates may be subject to
the stripped bond rules of Section 1286 of the Code and for purposes of this
discussion will be referred to as "Stripped Certificates." In general, a
Stripped Certificate will be subject to the stripped bond rules where there has
been a separation of ownership of the right to receive some or all of the
principal payments on a mortgage loan held by the Grantor Trust Fund from
ownership of the right to receive some or all of the related interest payments.
Generally, where a separation has occurred, under the stripped bond rules of
Section 1286 of the Code, the holder of a right to receive a principal or
interest payment on the bond is required to accrue into income, on a constant
yield basis under rules governing original issue discount (see "REMICs--Taxation
of Owners of Regular Securities--Original Issue Discount"), the difference
between the holder's initial purchase price for the right to receive principal
or interest, and the principal or interest payment to be received with respect
to that right. However, a holder of a Stripped Certificate will account for any
discount on the Stripped Certificate (other than an interest treated as a
"stripped coupon") as market discount rather than original issue discount if
either (i) the amount of original issue discount with respect to the Stripped
Certificate was treated as zero under the original issue discount de minimis
rule when the Stripped Certificate was stripped or (ii) no more than 100 basis
points (including any amount of servicing in excess of reasonable servicing) is
stripped off from the mortgage assets.

         Certificates will constitute Stripped Certificates and will be subject
to these rules under various circumstances, including the following:

         o   if any servicing compensation is deemed to exceed a reasonable
             amount;



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         o   if the company or any other party retains a retained yield with
             respect to the assets held by the Grantor Trust Fund;

         o   if two or more classes of certificates are issued representing the
             right to non-pro rata percentages of the interest or principal
             payments on the Grantor Trust Fund's assets; or

         o   if certificates are issued which represent the right to
             interest-only payments or principal-only payments.

         The tax treatment of the Stripped Certificates with respect to the
application of the original issue discount provisions of the Code is currently
unclear. However, the trustee intends to treat each Stripped Certificate as a
single debt instrument issued on the day it is purchased for purposes of
calculating any original issue discount. Original issue discount with respect to
a Stripped Certificate must be included in ordinary gross income for federal
income tax purposes as it accrues in accordance with the constant yield method
that takes into account the compounding of interest and this accrual of income
may be in advance of the receipt of any cash attributable to that income. See
"REMICs--Taxation of Owners of Regular Securities--Original Issue Discount"
above. For purposes of applying the original issue discount provisions of the
Code, the stated redemption price at maturity may include the aggregate amount
of all payments to be made with respect to the Stripped Certificate whether or
not denominated as interest. The amount of original issue discount with respect
to a Stripped Certificate may be treated as zero under the original issue
discount de minimis rules described above.

         Subordinated Certificates. In the event the Grantor Trust Fund issues
two classes of Grantor Trust Securities that are identical except that one class
is a subordinate class, with a relatively high certificate pass-through rate,
and the other is a senior class, with a relatively low certificate pass-through
rate (referred to in this prospectus as the "Subordinate Certificates" and
"Senior Certificates", respectively), the Grantor Trust Securityholders in the
aggregate will be deemed to have acquired the following assets: (1) the
principal portion of each mortgage loan plus a portion of the interest due on
each mortgage loan (the "Grantor Trust Fund Stripped Bond"), and (2) a portion
of the interest due on each mortgage loan equal to the difference between the
Interest Rate on the Subordinate Certificates and the Interest Rate on the
Senior Certificates, if any, which difference is then multiplied by the
Subordinate Class Percentage (the "Grantor Trust Fund Stripped Coupon"). The
"Subordinate Class Percentage" equals the initial aggregate principal amount of
the Subordinate Certificates divided by the sum of the initial aggregate
principal amount of the Subordinate Certificates and the Senior Certificates.
The "Senior Class Percentage" equals the initial aggregate principal amount of
the Senior Certificates divided by the sum of the initial aggregate principal
amount of the Subordinate Certificates and the Senior Certificates.

         The Senior Certificateholders in the aggregate will own the Senior
Class Percentage of the Grantor Trust Fund Stripped Bond and accordingly each
Senior Certificateholder will be treated as owning its pro rata share of such
asset. The Senior Certificateholders will not own any portion of the Grantor
Trust Fund Stripped Coupon. The Subordinate Certificateholders in the aggregate
own both the Subordinate Class Percentage of the Grantor Trust Fund Stripped
Bond plus 100% of the Grantor Trust Fund Stripped Coupon, if any, and
accordingly each Subordinate



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Certificateholder will be treated as owning its pro rata share in both assets.
The Grantor Trust Fund Stripped Bond will be treated as a "stripped bond" and
the Grantor Trust Fund Stripped Coupon will be treated as "stripped coupons"
within the meaning of Section 1286 of the Code.

         Although not entirely clear, the interest income on the Subordinate
Certificates and the portion of the servicing fee allocable to such certificates
that does not constitute excess servicing will be treated by the Grantor Trust
Fund as qualified stated interest, assuming the interest with respect to the
mortgage loans held by the Grantor Trust Fund would otherwise qualify as
qualified stated interest. Accordingly, except to the extent modified below, the
income of the Subordinate Certificates will be reported in the same manner as
described generally above for holders of Senior Certificates.

         If the Subordinate Certificateholders receive distribution of less than
their share of the Grantor Trust Fund's receipts of principal or interest (the
"Shortfall Amount") because of the subordination of the Subordinate
Certificates, holders of Subordinate Certificates would probably be treated for
federal income tax purposes as if they had

         o   received as distributions their full share of receipts;

         o   paid over to the Senior Certificateholders an amount equal to the
             Shortfall Amount; and

         o   retained the right to reimbursement of the relevant amounts to the
             extent these amounts are otherwise available as a result of
             collections on the mortgage loans or amounts available from a
             reserve account or other form of credit enhancement, if any.

         Under this analysis,

         o   Subordinate Certificateholders would be required to accrue as
             current income any interest income, original issue discount, or (to
             the extent paid on assets of the Grantor Trust Fund) accrued market
             discount of the Grantor Trust Fund that was a component of the
             Shortfall Amount, even though that amount was in fact paid to the
             Senior Certificateholders;

         o   a loss would only be allowed to the Subordinate Certificateholders
             when their right to receive reimbursement of the Shortfall Amount
             became worthless (i.e., when it becomes clear that amount will not
             be available from any source to reimburse the loss); and

         o   reimbursement of the Shortfall Amount prior to a claim of
             worthlessness would not be taxable income to Subordinate
             Certificateholders because the amount was previously included in
             income.

Those results should not significantly affect the inclusion of income for
Subordinate Certificateholders on the accrual method of accounting, but could
accelerate inclusion of income to Subordinate Certificateholders on the cash
method of accounting by, in effect, placing them on the accrual method.
Moreover, the character and timing of loss deductions are unclear.



                                      138


Subordinate Certificateholders are strongly urged to consult their own tax
advisors regarding the appropriate timing, amount and character of any losses
sustained with respect to the Subordinate Certificates including any loss
resulting from the failure to recover previously accrued interest or discount
income.

         Election to Treat All Interest as Original Issue Discount. The Treasury
Regulations relating to original issue discount permit a Grantor Trust
Securityholder to elect to accrue all interest, discount, including de minimis
market or original issue discount, reduced by any premium, in income as
interest, based on a constant yield method. If an election were to be made with
respect to an interest in a mortgage loan with market discount, the Grantor
Trust Securityholder would be deemed to have made an election to include in
income currently market discount with respect to all other debt instruments
having market discount that the Grantor Trust Securityholder acquires during the
year of the election or afterward. See "--Market Discount" above. Similarly, a
Grantor Trust Securityholder that makes this election for an interest in a
mortgage loan that is acquired at a premium will be deemed to have made an
election to amortize bond premium with respect to all debt instruments having
amortizable bond premium that the Grantor Trust Securityholder owns at the
beginning of the first taxable year to which the election applies or acquires
afterward. See "--Premium" above. The election to accrue interest, discount and
premium on a constant yield method with respect to a Grantor Trust Security is
irrevocable.

         Prepayments. The Taxpayer Relief Act of 1997 (the "1997 Act") contains
a provision requiring original issue discount on any pool of debt instruments
the yield on which may be affected by reason of prepayments be calculated taking
into account the Prepayment Assumption and requiring the discount to be taken
into income on the basis of a constant yield to assumed maturity taking account
of actual prepayments. The legislative history to the 1986 Act states that
similar rules apply with respect to market discount and amortizable bond premium
on debt instruments.

         Sale or Exchange of a Grantor Trust Security. Sale or exchange of a
Grantor Trust Security prior to its maturity will result in gain or loss equal
to the difference, if any, between the amount realized, exclusive of amounts
attributable to accrued and unpaid interest (which will be treated as ordinary
income allocable to the related asset of the Grantor Trust Fund), and the
owner's adjusted basis in the Grantor Trust Security. The adjusted basis
generally will equal the seller's cost for the Grantor Trust Security, increased
by the original issue discount and any market discount included in the seller's
gross income with respect to the Grantor Trust Security, and reduced, but not
below zero, by any premium amortized by the seller and by principal payments on
the Grantor Trust Security previously received by the seller. The gain or loss
will, except as discussed below, be capital gain or loss to an owner for which
the assets of the Grantor Trust Fund represented by a Grantor Trust Security are
"capital assets" within the meaning of Section 1221. A capital gain or loss will
be long-term or short-term depending on whether or not the Grantor Trust
Security has been owned for the long-term capital gain holding period.

         Notwithstanding the foregoing, any gain realized on the sale or
exchange of a Grantor Trust Security will be ordinary income to the extent of
the seller's interest in accrued market discount on Grantor Trust Fund assets
not previously taken into income. See "--Market Discount," above. Further,
Grantor Trust Securities will be "evidences of indebtedness" within the meaning
of Section 582(c)(1), so that gain or loss recognized from the sale of a Grantor
Trust



                                      139


Security by a bank or thrift institution to which such section applied will be
treated as ordinary gain or loss.

         Foreign Investors in Grantor Trust Securities. A holder of a Grantor
Trust Security who is not a "U.S. Person" (as defined above at "REMICs--Tax
Related Restrictions on Transfer of Residual Securities--Foreign Investors") and
is not subject to federal income tax as a result of any direct or indirect
connection to the United States other than its ownership of a Grantor Trust
Security generally will not be subject to United States income or withholding
tax in respect of payments of interest or original issue discount on its Grantor
Trust Security to the extent attributable to debt obligations held by the
Grantor Trust Fund that were originated after July 18, 1984, provided that the
Grantor Trust Securityholder complies to the extent necessary with certain
certification requirements which generally relate to the identity of the
beneficial owner and the status of the beneficial owner as a person that is not
a U.S. Person. Interest or original issue discount on a Grantor Trust Security
attributable to debt obligations held by the Grantor Trust Fund that were
originated prior to July 19, 1984 will be subject to a 30% withholding tax
(unless such tax is reduced or eliminated by an applicable tax treaty). All
holders of Grantor Trust Securities should consult their tax advisors regarding
the tax documentation and certifications that must be provided to secure any
applicable exemptions from United States withholding taxes including certain
more extensive documentation and certification requirements which may apply to a
beneficial owner claiming exemption through an intermediary.

         Any capital gain realized on the sale or other taxable disposition of a
Grantor Trust Security by a Non-U.S. Person (as defined above at
"REMICs--Taxation of Certain Foreign Investors--Regular Securities") generally
will be exempt from United States federal income and withholding tax, provided
that (i) such gain is not effectively connected with the conduct of a trade or
business in the United States by the Non-U.S. Person and (ii) in the case of an
individual Non-U.S. Person, the Non-U.S. Person is not present in the United
States for 183 days or more in the taxable year.

         If the interest, gain or income with respect to a Grantor Trust
Security held by a Non-U.S. Person is effectively connected with the conduct of
a trade or business in the United States by the Non-U.S. Person (although exempt
from the withholding tax previously discussed if the holder provides an
appropriate statement establishing that such income is so effectively
connected), the holder generally will be subject to United States federal income
tax on the interest, gain or income at regular federal income tax rates. In
addition, if the Non-U.S. Person is a foreign corporation, it may be subject to
a branch profits tax equal to 30% of its "effectively connected earnings and
profits," within the meaning of the Code, for the taxable year, as adjusted for
certain items, unless it qualifies for a lower rate under an applicable tax
treaty (as modified by the branch profits tax rules).

         Backup Withholding. Distributions made on the Grantor Trust Securities
and proceeds from the sale of the Grantor Trust Securities will be subject to a
"backup" withholding tax of 31% if, in general, the Grantor Trust Securityholder
fails to comply with particular identification procedures, unless the holder is
an exempt recipient under applicable provisions of the Code and, if necessary,
demonstrates such status. Any amounts so withheld would be refunded by the
Internal Revenue Service or allowable as a credit against the Grantor Trust
Securityholder's federal income tax.



                                      140


PARTNERSHIP TRUST FUNDS AND DISREGARDED TRUST FUNDS

         Classification of Trust Funds

         For each Series of Partnership Certificates or Debt Securities, Federal
Tax Counsel will deliver its opinion that the Trust Fund will not be a taxable
mortgage pool or an association (or publicly traded partnership) taxable as a
corporation for federal income tax purposes. This opinion will be based on the
assumption that the terms of the related Agreement and related documents will be
complied with, and on counsel's opinion that the nature of the income of the
Trust Fund will exempt it from the rule that some publicly traded partnerships
are taxable as corporations.

         Taxation of Debt Securityholders

         The Depositor will agree, and the securityholders will agree by their
purchase of Debt Securities, to treat the Debt Securities as debt for federal
income tax purposes. No regulations, published rulings, or judicial decisions
exist that discuss the characterization for federal income tax purposes of
securities with terms substantially the same as the Debt Securities. However,
for each Series of Debt Securities, Federal Tax Counsel will deliver its opinion
that the Debt Securities will be classified as indebtedness for federal income
tax purposes. The discussion below assumes this characterization of the Debt
Securities is correct.

         If, contrary to the opinion of counsel, the Internal Revenue Service
successfully asserted that the Debt Securities were not debt for federal income
tax purposes, the Debt Securities might be treated as equity interests in the
Trust Fund. If so treated, the Trust Fund might be treated as a publicly traded
partnership that would be taxable as a corporation unless it met particular
qualifying income tests, and the resulting taxable corporation would not be able
to reduce its taxable income by deductions for interest expense on Debt
Securities recharacterized as equity. Treatment of the Debt Securities as equity
interests in a partnership could have adverse tax consequences to some holders,
even if the Trust Fund were not treated as a publicly traded partnership taxable
as a corporation. For example, income allocable to foreign holders might be
subject to United States tax and United States tax return filing and withholding
requirements, income allocable to tax-exempt holders might constitute "unrelated
business taxable income" (if some, but not all, of the Debt Securities were
recharacterized as equity in a partnership), individual holders might be subject
to limitations on their ability to deduct their share of Trust Fund expenses,
and income from the Trust Fund's assets would be taxable to owners of Debt
Securities without regard to whether cash distributions are made to such owners
and without regard to the owners' method of tax accounting.

         Debt Securities generally will be subject to the same rules of taxation
as Regular Securities issued by a REMIC, as described above, except that (1)
income reportable on Debt Securities is generally not required to be reported
under the accrual method unless the holder otherwise uses the accrual method and
(2) the special 110% yield rule treating a portion of the gain on sale or
exchange of a Regular Security as ordinary income is inapplicable to Debt
Securities. See "--REMICs--Taxation of Owners of Regular Securities" and "--Sale
or Exchange of Regular Securities."

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         Further, for federal income tax purposes, (i) Debt Securities held by a
thrift institution taxed as a domestic building and loan association will not
constitute "loans . . . secured by an interest in real property" within the
meaning of Section 7701(a)(19)(C)(v) of the Code; (ii) interest on Debt
Securities held by a real estate investment trust will not be treated as
"interest on obligations secured by mortgages on real property or on interests
in real property "within the meaning of Code Section 856(c)(3)(B); (iii) Debt
Securities held by a real estate investment trust will not constitute "real
estate assets" or "Government securities" within the meaning of Section
856(c)(4)(A) of the Code; (iv) Debt Securities held by a regulated investment
company will not constitute "Government securities" within the meaning of
Section 851(b)(3)(A)(i) of the Code; and (v) Debt Securities will not constitute
"qualified mortgages" with in the meaning of Section 860G(a)(3) of the Code for
REMICs.

         Taxation of Owners of Partnership Certificates

1.       Treatment of the Trust Fund as a Partnership

         The Partnership Trust Fund will agree, and the related owners of
Partnership Certificates ("Partnership Certificate Owners") will agree by their
purchase of Partnership Certificates, if there is more than one Partnership
Certificate Owner, to treat the Partnership Trust Fund as a partnership for
purposes of federal and state income tax, franchise tax and any other tax
measured in whole or in part by income, with the assets of the partnership being
the assets held by the Partnership Trust Fund, the partners of the partnership
being the Partnership Certificate Owners, including, to the extent relevant, the
Depositor in its capacity as recipient of distributions from any reserve fund,
and the Debt Securities, if any, being debt of the partnership, and if there is
one Partnership Certificate Owner, to treat the Partnership Certificate Owner as
the owner of the assets of the Partnership Trust Fund and to treat the
Partnership Trust Fund as a disregarded entity. However, the proper
characterization of the arrangement involving the Partnership Trust Fund, the
Partnership Certificates, the Debt Securities and the Depositor is not certain
because there is no authority on transactions closely comparable to that
contemplated in this prospectus.

         A variety of alternative characterizations are possible. For example,
because the Partnership Certificates have certain features characteristic of
debt, the Partnership Certificates might be considered debt of the Partnership
Trust Fund. Generally, provided such Partnership Certificates are issued at or
close to face value, any such characterization would not result in materially
adverse tax consequences to holders of Partnership Certificates as compared to
the consequences from treatment of the Partnership Certificates as equity in a
partnership, described below. The following discussion assumes that the
Partnership Certificates represent equity interests in a partnership. The
following discussion also assumes that all payments on the Partnership
Certificates are denominated in U.S. dollars, none of the Partnership
Certificates have Interest Rates which would qualify as contingent interest
under the Treasury regulations relating to original issue discount, and that a
Series of securities includes a single class of Partnership Certificates. If
these conditions are not satisfied with respect to any given Series of
Partnership Certificates, additional tax considerations with respect to such
Partnership Certificates will be disclosed in the applicable prospectus
supplement.

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2.       Partnership Taxation

         As a partnership, the Partnership Trust Fund will not be subject to
federal income tax. Rather, each Partnership Certificate Owner will be required
to take into account separately the Partnership Certificate Owner's allocable
share of income, gains, losses, deductions and credits of the Partnership Trust
Fund, whether or not there is a corresponding cash distribution. Thus, cash
basis holders will in effect be required to report income from the Partnership
Certificates on the accrual basis and Partnership Certificate Owners may become
liable for taxes on Partnership Trust Fund income even if they have not received
cash from the Partnership Trust Fund to pay the taxes. The Partnership Trust
Fund's income will consist primarily of interest and finance charges earned on
the related mortgage loans, including appropriate adjustments for market
discount, original issue discount and bond premium, and any gain upon collection
or disposition of the mortgage loans.

         The Partnership Trust Fund's deductions will consist primarily of
interest accruing with respect to the Debt Securities, servicing and other fees,
and losses or deductions upon collection or disposition of mortgage loans.

         The tax items of a partnership are allocable to the partners in
accordance with the Code, Treasury regulations and the partnership agreement
(i.e., the Agreement and related documents). The Agreement will provide, in
general, that the Partnership Certificate Owners will be allocated taxable
income of the Partnership Trust Fund for each month equal to the sum of:

         o   the interest or other income that accrues on the Partnership
             Certificates in accordance with their terms for the relevant month
             including, as applicable, interest accruing at the related
             Partnership Certificate Interest Rate for that month and interest
             on amounts previously due on the Partnership Certificates but not
             yet distributed;

         o   any income of the Partnership Trust Fund attributable to discount
             on the related mortgage loans that corresponds to any excess of the
             principal amount of the Partnership Certificates over their initial
             issue price;

         o   any prepayment premium payable to the Partnership Certificate
             Owners for the applicable month; and

         o   any other amounts of income payable to the Partnership Certificate
             Owners for the applicable month.

The allocation will be reduced by any amortization by the Partnership Trust Fund
of premium on mortgage loans that corresponds to any excess of the issue price
of Partnership Certificates over their principal amount. All remaining taxable
income of the Partnership Trust Fund will be allocated to the Depositor. Losses
will generally be allocated in the manner in which they are borne.

         Based on the economic arrangement of the parties, the foregoing
approach for allocating income of the Partnership Trust Fund should be
permissible under applicable Treasury regulations, although no assurance can be
given that the Internal Revenue Service would not



                                      143


require a greater amount of income to be allocated to Partnership Certificate
Owners. Moreover, even under the foregoing method of allocation, Partnership
Certificate Owners may be allocated income equal to the entire Partnership
Certificate Interest Rate plus the other items described above, even though the
Partnership Trust Fund might not have sufficient cash to make current cash
distributions of the amount. In addition, because tax allocations and tax
reporting will be done on a uniform basis for all Partnership Certificate
Owners, but Partnership Certificate Owners may be purchasing Partnership
Certificates at different times and at different prices, Partnership Certificate
Owners may be required to report on their tax returns taxable income that is
greater or less than the amount reported to them by the Partnership Trust Fund.

         Assuming Debt Securities are also issued, all or substantially all of
the taxable income allocated to a Partnership Certificate Owner that is a
pension, profit sharing or employee benefit plan or other tax-exempt entity,
including an individual retirement account, will constitute "unrelated business
taxable income" generally taxable to the holder under the Code.

         An individual taxpayer's share of expenses of the Partnership Trust
Fund, including fees to the servicer, but not interest expense, would be
miscellaneous itemized deductions and thus deductible only to the extent such
expenses plus all other miscellaneous itemized deductions exceeds two percent of
the individual's adjusted gross income. An individual taxpayer will be allowed
no deduction for his share of expenses of the Partnership Trust Fund, other than
interest, in determining his liability for alternative minimum tax. In addition,
Section 68 of the Code provides that the amount of itemized deductions otherwise
allowable for the taxable year for an individual whose adjusted gross income
exceeds a prescribed threshold amount will be reduced by the lesser of (1) 3% of
the excess of adjusted gross income over the specified threshold amount or (2)
80% of the amount of itemized deductions otherwise allowable for the applicable
taxable year (although the reduction is scheduled to be gradually phased-out
starting in 2006). Accordingly, deductions might be disallowed to the individual
in whole or in part and might result in the Partnership Certificate Owner being
taxed on an amount of income that exceeds the amount of cash actually
distributed to the holder over the life of the Partnership Trust Fund.

         The Partnership Trust Fund intends to make all tax calculations
relating to income and allocations to Partnership Certificate Owners on an
aggregate basis to the extent relevant. If the Internal Revenue Service were to
require that the calculations be made separately for each mortgage loan, the
calculations may result in some timing and character differences under some
circumstances.

3.       Discount and Premium

         The purchase price paid by the Partnership Trust Fund for the related
mortgage loans may be greater or less than the remaining principal balance of
the mortgage loans at the time of purchase. If so, the mortgage loans will have
been acquired at a premium or market discount, as the case may be. See
"REMICs--Taxation of Owners of Regular Securities--Acquisition Premium" and "--
Market Discount" above. As indicated above, the Partnership Trust Fund will make
this calculation on an aggregate basis, but it is possible that the Internal
Revenue Service might require that it be recomputed on a mortgage
loan-by-mortgage loan basis. Further, with respect to any asset of the
Partnership Trust Fund that is an instrument evidencing ownership of specific
interest and/or principal of a particular bond, it will be subject to the rules
relating to



                                      144


original issue discount with respect to such security or instrument (in lieu of
the rules relating to market discount). See "REMICs--Taxation of Owners of
Regular Securities--Original Issue Discount" above.

         If the Partnership Trust Fund acquires the mortgage loans at a market
discount or premium, the Partnership Trust Fund will elect to include any market
discount in income currently as it accrues over the life of the mortgage loans
or to offset any premium against interest income on the mortgage loans. As
indicated above, a portion of the market discount income or premium deduction
may be allocated to Partnership Certificate Owners.

4.       Section 708 Termination

         Under Section 708 of the Code, the Partnership Trust Fund will be
deemed to terminate for federal income tax purposes if 50% or more of the
capital and profits interests in the Partnership Trust Fund are sold or
exchanged within a 12-month period. If a termination occurs under Section 708 of
the Code, the Partnership Trust Fund will be considered to contribute its assets
to a new Partnership Trust Fund, which would be treated as a new partnership, in
exchange for Partnership Certificates in the new Partnership Trust Fund. The
original Partnership Trust Fund will then be deemed to distribute the
Partnership Certificates in the new Partnership Trust Fund to each of the owners
of Partnership Certificates in the original Partnership Trust Fund in
liquidation of the original Partnership Trust Fund. The Partnership Trust Fund
will not comply with particular technical requirements that might apply when a
constructive termination occurs. As a result, the Partnership Trust Fund may be
subject to some tax penalties and may incur additional expenses if it is
required to comply with those requirements. Furthermore, the Partnership Trust
Fund might not be able to comply with these requirements due to lack of data.

5.       Disposition of Partnership Certificates

         Generally, capital gain or loss will be recognized on a sale of
Partnership Certificates in an amount equal to the difference between the amount
realized and the seller's tax basis in the Partnership Certificates sold. Any
gain or loss would be long-term capital gain or loss if the Partnership
Certificate Owner's holding period exceeded one year. A Partnership Certificate
Owner's tax basis in a Partnership Certificate will generally equal its cost,
increased by its share of Partnership Trust Fund income allocable to the
Partnership Certificate Owner and decreased by any distributions received or
losses allocated with respect to the Partnership Certificate. In addition, both
the tax basis in the Partnership Certificates and the amount realized on a sale
of a Partnership Certificate would include the Partnership Certificate Owner's
share, determined under Treasury Regulations, of the Debt Securities and other
liabilities of the Partnership Trust Fund. A Partnership Certificate Owner
acquiring Partnership Certificates at different prices will generally be
required to maintain a single aggregate adjusted tax basis in the Partnership
Certificates and, upon a sale or other disposition of some of the Partnership
Certificates, allocate a portion of the aggregate tax basis to the Partnership
Certificates sold, rather than maintaining a separate tax basis in each
Partnership Certificate for purposes of computing gain or loss on a sale of that
Partnership Certificate.



                                      145


         If a Partnership Certificate Owner is required to recognize an
aggregate amount of income (not including income attributable to disallowed
itemized deductions described above) over the life of the Partnership
Certificates that exceeds the aggregate cash distributions with respect to the
Partnership Certificates, the excess will generally give rise to a capital loss
upon the retirement of the Partnership Certificates.

6. Allocations Between Transferors and Transferees.

         In general, the Partnership Trust Fund's taxable income and losses will
be determined each Due Period and the tax items for a particular Due Period will
be apportioned among the Partnership Certificate Owners in proportion to the
principal amount of Partnership Certificates owned by them as of the close of
the last day of that Due Period. As a result, a Partnership Certificate Owner
purchasing Partnership Certificates may be allocated tax items, which will
affect the purchaser's tax liability and tax basis, attributable to periods
before the actual transaction.

         The use of a Due Period convention may not be permitted by existing
Treasury regulations. If a Due Period convention is not allowed, or only applies
to transfers of less than all of the partner's interest, taxable income or
losses of the Partnership Trust Fund might be reallocated among the Partnership
Certificate Owners. The Partnership Trust Fund's method of allocation between
transferors and transferees may be revised to conform to a method permitted by
future laws, regulations or other Internal Revenue Service guidance.

7.       Section 731 Distributions

         In the case of any distribution to a Partnership Certificate Owner, no
gain will be recognized to that Partnership Certificate Owner to the extent that
the amount of any money distributed for that Partnership Certificate does not
exceed the adjusted basis of that Partnership Certificate Owner's interest in
the Partnership Certificate. To the extent that the amount of money distributed
exceeds that Partnership Certificate Owner's adjusted basis, gain will be
currently recognized. In the case of any distribution to a Partnership
Certificate Owner, no loss will be recognized except upon a distribution in
liquidation of a Partnership Certificate Owner's interest. Any gain or loss
recognized by a Partnership Certificate Owner generally will be capital gain or
loss.

8.       Section 754 Election

         In the event that a Partnership Certificate Owner sells its Partnership
Certificates at a profit (or loss), the purchasing Partnership Certificate Owner
will have a higher (or lower) basis in the Partnership Certificates than the
selling Partnership Certificate Owner had. The tax basis of the Partnership
Trust Fund's assets will not be adjusted to reflect that higher (or lower) basis
unless the Partnership Trust Fund were to file an election under Section 754 of
the Code. In order to avoid the administrative complexities that would be
involved in keeping accurate accounting records, as well as potentially onerous
information reporting requirements, the Partnership Trust Fund currently does
not intend to make an election under Section 754 of the Code. As a result,
Partnership Certificate Owners might be allocated a greater or lesser amount



                                      146


of Partnership Trust Fund income than would be appropriate based on their own
purchase price for Partnership Certificates.

         The American Jobs Creation Act of 2004 added a provision to the Code
that would require a partnership with a "substantial built-in loss" immediately
after a transfer of a partner's interest in such partnership to make the types
of basis adjustments that would be required if an election under Section 754 of
the Code were in effect. This new provision does not apply to a "securitization
partnership." The applicable prospectus supplement will address whether any
partnership in which a Partnership Certificate represents an interest will
constitute a securitization partnership for this purpose.

9.       Administrative Matters

         The trustee is required to keep or cause to be kept complete and
accurate books of the Partnership Trust Fund. The trustee will file a
partnership information return (IRS Form 1065) with the Internal Revenue Service
for each taxable year of the Partnership Trust Fund and will report each
Partnership Certificate Owner's allocable share of items of Partnership Trust
Fund income and expense to Partnership Certificate Owners and the Internal
Revenue Service on Schedule K-1. The Partnership Trust Fund will provide the
Schedule K-1 information to nominees that fail to provide the Partnership Trust
Fund with the information statement described below and the nominees will be
required to forward this information to the beneficial owners of the Partnership
Certificates. Generally, holders must timely file tax returns that are
consistent with the information return filed by the Partnership Trust Fund or be
subject to penalties unless the holder notifies the Internal Revenue Service of
all the inconsistencies.

         Under Section 6031 of the Code, any person that holds Partnership
Certificates as a nominee at any time during a calendar year is required to
furnish the Partnership Trust Fund with a statement containing specific
information on the nominee, the beneficial owners and the Partnership
Certificates so held. The information includes (1) the name, address and
taxpayer identification number of the nominee and (2) as to each beneficial
owner

         o   the name, address and identification number of such person,

         o   whether such person is a United States person, a tax-exempt entity
             or a foreign government, an international organization, or any
             wholly owned agency or instrumentality of either of the foregoing,
             and

         o   particular information on Partnership Certificates that were held,
             bought or sold on behalf of the person throughout the year.

In addition, brokers and financial institutions that hold Partnership
Certificates through a nominee are required to furnish directly to the
Partnership Trust Fund information as to themselves and their ownership of
Partnership Certificates. A clearing agency registered under Section 17A of the
Exchange Act is not required to furnish any information statement to the
Partnership Trust Fund. The information referred to above for any calendar year
must be furnished to the Partnership Trust Fund on or before the following
January 31. Nominees,


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brokers and financial institutions that fail to provide the Partnership Trust
Fund with the information described above may be subject to penalties.

         Unless another designation is made, the Depositor will be designated as
the tax matters partner for each Partnership Trust Fund in the pooling and
servicing agreement and, as the tax matters partner, will be responsible for
representing the Partnership Certificate Owners in some specific disputes with
the Internal Revenue Service. The Code provides for administrative examination
of a partnership as if the partnership were a separate and distinct taxpayer.
Generally, the statute of limitations for partnership items does not expire
before the later of three years after the date on which the partnership
information return is filed or the last day for filing the return for the
applicable year, determined without regard to extensions. Any adverse
determination following an audit of the return of the Partnership Trust Fund by
the appropriate taxing authorities could result in an adjustment of the returns
of the Partnership Certificate Owners, and, under some circumstances, a
Partnership Certificate Owner may be precluded from separately litigating a
proposed adjustment to the items of the Partnership Trust Fund. An adjustment
could also result in an audit of a Partnership Certificate Owner's returns and
adjustments of items not related to the income and losses of the Partnership
Trust Fund.

         A special audit system exists for qualifying large partnerships that
have elected to apply a simplified flow-through reporting system under Sections
771 through 777 of the Code. Unless otherwise specified in the applicable
prospectus supplement, a Partnership Trust Fund will not elect to apply the
simplified flow-through reporting system.

10.      Taxation of Certain Foreign Partnership Certificate Owners

         As used below, the term "Non-United States Owner" means a Partnership
Certificate Owner that is not a U.S. Person, as defined under "REMICs--Taxation
of Owners of Residual Securities--Tax Related Restrictions on Transfer of
Residual Securities--Foreign Investors," above.

         It is not clear whether the Partnership Trust Fund would be considered
to be engaged in a trade or business in the United States for purposes of
federal withholding taxes with respect to Non-United States Owners because there
is no clear authority dealing with that issue under facts substantially similar
to those described in this prospectus. Although it is not expected that the
Partnership Trust Fund would be engaged in a trade or business in the United
States for these purposes, the Partnership Trust Fund will withhold as if it
were so engaged in order to protect the Partnership Trust Fund from possible
adverse consequences of a failure to withhold. The Partnership Trust Fund
expects to withhold on the portion of its taxable income that is allocable to
Non-United States Owners pursuant to Section 1446 of the Code, as if the income
were effectively connected to a U.S. trade or business.

         Subsequent adoption of Treasury regulations or the issuance of other
administrative pronouncements may require the Partnership Trust Fund to change
its withholding procedures.

         Each Non-United States Owner might be required to file a U.S.
individual or corporate income tax return on its share of the income of the
Partnership Trust Fund including, in the case of a corporation, a return in
respect of the branch profits tax. Assuming the Partnership Trust



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Fund is not engaged in a U.S. trade or business, a Non-United States Owner would
be entitled to a refund with respect to all or a portion of taxes withheld by
the Partnership Trust Fund if, in particular, the Owner's allocable share of
interest from the Partnership Trust Fund constituted "portfolio interest" under
the Code.

         The interest, however, may not constitute "portfolio interest" if,
among other reasons, the underlying obligation is not in registered form or if
the interest is determined without regard to the income of the Partnership Trust
Fund, in the later case, the interest being properly characterized as a
guaranteed payment under Section 707(c) of the Code. If this were the case,
Non-United States Owners would be subject to a United States federal income and
withholding tax at a rate of 30 percent on the Partnership Trust Fund's gross
income, without any deductions or other allowances for costs and expenses
incurred in producing the income, unless reduced or eliminated pursuant to an
applicable treaty. In this case, a Non-United States Owner would only be
entitled to a refund for that portion of the taxes, if any, in excess of the
taxes that should have been withheld with respect to the interest.

11.      Backup Withholding

         Distributions made on the Partnership Certificates and proceeds from
the sale of the Partnership Certificates will be subject to a "backup"
withholding tax of up to 31% if, in general, the Partnership Certificate Owner
fails to comply with particular identification procedures, unless the holder is
an exempt recipient under applicable provisions of the Code and, if necessary,
demonstrates such status. Any amounts so withheld would be refunded by the
Internal Revenue Service or allowable as a credit against the Non-United States
Owner's federal income tax.

CERTAIN CERTIFICATES TREATED AS INDEBTEDNESS

         General. Upon the issuance of Certificates that are intended to be
treated as indebtedness for federal income tax purposes, Federal Tax Counsel
will opine that based upon its analysis of the factors discussed below and
certain assumptions and qualifications, the Certificates will be properly
classified as indebtedness for federal income tax purposes. However, opinions of
counsel are not binding on the Internal Revenue Service and there can be no
assurance that the Internal Revenue Service could not successfully challenge
this conclusion. Such Certificates that are intended to be treated as
indebtedness are herein referred to as "Debt Certificates" and holders of such
Certificates are herein referred to as "Debt Certificateholders."

         The Depositor and any Unaffiliated Sellers, will express in the
Agreements their intent that for federal, state and local income and franchise
tax purposes, the Debt Certificates will be indebtedness secured by the assets
in the Trust Fund. The Depositor and each Unaffiliated Seller agrees and each
Debt Certificateholder, by acquiring an interest in a Debt Certificate, agrees
or will be deemed to agree to treat the Debt Certificates as indebtedness for
federal, state and local income or franchise tax purposes. However, because
different criteria are used to determine the non-tax accounting characterization
of the transactions contemplated by the Agreements, the transactions may be
treated as a sale of ownership interests in the assets held by the Trust Fund
for financial accounting purposes, and not as debt obligations.

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         In general, whether for federal income tax purposes a transaction
constitutes a sale of property or a loan the repayment of which is secured by
the property, is a question of fact, the resolution of which is based upon the
economic substance of the transaction. The form of a transaction, while a
relevant factor, is not conclusive evidence of its economic substance. In
appropriate circumstances, the courts have allowed taxpayers, as well as the
Internal Revenue Service, to treat a transaction in accordance with its economic
substance, as determined under federal income tax laws, notwithstanding that the
participants characterize the transaction differently for non-tax purposes. In
some instances, however, courts have held that a taxpayer is bound by a
particular form it has chosen for a transaction, even if the substance of the
transaction does not accord with its form. It is expected that Federal Tax
Counsel will advise that the rationale of those cases will not apply to the
transactions evidenced by a Series of Debt Certificates.

         While the Internal Revenue Service and the courts have set forth
several factors to be taken into account in determining whether the substance of
a transaction is a sale of property or a secured indebtedness for federal income
tax purposes, the primary factor in making this determination is whether the
transferee has assumed the risk of loss or other economic burdens relating to
the property and has obtained the economic benefits of ownership thereof.
Federal Tax Counsel will analyze and rely on several factors in reaching its
opinion that the weight of the benefits and burdens of ownership of the assets
held by the Trust Fund has not been transferred to the Debt Certificateholders
and that the Debt Certificates are properly characterized as indebtedness for
federal income tax purposes. Contrary characterizations that could be asserted
by the Internal Revenue Service are described below under "--Possible
Classification of the Transaction as a Partnership or as an Association Taxable
as a Corporation."

         Taxation of Income of Debt Certificateholders. As set forth above, it
is expected that Federal Tax Counsel will advise the Depositor and/or the
Unaffiliated Sellers that the Debt Certificates will constitute indebtedness for
federal income tax purposes, and accordingly, holders of Debt Certificates
generally will be taxed in the manner described above in "Partnership Trust
Funds and Disregarded Trust Funds--Taxation of Debt Securityholders."

         If the Debt Certificates are issued with OID that is more than a de
minimis amount as defined in the Code and Treasury regulations (see
"REMICs--Taxation of Regular Securities--Original Issue Discount") a United
States holder of a Debt Certificate (including a cash basis holder) generally
would be required to accrue the OID on its interest in a Debt Certificate in
income for federal income tax purposes on a constant yield basis, resulting in
the inclusion of OID in income in advance of the receipt of cash attributable to
that income. Under Section 1272(a)(6) of the Code, special provisions apply to
debt instruments on which payments may be accelerated due to prepayments of
other obligations securing those debt instruments. However, no regulations have
been issued interpreting those provisions, and the manner in which those
provisions would apply to the Debt Certificates is unclear. Additionally, the
Internal Revenue Service could take the position based on Treasury regulations
that none of the interest payable on a Debt Certificate is "unconditionally
payable" and hence that all of such interest should be included in the Debt
Certificate's stated redemption price at maturity. Accordingly, Federal Tax
Counsel is unable to opine as to whether interest payable on a Debt Certificates
constitutes "qualified stated interest" that is not included in a Debt
Certificate's stated redemption price at maturity. Consequently, prospective
investors in Debt Certificates should consult their own tax



                                      150


advisors concerning the impact to them in their particular circumstances. The
prospectus supplement will indicate whether the Trust expects to treat a Debt
Certificate as having been issued with OID.

         Tax Characterization of the Trust Fund. Consistent with the treatment
of the Debt Certificates as indebtedness, the Trust Fund will be treated as a
security device to hold mortgage assets securing the repayment of the Debt
Certificates. In connection with the issuance of Debt Certificates of any
Series, Federal Tax Counsel will render an opinion that, based on the
assumptions and qualifications set forth therein, under then current law, the
applicable Trust will not be characterized for federal income tax purposes as a
taxable mortgage pool or as an association (or publicly traded partnership)
taxable as a corporation.

         Possible Classification of the Transaction as a Partnership or as an
Association Taxable as a Corporation. The opinion of Federal Tax Counsel with
respect to Debt Certificates will not be binding on the courts or the Internal
Revenue Service. It is possible that the Internal Revenue Service could assert
that, for federal income tax purposes, the transactions contemplated constitute
a sale of the assets held in the Trust Fund (or an interest therein) to the Debt
Certificateholders and that the proper classification of the legal relationship
between the Unaffiliated Sellers, the Depositor, and some or all of the Debt
Certificateholders resulting from the transactions is that of a partnership
(including a publicly traded partnership), a publicly traded partnership taxable
as a corporation, or an association taxable as a corporation. The Depositor
currently does not intend to comply with the federal income tax reporting
requirements that would apply if any Classes of Debt Certificates were treated
as interests in a partnership or corporation.

         If a transaction were treated as creating a partnership between any of
the Unaffiliated Sellers and/or the Depositor and the Debt Certificateholders,
the partnership itself would not be subject to federal income tax (unless it
were characterized as a publicly traded partnership taxable as a corporation);
rather, the partners of such partnership, including the Debt Certificateholders,
would be taxed individually on their respective distributive shares of the
partnership's income, gain, loss, deductions and credits. The amount and timing
of items of income and deductions of a Debt Certificate could differ if the Debt
Certificates were held to constitute partnership interests, rather than
indebtedness. Moreover, unless the partnership were treated as engaged in a
trade or business, an individual's share of expenses of the partnership would be
miscellaneous itemized deductions that, in the aggregate, are allowed as
deductions only to the extent they exceed two percent of the individual's
adjusted gross income, and would be subject to reduction under Section 68 of the
Code if the individual's adjusted gross income exceeded certain limits. As a
result, the individual might be taxed on a greater amount of income than the
stated rate on the Debt Certificates. Finally, all or a portion of any taxable
income allocated to a Debt Certificateholder that is a pension, profit-sharing
or employee benefit plan or other tax-exempt entity (including an individual
retirement account) may, under certain circumstances, constitute "unrelated
business taxable income" which generally would be taxable to the holder under
the Code.

         If it were determined that a transaction created an entity classified
as an association or as a publicly traded partnership taxable as a corporation,
the Trust Fund would be subject to federal income tax at corporate income tax
rates on the income it derives from the mortgage assets it



                                      151


holds, which would reduce the amounts available for distribution to the Debt
Certificateholders. Such classification may also have adverse state and local
tax consequences that would reduce amounts available for distribution to Debt
Certificateholders. Moreover, distributions on Debt Certificates that are
recharacterized as equity in an entity taxable as a corporation would not be
deductible in computing the entity's taxable income, and cash distributions on
such Debt Certificates generally would be treated as dividends for tax purposes
to the extent of such deemed corporation's earnings and profits.

         Foreign Investors in Debt Certificates. As set forth above, it is
expected that Federal Tax Counsel will advise the Depositor and/or the
Unaffiliated Sellers that the Debt Certificates will constitute indebtedness for
federal income tax purposes. Accordingly, Foreign Persons (that is, persons
which are not U.S. Persons, as defined in "REMICs--Taxation of Owners of
Residual Securities--Tax Related Restrictions on Transfer of Residual
Securities--Foreign Investors) that hold Debt Certificates generally will be
taxed in the manner described in that section.

         If the Internal Revenue Service were to contend successfully that the
Debt Certificates are interests in a partnership and if such partnership were
considered to be engaged in a trade or business in the United States, the
partnership would be subject to a withholding tax on income of the Trust Fund
that is allocable to a Foreign Person and such Foreign Person would be credited
for his or her share of the withholding tax paid by the partnership. In such
case, the Foreign Person generally would be subject to United States federal
income tax at regular income tax rates, and possibly a branch profits tax in the
case of a corporate holder.

         Alternatively, although there may be arguments to the contrary, if such
partnership is not considered to be engaged in a trade or business within the
United States and if income with respect to the Debt Certificates is not
otherwise effectively connected with the conduct of a trade or business in the
United States by the Foreign Person, the Foreign Person would be subject to
United States income tax and withholding at a rate of 30% (unless reduced by an
applicable tax treaty) on the holder's distributive share of the partnership's
interest income. See "Partnership Trust Funds and Disregarded Trust
Funds--Taxation of Owners of Partnership Certificates--Taxation of Certain
Foreign Partnership Certificate Owners" for a general discussion of the
consequences of an equity investment by a Foreign Person in an entity
characterized as a partnership.

         If the Trust Fund were recharacterized as an association or publicly
traded partnership taxable as a corporation, distribution to owners of Debt
Certificates that are Foreign Persons, to the extent treated as dividends, would
generally be subject to withholding at the rate of 30%, unless such rate were
reduced or eliminated by an applicable income tax treaty. If such dividend were
effectively connected with the Foreign Person's United States trade or business
(and, if necessary, the Foreign Person establishes that it is so effectively
connected) the dividend would not be subject to withholding tax, but would be
subject to United States federal income tax at regular federal income tax rates,
and if the holder is a corporation, might be subject to a branch profits tax.



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CONSEQUENCES FOR PARTICULAR INVESTORS

         The federal tax discussions above may not be applicable depending on a
Securityholder's particular tax situation. The Depositor recommends that
prospective purchasers consult their tax advisors for the tax consequences to
them of the purchase, ownership and disposition of REMIC Securities, Grantor
Trust Securities, Partnership Certificates, Debt Securities and Debt
Certificates, including the tax consequences under state, local, foreign and
other tax laws and the possible effects of changes in federal or other tax laws.

REPORTABLE TRANSACTIONS

         Pursuant to recently enacted legislation, a penalty in the amount of
$10,000 in the case of a natural person and $50,000 in any other case is imposed
on any taxpayer that fails to file timely an information return with the IRS
with respect to a "reportable transaction" (as defined in Section 6011 of the
Code). The rules defining "reportable transactions" are complex. In general,
they include transactions that result in certain losses that exceed threshold
amounts and transactions that result in certain differences between the
taxpayer's tax treatment of an item and book treatment of that same item.
Prospective investors are advised to consult their own tax advisers regarding
any possible disclosure obligations in light of their particular circumstances.

                       STATE AND OTHER TAX CONSIDERATIONS

         In addition to the federal income tax consequences described in
"Material Federal Income Tax Considerations," potential investors should
consider the state and other tax consequences of the acquisition, ownership, and
disposition of the Notes or Certificates, as applicable, offered under this
prospectus. State tax law may differ substantially from the corresponding
federal tax law, and the discussion above does not purport to describe any
aspect of the tax laws of any state or other jurisdiction. Therefore,
prospective investors should consult their own tax advisors for the various tax
consequences of investments in the Notes or Certificates, as applicable, offered
under this prospectus.

                              ERISA CONSIDERATIONS

GENERAL

         A fiduciary of a pension, profit-sharing, retirement or other employee
benefit plan subject to Title I of ERISA should consider the fiduciary standards
under the Employee Retirement Income Security Act of 1974, as amended ("ERISA")
in the context of the plan's particular circumstances before authorizing an
investment of a portion of such plan's assets in the Securities. Accordingly,
pursuant to Section 404 of ERISA, such fiduciary should consider among other
factors (i) whether the investment is for the exclusive benefit of plan
participants and their beneficiaries; (ii) whether the investment satisfies the
applicable diversification requirements; (iii) whether the investment is in
accordance with the documents and instruments governing the plan; and (iv)
whether the investment is prudent, considering the nature of the investment.
Fiduciaries of plans also should consider ERISA's prohibition on improper
delegation of control over, or responsibility for, plan assets.



                                      153


         In addition, employee benefit plans and other retirement arrangements
subject to ERISA, as well as individual retirement accounts, certain types of
Keogh plans not subject to ERISA but subject to Section 4975 of the Code, and
any entity (including insurance company separate or general accounts) whose
underlying assets include plan assets by reason of such plans, arrangements or
accounts investing in the entity (each, a "Plan") are prohibited from engaging
in a broad range of transactions involving Plan assets with persons having
certain specified relationships to the Plan ("parties in interest" and
"disqualified persons"). Such transactions are treated as "prohibited
transactions" under Sections 406 of ERISA and excise taxes and/or other
penalties are imposed upon such persons under ERISA and/or Section 4975 of the
Code unless an exemption applies. The Depositor, Credit Suisse First Boston,
each Master Servicer or other Servicer, any Insurer, the Trustee, the Indenture
Trustee and certain of their affiliates might be considered "parties in
interest" or "disqualified persons" with respect to a Plan. If so, the
acquisition, holding or disposition of Securities by or on behalf of such Plan
could be considered to give rise to a "prohibited transaction" within the
meaning of ERISA and the Code unless a statutory, regulatory or administrative
exception or exemption is available.

ERISA CONSIDERATIONS RELATING TO CERTIFICATES

         Plan Assets

         In 29 C.F.R. ss.2510.3-101 (the "Plan Asset Regulations"), the U.S.
Department of Labor ("DOL") has defined what constitutes "plan assets" for
purposes of ERISA and Section 4975 of the Code. The Plan Asset Regulations
provide that if a Plan makes an investment in an "equity interest" in an entity,
an undivided portion of the assets of the entity will be considered the assets
of such Plan unless certain exceptions set forth in such Regulations apply. The
Certificates will be deemed an equity interest for purposes of the Plan Asset
Regulations, and the Depositor can give no assurance that the Certificates will
qualify for any of the exceptions under the Plan Asset Regulations. As a result,
(i) a Plan may be deemed to have acquired an interest in the assets of the Trust
Fund and not merely an interest in the Certificates, (ii) the fiduciary
investment standards of ERISA could apply to such assets and (iii) transactions
occurring in the course of managing, operating and servicing the Trust Fund and
its assets might constitute prohibited transactions, unless a statutory,
regulatory or administrative exemption applies.

         Prohibited Transaction Class Exemption 83-1

         The DOL has issued an administrative exemption, Prohibited Transaction
Class Exemption ("PTCE") 83-1 ("PTCE 83-1"), which under certain conditions
exempts from the application of the prohibited transaction rules of ERISA and
the excise tax provisions of Section 4975 of the Code transactions involving a
Plan in connection with the operation of a "mortgage pool" and the purchase,
sale and holding of Certificates which are "mortgage pool pass-through
certificates." A "mortgage pool" is defined as a fixed investment pool
consisting solely of interest-bearing obligations secured by first or second
mortgages or deeds of trust on single-family residential property, property
acquired in foreclosure and undistributed cash. A "mortgage pool pass-through
certificate" is defined as a Certificate which represents a beneficial undivided
interest in a mortgage pool which entitles the holder to pass through payments
of principal and interest from the mortgage loans. PTCE 83-1 requires that: (i)
the Depositor and the Trustee maintain a system of insurance or other protection
for the mortgage loans, the


                                      154


property securing such mortgage loans and for indemnifying holders of
Certificates against reductions in pass-through payments due to defaults in loan
payments or property damage in an amount at least equal to the greater of (x) 1%
of the aggregate principal balance of the mortgage loans or (y) the principal
balance of the largest covered pooled mortgage loan; (ii) the Trustee may not be
an affiliate of the Depositor; and (iii) the payments made to, and retained by,
the Depositor in connection with the Trust Fund, together with all funds inuring
to its benefit for administering the Trust Fund, represent no more than
"adequate consideration" for selling the mortgage loans, plus reasonable
compensation for services provided to the Trust Fund. PTCE 83-1 exempts the
initial sale of Certificates to and the continued holding by a Plan with respect
to which the Depositor, the Insurer, the Master Servicer or other Servicer or
the Trustee is a party in interest if the Plan does not pay more than fair
market value for such Certificates and the rights and interests evidenced by
such Certificates are not subordinated to the rights and interests evidenced by
other Certificates of the same pool.

         PTCE 83-1 also exempts from the prohibited transaction rules any
transactions in connection with the servicing and operation of the mortgage
pool, provided that any payments made to the Master Servicer in connection with
the servicing of the Trust Fund are made in accordance with a binding agreement,
copies of which must be made available to prospective Plan investors. In the
case of any Plan with respect to which the Depositor, the Master Servicer, the
Insurer or the Trustee is a fiduciary, PTCE 83-1 will only apply if, in addition
to the other requirements: (i) the initial sale, exchange or transfer of
Certificates is expressly approved by an independent fiduciary who has authority
to manage and control those Plan assets being invested in Certificates; (ii) the
Plan pays no more for the Certificates than would be paid in an arm's-length
transaction; (iii) no investment management, advisory or underwriting fee, sales
commission or similar compensation is paid to the Depositor with regard to the
sale, exchange or transfer of Certificates to the Plan; (iv) the total value of
the Certificates purchased by such Plan does not exceed 25% of the amount issued
and (v) at least 50% of the aggregate amount of Certificates is acquired by
persons independent of the Depositor, the Trustee, the Master Servicer and the
Insurer. Before purchasing Certificates in reliance on PTCE 83-1, a fiduciary of
a Plan should confirm that the Trust Fund is a "mortgage pool," that the
Certificates constitute "mortgage pool pass-through certificates" and that the
conditions set forth in PTCE 83-1 would be satisfied. In addition to making its
own determination as to the availability of the exemptive relief provided in
PTCE 83-1, the Plan fiduciary should consider the availability of any other
prohibited transaction exemptions. The Plan fiduciary should also consider its
general fiduciary obligations under ERISA in determining whether to purchase any
Certificates on behalf of a Plan pursuant to PTCE 83-1.

         Underwriter Exemption

         The DOL has granted to Credit Suisse First Boston an individual
exemption, Prohibited Transaction Exemption ("PTE") 89-90, which was most
recently amended and restated pursuant to PTE 2002-41 (the "Exemption") which is
applicable to Certificates which meet its requirements whenever Credit Suisse
First Boston or its affiliate is the sole underwriter, manager or co-manager of
an underwriting syndicate or is the selling or placement agent. The Exemption
generally exempts certain transactions from the application of certain of the
prohibited transaction provisions of ERISA and the Code provided that the
conditions set forth in the Exemption are satisfied. These transactions include
the servicing, managing and operation of



                                      155


investment trusts holding fixed (generally non-revolving pools) of enumerated
categories of assets which include: single and multi-family residential mortgage
loans, home equity loans or receivables (including cooperative housing loans),
manufactured housing loans and participation interests therein and the purchase,
sale and holding of Certificates which represent beneficial ownership interests
in the assets of such trusts.

         General Conditions of Exemption

         The Exemption sets forth general conditions which must be satisfied for
a transaction involving the purchase, sale and holding of the Certificates to be
eligible for exemptive relief thereunder. First, the acquisition of Certificates
by Plans must be on terms that are at least as favorable to the Plan as they
would be in an arm's-length transaction with an unrelated party. Second, the
assets held by the Trust Fund must be fully secured (other than one-to-four
family residential mortgage loans and home equity loans or receivables backing
certain types of Certificates, as described below). (Mortgage loans, loans,
obligations and receivables will be collectively referred to herein as
"loans."). Third, unless the Certificates are issued in "designated
transactions" (as described below) and are backed by fully-secured loans, they
may not be subordinated. Fourth, the Certificates at the time of acquisition by
the Plan must generally be rated in one of the three (or in the case of
designated transactions, four) highest generic rating categories by Standard &
Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., Moody's
Investors Services, Inc. or Fitch, Inc. (each, a "Rating Agency"). Fifth, the
Trustee and the Indenture Trustee generally cannot be affiliates of any member
of the "Restricted Group", other than any underwriter. The Restricted Group
consists of any (i) underwriter as defined in the Exemption, (ii) the Depositor,
(iii) the Master Servicer, (iv) each Servicer, (v) the Insurer, (vi) the
counterparty of any "interest swap" (as described below) held as an asset of the
Trust Fund, (vii) any Obligor with respect to loans constituting more than 5% of
the aggregate unamortized principal balance of the loans held in the Trust Fund
as of the date of initial issuance of the Certificates and (viii) any of their
respective affiliates. Sixth, the sum of all payments made to, and retained by,
such underwriters must represent not more than reasonable compensation for
underwriting the Certificates; the sum of all payments made to, and retained by,
the Depositor pursuant to the assignment of the loans to the related Trust Fund
must represent not more than the fair market value of such loans; and the sum of
all payments made to, and retained by, the Master Servicer and any Servicer must
represent not more than reasonable compensation for such person's services under
the Agreement and reimbursement of such person's reasonable expenses in
connection therewith. Seventh, (i) the investment pool must consist only of
assets of the type enumerated in the Exemption and which have been included in
other investment pools; (ii) Certificates evidencing interests in such other
investment pools must have been rated in one of the three (or in the case of
designated transactions, four) highest generic rating categories by one of the
Rating Agencies for at least one year prior to a Plan's acquisition of
Certificates; and (iii) Certificates evidencing interests in such other
investment pools must have been purchased by investors other than Plans for at
least one year prior to a Plan's acquisition of Certificates. Finally, the
investing Plan must be an accredited investor as defined in Rule 501(a)(1) of
Regulation D of the Commission under the Securities Act of 1933, as amended. The
Depositor assumes that only Plans which are accredited investors under the
federal securities laws will be permitted to purchase the Certificates.


                                      156


         Types of Trust Funds

         The Exemption has expanded the types of permitted Trust Funds to
include owner-trusts, as well as grantor trusts, REMICs. Owner-trusts are
subject to certain restrictions in their governing documents to ensure that
their assets may not be reached by the creditors of the Depositor in the event
of bankruptcy or other insolvency and must provide certain legal opinions.

         Designated Transactions

         In the case where the Certificates are backed by Trust Fund assets
which are residential, home equity, manufactured housing or multi-family loans
which are described and defined in the Exemption as designated transactions
("Designated Transactions"), the Exemption permits the Certificates issued by
the Trust Fund in such transactions to be rated in one of the highest four
generic rating categories by a Rating Agency and/or to be subordinated. The
assets will qualify for Designated Transaction treatment under the Exemption
unless otherwise specified in the prospectus supplement. In addition, one subset
of Designated Transactions, residential (one- to-four family) and home equity
loans, may be less than fully secured, provided that (a) the rights and
interests evidenced by Certificates issued in such Designated Transactions are
not subordinated to the rights and interests evidenced by Securities of the same
Trust Fund; (b) such Certificates acquired by the Plan have received a rating
from a Rating Agency at the time of such acquisition that is in one of the two
highest generic rating categories; and (c) any loan included in the corpus or
assets of the Trust Fund is secured by collateral whose fair market value on the
Closing Date of the Designated Transactions is at least equal to 80% of the sum
of: (i) the outstanding principal balance due under the loan which is held by
the Trust Fund and (ii) the outstanding principal balance(s) of any other
loan(s) of higher priority (whether or not held by the Trust Fund) which are
secured by the same collateral.

         Insurance Company General Accounts

         In the event that Certificates do not meet the requirements of the
Exemption solely because they are Subordinate Certificates or fail to meet a
minimum rating requirement under the Exemption, certain Plans may be eligible to
purchase Certificates pursuant to Section III of PTCE 95-60 which permits
insurance company general accounts as defined in PTCE 95-60 to purchase such
Certificates if they otherwise meet all of the other requirements of the
Exemption.

         In addition, the rating of a Certificate may change. If the rating of a
Certificate declines below the lowest permitted rating, the Certificate will no
longer be eligible for relief under the Exemption (although a Plan that had
purchased the Certificate when the Certificate had a permitted rating would not
be required by the Exemption to dispose of it). Consequently, a Certificate may
not be purchased or sold to a Plan in such circumstances other than to an
insurance company general account pursuant to PTCE 95-60.

         Permitted Assets

         The Exemption permits an interest-rate swap to be an asset of a Trust
Fund which issues Certificates acquired by Plans in an initial offering or in
the secondary market and clarifies the requirements regarding yield supplement
agreements. An interest-rate swap (or if purchased by or on behalf of the Trust
Fund) an interest-rate cap contract (collectively, a "Swap" or "Swap



                                      157


Agreement") is a permitted Trust Fund asset if it: (a) is an "eligible Swap;"
(b) is with an "eligible counterparty;" (c) relates to a Class of Certificates
purchased by a "qualified plan investor;" (d) meets certain additional specific
conditions which depend on whether the Swap is a "ratings dependent Swap" or a
"non-ratings dependent Swap" and (e) permits the Trust Fund to make termination
payments to the Swap (other than currently scheduled payments) solely from
excess spread or amounts otherwise payable to the Servicer or Depositor.

         An "eligible Swap" is one which: (a) is denominated in U.S. dollars;
(b) pursuant to which the Trust Fund pays or receives, on or immediately prior
to the respective payment or distribution date for the class of Certificates to
which the Swap relates, a fixed rate of interest or a floating rate of interest
based on a publicly available index (e.g., LIBOR or the U.S. Federal Reserve's
Cost of Funds Index (COFI)), with the Trust Fund receiving such payments on at
least a quarterly basis and obligated to make separate payments no more
frequently than the counterparty, with all simultaneous payments being netted
("Allowable Interest Rate"); (c) has a notional amount that does not exceed
either: (i) the principal balance of the class of Certificates to which the Swap
relates, or (ii) the portion of the principal balance of such class represented
by obligations ("Allowable Notional Amount"); (d) is not leveraged (i.e.,
payments are based on the applicable notional amount, the day count fractions,
the fixed or floating rates permitted above, and the difference between the
products thereof, calculated on a one-to-one ratio and not on a multiplier of
such difference) ("Leveraged"); (e) has a final termination date that is either
the earlier of the date on which the Trust Fund terminates or the related class
of Certificates are fully repaid and (f) does not incorporate any provision
which could cause a unilateral alteration in the interest rate requirements or
the prohibition against leveraging described above.

         An "eligible counterparty" means a bank or other financial institution
which has a rating at the date of issuance of the Certificates, which is in one
of the three highest long-term credit rating categories or one of the two
highest short-term credit rating categories, utilized by at least one of the
Rating Agencies rating the Certificates; provided that, if a counterparty is
relying on its short-term rating to establish eligibility hereunder, such
counterparty must either have a long-term rating in one of the three highest
long-term rating categories or not have a long-term rating from the applicable
Rating Agency.

         A "qualified plan investor" is a Plan or Plans where the decision to
buy such class of Certificates is made on behalf of the Plan by an independent
fiduciary qualified to understand the Swap transaction and the effect the Swap
would have on the rating of the Certificates and such fiduciary is either (a) a
"qualified professional asset manager" ("QPAM") under PTCE 84-14 (see below),
(b) an "in-house asset manager" under PTCE 96-23 (see below) or (c) has total
assets (both Plan and non-Plan) under management of at least $100 million at the
time the Certificates are acquired by the Plan.

         In "ratings dependent Swaps" (where the rating of a class of
Certificates is dependent on the terms and conditions of the Swap), the Swap
Agreement must provide that if the credit rating of the counterparty is
withdrawn or reduced by any Rating Agency below a level specified by the Rating
Agency, the Servicer must, within the period specified under the Pooling and
Servicing Agreement: (a) obtain a replacement Swap Agreement with an eligible
counterparty which is acceptable to the Rating Agency and the terms of which are
substantially the same as the current Swap Agreement (at which time the earlier
Swap Agreement must terminate); or (b) cause the



                                      158


Swap counterparty to establish any collateralization or other arrangement
satisfactory to the Rating Agency such that the then current rating by the
Rating Agency of the particular class of Certificates will not be withdrawn or
reduced (and the terms of the Swap Agreement must specifically obligate the
counterparty to perform these duties for any class of Certificates with a term
of more than one year). In the event that the Servicer fails to meet these
obligations, Plan certificateholders must be notified in the immediately
following periodic report which is provided to certificateholders but in no
event later than the end of the second month beginning after the date of such
failure. Sixty days after the receipt of such report, the exemptive relief
provided under the Exemption will prospectively cease to be applicable to any
class of Certificates held by a Plan which involves such ratings dependent Swap.

         "Non-ratings dependent Swaps" (those where the rating of the
Certificates does not depend on the terms and conditions of the Swap) are
subject to the following conditions. If the credit rating of the counterparty is
withdrawn or reduced below the lowest level permitted above, the Servicer will,
within a specified period after such rating withdrawal or reduction: (a) obtain
a replacement Swap Agreement with an eligible counterparty, the terms of which
are substantially the same as the current Swap Agreement (at which time the
earlier Swap Agreement must terminate); (b) cause the counterparty to post
collateral with the Trust Fund in an amount equal to all payments owed by the
counterparty if the Swap transaction were terminated; or (c) terminate the Swap
Agreement in accordance with its terms.

         An "eligible yield supplement agreement" is any yield supplement
agreement or similar arrangement (or if purchased by or on behalf of the Trust
Fund) an interest rate cap contract to supplement the interest rates otherwise
payable on obligations held by the Trust Fund ("EYS Agreement"). If the EYS
Agreement has a notional principal amount and/or is written on an International
Swaps and Derivatives Association, Inc. (ISDA) form, the EYS Agreement may only
be held as an asset of the Trust Fund if it meets the following conditions: (a)
it is denominated in U.S. dollars; (b) it pays an Allowable Interest Rate; (c)
it is not Leveraged; (d) it does not allow any of these three preceding
requirements to be unilaterally altered without the consent of the Trustee; (e)
it is entered into between the Trust Fund and an eligible counterparty and (f)
it has an Allowable Notional Amount.

         Pre-Funding Accounts

         The Exemption extends exemptive relief to certain mortgage-backed and
asset-backed securities transactions that use pre-funding accounts and that
otherwise meet the requirements of the Exemption relating to pre-funding
accounts. Generally, obligations in an investment pool supporting payments to
securityholders, and having a value equal to no more than 25% of the total
initial principal balance of the related certificates, may be transferred to the
trust fund within the pre-funding period which must end no later than the later
of three months or 90 days after the closing date, instead of being required to
be either identified or transferred on for before the closing date.

         Revolving Pool Features

         The Exemption only covers Certificates backed by "fixed" pools of loans
which require that all the loans must be transferred to the Trust Fund or
identified at closing (or transferred



                                      159


within the DOL Pre-Funding Period, if pre-funding meeting the conditions
described above is used). Accordingly, Certificates issued by Trust Funds which
feature revolving pools of assets will not be eligible for a purchase by Plans.
However, Securities which are Notes backed by revolving pools of assets may be
eligible for purchase by Plans pursuant to certain other prohibited transaction
exemptions. See discussion below in "ERISA Considerations Relating to Notes."

         Limitations on Scope of the Exemption

         If the general conditions of the Exemption are satisfied, the Exemption
may provide an exemption from the restrictions imposed by ERISA and the Code in
connection with the initial acquisition, transfer or holding, and the
acquisition or disposition in the secondary market, of the Certificates by
Plans. However, no exemption is provided from the restrictions of ERISA for the
acquisition or holding of a Certificate on behalf of an "Excluded Plan" by any
person who is a fiduciary with respect to the assets of such Excluded Plan. For
those purposes, an Excluded Plan is a Plan sponsored by any member of the
Restricted Group. Exemptive relief may also be provided for the acquisition,
holding and disposition of Certificates by Plans if the fiduciary or its
affiliate is the Obligor with respect to 5% or less of the fair market value of
the Loans in the Trust Fund provided that: (i) the Plan is not an Excluded Plan,
(ii) each Plan's investment in each class of Certificates does not exceed 25% of
the outstanding Certificates in the class, (iii) after the Plan's acquisition of
the Certificates, no more than 25% of the assets over which the fiduciary has
investment authority are invested in Certificates of a trust containing assets
which are sold or serviced by the same entity and (iv) in the case of initial
issuance (but not secondary market transactions), at least 50% of each class of
Certificates and at least 50% of the aggregate interests in the Trust Fund are
acquired by persons independent of the Restricted Group.

ERISA CONSIDERATIONS RELATING TO NOTES

         Under the Plan Asset Regulations, the assets of the Trust Fund would be
treated as "plan assets" of a Plan for the purposes of ERISA and the Code only
if the Plan acquires an "equity interest" in the Trust Fund and none of the
exceptions contained in the Plan Asset Regulations is applicable. An equity
interest is defined under the Plan Asset Regulations as an interest other than
an instrument which is treated as indebtedness under applicable local law and
which has no substantial equity features. Assuming that the Notes are treated as
indebtedness without substantial equity features for purposes of the Plan Asset
Regulations, then such Notes will be eligible for purchase by Plans. However,
without regard to whether the Notes are treated as an "equity interest" for such
purposes, the acquisition or holding of Notes by or on behalf of a Plan could be
considered to give rise to a prohibited transaction if the Trust Fund or any of
its affiliates is or becomes a party in interest or disqualified person with
respect to such Plan, or in the event that a Note is purchased in the secondary
market and such purchase constitutes a sale or exchange between a Plan and a
party in interest or disqualified person with respect to such Plan. There can be
no assurance that the Trust Fund or any of its affiliates will not be or become
a party in interest or a disqualified person with respect to a Plan that
acquires Notes.

         The Exemption covers Notes as well as Certificates. The exemptive
relief provided under the Exemption for any prohibited transactions which could
be caused as a result of the operation, management or servicing of the Trust
Fund and its assets would not be necessary with



                                      160


respect to Notes with no substantial equity features which are issued as
obligations of the Trust Fund. However, the Exemption would provide prohibited
transaction exemptive relief for the acquisition, holding or transfer of Notes
between a Plan and a party in interest, provided that the same conditions of the
Exemption described above relating to Certificates are met with respect to the
Notes, certain restrictions are imposed on the Issuer's governing documents to
ensure that its assets may not be reached by the creditors of the Depositor in
the event of bankruptcy or other insolvency and certain legal opinions are
provided. The same limitations of such exemptive relief relating to acquisitions
of Certificates by fiduciaries with respect to Excluded Plans would also be
applicable to the Notes as described herein in "Limitations on Scope of the
Exemption."

         In the event that the Exemption is not applicable to the Notes, one or
more other prohibited transactions exemptions may be available to Plans
purchasing or transferring the Notes depending in part upon the type of Plan
fiduciary making the decision to acquire the Notes and the circumstances under
which such decision is made. These exemptions include, but are not limited to,
Prohibited Transaction Class Exemption 90-1 (regarding investments by insurance
company pooled separate accounts), Prohibited Transaction Class Exemption 91-38
(regarding investments by bank collective investments funds), PTCE 84-14
(regarding transactions effected by "qualified professional asset managers"),
PTCE 95-60 (regarding investments by insurance company general accounts) and
PTCE 96-23 (regarding transactions effected by "in-house asset managers")
(collectively, the "Investor-Based Exemptions"). However, even if the conditions
specified in these Investor-Based Exemptions are met, the scope of the relief
provided under such Exemptions might or might not cover all acts which might be
construed as prohibited transactions.

         EACH PROSPECTUS SUPPLEMENT WILL CONTAIN INFORMATION CONCERNING
CONSIDERATIONS RELATING TO ERISA AND THE CODE THAT ARE APPLICABLE TO THE RELATED
SECURITIES. BEFORE PURCHASING SECURITIES IN RELIANCE ON PTCE 83-1, THE
EXEMPTION, THE INVESTOR-BASED EXEMPTIONS OR ANY OTHER EXEMPTION, A FIDUCIARY OF
A PLAN SHOULD ITSELF CONFIRM THAT REQUIREMENTS SET FORTH IN SUCH EXEMPTION WOULD
BE SATISFIED.

         ANY PLAN INVESTOR WHO PROPOSES TO USE "PLAN ASSETS" OF ANY PLAN TO
PURCHASE SECURITIES OF ANY SERIES OR CLASS SHOULD CONSULT WITH ITS COUNSEL WITH
RESPECT TO THE POTENTIAL CONSEQUENCES UNDER ERISA AND SECTION 4975 OF THE CODE
OF THE ACQUISITION AND OWNERSHIP OF SUCH SECURITIES.

         Governmental plans and church plans as defined in ERISA are not subject
to ERISA or Code Section 4975, although they may elect to be qualified under
Section 401(a) of the Code and exempt from taxation under Section 501(a) of the
Code and would then be subject to the prohibited transaction rules set forth in
Section 503 of the Code. In addition, governmental plans may be subject to
federal, state and local laws which are to a material extent similar to the
provisions of ERISA or a Code Section 4975 ("Similar Law"). A fiduciary of a
governmental plan should make its own determination as to the propriety of an
investment in Securities under applicable fiduciary or other investment
standards and the need for the availability of any exemptive relief under any
Similar Law.



                                      161


                                LEGAL INVESTMENT

         The applicable prospectus supplement for a Series of Notes or
Certificates, as applicable, will specify whether a Class or Subclass of the
Notes or Certificates, as applicable, as long as it is rated in one of the two
highest rating categories by one or more nationally recognized statistical
rating organizations, will constitute a "mortgage related security" for purposes
of the Secondary Mortgage Market Enhancement Act of 1984 ("SMMEA"). The Class or
Subclass, if any, constituting a "mortgage related security" will be a legal
investment for persons, trusts, corporations, partnerships, associations,
business trusts and business entities, including depository institutions,
insurance companies, trustees and state government employee retirement systems,
created pursuant to or existing under the laws of the United States or of any
state (including the District of Columbia and Puerto Rico) whose authorized
investments are subject to state regulation to the same extent that, under
applicable law, obligations issued by or guaranteed as to principal and interest
by the United States or any agency or instrumentality of the United States
constitute legal investments for the entities.

         Pursuant to SMMEA, a number of states enacted legislation, on or prior
to the October 3, 1991 cutoff for the enactments, limiting to varying extents
the ability of specific entities, in particular, insurance companies, to invest
in "mortgage related securities," in most cases by requiring the affected
investors to rely solely upon existing state law, and not SMMEA. Accordingly,
the investors affected by the legislation will be authorized to invest in Notes
or Certificates, as applicable, qualifying as "mortgage related securities" only
to the extent provided in the legislation.

         SMMEA also amended the legal investment authority of
federally-chartered depository institutions as follows: federal savings and loan
associations and federal savings banks may invest in, sell or otherwise deal in
mortgage related securities without limitation as to the percentage of their
assets represented thereby, federal credit unions may invest in the securities,
and national banks may purchase the securities for their own account without
regard to the limitations generally applicable to investment securities set
forth in 12 U.S.C. 24 (Seventh), subject in each case to the regulations as the
applicable federal regulatory authority may prescribe. In this connection,
federal credit unions should review NCUA Letter to Credit Unions No. 96, as
modified by Letter to Credit Unions No. 108, which includes guidelines to assist
federal credit unions in making investment decisions for mortgage related
securities. The NCUA has adopted rules, codified as 12 C.F.R. Section
703.5(f)-(k), which prohibit federal credit unions from investing in particular
mortgage related securities, including the securities of particular Series,
Classes or Subclasses of Notes or Certificates, as applicable, except under
limited circumstances.

         All depository institutions considering an investment in the Notes or
Certificates, as applicable, should review the "Supervisory Policy Statement on
Securities Activities" dated January 28, 1992, as revised April 15, 1994 (the
"Policy Statement") of the Federal Financial Institutions Examination Council.

         The Policy Statement which has been adopted by the Board of Governors
of the Federal Reserve System, the Office of the Comptroller of the Currency,
the FDIC and the Office of Thrift Supervision and by the NCUA, with some
modifications, prohibits depository institutions



                                      162


from investing in particular "high-risk Mortgage Certificates", including the
securities of particular Series, Classes or Subclasses of the Notes or
Certificates, as applicable, except under limited circumstances, and sets forth
investment practices deemed to be unsuitable for regulated institutions.

         Institutions whose investment activities are subject to regulation by
federal or state authorities should review rules, policies and guidelines
adopted from time to time by the authorities before purchasing any Notes or
Certificates, as applicable, as some Series, Classes or Subclasses may be deemed
unsuitable investments, or may otherwise be restricted, under the rules,
policies or guidelines, in some instances irrespective of SMMEA.

         The foregoing does not take into consideration the applicability of
statutes, rules, regulations, orders, guidelines or agreements generally
governing investments made by a particular investor, including, but not limited
to, "prudent investor" provisions, percentage-of-assets limits, provisions which
may restrict or prohibit investment in securities which are not "interest
bearing" or "income paying," and, with regard to any Notes or Certificates, as
applicable, issued in book-entry form, provisions which may restrict or prohibit
investments in securities which are issued in book-entry form.

         Except as to the status of some of the Classes of Notes or
Certificates, as applicable, as "mortgage related securities," no representation
is made as to the proper characterization of the Notes or Certificates, as
applicable, for legal investment purposes, financial institution regulatory
purposes, or other purposes, or as to the ability of particular investors to
purchase Notes or Certificates, as applicable, under applicable legal investment
restrictions. The uncertainties described above, and any unfavorable future
determinations concerning legal investment or financial institution regulatory
characteristics of the Notes or Certificates, as applicable, may adversely
affect the liquidity of the Notes or Certificates, as applicable.

         Investors should consult their own legal advisers in determining
whether and to what extent the Notes or Certificates, as applicable, constitute
legal investments for the investors.

                              PLAN OF DISTRIBUTION

         Each Series of Notes or Certificates, as applicable, offered by this
prospectus and by means of the related prospectus supplements may be sold
directly by the Depositor or may be offered through Credit Suisse First Boston
LLC, an affiliate of the Depositor, or underwriting syndicates represented by
Credit Suisse First Boston LLC (the "Underwriters"). The prospectus supplement
with respect to each Series of Notes or Certificates, as applicable, will set
forth the terms of the offering of the Series or Class of Notes or Certificates,
as applicable, and each Subclass within the Series, including the name or names
of the Underwriters, the proceeds to the Depositor, and either the initial
public offering price, the discounts and commissions to the Underwriters and any
discounts or concessions allowed or reallowed to particular dealers, or the
method by which the price at which the Underwriters will sell the Notes or
Certificates, as applicable, will be determined.

         Unless otherwise specified in the prospectus supplement, the
Underwriters will be obligated to purchase all of the Notes or Certificates, as
applicable, of a Series described in the



                                      163


prospectus supplement with respect to the Series if any Notes or Certificates,
as applicable, are purchased. The Notes or Certificates, as applicable, may be
acquired by the Underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.

         If so indicated in the prospectus supplement, the Depositor will
authorize the Underwriters or other persons acting as the Depositor's agents to
solicit offers by specific institutions to purchase the Notes or Certificates,
as applicable, from the Depositor pursuant to contracts providing for payment
and delivery on a future date. Institutions with which the contracts may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and others, but in
all cases the institutions must be approved by the Depositor. The obligation of
any purchaser under any contract will be subject to the condition that the
purchase of the offered Notes or Certificates, as applicable, shall not at the
time of delivery be prohibited under the laws of the jurisdiction to which the
purchaser is subject. The Underwriters and other agents will not have any
responsibility in respect of the validity or performance of the contracts.

         The Depositor may also sell the Notes or Certificates, as applicable,
offered by this prospectus and by means of the related prospectus supplements
from time to time in negotiated transactions or otherwise, at prices determined
at the time of sale. The Depositor may effect the transactions by selling Notes
or Certificates, as applicable, to or through dealers, and the dealers may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Depositor and any purchasers of Notes or Certificates, as
applicable, for whom they may act as agents.

         The place and time of delivery for each Series of Notes or
Certificates, as applicable, offered by this prospectus and by means of the
related prospectus supplement will be set forth in the prospectus supplement
with respect to the Series.

         If and to the extent required by applicable law or regulation, this
prospectus and the attached prospectus supplement will also be used by the
Underwriters after the completion of the offering in connection with offers and
sales related to market-making transactions in the offered Notes or
Certificates, as applicable, in which the Underwriters act as principal. Sales
will be made at negotiated prices determined at the time of sales.

                                  LEGAL MATTERS

         Some legal matters in connection with the Notes or Certificates, as
applicable, offered by this prospectus, including material federal income tax
consequences, will be passed upon for the Depositor and for the Underwriters by
McKee Nelson LLP, New York, New York, or other counsel specified in the related
prospectus supplement.

                              PROSPECTUS SUPPLEMENT

         The prospectus supplement with respect to each Series of Notes or
Certificates, as applicable, will, among other things, set forth with respect to
the Series of Notes or Certificates, as applicable:

                                      164



o    the identity of each Class or Subclass of Notes or Certificates, as
     applicable, within the Series;

o    the undivided interest, Percentage Interest, Stated Principal Balance,
     principal balance or notional amount of each Class or Subclass of Notes or
     Certificates, as applicable;

o    the Interest Rate borne, or manner in which interest is paid, if any, by
     each Class or Subclass of Notes or Certificates, as applicable, within the
     Series;

o    particular information concerning the Mortgage Loans, the Mortgage
     Certificates, the Contracts, if any, and the other assets comprising the
     Trust Fund for the Series;

o    the final Distribution Date of each Class or Subclass of Notes or
     Certificates, as applicable, within the Series;

o    the identity of each Class or Subclass of Compound Interest Notes or
     Certificates, as applicable, if any, within the Series;

o    the method used to calculate the amount to be distributed with respect to
     each Class or Subclass of Notes or Certificates, as applicable, within the
     Series;

o    the order of application of distributions to each of the Classes or
     Subclasses of Notes or Certificates, as applicable, within the Series,
     whether sequential, pro rata or otherwise;

o    the Distribution Dates with respect to the Series;

o    information with respect to the terms of the Residual Certificates or
     Subordinated Securities offered by this prospectus, if any, are offered;

o    information with respect to the method of credit support, if any, with
     respect to the Series; and

o    additional information with respect to the plan of distribution of the
     Series of Certificates.

                             ADDITIONAL INFORMATION

         This prospectus contains, and the prospectus supplement for each Series
of Notes or Certificates, as applicable, will contain, a summary of the material
terms of the documents referred to in this prospectus and in the prospectus
supplement, but neither contains nor will contain all of the information set
forth in the Registration Statement of which this prospectus and the related
prospectus supplement is a part. For further information, reference is made to
the Registration Statement and the exhibits to the Registration Statement which
the Depositor has filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended. Statements contained
in this prospectus and any prospectus supplement as to the contents of any
contract or other document referred to are summaries and in each instance
reference is made to the copy of the contract or other document filed as an
exhibit to the Registration Statement, each statement being qualified in all
respects by the reference. Copies of the Registration Statement may be obtained
from the Commission, upon payment of the prescribed charges, or may be examined
free of charge at the Commission's offices. Reports and other information filed
with the Commission can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Regional Offices of the Commission at Citicorp Center,
500 West Madison Street, Suite



                                      165


1400, Chicago, Illinois 60661 and 233 Broadway, New York, New York 10279. Copies
of this information can be obtained from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates.

         The Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. The address of the site is
(http://www.sec.gov).

         Copies of the Pooling and Servicing Agreement or of the Trust
Agreement, Indenture and Sale and Servicing Agreement pursuant to which a Series
of Notes or Certificates, as applicable, is issued, as applicable, will be
provided to each person to whom a prospectus and the related prospectus
supplement are delivered, upon written or oral request directed to: Treasurer,
Asset Backed Securities Corporation, Eleven Madison Avenue, New York, New York
10010, (212) 325-2000.

                INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

         There are incorporated in this prospectus by reference all documents
and reports filed or caused to be filed by the Depositor with respect to a Trust
Fund pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to
the termination of the offering of Notes or Certificates, as applicable, offered
by this prospectus. The Depositor will provide or cause to be provided without
charge to each person to whom this prospectus is delivered in connection with
the offering of one or more Classes or Subclasses of Notes or Certificates, as
applicable, upon request, a copy of any or all the documents or reports
incorporated in this prospectus by reference, in each case to the extent the
documents or reports relate to one or more of the Classes of the Notes or
Certificates, as applicable, other than the exhibits to the documents, unless
the exhibits are specifically incorporated by reference in the documents.
Requests to the Depositor should be directed to: Asset Backed Securities
Corporation, Eleven Madison Avenue, New York, New York 10010, (212) 325-2000.

         IF AND TO THE EXTENT REQUIRED BY APPLICABLE LAW OR REGULATIONS, THIS
PROSPECTUS AND THE ATTACHED PROSPECTUS SUPPLEMENT WILL ALSO BE USED BY THE
UNDERWRITER AFTER THE COMPLETION OF THE OFFERING IN CONNECTION WITH OFFERS AND
SALES RELATED TO MARKET-MAKING TRANSACTIONS IN THE OFFERED SECURITIES IN WHICH
THE UNDERWRITER ACTS AS PRINCIPAL. SALES WILL BE MADE AT NEGOTIATED PRICES
DETERMINED AT THE TIME OF SALE.



                                      166


                                 INDEX OF TERMS




110% yield rule.................................................................................................120
1986 Act........................................................................................................112
1997 Act........................................................................................................139
Accrual Distribution Amount......................................................................................34
Advances.........................................................................................................53
Agreement....................................................................................................13, 29
Allowable Interest Rate.........................................................................................158
Allowable Notional Amount.......................................................................................158
Alternative Credit Support........................................................................................6
Appraised Value..................................................................................................21
Approved Sale....................................................................................................88
APRs.............................................................................................................19
ARM Loans.........................................................................................................8
Asset Value......................................................................................................31
Buy-Down Fund.....................................................................................................9
Buy-Down Loans....................................................................................................9
Certificate Account..............................................................................................44
Certificate Distribution Account.................................................................................45
Certificate Principal Balance....................................................................................27
Certificate Register.............................................................................................35
Certificateholders...............................................................................................12
Certificates......................................................................................................5
CI...............................................................................................................72
Class.............................................................................................................5
Cleanup Costs...................................................................................................100
Clearstream, Luxembourg..........................................................................................72
Clearstream, Luxembourg Participants.............................................................................72
Closed Loans.....................................................................................................13
Closed-End Loans..................................................................................................6
Code............................................................................................................105
Coinsurance......................................................................................................85
Collection Account...............................................................................................44
Commercially Reasonable..........................................................................................96
Commission......................................................................................................165
Contract Loan-to-Value Ratio.....................................................................................21
Contract Pool....................................................................................................18
Contract Schedule................................................................................................39
Contracts........................................................................................................18
Converted Mortgage Loan...........................................................................................9
Cooperative.......................................................................................................6
Cooperative Dwelling..............................................................................................6
Cooperative Housing Corporation..................................................................................94
Cooperative Loans.................................................................................................6
Custodial Account................................................................................................45


                                      167





Custodial Agreement..............................................................................................19
Custodian........................................................................................................19
Cut-off Date......................................................................................................5
DBC..............................................................................................................72
Debt Certificateholders.........................................................................................149
Debt Certificates...............................................................................................149
Debt Securities.................................................................................................106
Defective Obligation............................................................................................108
Deferred Interest.................................................................................................9
Deficiency Event.................................................................................................64
Deleted Contract.................................................................................................20
Deleted Mortgage Certificates....................................................................................36
Deleted Mortgage Loans...........................................................................................38
Deleted Warehouse Loan...........................................................................................22
Depositor........................................................................................................23
Designated Transactions.........................................................................................157
Determination Date...............................................................................................49
Discount Securities..............................................................................................28
Disqualified Organization.......................................................................................125
Distribution Date................................................................................................32
DOL.............................................................................................................154
Due Date..........................................................................................................8
Due Period.......................................................................................................34
Eligible Corporation............................................................................................127
eligible counterparty...........................................................................................158
Eligible Investment..............................................................................................41
eligible Swap...................................................................................................158
ERISA...........................................................................................................153
Escrow Account...................................................................................................54
Exemption.......................................................................................................155
EYS Agreement...................................................................................................159
Federal Tax Counsel.............................................................................................105
FHA..............................................................................................................10
FHA Experience...................................................................................................24
FHA Loans.........................................................................................................7
FHLMC............................................................................................................14
Fixture Filing..................................................................................................101
FNMA.............................................................................................................14
Garn-St Germain Act..............................................................................................98
GPM Fund.........................................................................................................10
GPM Loans........................................................................................................10
Grantor Trust Fund..............................................................................................105
Grantor Trust Fund Stripped Bond................................................................................137
Grantor Trust Fund Stripped Coupon..............................................................................137
Grantor Trust Securities........................................................................................105
Grantor Trust Securityholders...................................................................................133



                                      168





Holder-in-Due-Course............................................................................................104
Home Equity Loans.................................................................................................6
Indenture.........................................................................................................5
Indenture Trustee.................................................................................................5
Indirect Participants............................................................................................71
Initial Deposit..................................................................................................75
Insurance Proceeds...............................................................................................46
Insured..........................................................................................................57
Interest Distribution............................................................................................33
Interest Rate....................................................................................................27
Interest Weighted Class..........................................................................................28
Interest Weighted Subclass.......................................................................................28
Investor-Based Exemptions.......................................................................................161
Issuer............................................................................................................5
L/C Bank.........................................................................................................73
L/C Percentage...................................................................................................73
Letter of Credit..................................................................................................6
Leveraged.......................................................................................................158
Limited Documentation............................................................................................15
Liquidating Loan.................................................................................................74
Liquidation Proceeds.............................................................................................46
loans...........................................................................................................156
Loss.............................................................................................................81
Manufactured Home................................................................................................19
Mortgage Certificates.........................................................................................7, 18
Mortgage Loans...............................................................................................7, 106
Mortgage Notes....................................................................................................7
Mortgage Pool...................................................................................................154
mortgage pool pass-through certificates.........................................................................154
Mortgage Pools....................................................................................................6
Mortgage Rates....................................................................................................9
Mortgage Related Securities.....................................................................................162
Mortgage Related Security.......................................................................................162
Mortgagor.........................................................................................................7
Mortgagor Bankruptcy Bond.........................................................................................6
Multi-Class Securities...........................................................................................27
Multifamily Property..............................................................................................6
New CI...........................................................................................................72
noneconomic residual interest...................................................................................126
Non-U.S. Person.................................................................................................133
Non-United States Owner.........................................................................................148
Note Distribution Account........................................................................................45
Note Register....................................................................................................35
Noteholders......................................................................................................12
Notes.............................................................................................................5
objective rate..................................................................................................115



                                      169





Obligor..........................................................................................................27
OID Regulations.................................................................................................106
Original Value....................................................................................................8
Originator.......................................................................................................14
Participants.....................................................................................................71
Partnership Certificate Owners..................................................................................142
Partnership Certificates........................................................................................106
Partnership Trust Fund..........................................................................................106
Pass-Through Entity.............................................................................................125
Payment Deficiencies.............................................................................................75
Peaceful........................................................................................................103
Percentage Interest...............................................................................................5
Performance Bond.................................................................................................20
Plan............................................................................................................154
Plan Asset Regulations..........................................................................................154
Policy Statement................................................................................................162
Pool Insurance Policy.............................................................................................6
Pool Insurer.....................................................................................................57
Pooling and Servicing Agreement...............................................................................5, 29
Pre-Funded Amount................................................................................................41
Pre-Funding Account..............................................................................................41
Pre-Funding Period...............................................................................................41
Premium Securities...............................................................................................28
Prepayment Assumption...........................................................................................113
Primary Insurer..................................................................................................47
Primary Mortgage Insurance Policy................................................................................57
Primary Mortgage Insurer.........................................................................................57
Principal Distribution...........................................................................................32
Principal Prepayments............................................................................................28
Principal Weighted Class.........................................................................................27
Principal Weighted Subclass......................................................................................27
Prudent Investor................................................................................................163
PTCE............................................................................................................154
PTCE 83-1.......................................................................................................154
PTE.............................................................................................................155
Purchase Price...................................................................................................40
QPAM............................................................................................................158
qualified floating rates........................................................................................115
qualified inverse floating rate.................................................................................115
Qualified Liquidation............................................................................................70
qualified plan investor.........................................................................................158
Rating Agency...................................................................................................156
Record Date......................................................................................................32
Reference Agreement..............................................................................................29
Regular Interests................................................................................................31
Regular Securities..............................................................................................107



                                      170





Regular Securityholder..........................................................................................111
REMIC...........................................................................................................105
REMIC Pool......................................................................................................106
REMIC Provisions................................................................................................105
REMIC qualified floating rate...................................................................................111
REMIC Regulations...............................................................................................106
REMIC Securities................................................................................................105
Required Distribution............................................................................................78
Required Reserve.................................................................................................75
Reserve Fund......................................................................................................6
Residual Certificates............................................................................................28
Residual Holders................................................................................................120
Residual Interest................................................................................................31
Residual Securities.............................................................................................107
Revolving Credit Line Loans.......................................................................................6
Rules............................................................................................................71
Sale and Servicing Agreement......................................................................................5
Securities........................................................................................................5
Securities Act...................................................................................................32
Security Guarantee Insurance......................................................................................6
Security Owners..................................................................................................70
Securityholders..................................................................................................12
Self-Help.......................................................................................................103
Senior Certificates.............................................................................................137
Senior Class Percentage.........................................................................................137
Senior Notes......................................................................................................6
Senior Prepayment Percentage.....................................................................................76
Senior Securities.................................................................................................6
Series............................................................................................................5
Servicemen's Readjustment Act....................................................................................10
Servicer.........................................................................................................12
Servicing Account................................................................................................45
Servicing Agreement..............................................................................................13
Shortfall Amount................................................................................................138
Similar Law.....................................................................................................161
Single Family Property............................................................................................6
SMMEA...........................................................................................................162
SPA..............................................................................................................24
Special Distributions............................................................................................51
Special Hazard Insurance Policy...................................................................................6
Standard Hazard Insurance Policy.................................................................................55
Standard Terms...................................................................................................29
Startup Day.....................................................................................................107
Stated Principal Balance.........................................................................................27
Stated Principal Distribution Amount.............................................................................34
Stripped Certificates...........................................................................................134



                                      171





Subclass..........................................................................................................5
Subordinate Certificates.....................................................................................6, 137
Subordinate Class Percentage....................................................................................137
Subordinate Notes.................................................................................................6
Subordinate Securities............................................................................................6
Subordinated Amount...............................................................................................6
Subordinated Class................................................................................................6
Subordinated Pool................................................................................................75
Subordinated Subclass.............................................................................................6
Substitute Contract..............................................................................................20
Substitute Mortgage Certificates.................................................................................36
Substitute Mortgage Loans........................................................................................38
Substitute Warehouse Loan........................................................................................22
Super-Premium...................................................................................................113
Swap............................................................................................................157
Swap Agreement..................................................................................................158
Taxable Mortgage Pools..........................................................................................106
Tiered REMICs...................................................................................................110
Title V.........................................................................................................104
Trust.............................................................................................................5
Trust Agreement...................................................................................................5
Trust Assets.....................................................................................................18
Trust Fund........................................................................................................5
Trustee...........................................................................................................5
U.S. Person.....................................................................................................128
UCC..........................................................................................................71, 96
Unaffiliated Sellers.............................................................................................13
Underwriters....................................................................................................163
VA................................................................................................................7
VA Loans..........................................................................................................7
Voidable Preference..............................................................................................80
Warehouse Loan Pool..............................................................................................21
Warehouse Loans..................................................................................................21
Warranty and Servicing Agreement.................................................................................29



                                      172


================================================================================

                                 $1,109,051,000

                                 (APPROXIMATE)



                      ASSET BACKED SECURITIES CORPORATION
                                   Depositor



                         SAXON MORTGAGE SERVICES, INC.
                                   Servicer



                      ASSET BACKED SECURITIES CORPORATION
                    HOME EQUITY LOAN TRUST, SERIES 2005-HE1
                                    Issuer



             ASSET BACKED PASS-THROUGH CERTIFICATES, SERIES 2005-HE1
                              ---------------------

                              PROSPECTUS SUPPLEMENT

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


                           CREDIT SUISSE FIRST BOSTON


                                   Underwriter


YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION.


WE ARE NOT OFFERING THE CERTIFICATES IN ANY STATE WHERE THE OFFER IS NOT
PERMITTED.


We represent the accuracy of the information in this prospectus supplement and
the accompanying prospectus only as of the dates on their respective covers.


Dealers will be required to deliver a prospectus supplement and prospectus when
acting as underwriters of the certificates offered hereby and with respect to
their unsold allotments or subscriptions. In addition, all dealers selling the
offered certificates, whether or not participating in this offering, may be
required to deliver a prospectus supplement and prospectus until ninety days
after the date of this prospectus supplement.

================================================================================