Filed Pursuant to Rule 424(b)(5)
                                              Registration File No.: 333-106982


PROSPECTUS SUPPLEMENT DATED SEPTEMBER 28, 2004
(TO PROSPECTUS DATED AUGUST 23, 2004)
                                                                    [MASTR LOGO]



                                  $417,731,685
                                  (APPROXIMATE)


                      MASTR ALTERNATIVE LOAN TRUST 2004-10
                                    (ISSUER)


                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.
                                   (DEPOSITOR)


                         UBS REAL ESTATE SECURITIES INC.
                                  (TRANSFEROR)


                     WELLS FARGO BANK, NATIONAL ASSOCIATION
                    (MASTER SERVICER AND TRUST ADMINISTRATOR)


               MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-10


     The MASTR Alternative Loan Trust 2004-10 is issuing certificates consisting
in the aggregate of 25 classes, but is offering only 21 classes through this
prospectus supplement.

o    The trust's main source of funds for making distributions on the
     certificates will be collections on five pools of closed-end, fixed-rate
     loans secured by first mortgages or deeds of trust on residential one- to
     four-family properties.

o    Credit enhancement will be provided by the subordination of certain classes
     of certificates in respect of the right to receive interest and principal.

--------------------------------------------------------------------------------
YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE S-18 OF THIS
PROSPECTUS SUPPLEMENT AND PAGE 17 IN THE PROSPECTUS.

The certificates will not represent obligations of Mortgage Asset Securitization
Transactions, Inc., UBS Real Estate Securities Inc., UBS Securities LLC or any
other person or entity. No governmental agency or instrumentality or any other
person will insure the certificates or the collateral securing the certificates.

You should consult with your own advisors to determine if the offered
certificates are appropriate investments for you and to determine the applicable
legal, tax, regulatory and accounting treatment of the offered certificates.
-------------------------------------------------------------------------------

     NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED 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.

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

     We will not list the offered certificates on any national securities
exchange or on any automated quotation system of any registered securities
association such as NASDAQ.

     The underwriter, UBS Securities LLC, will purchase the offered certificates
from Mortgage Asset Securitization Transactions, Inc. and expects to deliver the
offered certificates (other than the Class A-LR and Class A-R certificates) in
book-entry form through the facilities of The Depository Trust Company to
purchasers on or about September 29, 2004.

     The proceeds to depositor are expected to be approximately $426,049,599
plus accrued interest and before deducting expenses, estimated at $460,115. See
"Underwriting" in this prospectus supplement. The underwriter will sell the
offered certificates purchased by it from time to time in negotiated
transactions at varying prices determined at the time of sale.

                           [UBS INVESTMENT BANK LOGO]




                                TABLE OF CONTENTS






Summary ..................................................................................   S- 7
Risk Factors .............................................................................   S-18
      Certificates May Not Be Appropriate for Individual Investors .......................   S-18
      The Credit Enhancement Features May Be Inadequate to Provide Protection
          for the Certificates ...........................................................   S-18
      Subordinate Certificates Provide Subordination for All Senior Certificates .........   S-19
      Inadequacy of Value of Properties Could Affect Severity of Losses ..................   S-20
      Bankruptcy of Borrowers May Adversely Affect Distributions on Certificates .........   S-20
      There Are Risks Involving Unpredictability of Prepayments and LIBOR Rates
          and the Effect of Prepayments and LIBOR Rates on Yields ........................   S-21
      The Transferor May Not Be Able to Repurchase or Replace Defective Loans ............   S-23
      There Are Risks in Holding Subordinate Certificates and the Class 5-A-7 Certificates   S-23
      Geographic Concentration Could Increase Losses on the Loans ........................   S-24
      Delay in Receipt of Liquidation Proceeds; Liquidation Proceeds May Be Less
          Than the Loan Balance ..........................................................   S-25
      High Loan-to-Value Ratios Increase Risk of Loss ....................................   S-25
      Interest Only Loans Have a Greater Risk Upon Default ...............................   S-25
      The Rate of Default on Loans That Are Secured by Investor Properties May Be
          Higher Than on Other Loans .....................................................   S-25
      Failure of Master Servicer or Servicers to Perform Their Obligations May
          Adversely Affect Distributions on Certificates; Potential Conflict of Interest .   S-26
      The Recording of the Mortgages in the Name of MERS May Affect the Yield on
          the Certificates ...............................................................   S-26
      Limited Liquidity May Adversely Affect Market Value of the Certificates ............   S-27
      The Ratings on Your Certificates Could Be Reduced or Withdrawn .....................   S-27
      The Certificates Are Obligations of the Trust Only .................................   S-27
      Rights of Beneficial Owners May Be Limited by Book-Entry System ....................   S-27
      Risks Related to the Residual Certificates .........................................   S-28
      The Return on Your Certificates Could Be Reduced Due to the Application of
           the Servicemembers Civil Relief Act ...........................................   S-29
Forward-Looking Statements ...............................................................   S-30
Defined Terms ............................................................................   S-30
Description of the Loans .................................................................   S-30
      General ............................................................................   S-30
      Statistical Information ............................................................   S-32
Underwriting Standards ...................................................................   S-32
      General ............................................................................   S-32
      Modified Standards .................................................................   S-34
      Countrywide Home Loans, Inc. .......................................................   S-35
      Underwriting Process ...............................................................   S-35
      Wells Fargo Bank, National Association .............................................   S-41
The Master Servicer and the Servicers ....................................................   S-45
      General ............................................................................   S-45
      The Master Servicer ................................................................   S-45


                                      S-2





      The Servicers ......................................................................   S-46
Description of the Offered Certificates ..................................................   S-56
      General ............................................................................   S-56
      Book-Entry Certificates ............................................................   S-56
      Physical Certificates ..............................................................   S-57
      Allocation of Available Funds to the Certificates ..................................   S-57
      Interest ...........................................................................   S-62
      Principal ..........................................................................   S-63
      Principal Allocation of the Class 5-A-5 Accrual Amounts ............................   S-64
      Recoveries .........................................................................   S-64
      Allocation of Losses on the Certificates ...........................................   S-65
      Subordination ......................................................................   S-67
      Restrictions on Transfer of the Residual Certificates .............................    S-70
      Reports to Certificateholders ......................................................   S-72
Prepayment and Yield Considerations ......................................................   S-74
      General ............................................................................   S-74
      Prepayments and Defaults and LIBOR .................................................   S-74
      The Offered Subordinate Certificates ...............................................   S-77
      Modeling Assumptions ...............................................................   S-78
      Sensitivity of the Principal Only Certificates .....................................   S-81
      Sensitivity of the Class 15-AX-1, Class 15-AX-2 and Class 30-AX Certificates .......   S-82
      Sensitivity of the Class 5-A-2 Certificates ........................................   S-83
      Weighted Average Lives of the Offered Certificates .................................   S-84
      Yield on the Residual Certificates .................................................   S-99
The Pooling and Servicing Agreement ......................................................   S-99
      General ............................................................................   S-99
      Assignment of the Loans ............................................................   S-100
      Collection and Other Servicing Procedures ..........................................   S-102
      Hazard Insurance ...................................................................   S-103
      Realization upon Defaulted Loans ...................................................   S-104
      Servicing and Master Servicing Compensation and Payment of Expenses ................   S-104
      Protected Accounts .................................................................   S-105
      Collection Account and Distribution Account ........................................   S-105
      Certain Matters Regarding the Master Servicer ......................................   S-107
      Events of Servicing Termination ....................................................   S-108
      Advances ...........................................................................   S-110
      Termination ........................................................................   S-110
      Voting Rights ......................................................................   S-111
      Amendment ..........................................................................   S-112
      The Trustee ........................................................................   S-113
      The Trust Administrator ............................................................   S-113
Federal Income Tax Consequences ..........................................................   S-114
      General ............................................................................   S-114
      Regular Certificates ...............................................................   S-114
      Residual Certificates ..............................................................   S-115
      REMIC Taxes and Reporting ..........................................................   S-116
State and Other Taxes ....................................................................   S-117
ERISA Considerations .....................................................................   S-117
Legal Investment .........................................................................   S-120
Use of Proceeds ..........................................................................   S-120
Underwriting .............................................................................   S-120
Ratings ..................................................................................   S-121
Legal Matters ............................................................................   S-122
Glossary of Terms ........................................................................   S-123

Annex A:  Loan Statistical Information ...................................................   A-1


                                      S-3



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

      Information about the offered certificates is provided in two separate
documents that progressively include more detail:

     o    the prospectus, dated August 23, 2004, provides general information,
          some of which may not apply to the offered certificates; and

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

      Sales of the offered certificates may not be completed unless you have
received both this prospectus supplement and the prospectus. Please read this
prospectus supplement and the prospectus in full.

      If the terms of the offered certificates vary between this prospectus
supplement and the prospectus, then you should rely on the information in this
prospectus supplement.

      Cross-references in this prospectus supplement and the prospectus to
captions in these materials are included to assist in locating further related
discussions. The foregoing table of contents and the table of contents in the
prospectus provide the pages on which these captions are located.

      All statistical data with respect to the loans are approximate, and are
based on the scheduled principal balances of the loans as of the cut-off date
except where otherwise noted.


                                      S-4



                         THE SERIES 2004-10 CERTIFICATES



                       INITIAL CERTIFICATE                                                                      INITIAL RATING
                       PRINCIPAL BALANCE     APPROXIMATE                                                  OF OFFERED CERTIFICATES(2)
                           OR NOTIONAL      INITIAL PASS                                   INTEREST       --------------------------
        CLASS               AMOUNT(1)       THROUGH RATE        PRINCIPAL TYPES              TYPES          FITCH          S&P
--------------------   -------------------- ------------    --------------------------   --------------    -------         ---

OFFERED CERTIFICATES
Class 1-A-1 .........   $  36,000,000           4.500%         Senior, Pass-Through        Fixed Rate         AAA           AAA
Class 2-A-1 .........   $  99,498,000           5.500%         Senior, Pass-Through        Fixed Rate         AAA           AAA
Class 3-A-1 .........   $ 100,650,000           5.000%         Senior, Pass-Through        Fixed Rate         AAA           AAA
Class 4-A-1 .........   $  49,875,000           6.000%         Senior, Pass-Through        Fixed Rate         AAA           AAA
Class 5-A-1 .........   $  13,068,000            (3)        Senior, Accretion Directed   Variable Rate        AAA           AAA
Class 5-A-2 .........   $  13,068,000(4)         (5)         Senior, Notional Amount     Variable Rate,       AAA           AAA
                                                                                         Interest Only
Class 5-A-3 .........   $  39,204,000           5.500%      Senior, Accretion Directed     Fixed Rate         AAA           AAA
Class 5-A-4 .........   $  39,204,000           5.250%      Senior, Accretion Directed     Fixed Rate         AAA           AAA
Class 5-A-5 .........   $   2,404,000           5.750%        Senior, Sequential Pay      Fixed Rate,         AAA           AAA
                                                                                            Accrual
Class 5-A-6 .........   $  21,964,000           5.750%        Super Senior, Lockout        Fixed Rate         AAA           AAA
Class 5-A-7 .........   $   1,156,000           5.750%       Senior Support, Lockout       Fixed Rate         AAA           AAA
Class 15-PO .........   $   1,788,543            (6)           Senior, Ratio Strip       Principal Only       AAA           AAA
Class 30-PO .........   $   1,141,042            (6)          Senior, Ratio Strip       Principal Only
Class 15-AX-1 .......   $   3,433,154(4)        5.000%       Senior, Notional Amount      Fixed Rate,         AAA           AAA
                                                                                         Interest Only
Class 15-AX-2 .......   $   3,492,392(4)        5.500%       Senior, Notional Amount      Fixed Rate,         AAA           AAA
                                                                                         Interest Only
Class 30-AX .........   $   2,226,918(4)        5.750%       Senior, Notional Amount      Fixed Rate,         AAA           AAA
                                                                                         Interest Only
Class A-LR ..........   $          50           4.500%           Senior, Residual          Fixed Rate         AAA           AAA
Class A-R ...........   $          50           4.500%           Senior, Residual          Fixed Rate         AAA           AAA
Class B-1 ...........   $   7,152,000            (7)               Subordinate           Variable Rate        AA-            AA
Class B-2 ...........   $   2,944,000            (7)               Subordinate           Variable Rate         A-            A
Class B-3 ...........   $   1,683,000            (7)               Subordinate           Variable Rate        BBB-          BBB

   NON-OFFERED
  CERTIFICATES
Class B-4 ...........   $   1,262,000            (7)               Subordinate           Variable Rate         NR            BB
Class B-5 ...........   $   1,052,000            (7)               Subordinate           Variable Rate         NR            B
Class B-6 ...........   $     631,346            (7)               Subordinate           Variable Rate         NR            NR
Class P .............                (8)         N/A                   N/A                    N/A              NR            NR


------------------------------------------
(1)  Approximate, subject to adjustment as described in this prospectus
     supplement.

(2)  A description of the ratings of the offered certificates is set forth under
     the heading "Ratings" in this prospectus supplement.

(3)  Interest will accrue on the Class 5-A-1 certificates at a per annum rate
     equal to (i) 0.450% plus (ii) LIBOR, subject to a maximum rate of 8.000%
     and a minimum rate of 0.450%. The per annum pass through rate on the Class
     5-A-1 certificates for the first interest accrual period is expected to be
     approximately 2.280%.

(4)  The Class 5-A-2, Class 15-AX-1, Class 15-AX-2 and Class 30-AX certificates
     are interest only certificates, will not be entitled to distributions in
     respect of principal and will bear interest on their respective notional
     amounts as described in this prospectus supplement under "Description of
     the Offered Certificates--Interest."

(5)  Interest will accrue on the Class 5-A-2 certificates at a per annum rate
     equal to (i) 7.550% minus (ii) LIBOR, subject to a maximum rate of 7.550%
     and a minimum rate of 0.000%. The per annum pass through rate on the Class
     5-A-2 certificates for the first interest accrual period is expected to be
     approximately 5.720%.

(6)  The Class 15-PO and Class 30-PO certificates are principal-only
     certificates and will not be entitled to distributions in respect of
     interest.

                                      S-5


(7)   Interest will accrue on the Class B-1, Class B-2, Class B-3, Class B-4,
      Class B-5 and Class B-6 certificates at a per annum rate equal to the
      weighted average of 4.50% for loan group 1, 5.50% for loan group 2, 5.00%
      for loan group 3, 6.00% for loan group 4 and 5.75% for loan group 5,
      weighted on the basis of the portion of the aggregate principal balance of
      the Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6
      certificates attributable to each such loan group. The per annum
      pass-through rate on the Class B-1, Class B-2, Class B-3, Class B-4, Class
      B-5 and Class B-6 certificates for the first interest accrual period will
      be approximately 5.436%.

(8)  The Class P certificates will not have an aggregate principal balance and
     will not be entitled to distributions in respect of principal or interest.
     The Class P certificates will be entitled to prepayment premiums or charges
     received in respect of the loans in the loan pool, except such prepayment
     premiums or charges that are to be paid to the related servicer as more
     particularly set forth in the pooling and servicing agreement.



                                      S-6


                                     SUMMARY

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



RELEVANT PARTIES


      Issuer.....................................   MASTR Alternative Loan Trust 2004-10. The trust will be established under a
                                                    pooling and servicing agreement among Mortgage Asset Securitization
                                                    Transactions, Inc., as depositor, UBS Real Estate Securities Inc., as
                                                    transferor, Wells Fargo Bank, National Association, as master servicer, trust
                                                    administrator and a custodian, U.S. Bank National Association, as a custodian
                                                    and Wachovia Bank, National Association, as trustee.

      Depositor..................................   Mortgage Asset Securitization Transactions, Inc., a Delaware corporation. The
                                                    depositor's address is 1285 Avenue of the Americas, New York, New York 10019,
                                                    telephone number (212) 713-2000. See "The Depositor" in the prospectus.

      Master Servicer............................   Wells Fargo Bank, National Association, a national banking association. The
                                                    master servicer maintains an office located at 9062 Old Annapolis Road,
                                                    Columbia, Maryland 21045. See "The Master Servicer and the Servicers--The Master
                                                    Servicer" in this prospectus supplement.

                                                    Pursuant to the pooling and servicing agreement, the master servicer will be
                                                    required to monitor the performance of the servicers. See "The Pooling and
                                                    Servicing Agreement" in this prospectus supplement.

      Servicers..................................   ABN AMRO Mortgage Group Inc., Cendant Mortgage Corporation, Chase Manhattan
                                                    Mortgage Corporation, CitiMortgage, Inc., Countrywide Home Loans Servicing LP,
                                                    Downey Savings and Loan Association, F.A., EverBank, First Tennessee Mortgage
                                                    Services, Inc., GMAC Mortgage Corporation, GreenPoint Mortgage Funding, Inc.,
                                                    Lydian Private Bank, Mid America Bank, FSB, National City Mortgage Co.,
                                                    Provident Funding, SunTrust Mortgage, Inc., Washington Mutual Bank, Washington
                                                    Mutual Mortgage Securities Corp. and Wells Fargo Bank, National Association will
                                                    initially be the

                                                                S-7




                                                    primary servicers of the loans. See "The Master Servicer and the Servicers--The
                                                    Servicers" in this prospectus supplement.

                                                    Pursuant to each of the underlying servicing agreements, each servicer will be
                                                    required to:

                                                    o    perform customary servicing functions with respect to the loans;

                                                    o    provide certain reports to the master servicer; and

                                                    o    make certain advances.

      Transferor.................................   UBS Real Estate Securities Inc. The transferor's address is 1285 Avenue of the
                                                    Americas, New York, New York 10019, telephone number (212) 713-2000.

      Loan Sellers...............................   UBS Real Estate Securities Inc. will have previously acquired the loans from
                                                    Cendant Mortgage Corporation, Chase Manhattan Mortgage Corporation, Countrywide
                                                    Home Loans, Inc., EverHome Mortgage Company, Wells Fargo Bank, National
                                                    Association, certain originators under the transferor's conduit origination
                                                    program as described under "Underwriting Standards" in this prospectus
                                                    supplement and certain other loan sellers, each of which represents less than 5%
                                                    of the cut-off date pool balance of the loans. See "Underwriting Standards" in
                                                    this prospectus supplement.

      Trust Administrator........................   Wells Fargo Bank, National Association. See "The Pooling and Servicing
                                                    Agreement--The Trust Administrator" in this prospectus supplement.

      Trustee....................................   Wachovia Bank, National Association, a national banking association. The
                                                    trustee's principal office is 401 South Tryon Street, 12th Floor, NC 1179,
                                                    Charlotte, North Carolina 28288-1179. See "The Pooling and Servicing
                                                    Agreement--The Trustee" in this prospectus supplement.

      Custodians.................................   Wells Fargo Bank, National Association and U.S. Bank National Association, a
                                                    national banking association. U.S. Bank National Association's address, as
                                                    custodian, is 1133 Rankin Street, St. Paul, Minnesota 55116.

RELEVANT DATES

      Cut-Off Date...............................   September 1, 2004.

                                                                S-8




      Closing Date...............................   On or about September 29, 2004.

      Distribution Date..........................   The 25th day of each month or, if that day is not a business day, the next
                                                    business day, beginning in October 2004.

      Servicer Remittance Date...................   For each servicer generally the 18th day (or, in the case of Washington Mutual
                                                    Mortgage Securities Corp., the 24th day) of each month (or, if such day is not a
                                                    business day, either the immediately preceding business day, or the immediately
                                                    following business day (or, for Washington Mutual Mortgage Securities Corp., if
                                                    that day is not a business day, the immediately preceding business day) as the
                                                    case may be).

      Interest Accrual Period....................   For each class of certificates entitled to interest (other than the Class 5-A-1
                                                    and Class 5-A-2 certificates), the calendar month immediately prior to the month
                                                    in which the relevant distribution date occurs. For the Class 5-A-1 and 5-A-2
                                                    certificates, the period from and including the 25th day of the month preceding
                                                    the month in which the relevant distribution date occurs to and including the
                                                    24th day of the month in which that distribution date occurs.

OFFERED CERTIFICATES.............................   We are offering the 21 classes of certificates listed in the table beginning on
                                                    page S-5 under the heading "Offered Certificates." The Class B-4, Class B-5,
                                                    Class B-6 and Class P certificates are not being offered through this prospectus
                                                    supplement and the prospectus. Certain limited information about the non-offered
                                                    certificates is included in this prospectus supplement to help you better
                                                    understand the offered certificates.

      Interest Distributions.....................   The offered certificates, other than the Class 15-PO and Class 30-PO
                                                    certificates, will bear interest at the rates per annum set forth in the table
                                                    beginning on page S-5 of this prospectus supplement.

                                                    The actual amount of interest you receive on your certificates on each
                                                    distribution date will depend on:

                                                    o    the amount of interest accrued on your certificates;

                                                    o    the total amount of funds available for distribution; and

                                                    o    the amount of any accrued interest not paid on your certificates on earlier
                                                         distribution dates.

                                                    Interest on the certificates will accrue on the basis of a 360-day year
                                                    consisting of twelve 30-day months.

                                                                S-9




                                                    The Class 5-A-5 certificates may not receive interest distributions until the
                                                    principal balance of certain classes of certificates has been reduced to zero as
                                                    described under "Description of the Offered Certificates--Principal" in this
                                                    prospectus supplement. Until then, the amount of interest that would otherwise
                                                    be distributable on the Class 5-A-5 certificates will be added to the principal
                                                    balance of such class and will be distributed as principal to certain other
                                                    classes of certificates as specified under "Description of the Offered
                                                    Certificates--Principal" in this prospectus supplement.

                                                    The Class 15-PO and Class 30-PO certificates are principal-only certificates and
                                                    will not be entitled to distributions in respect of interest.

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

      Principal Distributions....................   On each distribution date, one or more classes of the offered certificates will
                                                    be entitled to distributions of principal. The Class 5-A-2, 15-AX-1, Class
                                                    15-AX-2 and Class 30-AX certificates are interest only certificates and are not
                                                    entitled to distributions of principal. See "Description of the Offered
                                                    Certificates--Principal" and "--Allocation of Available Funds to the
                                                    Certificates" in this prospectus supplement for a detailed discussion of the
                                                    amount and timing of principal distributions.

      Related Loan Groups........................   The certificates with a "1" prefix and the Class A-LR and Class A-R certificates
                                                    are designated as certificate group 1, and correspond to loan group 1. The
                                                    certificates with a "2" prefix are designated as certificate group 2 and
                                                    correspond to loan group 2. The certificates with a "3" prefix are designated as
                                                    certificate group 3 and correspond to loan group 3. The certificates with a "4"
                                                    prefix are designated as certificate group 4 and correspond to loan group 4. The
                                                    certificates with a "5" prefix are designated as certificate group 5 and
                                                    correspond to loan group 5. The Class 15-AX-1 certificates correspond to loan
                                                    group 1 and loan group 3. The Class 15-AX-2 certificates correspond to loan
                                                    group 2 and loan group 4. The Class 30-AX certificates correspond to loan group
                                                    5. The Class 15-PO certificates correspond to loan group 1, loan group 2, loan
                                                    group 3 and loan group 4. The Class 30-PO certificates correspond to loan group
                                                    5. The certificates with a "B" prefix are designated as the subordinate
                                                    certificates and correspond to all of the loan groups. The Class P

                                                                S-10




                                                    certificates correspond to all of the loan groups (to a limited extent as
                                                    described in this prospectus supplement). The certificates generally receive
                                                    principal and interest collected from the mortgage loans in the corresponding
                                                    loan group or loan groups.

ASSETS OF THE POOL...............................   The trust will be comprised of fixed rate, closed-end loans secured by first
                                                    priority mortgages or deeds of trust on residential one- to four-family
                                                    properties.

                                                    The loans will be divided into five loan groups. Substantially all of the loans
                                                    in loan group 1, loan group 2, loan group 3 and loan group 4 have original terms
                                                    to maturity of approximately 15 years. Substantially all of the loans in loan
                                                    group 5 have original terms to maturity of approximately 30 years.

                                                    The loans are expected to have the following approximate characteristics based
                                                    on the scheduled principal balances of the loans as of the cut-off date:





                                                            Group 1 Loans

Number of Loans:.........................................................................                                        126
Aggregate Scheduled Principal Balance:...................................................                                $37,668,253
Range of Scheduled Principal Balances:...................................................                      $29,191 to $1,336,565
Average Scheduled Principal Balance:.....................................................                                   $298,954
Range of Mortgage Interest Rates:........................................................                           4.250% to 5.625%
Weighted Average Mortgage Interest Rate:.................................................                                     4.906%
Range of Remaining Scheduled Terms to Maturity:..........................................                   153 months to 179 months
Weighted Average Remaining Scheduled Term to Maturity:...................................                                 176 months
Range of Original Loan-to-Value Ratios:..................................................                           8.57% to 100.00%
Weighted Average Original Loan-to-Value Ratio:...........................................                                     54.26%
Geographic Concentration of Mortgaged Properties Securing Loans in Excess of 5% of the
        Aggregate Scheduled Principal Balance:...........................................
                                                                                                        California            39.07%
                                                                                                          New York            10.57%
                                                                                                          Illinois             7.31%
                                                                                                     Massachusetts             5.76%




                                                                S-11




                                                            Group 2 Loans



Number of Loans:.............................................................................                                    371
Aggregate Scheduled Principal Balance:.......................................................                           $102,552,171
Range of Scheduled Principal Balances:.......................................................                  $29,008 to $1,762,763
Average Scheduled Principal Balance:.........................................................                               $276,421
Range of Mortgage Interest Rates:............................................................                       5.625% to 6.000%
Weighted Average Mortgage Interest Rate:.....................................................                                 5.798%
Range of Remaining Scheduled Terms to Maturity:..............................................               161 months to 180 months
Weighted Average Remaining Scheduled Term to Maturity:.......................................                             176 months
Range of Original Loan-to-Value Ratios:......................................................                      11.63% to 100.00%
Weighted Average Original Loan-to-Value Ratio:...............................................                                 65.08%
Geographic Concentration of Mortgaged Properties Securing Loans in Excess of 5% of the
        Aggregate Scheduled Principal Balance:...............................................
                                                                                                           California         31.24%
                                                                                                             New York         13.02%
                                                                                                              Florida          8.98%
                                                                                                           New Jersey          6.41%
                                                                                                               Nevada          5.22%


                                                            Group 3 Loans



Number of Loans:.............................................................................                                    312
Aggregate Scheduled Principal Balance:.......................................................                           $104,814,884
Range of Scheduled Principal Balances:.......................................................                  $34,618 to $2,217,151
Average Scheduled Principal Balance:.........................................................                               $335,945
Range of Mortgage Interest Rates:............................................................                       5.125% to 5.585%
Weighted Average Mortgage Interest Rate:.....................................................                                 5.330%
Range of Remaining Scheduled Terms to Maturity:..............................................               167 months to 179 months
Weighted Average Remaining Scheduled Term to Maturity:.......................................                             176 months
Range of Original Loan-to-Value Ratios:......................................................                      10.64% to 100.00%
Weighted Average Original Loan-to-Value Ratio:...............................................                                 60.86%
Geographic Concentration of Mortgaged Properties Securing Loans in Excess of 5% of the
        Aggregate Scheduled Principal Balance:...............................................
                                                                                                          California          42.84%
                                                                                                            New York          17.73%
                                                                                                             Florida           6.57%





                                                                S-12




                                                            Group 4 Loans



Number of Loans:.............................................................................                                    279
Aggregate Scheduled Principal Balance:.......................................................                            $52,715,691
Range of Scheduled Principal Balances:.......................................................                  $10,514 to $1,291,319
Average Scheduled Principal Balance:.........................................................                               $188,945
Range of Mortgage Interest Rates:............................................................                       6.125% to 8.250%
Weighted Average Mortgage Interest Rate:.....................................................                                 6.478%
Range of Remaining Scheduled Terms to Maturity:..............................................               170 months to 179 months
Weighted Average Remaining Scheduled Term to Maturity:.......................................                             175 months
Range of Original Loan-to-Value Ratios:......................................................                        8.50% to 95.00%
Weighted Average Original Loan-to-Value Ratio:...............................................                                 72.89%
Geographic Concentration of Mortgaged Properties Securing Loans in Excess of 5% of the
        Aggregate Scheduled Principal Balance:...............................................
                                                                                                         California           23.52%
                                                                                                           New York            7.67%
                                                                                                            Florida            6.88%
                                                                                                             Nevada            5.31%
                                                                                                              Texas            5.13%
                                                                                                            Arizona            5.07%


                                                            Group 5 Loans



Number of Loans:.............................................................................                                    422
Aggregate Scheduled Principal Balance:.......................................................                           $122,926,033
Range of Scheduled Principal Balances:.......................................................                  $29,910 to $1,515,210
Average Scheduled Principal Balance:.........................................................                               $291,294
Range of Mortgage Interest Rates:............................................................                       5.780% to 6.500%
Weighted Average Mortgage Interest Rate:.....................................................                                 6.106%
Range of Remaining Scheduled Terms to Maturity:..............................................               346 months to 359 months
Weighted Average Remaining Scheduled Term to Maturity:.......................................                             356 months
Range of Original Loan-to-Value Ratios:......................................................                      17.86% to 100.00%
Weighted Average Original Loan-to-Value Ratio:...............................................                                 74.48%
Geographic Concentration of Mortgaged Properties Securing Loans in Excess of 5% of the
        Aggregate Scheduled Principal Balance:...............................................
                                                                                                         California           31.65%
                                                                                                           New York           17.01%





                                                                S-13




                                                       Loans in the Aggregate



Number of Loans:.............................................................................                                  1,510
Aggregate Scheduled Principal Balance:.......................................................                           $420,677,032
Range of Scheduled Principal Balances:.......................................................                  $10,514 to $2,217,151
Average Scheduled Principal Balance:.........................................................                               $278,594
Range of Mortgage Interest Rates:............................................................                       4.250% to 8.250%
Weighted Average Mortgage Interest Rate:.....................................................                                 5.777%
Range of Remaining Scheduled Terms to Maturity:..............................................               153 months to 359 months
Weighted Average Remaining Scheduled Term to Maturity:.......................................                             228 months
Range of Original Loan-to-Value Ratios:......................................................                       8.50% to 100.00%
Weighted Average Original Loan-to-Value Ratio:...............................................                                 66.79%
Geographic Concentration of Mortgaged Properties Securing Loans in Excess of 5% of the
        Aggregate Scheduled Principal Balance:...............................................
                                                                                                        California            33.98%
                                                                                                          New York            14.47%
                                                                                                           Florida             6.32%




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

OPTIONAL TERMINATION.............................   The master servicer may, at its option, purchase all but not less than all of
                                                    the loans in the trust on any distribution date on or after the first date on
                                                    which the current aggregate scheduled principal balance of the loans, as of that
                                                    date of determination, is less than 5% of the aggregate scheduled principal
                                                    balance of the loans as of the cut-off date. See "The Pooling and Servicing
                                                    Agreement--Termination" in this prospectus supplement.

CREDIT ENHANCEMENT...............................   Credit enhancement may reduce the harm caused to holders of certificates by
                                                    shortfalls in payments collected on the loans. Credit enhancement can reduce the
                                                    effect of shortfalls on all classes of offered certificates, or they can
                                                    allocate shortfalls so they affect some classes before others.

                                                    Subordination. The group 1, group 2, group 3, group 4, group 5, Class 15-AX-1,
                                                    Class 15-AX-2, Class 30-AX, Class 15-PO and Class 30-PO certificates will
                                                    receive distributions of interest and principal, as applicable, before the
                                                    subordinate certificates are entitled to receive distributions of interest or
                                                    principal. In addition, each class of subordinate certificates will receive
                                                    distributions of interest and principal prior to any other class of subordinate
                                                    certificates with a higher alphanumerical class designation. The subordinate
                                                    certificates, in reverse order of alphanumerical class designation, will absorb
                                                    most losses

                                                                S-14




                                                    on the related loans, other than certain excess losses, prior to other classes
                                                    of certificates.

                                                    Shifting of Interests. The group 1, group 2, group 3, group 4 and group 5
                                                    certificates will receive 100% of the principal prepayments received on the
                                                    loans (not including the portion of principal prepayments payable to the Class
                                                    15-PO and Class 30-PO certificates as described in this prospectus supplement)
                                                    in the related loan group or loan groups until the fifth anniversary of the
                                                    first distribution date. During the next four years, these senior certificates
                                                    in the aggregate will generally receive a disproportionately large, but
                                                    decreasing, share of such related principal prepayments. This will result in a
                                                    quicker return of principal to such senior certificates and increases the
                                                    likelihood that holders of such senior certificates will be paid the full amount
                                                    of principal to which they are entitled.

                                                    In addition, after the date on which the aggregate principal balance of the
                                                    subordinate certificates has been reduced to zero, losses (other than certain
                                                    excess losses as described under "Description of the Offered
                                                    Certificates--Allocation of Losses on the Certificates" in this prospectus
                                                    supplement) allocated to the Class 5-A-6 certificates will be borne by the Class
                                                    5-A-7 certificates (in addition to other losses allocated to the Class 5-A-7
                                                    certificates) so long as the principal balance of the Class 5-A-7 certificates
                                                    is greater than zero.

                                                    Cross-Collateralization. In certain limited circumstances, principal and
                                                    interest collected from loans in a loan group may be used to pay principal or
                                                    interest, or both, to the senior certificates unrelated to that loan group or
                                                    loan groups. See "Description of the Offered Certificates" in this prospectus
                                                    supplement.

REGISTRATION AND
   DENOMINATIONS OF
   THE CERTIFICATES..............................   The offered certificates, other than the Class A-LR and Class A-R certificates,
                                                    initially will be issued in book-entry form. The offered certificates will be
                                                    issued in the minimum denominations set forth in "Description of the Offered
                                                    Certificates--General" in this prospectus supplement. The Class A-LR and Class
                                                    A-R certificates are expected to be issued in fully registered, certificated
                                                    form each with a denomination of $50. No person acquiring an interest in the
                                                    book-entry certificates will be entitled to receive a definitive certificate
                                                    representing that

                                                                S-15




                                                    person's interest in the trust fund, except under limited circumstances as
                                                    described in this prospectus supplement. Beneficial owners may elect to hold
                                                    their interests through The Depository Trust Company. Transfers within DTC will
                                                    be in accordance with the usual rules and operating procedures of DTC. See
                                                    "Description of the Offered Certificates--General" and "--Book-Entry
                                                    Certificates" in this prospectus supplement.

LAST SCHEDULED
   DISTRIBUTION DATE.............................   The distribution date in September 2019 will be the last scheduled distribution
                                                    date for the group 1 (other than the residual certificates), group 3, group 4
                                                    and Class 15-AX-1 certificates. The distribution date in October 2019 will be
                                                    the last scheduled distribution date for the group 2, Class 15-AX-2 and Class
                                                    15-PO certificates. The distribution date in September 2034 will be the last
                                                    scheduled distribution date for the group 5, Class 30-AX and Class 30-PO
                                                    certificates and the subordinate certificates and the residual certificates.
                                                    These dates represent the distribution date occurring in the month following the
                                                    maturity date of the latest maturing loan in the related loan group or groups.
                                                    It is possible that the principal balance or notional amount, as applicable, of
                                                    these certificates may be fully paid or reduced to zero, as applicable, prior to
                                                    the related last scheduled distribution date, or may not be fully paid or
                                                    reduced to zero, as applicable, by the related last scheduled distribution date.

TAX STATUS.......................................   Elections will be made to treat designated portions of the trust as three
                                                    separate real estate mortgage investment conduits, or REMICs, designated as the
                                                    Upper-Tier REMIC, the Middle-Tier REMIC and the Lower-Tier REMIC, respectively,
                                                    for federal income tax purposes. The offered certificates, other than the Class
                                                    A-LR and Class A-R certificates, will be treated as debt instruments of a REMIC
                                                    for federal income tax purposes. The Class A-LR certificates will be treated as
                                                    the sole class of residual interests in the Lower-Tier REMIC; and the Class A-R
                                                    certificates will be treated as the sole class of residual interests in each of
                                                    the Middle-Tier REMIC and the Upper-Tier REMIC.

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

                                                                S-16




ERISA CONSIDERATIONS.............................   If you are a fiduciary of any retirement plan or other employee benefit
                                                    arrangement subject to the Employee Retirement Income Security Act of 1974, as
                                                    amended, or Section 4975 of the Internal Revenue Code of 1986, you should
                                                    consult with counsel as to whether you can buy or hold an offered certificate.
                                                    The residual certificates may not be purchased by or transferred to such a plan.
                                                    See "ERISA Considerations" in this prospectus supplement.

LEGAL INVESTMENT.................................   The offered certificates (other than the Class B-2 and Class B-3 certificates)
                                                    will constitute "mortgage related securities" for purposes of the Secondary
                                                    Mortgage Market Enhancement Act of 1984, as amended, commonly known as SMMEA, so
                                                    long as they are rated in one of the two highest rating categories by Fitch,
                                                    Inc. and Standard & Poor's Ratings Services, a division of The McGraw-Hill
                                                    Companies, Inc. or another nationally recognized statistical rating
                                                    organization.

                                                    The Class B-2 and Class B-3 certificates will not constitute "mortgage related
                                                    securities" for purposes of SMMEA. If your investment activities are subject to
                                                    legal investment laws and regulations, regulatory capital requirements, or
                                                    review by regulatory authorities, then you may be subject to restrictions on
                                                    investment in the offered certificates. You should consult your own legal
                                                    advisors for assistance in determining the suitability of and consequences to
                                                    you of the purchase, ownership, and sale of the offered certificates.

                                                    See "Legal Investment" in this prospectus supplement and in the prospectus.

CERTIFICATE RATINGS..............................   On the closing date, the offered certificates must have ratings not lower than
                                                    those set forth in the table beginning on page S-5 by each of Fitch, Inc. and
                                                    Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
                                                    Inc.

                                                    A security rating is not a recommendation to buy, sell or hold securities and
                                                    the assigning rating organization may revise or withdraw a rating at any time.
                                                    The ratings do not address the possibility that holders of the offered
                                                    certificates may suffer a lower than anticipated yield.

                                                    See "Ratings" in this prospectus supplement for a discussion of the primary
                                                    factors on which the ratings are based.



                                                                S-17



                                  RISK FACTORS

      Before making an investment decision, you should carefully consider the
following risks that we believe describe the principal factors that make an
investment in the certificates speculative or risky. In particular, payments on
your certificates will depend on payments received on, and other recoveries with
respect to, the loans. Therefore, you should carefully consider the following
risk factors.

CERTIFICATES MAY NOT BE APPROPRIATE FOR INDIVIDUAL INVESTORS

      The offered certificates are not suitable investments for all investors.
In particular, you should not purchase any class of offered certificates unless
you understand the prepayment, credit, liquidity and market risks associated
with that class because:

      o   The amounts you receive on your certificates will depend on the amount
          of the payments borrowers make on the loans. Because we cannot predict
          the rate at which borrowers will repay their loans, you may receive
          distributions on your certificates in amounts that are larger or
          smaller than you expect. In addition, the life of your certificates
          may be longer or shorter than anticipated. Because of this, we cannot
          guarantee that you will receive distributions at any specific future
          date or in any specific amount.

      o   The yield to maturity on your certificates will depend primarily on
          the purchase price of your certificates and the rate of principal
          payments on the loans in the trust.

      o   Rapid prepayment rates on the loans are likely to coincide with
          periods of low prevailing interest rates. During these periods, the
          yield at which you may be able to reinvest amounts received as
          payments on your certificates may be lower than the yield on your
          certificates. Conversely, slow prepayment rates on the loans are
          likely to coincide with periods of high interest rates. During these
          periods, the amount of payments available to you for reinvestment at
          high rates may be relatively low.

      The certificates are complex securities. You should possess, either alone
or together with an investment advisor, the expertise necessary to evaluate the
information contained in this prospectus supplement and the prospectus in the
context of your financial situation and tolerance for risk.

      You should carefully consider, among other things, the factors described
below and under "Prepayment and Yield Considerations" in this prospectus
supplement and "Risk Factors" in the prospectus before purchasing the
certificates.

THE CREDIT ENHANCEMENT FEATURES MAY BE INADEQUATE TO PROVIDE PROTECTION FOR THE
  CERTIFICATES

      A decline in real estate values or in economic conditions generally could
increase the rates of delinquencies, foreclosures and losses on the loans to a
level that is significantly higher than those experienced currently. This in
turn will reduce the yield on your certificates, particularly if

                                      S-18


the credit enhancement described in this prospectus supplement is not enough to
protect your certificates from these losses.

      The credit enhancement features described in this prospectus supplement
are intended to enhance the likelihood that holders of the senior certificates,
and to a limited extent, the holders of the subordinate certificates, will
receive regular payments of interest and principal. However, we cannot assure
you that the applicable credit enhancement will adequately cover any shortfalls
in cash available to pay your certificates as a result of delinquencies or
defaults on the loans. If delinquencies or defaults occur on the loans, none of
the related servicer, the master servicer, the trust administrator or any other
entity will advance scheduled monthly payments of interest and principal on
delinquent or defaulted loans if the advances are not likely to be recovered.

      As described in "Description of the Offered Certificates--Allocation of
Losses on the Certificates" in this prospectus supplement, certain losses on any
loan group will be allocated first to the subordinate certificates, in inverse
order of priority. Losses may be severe enough, however, to reduce the aggregate
principal balance of the subordinate certificates to zero. If this occurs, the
senior certificates of the related certificate groups may bear a portion of the
losses thereafter as described in this prospectus supplement. Investors in the
Class 5-A-7 certificates should understand that after the date on which the
aggregate principal balance of the subordinate certificates has been reduced to
zero, losses (other than certain excess losses as described under "Description
of the Offered Certificates--Allocation of Losses on the Certificates" in this
prospectus supplement) allocated to the Class 5-A-6 certificates will be borne
by the Class 5-A-7 certificates (in addition to other losses allocated to the
Class 5-A-7 certificates) so long as the principal balance of the Class 5-A-7
certificates is greater than zero. See "Description of the Offered
Certificates--Allocation of Losses on the Certificates" in this prospectus
supplement.

      In addition, certain types of losses with respect to loans of a loan group
will be borne solely by the subordinate certificates up to certain stated levels
described in this prospectus supplement. Any such losses exceeding these levels
will generally be borne pro rata by (i) the senior certificates of the related
certificate group and (ii) the subordinate certificates, after a specified
amount of these losses are borne solely by the subordinate certificates. The
method of allocating these losses is described in this prospectus supplement
under "Description of the Offered Certificates--Allocation of Losses on the
Certificates."

      If losses occur as a result of defaults and delinquent payments on the
loans, you may suffer losses and if the protection afforded by the credit
enhancement is insufficient, you could experience a loss on your investment.

SUBORDINATE CERTIFICATES PROVIDE SUBORDINATION FOR ALL SENIOR CERTIFICATES

      Because the subordinate certificates provide credit support for all the
senior certificates, the protection provided to any such group of certificates
by the subordinate certificates could be reduced to zero as a result of a
disproportionate amount of realized losses on the loans in the loan group
related to one or more of the other groups of senior certificates. Therefore,
losses on the loans in one or more of the loan groups will reduce the
subordination provided by the subordinate certificates to the senior
certificates related to the other loan group or loan groups and increase the
likelihood that losses may be allocated to these senior certificates. See

                                      S-19


"Description of the Offered Certificates--Allocation of Losses on the
Certificates" in this prospectus supplement.

      Losses on the loans in each loan group, up to a limited amount, resulting
from special hazards, mortgagor fraud and mortgagor bankruptcy will be allocated
solely to the subordinate certificates. Since the subordinate certificates
provide subordination for each certificate group, in the event loans in one or
more of the loan groups suffer a high level of these losses, the available
coverage for these losses for the senior certificates related to each loan group
will be reduced. In the event loans in a loan group suffer these losses after
the available coverage has been exhausted, those losses above the coverage will
be allocated as described under "Description of the Offered
Certificates--Allocation of Losses on the Certificates" in this prospectus
supplement.

      Under certain circumstances, loan payments derived from one or more of the
loan groups otherwise payable to the subordinate certificates will be paid to
the senior certificates related to the other loan group or loan groups as
described under "Description of the Offered
Certificates--Subordination--Cross-Collateralization" in this prospectus
supplement. In addition, the Class 15-PO certificates will be entitled to
reimbursement for certain losses on the loans in loan group 1, loan group 2,
loan group 3 and loan group 4, and the Class 30-PO certificates will be entitled
to reimbursement for certain losses on the loans in loan group 5, in each case,
allocated to them from amounts otherwise distributable on the subordinate
certificates.

INADEQUACY OF VALUE OF PROPERTIES COULD AFFECT SEVERITY OF LOSSES

      Assuming that the properties provide adequate security for the loans,
substantial delays in recoveries may occur from the foreclosure or liquidation
of defaulted loans. We cannot assure you that the values of the properties have
remained or will remain at the levels in effect on the dates of origination of
the related loans. Further, liquidation expenses, including legal fees, real
estate taxes, and maintenance and preservation expenses will reduce the proceeds
payable on the loans and thereby reduce the security for the loans. As a result,
the risk that you will suffer losses could increase. If any of the properties
fail to provide adequate security for the related loan, you may experience a
loss. See "The Pooling and Servicing Agreement--Realization Upon Defaulted
Loans" in this prospectus supplement, and "Certain Legal Aspects of Residential
Loans--Foreclosure on Mortgages" in the prospectus.

BANKRUPTCY OF BORROWERS MAY ADVERSELY AFFECT DISTRIBUTIONS ON CERTIFICATES

      The application of federal and state laws, including bankruptcy and debtor
relief laws, may interfere with or adversely affect the ability to realize on
the properties, enforce deficiency judgments or pursue collection litigation
with respect to defaulted loans. As a consequence, borrowers who have defaulted
on their loans and sought, or are considering seeking, relief under bankruptcy
or debtor relief laws will have substantially less incentive to repay their
loans. As a result, these loans will likely experience more severe losses, which
may be total losses and could therefore increase the risk that you will suffer
losses. See "--The Credit Enhancement Features May Be Inadequate to Provide
Protection for the Certificates" above.

                                      S-20


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

      Other than approximately 0.67% of the loans in loan group 1, approximately
12.15% of the loans in loan group 2, approximately 2.26% of the loans in loan
group 3, approximately 41.55% of the loans in loan group 4 and approximately
42.21% of the loans in loan group 5 (in each case, by cut-off date pool balance
for the related loan group), borrowers may generally prepay their loans in whole
or in part at any time without penalty. We cannot predict the rate at which
borrowers will repay their loans. A prepayment of a loan generally will result
in more rapid payments on the certificates.

      o   If you purchase your certificates at a discount and principal payments
          on the related loans occur more slowly than you anticipate, or if you
          purchase a Class 15-PO certificate and principal payments on the
          discount loans in loan group 1, loan group 2, loan group 3 or loan
          group 4 occur more slowly than you anticipate or if you purchase a
          Class 30-PO certificate and principal payments on the discount loans
          in loan group 5 occur more slowly than you anticipate, then, in each
          case, your yield may be lower than you anticipate. See "Prepayment and
          Yield Considerations--Sensitivity of the Principal Only Certificates"
          in this prospectus supplement for a more detailed description of risks
          associated with the purchase of the Class 15-PO and Class 30-PO
          certificates, including tables demonstrating the particular
          sensitivities of such certificates to the rate of prepayments.

      o   If you purchase your certificates at a premium and principal payments
          on the related loans occur faster than you anticipate, or if you
          purchase a Class 5-A-2 certificate, and principal prepayments on the
          Loans in loan group 5 occur faster than you anticipate, or if you
          purchase a Class 15-AX-1 certificate and principal payments on the
          non-discount loans in loan group 1 or loan group 3, occur faster than
          you anticipate, or if you purchase a Class 15-AX-2 certificate and
          principal payments on the non-discount loans in loan group 2 or loan
          group 4 occur faster than you anticipate, or if you purchase a Class
          30-AX certificate and principal payments on the non-discount loans in
          loan group 5 occur faster than you anticipate, then, in each case,
          your yield may be lower than you anticipate.

      o   If you purchase a Class 15-AX-1 certificate, you should consider the
          risk that a rapid rate of principal payments on the non-discount loans
          in loan group 1 or loan group 3 could result in your failure to fully
          recover your initial investment. If you purchase a Class 15-AX-2
          certificate, you should consider the risk that a rapid rate of
          principal payments on the non-discount loans in loan group 2 or loan
          group 4 could result in your failure to fully recover your initial
          investment. If you purchase a Class 30-AX certificate, you should
          consider the risk that a rapid rate of principal payments on the
          non-discount loans in loan group 5 could result in your failure to
          fully recover your initial investment. If you purchase a Class 5-A-2
          certificate, you should consider the risk that a rapid rate of
          principal payments on the loans in loan group 5 could result in your
          failure to fully recover your initial investment. See "Prepayment and
          Yield Considerations--Sensitivity of the Class 15-AX-1, Class 15-AX-2
          and Class 30-AX Certificates" and "--Sensitivity of the Class 5-A-2
          Certificates" in this prospectus supplement for a more detailed


                                      S-21


          description of risks associated with the purchase of such
          certificates, including tables demonstrating the particular
          sensitivities of such certificates to the rate of prepayments.

      o   The Class 5-A-1 certificates will receive interest at a rate that
          varies directly with changes in LIBOR. Accordingly, if you purchase
          Class 5-A-1 certificates, you should be aware that such certificates
          will be sensitive to changes in LIBOR.

      o   The Class 5-A-2 certificates will receive interest at a rate that
          varies inversely with changes in LIBOR. If you purchase any of these
          certificates, you should also consider the risk that a high rate of
          LIBOR may result in a lower actual yield than you expected. In
          particular, if you purchase Class 5-A-2 certificates, you should
          consider the risk that high constant rates of LIBOR combined with high
          constant prepayment rates on the loans in the related loan group could
          have a negative effect on your yield. See "Prepayment and Yield
          Considerations--Sensitivity of the Class 5-A-2 Certificates" in this
          prospectus supplement for a more detailed description of the risks
          associated with the purchase of these certificates, including tables
          demonstrating the particular sensitivities of these certificates to
          the rate of prepayments and LIBOR.

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

      o   Approximately 21.13% of the loans by principal balance as of the
          cut-off date require the borrower to pay a prepayment penalty in
          certain instances if the borrower prepays the loan during a specified
          period, which may be during the first 60 months after the loan was
          originated. A prepayment penalty may or may not discourage a borrower
          from prepaying the related loan during the applicable period.

      o   The master servicer may, at its option, purchase all but not less than
          all of the loans in the trust on any distribution date on or after the
          first date on which the aggregate scheduled principal balance of the
          loans, as of that date of determination, is less than 5% of the
          aggregate scheduled principal balance of the loans as of the cut-off
          date.

      o   Newly originated loans may be more likely to default, which may cause
          losses on the offered certificates. Defaults on loans tend to occur at
          higher rates during the early years of the loans. Substantially all of
          the loans have been originated within the 10 months prior to their
          sale to the trust. As a result, the trust may experience higher rates
          of default than if the loans had been outstanding for a longer period
          of time.

      o   The effective interest rate on your certificates may be less than the
          interest rate stated in this prospectus supplement. Your certificates
          will be allocated any prepayment interest shortfalls that are not
          compensated for as described in this prospectus supplement. The
          circumstances under which prepayment interest shortfalls will occur
          are described under "Description of the Offered
          Certificates--Allocation of Available Funds to the Certificates" and
          "--Interest" in this prospectus supplement.

                                      S-22


      o   UBS Real Estate Securities Inc. (in its capacity as transferor) may be
          required to purchase loans from the trust in the event certain
          breaches of representations and warranties have not been cured. These
          purchases will have the same effect on the holders of the offered
          certificates as a prepayment of the loans.

      o   Each of the loan sellers and the servicers may make general and
          targeted solicitations for refinancings. Any solicited refinancings
          may result in a rate of prepayment that is higher than you might
          otherwise expect.

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

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

THE TRANSFEROR MAY NOT BE ABLE TO REPURCHASE OR REPLACE DEFECTIVE LOANS

      UBS Real Estate Securities Inc. will make various representations and
warranties related to the loans. Those representations are summarized in "The
Pooling and Servicing Agreement--Assignment of the Loans" in this prospectus
supplement.

      If UBS Real Estate Securities Inc. fails to cure a material breach of its
representations and warranties with respect to any loan in a timely manner, then
it will be required to repurchase or replace the defective loan. See "The
Pooling and Servicing Agreement--Assignment of the Loans" in this prospectus
supplement. It is possible that UBS Real Estate Securities Inc. may not be
capable of repurchasing or replacing any defective loans, for financial or other
reasons. The inability of UBS Real Estate Securities Inc. to repurchase or
replace defective loans would likely cause the loans to experience higher rates
of delinquencies, defaults and losses. As a result, shortfalls in the
distributions due on your certificates could occur. See "--The Credit
Enhancement Features May Be Inadequate to Provide Protection for the
Certificates" above.

THERE ARE RISKS IN HOLDING SUBORDINATE CERTIFICATES AND THE CLASS 5-A-7
  CERTIFICATES

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

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

      o   If any servicer determines not to advance a delinquent payment on a
          loan because such servicer determines the amount is not recoverable
          from a borrower or if the master servicer is required to make an
          advance and makes a similar determination and does not advance funds
          with respect to such delinquent payment, there may be a shortfall in
          distributions on the certificates that will impact the subordinate
          certificates.

                                      S-23


      o   The subordinate certificates are not entitled to a proportionate share
          of principal prepayments on the loans until the beginning of the tenth
          year after the closing date. In addition, if certain losses on the
          loans in a loan group exceed stated levels, a portion of the principal
          distribution payable to classes of subordinate certificates with
          higher alphanumerical class designations will be paid to the classes
          of subordinate certificates with lower alphanumerical designations.

      o   Losses resulting from the liquidation of defaulted loans will
          generally be allocated to the subordinate certificates. A loss
          allocation results in a reduction in a certificate principal balance,
          potentially to zero, without a corresponding distribution of cash to
          the holder. A lower certificate principal balance will result in less
          interest accruing on the certificate.

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

      o   If you purchase Class 5-A-7 certificates, you should consider the risk
          that after the date on which the aggregate principal balance of the
          subordinate certificates has been reduced to zero, the principal
          portion of losses (other than certain excess losses as described under
          "Description of the Offered Certificates--Allocation of Losses on the
          Certificates" in this prospectus supplement) allocated to the Class
          5-A-6 certificates will be borne by the Class 5-A-7 certificates (in
          addition to other losses allocated to the Class 5-A-7 certificates),
          so long as the principal balance of the 5-A-7 certificates is greater
          than zero.

      See "Description of the Offered Certificates" and "Prepayment and Yield
Considerations" in this prospectus supplement.

GEOGRAPHIC CONCENTRATION COULD INCREASE LOSSES ON THE LOANS

      The yield to maturity on your certificates may be affected by the
geographic concentration of the mortgaged properties securing the loans in the
related loan group or loan groups. Any concentration of the mortgaged properties
securing the loans related to your certificates in particular geographic regions
might magnify the effect on the pool of loans of adverse economic conditions or
of special hazards in these areas, such as earthquakes, hurricanes, wildfires or
tornadoes, and might increase the rate of delinquencies, defaults and losses on
the loans. Consequently, the geographic concentration could result in shortfalls
in distributions due on your certificates more than would be the case if the
mortgaged properties were more geographically diversified. See "Description of
the Loans" in this prospectus supplement.

      In addition, a number of hurricanes that struck the southeastern United
States in August 2004 and September 2004, may have adversely affected any
mortgaged properties located in that region. UBS Real Estate Securities Inc. (in
its capacity as the transferor of the loans) will make a representation and
warranty that no mortgaged property is damaged by water, fire, earthquake or
other earth movement, windstorm, flood, tornado or similar casualty as of the
closing date. We do not know how many mortgaged properties have been or may be
affected by these hurricanes. No assurance can be given as to the effect of this
event on the rate of delinquencies and losses on the mortgage loans secured by
mortgaged properties that were or may be affected by these hurricanes. Any
adverse impact as a result of this event may be borne by the holders of the

                                      S-24


offered certificates, particularly if the transferor fails to repurchase any
mortgage loan that breaches this representation and warranty.

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

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

HIGH LOAN-TO-VALUE RATIOS INCREASE RISK OF LOSS

      Loans with higher loan-to-value ratios may present a greater risk of loss
than loans with loan-to-value ratios of 80% or below. Approximately 10.84% of
the loans had loan-to-value ratios at origination in excess of 80%. All of the
loans with loan-to-value ratios in excess of 80% have primary mortgage insurance
(except for 4 loans secured by additional collateral, representing approximately
0.44% of the loans by principal balance as of the cut-off date). However, we
cannot assure you that the primary mortgage insurance coverage will be adequate
to cover any losses that might be experienced by those loans.

      The determination of the value of a mortgaged property used in the
calculation of the loan-to-value ratios of the loans for the purpose of
determining whether primary mortgage insurance is required may differ from the
appraised value of such mortgaged properties for loans obtained for the purpose
of acquiring the related mortgaged property. Loan-to-value ratios for loans are
generally determined based upon the lesser of the selling price of the mortgaged
property or its appraised value at the time of sale, although this calculation
may vary depending on the state in which the related mortgaged property is
located.

INTEREST ONLY LOANS HAVE A GREATER RISK UPON DEFAULT

      Approximately 7.95% of the loans in loan group 5 (by cut-off date pool
balance for the related loan group), do not provide for any payments of
principal prior to ten years, after origination. These loans may involve a
greater degree of risk because, if the related mortgagor defaults, the
outstanding principal balance of that loan will be higher than for a loan that
commences amortizing as of its first due date.

THE RATE OF DEFAULT ON LOANS THAT ARE SECURED BY INVESTOR PROPERTIES MAY BE
  HIGHER THAN ON OTHER LOANS

      As of the cut-off-date, approximately 2.34% of the loans in loan group 2,
approximately 1.10% of the loans in loan group 3, approximately 9.84% of the
loans in loan group 4, and approximately 2.79% of the loans in loan group 5 (in
each case, by cut-off date pool balance for the related loan group), are
expected to be secured by investor properties. None of the loans in loan group 1
are secured by investor properties. An investor property is a property which, at
the time of origination, the borrower represented would not be used as the
borrower's primary

                                      S-25


residence or second home. Because the borrower is not living on the property,
the borrower may be more likely to default on the related loan than on a
comparable loan secured by a primary residence, or to a lesser extent, a second
home. In addition, income expected to be generated from an investor property may
have been considered for underwriting purposes in addition to the income of the
borrower from other sources. Should this income not materialize, it is possible
the borrower would not have sufficient resources to make payments on the related
loan.

FAILURE OF MASTER SERVICER OR SERVICERS TO PERFORM THEIR OBLIGATIONS MAY
  ADVERSELY AFFECT DISTRIBUTIONS ON CERTIFICATES; POTENTIAL CONFLICT OF INTEREST

      The amount and timing of distributions on the certificates generally will
be dependent on the servicers performing their respective servicing obligations
and the master servicer performing its master servicing obligations in an
adequate and timely manner. See "The Pooling and Servicing Agreement--Collection
Account and Distribution Account" in this prospectus supplement. A potential
conflict of interest exists because Wells Fargo Bank, National Association,
which is also the master servicer and the trust administrator, will act as
servicer of approximately 22.48% of the loans (by cut-off date pool balance of
the loans). However, the master servicer is required to act in accordance with
the master servicing standard set forth in the pooling and servicing agreement,
without regard to who is servicing the loans. If any servicer fails to perform
its servicing obligations, or if the master servicer fails to perform its master
servicing obligations, this failure may result in the termination of such
servicer or the master servicer, as applicable. A termination of the servicer
with its corresponding transfer of daily collection activities will likely
increase the rates of delinquencies, defaults and losses on the loans. As a
result, shortfalls in the distributions due on your certificates could occur.

THE RECORDING OF THE MORTGAGES IN THE NAME OF MERS MAY AFFECT THE YIELD ON THE
  CERTIFICATES

      The mortgages or assignments of mortgage for some of the loans have been
or may be recorded in the name of Mortgage Electronic Registration Systems, Inc.
or MERS, solely as nominee for the seller and its successors and assigns.
Subsequent assignments of those mortgages are registered electronically through
the MERS system. However, if MERS discontinues the MERS system and it becomes
necessary to record an assignment of mortgage to the trustee, then any related
expenses will be paid by the trust and will reduce the amount available to pay
principal of and interest on the certificates.

      The recording of mortgages in the name of MERS is a new practice in the
mortgage lending industry. Public recording officers and others may have
limited, if any, experience with lenders seeking to foreclose mortgages,
assignments of which are registered with MERS. Accordingly, delays and
additional costs in commencing, prosecuting and completing foreclosure
proceedings and conducting foreclosure sales of the mortgaged properties could
result. Those delays and the additional costs could in turn delay the
distribution of liquidation proceeds to certificateholders and increase the
amount of losses on the loans.

                                      S-26


LIMITED LIQUIDITY MAY ADVERSELY AFFECT MARKET VALUE OF THE CERTIFICATES

      A secondary market for the offered certificates may not develop or, if it
does develop, it may not provide you with liquidity of investment or continue
while your certificates are outstanding. Lack of liquidity could result in a
substantial decrease in the market value of your certificates. See "Risk
Factors--Limited Liquidity of Securities May Adversely Affect Market Value of
Securities" in the prospectus.

      The secondary market for mortgage-backed securities has experienced
periods of illiquidity and can be expected to do so in the future. Illiquidity
means that there may not be any purchasers for your class of certificates.
Although any class of certificates may experience illiquidity, it is more likely
that classes of certificates that are more sensitive to prepayment, credit or
interest rate risk will experience illiquidity.

THE RATINGS ON YOUR CERTIFICATES COULD BE REDUCED OR WITHDRAWN

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

THE CERTIFICATES ARE OBLIGATIONS OF THE TRUST ONLY

      The certificates will not represent an interest in or obligation of the
depositor, the master servicer, the trust administrator, the transferor, the
trustee, the custodians or any of their respective affiliates. Neither the
certificates nor the underlying loans will be guaranteed or insured by any
governmental agency or instrumentality or by the depositor, the master servicer,
the trust administrator, the custodians, the trustee or any of their respective
affiliates. Proceeds of the assets included in the trust will be the sole source
of payments on the certificates, and there will be no recourse to the depositor,
the master servicer, the trust administrator, the custodians, the transferor,
the trustee or any other entity in the event that such proceeds are insufficient
or otherwise unavailable to make all payments provided for under the
certificates.

RIGHTS OF BENEFICIAL OWNERS MAY BE LIMITED BY BOOK-ENTRY SYSTEM

      Unless you are the purchaser of a Class A-LR or Class A-R certificate,
your ownership of the offered certificates will be registered electronically
with DTC. The lack of physical certificates could:

      o   result in payment delays on your certificates because the trust
          administrator will be sending distributions on the certificates to DTC
          instead of directly to you;

      o   make it difficult for you to pledge your certificates if physical
          certificates are required by the party demanding the pledge; and

      o   hinder your ability to resell your certificates because some investors
          may be unwilling to buy certificates that are not in physical form.
          See "Description of the Offered

                                      S-27


          Certificates--Book-Entry Certificates" in this prospectus supplement
          and "Description of the Securities--Book-Entry Registration of
          Securities" in the prospectus.

RISKS RELATED TO THE RESIDUAL CERTIFICATES

      The holders of the Class A-LR and Class A-R certificates (which are also
called, collectively, the residual certificates) must include the taxable income
or loss of the related REMIC in determining their federal taxable income.
Prospective investors are cautioned that the residual certificateholders' REMIC
taxable income and the tax liability associated therewith may be substantial
during certain periods, in which event the holders thereof must have sufficient
sources of funds to pay such tax liability. It is not anticipated that the
residual certificateholders will receive distributions from the trust.
Furthermore, it is anticipated that all or a substantial portion of the taxable
income of the related REMIC includible by the holders of the residual
certificates will be treated as "excess inclusion" income, resulting in (i) the
inability of such holders to use net operating losses to offset such income,
(ii) the treatment of such income as "unrelated business taxable income" to
certain holders who are otherwise tax-exempt, and (iii) the treatment of such
income as subject to 30% withholding tax to certain non-U.S. investors, with no
exemption or treaty reduction.

      Under the provisions of the Internal Revenue Code of 1986 relating to
REMICs, it is likely that the residual certificates will be considered to be
"non-economic residual interests," with the result that transfers thereof would
be disregarded for federal income tax purposes if any significant purpose of the
transferor was to impede the assessment or collection of tax. Accordingly, the
transferee affidavit used for transfers of the residual certificates will
require the transferee to affirm that it (i) historically has paid its debts as
they have come due and intends to do so in the future, (ii) understands that it
may incur tax liabilities with respect to the residual certificates in excess of
cash flows generated by them, (iii) intends to pay taxes associated with holding
the residual certificates as such taxes become due, (iv) will not cause the
income from the residual certificates to be attributable to a foreign permanent
establishment or fixed base, within the meaning of an applicable income tax
treaty, of the transferee or any other U.S. person and (v) will not transfer the
residual certificates to any person or entity that does not provide a similar
affidavit. The transferor must certify in writing to the trust administrator
that, as of the date of transfer, it had no knowledge or reason to know that the
affirmations made by the transferee pursuant to the preceding sentence were
false. In addition, Treasury regulations provide alternatives for either paying
the transferee of the residual certificates a formula specified minimum price or
transferring the residual certificates to an eligible corporation under certain
conditions in order to meet the safe harbor against the possible disregard of
such transfer. Finally, residual certificates generally may not be transferred
to a person who is not a U.S. person unless the income thereon is effectively
connected with the conduct of a U.S. trade or business and the transferee
furnishes the transferor and the trust administrator with an effective Internal
Revenue Service Form W-8ECI. See "Description of the Offered
Certificates--Restrictions on Transfer of the Residual Certificates" in this
prospectus supplement and "Federal Income Tax Consequences--REMICs--Taxation of
Owners of Residual Securities--Treatment of Certain Items of REMIC Income and
Expense," "-Limitations on Offset or Exemption of REMIC Income" and
"-Tax-Related Restrictions on Transfer of Residual Securities" in the
prospectus.

                                      S-28


      An individual, trust or estate that holds residual certificates (whether
the residual certificates are held directly or indirectly through certain
pass-through entities) also may have additional gross income with respect to
such residual certificates, but may be subject to limitations or disallowance of
deductions for servicing fees on the loans and other administrative expenses
properly allocable to such residual certificates in computing such holder's
regular tax liability, and may not be able to deduct such fees or expenses to
any extent in computing such holder's alternative minimum tax liability. The
pooling and servicing agreement will require that any such gross income and such
fees and expenses will be allocable to holders of the residual certificates in
proportion to their respective ownership interests. See "Federal Income Tax
Consequences--REMICs--Limitations on Deduction of Certain Expenses" in the
prospectus. In addition, some portion of a purchaser's basis, if any, in
residual certificates may not be recovered until termination of the trust fund.
Furthermore, Treasury regulations have been issued concerning the federal income
tax consequences of any consideration paid to a transferee on a transfer of
residual certificates. Any transferee of residual certificates receiving such
consideration should consult its tax advisors. See "Federal Income Tax
Consequences--REMICs--Taxation of Owners of Residual Securities--Basis and
Losses" in the prospectus.

      Due to the special tax treatment of residual interests, the effective
after-tax return of the residual certificates may be significantly lower than
would be the case if the residual certificates were taxed as debt instruments
and could be negative.

THE RETURN ON YOUR CERTIFICATES COULD BE REDUCED DUE TO THE APPLICATION OF THE
  SERVICEMEMBERS CIVIL RELIEF ACT

      In response to previously executed and threatened terrorist attacks in the
United States and foreign countries, the United States has initiated military
operations and has placed a substantial number of armed forces reservists and
members of the National Guard on active duty status. It is possible that the
number of reservists and members of the National Guard placed on active duty
status in the near future may increase. To the extent that a member of the
military, or a member of the armed forces reserves or National Guard who is
called to active duty, is a mortgagor of a mortgage loan in the trust, the
interest rate limitation of the Servicemembers Civil Relief Act and any
comparable state law, will apply. A significant number of the loans have
mortgage interest rates that exceed such limitation, if applicable. This may
result in interest shortfalls on the loans, which, in turn will be allocated
ratably in reduction of accrued interest on all classes of interest-bearing
certificates, irrespective of the availability of excess cash flow or other
credit enhancement. None of the depositor, the transferor, the underwriter, the
master servicer, the trust administrator, the trustee, either custodian or any
other party has taken any action to determine whether any of the loans would be
affected by such interest rate limitation. See "Description of the Offered
Certificates--Interest" and "--Allocation of Losses on the Certificates" in this
prospectus supplement and "Certain Legal Aspects of Residential
Loans--Servicemembers Civil Relief Act and the California Military and Veterans
Code" in the prospectus.

                                      S-29


                           FORWARD-LOOKING STATEMENTS


      In this prospectus supplement and the prospectus, we use certain
forward-looking statements. These forward-looking statements are found in the
material, including the tables set forth under "Prepayment and Yield
Considerations" in this prospectus supplement. Forward-looking statements are
also found elsewhere in this prospectus supplement and the prospectus and
include words like "may," "will," "should," "believes," "expects," "intends,"
"anticipates," "estimates" and other similar words. These statements are
intended to convey our projections or expectations as of the date of this
prospectus supplement. These statements are inherently subject to a variety of
risks and uncertainties. Actual results could differ materially from those we
anticipate due to changes in, among other things:

                (1) economic conditions and industry competition;

                (2) political and/or social conditions; and

                (3) the law and government regulatory initiatives.

      We will not update or revise any forward-looking statement to reflect
changes in our expectations or changes in the conditions or circumstances on
which these statements were originally based.

                                  DEFINED TERMS

      We define and use capitalized terms in this prospectus supplement and the
prospectus to assist you in understanding the terms of the offered certificates
and this offering. We define the capitalized terms we use in this prospectus
supplement under the caption "Glossary of Terms" beginning on page S-123 in this
prospectus supplement. We define capitalized terms we use in the prospectus
under the caption "Glossary of Terms" beginning on page 187 in the prospectus.

                            DESCRIPTION OF THE LOANS


GENERAL

      On or about September 29, 2004, Mortgage Asset Securitization
Transactions, Inc., the depositor, will acquire five groups of Loans, having an
aggregate scheduled principal balance as of the Cut-Off Date of approximately
$420,677,032 from UBS Real Estate Securities Inc., which will have previously
acquired the Loans under certain purchase and sale agreements from the Loan
Sellers. The depositor will then transfer the Loans to the trust pursuant to the
Pooling and Servicing Agreement. The trust will be entitled to all scheduled
payments of principal and interest in respect of the Loans due after September
1, 2004 and all unscheduled payments of principal and interest received after
the Cut-Off Date.

      Unless otherwise stated, the statistical information presented in this
prospectus supplement relates to the Loans as of the Cut-Off Date, and
information as to percentages of Loans is based

                                      S-30


on the scheduled principal balances of Loans in the applicable Loan Group as of
the Cut-Off Date (after taking into account scheduled payments of principal on
that date).

      Substantially all of the Group 1 Loans, Group 2 Loans, Group 3 Loans and
Group 4 Loans have original terms to maturity of approximately 15 years.
Substantially all of the Group 5 Loans have original terms to maturity of
approximately 30 years. As of the close of business on the Cut-Off Date,
approximately 0.40% of the Loans were 30 days past due in the payment of
scheduled principal and interest.

      The Loans are evidenced by Mortgage Notes, secured primarily by mortgages
or deeds of trust on the Mortgaged Properties. As of the Cut-Off Date, all of
the Loans were secured by first liens on Mortgaged Properties.

      All of the Loans provide for payments due as of the first day of each
month. The scheduled monthly payment on substantially all of the Loans generally
includes a substantially equal payment consisting of interest plus principal in
an amount that will amortize the outstanding principal balance of the Loan over
its remaining term, except for approximately 7.95% of the Group 5 Loans (based
on Cut-Off Date Pool Balance for the related Loan Group) that do not provide for
any payment of principal prior to ten years after origination, but which require
that their principal balances be fully amortized over the related remaining term
of the Loans.

      The latest scheduled maturity date of any Group 1 Loan, Group 3 Loan or
Group 4 Loan is in August 2019. The latest scheduled maturity date of any Group
2 Loan is in September 2019. The latest scheduled maturity date of any Group 5
Loan is in August 2034. However, the actual date on which any Loan is paid in
full may be earlier than the stated maturity date due to unscheduled payments of
principal.

      Other than approximately 0.67% of the Group 1 Loans, approximately 12.15%
of the Loans in Group 2 loans, approximately 2.26% of the Group 3 Loans,
approximately 41.55% of the Group 4 Loans and approximately 42.21% of the Group
5 Loans (in each case, by Cut-Off Date Pool Balance for the related Loan Group),
the borrowers may generally prepay their Loans at any time without penalty.
Prepayment premiums, penalties and charges collected from borrowers will be paid
to the holders of the Class P certificates or the related servicer. Each of the
Loans is subject to a due-on-sale clause. See "Certain Legal Aspects of
Residential Loans" in the prospectus.

      All Loans with an LTV Ratio at origination of more than 80% are covered by
a primary mortgage insurance policy issued by a mortgage insurance company
acceptable to Freddie Mac or Fannie Mae (except for 4 Loans which are secured by
additional collateral, representing approximately 0.44% by Cut-Off Date Pool
Balance for all of the Loan Groups). Each policy provides coverage in an amount
equal to a specified percentage times the sum of the remaining principal balance
of the Loan, the accrued interest on the Loan and the related foreclosure
expenses.

      o   Approximately 10.84% of the Loans, by Cut-Off Date Pool Balance for
          all of the Loan Groups, had LTV Ratios at origination of greater than
          80% and, with respect to each such Loan, the related borrowers were
          required to obtain primary mortgage insurance (except

                                      S-31


          for the 4 Loans specified in the immediately preceding paragraph). No
          primary mortgage insurance policy will be required on any Loan if
          maintaining the policy is prohibited by law.

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 sale date. If
residential real estate values decline generally or in a particular geographic
area decline, the LTV Ratios might not be a reliable indicator of the rates of
delinquencies, foreclosures and losses that could occur with respect to the
Loans.

STATISTICAL INFORMATION

      Statistical information regarding characteristics of the Loans in the
aggregate, as well as by Loan Group, as of the Cut-Off Date, is set forth in
Annex A to this prospectus supplement.

      Before the Closing Date, the depositor may remove any of the Loans
identified as of the date of this prospectus supplement or may substitute
comparable loans for any of the Loans identified as of the date of this
prospectus supplement. However, the aggregate principal balance of the
substituted Loans will not vary by more than plus or minus 5% of the Loans, by
Cut-Off Date Pool Balance for each Loan Group. As a result, the statistical
information presented in Annex A to this prospectus supplement regarding the
characteristics of the Loans identified for inclusion in the trust may vary in
some respects from comparable information based on the actual composition of the
Loans included in the trust on the Closing Date. In addition, after the Cut-Off
Date, the characteristics of the Loans may materially vary from the information
below due to a number of factors. These factors include prepayments of the Loans
after the Cut-Off Date and the substitution or repurchase of Loans after the
Closing Date.

                             UNDERWRITING STANDARDS


GENERAL

      The Loans have either been originated by a Loan Seller or purchased by a
Loan Seller from various banks, savings and loan associations, mortgage bankers
(which may or may not be affiliated with that Loan Seller) and other mortgage
loan originators and purchasers of mortgage loans in the secondary market, and
were originated generally in accordance with the underwriting criteria described
in this section "--General," in the following section "--Modified Standards" or
one of the other following sections pertaining to a particular Loan Seller and
related Loans.

      All of the Loans are "conventional non-conforming mortgage loans" (i.e.,
loans which are not insured by the Federal Housing Authority ("FHA") or
partially guaranteed by the Department of Veteran Affairs ("VA") or which do not
qualify for sale to Fannie Mae or Freddie Mac and are secured by first liens on
one- to four-family residential properties).

      The underwriting standards applicable to the Loans typically differ from,
and are, with respect to a substantial number of Loans, generally less stringent
than, the underwriting standards established by Fannie Mae or Freddie Mac
primarily with respect to original principal

                                      S-32


balances, loan to value ratios, borrower income, required documentation,
interest rates, borrower occupancy of the mortgaged property and/or property
types. To the extent the programs reflect underwriting standards different from
those of Fannie Mae and Freddie Mac, the performance of the Loans thereunder may
reflect higher delinquency rates and/or credit losses. In addition, certain
exceptions to the underwriting standards described in this prospectus supplement
are made in the event that compensating factors are demonstrated by a
prospective borrower.

      Generally, each borrower will have been required to complete an
application designed to provide to the original lender pertinent credit
information concerning the borrower. As part of the description of the
borrower's financial condition, the borrower will have furnished information
with respect to its assets, liabilities, income (except as described below),
credit history, employment history and personal information, and furnished an
authorization to apply for a credit report which summarizes the borrower's
credit history with local merchants and lenders and any record of bankruptcy.
The borrower may also have been required to authorize verifications of deposits
at financial institutions where the borrower had demand or savings accounts. In
the case of investment properties and two- to four-unit dwellings, income
derived from the mortgaged property may have been considered for underwriting
purposes, in addition to the income of the borrower from other sources. With
respect to mortgaged properties consisting of vacation or second homes, no
income derived from the property generally will have been considered for
underwriting purposes. In the case of certain borrowers with acceptable payment
histories, no income will be required to be stated (or verified) in connection
with the loan application.

      Based on the data provided in the application and certain verification (if
required), a determination is made by the original lender that the borrower's
monthly income (if required to be stated) will be sufficient to enable the
borrower to meet its monthly obligations on the mortgage loan and other expenses
related to the property such as property taxes, utility costs, standard hazard
insurance and other fixed obligations other than housing expenses. Generally,
scheduled payments on a Loan during the first year of its term plus taxes and
insurance and all scheduled payments on obligations that extend beyond ten
months equal no more than a specified percentage of the prospective borrower's
gross income. The percentage applied varies on a case by case basis depending on
a number of underwriting criteria, including the LTV Ratio of the loan. The
originator may also consider the amount of liquid assets available to the
borrower after origination.

      Certain Loans have been originated under reduced documentation,
no-stated-income, no-documentation or no-ratio programs, which require less
documentation and verification than do traditional full documentation programs.
Generally, under a reduced documentation program, verification of either a
borrower's stated income or stated assets, but not both, is undertaken by the
originator. Under a no-stated-income program or a no-ratio program, certain
borrowers with acceptable payment histories will not be required to provide any
information regarding income and no other investigation regarding the borrower's
income will be undertaken. Under a no-documentation program, no verification of
a borrower's income or assets is undertaken by the originator. The underwriting
for such Loans may be based primarily or entirely on other factors, such as an
appraisal of the mortgaged property, the loan to value ratio at origination and
the borrower's credit score and mortgage payment history.

                                      S-33


      The adequacy of the mortgaged property as security for repayment of the
related Loan will generally have been determined by an appraisal in accordance
with pre-established appraisal procedure standards for appraisals established by
or acceptable to the originator. All appraisals conform to the Uniform Standards
of Professional Appraisal Practice adopted by the Appraisal Standards Board of
the Appraisal Foundation and must be on forms acceptable to Fannie Mae and/or
Freddie Mac. Appraisers may be staff appraisers employed by the originator or
independent appraisers selected in accordance with pre-established appraisal
procedure standards established by the originator. The appraisal procedure
standards generally will have required the appraiser or an agent on its behalf
to personally inspect the property and to verify whether the property was in
good condition and that construction, if new, had been substantially completed.
The appraisal generally will have been based upon a market data analysis of
recent sales of comparable properties and, when deemed applicable, an analysis
based on the current cost of constructing or purchasing a similar property.

      Approximately 7.52% of the Loans, by Cut-Off Date Pool Balance, were
purchased from various originators pursuant to the transferor's conduit loan
origination program (the "UBS Conduit"). Pursuant to the program, the transferor
purchases loans originated by the participating originators if the loans satisfy
the underwriting guidelines of the program, which underwriting guidelines are
substantially similar to the guidelines described above.

MODIFIED STANDARDS

      In comparison to the sellers' "general" underwriting standards described
above, the underwriting standards applicable to mortgage loans under the loan
sellers' "alternative" mortgage loan underwriting program permit different
underwriting criteria, additional types of mortgaged properties or categories of
borrowers such as "foreign nationals" without a FICO score who hold certain
types of visas and have acceptable credit references, and include certain other
less restrictive parameters. Generally, relative to the "general" underwriting
standards, these standards include higher loan amounts, higher maximum loan to
value ratios, higher maximum "combined" loan to value ratios (in each case,
relative to mortgage loans with otherwise similar characteristics) in cases of
simultaneous primary and secondary financings, less restrictive requirements for
"equity take out" refinancings, the removal of limitations on the number of
permissible mortgage loans that may be extended to one borrower and the ability
to originate mortgage loans with loan to value ratios in excess of 80% without
the requirement to obtain primary mortgage insurance if such loans are secured
by investment properties. Under a program available to eligible borrowers who
meet certain underwriting criteria and for which program a minimum down payment
of only 3% is required, mortgage loans may be originated with loan to value
ratios between 95.01% and 97% with the application of less restrictive maximum
qualifying ratios of borrower monthly housing debt or total monthly debt
obligations to borrower monthly income and reduced minimum requirements for
primary mortgage insurance coverage.

      With respect to mortgaged property types, mortgage loans may be secured by
shares in "manufactured homes," investment properties permitted under less
stringent standards, condotels (features of which may include maid service, a
front desk or resident manager, rental pools and up to 20% of commercial space),
and the mortgaged properties may represent an unusually high percentage of land
vs. structure or have other unique characteristics.

                                      S-34


      In addition, borrowers who satisfy certain standards regarding credit
history may have been approved under a No Ratio program (such mortgage loans,
"No Ratio Loans") or under a No Income, No Asset program (such mortgage loans,
"No Income, No Asset Loans"). In the case of No Ratio Loans, the borrower's
income would not have been verified nor would there have been the calculation of
any ratios, as part of the loan underwriting decision, of the borrower's
expected monthly housing debt or total monthly debt obligations to the
borrower's monthly income. In connection with such No Ratio program, the
borrower's assets would have been verified and certain minimum "cash reserves"
required. In the case of No Income, No Asset Loans, borrowers would not have
been required to provide any information in their loan application regarding
their income or assets.

COUNTRYWIDE HOME LOANS, INC.

      Approximately 29.86% of the Loans, by Cut-Off Date Pool Balance, were
originated by Countrywide Home Loans. The information set forth in this section
with regard to the underwriting standards of Countrywide Home Loans has been
provided to the depositor or compiled from information provided to the depositor
by Countrywide Home Loans. None of the depositor, the trustee, the trust
administrator, the master servicer, either custodian, the underwriters or any of
their respective affiliates has made any independent investigation of this
information or has made or will make any representation as to the accuracy or
completeness of this information.

UNDERWRITING PROCESS

      Countrywide Home Loans' underwriting standards are applied in accordance
with applicable federal and state laws and regulations. As part of its
evaluation of potential borrowers, Countrywide Home Loans generally requires a
description of income. If required by its underwriting guidelines, Countrywide
Home Loans obtains employment verification providing current and historical
income information and/or a telephonic employment confirmation. Such employment
verification may be obtained, either through analysis of the prospective
borrower's recent pay stub and/or W-2 forms for the most recent two years,
relevant portions of the most recent two years' tax returns, or from the
prospective borrower's employer, wherein the employer reports the length of
employment and current salary with that organization. Self-employed prospective
borrowers generally are required to submit relevant portions of their federal
tax returns for the past two years.

      In assessing a prospective borrower's creditworthiness, Countrywide Home
Loans may use FICO Credit Scores. "FICO Credit Scores" are statistical credit
scores designed to assess a borrower's creditworthiness and likelihood to
default on a consumer obligation over a two-year period based on a borrower's
credit history. FICO Credit Scores were not developed to predict the likelihood
of default on mortgage loans and, accordingly, may not be indicative of the
ability of a mortgagor to repay its mortgage loan. FICO Credit Scores range from
approximately 250 to approximately 900, with higher scores indicating an
individual with a more favorable credit history compared to an individual with a
lower score. Under Countrywide Home Loans' underwriting guidelines, borrowers
possessing higher FICO Credit Scores, which indicate a more favorable credit
history, and who give Countrywide Home Loans the right to obtain the tax returns
they filed for the preceding two years may be eligible for Countrywide Home
Loans'

                                      S-35


processing program (the "Preferred Processing Program"). Countrywide Home Loans
may waive some documentation requirements for mortgage loans originated under
the Preferred Processing Program.

      Periodically the data used by Countrywide Home Loans to complete the
underwriting analysis may be obtained by a third party, particularly for
mortgage loans originated through a loan correspondent or mortgage broker. In
those instances, the initial determination as to whether a mortgage loan
complies with Countrywide Home Loans' underwriting guidelines may be made by an
independent company hired to perform underwriting services on behalf of
Countrywide Home Loans, the loan correspondent or mortgage broker. In addition,
Countrywide Home Loans may acquire mortgage loans from approved correspondent
lenders under a program pursuant to which Countrywide Home Loans delegates to
the correspondent the obligation to underwrite the mortgage loans to Countrywide
Home Loans' standards. Under these circumstances, the underwriting of a mortgage
loan may not have been reviewed by Countrywide Home Loans before acquisition of
the mortgage loan and the correspondent represents that Countrywide Home Loans'
underwriting standards have been met. After purchasing mortgage loans under
those circumstances, Countrywide Home Loans conducts a quality control review of
a sample of the mortgage loans. The number of loans reviewed in the quality
control process varies based on a variety of factors, including Countrywide Home
Loans' prior experience with the correspondent lender and the results of the
quality control review process itself.

      Countrywide Home Loans' underwriting standards are applied by or on behalf
of Countrywide Home Loans to evaluate the prospective borrower's credit standing
and repayment ability and the value and adequacy of the mortgaged property as
collateral. Under those standards, a prospective borrower must generally
demonstrate that the ratio of the borrower's monthly housing expenses (including
principal and interest on the proposed mortgage loan and, as applicable, the
related monthly portion of property taxes, hazard insurance and mortgage
insurance) to the borrower's monthly gross income and the ratio of total monthly
debt to the monthly gross income (the "debt-to-income" ratios) are within
acceptable limits. The maximum acceptable debt-to-income ratio, which is
determined on a loan-by-loan basis varies depending on a number of underwriting
criteria, including the Loan-to-Value Ratio, loan purpose, loan amount and
credit history of the borrower. In addition to meeting the debt-to-income ratio
guidelines, each prospective borrower is required to have sufficient cash
resources to pay the down payment and closing costs. Exceptions to Countrywide
Home Loans' underwriting guidelines may be made if compensating factors are
demonstrated by a prospective borrower.

      Countrywide Home Loans may provide secondary financing to a mortgagor
contemporaneously with the origination of a mortgage loan, subject to the
following limitations: the Loan-to-Value Ratio of the senior (i.e., first) lien
may not exceed 80% and the combined Loan-to-Value Ratio may not exceed 100%.
Countrywide Home Loans' underwriting guidelines do not prohibit or otherwise
restrict a mortgagor from obtaining secondary financing from lenders other than
Countrywide Home Loans, whether at origination of the mortgage loan or
thereafter.

      The nature of the information that a borrower is required to disclose and
whether the information is verified depends, in part, on the documentation
program used in the origination

                                      S-36


process. In general under the Full Documentation Loan Program (the "Full
Documentation Program"), each prospective borrower is required to complete an
application which includes information with respect to the applicant's assets,
liabilities, income, credit history, employment history and other personal
information. Self-employed individuals are generally required to submit their
two most recent federal income tax returns. Under the Full Documentation
Program, the underwriter verifies the information contained in the application
relating to employment, income, assets or mortgages.

      A prospective borrower may be eligible for a loan approval process that
limits or eliminates Countrywide Home Loans' standard disclosure or verification
requirements or both. Countrywide Home Loans offers the following documentation
programs as alternatives to its Full Documentation Program: an Alternative
Documentation Loan Program (the "Alternative Documentation Program"), a Reduced
Documentation Loan Program (the "Reduced Documentation Program"), a CLUES Plus
Documentation Loan Program (the "CLUES Plus Documentation Program"), a No
Income/No Asset Documentation Loan Program (the "No Income/No Asset
Documentation Program"), a Stated Income/Stated Asset Documentation Loan Program
(the "Stated Income/Stated Asset Documentation Program") and a Streamlined
Documentation Loan Program (the "Streamlined Documentation Program").

      For all mortgage loans originated or acquired by Countrywide Home Loans,
Countrywide Home Loans obtains a credit report relating to the applicant from a
credit reporting company. The credit report typically contains information
relating to such matters as credit history with local and national merchants and
lenders, installment debt payments and any record of defaults, bankruptcy,
dispossession, suits or judgments. All adverse information in the credit report
is required to be explained by the prospective borrower to the satisfaction of
the lending officer.

      Except with respect to mortgage loans originated pursuant to its
Streamlined Documentation Program, Countrywide Home Loans obtains appraisals
from independent appraisers or appraisal services for properties that are to
secure mortgage loans. The appraisers inspect and appraise the proposed
mortgaged property and verify that the property is in acceptable condition.
Following each appraisal, the appraiser prepares a report which includes a
market data analysis based on recent sales of comparable homes in the area and,
when deemed appropriate, a replacement cost analysis based on the current cost
of constructing a similar home. All appraisals are required to conform to Fannie
Mae or Freddie Mac appraisal standards then in effect.

      Countrywide Home Loans requires title insurance on all of its mortgage
loans secured by first liens on real property. Countrywide Home Loans also
requires that fire and extended coverage casualty insurance be maintained on the
mortgaged property in an amount at least equal to the principal balance of the
related single-family mortgage loan or the replacement cost of the mortgaged
property, whichever is less.

      In addition to Countrywide Home Loans' standard underwriting guidelines
(the "Standard Underwriting Guidelines"), which are consistent in many respects
with the guidelines applied to mortgage loans purchased by Fannie Mae and
Freddie Mac, Countrywide Home Loans uses underwriting guidelines featuring
expanded criteria (the "Expanded Underwriting Guidelines"). The Standard
Underwriting Guidelines and the Expanded Underwriting Guidelines are described
further under the next two headings.

                                      S-37


      Standard Underwriting Guidelines

      Countrywide Home Loans' Standard Underwriting Guidelines for mortgage
loans with non-conforming original principal balances generally allow
Loan-to-Value Ratios at origination of up to 95% for purchase money or rate and
term refinance mortgage loans with original principal balances of up to
$400,000, up to 90% for mortgage loans with original principal balances of up to
$650,000, up to 75% for mortgage loans with original principal balances of up to
$1,000,000, up to 65% for mortgage loans with original principal balances of up
to $1,500,000, and up to 60% for mortgage loans with original principal balances
of up to $2,000,000.

      For cash-out refinance mortgage loans, Countrywide Home Loans' Standard
Underwriting Guidelines for mortgage loans with non-conforming original
principal balances generally allow Loan-to-Value Ratios at origination of up to
75% and original principal balances ranging up to $650,000. The maximum
"cash-out" amount permitted is $200,000 and is based in part on the original
Loan-to-Value Ratio of the related mortgage loan. As used in this section, a
refinance mortgage loan is classified as a cash-out refinance mortgage loan by
Countrywide Home Loans if the borrower retains an amount greater than the lesser
of 2% of the entire amount of the proceeds from the refinancing of the existing
loan or $2,000.

      Countrywide Home Loans' Standard Underwriting Guidelines for conforming
balance mortgage loans generally allow Loan-to-Value Ratios at origination on
owner occupied properties of up to 95% on 1 unit properties with principal
balances up to $333,700 ($500,550 in Alaska and Hawaii) and 2 unit properties
with principal balances up to $427,150 ($640,725 in Alaska and Hawaii) and up to
80% on 3 unit properties with principal balances of up to $516,300 ($774,450 in
Alaska and Hawaii) and 4 unit properties with principal balances of up to
$641,650 ($962,475 in Alaska and Hawaii). On second homes, Countrywide Home
Loans' Standard Underwriting Guidelines for conforming balance mortgage loans
generally allow Loan-to-Value Ratios at origination of up to 95% on 1 unit
properties with principal balances up to $333,700 ($500,550 in Alaska and
Hawaii). Countrywide Home Loans' Standard Underwriting Guidelines for conforming
balance mortgage loans generally allow Loan-to-Value Ratios at origination on
investment properties of up to 90% on 1 unit properties with principal balances
up to $333,700 ($500,550 in Alaska and Hawaii) and 2 unit properties with
principal balances up to $427,150 ($640,725 in Alaska and Hawaii) and up to 75%
on 3 unit properties with principal balances of up to $516,300 ($774,450 in
Alaska and Hawaii) and 4 unit properties with principal balances of up to
$641,650 ($962,475 in Alaska and Hawaii).

      Under its Standard Underwriting Guidelines, Countrywide Home Loans
generally permits a debt-to-income ratio based on the borrower's monthly housing
expenses of up to 33% and a debt-to-income ratio based on the borrower's total
monthly debt of up to 38%.

      In connection with the Standard Underwriting Guidelines, Countrywide Home
Loans originates or acquires mortgage loans under the Full Documentation
Program, the Alternative Documentation Program, the Reduced Documentation
Program, the CLUES Plus Documentation Program or the Streamlined Documentation
Program.

                                      S-38


      The Alternative Documentation Program permits a borrower to provide W 2
forms instead of tax returns covering the most recent two years, permits bank
statements in lieu of verification of deposits and permits alternative methods
of employment verification.

      Under the Reduced Documentation Program, some underwriting documentation
concerning income, employment and asset verification is waived. Countrywide Home
Loans obtains from a prospective borrower either a verification of deposit or
bank statements for the two-month period immediately before the date of the
mortgage loan application or verbal verification of employment. Since
information relating to a prospective borrower's income and employment is not
verified, the borrower's debt-to-income ratios are calculated based on the
information provided by the borrower in the mortgage loan application. The
maximum Loan-to-Value Ratio, including secondary financing, ranges up to 75%.

      The CLUES Plus Documentation Program permits the verification of
employment by alternative means, if necessary, including verbal verification of
employment or reviewing paycheck stubs covering the pay period immediately prior
to the date of the mortgage loan application. To verify the borrower's assets
and the sufficiency of the borrower's funds for closing, Countrywide Home Loans
obtains deposit or bank account statements from each prospective borrower for
the month immediately prior to the date of the mortgage loan application. Under
the CLUES Plus Documentation Program, the maximum Loan-to-Value Ratio is 75% and
property values may be based on appraisals comprising only interior and exterior
inspections. Cash-out refinances and investor properties are not permitted under
the CLUES Plus Documentation Program.

      The Streamlined Documentation Program is available for borrowers who are
refinancing an existing mortgage loan that was originated or acquired by
Countrywide Home Loans provided that, among other things, the mortgage loan has
not been more than 30 days delinquent in payment during the previous
twelve-month period. Under the Streamlined Documentation Program, appraisals are
obtained only if the loan amount of the loan being refinanced had a
Loan-to-Value Ratio at the time of origination in excess of 80% or if the loan
amount of the new loan being originated is greater than $650,000. In addition,
under the Streamlined Documentation Program, a credit report is obtained but
only a limited credit review is conducted, no income or asset verification is
required, and telephonic verification of employment is permitted. The maximum
Loan-to-Value Ratio under the Streamlined Documentation Program ranges up to
95%.

      Expanded Underwriting Guidelines

      Mortgage loans which are underwritten pursuant to the Expanded
Underwriting Guidelines may have higher Loan-to-Value Ratios, higher loan
amounts and different documentation requirements than those associated with the
Standard Underwriting Guidelines. The Expanded Underwriting Guidelines also
permit higher debt-to-income ratios than mortgage loans underwritten pursuant to
the Standard Underwriting Guidelines.

      Countrywide Home Loans' Expanded Underwriting Guidelines for mortgage
loans with non-conforming original principal balances generally allow
Loan-to-Value Ratios at origination of up to 95% for purchase money or rate and
term refinance mortgage loans with original principal

                                      S-39


balances of up to $400,000, up to 90% for mortgage loans with original principal
balances of up to $650,000, up to 80% for mortgage loans with original principal
balances of up to $1,000,000, up to 75% for mortgage loans with original
principal balances of up to $1,500,000 and up to 70% for mortgage loans with
original principal balances of up to $3,000,000. Under certain circumstances,
however, Countrywide Home Loans' Expanded Underwriting Guidelines allow for
Loan-to-Value Ratios of up to 100% for purchase money mortgage loans with
original principal balances of up to $375,000.

      For cash-out refinance mortgage loans, Countrywide Home Loans' Expanded
Underwriting Guidelines for mortgage loans with non-conforming original
principal balances generally allow Loan-to-Value Ratios at origination of up to
90% and original principal balances ranging up to $1,500,000. The maximum
"cash-out" amount permitted is $400,000 and is based in part on the original
Loan-to-Value Ratio of the related mortgage loan.

      Countrywide Home Loans' Expanded Underwriting Guidelines for conforming
balance mortgage loans generally allow Loan-to-Value Ratios at origination on
owner occupied properties of up to 100% on 1 unit properties with principal
balances up to $333,700 ($500,550 in Alaska and Hawaii) and 2 unit properties
with principal balances up to $427,150 ($640,725 in Alaska and Hawaii) and up to
85% on 3 unit properties with principal balances of up to $516,300 ($774,450 in
Alaska and Hawaii) and 4 unit properties with principal balances of up to
$641,650 ($962,475 in Alaska and Hawaii). On second homes, Countrywide Home
Loans' Expanded Underwriting Guidelines for conforming balance mortgage loans
generally allow Loan-to-Value Ratios at origination of up to 95% on 1 unit
properties with principal balances up to $333,700 ($500,550 in Alaska and
Hawaii). Countrywide Home Loans' Expanded Underwriting Guidelines for conforming
balance mortgage loans generally allow Loan-to-Value Ratios at origination on
investment properties of up to 90% on 1 unit properties with principal balances
up to $333,700 ($500,550 in Alaska and Hawaii) and 2 unit properties with
principal balances up to $427,150 ($640,725 in Alaska and Hawaii) and up to 85%
on 3 unit properties with principal balances of up to $516,300 ($774,450 in
Alaska and Hawaii) and 4 unit properties with principal balances of up to
$641,650 ($962,475 in Alaska and Hawaii).

      Under its Expanded Underwriting Guidelines, Countrywide Home Loans
generally permits a debt-to-income ratio based on the borrower's monthly housing
expenses of up to 36% and a debt-to-income ratio based on the borrower's total
monthly debt of up to 40%; provided, however, that if the Loan-to-Value Ratio
exceeds 80%, the maximum permitted debt-to-income ratios are 33% and 38%,
respectively.

      In connection with the Expanded Underwriting Guidelines, Countrywide Home
Loans originates or acquires mortgage loans under the Full Documentation
Program, the Alternative Documentation Program, the Reduced Documentation Loan
Program, the No Income/No Asset Documentation Program and the Stated
Income/Stated Asset Documentation Program. Neither the No Income/No Asset
Documentation Program nor the Stated Income/Stated Asset Documentation Program
is available under the Standard Underwriting Guidelines.

      The same documentation and verification requirements apply to mortgage
loans documented under the Alternative Documentation Program regardless of
whether the loan has been underwritten under the Expanded Underwriting
Guidelines or the Standard Underwriting


                                      S-40


Guidelines. However, under the Alternative Documentation Program, mortgage loans
that have been underwritten pursuant to the Expanded Underwriting Guidelines may
have higher loan balances and Loan-to-Value Ratios than those permitted under
the Standard Underwriting Guidelines.

      Similarly, the same documentation and verification requirements apply to
mortgage loans documented under the Reduced Documentation Program regardless of
whether the loan has been underwritten under the Expanded Underwriting
Guidelines or the Standard Underwriting Guidelines. However, under the Reduced
Documentation Program, higher loan balances and Loan-to-Value Ratios are
permitted for mortgage loans underwritten pursuant to the Expanded Underwriting
Guidelines than those permitted under the Standard Underwriting Guidelines. The
maximum Loan-to-Value Ratio, including secondary financing, ranges up to 90%.
The borrower is not required to disclose any income information for some
mortgage loans originated under the Reduced Documentation Program, and
accordingly debt-to-income ratios are not calculated or included in the
underwriting analysis. The maximum Loan-to-Value Ratio, including secondary
financing, for those mortgage loans ranges up to 85%.

      Under the No Income/No Asset Documentation Program, no documentation
relating to a prospective borrower's income, employment or assets is required
and therefore debt-to-income ratios are not calculated or included in the
underwriting analysis, or if the documentation or calculations are included in a
mortgage loan file, they are not taken into account for purposes of the
underwriting analysis. This program is limited to borrowers with excellent
credit histories. Under the No Income/No Asset Documentation Program, the
maximum Loan-to-Value Ratio, including secondary financing, ranges up to 95%.
Mortgage loans originated under the No Income/No Asset Documentation Program are
generally eligible for sale to Fannie Mae or Freddie Mac.

      Under the Stated Income/Stated Asset Documentation Program, the mortgage
loan application is reviewed to determine that the stated income is reasonable
for the borrower's employment and that the stated assets are consistent with the
borrower's income. The Stated Income/Stated Asset Documentation Program permits
maximum Loan-to-Value Ratios up to 90%. Mortgage loans originated under the
Stated Income/Stated Asset Documentation Program are generally eligible for sale
to Fannie Mae or Freddie Mac.

      Under the Expanded Underwriting Guidelines, Countrywide Home Loans may
also provide mortgage loans to borrowers who are not U.S. citizens, including
permanent and non-permanent residents. The borrower is required to have a valid
U.S. social security number or a certificate of foreign status (IRS form W-8).
The borrower's income and assets must be verified under the Full Documentation
Program or the Alternative Documentation Program. The maximum Loan-to-Value
Ratio, including secondary financing, is 80%.

WELLS FARGO BANK, NATIONAL ASSOCIATION

      Approximately 20.43% of the Loans, by Cut-Off Date Pool Balance, were
originated by Wells Fargo Bank, National Association ("WFB"). The information
set forth in this section with regard to the underwriting standards of WFB has
been provided to the depositor or compiled from information provided to the
depositor by WFB. None of the depositor, the trustee, the trust

                                      S-41


administrator, the master servicer, either custodian, the underwriters or any of
their respective affiliates has made any independent investigation of this
information or has made or will make any representation as to the accuracy or
completeness of this information.

      The WFB Underwriting Guidelines evaluate the applicant's credit standing
and ability to repay the loan, as well as the value and adequacy of the
mortgaged property as collateral. The WFB Underwriting Guidelines represent a
balancing of several factors that may affect the ultimate recovery of the loan
amount, including, among others, the amount of the loan, the ratio of the loan
amount to the property value (i.e., generally the lower of the appraised value
of the mortgaged property and the purchase price), the borrower's means of
support and the borrower's credit history. The WFB Underwriting Guidelines may
vary according to the nature of the borrower or the type of loan, since
differing characteristics may be perceived as presenting different levels of
risk.

      WFB supplements the mortgage loan underwriting process with either its own
proprietary scoring system or scoring systems developed by third parties such as
Freddie Mac's Loan Prospector, Fannie Mae's Desktop Underwriter or scoring
systems developed by private mortgage insurance companies. These scoring systems
assist WFB in the mortgage loan approval process by providing consistent,
objective measures of borrower credit and certain loan attributes. Such
objective measures are then used to evaluate loan applications and assign each
application a "mortgage score."

      The portion of the mortgage score related to borrower credit history is
generally based on computer models developed by a third party. These models
evaluate information available from three major credit reporting bureaus
regarding historical patterns of consumer credit behavior in relation to default
experience for similar types of borrower profiles. A particular borrower's
credit patterns are then considered in order to derive a "FICO score" which
indicates a level of default probability over a two-year period.

      The mortgage score is used to determine the type of underwriting process
and which level of underwriter will review the loan file. For transactions that
are determined to be low-risk transactions, based upon the mortgage score and
other parameters (including the mortgage loan production source), the lowest
underwriting authority is generally required. For moderate and higher risk
transactions, higher level underwriters and a full review of the mortgage file
are generally required. Borrowers who have a satisfactory mortgage score (based
upon the mortgage loan production source) are generally subject to streamlined
credit review (which relies on the scoring process for various elements of the
underwriting assessments). Such borrowers may also be eligible for a reduced
documentation program and are generally permitted greater latitude in the
application of borrower total debt-to-income ratio.

      A prospective borrower applying for a mortgage loan is required to
complete a detailed application. The loan application elicits pertinent
information about the applicant, with particular emphasis on the applicant's
financial health (assets, liabilities, income and expenses), the property being
financed and the type of loan desired. A self-employed applicant may be required
to submit his or her most recent signed federal income tax returns. With respect
to every applicant, credit reports are obtained from commercial reporting
services, summarizing the applicant's credit history with merchants and lenders.
Generally, significant unfavorable credit

                                      S-42


information reported by the applicant or a credit reporting agency must be
explained by the applicant. The credit review process generally is streamlined
for borrowers with a qualifying credit score.

      Verifications of employment, income, assets or mortgages may be used to
supplement the loan application and the credit report in reaching a
determination as to the applicant's ability to meet his or her monthly
obligations on the proposed mortgage loan, as well as his or her other mortgage
payments (if any), living expenses and financial obligations. Mortgage
verification involves obtaining information regarding the borrower's payment
history with respect to any existing mortgage the applicant may have.
Verifications of income, assets or mortgages may be waived under certain
programs offered by WFB, but the WFB Underwriting Guidelines require, in most
instances, a verbal or written verification of employment to be obtained. In
addition, the loan applicant may be eligible for a loan approval process
permitting reduced documentation. The above referenced reduced documentation
options and waivers limit the amount of documentation required for an
underwriting decision and have the effect of increasing the relative importance
of the credit report and the appraisal.

      Documentation requirements vary based upon a number of factors, including
the purpose of the loan, the amount of the loan, the ratio of the loan amount to
the property value and the mortgage loan production source. WFB accepts
alternative methods of verification in those instances when verifications are
part of the underwriting decision; for example, salaried income may be
substantiated either by means of a form independently prepared and signed by the
applicant's employer or by means of the applicant's most recent paystub and/or
W-2. Loans underwritten using alternative verification methods are considered by
WFB to have been underwritten with "full documentation."

      In general, borrowers applying for loans must demonstrate that the ratio
of their total monthly debt to their monthly gross income does not exceed
certain maximum levels. In the case of adjustable-rate mortgage loans, the
interest rate used to determine a mortgagor's monthly payment for purposes of
such ratios may, in certain cases, be the initial mortgage interest rate or
another interest rate, which, in either case, is lower than the sum of the index
rate that would have been applicable at origination plus the applicable margin.
In the case of a mortgage loan referred by WFB's private mortgage banking
division, for certain applicants referred by this division, qualifying income
may be based on an "asset dissipation" approach under which future income is
projected from the assumed liquidation of a portion of the applicant's specified
assets. Secondary financing is permitted on mortgage loans under certain
circumstances. In those cases, the payment obligations under both primary and
secondary financing are included in the computation of the total debt-to-income
ratio, and the combined amount of primary and secondary loans will be used to
calculate the combined loan-to-value ratio. In evaluating an application with
respect to a "non-owner-occupied" property, which WFB defines as a property
leased to a third party by its owner (as distinct from a "second home," which
WFB defines as an owner-occupied, non-rental property that is not the owner's
principal residence), WFB will include projected rental income net of certain
mortgagor obligations and other assumed expenses or loss from such property to
be included in the applicant's monthly gross income or total monthly debt in
calculating the foregoing ratios. A mortgage loan secured by a two- to
four-family mortgaged property is considered to be an owner-occupied property if
the borrower

                                      S-43


occupies one of the units; rental income on the other units is generally taken
into account in evaluating the borrower's ability to repay the mortgage loan.

      Mortgage loans will not generally have had at origination a loan-to-value
ratio in excess of 95%. The "loan-to-value ratio" is the ratio, generally
expressed as a percentage, of the principal amount of the mortgage loan at
origination to the lesser of (i) the appraised value of the related mortgaged
property, as established by an appraisal obtained by the originator generally no
more than four months prior to origination (or, with respect to
newly-constructed properties, no more than twelve months prior to origination),
or (ii) the sale price for such property. In some instances, the loan-to-value
ratio is based on an appraisal that was obtained by the originator more than
four months prior to origination, provided that (i) a recertification of the
original appraisal is obtained and (ii) the original appraisal was obtained no
more than twelve months prior to origination. For the purpose of calculating the
loan-to-value ratio of any mortgage loan that is the result of the refinancing
of an existing mortgage loan, the appraised value of the related mortgaged
property is generally determined by reference to an appraisal obtained in
connection with the origination of the replacement loan. In connection with
certain of its originations, WFB currently obtains appraisals through Value
Information Technology, Inc., an entity jointly owned by WFB and an unaffiliated
third party.

      WFB originates mortgage loans with loan-to-value ratios in excess of 80%
either with or without the requirement to obtain primary mortgage insurance. In
some cases for which such primary mortgage insurance is obtained, the excess
over 75% (or such lower percentage as WFB may require at origination) will be
covered by primary mortgage insurance (subject to certain standard policy
exclusions for default arising from, among other things, fraud or negligence in
the origination or servicing of a mortgage loan, including misrepresentation by
the mortgagor or other persons involved in the origination thereof) from an
approved primary mortgage insurance company until the unpaid principal balance
of the mortgage loan is reduced to an amount that will result in a loan-to-value
ratio less than or equal to 80%. In cases for which such primary mortgage
insurance is not obtained, loans having loan-to-value ratios exceeding 80% are
required to be secured by primary residences or second homes (excluding
cooperatives). Generally, each loan originated without primary mortgage
insurance will have been made at an interest rate that was higher than the rate
would have been had the loan-to-value ratios been 80% or less or had primary
mortgage insurance been obtained.

      A borrower whose mortgage loan is serviced by WFB may be eligible for
WFB's retention program. Provided such a borrower is current in his or her
mortgage payment obligations, WFB may permit a refinancing of the mortgage loan
to a current market interest rate without applying any significant borrower
credit or property underwriting standards. As a result, borrowers who qualify
under the retention program may not need to demonstrate that their total monthly
debt obligations in relation to their monthly income level does not exceed a
certain ratio; WFB may not obtain a current credit report for the borrower or
apply a new credit score to the refinanced loan; and the borrower may not be
required to provide any verifications of current employment, income level or
extent of assets. In addition, no current appraisal or indication of market
value may be required with respect to the properties securing mortgage loans
that are refinanced under the retention program.

                                      S-44


      WFB may also apply the retention program to its existing borrowers who
obtain new purchase money mortgage loans secured by primary residences where the
initial principal balance of the new loan would not exceed 200% of the original
principal balance of the previous loan. Borrowers may be pre-approved under this
program if they have a satisfactory payment history with WFB, as well as a
satisfactory FICO score. WFB may waive verifications of borrower income and
assets under this program and may not impose any limitation on a borrower's
total debt ratio. A new appraisal will be obtained with respect to the residence
securing the new purchase money mortgage loan.

                      THE MASTER SERVICER AND THE SERVICERS


GENERAL

      Wells Fargo Bank, National Association ("Wells Fargo"), will act as the
master servicer of the Loans pursuant to a Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), among Mortgage Asset Securitization
Transactions, Inc., as depositor, UBS Real Estate Securities Inc., as
transferor, Wells Fargo, as master servicer, trust administrator and a
custodian, U.S. Bank National Association, as a custodian and Wachovia Bank,
National Association, as trustee.

      Primary servicing of the Loans will be provided for by ABN AMRO Mortgage
Group Inc., Cendant Mortgage Corporation, Chase Manhattan Mortgage Corporation,
CitiMortgage, Inc., Countrywide Home Loans Servicing LP, Downey Savings and Loan
Association, F.A., EverBank, First Tennessee Mortgage Services, Inc., GMAC
Mortgage Corporation, GreenPoint Mortgage Funding, Inc., Lydian Private Bank,
Mid America Bank, FSB, National City Mortgage Co., Provident Funding, SunTrust
Mortgage, Inc., Washington Mutual Bank, Washington Mutual Mortgage Securities
Corp. and Wells Fargo Bank, National Association in accordance with the
applicable Servicing Agreements. Each servicer will be responsible for the
servicing of those Loans subject to the related Servicing Agreement, and the
master servicer will be required to supervise, monitor and oversee the
performance of each servicer; provided, that Washington Mutual Mortgage
Securities Corp. will remit payments directly to the trust administrator, and
provided, further, that, with respect to Washington Mutual Mortgage Securities
Corp., the master servicer's duties will be limited as described in the Pooling
and Servicing Agreement. In the event of a default by a servicer under the
related Servicing Agreement, the master servicer will be required to enforce any
remedies against the servicer, and will either find a successor servicer or will
assume the primary servicing obligations for the related Loans.

THE MASTER SERVICER

      Wells Fargo is a national banking association, maintaining a master
servicing office at 9062 Old Annapolis Road, Columbia, Maryland 21045. Among
other things, Wells Fargo is engaged in the business of master servicing single
family residential mortgage loans secured by properties located in all 50 states
and the District of Columbia.


                                      S-45


THE SERVICERS

      The Loans will initially be serviced by the entities listed in the
following table. The table shows, for each servicer, the percentage of Loans
serviced by it, by Cut-Off Date Pool Balance for each Loan Group and for all of
the Loan Groups, by aggregate Cut-Off Date Pool Balance.


                                      S-46




                         PRIMARY SERVICING OF THE LOANS
      (BY PERCENTAGES OF THE CUT-OFF DATE POOL BALANCE FOR EACH LOAN GROUP)



                                                                                                         ALL LOAN
                 SERVICER                          GROUP 1    GROUP 2    GROUP 3    GROUP 4    GROUP 5    GROUPS
-------------------------------------------        ------     ------     ------     ------     -------   --------

ABN AMRO Mortgage Group Inc. ..............         0.00%      0.00%      0.42%      0.00%      0.00%      0.11%
Cendant Mortgage Corporation ..............         6.80%      7.28%      5.14%      2.67%     15.72%      8.59%
Chase Manhattan Mortgage Corporation ......        16.27%     14.92%     21.88%      2.07%      0.66%     11.00%
CitiMortgage, Inc. ........................        11.07%      6.21%      4.93%      0.20%      0.39%      3.87%
Countrywide Home Loans Servicing LP. ......        21.79%     41.58%     51.39%     36.66%      1.27%     29.86%
Downey Savings and Loan Association, F.A ..         0.00%      1.73%      0.00%      0.00%      0.52%      0.57%
EverBank ..................................         9.49%      2.60%      6.48%      0.00%      7.03%      5.15%
First Tennessee Mortgage Services, Inc. ...         0.00%      0.00%      0.00%      0.00%      0.63%      0.18%
GMAC Mortgage Corporation .................        25.10%      7.71%      4.82%      9.36%     15.48%     11.02%
GreenPoint Mortgage Funding, Inc. .........         0.64%      1.48%      0.00%      0.88%      6.29%      2.37%
Lydian Private Bank .......................         0.00%      0.00%      0.00%      0.00%      0.35%      0.10%
Mid America Bank, FSB .....................         0.00%      0.00%      0.00%      0.00%      0.56%      0.16%
National City Mortgage Co. ................         2.77%      6.22%      1.61%      4.40%      3.05%      3.61%
Provident Funding .........................         2.32%      0.00%      0.00%      0.00%      0.00%      0.21%
SunTrust Mortgage, Inc. ...................         0.14%      0.00%      0.00%      0.00%      0.00%      0.01%
Washington Mutual Bank ....................         0.00%      0.00%      0.88%      0.00%      0.00%      0.22%
Washington Mutual Mortgage Securities Corp.         0.00%      0.29%      0.00%      0.00%      1.42%      0.49%
Wells Fargo Bank, National Association ....         3.61%      9.98%      2.44%     43.77%     46.63%     22.48%




                                      S-47



      Information relating to the servicing activities of Countrywide Home Loans
Servicing LP, Wells Fargo Bank, National Association, GMAC Mortgage Corporation,
Chase Manhattan Mortgage Corporation and Cendant Mortgage Corporation who will
service in the aggregate approximately 82.95% of the Loans, by Cut-Off Date Pool
Balance for all Loan Groups, is summarized below. The information set forth in
this section has been provided by Countrywide Home Loans Servicing LP, Wells
Fargo Bank, National Association, GMAC Mortgage, Chase Manhattan Mortgage
Corporation and Cendant Mortgage Corporation. None of the depositor, the master
servicer, the trust administrator, the trustee, either custodian, the
underwriter or any of their respective affiliates have made or will make any
representation as to the accuracy or completeness of this information.

      Countrywide Home Loans Servicing LP

      Countrywide Home Loans Servicing LP ("Countrywide Servicing") will act as
one of the servicers. The principal executive offices of Countrywide Servicing
are located at 7105 Corporate Drive, Plano, Texas 75024. Countrywide Servicing
is a Texas limited partnership directly owned by Countrywide GP, Inc. and
Countrywide LP, Inc., each a Nevada corporation and a direct wholly owned
subsidiary of Countrywide Home Loans, Inc., a New York corporation ("Countrywide
Home Loans"). Countrywide Home Loans is a direct wholly owned subsidiary of
Countrywide Financial Corporation (formerly known as Countrywide Credit
Industries, Inc.), a Delaware corporation ("Countrywide Financial"). Countrywide
GP, Inc. owns a 0.1% interest in Countrywide Servicing and is the general
partner. Countrywide LP, Inc. owns a 99.9% interest in Countrywide Servicing and
is a limited partner.

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

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

                                      S-48


      Countrywide Servicing is an approved mortgage loan servicer for Fannie
Mae, Freddie Mac, Ginnie Mae, HUD and VA and is licensed to service mortgage
loans in each state where a license is required. Its loan servicing activities
are guaranteed by Countrywide Financial and/or Countrywide Home Loans (when
required by the owner of the mortgage loans). As of June 30, 2004, Countrywide
Servicing had a net worth of approximately $11.1 billion.

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

      The principal executive offices of Countrywide Home Loans are located at
4500 Park Granada, Calabasas, California 91302.

      Countrywide Home Loans services substantially all of the mortgage loans it
originates or acquires. In addition, Countrywide Home Loans has purchased in
bulk the rights to service mortgage loans originated by other lenders.
Countrywide Home Loans has in the past and may in the future sell to other
mortgage bankers a portion of its portfolio of loan servicing rights. As of June
30, 2004, Countrywide Home Loans provided servicing for approximately $726.227
billion aggregate principal amount of mortgage loans, substantially all of which
are being serviced for unaffiliated persons.

      Foreclosure, Delinquency and Loss Experience

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

      A general deterioration of the real estate market in regions where the
mortgaged properties are located may result in increases in delinquencies of
loans secured by real estate, slower absorption rates of real estate into the
market and lower sales prices for real estate. A general weakening of the
economy may result in decreases in the financial strength of borrowers and
decreases in the value of collateral serving as security for loans. If the real
estate market and economy were to decline, Countrywide Home Loans may experience
an increase in delinquencies on the loans it services and higher net losses on
liquidated loans.

      The following table summarizes the delinquency, foreclosure and loss
experience, respectively, on the dates indicated, of the mortgage loans
originated or acquired by Countrywide Home Loans, serviced or master serviced by
Countrywide Home Loans and securitized by certain affiliates of Countrywide Home
Loans. The delinquency, foreclosure and

                                      S-49


loss percentages may be affected by the size and relative lack of seasoning in
the servicing portfolio. Accordingly, the information should not be considered
as a basis for assessing the likelihood, amount or severity of delinquency or
losses on the mortgage loans and no assurances can be given that the
foreclosure, delinquency and loss experience presented in the following table
will be indicative of the actual experience on the mortgage loans (totals may
not add due to rounding):




                                             AT FEBRUARY 28(29),                      AT DECEMBER 31,                   AT JUNE 30,
                                         --------------------------    --------------------------------------------     -----------
                                            2000           2001           2001            2002             2003             2004
                                         -----------    -----------    -----------     -----------      -----------     -----------
                                                (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT LOSSES ON LIQUIDATED MORTGAGE LOANS)

Volume of Loans(1).................      $17,759,361    $21,250,550    $25,658,250     $33,455,108      $48,747,872     $58,628,200
Delinquent Mortgage Loans and Pending
   Foreclosures at Period End
   30 - 59 days....................            1.36%          1.61%          1.89%           2.11%            2.77%           2.13%
   60 - 89 days....................             0.22           0.28           0.39            0.53             1.18            0.74
   90 days or more (excluding pending
      foreclosures)................             0.16           0.14           0.23            0.35             1.45            1.09
Total of delinquencies.............            1.75%          2.03%          2.50%           2.99%            5.41%           3.95%
Foreclosures pending...............            0.16%          0.27%          0.31%           0.31%            1.39%           0.42%
Total delinquencies and
   Foreclosures pending............            1.91%          2.30%          2.82%           3.31%            6.80%           4.38%
Losses on liquidated loans(2)......     $(3,076,240)   $(2,988,604)   $(5,677,141)   $(10,788,657)    $(16,159,208)    $(9,143,911)


--------------
(1)   "Volume of loans" reflects both performing and delinquent mortgage loans
      in the servicing portfolio on the dates indicated.
(2)   "Losses on liquidated loans" reflect the losses accumulated during (i) the
      years ended on February 29, 2000 and February 28, 2001, (ii) the 10-month
      period ending on December 31, 2001, (iii) the years ended on December 31,
      2002 and December 31, 2003, and (iv) the 6-month period ending on June 30,
      2004, respectively.

      Wells Fargo Bank, National Association

      WFB is an indirect, wholly owned subsidiary of Wells Fargo & Company. WFB
is engaged in the business of (i) originating, purchasing and selling
residential mortgage loans in its own name and through its affiliates and (ii)
servicing residential mortgage loans for its own account and for the account of
others. WFB is an approved servicer of Fannie Mae and Freddie Mac. WFB's
principal office for servicing functions is located at 1 Home Campus, Des
Moines, Iowa 50328-0001.

      Wells Fargo Bank, National Association Delinquency Experience

      The following tables sets forth certain information, as reported by WFB,
concerning recent delinquency and foreclosure experience on mortgage loans
included in various mortgage pools underlying all series of Wells Fargo Asset
Securities Corporation's mortgage pass-through certificates with respect to
which one or more classes of certificates were publicly offered. The delinquency
and foreclosure experience set forth in the following tables includes mortgage
loans with various terms to stated maturity and includes loans having a variety
of payment characteristics. There can be no assurance that the delinquency and
foreclosure experience set forth in the following tables will be representative
of the results that may be experienced with respect to the Loans included in the
trust being serviced by WFB.



                                      S-50


                           WFB DELINQUENCY EXPERIENCE



                                                  BY DOLLAR                             BY                                  BY
                                 BY NO.            AMOUNT            BY NO         DOLLAR AMOUNT        BY NO         DOLLAR AMOUNT
                                OF LOANS          OF LOANS          OF LOANS         OF LOANS          OF LOANS          OF LOANS
                             --------------    --------------    --------------    --------------   --------------    --------------
(Dollar Amounts in
   Thousands)                     AS OF DECEMBER 31, 2002            AS OF DECEMBER 31, 2003               AS OF JUNE 30, 2004
                             --------------------------------    --------------------------------   --------------------------------

Fixed-Rate Loans                 57,527          $21,021,499         27,528         $12,684,974         28,659         $13,208,318
                             ==============    ==============    ==============    ==============   ==============    ==============
Period of Delinquency(1)
30-59 Days                         398            $129,563             55             $25,106             39             $15,490
60-89 Days                         103             $31,662             14             $5,033              8               $3,270
90 days or more                    100             $32,817              9             $3,523               5              $2,157
                             --------------    --------------    --------------    --------------   --------------    --------------

Total Delinquent Loans             601            $194,042             78             $33,662             52             $20,917
                             ==============    ==============    ==============    ==============   ==============    ==============
Percent of Fixed-Rate
   Loans                          1.04%             0.92%            0.28%             0.27%            0.18%             0.16%

Foreclosures(2)                                    $48,928                            $11,328                             $3,510
Foreclosure Ratio(3)                                0.23%                              0.09%                              0.03%


------------------------------------------
(1)   The indicated periods of delinquency are based on the number of days past
      due, based on a 30-day month. No mortgage loan is considered delinquent
      for these purposes until one month has passed since its contractual due
      date. A mortgage loan is no longer considered delinquent once foreclosure
      proceedings have commenced.
(2)   Includes loans in the applicable portfolio for which foreclosure
      proceedings had been instituted or with respect to which the related
      property had been acquired as of the dates indicated.
(3)   Foreclosure as a percentage of total loans in the applicable portfolio at
      the end of each period.

      GMAC Mortgage Corporation

      The following table summarizes the delinquency experience for all the
mortgage loans originated and serviced by GMAC Mortgage Corporation under its
Solutions/Expanded Criteria (alt-A) program for conforming and non-conforming
fixed rate and adjustable rate loans. These mortgage loans include fixed rate
mortgage loans that are not included in the trust. The data presented in the
following table is for illustrative purposes only, and there is no assurance
that the delinquency experience of the mortgage loans included in the trust will
be similar to that set forth below.

                                      S-51


               GMAC MORTGAGE CORPORATION DELINQUENCY EXPERIENCE(1)




                                     AT JUNE 30, 2004          AT DECEMBER 31, 2003        AT DECEMBER 31, 2002
                                  ----------------------      ----------------------      ----------------------
                                    $ Loans       % by $        $ Loans       % by $        $ Loans       % by $
                                  ------------   --------     ------------   --------     ------------   --------

Number of Loans ......                   1,724                       1,475                       1,678
Total Portfolio ......            $285,078,434     100%       $193,962,581     100%       $193,408,035      100%
Period of Delinquency
   30-59 Days ........            $ 13,554,242     4.75%      $  5,939,567     3.06%      $  7,796,197     4.03%
   60-89 Days ........            $  2,449,951     0.86%      $    730,076     0.38%      $  2,607,028     1.35%
   90 or more Days ...            $  1,100,490     0.39%      $    550,729     0.28%      $    733,483     0.38%
Sub-Total ............            $ 17,104,682     6.00%      $  7,220,372     3.72%      $ 11,136,707     5.76%
                                  ------------   --------     ------------   --------     ------------   --------
Delinquency Status
   Bankruptcy ........            $  2,313,054     0.81%      $  1,529,148     0.79%      $  1,117,364     0.58%
   Foreclosure .......            $  2,102,906     0.74%      $    746,105     0.38%      $  1,309,260     0.68%
   Real Estate Owned .            $    783,705     0.27%      $    689,392     0.36%      $  1,350,091     0.70%
Sub-Total ............            $  5,199,665     1.82%      $  2,964,645     1.53%      $  3,776,714     1.95%
                                  ------------   --------     ------------   --------     ------------   --------
Total Delinquent Loans            $ 22,304,347     7.82%      $ 10,185,017     5.25%      $ 14,913,422     7.71%
                                  ============   ========     ============   ========     ============   ========


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

(1)   All percentages based on the total loan balance outstanding rounded to the
      nearest dollar.

      Chase Manhattan Mortgage Corporation's Delinquency, Loss and Foreclosure
Experience

      Chase Manhattan Mortgage Corporation ("CMMC") is a New Jersey corporation
formed in 1920. It is a wholly owned indirect subsidiary of J.P. Morgan Chase &
Co. Effective July 1, 2004, Bank One Corporation merged with and into J.P.
Morgan Chase & Co., the surviving corporation in the merger, pursuant to the
Agreement and Plan of Merger dated as of January 14, 2004. On July 20, 2004,
J.P. Morgan Chase & Co. changed its name to JPMorgan Chase & Co.

      CMMC is engaged in the mortgage origination and servicing businesses. CMMC
is a HUD-approved mortgagee. CMMC is subject to supervision, examination and
regulation by the Board of Governors of the Federal Reserve System and various
state regulatory bodies. The address of CMMC is 343 Thornall Street, Edison, New
Jersey 08837 and its telephone number is (732) 205-0600. CMMC makes loans in all
50 states and the District of Columbia primarily for the purpose of enabling
borrowers to purchase or refinance residential real property, secured by first
liens on such property. CMMC's real estate loans primarily are made to
homeowners based on the security of one- to four-family residences.

      The recent loan delinquency and loan foreclosure experience of CMMC as a
servicer of "prime" mortgage loans secured by one- to four-family residential
properties which were originated by or for CMMC (exclusive of any such mortgage
loans as to which master servicing or subservicing arrangements exist)
(expressed as percentages of the total portfolio of such loans as of such date)
is as follows (the sum of the columns below may not equal the total indicated
due to rounding):

                                      S-52




                                  AS OF JUNE 30,                               AS OF DECEMBER 31,
                           ----------------------------    ------------------------------------------------------------
                                       2004                            2003                           2002
                           -------------  -------------    -----------------------------    ---------------------------
                             BY NUMBER    BY PRINCIPAL       BY NUMBER    BY PRINCIPAL      BY NUMBER     BY PRINCIPAL
  PERIOD OF DELINQUENCY       OF LOANS       BALANCE          OF LOANS       BALANCE         OF LOANS       BALANCE
                           -------------  -------------    -------------  --------------    ------------  -------------

30 to 59 days.........         2.95%          2.31%            3.16%         2.48%             3.59%         3.17%
60 to 89 days.........         0.63%          0.46%            0.75%         0.57%             0.87          0.74
90 days or more.......         0.38%          0.28%            0.46%         0.34%             0.53          0.46
     Total............         3.96%          3.05%            4.37%         3.39%             4.99%         4.36%
Foreclosure...........         0.97%          0.72%            1.16%         0.90%             1.45%         1.25%



      The following table presents, for the portfolio of mortgage loans secured
by one- to four-family residential properties which were originated by or for
CMMC and which are owned by JPMorgan Chase Bank or Chase Mortgage Holdings, Inc.
and serviced by CMMC, the net gains (losses) as a percentage of the average
principal amount of such portfolio on the disposition of properties acquired in
foreclosure or by deed-in-lieu of foreclosure during the periods indicated.




                                                 MONTH ENDED             MONTH ENDED
                                                JUNE 30, 2004         DECEMBER 31, 2003
                                            ---------------------   ---------------------
                                            (DOLLARS IN MILLIONS)   (DOLLARS IN MILLIONS)

Average portfolio principal amount..........       $29,836                 $28,474




                                              SIX MONTHS ENDED       TWELVE MONTHS ENDED
                                                JUNE 30, 2004         DECEMBER 31, 2003
                                            ---------------------   ---------------------

Net gains (losses) (1)......................      (0.001%)                 (0.02%)



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

(1)   Losses are defined as unrealized losses on properties acquired in
      foreclosure or by deed-in-lieu of foreclosure and proceeds from sale less
      outstanding book balance (after recognition of such unrealized losses)
      less certain capitalized costs related to disposition of the related
      property (exclusive of accrued interest). If accrued interest were
      included in the calculation of losses, the level of losses could
      substantially increase.

      There can be no assurance that delinquency, foreclosure and loss
experience of the mortgage loans included in the trust will correspond to the
delinquency, foreclosure and loss experience set forth in the foregoing tables.
In general, during periods in which the residential real estate market is
experiencing an overall decline in property values such that the principal
balances of the mortgage loans and any secondary financing on the related
mortgaged properties become equal to or greater than the value of the related
mortgaged properties, rates of delinquencies, foreclosures and losses could be
significantly higher than might otherwise be the case. In addition, adverse
economic conditions (which may affect real property values) may affect the
timely payment by mortgagors of monthly payments, and accordingly, the actual
rates of delinquencies, foreclosures and losses with respect to the mortgage
loans in the trust.

      Cendant Mortgage Corporation

      Cendant Mortgage Corporation's ("Cendant") executive offices are located
at 3000 Leadenhall Road, Mt. Laurel, New Jersey 08054, and its telephone number
is (856) 917-6000. As of June 30, 2004, Cendant has provided servicing for
approximately $141.9 billion aggregate principal amount of mortgage loans,
substantially all of which are being serviced for unaffiliated persons.



                                      S-53


      Recent Developments

      Cendant Corporation is in the process of receiving proposals and holding
preliminary discussions with third parties regarding the sale of its mortgage
business and is also considering other strategic alternatives for the business.
It is anticipated that any transaction will provide for Cendant Corporation's
continued participation in the mortgage business through its residential real
estate, relocation and settlement services businesses. There can be no assurance
that any transaction will be completed. A transfer of servicing of the Loans
serviced by Cendant may result in a temporary increase in delinquencies on those
Loans.

      Pursuant to a merger with HFS Incorporated ("HFS") in April 1997, PHH
Corporation became a wholly-owned subsidiary of HFS. On December 17, 1997,
pursuant to a merger between CUC International, Inc. ("CUC") and HFS, HFS was
merged into CUC with CUC surviving and changing its name to Cendant Corporation.

      On April 15, 1998, Cendant Corporation announced that in the course of
transferring responsibility for Cendant Corporation's accounting functions from
Cendant Corporation personnel associated with CUC prior to the merger to Cendant
Corporation personnel associated with HFS before the merger and preparing for
the report of first quarter 1998 financial results, Cendant Corporation
discovered accounting irregularities in some of the CUC business units.

      Following the April 15, 1998 announcement of the discovery of accounting
irregularities in the former business units of CUC, approximately 70 lawsuits
claiming to be class actions and various individual lawsuits and arbitration
proceedings were commenced in various courts and other forums against Cendant
Corporation and other defendants by or on behalf of persons claiming to have
purchased or otherwise acquired securities or options issued by CUC or Cendant
Corporation between May 1995 and August 1998.

      On December 7, 1999, Cendant Corporation announced that it had reached an
agreement to settle claims made by class members in the principal securities
class action pending against it for approximately $2.85 billion in cash. The
settlement has received all necessary court approvals and was fully funded by
Cendant Corporation on May 24, 2002.

      The accounting irregularities described above did not include PHH
Corporation or any of its subsidiaries, including Cendant Mortgage Corporation.

      Delinquency and Foreclosure Statistics. The following table sets forth the
delinquency and foreclosure experience of residential mortgage loans funded and
serviced by Cendant as of the dates indicated. Cendant's portfolio of mortgage
loans in the aggregate may differ significantly from the Loans serviced by it in
the mortgage pool in terms of interest rates, principal balances, geographic
distribution, loan-to-value ratios 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 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. The actual loss and delinquency experience on the Loans in the
mortgage pool will depend, among other things, upon the value of the real estate
securing those Loans and the ability of borrowers to make required payments.

                                      S-54


          DELINQUENCY AND FORECLOSURE EXPERIENCE IN CENDANT'S PORTFOLIO
              OF ONE- TO FOUR- FAMILY RESIDENTIAL MORTGAGE LOANS(1)




                                                        AS OF                       AS OF                       AS OF
                                                    DECEMBER 31, 2002           DECEMBER 31, 2003             JUNE 30, 2004
                                                 -----------------------     -----------------------     -----------------------
                                                 NUMBER OF     PRINCIPAL     NUMBER OF     PRINCIPAL     NUMBER OF     PRINCIPAL
                                                   LOANS        BALANCE        LOANS        BALANCE        LOANS        BALANCE
                                                 ---------     ---------     ---------     ---------     ---------     ---------

Total Portfolio                                   786,201      $114,079       888,860      $136,427       907,874      $141,92
                                                  =======      ========       =======      ========       =======      ========
Period of Delinquency(2)(3)
    30-59 days                                     19,075        $2,260        20,075        $2,383        16,711        $1,964
      Percent Delinquent                             2.4%          2.0%          2.3%          1.7%          1.8%          1.4%
    60-89 days                                      3,827          $427         3,896          $398         3,528          $378
      Percent Delinquent                             0.5%          0.4%          0.4%          0.3%          0.4%          0.3%
    90 days or more                                 4,932          $467         5,736          $536         3,959          $398
      Percent Delinquent                             0.6%          0.4%          0.6%          0.4%          0.4%          0.3%
                                                  -------      --------       -------      --------       -------      --------
Total Delinquencies(4)                             27,834        $3,154        29,707        $3,317        24,198        $2,740
                                                  =======      ========       =======      ========       =======      ========
Total Delinquencies by Percent
   of Total Portfolio                                3.5%          2.8%          3.3%          2.4%          2.7%          1.9%
Foreclosures, Bankruptcies or
   Real Estate Owned                                8,629          $781        10,120          $950         9,476          $905
Percent of Total Portfolio in Foreclosures,
   Bankruptcies or Real Estate Owned(5)              1.1%          0.7%          1.1%          0.7%          1.0%          0.6%


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

(1)   This table shows mortgage loans which were delinquent or for which
      foreclosure proceedings had been instituted as of the date indicated. All
      dollar amounts are in millions and have been rounded to the nearest whole
      number.

(2)   No mortgage loan is included in this table as delinquent until it is 30
      days past due.

(3)   Bankruptcies are included in the delinquency calculations and also in the
      "Foreclosure, Bankruptcies or Real Estate Owned" category. The
      Foreclosures and Real Estate Owned categories are excluded from the
      delinquency calculations.

(4)   Entries may not add up to total due to rounding.

(5)   Percentages stated are of the total servicing portfolio.

      While the above foreclosure and delinquency experience is typical of
Cendant's recent experience, there can be no assurance that experience on the
Loans will be similar. As a result of the rapid growth experienced by Cendant,
its servicing portfolio is relatively unseasoned. Accordingly, the information
should not be considered to reflect the credit quality of the Loans, or as a
basis for assessing the likelihood, amount or severity of losses on the Loans.
The statistical data in the table is based on all of the loans in Cendant's
servicing portfolio. The Loans may be more recently originated than, and also
have other characteristics which distinguish them from, the majority of the
loans in Cendant's servicing portfolio.

      The information set forth in this section has been provided by Countrywide
Home Loans Servicing LP, Wells Fargo Bank, National Association, GMAC Mortgage
Corporation, Chase Manhattan Mortgage Corporation and Cendant Mortgage
Corporation. None of the depositor, the transferor, the master servicer, the
trust administrator, either custodian, the trustee, the underwriter nor any of
their respective affiliates have made or will make any representation as to the
accuracy or completeness of this information.

                                      S-55


                     DESCRIPTION OF THE OFFERED CERTIFICATES


GENERAL

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

      The trust will issue 18 classes of Senior Certificates and 6 classes of
Subordinate Certificates. Of the Subordinate Certificates, only the Class B-1,
Class B-2 and Class B-3 certificates are offered by this prospectus supplement.
The Class P certificates are not offered by this prospectus supplement.

      The offered certificates will have the respective initial Certificate
Principal Balances or Notional Amounts specified in the table beginning on page
S-5.

      The offered certificates, other than the Residual Certificates, will be
issued in book-entry form as described below. The offered certificates will be
issued in the minimum dollar denominations described in the table below, except
that one certificate of each class may be issued in a different denomination.

                 FORMS AND DENOMINATIONS OF OFFERED CERTIFICATES




                                                                                 ORIGINAL              MINIMUM          INCREMENTAL
                                  CLASS                                      CERTIFICATE FORM       DENOMINATION       DENOMINATION
----------------------------------------------------------------------       ----------------       ------------       ------------

Classes 1-A-1, 2-A-1, 3-A-1, 4-A-1, 5-A-1, 5-A-2, 5-A-3, 5-A-4,
   5-A-5, 5-A-6, 5-A-7, 15-PO, 30-PO, B-1, B-2, B-3...................          Book-Entry           $     25,000            $1
Classes 15-AX-1, 15-AX-2 and 30-AX....................................          Book-Entry           $    100,000            $1
Classes A-LR and A-R..................................................           Physical            $         50           N/A


      Distributions on the offered certificates are required to be made by the
trust administrator on the 25th day of each month, or if that day is not a
business day, on the first business day after the 25th day, commencing in
October 2004, to the persons in whose names the certificates are registered at
the close of business on the Record Date.


BOOK-ENTRY CERTIFICATES

      The offered certificates, other than the Residual Certificates, will be
book-entry certificates. Persons acquiring beneficial ownership interests in the
offered certificates will hold certificates through DTC, or indirectly through
organizations which are participants in that system. The book-entry certificates
of each class will be issued in one or more certificates which equal the
aggregate Certificate Principal Balance or Notional Amount of that class and
will initially be registered in the name of Cede & Co., the nominee of DTC.
Except as described in the prospectus under "Description of the
Securities--Book-Entry Registration of Securities," no person acquiring a
book-entry certificate will be entitled to receive a physical 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. Beneficial owners will not be

                                      S-56


certificateholders as that term is used in the Pooling and Servicing Agreement.
Beneficial owners are only permitted to exercise their rights indirectly through
DTC and participants of DTC. For a discussion of DTC, see "Description of the
Securities--Book-Entry Registration of Securities" in the prospectus. For
information with respect to tax documentation procedures relating to the
certificates, see "Federal Income Tax Consequences--REMICs--Taxation of Certain
Foreign Investors--Regular Securities" and "--REMICs--Backup Withholding" in the
prospectus.

PHYSICAL CERTIFICATES

      The Residual Certificates will be issued in fully-registered, certificated
form. The Residual Certificates will be transferable and exchangeable at the
office of the trust administrator located at Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention: Corporate Trust Services - MASTR
Alternative Loan Trust 2004-10. Under the Pooling and Servicing Agreement, the
trust administrator will initially be appointed as the certificate registrar. No
service charge will be made for any registration of transfer or exchange of the
Residual Certificates but payment of a sum sufficient to cover any tax or other
governmental charge may be required by the trust administrator. The Residual
Certificates will be subject to certain restrictions on transfer. See
"--Restrictions on Transfer of the Residual Certificates" below.

      Distributions of principal and interest, if any, on each Distribution Date
on the Residual Certificates will be made to the persons in whose names such
certificates are registered at the close of business on the Record Date.
Distributions will be made by check or money order mailed to the person entitled
to them at the address appearing in the certificate register or, to the extent
permitted in the Pooling and Servicing Agreement, upon written request by the
certificateholder to the trust administrator, by wire transfer to a United
States depository institution designated by such certificateholder and
acceptable to the trust administrator or by such other means of payment as such
certificateholder and the trust administrator may agree; provided, however, that
the final distribution in retirement of the Residual Certificates will be made
only upon presentation and surrender of such certificates at the office or
agency of the trust administrator specified in the notice to the holders thereof
of such final distribution.

ALLOCATION OF AVAILABLE FUNDS TO THE CERTIFICATES

      Distributions to holders of each class of Senior Certificates in each
Certificate Group will be made on each Distribution Date from Available Funds
related to that Loan Group and, to the extent of cross-collateralization
payments described under "--Subordination--Cross-Collateralization" below, from
Available Funds from certain other Loan Groups remaining after payment of the
Senior Certificates related to such other Loan Groups. Distributions to holders
of the Class 15-PO certificates will be made on each Distribution Date from
Available Funds related to Loan Group 1, Loan Group 2, Loan Group 3 and Loan
Group 4. Distributions to holders of the Class 30-PO certificates will be made
on each Distribution Date from Available Funds related to Loan Group 5.
Distributions to holders of the Class 15-AX-1 certificates will be made on each
Distribution D ate from Available Funds related to Loan Group 1 and Loan Group
3. Distributions to holders of the Class 15-AX-2 certificates will be made on
each Distribution Date from Available Funds related to Loan Group 2 and Loan
Group 4. Distributions to holders of the Class 30-AX certificates will be made
on each Distribution Date

                                      S-57


from Available Funds related to Loan Group 5. Distributions to
holders of the Subordinate Certificates will be made on each Distribution Date
from Available Funds related to all of the Loan Groups in the aggregate
remaining after distribution of amounts due to all Senior Certificates.

      On each Distribution Date, the Available Funds will be distributed in
accordance with this paragraph and in the order of priority set forth below
among the certificates to the extent available:

      first, concurrently,

      (A) from the Available Funds for Loan Group 1, to the Group 1 Certificates
and the Class 15-AX-1 certificates, pro rata, the applicable Accrued Certificate
Interest for that Distribution Date; provided, that for purposes of
distributions pursuant to this clause (A), the Accrued Certificate Interest for
the Class 15-AX-1 certificates will be calculated solely on the basis of that
portion of the Notional Amount of the Class 15-AX-1 certificates attributable to
the Group 1 Loans;

      (B) from the Available Funds for Loan Group 2, to the Group 2 Certificates
and the Class 15-AX-2 certificates, pro rata, the applicable Accrued Certificate
Interest for that Distribution Date; provided, that for purposes of
distributions pursuant to this clause (B), the Accrued Certificate Interest for
the Class 15-AX-2 certificates will be calculated solely on the basis of that
portion of the Notional Amount of the Class 15-AX-2 certificates attributable to
the Group 2 Loans;

      (C) from the Available Funds for Loan Group 3, to the Group 3 Certificates
and the Class 15-AX-1 certificates, pro rata, the applicable Accrued Certificate
Interest for that Distribution Date; provided, that for purposes of
distributions pursuant to this clause (C), the Accrued Certificate Interest for
the Class 15-AX-1 certificates will be calculated solely on the basis of that
portion of the Notional Amount of the Class 15-AX-1 certificates attributable to
the Group 3 Loans;

      (D) from the Available Funds for Loan Group 4, to the Group 4 Certificates
and the Class 15-AX-2 certificates, pro rata, the applicable Accrued Certificate
Interest for that Distribution Date; provided, that for purposes of
distributions pursuant to this clause (D), the Accrued Certificate Interest for
the Class 15-AX-2 certificates will be calculated solely on the basis of that
portion of the Notional Amount of the Class 15-AX-2 certificates attributable to
the Group 4 Loans; and

      (E) from the Available Funds for Loan Group 5, to the Group 5 Certificates
and the Class 30-AX certificates, pro rata, the applicable Accrued Certificate
Interest for that Distribution Date; provided, that for purposes of
distributions pursuant to this clause (E), the Accrued Certificate Interest for
the Class 30-AX certificates will be calculated solely on the basis of that
portion of the Notional Amount of the Class 30-AX certificates attributable to
the Group 5 Loans; provided, further, that (i) the Accrued Certificate Interest
with respect to the Class 5-A-5 certificates on or before the Group 5 Accretion
Termination Date will be added to the Certificate Principal Balance of the Class
5-A-5 certificates and distributed as principal, as

                                      S-58


described under "--Principal--Principal Allocation of the Class 5-A-5 Accrual
Amounts" in this prospectus supplement;

      second, concurrently,

      (A) from the Available Funds for Loan Group 1, to the Group 1 Certificates
and Class 15-PO certificates, concurrently, as follows:

            (1) to the Group 1 Certificates, the Senior Optimal Principal Amount
      for Group 1 for that Distribution Date, sequentially as follows:

                  first, to the Class A-LR and Class A-R certificates, pro rata,
            based on their Certificate Principal Balances, until the Certificate
            Principal Balance of each such class is reduced to zero; and

                  second, to the Class 1-A-1 certificates, until its Certificate
            Principal Balance is reduced to zero; and

            (2) to the Class 15-PO certificates, the Group PO Principal
      Distribution Amount for Loan Group 1 for that Distribution Date, until its
      Certificate Principal Balance is reduced to zero;

      (B) from the Available Funds for Loan Group 2, to the Class 2-A-1 and
Class 15-PO certificates, concurrently, as follows:

            (1) to the Class 2-A-1 certificates, the Senior Optimal Principal
      Amount for Group 2 for that Distribution Date, until its Certificate
      Principal Balance is reduced to zero; and

            (2) to the Class 15-PO certificates, the Group PO Principal
      Distribution Amount for Loan Group 2 for that Distribution Date, until its
      Certificate Principal Balance is reduced to zero;

      (C) from the Available Funds for Loan Group 3, to the Class 3-A-1 and
Class 15-PO certificates, concurrently, as follows:

            (1) to the Class 3-A-1 certificates, the Senior Optimal Principal
      Amount for Group 3 for that Distribution Date, until its Certificate
      Principal Balance is reduced to zero; and

            (2) to the Class 15-PO certificates, the Group PO Principal
      Distribution Amount for Loan Group 3 for that Distribution Date, until its
      Certificate Principal Balance is reduced to zero;

                                      S-59


      (D) from the Available Funds for Loan Group 4, to the Class 4-A-1
Certificates and Class 15-PO certificates, concurrently, as follows:

           (1) to the Group 4 Certificates, the Senior Optimal Principal Amount
           for Group 4 for that Distribution Date, until its Certificate
           Principal Balance is reduced to zero;

            (2) to the Class 15-PO certificates, the Group PO Principal
      Distribution Amount for Loan Group 4 for that Distribution Date, until its
      Certificate Principal Balance is reduced to zero; and

      (E) from the Available Funds for Loan Group 5, to the Group 5 Certificates
(other than the Class 5-A-2 certificates) and Class 30-PO certificates,
concurrently, as follows:

            (1) to the Group 5 Certificates (other than the Class 5-A-2
      certificates), the Senior Optimal Principal Amount for Group 5 for that
      Distribution Date sequentially as follows:

                  (a) first, to the Class 5-A-6 and Class 5-A-7 certificates,
            pro rata, the Group 5 Priority Principal Distribution Amount, until
            their Certificate Principal Balances are reduced to zero;

                  (b) second, to the Class 5-A-1, Class 5-A-3 and Class 5-A-4
            certificates, pro rata, until their Certificate Principal Balances
            are reduced to zero;

                  (c) third, to the Class 5-A-5 certificates, until its
            Certificate Principal Balance is reduced to zero;

                  (d) fourth, to the Class 5-A-6 and Class 5-A-7 certificates,
            pro rata, until their Certificate Principal Balances are reduced to
            zero; and

            (2) to the Class 30-PO certificates, the Group PO Principal
      Distribution Amount for Loan Group 5 for that Distribution Date, until its
      Certificate Principal Balance is reduced to zero;

      provided, however, that notwithstanding the priorities in clause (E) (1),
      on each Distribution Date after the Cross-Over Date, distributions of
      principal on the Group 5 Certificates (other than the Class 5-A-2
      certificates) will be made pro rata among all such certificates based on
      their Certificate Principal Balances, until their Certificate Principal
      Balances are reduced to zero.

      third, on any Distribution Date on or prior to the Cross-Over Date, (A)(i)
first, from any PO Recoveries for that Distribution Date related to Loan Group
1, Loan Group 2, Loan Group 3 and Loan Group 4 to the Class 15-PO certificates,
up to the Group 1 PO Deferred Amount, Group 2 PO Deferred Amount, Group 3 PO
Deferred Amount

                                      S-60


and Group 4 PO Deferred Amount for that Distribution Date and (ii) second, from
the remaining Available Funds for Loan Group 1, Loan Group 2, Loan Group 3 and
Loan Group 4 to the Class 15-PO certificates, up to the remaining Group 1 PO
Deferred Amount, Group 2 PO Deferred Amount, Group 3 PO Deferred Amount and
Group 4 PO Deferred Amount for that Distribution Date, and (B)(i) first, from
any PO Recoveries for that Distribution Date related to Loan Group 5, to the
Class 30-PO certificates, up to the Group 5 PO Deferred Amount for that
Distribution Date and (ii) second, from the remaining Available Funds for Loan
Group 5, to the Class 30-PO certificates, up to the remaining Group 5 PO
Deferred Amount for that Distribution Date; provided that, (1) on any
Distribution Date, the aggregate of the distributions pursuant to clauses
(A)(ii) and (B)(ii) of this priority third of the Group PO Deferred Amounts will
not exceed the Subordinate Principal Distribution Amount for that Distribution
Date, (2) such distributions will not reduce the Certificate Principal Balance
of the Class 15-PO and Class 30-PO certificates and (3) no distribution will be
made in respect of any such Group PO Deferred Amounts after the Cross-Over Date;

      fourth, from the remaining Available Funds for all Loan Groups in the
aggregate, to the Class B-1 certificates in the following order: (1) the Accrued
Certificate Interest on the Class B-1 certificates for that Distribution Date
and (2) the Class B-1 certificates' Allocable Share for that Distribution Date;

      fifth, from the remaining Available Funds for all Loan Groups in the
aggregate, to the Class B-2 certificates in the following order: (1) the Accrued
Certificate Interest on the Class B-2 certificates for that Distribution Date
and (2) the Class B-2 certificates' Allocable Share for that Distribution Date;

      sixth, from the remaining Available Funds for all Loan Groups in the
aggregate, to the Class B-3 certificates in the following order: (1) the Accrued
Certificate Interest on the Class B-3 certificates for that Distribution Date
and (2) the Class B-3 certificates' Allocable Share for that Distribution Date;

      seventh, from the remaining Available Funds for all Loan Groups in the
aggregate, to the Class B-4 certificates in the following order: (1) the Accrued
Certificate Interest on the Class B-4 certificates for that Distribution Date
and (2) the Class B-4 certificates' Allocable Share for that Distribution Date;

      eighth, from the remaining Available Funds for all Loan Groups in the
aggregate, to the Class B-5 certificates in the following order: (1) the Accrued
Certificate Interest on the Class B-5 certificates for that Distribution Date
and (2) the Class B-5 certificates' Allocable Share for that Distribution Date;

      ninth, from the remaining Available Funds for all Loan Groups in the
aggregate, to the Class B-6 certificates in the following order: (1) the Accrued
Certificate Interest on the Class B-6 certificates for that Distribution Date
and (2) the Class B-6 certificates' Allocable Share for that Distribution Date;
and

      tenth, to the Class A-LR certificates, any remaining portion (which is
expected to be zero) of the Available Funds in the Lower-Tier REMIC for that
Distribution Date; and to the Class A-R certificates, any remaining portion
(which is expected to be zero) of the Available Funds in each of the Middle-Tier
REMIC and the Upper-Tier REMIC for that Distribution Date.

                                      S-61


INTEREST

      Interest will accrue on the certificates (other than the Principal Only
Certificates) on their respective Certificate Principal Balances or Notional
Amounts, as applicable, at the respective pass-through rates set forth in the
table beginning on page S-5 during each Interest Accrual Period; provided,
however, the Accrued Certificate Interest with respect to the Class 5-A-5
certificates on or before the Group 5 Accretion Termination Date will instead be
added to the Certificate Principal Balance of the Class 5-A-5 certificates.

      The Class 15-PO and Class 30-PO certificates are principal-only
certificates and will not accrue interest.

      The Accrued Certificate Interest for each class of certificates for each
Distribution Date will be an amount equal to (1) the interest accrued at such
class's pass-through rate during the related Interest Accrual Period on the
Certificate Principal Balance or the Notional Amount, as applicable, of such
class of certificates, minus each class's pro rata share of any related Net
Interest Shortfalls, the interest portion of any Excess Losses through the
Cross-Over Date to the extent allocated to such class and, after the Cross-Over
Date, the interest portion of Realized Losses, including Excess Losses to the
extent allocated to such class plus (2) any Accrued Certificate Interest for
that class remaining undistributed from previous Distribution Dates.

      With respect to any Distribution Date, the "Net Interest Shortfall" for
any Loan Group will equal the sum of:

            (1) the aggregate amount of interest that would otherwise have been
      received for each Loan in that Loan Group that was the subject of a Relief
      Act Reduction (such amount, the "Interest Shortfall"); and

            (2) any related Net Prepayment Interest Shortfall.

      With respect to any Distribution Date, the "Net Prepayment Interest
Shortfall" for any Loan Group will equal the aggregate Prepayment Interest
Shortfalls with respect to that Distribution Date less any Compensating Interest
received for that Loan Group. See "The Pooling and Servicing
Agreement--Servicing and Master Servicing Compensation and Payment of Expenses"
in this prospectus supplement.

      With respect to each Loan Group, any Net Interest Shortfall and the
interest portion of any Excess Losses through the Cross-Over Date and, after the
Cross-Over Date, the interest portion of any Realized Losses will, on each
Distribution Date, be allocated among all the outstanding certificates entitled
to distributions of interest in proportion to the amount of Accrued Certificate
Interest that would have been allocated to the applicable certificate in the
absence of the shortfall and losses. The amount of Accrued Certificate Interest
that would have been allocated to the Class 15-AX-1 or Class 15-AX-2
certificates in respect of any related Loan Group will be based on the amount of
interest accruing on the portion of the Class 15-AX-1 Notional Amount or Class
15-AX-2 Notional Amount, respectively, derived from such Loan Group. The amount
of Accrued Certificate Interest that would have been allocated to each class of
Subordinate Certificates in respect of any Loan Group shall be based upon the
amount of interest accruing at the Required Coupon for such Loan Group, on such
class' proportionate share, based on

                                      S-62


Certificate Principal Balance, of the Group Subordinate Amount for that
Distribution Date. See "--Allocation of Losses on the Certificates" below and
"The Pooling and Servicing Agreement--Servicing and Master Servicing
Compensation and Payment of Expenses" in this prospectus supplement.

      The interest portion of any Realized Losses (other than Excess Losses)
occurring prior to the Cross-Over Date will not be allocated among any
certificates, but will reduce the amount of Available Funds for the related Loan
Group on the related Distribution Date. As a result of the subordination of the
Subordinate Certificates, such losses will be borne first by the related
outstanding Subordinate Certificates in inverse order of priority (e.g., first
to Class B-6, then to Class B-5, and so forth).

      If Available Funds and available credit enhancement for any Group are
insufficient on any Distribution Date to distribute the aggregate Accrued
Certificate Interest on the classes of Senior Certificates (other than the
Principal Only Certificates) related to such Group, any shortfall in available
amounts will be allocated among those classes in proportion to the amounts of
Accrued Certificate Interest otherwise distributable to those classes (or, with
respect to the Class 15-AX-1 or Class 15-AX-2 certificates, the portion of its
Accrued Certificate Interest derived from the related Loan Group or Groups). The
amount of any such undistributed Accrued Certificate Interest will be added to
the amount of interest to be distributed on those certificates entitled to
distributions of interest on subsequent Distribution Dates in accordance with
the definition of Accrued Certificate Interest in this prospectus supplement. No
interest will accrue on any Accrued Certificate Interest remaining undistributed
from previous Distribution Dates.

PRINCIPAL

      Distributions in reduction of the Certificate Principal Balance of each
certificate entitled to principal distributions will be made on each
Distribution Date. The Interest Only Certificates do not have a Certificate
Principal Balance and will not be entitled to distributions of principal.

      Distributions in reduction of the Certificate Principal Balance of each
class of Senior Certificates of a Group entitled to principal distributions will
be made on each Distribution Date as described in the second paragraph under
"--Allocation of Available Funds to the Certificates" above in accordance with
priority second. The Available Funds related to such Group remaining after the
distribution of interest will be allocated to the Senior Certificates of such
Group (other than the Interest Only Certificates) in an aggregate amount not to
exceed the sum of the Senior Optimal Principal Amount for such Group and the
Group PO Principal Distribution Amount for such Group, if any, for the
respective Distribution Date. If the applicable Available Funds are insufficient
to make the full distribution as described in the second paragraph under
"--Allocation of Available Funds to the Certificates" above in accordance with
priority second (A), (B), (C), (D) and (E) such Available Funds will be
distributed to the Senior Certificates of such Group and the related Class PO
Certificates, pro rata, based on the applicable Senior Optimal Principal Amount
and the Group PO Principal Distribution Amount, respectively.

      Distributions in reduction of the Certificate Principal Balances of the
Subordinate Certificates will be made on each Distribution Date as described in
the second paragraph under "--Allocation of Available Funds to the Certificates"
above in accordance with priorities fourth

                                      S-63


through ninth, as adjusted for cross-collateralization as described under
"--Subordination--Cross-Collateralization" below.

      If the Class Prepayment Distribution Trigger is not satisfied for a class
of outstanding Subordinate Certificates on any Distribution Date, this may have
the effect of accelerating the amortization of more senior ranking classes of
the Subordinate Certificates because the amount of partial or full principal
prepayments, net liquidation proceeds and net insurance proceeds otherwise
distributable to such class will be distributable among the outstanding
Subordinate Certificates as to which the Class Prepayment Distribution Trigger
has been satisfied, on a pro rata basis. On any Distribution Date, any reduction
in funds available for distribution to the classes of Subordinate Certificates
resulting from a distribution of any Group PO Deferred Amounts to the Class PO
Certificates, or to cover any shortfalls in distributions of principal to the
Senior Certificates of any Group due to a shortfall in Available Funds for such
Group, will be allocated to the classes of Subordinate Certificates, in inverse
order of priority.

PRINCIPAL ALLOCATION OF THE CLASS 5-A-5 ACCRUAL AMOUNTS

      On each Distribution Date prior to the Group 5 Accretion Termination Date,
the Class 5-A-5 Accrual Amount will be added to the Certificate Principal
Balance of the Class 5-A-5 certificates (and thereafter accrue interest at the
applicable pass-through rate).

      On each Distribution Date prior to the Group 5 Accretion Termination Date,
the Class 5-A-5 Accrual Amount, if any, will be distributed as principal in the
following order of priority:

      first, to the Class 5-A-1, Class 5-A-3 and Class 5-A-4 certificates, pro
rata, until the Certificate Principal Balance for each such class has been
reduced to zero, and

      second, to the Class 5-A-5 certificates, until the Certificate Principal
Balance for such class has been reduced to zero.

RECOVERIES

   Prior to the Cross-Over Date, Non-PO Recoveries received during a Prepayment
Period with respect to a loss on a Loan in a Loan Group will be treated as a
principal prepayment and will result in a payment of principal to one or more
corresponding classes of related certificates on the related Distribution Date.
It is possible that such payment will not be made to the class that originally
bore the loss. Further, even though a class may have previously had its
Certificate Principal Balance reduced as a result of a loss for which there is
later a Non-PO Recovery, that class will not be entitled to any interest on the
amount of such reduction. Because such Non-PO Recoveries result in a payment of
principal to certain classes without a corresponding decrease in the aggregate
Pool Balance of the Loans, the Certificate Principal Balance of one or more
classes of certificates that have been allocated Realized Losses, will be
increased, as follows:

            (a) first, up to the amount of the Non-PO Recoveries with respect to
      a Loan Group, the Certificate Principal Balance of each class of Senior
      Certificates (other than the Class PO Certificates and the Interest Only
      Certificates) of the Certificate Group corresponding to that Loan Group
      will be increased, pro rata, up to the amount of unrecovered Realized
      Losses previously allocated to such class, if any; and

                                      S-64


            (b) second, up to the amount of the Non-PO Recoveries remaining
      after allocation pursuant to clause (a) the Certificate Principal Balance
      of each class of Subordinate Certificates, in order of seniority, will be
      increased by the amount of unrecovered Realized Losses previously
      allocated to such class, if any.

      Commencing on the Cross-Over Date, the amount of any Recovery on a Loan
received during a Prepayment Period will be distributed to the Senior
Certificates, without a corresponding reduction in their Certificate Principal
Balances, as follows: (i) the PO Percentage of the Recovery will be
distributable to the outstanding class of Class PO Certificates related to the
Loan Group of that Loan, and (ii) the amount of the Recovery remaining after
distribution pursuant to the preceding clause (i) will be distributable to the
classes of Senior Certificates (other than the Class PO Certificates and
Interest Only Certificates) of the Certificate Group corresponding to that Loan
Group, pro rata.

ALLOCATION OF LOSSES ON THE CERTIFICATES

      On each Distribution Date, the applicable PO Percentage of the principal
portion of any Realized Loss (including any Excess Loss) on (a) a Discount Loan
in Loan Group 1, Loan Group 2, Loan Group 3 and Loan Group 4 will be allocated
to the Class 15-PO certificates and (b) a Discount Loan in Loan Group 5 will be
allocated to the Class 30-PO certificates, in each case, until the Certificate
Principal Balance of such certificates is reduced to zero.

      On each Distribution Date prior to the Cross-Over Date, distributions in
respect of each Group PO Deferred Amount will be made on the related Class PO
Certificates, in each case, in accordance with priority third of the second
paragraph under "--Allocation of Available Funds to the Certificates" above to
the extent of any PO Recoveries and any other Available Funds remaining after
distributions in accordance with priority second of that paragraph. Any
distribution of such PO Recoveries and any other Available Funds in respect of a
Group PO Deferred Amount will not reduce the Certificate Principal Balance of
the Class PO Certificates. No interest will accrue on any Group PO Deferred
Amount. On each Distribution Date prior to the Cross-Over Date, the Certificate
Principal Balance of the most subordinate class of the Subordinate Certificates
then outstanding will be reduced by the amount of any distributions made on the
Distribution Date to the Class PO Certificates in respect of any Group PO
Deferred Amounts, through the operation of the Class PO Deferred Payment
Writedown Amount. After the Cross-Over Date no distributions will be made in
respect of any related Group PO Deferred Amount and Realized Losses will be
allocated to the related Class PO Certificates without a right of reimbursement
from any other class of certificates.

      Prior to the Cross-Over Date, the applicable Non-PO Percentage of the
principal portion of any Non-Excess Realized Loss will be allocated among the
outstanding classes of Subordinate Certificates, in inverse order of priority of
payment, until the Certificate Principal Balance of each class has been reduced
to zero.

      Commencing on the Cross-Over Date, the applicable Non-PO Percentage of the
principal portion of any Realized Loss will be allocated among the outstanding
classes of the Senior Certificates (other than the Class PO Certificates and the
Interest Only Certificates) of the Certificate Group related to the Loan that
incurred the Realized Loss; provided, however, that the

                                      S-65


Class 5-A-7 certificates will also bear the principal portion of all Realized
Losses (other than Excess Losses) allocable to the Class 5-A-6 certificates for
so long as the Certificate Principal Balance of the Class 5-A-7 certificates is
greater than zero.

      With respect to any Loan Group, the applicable Non-PO Percentage of the
principal portion of any Excess Loss in such Loan Group for any Distribution
Date will be allocated pro rata among all outstanding classes of Senior
Certificates (other than the Class PO Certificates and the Interest Only
Certificates) of the related Certificate Group and all the outstanding
Subordinate Certificates, in each case, based on their then-outstanding
Certificate Principal Balances (or with respect to such Subordinate
Certificates, based on its pro rata share of the related Group Subordinate
Amount).

      On each Distribution Date, the Subordinate Certificate Writedown Amount,
if any, will be deemed a Realized Loss, and will be allocated to the most
subordinate class of Subordinate Certificates then outstanding.

      A Deficient Valuation may result from the personal bankruptcy of a
borrower if the bankruptcy court establishes the value of the Mortgaged Property
at an amount less than the then outstanding principal balance of the Loan
secured by such Mortgaged Property and reduces the secured debt to such value.
In such case, the trust, as the holder of such Loan, would become an unsecured
creditor to the extent of the difference between the outstanding principal
balance of such Loan and such reduced secured debt.

      All allocations of Realized Losses to a class of certificates will be
accomplished on a Distribution Date by reducing the Certificate Principal
Balance of the class by the appropriate share of any such losses occurring
during the month preceding the month of such Distribution Date and, accordingly,
will be taken into account in determining the distributions of principal and
interest on the certificates commencing on the following Distribution Date.

      The interest portion of all Realized Losses will be allocated among the
applicable outstanding classes of certificates of the related Loan Group
entitled to distributions of interest as described under "-Interest" above.

      No reduction of the Certificate Principal Balance of any class of Senior
Certificates (other than the Interest Only Certificates and Principal Only
Certificates) will be made on any Distribution Date on account of any Realized
Loss to the extent that the reduction would have the effect of reducing the
aggregate Certificate Principal Balance of all of the Certificates as of that
Distribution Date to an amount less than the Pool Balance for all of the Loan
Groups in the aggregate as of the following Distribution Date minus (i) any
Deficient Valuations occurring before the Bankruptcy Loss Coverage Amount has
been reduced to zero and minus (ii) the PO Percentage of the Scheduled Principal
Balance of any related Discount Loans.

      Debt Service Reductions are not Realized Losses, and the principal portion
of Debt Service Reductions will not be allocated in reduction of the Certificate
Principal Balance of any certificate. However, after the Bankruptcy Loss
Coverage Amount has been reduced to zero, the portion of the Senior Optimal
Principal Amount relating to a Group, any applicable Group PO Principal
Distribution Amount and Subordinate Optimal Principal Amount relating to a

                                      S-66


Group representing scheduled principal payments will be reduced by the amount of
the principal portion of any Debt Service Reductions related to that Group.
Regardless of when they occur, Debt Service Reductions related to a Group may
reduce the amount of Available Funds of that Group otherwise available for
distribution on a Distribution Date. As a result of the subordination of the
Subordinate Certificates, the reduction in Available Funds of any Group
resulting from any Debt Service Reductions will be borne by the Subordinate
Certificates (to the extent then outstanding) in inverse order of priority.

SUBORDINATION

   Priority of Senior Certificates

        As of the date of the initial issuance of the certificates, the
aggregate Certificate Principal Balance of the Subordinate Certificates will
equal approximately 3.50% of the initial aggregate Pool Balance for all of the
Loan Groups. The rights of the holders of the Subordinate Certificates to
receive distributions with respect to the Loans will be subordinate to such
rights of the holders of the Senior Certificates, to the extent described above.
The subordination of the Subordinate Certificates is intended:

            (1) to enhance the likelihood of timely receipt by the holders of
      the Senior Certificates (to the extent of the subordination of the
      Subordinate Certificates) of the full amount of the scheduled monthly
      distributions of principal and interest allocable to the Senior
      Certificates; and

            (2) to afford the holders of the Senior Certificates (to the extent
      of the subordination of the Subordinate Certificates) protection against
      Realized Losses, to the extent described above.

      If Realized Losses in a Loan Group exceed the credit support provided to
the Senior Certificates of the related Certificate Group through subordination,
or if Excess Losses in a Loan Group occur, all or a portion of such losses will
be borne by those related Senior Certificates.

           The protection afforded to the holders of Senior Certificates of each
Certificate Group by means of the subordination feature will be accomplished by:

            (1) the preferential right of such holders to receive, prior to any
      distribution being made on a Distribution Date in respect of the
      Subordinate Certificates, in accordance with the paydown rules specified
      under "--Allocation of Available Funds to the Certificates" above, the
      amounts due to the holders of the Senior Certificates on each Distribution
      Date out of the related Available Funds on that Distribution Date and, if
      necessary, by the right of holders to receive future distributions on the
      Loans that would otherwise have been payable to the holders of the
      Subordinate Certificates;

            (2) the allocation to the Subordinate Certificates of the applicable
      Non-PO Percentage of the principal portion of any Non-Excess Realized Loss
      to the extent set forth in this prospectus supplement; and

                                      S-67


            (3) the allocation to the Subordinate Certificates of the applicable
      PO Percentage of the principal portion of any Non-Excess Realized Loss on
      a Discount Loan to the extent set forth in this prospectus supplement
      through the operation of any Class PO Deferred Payment Writedown Amount.

      The allocation of the principal portion of Realized Losses described in
this prospectus supplement to the Subordinate Certificates on any Distribution
Date will decrease the protection provided to the Senior Certificates then
outstanding on future Distribution Dates by reducing the aggregate Certificate
Principal Balance of the Subordinate Certificates then outstanding.

      In addition, in order to extend the period during which the Subordinate
Certificates remain available as credit enhancement for the Senior Certificates,
the entire amount of the applicable Non-PO Percentage of any prepayment of
principal with respect to a Loan will be allocated to the Senior Certificates of
the related Certificate Group then entitled to principal distributions (other
than the Class PO Certificates) during at least the first five years after the
date of initial issuance of the certificates, with such allocation being subject
to reduction thereafter as described in this prospectus supplement. This
allocation has the effect of accelerating the amortization of the Senior
Certificates as a group (other than the Class PO Certificates) while, in the
absence of losses in respect of the Loans, increasing the percentage interest in
the principal balance of the Loans evidenced by the Subordinate Certificates.

      After the payment of amounts distributable in respect of the Senior
Certificates on each Distribution Date, the Subordinate Certificates will be
entitled to the remaining portion, if any, of the aggregate Available Funds in
an amount equal to the Accrued Certificate Interest on the Subordinate
Certificates for that Distribution Date (which includes any remaining
undistributed Accrued Certificate Interest from previous Distribution Dates) and
the sum of the Allocable Shares of the Subordinate Certificates. These amounts
actually distributed to the holders of the Subordinate Certificates will not be
available to cover any shortfalls in distributions or any Realized Losses on
subsequent Distribution Dates.

      Priority Among Subordinate Certificates

      As of the date of the initial issuance of the certificates, the aggregate
Certificate Principal Balance of the Class B-4, Class B-5 and Class B-6
certificates, all of which are subordinate in right of distribution to the Class
B-1, Class B-2 and Class B-3 certificates offered under this prospectus
supplement, will equal approximately 0.70% of the initial aggregate Pool Balance
for all of the Loan Groups and approximately 20.00% of the initial aggregate
Certificate Principal Balance of all of the Subordinate Certificates. On each
Distribution Date, the holders of any particular class of Subordinate
Certificates will have a preferential right to receive the amounts due to them
on such Distribution Date out of Available Funds prior to any distribution being
made on such date on each class of Subordinate Certificates ranking subordinate
to such class.

      In addition, with respect to a Group, the applicable Non-PO Percentage of
the principal portion of any Non-Excess Realized Loss and any Class PO Deferred
Payment Writedown Amount will be allocated, to the extent set forth in this
prospectus supplement, in reduction of the Certificate Principal Balances of the
Subordinate Certificates in inverse order of priority of such certificates. The
effect of the allocation of such Realized Losses and of any Class PO

                                      S-68


Deferred Payment Writedown Amount to a class of Subordinate Certificates will be
to reduce future distributions allocable to such class and increase the relative
portion of distributions allocable to more senior classes of certificates of the
related Group.

      In order to maintain the relative levels of subordination among the
Subordinate Certificates, the applicable Non-PO Percentage of prepayments and
certain other unscheduled recoveries of principal in respect of the Loans (which
in certain cases may not be distributable to those certificates for at least the
first five years after the date of initial issuance of the certificates) will
not be distributable to the holders of any class of Subordinate Certificates on
any Distribution Date for which the Class Prepayment Distribution Trigger is not
satisfied. See "--Principal" above. If the Class Prepayment Distribution Trigger
is not satisfied with respect to any class of Subordinate Certificates (other
than the Class B-1 certificates), the amortization of more senior ranking
classes of Subordinate Certificates may occur more rapidly than would otherwise
have been the case.

      As a result of the subordination of the Subordinate Certificates, these
certificates in increasing order of priority of payment will be more sensitive
than more senior ranking classes of certificates to the rate of delinquencies
and defaults on the Loans, and under certain circumstances investors in such
certificates may not recover their initial investment.

      Cross-Collateralization

      On each Distribution Date prior to the Cross-Over Date, (A) funds
otherwise payable to the Subordinate Certificates are required to be applied to
payment of the Senior Certificates as follows: (i) first, to cover any Accrued
Certificate Interest on the Senior Certificates (other than the Class 15-PO and
Class 30-PO certificates) remaining unpaid, (ii) second, in respect of Group PO
Deferred Amounts for the Class 15-PO and Class 30-PO certificates, as
applicable, then payable but not paid from Available Funds for the related Loan
Group or Groups, (iii) third, to pay principal of the Senior Certificates (other
than the Class 15-PO and Class 30-PO certificates) of an Undercollateralized
Group, and (iv) fourth, to maintain subordination levels under limited
circumstances where the Senior Certificates (other than the related Principal
Only Certificates and Interest Only Certificates) of one or more Certificate
Groups have been paid in full as described below.

      To the extent any Accrued Certificate Interest with respect to any class
of one or more of the Senior Certificates (other than the Class 15-PO and Class
30-PO certificates) remains unpaid, Available Funds remaining from such other
Group or Groups after payments on the Senior Certificates in such Group or
Groups will be applied to cover such unpaid Accrued Certificate Interest, and,
to the extent payable to more than one Certificate Group or more than one class
within a Certificate Group, will be applied pro rata based on the amounts of
such unpaid Accrued Certificate Interest to the extent there are insufficient
funds to pay such amounts in full.

      Prior to the Cross-Over Date, to the extent any Group PO Deferred Amount
for any Loan Group then payable has not been paid from PO Recoveries and any
other Available Funds for the related Groups, then, following any payments to
the Senior Certificates pursuant to the preceding paragraph, amounts that would
otherwise constitute the Subordinate Principal Distribution Amount will be
applied to pay any such unpaid Group PO Deferred Amount. Any application of

                                      S-69


the Subordinate Principal Distribution Amount pursuant to this paragraph will
reduce distributions of such amount to the Subordinate Certificates in reverse
order of priority pursuant to the priorities set forth above under "--Allocation
of Available Funds to the Certificates."

      If on any Distribution Date one or more of the Certificate Groups is an
Undercollateralized Group, then all amounts otherwise distributable as principal
on the Subordinate Certificates as the Subordinate Principal Distribution Amount
(other than amounts needed to pay any Group PO Deferred Amounts as described
above) will be paid to the Senior Certificates (other than the related Interest
Only Certificates and Class PO Certificates) related to each Undercollateralized
Group as principal in accordance with the priorities set forth above under
"--Allocation of Available Funds to the Certificates" until the aggregate
Certificate Principal Balance of the Senior Certificates (other than the related
Interest Only Certificates and Class PO Certificates) after allocation of all
principal payments related to each Undercollateralized Group equals the Pool
Balance of the related Loan Group (net of the PO Percentage of the Scheduled
Principal Balance of the Discount Loans in such Loan Group, if any) as of the
following Distribution Date. Any application of the Subordinate Principal
Distribution Amount pursuant to this paragraph will reduce distributions of such
amount to the Subordinate Certificates in reverse order of priority pursuant to
the priorities set forth above under "--Allocation of Available Funds to the
Certificates."

      On or after the Distribution Date on which the Certificate Principal
Balances of all of the Classes of the Senior Certificates of any Certificate
Group have been reduced to zero, amounts otherwise distributable as principal on
the Subordinate Certificates, up to the applicable Apportioned Subordinate
Principal Distribution Amount (representing generally the portion of the
Subordinate Principal Distribution Amount attributable to Loans in the Loan
Group with respect to which the related Senior Certificates have been paid in
full), will be allocated pro rata among the Senior Certificates of such other
Groups, based on the aggregate Certificate Principal Balances, and paid to such
Senior Certificates in accordance with the priorities set forth above for the
applicable Group under "--Allocation of Available Funds to the Certificates,"
provided that on such Distribution Date (a) the Aggregate Subordinate Percentage
for such Distribution Date is less than twice the initial Aggregate Subordinate
Percentage or (b) the average outstanding principal balance of Loans in any Loan
Group delinquent 60 days or more over the last six months (including for this
purpose any of such Loans in bankruptcy or foreclosure and such Loans with
respect to which the related Mortgaged Property has been acquired by the trust)
as a percentage of the related Group Subordinate Amount is greater than or equal
to 50%. Any application of the Apportioned Subordinate Principal Distribution
Amount to the applicable Senior Certificates pursuant to this paragraph will
reduce distributions of the Subordinate Principal Distribution Amount to the
Subordinate Certificates, pro rata, based on the Certificate Principal Balances
of the Subordinate Certificates.

RESTRICTIONS ON TRANSFER OF THE RESIDUAL CERTIFICATES

      The REMIC provisions of the Code impose certain taxes on (i) transferors
of residual interests to, or agents that acquire residual interests on behalf
of, disqualified organizations and (ii) certain pass-through entities that have
disqualified organizations as beneficial owners. No tax will be imposed on a
pass-through entity (other than an "electing large partnership") with regard to
the Residual Certificates to the extent it has received an affidavit from each
owner

                                      S-70


thereof indicating that such owner is not a disqualified organization or a
nominee for a disqualified organization. The Pooling and Servicing Agreement
will provide that no legal or beneficial interest in a Residual Certificate may
be transferred to or registered in the name of any person unless (i) the
proposed purchaser provides to the transferor and the trust administrator an
affidavit, substantially in the form set forth in the Pooling and Servicing
Agreement, to the effect that, among other items, such transferee is not a
disqualified organization and is not purchasing such Residual Certificate as an
agent (i.e., as a broker, nominee, or other middleman thereof) for a
disqualified organization and is otherwise making such purchase pursuant to a
permitted transfer and (ii) the transferor states in a writing to the trust
administrator that it has no actual knowledge that such affidavit is false.
Further the affidavit requires the transferee to affirm that it (i) historically
has paid its debts as they have come due and intends to do so in the future,
(ii) understands that it may incur tax liabilities with respect to such Residual
Certificate in excess of cash flows generated thereby, (iii) intends to pay
taxes associated with holding such Residual Certificate as such taxes become
due, (iv) will not cause the income attributable to such Residual Certificate to
be attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of the transferee or any other U.S.
person and (v) will not transfer such Residual Certificate to any person or
entity that does not provide a similar affidavit. The transferor must also
certify in a writing to the trust administrator in the form set forth in the
Pooling and Servicing Agreement that it had no knowledge or reason to know that
the affirmations made by the transferee pursuant to the preceding clauses (i),
(iii) and (iv) were false.

      In addition, Treasury regulations require either that (i) the transferor
of a Residual Certificate pay the transferee a specified minimum formula amount
designed to compensate the transferee for assuming the related tax liability or
(ii) the transfer be to an eligible corporation that agrees to make any further
qualifying transfers in order to meet the safe harbor against the possible
disregard of such transfer. Because these rules are not mandatory but would
provide safe harbor protection, the Pooling and Servicing Agreement will not
require that they be met as a condition to transfer of the Residual
Certificates. Holders of the Residual Certificates are advised to consult their
tax advisors as to whether and how to qualify for protection of the safe harbor
for transfers and whether or in what amount any payment should be made upon
transfer thereof. See "Federal Income Tax Consequences--REMICs--Taxation of
Owners of Residual Securities--Tax-Related Restrictions on Transfer of Residual
Securities" and "--Noneconomic Residual Interests" in the prospectus.

      Finally, the Residual Certificates may not be purchased by or transferred
to any person that is not a "U.S. Person" unless (i) such person holds such
Residual Certificates in connection with the conduct of trade or business within
the United States and furnishes the transferor and the trust administrator with
an effective Internal Revenue Service Form W-8ECI or (ii) the transferee
delivers to both the transferor and the trust administrator an opinion of a
nationally recognized tax counsel to the effect that such transfer is in
accordance with the requirements of the Code and the regulations promulgated
thereunder and that such transfer of the Residual Certificates will not be
disregarded for federal income tax purposes. The term "U.S. Person" means a
citizen or resident of the United States, a corporation or partnership created
or organized in or under the laws of the United States, any State thereof or the
District of Columbia (unless, in the case of a partnership, Treasury regulations
are adopted that provide otherwise), including an entity treated as a
corporation or partnership for federal income tax purposes, an estate whose
income is

                                      S-71


subject to U.S. federal income tax regardless of its source, or a trust if a
court within the United States is able to exercise primary supervision over the
administration of such trust, and one or more such U.S. Persons have the
authority to control all substantial decisions of such trust (or, to the extent
provided in applicable Treasury regulations, a trust in existence on August 20,
1996 which is eligible to elect to be treated as U.S. Persons and so elects).

      The Pooling and Servicing Agreement provides that any attempted or
purported transfer of Residual Certificates in violation of those transfer
restrictions will be null and void ab initio and will vest no rights in any
purported transferee and will not relieve the transferor of any obligations with
respect to the Residual Certificates. Any transferor or agent to whom
information is provided as to any applicable tax imposed on such transferor or
agent may be required to bear the cost of computing or providing such
information.

      The Residual Certificates may not be purchased by or transferred to any
person which is a Plan or any plan or arrangement subject to Similar Law. See
"ERISA Considerations" in this prospectus supplement and "ERISA Considerations"
in the prospectus.

      The Residual Certificates will contain a legend describing the foregoing
restrictions.

REPORTS TO CERTIFICATEHOLDERS

   On each Distribution Date, the trust administrator will be required to
prepare and make available to each certificateholder, the parties to the Pooling
and Servicing Agreement and any other interested parties, a Distribution Date
statement, based in part on information provided by each servicer, which
generally will set forth, among other things:

                  (1) the amount of the distribution on the Distribution Date
            made to the holders of each class of certificates allocable to
            principal;

                  (2) the amount of the distribution on the Distribution Date
            made to the holders of each class of certificates allocable to
            interest;

                  (3) any unpaid Interest Shortfalls included in such
            distribution and the aggregate Interest Shortfalls remaining unpaid
            as of such Distribution Date;

                  (4) any Prepayment Interest Shortfalls included in such
            distribution and the aggregate Prepayment Interest Shortfalls as of
            such Distribution Date;

                  (5) the Certificate Principal Balance or Notional Amount of
            each class of certificates after giving effect to distribution of
            principal on that Distribution Date;

                  (6) the Pool Balance for each Loan Group for the Distribution
            Date;

                  (7) the Senior Percentage and the Subordinate Percentage for
            each Certificate Group for the following Distribution Date;

                  (8) the aggregate amount of Servicing Fees with respect to the
            related Distribution Date;

                                      S-72


                  (9) the pass-through rate of interest on each class of
            certificates for that Distribution Date;

                  (10) the aggregate amount of Advances included in the
            distribution for the applicable Distribution Date and the aggregate
            amount of Advances outstanding as of the Distribution Date;

                  (11) (a) the number and aggregate unpaid principal balance of
            Loans (exclusive of Loans in foreclosure) delinquent:

                            (i) 1 to 30 days;

                            (ii) 31 to 60 days;

                            (iii) 61 to 90 days; and

                            (iv) 91 or more days.

                        (b) the number and aggregate unpaid principal balance of
                  Loans in foreclosure and delinquent;

                  (12) with respect to any Loan that became an REO Property
            during the preceding calendar month, the loan number of the related
            Loan, the unpaid principal balance of the related Loan and the
            principal balance of the related Loan as of the date it became an
            REO Property;

                  (13) the book value of any REO Property as of the close of
            business on the last business day of the calendar month preceding
            the Distribution Date, and, cumulatively, the total number and
            cumulative principal balance of all REO Properties as of the close
            of business of the determination date set forth in the related
            Servicing Agreement;

                  (14) the Senior Prepayment Percentage for each Group for the
            Distribution Date;

                  (15) the aggregate Realized Losses, by Loan Group, incurred
            during the prior calendar month; and

                  (16) the Special Hazard Loss Coverage Amount, the Fraud Loss
            Coverage Amount and the Bankruptcy Loss Coverage Amount, in each
            case as of the determination date as set forth in the related
            Servicing Agreement.

      The trust administrator will make the Distribution Date statement
available each month via its internet website. The trust administrator's
internet website will initially be located at www.ctslink.com. Assistance in
using the trust administrator's website can be obtained by calling the trust
administrator's customer service desk at (301) 815-6600. Parties that are unable
to use the above distribution method are entitled to have a paper copy mailed to
them via first class mail by calling the trust administrator's customer service
desk and indicating such. The trust administrator shall have the right to change
the way the Distribution Date statement is

                                      S-73


distributed in order to make such distribution more convenient and/or more
accessible and the trust administrator shall provide timely and adequate
notification to the certificateholders and the parties to the Pooling and
Servicing Agreement regarding any such changes.

      The trust administrator shall also be entitled to rely on but shall not be
responsible for the content or accuracy of any information provided by third
parties for purposes of preparing the Distribution Date statement and may affix
to it any disclaimer it deems appropriate in its reasonable discretion.

      As a condition to access the trust administrator's internet website, the
trust administrator may require registration and the acceptance of a disclaimer.
The trust administrator will not be liable for the dissemination of information
in accordance with the Pooling and Servicing Agreement.

                       PREPAYMENT AND YIELD CONSIDERATIONS


GENERAL

      The effective yield on the certificates will depend upon, among other
things, the price at which the certificates are purchased and the rate and
timing of payments of principal (including both scheduled and unscheduled
payments) on the Loans in the related Loan Group or Loan Groups. If significant
principal distributions are made on your certificates (other than the Interest
Only Certificates), you may not be able to reinvest those distributions in a
comparable alternative investment having a comparable yield or, in the case of
the Interest Only Certificates (because the Notional Amount of such certificates
is based in part on the Certificate Principal Balance of the related
certificates), you may not fully recover your initial investment. No prediction
can be made as to the rate of prepayments on the Loans in either stable or
changing interest rate environments. The final distribution of principal on your
certificates (other than the Interest Only Certificates) could occur
significantly earlier than you anticipated. You will bear entirely any
reinvestment risk resulting from the rate of prepayments on the Loans.

PREPAYMENTS AND DEFAULTS AND LIBOR

   The rate of principal distributions on each class of offered certificates
(other than the Interest Only Certificates), the aggregate amount of each
interest distribution on each class (other than the Principal Only Certificates)
and the yield to maturity on each class will be directly related to and affected
by:

            (1) the amortization schedules of the Loans;

            (2) the prepayment experience of the Loans; and

            (3) under some circumstances, the rates of delinquencies, defaults
      or losses experienced on the Loans.

      Other than approximately 0.67% of the Group 1 Loans, approximately 12.15%
of the Group 2 Loans, approximately 2.26% of the Group 3 Loans, approximately
41.55% of the Group 4 Loans and approximately 42.21% of the Group 5 Loans (in
each case, by Cut-Off Date

                                      S-74


Pool Balance for the related Loan Group), the borrowers may generally prepay
their Loans at any time without penalty. Each of the Loans is subject to a
due-on-sale clause. See "Certain Legal Aspects of Residential Loans" in the
prospectus. Additionally, repurchases by the transferor of any Loan as to which
there has been a material breach of representation or warranty or defect in
documentation (or deposit of certain amounts in respect of delivery of a
substitute loan therefor) or any optional repurchase of the Loans in connection
with a termination of the trust will have the same effect as a prepayment and
result in distributions on the offered certificates which would otherwise be
distributed over the remaining terms of the Loans.

      The rate of principal prepayments on the Loans will be influenced by a
variety of economic, tax, geographic, demographic, social, legal and other
factors, and has fluctuated considerably in recent years. In addition, the rate
of principal prepayments may differ among the Loans at any time because of
specific factors relating to the Loans. These factors include:

            (1) the age of the Loans;

            (2) the geographic location of the related properties and the extent
      of the related borrowers' equity in those properties; and

            (3) changes in the borrowers' housing needs and employment and job
      transfers.

      Furthermore, because the characteristics of the Loans in each Loan Group
differ, the Loans of each Loan Group as a whole may be expected to prepay at
different rates.

      In general, if prevailing interest rates for loans similar to the Loans
fall significantly below the interest rates at the time of origination, Loans
may be subject to higher prepayment rates than if prevailing interest rates for
loans similar to the Loans remain at or above those at the time those loans were
originated. Conversely, if prevailing interest rates for loans similar to the
Loans rise appreciably above the interest rates at the time of origination,
Loans may experience a lower prepayment rate than if prevailing interest rates
for loans similar to the Loans remained at or below those existing at the time
those Loans were originated. We cannot make assurances as to the prepayment rate
of the Loans. In addition, we cannot make assurances that the Loans will conform
to the prepayment experience of other loans or to any past prepayment experience
or any published prepayment forecast.

      In general, if an offered certificate is purchased at a premium over its
face amount and payments of principal on the Loans, or in the case of the Class
15-AX-1, Class 15-AX-2 and Class 30-AX Certificates, the Non-Discount Loans, in
the related Loan Group or Loan Groups and in the case of the Class 5-A-2
Certificates, the Group 5 Loans, in each case, occur at a rate faster than that
assumed at the time of purchase, the investor's actual yield to maturity will be
lower than that anticipated at the time of purchase and, in the case of the
Interest Only Certificates, the investor may not recover its initial investment.
Conversely, if an offered certificate, particularly a Principal Only
Certificate, is purchased at a discount from its face amount and payments of
principal on the Loans in the related Loan Group or Loan Groups, or in the case
of the Class PO Certificates, Discount Loans in the related Loan Group or Loan
Groups

                                      S-75


occur at a rate that is slower than that assumed at the time of purchase, the
purchaser's actual yield to maturity will be lower than originally anticipated.

      As described under "Description of the Offered Certificates--Principal" in
this prospectus supplement, the applicable Senior Prepayment Percentage of the
applicable Non-PO Percentage of all principal prepayments related to a Loan
Group will be initially distributed to the classes of Senior Certificates
related to such Loan Group (other than the Class PO Certificates and Interest
Only Certificates) then entitled to receive principal distributions. This may
result in all (or a disproportionate percentage) of such principal prepayments
being distributed to holders of such classes of Senior Certificates (other than
the Class PO Certificates and Interest Only Certificates) and none (or less than
their pro rata share) of such principal prepayments being distributed to holders
of the Subordinate Certificates during the periods of time described in the
definition of "Senior Prepayment Percentage."

      Investors in the Class 5-A-1 certificates should understand that if LIBOR
is greater than or equal to 7.55% per annum, the pass through rate of such class
will remain at its maximum rate of 8.00% per annum. Investors in the Class 5-A-1
certificates should consider the risk that if LIBOR is lower than anticipated,
the actual yields to such investors will be lower than the anticipated yields.

      Conversely, investors in the Class 5-A-2 certificates should consider the
risk that if LIBOR is higher than anticipated, the actual yields to such
investors will be significantly lower than the anticipated yields. Investors in
the Class 5-A-2 certificates should also understand that if LIBOR is greater
than or equal to approximately 7.55% per annum, the Class 5-A-2 certificates
will accrue interest at the minimum rate of 0.00% per annum.

      Investors in the Class 5-A-1 and Class 5-A-2 certificates should
understand that the timing of changes in LIBOR may affect the actual yields to
such investors even if the average rate of LIBOR is consistent with such
investors' expectations. Each investor must make an independent decision as to
the appropriate LIBOR assumptions to be used in deciding whether to purchase a
Class 5-A-1 or Class 5-A-2 certificate.

      The rate and timing of defaults on the Loans will also affect the rate and
timing of principal payments on the Loans and thus the yield on the offered
certificates. We cannot make assurances as to the rate of losses or
delinquencies on any of the Loans. To the extent that any losses are incurred on
any of the Loans, the certificateholders of the offered certificates will bear
the risk of losses resulting from default by borrowers. See "Risk Factors" in
this prospectus supplement and in the prospectus.

      The weighted average life of the offered certificates will be influenced
by, among other factors, the rate of principal payments on the Loans.

      The Distribution Date in September 2019 will be the last scheduled
Distribution Date for the Group 1, Group 3 and Group 4 Certificates and the
Class 15-AX-1 certificates. The Distribution Date in October 2019 will be the
last scheduled Distribution Date for the Group 2 Certificates and the Class
15-AX-2 and Class 15-PO certificates. The Distribution Date in September 2034


                                      S-76


will be the last scheduled Distribution Date for the Group 5 Certificates, the
Class 30-AX and Class 30-PO certificates and the Subordinate Certificates and
the Residual Certificates.

      The primary source of information available to investors concerning the
offered certificates will be the monthly statements discussed under "Description
of the Offered Certificates--Reports to Certificateholders" in this prospectus
supplement. These statements will include information as to the outstanding
Certificate Principal Balance or Notional Amount of the certificates. We cannot
assure that any additional information regarding the offered certificates will
be available through any other source. In addition, the depositor is not aware
of any source through which price information about the offered certificates
will be generally available on an ongoing basis. The limited nature of the
information regarding the offered certificates may adversely affect the
liquidity of the offered certificates, even if a secondary market for the
offered certificates becomes available.

THE OFFERED SUBORDINATE CERTIFICATES

      The rate of payment of principal, the aggregate amount of distributions
and the yield to maturity of the offered Subordinate Certificates will be
affected by the rate of prepayments on the Loans, as well as the rate of
borrower defaults on the Loans resulting in Realized Losses, by the severity of
those losses and by the timing thereof. See "Description of the Offered
Certificates--Allocation of Losses on the Certificates" in this prospectus
supplement for a description of the manner in which such losses are borne by the
holders of the certificates. If the purchaser of a Subordinate Certificate
calculates its anticipated yield based on an assumed rate of default and amount
of Realized Losses that is lower than the default rate and the amount of losses
actually incurred, its actual yield to maturity may be lower than that so
calculated and could be negative. The timing of defaults and losses will also
affect an investor's actual yield to maturity, even if the average rate of
defaults and severity of losses are consistent with an investor's expectations.
In general, the earlier a loss occurs, the greater is the effect on an
investor's yield to maturity. There can be no assurance as to the delinquency,
foreclosure or loss experience with respect to the Loans.

      The yields to maturity on the classes of Subordinate Certificates with
higher alphanumerical designations will be more sensitive to losses due to
liquidations of defaulted Loans than will the yields on such classes with lower
alphanumerical designations, and the yields to maturity on all of the
Subordinate Certificates will be more sensitive to such losses than will the
yields on the other classes of certificates. The Subordinate Certificates will
be more sensitive to losses due to liquidations of defaulted Loans (other than
Excess Losses) because the entire amount of such losses will be allocable to
such certificates in inverse order of priority, either directly or through the
allocation of the Class PO Deferred Payment Writedown Amount and the Subordinate
Certificate Writedown Amount. To the extent not covered by a servicer's or the
master servicer's advances of delinquent monthly payments of principal and
interest, delinquencies on the Loans may also have a relatively greater effect:

            (1) on the yields to investors in the Subordinate Certificates with
      higher alphanumerical designations than on the yields to investors in the
      Subordinate Certificates with lower alphanumerical designations; and

                                      S-77


            (2) on the yields to investors in the Subordinate Certificates than
      on the yields to investors in the other classes of the certificates.

      As described under "Description of the Offered Certificates--Interest,"
"--Principal," "--Allocation of Losses on the Certificates" and
"--Subordination" in this prospectus supplement, amounts otherwise distributable
to holders of any class of Subordinate Certificates will be made available to
protect the holders of the more senior ranking classes of related certificates
against interruptions in distributions due to certain borrower delinquencies.
Such delinquencies, even if subsequently cured, may affect the timing of the
receipt of distributions by the holders of the Subordinate Certificates.

      To the extent that a Subordinate Certificate is being purchased at a
discount from its initial Certificate Principal Balance, if the purchaser of
such a certificate calculates its yield to maturity based on an assumed rate of
payment of principal faster than that actually received on such certificate, its
actual yield to maturity may be lower than that so calculated.

MODELING ASSUMPTIONS

      For purposes of preparing the tables below, the following modeling
assumptions have been made:

            (1) no delinquencies or losses occur on the Assumed Loans (as
      defined below) and all scheduled principal payments on the Assumed Loans
      are timely received on the due date of each month commencing in October
      2004;

            (2) the scheduled payments on the Assumed Loans have been calculated
      on the outstanding principal balance, prior to giving effect to
      prepayments, the mortgage interest rate, and the remaining term to
      maturity such that the Assumed Loans will fully amortize by their
      remaining term to maturity (taking into account any interest only period);

            (3) all Assumed Loans prepay monthly at the specified percentages of
      the Prepayment Assumption;

                  (a) no optional or other early termination of the offered
            certificates occurs; and

                  (b) no substitutions or repurchases of the Assumed Loans
            occur;

            (4) all prepayments in respect of the Assumed Loans include 30 days'
      accrued interest and are received on the last day of each month commencing
      in September 2004;

            (5) the closing date for the offered certificates is September 29,
      2004;

            (6) each year will consist of twelve 30-day months;

            (7) cash distributions are received by the holders of the offered
      certificates on the 25th day of each month, commencing in October 2004;
      and

                                      S-78


            (8) the initial Certificate Principal Balance of each class of
      certificates is as described in the table (and the notes to that table)
      beginning on page S-5 of this prospectus supplement;

            (9) interest accrues on each class of certificates at the applicable
      pass-through rate as described in the table (and the notes to that table)
      beginning on page S-5; and

            (10) each Loan Group consists of the following loans ("Assumed
      Loans") with the following characteristics:



                                      S-79


                          ASSUMED LOAN CHARACTERISTICS



                                                 LOAN GROUP 1



CUT-OFF DATE POOL          MORTGAGE                  NET            REMAINING TERM TO
     BALANCE             INTEREST RATE          MORTGAGE RATE       MATURITY (MONTHS)      SEASONING (MONTHS)
-----------------      -----------------      -----------------     -----------------      ------------------

   $2,833,897.34         4.5539007890%          4.3005419794%               175                     5
  $34,834,355.56         4.9350753281%          4.6850130404%               176                     4




                                               LOAN GROUP 2



CUT-OFF DATE POOL          MORTGAGE                  NET             REMAINING TERM TO
     BALANCE             INTEREST RATE          MORTGAGE RATE        MATURITY (MONTHS)     SEASONING (MONTHS)
-----------------      -----------------      -----------------     -----------------      ------------------

  $33,560,221.76         5.6384116978%          5.3703333238%               176                     4
  $68,991,949.27         5.8762840426%          5.6147871511%               176                     4




                                               LOAN GROUP 3



CUT-OFF DATE POOL          MORTGAGE                  NET             REMAINING TERM TO
     BALANCE             INTEREST RATE          MORTGAGE RATE        MATURITY (MONTHS)     SEASONING (MONTHS)
-----------------      -----------------      -----------------     -----------------      ------------------

  $20,254,584.16         5.1288352192%          4.8775037822%               176                     4
  $84,560,299.68         5.3786188966%          5.1267848291%               176                     4




                                               LOAN GROUP 4



CUT-OFF DATE POOL          MORTGAGE                  NET              REMAINING TERM
     BALANCE             INTEREST RATE          MORTGAGE RATE      TO MATURITY (MONTHS)    SEASONING (MONTHS)
-----------------      -----------------      -----------------     -----------------      ------------------

  $15,271,549.95         6.1500356080%          5.8524690582%               175                     5
  $37,444,141.35         6.6123802540%          6.3014828830%               175                     5




                                           LOAN GROUP 5



CUT-OFF DATE POOL          MORTGAGE                  NET            REMAINING TERM TO                             REMAINING INTEREST
     BALANCE             INTEREST RATE          MORTGAGE RATE       MATURITY (MONTHS)      SEASONING (MONTHS)     ONLY TERM (MONTHS)
-----------------      -----------------      -----------------     -----------------      ------------------     ------------------

  $48,594,345.30         5.9392743540%          5.6225070785%               356                     4                      N/A
   $2,924,463.31         5.8750000000%          5.6250000000%               358                     2                      118
  $64,555,200.89         6.2211857566%          5.9154941352%               356                     4                      N/A
   $6,852,023.52         6.3095832405%          6.0595832405%               358                     2                      118



      Prepayments on loans are commonly measured relative to a prepayment
standard or model (the "Prepayment Assumption"). The Prepayment Assumptions used
in this prospectus supplement (the "Prepayment Curves") represent an assumed
rate of prepayment each month relative to the then outstanding principal balance
of a pool of loans for the life of such loans. A 100% Prepayment Curve for any
Loan Group (other than the Group 5 Loans) assumes prepayment rates of 4.00% per
annum of the outstanding principal balance of those Loans in the first month of
the life of those Loans and an additional approximate 1.090909% per annum in
each month thereafter up to and including the 12th month, and in each month
thereafter during

                                      S-80


the life of those Loans a per annum prepayment rate of 16.00% Constant
Prepayment Rate ("CPR"). A 100% Prepayment Curve for the Group 5 Loans assumes
prepayment rates of 6.000% per annum of the outstanding principal balance of the
Group 5 Loans in the first month of the life of those loans and an additional
approximate 1.090909% per annum in each month thereafter up to and including the
12th month, and in each month thereafter during the life of those Loans a per
annum CPR of 18.00%


      The Prepayment Assumptions do not purport to be a historical description
of prepayment experience or a prediction of the anticipated rate of prepayment
of any pool of loans, including the Loans. None of the master servicer, the
trust administrator, the depositor, the trustee or the underwriter makes any
representations about the appropriateness of the Prepayment Assumptions.

SENSITIVITY OF THE PRINCIPAL ONLY CERTIFICATES

      THE CLASS 15-PO AND CLASS 30-PO CERTIFICATES WILL BE "PRINCIPAL-ONLY"
CERTIFICATES AND WILL NOT BEAR INTEREST. AS INDICATED IN THE TABLE BELOW, A
LOWER THAN ANTICIPATED RATE OF PRINCIPAL PAYMENTS (INCLUDING PREPAYMENTS) ON THE
DISCOUNT LOANS IN LOAN GROUP 1, LOAN GROUP 2, LOAN GROUP 3 AND LOAN GROUP 4 WILL
HAVE AN ADVERSE EFFECT ON THE YIELD TO INVESTORS IN THE CLASS 15-PO CERTIFICATES
AND A LOWER THAN ANTICIPATED RATE OF PRINCIPAL PAYMENTS (INCLUDING PREPAYMENTS)
ON THE DISCOUNT LOANS IN LOAN GROUP 5 WILL HAVE AN ADVERSE EFFECT ON THE YIELD
TO INVESTORS IN THE CLASS 30-PO CERTIFICATES.

      The table below indicates the sensitivity of the pre-tax corporate bond
equivalent yields to maturity of the Principal Only Certificates to various
constant percentages of the applicable Prepayment Assumption. The yields set
forth in the table were calculated by determining the monthly discount rates
that, when applied to the assumed streams of cash flows to be paid on the
Principal Only Certificates would cause the discounted present value of such
assumed streams of cash flows to equal the assumed aggregate purchase price of
the Principal Only Certificates, and converting such monthly rates to corporate
bond equivalent rates. These calculations do not take into account variations
that may occur in the interest rates at which investors may be able to reinvest
funds received by them as distributions on such certificates and consequently do
not purport to reflect the return on any investment in any such class of
certificate when such reinvestment rates are considered.

      As described under "Description of the Offered Certificates--Principal" in
this prospectus supplement, each Group PO Principal Distribution Amount is
calculated by reference to the principal payments (including prepayments) on the
Discount Loans in the related Loan Group. The Discount Loans will have lower Net
Mortgage Rates (and lower Mortgage Interest Rates) than the other Loans. In
general, mortgage loans with higher mortgage rates tend to prepay at higher
rates than mortgage loans with relatively lower mortgage rates in response to a
given change in market interest rates. As a result, the Discount Loans may
prepay at lower rates, thereby reducing the rate of payment of principal and the
resulting yield of the Class PO Certificates.

      The information set forth in the following table has been prepared on the
basis of the modeling assumptions set forth under "--Modeling Assumptions" above
and on the assumption that the aggregate purchase prices of the Class 15-PO and
Class 30-PO certificates (expressed as

                                      S-81


a percentage of the initial Certificate Principal Balance of such class) are
86.00% and 78.00%, respectively:

   SENSITIVITY OF THE CLASS 15-PO AND CLASS 30-PO CERTIFICATES TO PREPAYMENTS
                          (PRE-TAX YIELDS TO MATURITY)




                                                  PERCENTAGES OF PREPAYMENT ASSUMPTION
                                      ---------------------------------------------------------------
               CLASS                    0%           50%            100%          150%          200%
----------------------------------    ------        ------         ------        ------       -------

Class 15-PO.......................    1.856%        2.764%         3.901%        5.237%        6.744%
Class 30-PO.......................    1.331%        3.265%         5.870%        8.822%       12.057%


      It is unlikely that the Discount Loans will have the precise
characteristics described in this prospectus supplement or that the Discount
Loans will all prepay at the same rate until maturity or that all of the
Discount Loans will prepay at the same rate or time. As a result of these
factors, the pre-tax yield on the Principal Only Certificates is likely to
differ from those shown in the tables above, even if all of the Loans prepay at
the indicated percentages of the Prepayment Assumption. No representation is
made as to the actual rate of principal payments on the Loans for any period or
over the life of the Principal Only Certificates or as to the yield on the
Principal Only Certificates. You must make your own decision as to the
appropriate prepayment assumption to be used in deciding whether to purchase any
of the Principal Only Certificates.

SENSITIVITY OF THE CLASS 15-AX-1, CLASS 15-AX-2 AND CLASS 30-AX CERTIFICATES

      THE CLASS 15-AX-1, CLASS 15-AX-2 AND CLASS 30-AX CERTIFICATES WILL NOT BE
ENTITLED TO DISTRIBUTIONS OF PRINCIPAL. AS INDICATED IN THE TABLE BELOW, A
HIGHER THAN ANTICIPATED RATE OF PRINCIPAL PAYMENTS (INCLUDING PREPAYMENTS) ON
THE RELATED LOANS COULD RESULT IN THE FAILURE OF INVESTORS IN THE CLASS 15-AX-1,
CLASS 15-AX-2 OR CLASS 30-AX CERTIFICATES TO FULLY RECOVER THEIR INITIAL
INVESTMENT.

      The table below indicates the sensitivity of the pre-tax corporate bond
equivalent yields to maturity of the Class 15-AX-1, Class 15-AX-2 and Class
30-AX certificates to various constant percentages of the applicable Prepayment
Assumption. The yields set forth in the table were calculated by determining the
monthly discount rates that, when applied to the assumed streams of cash flows
to be paid on such certificates, would cause the discounted present value of
such assumed streams of cash flows to equal the assumed aggregate purchase price
of such certificates and converting such monthly rates to corporate bond
equivalent rates. These calculations do not take into account variations that
may occur in the interest rates at which investors may be able to reinvest funds
received by them as distributions on such certificates and consequently do not
purport to reflect the return on any investment in any such class of
certificates when such reinvestment rates are considered.

      The Notional Amount of the Class 15-AX-1 certificates is based on the
Scheduled Principal Balances of the Non-Discount Loans in Loan Group 1 and Loan
Group 3. The Notional Amount of the Class 15-AX-2 certificates is based on the
Scheduled Principal Balances of the Non-Discount Loans in Loan Group 2 and Loan
Group 4. The Notional Amount of the Class 30-AX certificates is based on the
Scheduled Principal Balances of the Non-Discount Loans in Loan Group 5. See
"Description of the Offered Certificates--Interest" in this prospectus
supplement. The Non-Discount Loans will have higher Net Mortgage Rates (and

                                      S-82


higher Mortgage Interest Rates) than the other Loans. In general, mortgage loans
with higher mortgage rates tend to prepay at higher rates than mortgage loans
with relatively lower mortgage rates in response to a given change in market
interest rates. As a result, the Non-Discount Loans may prepay at higher rates,
thereby reducing the resulting yield of the Interest Only Certificates than
would be the case if the Non-Discount Loans prepaid at the same rate as the
other Loans. An investor in the Class 15-AX-1, Class 15-AX-2 or Class 30-AX
certificates should fully consider the associated risks, including the risk that
a rapid rate of principal payments (including prepayments) on the Non-Discount
Loans could result in the failure of such investor to fully recover its initial
investment.

      The information set forth in the following table has been prepared on the
basis of the modeling assumptions set forth under "--Modeling Assumptions" above
and on the assumption that the aggregate purchase prices of the Class 15-AX-1,
Class 15-AX-2 and Class 30-AX certificates (expressed as a percentage of the
initial Notional Amount of each such class) are 16.125%, 12.250% and 18.500%,
respectively, plus accrued interest:

         SENSITIVITY OF THE CLASS 15-AX-1, CLASS 15-AX-2 AND CLASS 30-AX
                           CERTIFICATES TO PREPAYMENTS
                          (PRE-TAX YIELDS TO MATURITY)




                                                   PERCENTAGES OF PREPAYMENT ASSUMPTION
                                      ----------------------------------------------------------------
       CLASS                            0%            50%           100%          150%          200%
-------------------------------       -------       -------        -------      --------     ---------

Class 15-AX-1..................       24.407%       15.918%         7.061%      (2.220)%     (11.989)%
Class 15-AX-2..................       40.962%       31.982%        22.612%       12.798%        2.468%
Class 30-AX....................       30.936%       21.004%        10.582%      (0.412)%     (12.084)%


      It is unlikely that the Non-Discount Loans will have the precise
characteristics described in this prospectus supplement or that the Non-Discount
Loans will all prepay at the same rate until maturity or that all of the
Non-Discount Loans will prepay at the same rate or time. As a result of these
factors, the pre-tax yields on the Class 15-AX-1, Class 15-AX-2 and Class 30-AX
certificates are likely to differ from those shown in the tables above, even if
all of the related Non-Discount Loans prepay at the indicated percentages of the
applicable Prepayment Assumption. No representation is made as to the actual
rate of principal payments on the Non-Discount Loans for any period or over the
life of such certificates or as to the yield on such certificates. You must make
your own decision as to the appropriate prepayment assumptions to be used in
deciding whether to purchase any of the Class 15-AX-1, Class 15-AX-2 or Class
30-AX certificates.


           SENSITIVITY OF THE CLASS 5-A-2 CERTIFICATES

      THE YIELD TO INVESTORS IN THE CLASS 5-A-2 CERTIFICATES WILL BE EXTREMELY
SENSITIVE TO CHANGES IN THE RATE OF LIBOR AND PREPAYMENTS. AS INDICATED IN THE
TABLES BELOW, INCREASES IN LIBOR AND A HIGHER THAN ANTICIPATED RATE OF
PREPAYMENTS WILL HAVE AN ADVERSE EFFECT ON YIELD TO SUCH INVESTORS.

      The tables below indicate the sensitivity of the pre-tax corporate bond
equivalent yields to maturity of the Class 5-A-2 certificates to various
constant percentages of the applicable Prepayment Assumption and rates of LIBOR.
The yields set forth in the table were calculated by

                                      S-83


determining the monthly discount rates that, when applied to the assumed streams
of cash flows to be paid on the Class 5-A-2 certificates would cause the
discounted present value of such assumed streams of cash flows to equal the
assumed aggregate purchase prices of such certificates, and converting such
monthly rates to corporate bond equivalent rates. These calculations do not take
into account variations that may occur in the interest rates at which investors
may be able to reinvest funds received by them as distributions on such
certificates and consequently do not purport to reflect the return on any
investment in any such class of certificate when such reinvestment rates are
considered.

      The information set forth in the following table has been prepared on the
basis of the modeling assumptions set forth under "--Modeling Assumptions" above
and on the assumption that (i) on the first LIBOR Determination Date, LIBOR will
be 1.83% and on each LIBOR Determination Date thereafter, LIBOR will be as
indicated, and (ii) the aggregate purchase price of the Class 5-A-2 certificates
(expressed as a percentage of the initial Notional Amount of such class) 9.00%,
plus accrued interest:

 SENSITIVITY OF THE CLASS 5-A-2 CERTIFICATES TO PREPAYMENTS AND CHANGES IN LIBOR
                          (PRE TAX YIELDS TO MATURITY)



                                                PERCENTAGES OF PREPAYMENT ASSUMPTION
                                  ------------------------------------------------------------------
             LIBOR                   0%            50%            100%         150%          200%
------------------------------    -------        -------        --------     ---------     ---------

1.83%.........................    70.300%        54.873%        35.600%       11.760%      (13.907)%
2.83%.........................    56.797%        41.765%        21.984%       (2.820)%     (28.741)%
4.83%.........................    30.807%        16.737%        (5.671)%     (34.249)%     (60.933)%
5.83%.........................    18.092%         4.641%       (20.504)%     (52.951)%     (80.124)%
7.55% and above...............    **             **             **            **            **


** Investors will suffer a loss of virtually all of their investment.


WEIGHTED AVERAGE LIVES OF THE OFFERED CERTIFICATES

   The following tables indicate at the specified percentages of the applicable
Prepayment Assumption, the percentages of the original Certificate Principal
Balances or Notional Amounts of the classes of offered certificates that would
be outstanding after each of the Distribution Dates shown at various constant
percentages of the Prepayment Assumption and the corresponding weighted average
lives of each class of certificates. The tables were prepared based on the
modeling assumptions and all percentages are rounded to the nearest 1% (other
than the ones indicated with an asterisk). As used in the following tables, the
weighted average life of a class is determined by:

      (a) multiplying the amount of each distribution of principal or reduction
of the Notional Amount, as the case may be, for that class by the number of
years from the date of issuance to the related Distribution Date;

      (b) summing the results; and

      (c) dividing the sum by the aggregate distributions of principal or
reductions of the Notional Amount, as the case may be, referred to in clause (a)
and rounding to two decimal places.



                                      S-84


              PERCENTAGE OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE
            AT THE FOLLOWING PERCENTAGES OF THE PREPAYMENT ASSUMPTION



                                                    CLASS A-LR AND CLASS A-R
                                       ---------------------------------------------------
                                                         PERCENTAGES OF
                                                      PREPAYMENT ASSUMPTION
                                       ---------------------------------------------------
        DISTRIBUTION DATE               0%          50%        100%       150%        200%
--------------------------------       ----        ----        ----       ----        ----

Initial.........................       100%        100%        100%       100%        100%
September 25, 2005..............         0           0           0          0           0
September 25, 2006..............         0           0           0          0           0
September 25, 2007..............         0           0           0          0           0
September 25, 2008..............         0           0           0          0           0
September 25, 2009..............         0           0           0          0           0
September 25, 2010..............         0           0           0          0           0
September 25, 2011..............         0           0           0          0           0
September 25, 2012..............         0           0           0          0           0
September 25, 2013..............         0           0           0          0           0
September 25, 2014..............         0           0           0          0           0
September 25, 2015..............         0           0           0          0           0
September 25, 2016..............         0           0           0          0           0
September 25, 2017..............         0           0           0          0           0
September 25, 2018..............         0           0           0          0           0
September 25, 2019..............         0           0           0          0           0
September 25, 2020..............         0           0           0          0           0
September 25, 2021..............         0           0           0          0           0
September 25, 2022..............         0           0           0          0           0
September 25, 2023..............         0           0           0          0           0
September 25, 2024..............         0           0           0          0           0
September 25, 2025..............         0           0           0          0           0
September 25, 2026..............         0           0           0          0           0
September 25, 2027..............         0           0           0          0           0
September 25, 2028..............         0           0           0          0           0
September 25, 2029..............         0           0           0          0           0
September 25, 2030..............         0           0           0          0           0
September 25, 2031..............         0           0           0          0           0
September 25, 2032..............         0           0           0          0           0
September 25, 2033..............         0           0           0          0           0
September 25, 2034..............         0           0           0          0           0
Weighted Average Life (in
   years).......................         0.07        0.07        0.07       0.07        0.07





                                      S-85




              PERCENTAGE OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE
            AT THE FOLLOWING PERCENTAGES OF THE PREPAYMENT ASSUMPTION




                                                           CLASS 1-A-1
                                      ---------------------------------------------------
                                                         PERCENTAGES OF
                                                      PREPAYMENT ASSUMPTION
                                      ---------------------------------------------------
        DISTRIBUTION DATE              0%         50%         100%       150%        200%
--------------------------------      ----       ----         ----       ----        ----

Initial.........................      100%       100%         100%       100%        100%
September 25, 2005..............       95         89           82         75          68
September 25, 2006..............       90         77           64         53          43
September 25, 2007..............       85         66           50         37          26
September 25, 2008..............       79         57           39         26          16
September 25, 2009..............       74         48           30         17           9
September 25, 2010..............       67         40           23         12           5
September 25, 2011..............       61         34           17          8           3
September 25, 2012..............       54         27           13          5           1
September 25, 2013..............       47         22            9          3           1
September 25, 2014..............       40         17            6          2           *
September 25, 2015..............       32         13            4          1           *
September 25, 2016..............       24          9            3          1           *
September 25, 2017..............       15          5            1          *           *
September 25, 2018..............        6          2            1          *           *
September 25, 2019..............        0          0            0          0           0
Weighted Average Life (in
   years).......................        8.23       5.57         3.95       2.92        2.23


----------
* Less than 0.5%, but greater than zero.


                                      S-86



              PERCENTAGE OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE
            AT THE FOLLOWING PERCENTAGES OF THE PREPAYMENT ASSUMPTION




                                                           CLASS 2-A-1
                                      ---------------------------------------------------
                                                         PERCENTAGES OF
                                                      PREPAYMENT ASSUMPTION
                                      ---------------------------------------------------
        DISTRIBUTION DATE              0%          50%        100%       150%        200%
--------------------------------      ----        ----        ----       ----        ----

Initial.........................      100%        100%        100%       100%        100%
September 25, 2005..............       96          89          82         76          69
September 25, 2006..............       91          78          65         54          44
September 25, 2007..............       86          67          52         38          28
September 25, 2008..............       81          58          40         27          17
September 25, 2009..............       75          49          31         19          10
September 25, 2010..............       69          42          24         13           6
September 25, 2011..............       63          35          18          9           4
September 25, 2012..............       56          29          14          6           2
September 25, 2013..............       49          23          10          4           1
September 25, 2014..............       41          18           7          2           1
September 25, 2015..............       33         13            5          2           *
September 25, 2016..............       25          9            3          1           *
September 25, 2017..............       16          5            2          *           *
September 25, 2018..............        7          2            1          *           *
September 25, 2019..............        0          0            0          0           0
Weighted Average Life (in
   years).......................        8.39        5.70        4.06       3.02        2.33


----------
* Less than 0.5%, but greater than zero.


                                      S-87



              PERCENTAGE OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE
            AT THE FOLLOWING PERCENTAGES OF THE PREPAYMENT ASSUMPTION




                                                           CLASS 3-A-1
                                      ---------------------------------------------------
                                                         PERCENTAGES OF
                                                      PREPAYMENT ASSUMPTION
                                      ---------------------------------------------------
        DISTRIBUTION DATE              0%          50%        100%       150%        200%
--------------------------------      ----        ----        ----       ----        ----

Initial.........................      100%        100%        100%       100%        100%
September 25, 2005..............       95          89          82         75          69
September 25, 2006..............       91          77          65         54          43
September 25, 2007..............       85          67          51         38          27
September 25, 2008..............       80          57          40         26          16
September 25, 2009..............       74          49          30         18           9
September 25, 2010..............       68          41          23         12           5
September 25, 2011..............       62          34          17          8           3
September 25, 2012..............       55          28          13          5           2
September 25, 2013..............       48          22           9          3           1
September 25, 2014..............       41          17           7          2           1
September 25, 2015..............       33          13           5          1           *
September 25, 2016..............       24           9           3          1           *
September 25, 2017..............       16           5           2          *           *
September 25, 2018..............        6           2           1          *           *
September 25, 2019..............        0           0           0          0           0
Weighted Average Life (in
   years).......................        8.31        5.63        3.99       2.96        2.27



----------
* Less than 0.5%, but greater than zero.


                                      S-88



              PERCENTAGE OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE
            AT THE FOLLOWING PERCENTAGES OF THE PREPAYMENT ASSUMPTION



                                                           CLASS 4-A-1
                                      ----------------------------------------------------
                                                         PERCENTAGES OF
                                                      PREPAYMENT ASSUMPTION
                                      ----------------------------------------------------
        DISTRIBUTION DATE               0%         50%        100%       150%         200%
--------------------------------      ----        ----        ----       ----         ----

Initial.........................      100%        100%        100%       100%         100%
September 25, 2005..............       96          89          82         74           67
September 25, 2006..............       91          77          65         53           42
September 25, 2007..............       86          67          51         37           26
September 25, 2008..............       81          58          39         25           15
September 25, 2009..............       76          49          30         17            8
September 25, 2010..............       70          41          23         11            5
September 25, 2011..............       63          35          17          8            2
September 25, 2012..............       57          28          13          5            1
September 25, 2013..............       50          23           9          3            1
September 25, 2014..............       42          18           7          2            *
September 25, 2015..............       34          13           5          1            *
September 25, 2016..............       25           9           3          1            *
September 25, 2017..............       16           5           2          *            *
September 25, 2018..............        6           2           *          *            *
September 25, 2019..............        0           0           0          0            0
Weighted Average Life (in
   years).......................        8.45        5.66        3.97       2.90         2.19


----------
* Less than 0.5%, but greater than zero.


                                      S-89



     PERCENTAGE OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE OR NOTIONAL AMOUNT
            AT THE FOLLOWING PERCENTAGES OF THE PREPAYMENT ASSUMPTION




                                      CLASS 5-A-1, CLASS 5-A-2, CLASS 5-A-3 AND CLASS 5-A-4
                                      ---------------------------------------------------
                                                         PERCENTAGES OF
                                                      PREPAYMENT ASSUMPTION
                                      ---------------------------------------------------
        DISTRIBUTION DATE               0%         50%        100%       150%        200%
--------------------------------      ----        ----        ----       ----        ----

Initial.........................      100%        100%        100%       100%        100%
September 25, 2005..............       98          88          78         68          58
September 25, 2006..............       97          76          57         40          24
September 25, 2007..............       95          65          40         19           3
September 25, 2008..............       93          54          25          4           0
September 25, 2009..............       91          45          14          0           0
September 25, 2010..............       89          38           8          0           0
September 25, 2011..............       88          33           3          0           0
September 25, 2012..............       86          29           2          0           0
September 25, 2013..............       84          25           1          0           0
September 25, 2014..............       82          23           1          0           0
September 25, 2015..............       79          20           1          0           0
September 25, 2016..............       77          18           *          0           0
September 25, 2017..............       74          16           0          0           0
September 25, 2018..............       71          14           0          0           0
September 25, 2019..............       68          13           0          0           0
September 25, 2020..............       65          11           0          0           0
September 25, 2021..............       62           9           0          0           0
September 25, 2022..............       58           7           0          0           0
September 25, 2023..............       54           4           0          0           0
September 25, 2024..............       50           2           0          0           0
September 25, 2025..............       46           0           0          0           0
September 25, 2026..............       41           0           0          0           0
September 25, 2027..............       36           0           0          0           0
September 25, 2028..............       31           0           0          0           0
September 25, 2029..............       26           0           0          0           0
September 25, 2030..............       20           0           0          0           0
September 25, 2031..............       11           0           0          0           0
September 25, 2032..............        2           0           0          0           0
September 25, 2033..............        0           0           0          0           0
Weighted Average Life (in
   years).......................       18.28        6.45        2.82       1.82        1.36


----------
* Less than 0.5%, but greater than zero.


                                      S-90



              PERCENTAGE OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE
            AT THE FOLLOWING PERCENTAGES OF THE PREPAYMENT ASSUMPTION



                                                           CLASS 5-A-5
                                      ---------------------------------------------------
                                                         PERCENTAGES OF
                                                      PREPAYMENT ASSUMPTION
                                      ---------------------------------------------------
        DISTRIBUTION DATE              0%          50%        100%       150%        200%
--------------------------------      ----        ----        ----       ----        ----

Initial.........................      100%        100%        100%       100%        100%
September 25, 2005..............      106         106         106        106         106
September 25, 2006..............      112         112         112        112         112
September 25, 2007..............      119         119         119        119         119
September 25, 2008..............      126         126         126        126           0
September 25, 2009..............      133         133         133          0           0
September 25, 2010..............      141         141         141          0           0
September 25, 2011..............      149         149         149          0           0
September 25, 2012..............      158         158         158          0           0
September 25, 2013..............      168         168         168          0           0
September 25, 2014..............      177         177         177          0           0
September 25, 2015..............      188         188         188          0           0
September 25, 2016..............      199         199         199          0           0
September 25, 2017..............      211         211         208          0           0
September 25, 2018..............      223         223         206          0           0
September 25, 2019..............      236         236         163          0           0
September 25, 2020..............      250         250         128          0           0
September 25, 2021..............      265         265         100          0           0
September 25, 2022..............      281         281          77          0           0
September 25, 2023..............      297         297          59          0           0
September 25, 2024..............      315         315          45          0           0
September 25, 2025..............      334         327          34          0           0
September 25, 2026..............      353         271          26          0           0
September 25, 2027..............      374         221          19          0           0
September 25, 2028..............      396         176          13          0           0
September 25, 2029..............      420         136           9          0           0
September 25, 2030..............      444         100           6          0           0
September 25, 2031..............      471          68           4          0           0
September 25, 2032..............      498          40           2          0           0
September 25, 2033..............      241          15           1          0           0
September 25, 2034..............        0           0           0          0           0
Weighted Average Life (in
   years).......................       28.99       24.60       17.8        4.55        3.32



                                      S-91


              PERCENTAGE OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE
            AT THE FOLLOWING PERCENTAGES OF THE PREPAYMENT ASSUMPTION




                                                   CLASS 5-A-6 AND CLASS 5-A-7
                                      ---------------------------------------------------
                                                         PERCENTAGES OF
                                                      PREPAYMENT ASSUMPTION
                                      ---------------------------------------------------
        DISTRIBUTION DATE              0%          50%        100%       150%        200%
--------------------------------      ----        ----        ----       ----        ----

Initial.........................      100%        100%        100%       100%        100%
September 25, 2005..............      100         100         100        100         100
September 25, 2006..............      100         100         100        100         100
September 25, 2007..............      100         100         100        100         100
September 25, 2008..............      100         100         100        100          71
September 25, 2009..............      100         100         100         88          38
September 25, 2010..............       98          94          89         60          19
September 25, 2011..............       95          87          77         40           9
September 25, 2012..............       93          77          61         27           4
September 25, 2013..............       90          67          45         19           2
September 25, 2014..............       87          55          32         14           1
September 25, 2015..............       84          45          21         10           1
September 25, 2016..............       80          35          12          7           *
September 25, 2017..............       76          26           5          5           *
September 25, 2018..............       72          19           0          3           *
September 25, 2019..............       68          12           0          2           *
September 25, 2020..............       63           5           0          2           *
September 25, 2021..............       59           0           0          1           *
September 25, 2022..............       53           0           0          1           *
September 25, 2023..............       48           0           0          1           *
September 25, 2024..............       42           0           0          *           *
September 25, 2025..............       36           0           0          *           *
September 25, 2026..............       29           0           0          *           *
September 25, 2027..............       22           0           0          *           *
September 25, 2028..............       15           0           0          *           *
September 25, 2029..............        7           0           0          *           *
September 25, 2030..............        0           0           0          *           *
September 25, 2031..............        0           0           0          *           *
September 25, 2032..............        0           0           0          *           *
September 25, 2033..............        0           0           0          *           *
September 25, 2034..............        0           0           0          0           0
Weighted Average Life (in
   years).......................       17.72       10.73        8.95       7.35        5.01


----------
* Less than 0.5%, but greater than zero.


                                      S-92



                     PERCENTAGE OF ORIGINAL NOTIONAL AMOUNT
            AT THE FOLLOWING PERCENTAGES OF THE PREPAYMENT ASSUMPTION




                                                          CLASS 15-AX-1
                                      ---------------------------------------------------
                                                         PERCENTAGES OF
                                                      PREPAYMENT ASSUMPTION
                                      ---------------------------------------------------
        DISTRIBUTION DATE              0%          50%        100%       150%        200%
--------------------------------      ----        ----        ----       ----        ----

Initial.........................      100%        100%        100%       100%        100%
September 25, 2005..............       95          89          82         76          69
September 25, 2006..............       90          78          66         55          45
September 25, 2007..............       85          67          52         39          29
September 25, 2008..............       80          58          41         28          18
September 25, 2009..............       74          49          32         20          12
September 25, 2010..............       68          42          25         14           7
September 25, 2011..............       62          35          19          9           4
September 25, 2012..............       55          29          14          6           3
September 25, 2013..............       48          23          10          4           2
September 25, 2014..............       40          18           7          3           1
September 25, 2015..............       33          13           5          2           1
September 25, 2016..............       24           9           3          1           *
September 25, 2017..............       16           5           2          *           *
September 25, 2018..............        6           2           1          *           *
September 25, 2019..............        0           0           0          0           0
Weighted Average Life (in
   years).......................        8.29        5.69        4.10       3.09        2.42


----------
* Less than 0.5%, but greater than zero.


                                      S-93



                     PERCENTAGE OF ORIGINAL NOTIONAL AMOUNT
            AT THE FOLLOWING PERCENTAGES OF THE PREPAYMENT ASSUMPTION




                                                          CLASS 15-AX-2
                                      ---------------------------------------------------
                                                         PERCENTAGES OF
                                                      PREPAYMENT ASSUMPTION
                                      ---------------------------------------------------
        DISTRIBUTION DATE               0%         50%        100%       150%        200%
--------------------------------      ----        ----        ----       ----        ----

Initial.........................      100%        100%        100%       100%        100%
September 25, 2005..............       96          89          82         76          69
September 25, 2006..............       91          78          66         55          45
September 25, 2007..............       86          68          52         39          29
September 25, 2008..............       81          59          41         28          18
September 25, 2009..............       75          50          32         20          12
September 25, 2010..............       70          43          25         14           7
September 25, 2011..............       63          36          19         10           5
September 25, 2012..............       57          29          14          7           3
September 25, 2013..............       50          24          11          4           2
September 25, 2014..............       42          18           8          3           1
September 25, 2015..............       34          14           5          2           1
September 25, 2016..............       25           9           3          1           *
September 25, 2017..............       16           6           2          *           *
September 25, 2018..............        6           2           1          *           *
September 25, 2019..............        0           0           0          0           0
Weighted Average Life (in
   years).......................        8.44        5.77        4.14       3.10        2.42


----------
* Less than 0.5%, but greater than zero.

                                      S-94




                     PERCENTAGE OF ORIGINAL NOTIONAL AMOUNT
            AT THE FOLLOWING PERCENTAGES OF THE PREPAYMENT ASSUMPTION



                                                           CLASS 30-AX
                                      ---------------------------------------------------
                                                         PERCENTAGES OF
                                                      PREPAYMENT ASSUMPTION
                                      ---------------------------------------------------
        DISTRIBUTION DATE               0%         50%        100%       150%        200%
--------------------------------      ----        ----        ----       ----        ----

Initial.........................      100%        100%        100%       100%        100%
September 25, 2005..............       99          91          84         76          69
September 25, 2006..............       98          82          68         55          43
September 25, 2007..............       97          74          55         40          28
September 25, 2008..............       96          67          45         29          17
September 25, 2009..............       94          60          36         21          11
September 25, 2010..............       93          54          29         15           7
September 25, 2011..............       91          48          24         11           4
September 25, 2012..............       90          43          19          8           3
September 25, 2013..............       88          38          15          5           2
September 25, 2014..............       86          34          12          4           1
September 25, 2015..............       84          30          10          3           1
September 25, 2016..............       82          27           8          2           *
September 25, 2017..............       79          24           6          1           *
September 25, 2018..............       76          21           5          1           *
September 25, 2019..............       73          18           4          1           *
September 25, 2020..............       70          16           3          *           *
September 25, 2021..............       67          14           2          *           *
September 25, 2022..............       63          12           2          *           *
September 25, 2023..............       59          10           1          *           *
September 25, 2024..............       55           9           1          *           *
September 25, 2025..............       51           7           1          *           *
September 25, 2026..............       47           6           1          *           *
September 25, 2027..............       42           5           *          *           *
September 25, 2028..............       37           4           *          *           *
September 25, 2029..............       31           3           *          *           *
September 25, 2030..............       25           2           *          *           *
September 25, 2031..............       19           2           *          *           *
September 25, 2032..............       12           1           *          *           *
September 25, 2033..............        5           *           *          *           *
September 25, 2034..............        0           0           0          0           0
Weighted Average Life (in
   years).......................       19.63        8.52        4.85       3.24        2.38


----------
* Less than 0.5%, but greater than zero.

                                      S-95


              PERCENTAGE OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE
            AT THE FOLLOWING PERCENTAGES OF THE PREPAYMENT ASSUMPTION




                                                           CLASS 15-PO
                                      ---------------------------------------------------
                                                         PERCENTAGES OF
                                                      PREPAYMENT ASSUMPTION
                                      ---------------------------------------------------
        DISTRIBUTION DATE              0%          50%        100%       150%        200%
--------------------------------      ----        ----        ----       ----        ----

Initial.........................      100%        100%        100%       100%        100%
September 25, 2005..............       95          89          82         76          69
September 25, 2006..............       91          78          66         55          45
September 25, 2007..............       86          67          52         39          29
September 25, 2008..............       80          58          41         28          18
September 25, 2009..............       74          50          32         20          12
September 25, 2010..............       68          42          25         14           7
September 25, 2011..............       62          35          19         10           4
September 25, 2012..............       55          29          14          6           3
September 25, 2013..............       48          23          10          4           2
September 25, 2014..............       41          18           7          3           1
September 25, 2015..............       33          13           5          2           1
September 25, 2016..............       24           9           3          1           *
September 25, 2017..............       16           5           2          *           *
September 25, 2018..............        6           2           1          *           *
September 25, 2019..............        0           0           0          0           0
Weighted Average Life (in
   years).......................        8.33        5.71        4.11       3.09        2.42


----------
*    Less than 0.5%, but greater than zero


                                      S-96




              PERCENTAGE OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE
            AT THE FOLLOWING PERCENTAGES OF THE PREPAYMENT ASSUMPTION




                                                           CLASS 30-PO
                                      ---------------------------------------------------
                                                         PERCENTAGES OF
                                                      PREPAYMENT ASSUMPTION
                                      ---------------------------------------------------
        DISTRIBUTION DATE              0%          50%        100%       150%        200%
--------------------------------      ----        ----        ----       ----        ----

Initial.........................      100%        100%        100%       100%        100%
September 25, 2005..............       99          91          84         76          68
September 25, 2006..............       98          82          68         55          43
September 25, 2007..............       96          74          55         39          27
September 25, 2008..............       95          66          44         28          17
September 25, 2009..............       93          59          36         20          11
September 25, 2010..............       92          53          29         15           7
September 25, 2011..............       90          47          23         10           4
September 25, 2012..............       88          42          19          7           3
September 25, 2013..............       86          37          15          5           2
September 25, 2014..............       84          33          12          4           1
September 25, 2015..............       82          29          10          3           1
September 25, 2016..............       79          26           8          2           *
September 25, 2017..............       77          23           6          1           *
September 25, 2018..............       74          20           5          1           *
September 25, 2019..............       71          17           4          1           *
September 25, 2020..............       68          15           3          *           *
September 25, 2021..............       64          13           2          *           *
September 25, 2022..............       61          11           2          *           *
September 25, 2023..............       57          10           1          *           *
September 25, 2024..............       53           8           1          *           *
September 25, 2025..............       49           7           1          *           *
September 25, 2026..............       45           6           1          *           *
September 25, 2027..............       40           5           *          *           *
September 25, 2028..............       35           4           *          *           *
September 25, 2029..............       30           3           *          *           *
September 25, 2030..............       24           2           *          *           *
September 25, 2031..............       18           1           *          *           *
September 25, 2032..............       12           1           *          *           *
September 25, 2033..............        5           *           *          *           *
September 25, 2034..............        0           0           0          0           0
Weighted Average Life (in
   years).......................       19.16        8.38        4.79       3.21        2.36

----------
*    Less than 0.5%, but greater than zero


                                      S-97



              PERCENTAGE OF ORIGINAL CERTIFICATE PRINCIPAL BALANCE
            AT THE FOLLOWING PERCENTAGES OF THE PREPAYMENT ASSUMPTION




                                                CLASS B-1, CLASS B-2 AND CLASS B-3
                                       ---------------------------------------------------
                                                          PERCENTAGES OF
                                                      PREPAYMENT ASSUMPTION
                                       ---------------------------------------------------
         DISTRIBUTION DATE              0%          50%       100%        150%        200%
--------------------------------       ----        ----       ----        ----        ----

Initial.........................       100%        100%       100%        100%        100%
September 25, 2005..............        97          97         97          97          97
September 25, 2006..............        93          93         93          93          93
September 25, 2007..............        89          89         89          89          89
September 25, 2008..............        85          85         85          85          85
September 25, 2009..............        81          81         81          81          81
September 25, 2010..............        76          74         72          70          68
September 25, 2011..............        71          67         63          58          54
September 25, 2012..............        66          59         52          46          39
September 25, 2013..............        61          51         41          33          26
September 25, 2014..............        55          42         31          22          15
September 25, 2015..............        49          34         23          15           9
September 25, 2016..............        43          27         16           9           5
September 25, 2017..............        36          21         11           6           3
September 25, 2018..............        29          15          7           3           1
September 25, 2019..............        23          11          5           2           1
September 25, 2020..............        22           9          4           1           *
September 25, 2021..............        21           8          3           1           *
September 25, 2022..............        20           7          2           1           *
September 25, 2023..............        19           6          2           *           *
September 25, 2024..............        18           5          1           *           *
September 25, 2025..............        16           4          1           *           *
September 25, 2026..............        15           4          1           *           *
September 25, 2027..............        13           3          1           *           *
September 25, 2028..............        12           2          *           *           *
September 25, 2029..............        10           2          *           *           *
September 25, 2030..............         8           1          *           *           *
September 25, 2031..............         6           1          *           *           *
September 25, 2032..............         4           1          *           *           *
September 25, 2033..............         2           *          *           *           *
September 25, 2034..............         0           0          0           0           0
Weighted Average Life (in
   years).......................        11.92        9.51       8.33        7.64        7.17


----------
* Less than 0.5%, but greater than zero.



                                      S-98


      The above tables have been prepared based on the enumerated modeling
assumptions and should be read in conjunction with these modeling assumptions.
The modeling assumptions include the characteristics and performance of the
Assumed Loans, which may differ from the actual characteristics and performance
of the Loans.

           YIELD ON THE RESIDUAL CERTIFICATES

      The after-tax rate of return to the holders of the Residual Certificates
will reflect their pre-tax rates of return (which may be zero), reduced by the
taxes required to be paid with respect to such certificates. If you hold a
Residual Certificate, you may have tax liabilities during the early years of the
related REMIC's term that substantially exceed any distributions payable thereon
during any such period. In addition, the present value of the tax liabilities
with respect to your Residual Certificate may substantially exceed the present
value of any distributions on your Residual Certificate and of any tax benefits
that may arise with respect to it. ACCORDINGLY, THE AFTER-TAX RATE OF RETURN ON
THE RESIDUAL CERTIFICATES MAY BE NEGATIVE OR MAY BE OTHERWISE SIGNIFICANTLY
ADVERSELY AFFECTED. The timing and amount of taxable income attributable to the
Residual Certificates will depend on, among other things, the timing and amounts
of prepayments and losses experienced with respect to the Loans. If you own a
Residual Certificate, you should consult your tax advisors regarding the effect
of taxes and the receipt of any payments made in connection with the purchase of
the Residual Certificate on your after-tax rate of return. See "Federal Income
Tax Consequences" in this prospectus supplement and in the prospectus.

                       THE POOLING AND SERVICING AGREEMENT

GENERAL

   The certificates will be issued pursuant to the Pooling and Servicing
Agreement, among the depositor, the transferor, the master servicer, the trust
administrator, the custodians and the trustee. The Pooling and Servicing
Agreement requires the master servicer to enforce the servicers' obligations to
service the Loans pursuant to the related Servicing Agreements. The trust
created under the Pooling and Servicing Agreement will consist generally of:

            (1) all of the depositor's right, title and interest in the Loans,
      the related Mortgage Notes, mortgages and other related documents;

            (2) all payments on or collections in respect of the Loans due after
      the Cut-Off Date, together with any proceeds thereof; and

            (3) any Mortgaged Properties acquired on behalf of
      certificateholders by foreclosure or by deed in lieu of foreclosure, and
      any revenues received from those properties.

      The certificates will be transferable and exchangeable at the corporate
trust office of the trust administrator.

                                      S-99


ASSIGNMENT OF THE LOANS

      On the Closing Date the depositor will transfer to the trust all of its
right, title and interest in and to each Loan, the related Mortgage Notes,
mortgages and other related documents, including all scheduled payments with
respect to each Loan due after the Cut-Off Date and all unscheduled payments
with respect to each Loan received after the Cut-Off Date. The trust
administrator, concurrently with this transfer, will deliver the certificates to
the depositor. Each Loan transferred to the trust will be identified on a
mortgage loan schedule delivered to the trustee pursuant to the Pooling and
Servicing Agreement. The mortgage loan schedule will include information such as
the principal balance of each Loan as of the Cut-Off Date, its Mortgage Interest
Rate as well as other information.

      The Pooling and Servicing Agreement will require that, on or prior to the
Closing Date, the depositor will deliver or cause to be delivered to the
applicable custodian, on behalf of the trustee, the Mortgage Notes endorsed to
the trustee on behalf of the certificateholders or in blank (or in the case of
permanently lost or destroyed Mortgage Notes, lost note affidavits), the
mortgages and other related documents.

      Assignments of the Loans to the trustee (or its nominee) will be recorded
by the applicable servicer in the appropriate public office for real property
records, except (i) in states where, in the opinion of counsel addressed to the
trustee, such recording is not required to protect the trustee's interests in
the Loan against the claim of any subsequent transferee or any successor to or
creditor of the depositor or the transferor, (ii) in states where recordation is
not required by either Rating Agency to obtain the initial ratings on the
certificates described under "Ratings" in this prospectus supplement or (iii)
with respect to any mortgage which has been recorded in the name of Mortgage
Electronic Registration Systems, Inc. ("MERS") or its designee, no mortgage
assignment in favor of the trustee will be required to be prepared or delivered.
Instead, pursuant to each Servicing Agreement the applicable servicer will be
required to take all actions as are necessary to cause the trustee to be shown
as the owner of the related Loan on the records of MERS for purposes of the
system of recording transfers of beneficial ownership of mortgages maintained by
MERS.

           Pursuant to the Pooling and Servicing Agreement, the transferor will
make, among others, the following representations and warranties with respect to
each Loan as of the Closing Date:

            (1) the information set forth in the mortgage loan schedule was true
and correct in all material respects at the date or dates respecting which such
information is furnished as specified in the mortgage loan schedule;

            (2) immediately prior to the transfer and assignment of the Loans to
the depositor, the transferor was the sole owner and holder of the Loan free and
clear of any and all liens, pledges, charges or security interests of any nature
and has full right and authority to sell and assign the same;

            (3) the Mortgaged Property is undamaged by water, fire, earthquake,
earth movement other than earthquake, windstorm, flood, tornado or similar
casualty (excluding casualty from the presence of hazardous wastes or hazardous
substances, as to which the transferor makes no

                                     S-100


representations), so as to affect adversely the value of the Mortgaged Property
as security for the Loan or the use for which the premises were intended and to
the best of the transferor's knowledge, there is no proceeding pending or
threatened for the total or partial condemnation of the Mortgaged Property;

            (4) the Loan meets, or is exempt from, applicable state or federal
laws, regulations and other requirements, pertaining to usury, and the Loan is
not usurious;

            (5) the Mortgage Note, the related mortgage and other agreements
executed in connection therewith are genuine, and each is the legal, valid and
binding obligation of the maker thereof, enforceable in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law); and, to the best
of the transferor's knowledge, all parties to the Mortgage Note and the mortgage
had legal capacity to execute the Mortgage Note and the mortgage and each
Mortgage Note and mortgage has been duly and properly executed by the mortgagor;

            (6) each Loan at the time it was made complied in all material
respects with applicable federal, state and local laws, including, without
limitation, all applicable predatory and abusive lending laws;

            (7) no Mortgage Note or mortgage is subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
nor will the operation of any of the terms of the Mortgage Note or mortgage, or
the exercise of any right thereunder, render the Mortgage Note or mortgage
unenforceable, in whole or in part, or subject it to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;

            (8) each mortgage contains customary and enforceable provisions such
as to render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security,
including realization by judicial foreclosure (subject to any limitation arising
from any bankruptcy, insolvency or other law for the relief of debtors), and
there is no homestead or other exemption available to the mortgagor which would
interfere with such right of foreclosure; and

            (9) the Loan was originated by a mortgagee approved by the Secretary
of Housing and Urban Development pursuant to Sections 203 and 211 of the
National Housing Act, as amended, a savings and loan association, a savings
bank, a commercial bank, credit union, insurance company or similar institution
which is supervised and examined by a federal or state authority.

      Upon discovery of a breach of any such representation and warranty which
materially and adversely affects the interests of the certificateholders in the
related Loan and related loan documents, the transferor will have a period of 90
days after the earlier of discovery or notice of the breach to effect a cure. If
the breach cannot be cured within the 90-day period (subject to certain time
extensions), the transferor will be obligated to purchase the Loan at the
Purchase

                                     S-101


Price or substitute an eligible substitute loan or loans for the affected Loan.
The Purchase Price will be required to be deposited in the Collection Account on
or prior to the date the master servicer is required to remit amounts on deposit
in the Collection Account to the trust administrator for deposit into the
Distribution Account in the month after the purchase obligation arises. The
obligation of the transferor to purchase or substitute for a defective Loan is
the sole remedy regarding breaches of representations and warranties relating to
the Loans available to the trustee or the certificateholders.

      In connection with the substitution of a Loan, the transferor will be
required to remit any Substitution Adjustment Amount, if applicable.

COLLECTION AND OTHER SERVICING PROCEDURES

      Each servicer will act in accordance with the servicing standard set forth
in the applicable Servicing Agreement to ensure that all payments required under
the terms and provisions of the Loans that it is servicing are collected, and
will be required to follow collection procedures comparable to the collection
procedures of mortgage lenders servicing mortgage loans for its own account, to
the extent such procedures are consistent with the applicable Servicing
Agreement and any primary mortgage insurance policy. Consistent with the
foregoing, each servicer may in its discretion waive, modify, or vary or permit
to be waived, modified or varied, any term of any Loan that it is servicing,
subject to the restrictions set forth in the applicable Servicing Agreement.

      If a Mortgaged Property has been or is about to be conveyed by the
borrower and the applicable servicer has knowledge thereof, that servicer will
be required to accelerate the maturity of the Loan, to the extent permitted by
the terms of the related Mortgage Note and applicable law. If it reasonably
believes that the due-on-sale clause cannot be enforced under applicable law,
the applicable servicer may enter into an assumption agreement with the person
to whom such property has been or is about to be conveyed, pursuant to which
such person becomes liable under the Mortgage Note and the borrower, to the
extent permitted by applicable law, remains liable thereon. Generally, the
servicers will retain any fee collected for entering into an assumption
agreement, as additional servicing compensation. In regard to circumstances in
which the servicers may be unable to enforce due-on-sale clauses, see "Certain
Legal Aspects of Residential Loans--Enforceability of Certain Provisions" in the
prospectus.

      As provided in the Servicing Agreements, the servicers will be required to
establish and maintain one or more accounts (each, a "Servicing Account") into
which the servicers will deposit and retain all collections from the borrower
for the payment of taxes, assessments, insurance premiums, or comparable items
as agent of the borrower as provided in the Servicing Agreements. Each Servicing
Account and the investment of deposits in those accounts must comply with the
requirements of the Servicing Agreements and must meet the requirements of the
Rating Agencies. Withdrawals of such amounts from the Servicing Accounts may be
made only to remit funds to the master servicer, or the trust administrator, in
the case of WMMSC, on the applicable Servicer Remittance Date, to effect timely
payment of taxes, assessments, insurance premiums, or comparable items, to
reimburse the master servicer or servicer for any advances made with respect to
such items, to refund to any borrower any sums as may be determined to be
overages, to pay interest, if required, to borrowers on balances in the
Servicing

                                     S-102


Accounts, to pay earnings not required to be paid to borrowers to the servicers,
or to clear and terminate the Servicing Accounts on, or at any time after, the
termination of the applicable Servicing Agreements.

      The servicers will be required to maintain errors and omissions insurance
and fidelity bonds in certain specified amounts.

HAZARD INSURANCE

      Each servicer will be required to maintain and keep, or cause to be
maintained and kept, with respect to each Loan that it is servicing, other than
a loan secured by a condominium unit, in full force and effect for each
Mortgaged Property a hazard insurance policy equal to at least the lesser of the
unpaid principal balance of the Loan or the maximum insurable value of the
improvements securing such Loan and containing a standard mortgagee clause;
provided, however, that the amount of the hazard insurance may not be less than
the amount necessary to prevent loss due to the application of any co-insurance
provision of the related policy. Any amounts collected by the servicers under
any such hazard insurance policy (other than amounts to be applied to the
restoration or repair of the Mortgaged Property or amounts released to the
borrower in accordance with normal servicing procedures) shall be deposited in a
Protected Account (as defined below). Any cost incurred in maintaining any such
hazard insurance policy shall not be added to the amount owing under the Loan
for the purpose of calculating monthly distributions to certificateholders,
notwithstanding that the terms of the Loan so permit. Such costs shall be
recoverable by the related servicer out of related late payments by the borrower
or out of insurance proceeds or liquidation proceeds or any other amounts in the
related Protected Account. The right of the servicer to reimbursement for such
costs incurred will be prior to the right of the master servicer to receive any
related insurance proceeds or liquidation proceeds or any other amounts in the
related Protected Account.

      In general, the standard form of fire and extended coverage policy covers
physical damage to or destruction of the improvements on the property by fire,
lightning, explosion, smoke, windstorm and hail, riot, strike and civil
commotion, subject to the conditions and exclusions particularized in each
policy. Although the policies relating to the Loans will be underwritten by
different insurers and therefore will not contain identical terms and
conditions, the basic terms thereof are dictated by state law. Such policies
typically do not cover any physical damage resulting from the following: war,
revolution, governmental actions, floods and other water-related causes, earth
movement (including earthquakes, landslides and mud flows), nuclear reactions,
wet or dry rot, vermin, rodents, insects or domestic animals, theft and, in
certain cases, vandalism and malicious mischief. The foregoing list is merely
indicative of certain kinds of uninsured risks and is not intended to be
all-inclusive.

      Hazard insurance policies covering properties similar to the Mortgaged
Properties typically contain a clause which in effect requires the insured at
all times to carry insurance of a specified percentage (generally 80% to 90%) of
the full replacement value of the improvements on the property in order to
recover the full amount of any partial loss. If the insured's coverage falls
below this specified percentage, such clause typically provides that the
insurer's liability in the event of partial loss does not exceed the greater of
(i) the replacement cost of the improvements

                                     S-103


less physical depreciation, or (ii) such proportion of the loss as the amount of
insurance carried bears to the specified percentage of the full replacement cost
of such improvements.

      Since the amount of hazard insurance to be maintained on the improvements
securing the Loans may decline as the principal balances owing thereon 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 restore fully the damaged property.

      If the Mortgaged Property securing a Loan is located at the time of
origination in a federally designated flood area, the applicable servicer
generally will be required to cause to be maintained with respect to such Loan
flood insurance to the extent available and in accordance with industry
practices. Such flood insurance generally will be in an amount equal to the
lesser of (i) the unpaid principal balance of the related Loan and (ii) the
minimum amount required under the terms of coverage to compensate for any damage
or loss on a replacement cost basis, but not more than the maximum amount of
such insurance available for the related Mortgaged Property under either the
regular or emergency programs of the National Flood Insurance Program (assuming
that the area in which such Mortgaged Property is located is participating in
such program).

      The servicers, on behalf of the trustee and certificateholders, will be
required to present claims to the insurer under any applicable hazard or flood
insurance policy. As set forth above, all collections under such policies that
are not applied to the restoration or repair of the related Mortgaged Property
or released to the borrower in accordance with normal servicing procedures are
to be deposited in a Protected Account. The servicers are required to deposit in
a Protected Account the amount of any deductible under a blanket hazard
insurance policy.

REALIZATION UPON DEFAULTED LOANS

      Each servicer will be required to take such action as it deems to be in
the best interest of the trust with respect to defaulted Loans that it is
servicing and foreclose upon or otherwise comparably convert the ownership of
properties securing defaulted Loans as to which no satisfactory collection
arrangements can be made. To the extent set forth in the related Servicing
Agreement or any primary mortgage insurance policy, each servicer will service
the property acquired by the trust through foreclosure or deed-in-lieu of
foreclosure and liquidation of the related mortgaged property in accordance with
procedures that the servicer employs and exercises in servicing and
administering loans for its own account and which are in accordance with
mortgage servicing practices of mortgage lenders servicing loans of the same
type as the applicable Loans.

      Since insurance proceeds cannot exceed deficiency claims and certain
expenses incurred by the servicers, no insurance payments will result in a
recovery to certificateholders which exceeds the principal balance of the
defaulted Loan together with accrued interest thereon at its Mortgage Interest
Rate.

SERVICING AND MASTER SERVICING COMPENSATION AND PAYMENT OF EXPENSES

      The master servicer will be entitled to compensation for its activities
under the Pooling and Servicing Agreement equal to the investment earnings on
amounts on deposit in the Collection

                                     S-104


Account and the Distribution Account and, with respect to approximately 2.04% of
the Loans (by Cut-Off Date Pool Balance for all of the Loan Groups), an
additional fee (the "Master Servicing Fee") equal to 0.030% per annum (the
"Master Servicing Fee Rate" for such Loans), in each case multiplied by the
Scheduled Principal Balance of those Loans as of the due date in the month
preceding the month in which the related Distribution Date occurs. Each of the
servicers will be entitled to receive a fee (the "Servicing Fee") as
compensation for its activities under the related Servicing Agreement equal to
the Servicing Fee Rate multiplied by the Scheduled Principal Balance of each
Loan it services as of the due date in the month preceding the month in which
the related Distribution Date occurs. The "Servicing Fee Rate" for each Loan
will be approximately 0.200% and 0.375% per annum and the weighted average
Servicing Fee Rate will be approximately 0.276% per annum. However, Prepayment
Interest Shortfalls on the Loans in any Prepayment Period will be required to be
offset by the related servicer (or the master servicer to the extent the related
servicer fails to offset) on the related Distribution Date to the extent of
Compensating Interest payments required to be made as described in this
prospectus supplement.

      In addition to the primary compensation described above, the applicable
servicer generally will retain all prepayment premiums, penalties and charges
and, if any (and to the extent not retained by the applicable servicer,
prepayment premiums, penalties and charges will be distributed to the holders of
the Class P certificates or paid to the related servicer), assumption fees, tax
service fees, fees for statement of account payoff and late payment charges, all
to the extent collected from borrowers.

      The applicable servicer will be required to pay all related expenses
incurred in connection with its servicing responsibilities (subject to limited
reimbursement as described in this prospectus supplement).

PROTECTED ACCOUNTS

      Each servicer will be required to establish and maintain one or more
accounts (the "Protected Accounts") into which it will deposit daily all
collections of principal and interest on any Loans that it is servicing,
including principal prepayments, insurance proceeds, liquidation proceeds, the
Purchase Price for any Loans repurchased, and advances made from the servicer's
own funds (less the applicable Servicing Fee). All Protected Accounts and
amounts at any time credited to them must comply with the requirements of the
applicable Servicing Agreements and must meet the requirements of the Rating
Agencies. The Protected Account established and maintained by WMMSC may be
commingled with similar investment accounts maintained by such servicer.

COLLECTION ACCOUNT AND DISTRIBUTION ACCOUNT

      The master servicer will be required to establish and maintain an account
(the "Collection Account") into which it will deposit amounts received from each
servicer (other than WMMSC) and advances (to the extent required to make
advances) made from the master servicer's own funds. The Collection Account may
be deemed to be a subaccount of the Distribution Account, and both the
Collection Account and amounts at any time credited to it must comply with the
requirements of the Pooling and Servicing Agreement and must meet the
requirements of the Rating Agencies. The master servicer will be required to
deposit in the Collection Account at

                                     S-105


the close of business on the related Servicer Remittance Date, as received, the
following amounts:

      (1) With respect to the Loans, all amounts received from the servicers
(other than WMMSC) as of the close of business on the related Servicer
Remittance Date including:

            (a) all payments on account of principal of the Loans, including
            unscheduled principal prepayments on the Loans;

            (b) all payments on account of interest on the Loans adjusted to the
            Net Mortgage Rate;


            (c) all net insurance proceeds and net proceeds from the liquidation
            of Loans, including condemnation proceeds, to the extent those
            proceeds are not to be applied to the restoration or repair of the
            related Mortgaged Property or released to the related borrower in
            accordance with the applicable servicer's normal servicing
            procedures;

            (d) any amounts deposited in the Collection Account by the master
            servicer in connection with any losses on the investments permitted
            by the Pooling and Servicing Agreement;

            (e) any amounts deposited in the Collection Account by the master
            servicer in connection with a deductible clause in any blanket
            hazard insurance policy;

            (f) all proceeds of a primary mortgage guaranty insurance policy;
            and

            (g) the net monthly rental income from the REO Properties;

      (2) Advance amounts;

      (3) any amounts payable in connection with the purchase of any Loan and
any Substitution Adjustment Amounts; and

      (4) Compensating Interest payments.

      On the business day prior to each Distribution Date, the master servicer
will withdraw or cause to be withdrawn from the Collection Account and will be
required to remit to the trust administrator for deposit in the Distribution
Account the Available Funds for such Distribution Date (except the portion of
Available Funds for such Distribution Date that WMMSC will be required to remit
directly to the trust administrator for deposit in the Distribution Account).

      As compensation for its master servicing obligations, the master servicer
will be entitled to receive all investment earnings on amounts in the Collection
Account and the Distribution Account.

      The trust administrator will be required to establish and maintain in the
name of the trustee, for the benefit of the certificateholders, an account (the
"Distribution Account"), into which will

                                     S-106


be deposited on the day prior to each Distribution Date, amounts withdrawn from
the Collection Account, and amounts remitted to the trust administrator by
WMMSC, for distribution to certificateholders on a Distribution Date, any
amounts the master servicer must deposit in connection with any losses on the
investments permitted by the Pooling and Servicing Agreement and any other
amounts required to be deposited under the Pooling and Servicing Agreement. The
Distribution Account will be an account meeting the eligibility requirements of
the Pooling and Servicing Agreement. Amounts on deposit in the Distribution
Account may be invested for the benefit and in accordance with the written
direction of the master servicer (or, with respect to amounts remitted by WMMSC,
at the written direction of WMMSC) in the investments permitted by the Pooling
and Servicing Agreement maturing on or before the business day prior to the
related Distribution Date unless the investments are invested in obligations of,
or obligations managed by, the institution that maintains the Distribution
Account, in which case the investments may mature on the related Distribution
Date.

CERTAIN MATTERS REGARDING THE MASTER SERVICER

      The Pooling and Servicing Agreement will generally provide that the master
servicer may resign from its obligations and duties thereunder upon appointment
of a successor and receipt by the trustee of confirmation from each Rating
Agency that such resignation and appointment will not result in a downgrade of
the ratings of any of the certificates or upon determination, evidenced by an
opinion of counsel to such effect, that the performance of such duties is no
longer permissible under applicable law. No such resignation will become
effective until the trustee or a successor master servicer has assumed the
obligations and duties of the master servicer to the extent required under the
Pooling and Servicing Agreement. The master servicer also has the right to
assign, sell or transfer its rights and delegate its duties and obligations
under the Pooling and Servicing Agreement; provided that the purchaser or
transferee accepting such assignment, sale, transfer or delegation is qualified
to service mortgage loans for Fannie Mae or Freddie Mac and shall satisfy the
other requirements listed in the Pooling and Servicing Agreement with respect to
the qualifications of such purchaser or transferee.

      The Pooling and Servicing Agreement will generally provide that neither
the master servicer nor any of its directors, officers, employees and agents
shall be under any liability to the trust for taking any action or for
refraining from taking any action in good faith pursuant to the Pooling and
Servicing Agreement, or for errors in judgment made in good faith; provided,
however, that neither the master servicer nor any such person will be protected
against any breach of warranties or representations made in the Pooling and
Servicing Agreement or any liability which would otherwise be imposed by reason
of willful misfeasance, bad faith or negligence in the performance of the master
servicer's duties or by reason of reckless disregard of the master servicer's
obligations and duties thereunder. In addition, the Pooling and Servicing
Agreement will provide that the master servicer is under no obligation to appear
in, prosecute or defend any legal action which is not incidental to its duties
and which in its opinion may involve it in any expense or liability. The master
servicer may, however, undertake any such action which it may deem necessary or
desirable in respect of the Pooling and Servicing Agreement and the rights and
duties of the parties to it. In such event, the legal expenses and costs of such
action and any liability resulting therefrom will be expenses, costs and
liabilities of the trust, and the master servicer will be entitled to be
reimbursed therefor from the trust.

                                     S-107


      The Servicing Agreements generally provide similar protections to the
servicers as are provided to the master servicer under the Pooling and Servicing
Agreement described above.

      Any corporation into which the master servicer may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the master servicer is a party, or any corporation
succeeding to the business of the master servicer will be the successor of the
master servicer under the Pooling and Servicing Agreement, provided that any
such successor to the master servicer shall be qualified to service loans on
behalf of Fannie Mae or Freddie Mac.

      The Pooling and Servicing Agreement will provide that the master servicer,
the trust administrator, the depositor, the transferor, the custodians and any
director, officer, employee or agent of the master servicer, the trust
administrator, the depositor, either custodian or the transferor will be
indemnified by the trust and will be held harmless against any loss, liability
or expense (i) that is incurred in connection with any audit, controversy or
judicial proceeding relating to a governmental taxing authority, (ii) that is
incurred in connection with the performance of their respective duties and
obligations and exercise of rights under the Pooling and Servicing Agreement or
(iii) that is incurred in connection with any legal action relating to the
Pooling and Servicing Agreement or the certificates. The trust shall fulfill
such obligation from amounts on deposit in the Collection Account.

EVENTS OF SERVICING TERMINATION

      An "Event of Servicing Termination" with respect to the master servicer
under the Pooling and Servicing Agreement will consist of (i) failure by the
master servicer to cause to be deposited in the Distribution Account amounts
required to be deposited by the master servicer pursuant to the Pooling and
Servicing Agreement, and such failure continues unremedied for one business day,
(ii) failure by the master servicer to observe or perform in any material
respect any other material covenants and agreements set forth in the Pooling and
Servicing Agreement to be performed by it that materially affects the rights of
certificateholders, and such failure continues unremedied for 60 days after the
date on which written notice of such failure has been given to the master
servicer, (iii) the entry against the master servicer of a decree or order by a
court or agency or supervisory authority having jurisdiction in the premises for
the appointment of a conservator, receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings, or for the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days, (iv) consent by the master servicer to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the master servicer or substantially all of its property, (v) admission by the
master servicer in writing of its inability to pay its debts generally as they
become due, filing of a petition to take advantage of any applicable insolvency
or reorganization statute, any assignment for the benefit of its creditors, or
voluntary suspension of payment of its obligations, or (vi) the assignment or
delegation by the master servicer of its duties or rights under the Pooling and
Servicing Agreement in contravention of the provisions in the Pooling and
Servicing Agreement permitting such assignment or delegation.

                                     S-108


      In each and every such case, so long as such Event of Servicing
Termination with respect to the master servicer shall not have been remedied,
the trustee may, and (i) at the written direction of the holders of certificates
aggregating ownership of not less than 25% of the voting rights described below
under "--Voting Rights," or (ii) if such Event of Servicing Termination is
related to a failure by the master servicer to make any Advance required to be
made by it pursuant to the terms of the Pooling and Servicing Agreement, the
trustee shall, in each case by notice in writing to the master servicer, with a
copy to the Rating Agencies, terminate all of the rights and obligations (but
not the liabilities accruing prior to the date of termination) of the master
servicer under the Pooling and Servicing Agreement and in and to the Loans
master serviced by the master servicer and the proceeds thereof. Upon the
receipt by the master servicer of such written notice, all authority and power
of the master servicer under the Pooling and Servicing Agreement, whether with
respect to the certificates, the Loans, the Servicing Agreements, or under any
other related agreements (but only to the extent that such other agreements
relate to the Loans) shall, subject to the provisions of the Pooling and
Servicing Agreement and to bankruptcy, insolvency or similar laws, if
applicable, automatically and without further action pass to and be vested in
the trustee.

      Upon receipt by the master servicer of a notice of termination or delivery
of an opinion of counsel to the trustee to the effect that the master servicer
is legally unable to act or to delegate its duties to a person which is legally
able to act, the trustee shall automatically become the successor in all
respects to the master servicer in its capacity under the Pooling and Servicing
Agreement and the transactions set forth or provided for in the Pooling and
Servicing Agreement and shall thereafter be subject to all the responsibilities,
duties, liabilities and limitations on liabilities placed on the master servicer
by the terms and provisions of the Pooling and Servicing Agreement; provided,
however, that the trustee (i) will be under no obligation to repurchase any
Loan; and (ii) will have no obligation whatsoever with respect to any liability
incurred by the prior master servicer. As compensation therefor, the trustee
shall be entitled to all funds relating to the Loans and all other compensation
which the master servicer would have been entitled to retain if the master
servicer had continued to act as such, except for those amounts due the master
servicer as reimbursement for advances previously made or expenses previously
incurred. Notwithstanding the above, the trustee may, if it is unwilling so to
act, or shall, if it is legally unable so to act or is requested in writing to
do so by holders of certificates aggregating not less than 25% of the voting
rights, appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution which is a Fannie Mae or Freddie
Mac approved seller/servicer (and which meets certain other requirements
provided in the Pooling and Servicing Agreement) as the successor to the master
servicer under the Pooling and Servicing Agreement in the assumption of all or
any part of the responsibilities, duties or liabilities of the master servicer
under the Pooling and Servicing Agreement. Pending appointment of a successor to
the master servicer under the Pooling and Servicing Agreement, the trustee shall
act in such capacity as provided under the Pooling and Servicing Agreement. In
connection with such appointment and assumption, the trustee may make such
arrangements for the compensation of such successor as it and such successor
shall agree; provided, however, that such compensation may not be in excess of
the compensation permitted the master servicer as provided above, and that such
successor will be required to undertake and assume the obligations of the master
servicer to pay compensation to any third person acting as an agent or
independent contractor in the performance of master servicing responsibilities
under the Pooling and Servicing Agreement. Notwithstanding the foregoing, in the
case of such appointment and

                                     S-109


assumption, the trustee will be entitled to reimbursement from the master
servicer or the trust (provided that the trust will be entitled to reimbursement
from the master servicer) for any costs and expenses incurred in connection with
the appointment of such successor master servicer.

      Under each Servicing Agreement, an event of default by a servicer will
generally occur if: (a) the servicer fails to remit to the master servicer or
the trust administrator, as applicable, any payment required to be made under
the related Servicing Agreement which continues unremedied for the period
specified in the related Servicing Agreement, (b) the servicer fails to duly
observe or perform in any material respect any other of the covenants or
agreements of the servicer set forth in the related Servicing Agreement which
continues unremedied for the period set forth in the related Servicing
Agreement, (c) certain insolvency events occur with respect to the servicer, or
(d) if the servicer ceases to be approved as a servicer by Fannie Mae or Freddie
Mac.

      In the event of a default by a servicer under the related Servicing
Agreement, the master servicer will be required under the Pooling and Servicing
Agreement to enforce any remedies against the servicer, and will be required
under the Pooling and Servicing Agreement to either find a successor servicer or
assume the primary servicing obligations for the related Loans itself as set
forth in the applicable Servicing Agreement.

ADVANCES

      If the scheduled payment on a Loan which was due on a related due date is
delinquent (other than as a result of application of the Relief Act), the
applicable servicer will be required to remit to the master servicer (or the
trust administrator in the case of WMMSC) on its Servicer Remittance Date, an
amount equal to such delinquency, net of the Servicing Fee except to the extent
the servicer determines any such advance to be nonrecoverable from liquidation
proceeds, insurance proceeds or from future payments on the Loan for which such
advance was made. Subject to the foregoing, such advances will be made by the
servicers through liquidation of the related Mortgaged Property. If the
applicable servicer fails to remit any required advance, the master servicer
will be required, subject to a recoverability determination, to deposit such
advance in the Distribution Account not later than one business day prior to the
related Distribution Date to the same extent the related servicer is required to
make such advance pursuant to the related Servicing Agreement. Any failure of
the master servicer to make such advances would constitute an Event of Servicing
Termination as discussed under "--Events of Servicing Termination" above. The
trustee, as successor master servicer, will be required to make any advance
which the master servicer was required to make but failed to so make.

TERMINATION

   The obligations created by the Pooling and Servicing Agreement will terminate
upon the earlier to occur of:

            (1) the later of (a) the final payment or other liquidation of the
      last Loan included in the trust and (b) the distribution of all amounts
      required to be distributed to certificateholders under the Pooling and
      Servicing Agreement; and

                                     S-110


            (2) the exercise by the master servicer of its right to terminate
      the trust as described below.

      Written notice of termination will be given to holders of certificates,
and the final distribution will be made only upon surrender and cancellation of
the certificates at the office of the trust administrator designated in the
notice.

      The master servicer will have the right to purchase all of the Loans and
REO Properties in the trust and thereby effect the early retirement of the
certificates, on any Distribution Date on which the aggregate Scheduled
Principal Balance of the Loans and REO Properties is less than 5% of the
aggregate Scheduled Principal Balance of the Loans as of the Cut-Off Date. In
the event that the option is exercised, the purchase will be made at a price
equal to the sum of (i) the greater of (x) 100% of the unpaid principal balance
of each purchased Loan (other than Loans for which the related Mortgaged
Property is an REO Property) plus accrued and unpaid interest for that Loan at
the applicable Net Mortgage Rate and (y) the fair market value of that Loan (to
be determined pursuant to a bid procedure in accordance with the Pooling and
Servicing Agreement) plus accrued and unpaid interest at the applicable Net
Mortgage Rate, and (ii) the lesser of (x) the appraised value of any purchased
REO Property as determined by the higher of two appraisals completed by two
independent appraisers selected by the master servicer at the expense of the
master servicer and (y) the unpaid principal balance of each Loan related to any
purchased REO Property plus accrued and unpaid interest thereon at the
applicable Net Mortgage Rate. Proceeds from the purchase (other than, with
respect to any Loan, an amount equal to the excess, if any, of the amount in
clause (i)(y), over the amount in clause (i)(x), in each case set forth in the
immediately preceding sentence (such excess, the "Fair Market Value Excess"))
will be included in Available Funds and will be distributed to the holders of
the certificates in accordance with the Pooling and Servicing Agreement. Any
Fair Market Value Excess received in connection with the purchase will not be
included in Available Funds and will be distributed to the holders of the Class
A-LR certificates. Any purchase of Loans and REO Properties will result in the
early retirement of the certificates.

VOTING RIGHTS

      With respect to any date of determination, the percentage of all of the
voting rights allocated among holders of the offered certificates (other than
the Interest Only Certificates) will be 98% and will be allocated among the
classes of those offered certificates in the proportion that the aggregate
Certificate Principal Balance of a class then outstanding bears to the aggregate
Certificate Principal Balance of all certificates then outstanding. With respect
to any date of determination, the percentage of all the voting rights allocated
among holders of the Interest Only Certificates in the aggregate and the Class P
certificates will each be 1%. The voting rights allocated to a class of
certificates will be allocated among all holders of that class in proportion to
the outstanding Certificate Principal Balances, or percentage interest, of those
certificates.

                                     S-111


AMENDMENT

      The Pooling and Servicing Agreement may be amended by all of the parties
to it without the consent of the holders of the certificates, for any of the
following purposes:

            (1) to cure any ambiguity or mistake;

            (2) to correct or supplement any provisions which may be defective
      or inconsistent with any other provisions of the Pooling and Servicing
      Agreement or this prospectus supplement;

            (3) to add to the duties of the depositor, the transferor, the trust
      administrator, the trustee, the custodians or the master servicer;

            (4) to make any other provisions with respect to matters or
      questions arising under the Pooling and Servicing Agreement; or

            (5) to modify, alter, amend or add to or rescind any of the terms or
      provisions contained in the Pooling and Servicing Agreement.

            However, any of the actions listed in clauses (4) and (5) above may
      not adversely affect in any material respect the interests of any
      certificateholder, as evidenced by:

            (1) notice from the Rating Agencies that the action will not result
      in the reduction or withdrawal of the rating of any outstanding class of
      certificates; or

            (2) an opinion of counsel delivered to the trustee.

      In addition, the Pooling and Servicing Agreement may be amended by all of
the parties to it with the consent of the holders of a majority in interest of
each class of certificates affected by the amendment for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of the Pooling and Servicing Agreement or of modifying in any manner the rights
of the holders of any class of certificates. However, no amendment of this type
may:

            (1) reduce in any manner the amount of, or delay the timing of,
      distributions required to be made on any class of certificates without the
      consent of the holders of those certificates;

            (2) adversely affect in any material respect the interests of the
      holders of any class of certificates in a manner other than as described
      in clause (1) above, without the consent of the holders of that class
      evidencing percentage interests aggregating at least 66%; or

            (3) reduce the percentage of aggregate outstanding principal amounts
      of certificates, the holders of which are required to consent to an
      amendment, without the consent of the holders of all certificates then
      outstanding.

                                     S-112


THE TRUSTEE

      Wachovia Bank, National Association, a national banking association, will
act as trustee for the certificates pursuant to the Pooling and Servicing
Agreement. The trustee's offices for notices under the Pooling and Servicing
Agreement are located at 401 South Tryon Street, 12th Floor, NC 1179, Charlotte,
North Carolina 28288-1179, and its telephone number is (704) 715-3827. The
principal compensation to be paid to the trustee in respect of its obligations
under the Pooling and Servicing Agreement will be set forth in a separate
agreement between the trustee and the master servicer and such fee is required
to be paid by the master servicer from its own compensation. The Pooling and
Servicing Agreement will provide that the trustee and any director, officer,
employee or agent of the trustee will be indemnified by the trust and will be
held harmless against any loss, liability or expense: (i) that is incurred by
the trustee arising out of or in connection with any legal action relating to
the Pooling and Servicing Agreement, the Loans or the certificates; (ii) that is
incurred by the trustee arising out of or in connection with the performance of
its obligations and duties under the Pooling and Servicing Agreement, other than
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence in the performance of the trustee's duties under the Pooling
and Servicing Agreement, (iii) that is incurred by reason of any action of the
trustee taken at the direction of the holders of the certificates or (iv) that
results from any error in any tax or information return prepared by the master
servicer. The trust shall fulfill such obligation from amounts on deposit in the
Distribution Account.

THE TRUST ADMINISTRATOR

      Wells Fargo Bank, National Association, a national banking association,
will act as trust administrator pursuant to the Pooling and Servicing Agreement.
The trust administrator's offices for purposes of presentment of certificates
for registration of transfer, exchange or final payment is Wells Fargo Bank,
National Association, Sixth Street and Marquette Avenue, Minneapolis, Minnesota
55479, Attention: Corporate Trust Services--MASTR Alternative Loan Trust
2004-10, and for all other purposes is located at 9062 Old Annapolis Road,
Columbia, Maryland 21045, Attention: Corporate Trust Services--MASTR Alternative
Loan Trust 2004-10. The principal compensation to be paid to the trust
administrator in respect of its obligations under the Pooling and Servicing
Agreement will be a fee payable by the master servicer from the compensation
received by the master servicer under the Pooling and Servicing Agreement. The
Pooling and Servicing Agreement will provide that the trust administrator and
any director, officer, employee or agent of the trust administrator will be
indemnified by the trust and will be held harmless against any loss, liability
or expense: (i) that is incurred by the trust administrator arising out of or in
connection with any legal action relating to the Pooling and Servicing
Agreement, the Loans or the certificates; (ii) that is incurred by the trust
administrator arising out of or in connection with the performance of its
obligations and duties under the Pooling and Servicing Agreement, other than any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance of the trust administrator's duties under the
Pooling and Servicing Agreement or (iii) that is incurred by reason of any
action or inaction of the trust administrator taken at the direction of the
holders of the certificates. The trust shall fulfill such obligation from
amounts on deposit in the Distribution Account.

                                     S-113


                         FEDERAL INCOME TAX CONSEQUENCES

GENERAL

      The following discussion, insofar as it states conclusions of law,
represents the opinion of Cadwalader, Wickersham & Taft LLP, special counsel to
the depositor.

      Elections will be made to treat designated portions of the trust as three
separate REMICs (the "Upper-Tier REMIC," the "Middle-Tier REMIC" and the
"Lower-Tier REMIC") for federal income tax purposes. The Regular Certificates
will be designated as "regular interests" in the Upper-Tier REMIC. The Class
A-LR certificates will be designated as the sole class of "residual interests"
in the Lower-Tier REMIC; and the Class A-R certificates will be designated as
the sole class of "residual interests" in the Middle-Tier REMIC and the
Upper-Tier REMIC.

REGULAR CERTIFICATES

      The Regular Certificates generally will be treated as debt instruments
issued by the Upper-Tier REMIC for federal income tax purposes. Income on
Regular Certificates must be reported under an accrual method of accounting. The
Principal Only Certificates will be issued with original issue discount in an
amount equal to the excess of their initial Certificate Principal Balance over
their issue price. In addition, the Interest-Only Certificates and the Class
5-A-5 certificates will be issued with original issue discount in an amount
equal to all distributions of interest expected to be received thereon (whether
current or accrued, in the case of the Class 5-A-5 certificates) over their
respective issue prices (including all accrued interest prior to the Closing
Date). Certain other classes of Regular Certificates may be issued with original
issue discount in an amount equal to the excess of their initial respective
Certificate Principal Balances (plus accrued interest from the last day
preceding the issue date corresponding to a Distribution Date through the issue
date), over their respective issue prices (including all accrued interest prior
to the Closing Date).

      Certain classes of the Regular Certificates may be treated for federal
income tax purposes as having been issued at a premium. Whether any holder of
such a class of certificates will be treated as holding a debt instrument 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 classes of
certificates should consult their own tax advisors regarding the possibility of
making an election to amortize such premium. The prepayment assumption that is
to be used in determining the rate of accrual of original issue discount and
market discount and whether any such discount is considered de minimis, and that
may be used by a holder of a Regular Certificate to amortize premium, will be
based on the assumption that the Loans prepay at 100% of the Prepayment
Assumption. No representation is made as to the actual rate at which the Loans
will prepay. See "Federal Income Tax Consequences--REMICs--General--
Characterization of Investments in REMIC Securities" in the prospectus for a
discussion of the status of the Regular Certificates for particular types of
investors.

      The requirement to report income on a Regular Certificate under an accrual
method may result in the inclusion of amounts in income that are not currently
distributed in cash. In the case

                                     S-114


of a Subordinate Certificate, accrued income may exceed cash distributions as a
result of the preferential right of classes of the related Senior Certificates
to receive cash distributions in the event of losses or delinquencies on the
Loans. Prospective purchasers of Subordinate Certificates should consult their
tax advisors regarding the timing of income from those certificates and the
timing and character of any deductions that may be available with respect to
principal or accrued interest that is not paid. See "Federal Income Tax
Consequences--REMICs--Taxation of Owners of Regular Securities" in the
prospectus.

RESIDUAL CERTIFICATES

      The holders of the Residual Certificates must include the taxable income
of the related REMIC in their federal taxable income. The Residual Certificates
will remain outstanding for federal income tax purposes until there are no
certificates of any other class outstanding. PROSPECTIVE INVESTORS ARE CAUTIONED
THAT THE RESIDUAL CERTIFICATES' REMIC TAXABLE INCOME AND THE TAX LIABILITY
THEREON MAY EXCEED, AND MAY SUBSTANTIALLY EXCEED, CASH DISTRIBUTIONS TO SUCH
HOLDER DURING CERTAIN PERIODS, IN WHICH EVENT, THE HOLDER THEREOF MUST HAVE
SUFFICIENT ALTERNATIVE SOURCES OF FUNDS TO PAY SUCH TAX LIABILITY. Furthermore,
it is anticipated that all or a substantial portion of the taxable income of the
related REMIC includible by the holders of the Residual Certificates will be
treated as "excess inclusion" income, resulting in (i) the inability of such
holder to use net operating losses to offset such income from the related REMIC,
(ii) the treatment of such income as "unrelated business taxable income" to
certain holders who are otherwise tax-exempt, and (iii) the treatment of such
income as subject to 30% withholding tax to certain non-U.S. investors, with no
exemption or treaty reduction.

      The Residual Certificates will be considered to be "noneconomic residual
interests," with the result that transfers would be disregarded for federal
income tax purposes if any significant purpose of the transferor was to impede
the assessment or collection of tax. Accordingly, the Residual Certificates are
subject to certain restrictions on transfer and any prospective transferee will
be required to furnish the trust administrator with an affidavit as described in
this prospectus supplement under "Description of the Offered
Certificates--Restrictions on Transfer of the Residual Certificates." See
"Federal Income Tax Consequences--REMICs--Taxation of Owners of Residual
Securities--Limitations on Offset or Exemption of REMIC Income," and
"-Tax-Related Restrictions on Transfer of Residual Securities" and "-Noneconomic
Residual Interests" in the prospectus.

      An individual, trust or estate that holds a Residual Certificate (whether
such certificate is held directly or indirectly through certain pass-through
entities) also may have additional gross income with respect to, but may be
subject to limitations on the deductibility of, Servicing Fees on the Loans and
other administrative expenses of the related REMIC in computing such holder's
regular tax liability, and may not be able to deduct such fees or expenses to
any extent in computing such holder's alternative minimum tax liability. Unless
required otherwise by applicable authority, it is anticipated that such expenses
will be allocated to the holder of the Class A-LR certificates in respect of the
residual interest in the Lower-Tier REMIC. In addition, some portion of a
purchaser's basis, if any, in a Residual Certificate may not be recovered until
termination of the related REMIC. Furthermore, regulations have been issued
concerning the federal income tax consequences of any consideration paid to a
transferee on a transfer of the Residual Certificates, including any "safe
harbor" payment described in the prospectus. See

                                     S-115


"Description of the Offered Certificates--Restrictions on Transfer of the
Residual Certificates" and under "Federal Income Tax
Consequences--REMICs--Taxation of Owners of Residual Securities" and
"-Noneconomic Residual Interests" in the prospectus. Any transferee receiving
consideration with respect to a Residual Certificate should consult its tax
advisors.

      Due to the special tax treatment of residual interests, the effective
after-tax return of the Residual Certificates may be significantly lower than
would be the case if the Residual Certificates were taxed as debt instruments,
or may be negative.

      Prospective purchasers of the Residual Certificates should consider
carefully the tax consequences of an investment in Residual Certificates
discussed in the prospectus and should consult their own tax advisors with
respect to those consequences. See "Federal Income Tax
Consequences--REMICs--Taxation of Owners of Residual Securities" in the
prospectus.

           REMIC TAXES AND REPORTING

   It is not anticipated that the trust will engage in any transactions that
would subject it to the prohibited transactions tax as defined in Section
860F(a)(2) of the Code, the contributions tax as defined in Section 860G(d) of
the Code or the tax on net income from foreclosure property as defined in
Section 860G(c) of the Code. However, in the event that any such tax is imposed
on the trust, such tax will be borne:

            (1) by the trustee, if the trustee has breached its obligations with
      respect to REMIC compliance under the Pooling and Servicing Agreement;

            (2) by the trust administrator, if the trust administrator has
      breached its obligations with respect to REMIC compliance under the
      Pooling and Servicing Agreement;

            (3) by the master servicer, if the master servicer has breached its
      obligations with respect to REMIC compliance under the Pooling and
      Servicing Agreement; and

            (4) otherwise by the trust, with a resulting reduction in amounts
      otherwise distributable to holders of the certificates.

      See "Federal Income Tax Consequences--REMICs--Taxes That May Be Imposed on
the REMIC Pool--Prohibited Transactions" in the prospectus.

      The responsibility for filing annual federal information returns and other
reports will be borne by the master servicer. See "Federal Income Tax
Consequences--REMICs--Administrative Matters" in the prospectus.

      For further information regarding the federal income tax consequences of
investing in the offered certificates, see "Federal Income Tax
Consequences--REMICs" in the prospectus.

                                     S-116


                             STATE AND OTHER TAXES

      The depositor makes no representations regarding the tax consequences of
purchase, ownership or disposition of the offered certificates under the tax
laws of any state, local or other jurisdiction. Investors considering an
investment in the offered certificates should consult their own tax advisors
regarding such tax consequences.

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

                              ERISA CONSIDERATIONS


      The Employee Retirement Income Security Act of 1974, as amended, and the
Code impose certain restrictions on:

      (1) employee benefit plans as defined in Section 3(3) of ERISA;

      (2) plans described in section 4975(e)(1) of the Code, including
individual retirement accounts or Keogh plans;

      (3) any entity whose underlying assets include plan assets by reason of an
investment in the entity by a plan described in clause (1) or (2) above; and

      (4) persons who have certain specified relationships to Plans, i.e.,
"Parties in Interest" under ERISA and "Disqualified Persons" under the Code.

      Moreover, based on the reasoning of the United States Supreme Court in
John Hancock Life Ins. Co. v. Harris Trust and Savings Bank, 510 U.S. 86 (1993),
an insurance company's general account may be deemed to include assets of the
Plans investing in the general account, e.g., through the purchase of an annuity
contract. As a result, the insurance company might be treated as a fiduciary or
other Party in Interest with respect to a Plan by virtue of the investment.
ERISA imposes certain duties on persons who are fiduciaries of Plans subject to
ERISA and prohibits certain transactions between a Plan and Parties in Interest
or Disqualified Persons with respect to the Plan. There are certain exemptions
issued by the United States Department of Labor that may be applicable to an
investment by a Plan in the certificates, including Prohibited Transaction Class
Exemption ("PTCE") 83-1. For further discussion of PTCE 83-1, including the
necessary conditions to its applicability and other important factors to be
considered by a Plan contemplating investing in the offered certificates, see
"ERISA Considerations" in the prospectus.

      The Residual Certificates may not be purchased by or transferred to a Plan
or any other person investing "plan assets" of any Plan (or any plan subject to
provisions of any federal, state or local law ("Similar Law") materially similar
to the provisions of ERISA or the Code discussed in this section). Accordingly,
the following discussion does not purport to discuss any considerations under
ERISA, the Code or Similar Law with respect to the purchase, acquisition

                                     S-117


or resale of the Residual Certificates and for purposes of the following
discussion all references to the offered certificates are deemed to exclude the
Residual Certificates.

      The U.S. Department of Labor has granted UBS Securities LLC (formerly
known as UBS Warburg LLC) Prohibited Transaction Exemption ("PTE") 91-22, 56
Fed. Reg. 15933 (1991), as amended by PTE 97-34, 62 Fed. Reg. 39021 (1997), PTE
2000-58, 65 Fed. Reg. 67765 (2000) and PTE 2002-41, 67 Fed. Reg. 54487 (2002).
PTE 91-22 exempts from certain of the prohibited transaction rules of ERISA
transactions with respect to the initial purchase, the holding and the
subsequent resale by a Plan of certificates in pass-through trusts that meet the
conditions and requirements of the exemption. Among the conditions that must be
satisfied for the exemption to apply are the following:

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

      (2) The offered certificates acquired by the Plan have received a rating
at the time of the acquisition that is in one of the four highest generic rating
categories from either S&P, Moody's or Fitch;

      (3) The sum of all payments made to the underwriter in connection with the
distribution of the offered certificates represents not more than reasonable
compensation for underwriting the offered certificates. The sum of all payments
made to and retained by the master servicer represents not more than reasonable
compensation for the master servicer's services under the Pooling and Servicing
Agreement and reimbursement of the master servicer's reasonable expenses in
connection with its services;

      (4) The trustee must not be an affiliate of any other member of the
"restricted group" (as defined below) other than an underwriter; and

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

      The trust also must meet the following requirements:

      (1) The corpus of the trust must consist solely of assets of the type
which have been included in other investment pools;

      (2) certificates in the other investment pools must have been rated in one
of the four highest rating categories of S&P, Moody's or Fitch for at least one
year prior to the Plan's acquisition of certificates; and

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

                                     S-118


      In order for the exemption to apply to certain self-dealing/conflict of
interest prohibited transactions that may occur when a Plan fiduciary causes the
Plan to acquire offered certificates, the exemption requires, among other
matters, that:

      (1) in the case of an acquisition in connection with the initial issuance
of offered certificates, at least 50% of each class of offered certificates in
which Plans have invested is acquired by persons independent of the "restricted
group" and at least 50% of the aggregate interest in the trust fund is acquired
by persons independent of the "restricted group." "Restricted group" means any
underwriter of the offered certificates, the trustee, the trust administrator,
the master servicer, any obligor with respect to more than 5% of the fair market
value of the loans included in the trust as of the Closing Date, any entity
deemed to be a "sponsor" of the trust as that term is defined in the exemption,
or any affiliate of any of these parties;

      (2) the fiduciary, or its affiliate, is not an obligor with respect to
more than 5% of the fair market value of the obligations contained in the trust;

      (3) the Plan's investment in offered certificates does not exceed 25% of
all of the certificates outstanding at the time of the acquisition; and

      (4) immediately after the acquisition, no more than 25% of the assets of
the Plan are invested in certificates representing an interest in one or more
trusts containing assets sold or serviced by the same entity.

      Subject to the foregoing, the depositor believes that the exemption will
apply to the acquisition and holding of the offered certificates, other than the
Residual Certificates, by Plans and that all conditions of that exemption other
than those within the control of the investors have been met.

      Before purchasing any offered certificate (other than a Residual
Certificate), a fiduciary of a Plan should make its own determination as to the
availability of the exemptive relief provided in PTE 91-22 or the availability
of any other prohibited transaction exemptions, including PTCE 83-1, and whether
the conditions of any exemption will be applicable to the offered certificates.
Any fiduciary of a Plan considering whether to purchase any offered certificate
(other than a Residual Certificate) should also carefully review with its own
legal advisors the applicability of the fiduciary duty and prohibited
transaction provisions of ERISA and the Code to the investment. See "ERISA
Considerations" in the prospectus.

      A governmental plan as defined in Section 3(32) of ERISA is not subject to
Title I of ERISA or Section 4975 of the Code. However, a governmental plan may
be subject to Similar Law. A fiduciary of a governmental plan should make its
own determination as to the need for and the availability of any exemptive
relief under such Similar Law.

      The sale of certificates to a Plan is not a representation by the
depositor or the underwriter, that this investment meets all relevant legal
requirements with respect to investments by Plans generally or any particular
Plan, or that this investment is appropriate for Plans generally or any
particular Plan.

                                     S-119


                                LEGAL INVESTMENT

      The offered certificates, other than the Class B-2 and Class B-3
certificates, will constitute "mortgage related securities" for purposes of the
Secondary Mortgage Market Enhancement Act of 1984, as amended ("SMMEA"), so long
as they are rated in one of the two highest rating categories by S&P, Fitch or
another nationally recognized statistical rating organization.

      The Class B-2 and Class B-3 certificates will not constitute "mortgage
related securities" for purposes of SMMEA and, as a result, the appropriate
characterization of these classes of offered certificates under various legal
investment restrictions, and the ability of investors subject to these
restrictions to purchase these classes, are subject to significant interpretive
uncertainties.

      Except as to the status of certain classes of the offered certificates as
"mortgage related securities," no representations are made as to the proper
characterization of the offered certificates for legal investment, financial
institution regulatory, or other purposes, or as to the ability of particular
investors to purchase the offered certificates under applicable legal investment
restrictions. Investors whose investment activities are subject to legal
investment laws and regulations, regulatory capital requirements or review by
regulatory authorities should consult with their own legal advisors in
determining whether and to what extent the offered certificates will constitute
legal investments for them or are subject to investment, capital or other
restrictions. See "Legal Investment" in the prospectus.

                                 USE OF PROCEEDS

      The depositor intends to use the net proceeds to be received from the sale
of the offered certificates to acquire the Loans and to pay other expenses
associated with the pooling of the Loans and the issuance of the certificates.

                                  UNDERWRITING

      Subject to the terms and conditions set forth in the underwriting
agreement between the depositor and UBS Securities LLC, an affiliate of the
depositor, the depositor has agreed to sell to the underwriter, and the
underwriter has agreed to purchase from the depositor the offered certificates.

      The depositor has been advised by the underwriter that it proposes to
offer the offered certificates to the public from time to time in negotiated
transactions or otherwise at varying prices to be determined at the time of
sale. In connection with the sale of offered certificates, the underwriter may
be deemed to have received compensation from the depositor in the form of
underwriting discounts.

      There is currently no secondary market for the offered certificates. We
cannot assure you that a secondary market for the offered certificates will
develop or, if it does develop, that it will continue.

                                     S-120


      The depositor has agreed to indemnify the underwriter against, or make
contributions to the underwriter with respect to, certain liabilities, including
liabilities under the Securities Act of 1933, as amended.

      The underwriter is an affiliate of Mortgage Asset Securitization
Transactions, Inc. and UBS Real Estate Securities Inc.

      Each of Mortgage Asset Securitization Transactions, Inc. and UBS Real
Estate Securities Inc. is a wholly owned subsidiary of UBS Americas Inc.

                                     RATINGS

      It is a condition to the original issuance of the offered certificates
that each class of offered certificates will have received the ratings set forth
on the table beginning on page S-5 of this prospectus supplement.

      The ratings will be the views only of the Rating Agencies. We cannot
assure that any ratings will continue for any period of time or that the ratings
will not be revised or withdrawn. Any revision or withdrawal of the ratings may
have an adverse effect on the market price of the offered certificates.

      A securities rating addresses the likelihood of the receipt by the
certificateholders of distributions on the offered certificates. The ratings on
the offered certificates do not constitute statements regarding the possibility
that the certificateholders might realize a lower than anticipated yield. A
securities 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 securities rating should be evaluated independently of
similar ratings on different securities.

      The ratings of the Rating Agencies do not address the possibility that, as
a result of principal prepayments, certificateholders may receive a lower than
anticipated yield.

      The ratings assigned by the Rating Agencies to mortgage pass-through
certificates address the likelihood of the receipt of all distributions on loans
by certificateholders under the agreements pursuant to which the certificates
are issued. The ratings of the Rating Agencies take into consideration the
credit quality of the related mortgage pool, including any credit support
providers, structural and legal aspects associated with the certificates, and
the extent to which the payment stream on the mortgage pool is adequate to make
the payments required by the certificates. The ratings assigned by the Rating
Agencies do not, however, constitute statements regarding the likelihood or
frequency of prepayments on loans or the possibility that a holder of an offered
certificate might realize a lower than anticipated yield. The ratings assigned
by the Rating Agencies to the Interest Only Certificates do not address whether
investors will recoup their initial investment. The ratings assigned by the
Rating Agencies to the Principal Only Certificates only addresses the return of
their Certificate Principal Balance. The rating assigned the Residual
Certificates only addresses the return of the related Certificate Principal
Balance and interest on that balance at its pass-through rate.

                                     S-121


      The depositor has not requested a rating of the offered certificates by
any rating agency other than S&P and Fitch. There can be no assurance, however,
as to whether any other rating agency will rate the offered certificates or, if
it does, what rating would be assigned by the other rating agency. The rating
assigned by the other rating agency to the offered certificates could be lower
than the respective ratings assigned by Fitch and S&P.

                                  LEGAL MATTERS

      The validity of the offered certificates and certain federal income tax
matters will be passed on for the depositor and the underwriter by Cadwalader,
Wickersham & Taft LLP, New York, New York.





                                     S-122


                                GLOSSARY OF TERMS


      "ACCRUED CERTIFICATE INTEREST" means, for each class of certificates
(other than the Principal Only Certificates) for each Distribution Date, the
"Accrued Certificate Interest" as described under "Description of the Offered
Certificates--Interest" in this prospectus supplement.

      "ADJUSTMENT AMOUNT" means, for the Special Hazard Loss Coverage Amount
and, with respect to each anniversary of September 1, 2004, the amount, if any,
by which such Special Hazard Loss Coverage Amount (without giving effect to the
deduction of the Adjustment Amount for such anniversary) exceeds the greatest of
(x) the product of 1% and the outstanding principal balance of all the Loans on
the Distribution Date immediately preceding such anniversary, (y) the
outstanding principal balance of the Loans secured by Mortgaged Properties in
the highest California zip code concentration on the Distribution Date
immediately preceding such anniversary, and (z) twice the outstanding principal
balance of the Loan that has the largest outstanding principal balance on the
Distribution Date immediately preceding such anniversary.

      "ADVANCE" means any of the advances required to be made by the servicer or
the master servicer, as applicable, for any Distribution Date in an amount equal
to the aggregate of all payments of principal and interest on the Loans, net of
the Servicing Fee and the Master Servicing Fee, if applicable, that were due on
the related due date, and that were not received by the related determination
date as set forth in the applicable Servicing Agreement.

      "AGGREGATE SUBORDINATE PERCENTAGE" means, with respect to the Subordinate
Certificates and any Distribution Date, the sum of the Certificate Principal
Balances of the Subordinate Certificates immediately prior to such Distribution
Date divided by the aggregate of the Scheduled Principal Balances of the
Mortgage Loans (net of the PO Percentage of the Scheduled Principal Balance of
each Discount Loan).

      "ALLOCABLE SHARE" means, with respect to any Distribution Date and any
class of Subordinate Certificates, the portion of the Subordinate Optimal
Principal Amount allocable to such class, equal to the product of the
Subordinate Optimal Principal Amount for each Group in the aggregate on such
Distribution Date and a fraction, the numerator of which is the related
Certificate Principal Balance of that class and the denominator of which is the
aggregate of the Certificate Principal Balances of the Subordinate Certificates;
provided, that no class of Subordinate Certificates will be entitled on any
Distribution Date to receive distributions pursuant to clauses (5), (6), and (7)
of the definition of Subordinate Optimal Principal Amount with respect to any
Group unless the Class Prepayment Distribution Trigger for that class is
satisfied for that Distribution Date; if the Class Prepayment Distribution
Trigger is not satisfied for an outstanding class of Subordinate Certificates,
those amounts will be distributable to the remaining classes of Subordinate
Certificates for which the Class Prepayment Distribution Trigger is satisfied,
pro rata, according to Certificate Principal Balance.

      "APPORTIONED SUBORDINATE PRINCIPAL DISTRIBUTION AMOUNT" means, with
respect to the Subordinate Certificates and any Distribution Date, the product
of (i) the aggregate Subordinate Principal Distribution Amount for the
Subordinate Certificates net of amounts applied from the

                                     S-123


Subordinate Principal Distribution Amount to pay the Group PO Deferred Amounts
and (ii) the applicable Apportionment Fraction.

      "APPORTIONMENT FRACTION" means, with respect to the Subordinate
Certificates and in the event that the Certificate Principal Balances of the
Senior Certificates of any Certificate Group have been reduced to zero, a
fraction the numerator of which is equal to the Subordinate Optimal Principal
Amount for the Group whose Senior Certificates have been reduced to zero and the
denominator of which is equal to the aggregate of the Subordinate Optimal
Principal Amounts with respect to each Group.

      "AVAILABLE FUNDS" means, with respect to any Loan Group and any
Distribution Date, an amount equal to the amounts on deposit in the Collection
Account on the business day immediately preceding that Distribution Date with
respect to that Loan Group less:

            (a) amounts permitted to be withdrawn from the Collection Account on
      or prior to the business day immediately preceding that Distribution Date
      with respect to that Loan Group, including (without duplication) all
      amounts reimbursed or paid to the master servicer, each servicer, the
      trust administrator, the trustee, the transferor or the depositor on or
      prior to that date;

            (b) all unscheduled principal prepayments, all net insurance
      proceeds and all net liquidation proceeds from the liquidation of the
      Loans in such Loan Group, including related condemnation proceeds, in each
      case received after the related Prepayment Period, excluding prepayment
      penalties;

            (c) all scheduled principal payments on the Loans in such Loan Group
      due after the related due date;

            (d) any amount deposited in the Collection Account on account of the
      Loans in such Loan Group and not required to be deposited therein;

            (e) Recoveries received on or following the Cross-Over Date and any
      PO Recoveries, which, in each case, will be distributed to certain classes
      of Senior Certificates, as described under "Description of the Offered
      Certificates--Principal" in this prospectus supplement; and

            (f) any amounts representing Fair Market Value Excess received in
      connection with the master servicer's exercise of its optional termination
      of the trust.

Prepayment premiums, penalties and charges received on the Loans will not be
part of Available Funds or available for distribution to the holders of the
offered certificates or Class B-4, Class B-5 or Class B-6 certificates.

      "BANKRUPTCY LOSS COVERAGE AMOUNT" means, with respect to any Distribution
Date, an amount equal to approximately $100,000 (approximately 0.02% of the
aggregate Cut-Off Date Pool Balance for all of the Loan Groups), minus the
aggregate amount of previous Deficient Valuations and Debt Service Reductions.
As of any Distribution Date on or after the Cross-Over Date, the Bankruptcy Loss
Coverage Amount will be zero. The Bankruptcy Loss Coverage Amount may be reduced
or modified upon written confirmation from the Rating Agencies that

                                     S-124


the reduction or modification will not adversely affect the then current ratings
of the Senior Certificates by the Rating Agencies. Such reduction may adversely
affect the coverage provided by subordination with respect to Deficient
Valuations and Debt Service Reductions.

      "CENDANT" means Cendant Mortgage Corporation.

      "CERTIFICATE GROUP" means, any of the Group 1, Group 2, Group 3, Group 4
or Group 5 Certificates.

      "CERTIFICATE PRINCIPAL BALANCE" means, with respect to any class of
certificates (other than the Interest Only Certificates) and any date, the
principal balance of that class on the date of the initial issuance of the
certificates as reduced, but not below zero, by:

            (1) all amounts distributed on previous Distribution Dates on that
         class on account of principal;

            (2) a principal portion of all Realized Losses allocated to that
         class on previous Distribution Dates; and

            (3) in the case of a class of Subordinate Certificates, the portion,
         if any, of any Subordinate Certificate Writedown Amount and any Class
         PO Deferred Payment Writedown Amount allocated to that class for
         previous Distribution Dates;

provided, however, that (a) the Certificate Principal Balance of a class of
certificates may be increased up to the amount of Realized Losses previously
allocated to such class, in the event that there is a Recovery on a related
Loan, as described under "Description of the Offered Certificates--Principal" in
this prospectus supplement and (b) the Certificate Principal Balance of the
Class 5-A-5 certificates will be increased by the amount of the Class 5-A-5
Accrual Amount distributed on previous Distribution Dates, as described under
"Description of the Offered Certificates--Principal Allocation of the Class
5-A-5 Accrual Amounts" in this prospectus supplement.

      "CITIMORTGAGE" means CitiMortgage, Inc.

      "CLASS PO CERTIFICATES" means the Class 15-PO and Class 30-PO
certificates, as applicable.

      "CLASS PO DEFERRED PAYMENT WRITEDOWN AMOUNT" means, with respect to any
Distribution Date, the amount, if any, distributed on that Distribution Date in
respect of any Group PO Deferred Amounts pursuant to priority third of the
second paragraph under "Description of the Offered Certificates--Allocation of
Available Funds to the Certificates" in this prospectus supplement.

      "CLASS PREPAYMENT DISTRIBUTION TRIGGER" is satisfied, with respect to a
class of Subordinate Certificates and any Distribution Date, if either (i) the
Fractional Interest for such class for such date equals or exceeds the
Fractional Interest for such class calculated as of the date of issuance of the
certificates, or (ii) that class of Subordinate Certificates is the only class
of Subordinate Certificates then outstanding.

                                     S-125


      "CLASS 5-A-5 ACCRUAL AMOUNT" means for any Distribution Date prior to the
Group 5 Accretion Termination Date, the amount of interest that would otherwise
have been distributable as Accrued Certificate Interest to the Class 5-A-5
certificates if such amount had not been added to the Certificate Principal
Balance of the Class 5-A-5 certificates, as described under "Description of the
Offered Certificates--Principal--Principal Allocation of the Class 5-A-5 Accrual
Amounts" in this prospectus supplement.

      "CLOSING DATE" means on or about September 29, 2004.

      "CMMC" means Chase Manhattan Mortgage Corporation.

      "CODE" means the Internal Revenue Code of 1986, as amended.

      "COLLECTION ACCOUNT" means the account established and maintained by the
master servicer for the benefit of the certificateholders, which may be deemed
to be a subaccount of the Distribution Account.

      "COMPENSATING INTEREST" for any Distribution Date and any servicer is an
amount required to be paid by such servicer under the related Servicing
Agreement in connection with Prepayment Interest Shortfalls that occur on Loans
serviced by such servicer for the related Distribution Date. The amount of such
Compensating Interest payments is generally limited to the aggregate Servicing
Fees due to the applicable servicer for such Distribution Date. If any servicer
fails to make its required Compensating Interest payment on any Distribution
Date, the master servicer will be required to make such Compensating Interest
payment to the same extent that such servicer was required to make such
Compensating Interest payment.

      "COUNTRYWIDE SERVICING" means Countrywide Home Loans Servicing LP.

      "CPR" or "CONSTANT PREPAYMENT RATE" represents an assumed rate of
prepayment each month relative to the then outstanding principal balance of the
pool of loans for the life of the loans as described under "Prepayment and Yield
Considerations--Modeling Assumptions" in this prospectus supplement.

      "CROSS-OVER DATE" means the Distribution Date on which the Certificate
Principal Balances of the Subordinate Certificates have been reduced to zero.

      "CUT-OFF DATE" means September 1, 2004.

      "CUT-OFF DATE POOL BALANCE" means the aggregate Scheduled Principal
Balance of the Loans as of the Cut-Off Date or, with respect to any Loan Group
or Loan Groups, the aggregate Scheduled Principal Balance of the Loans in such
Loan Group or Loan Groups as of the Cut-Off Date.

      "DEBT SERVICE REDUCTION" means a reduction in the amount of the monthly
payment due on a Loan as established by a bankruptcy court in a bankruptcy of
the related borrower.

      "DEFICIENT VALUATION" means the difference between the outstanding
principal balance of a Loan and a reduced secured debt as a result of a
bankruptcy court establishing the value of the

                                     S-126


mortgaged property at an amount less than the then outstanding principal balance
of the Loan in connection with a bankruptcy of the related borrower.

      "DEFINITIVE CERTIFICATE" means any certificate represented by a physical
certificate and not a book-entry certificate.

      "DISCOUNT LOAN" means any of the Group 1 Discount Loans, Group 2 Discount
Loans, Group 3 Discount Loans, Group 4 Discount Loans or Group 5 Discount Loans,
as applicable.

      "DISTRIBUTION ACCOUNT" means the account established and maintained by the
trust administrator for benefit of the certificateholders.

      "DISTRIBUTION DATE" means the 25th day of each month, or if that day is
not a business day, the first business day after that 25th day, commencing in
October 2004.

      "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

      "EVENT OF SERVICING TERMINATION" means any one of the conditions or
circumstances enumerated under "The Pooling and Servicing Agreement--Events of
Servicing Termination" in this prospectus supplement.

      "EXCESS LOSS" means a Deficient Valuation, Fraud Loss or Special Hazard
Loss or any part thereof, occurring after the Bankruptcy Loss Coverage Amount,
Fraud Loss Coverage Amount or Special Hazard Loss Coverage Amount, respectively,
has been reduced to zero.

      "FAIR MARKET VALUE EXCESS" means, with respect to any Loan, "Fair Market
Value Excess" as defined under "The Pooling and Servicing
Agreement--Termination" in this prospectus supplement.

      "FITCH" means Fitch, Inc.

      "FRACTIONAL INTEREST" means, with respect to any Distribution Date and
each class of Subordinate Certificates, a fraction (expressed as a percentage),
the numerator of which is the aggregate Certificate Principal Balance of such
class and each class of Subordinate Certificates subordinate to such class, if
any, and the denominator of which is the aggregate Scheduled Principal Balance
of the Loans.

      "FRAUD LOSS" means any Realized Loss attributable to fraud in the
origination of the related Loan, as reported by the applicable servicer to the
master servicer.

                                     S-127


      "FRAUD LOSS COVERAGE AMOUNT" means the approximate amount set forth in the
following table for the indicated period:

     PERIOD                                FRAUD LOSS COVERAGE AMOUNT
     ------                                --------------------------
Closing Date through            $4,206,770 (1) minus the aggregate amount of
August 30, 2007                 Fraud Losses that would have been allocated to
                                the Subordinate Certificates in the absence of
                                the Loss Allocation Limitation since the Cut-Off
                                Date

September 1, 2007 through       $2,103,385 (2) minus the aggregate amount of
August 30, 2009                 Fraud Losses that would have been allocated to
                                the Subordinate Certificates in the absence of
                                the Loss Allocation Limitation since the Cut-Off
                                Date

After the earlier to occur of
September 1, 2009 and the
Cross-Over Date                 $0

----------
(1)  Represents approximately 1.0% of the aggregate Cut-Off Date Pool Balance of
     the Loans.

(2)  Represents approximately 0.5% of the aggregate Cut-Off Date Pool Balance of
     the Loans.

      "GROUP" means either a Certificate Group or Loan Group as the context
requires.

      "GROUP 1 CERTIFICATES" means the Class 1-A-1, Class A-LR and Class A-R
certificates.

      "GROUP 1 DISCOUNT LOAN" means any Group 1 Loan having a Net Mortgage Rate
as of the Cut-Off Date less than the Required Coupon for Loan Group 1.

      "GROUP 1 LOANS" means those Loans designated as "Group 1 Loans."

      "GROUP 1 NON-DISCOUNT LOAN" means any Group 1 Loan having a Net Mortgage
Rate as of the Cut-Off Date equal to or in excess of the Required Coupon for
Loan Group 1.

      "GROUP 1 PO DEFERRED AMOUNT" means, with respect to Loan Group 1 and any
Distribution Date on or prior to the Cross-Over Date, the sum of (1) the
applicable PO Percentage of the principal portion of Non-Excess Realized Losses
on each Group 1 Discount Loan allocated to the Class 15-PO certificates on that
date and (2) all amounts previously allocated to the Class 15-PO certificates in
respect of those losses and not distributed to the Class 15-PO certificates on
prior Distribution Dates.

      "GROUP 2 CERTIFICATES" means the Class 2-A-1 certificates.

      "GROUP 2 DISCOUNT LOAN" means any Group 2 Loan having a Net Mortgage Rate
as of the Cut-Off Date less than the Required Coupon for Loan Group 2.

      "GROUP 2 LOANS" means those Loans designated as "Group 2 Loans."

      "GROUP 2 NON-DISCOUNT LOAN" means any Group 2 Loan having a Net Mortgage
Rate as of the Cut-Off Date equal to or in excess of the Required Coupon for
Loan Group 2.

                                     S-128


      "GROUP 2 PO DEFERRED AMOUNT" means, with respect to Loan Group 2 and any
Distribution Date on or prior to the Cross Over Date, the sum of (1) the
applicable PO Percentage of the principal portion of Non-Excess Realized Losses
on each Group 2 Discount Loan allocated to the Class 15-PO certificates on that
date and (2) all amounts previously allocated to the Class 15-PO certificates in
respect of those losses and not distributed to the Class 15-PO certificates on
prior Distribution Dates.

      "GROUP 3 CERTIFICATES" means the Class 3-A-1 certificates.

      "GROUP 3 DISCOUNT LOAN" means any Group 3 Loan having a Net Mortgage Rate
as of the Cut-Off Date less than the Required Coupon for Loan Group 3.

      "GROUP 3 LOANS" means those Loans designated as "Group 3 Loans."

      "GROUP 3 NON-DISCOUNT LOAN" means any Group 3 Loan having a Net Mortgage
Rate as of the Cut-Off Date equal to or in excess of the Required Coupon for
Loan Group 3.

      "GROUP 3 PO DEFERRED AMOUNT" means, with respect to Loan Group 3 and any
Distribution Date on or prior to the Cross-Over Date, the sum of (1) the
applicable PO Percentage of the principal portion of Non-Excess Realized Losses
on each Group 3 Discount Loan allocated to the Class 15-PO certificates on that
date and (2) all amounts previously allocated to the Class 15-PO certificates in
respect of those losses and not distributed to the Class 15-PO certificates on
prior Distribution Dates.

      "GROUP 4 CERTIFICATES" means the Class 4-A-1 certificates.

      "GROUP 4 DISCOUNT LOAN" means any Group 4 Loan having a Net Mortgage Rate
as of the Cut-Off Date less than the Required Coupon for Loan Group 4.

      "GROUP 4 LOANS" means those Loans designated as "Group 4 Loans."

      "GROUP 4 NON-DISCOUNT LOAN" means any Group 4 Loan having a Net Mortgage
Rate as of the Cut-Off Date equal to or in excess of the Required Coupon for
Loan Group 4.

      "GROUP 4 PO DEFERRED AMOUNT" means, with respect to Loan Group 4 and any
Distribution Date on or prior to the Cross-Over Date, the sum of (1) the
applicable PO Percentage of the principal portion of Non-Excess Realized Losses
on each Group 4 Discount Loan allocated to the Class 15-PO certificates on that
date and (2) all amounts previously allocated to the Class 15-PO certificates in
respect of those losses and not distributed to the Class 15-PO certificates on
prior Distribution Dates.

      "GROUP 5 ACCRETION TERMINATION DATE" means the earlier to occur of:

      (1) the Distribution Date following the Distribution Date on which the
aggregate Certificate Principal Balance of the Class 5-A-1, Class 5-A-3 and
Class 5-A-4 certificates is reduced to zero; and

      (2) the Distribution Date following the Cross-Over Date.

                                     S-129


       "GROUP 5 CERTIFICATES" means the Class 5-A-1, Class 5-A-2, Class 5-A-3,
Class 5-A-4, Class 5-A-5, Class 5-A-6 and Class 5-A-7 certificates.

      "GROUP 5 DISCOUNT LOAN" means any Group 5 Loan having a Net Mortgage Rate
as of the Cut-Off Date less than the Required Coupon for Loan Group 5.

      "GROUP 5 LOANS" means those Loans designated as "Group 5 Loans."

      "GROUP 5 NON-DISCOUNT LOAN" means any Group 5 Loan having a Net Mortgage
Rate as of the Cut-Off Date equal to or in excess of the Required Coupon for
Loan Group 5.

      "GROUP 5 PO DEFERRED AMOUNT" means, with respect to Loan Group 5 and any
Distribution Date on or prior to the Cross-Over Date, the sum of

      (1) the applicable PO Percentage of the principal portion of Non-Excess
Realized Losses on each Group 5 Discount Loan allocated to the Class 30-PO
certificates on that date and

      (2) all amounts previously allocated to the Class 30-PO certificates in
respect of those losses and not distributed to the Class 30-PO certificates on
prior Distribution Dates.

      "GROUP 5 PRIORITY PERCENTAGE" means, with respect to any Distribution
Date, the percentage obtained by dividing:

      (1) the Certificate Principal Balance of the Class 5-A-6 and Class 5-A-7
certificates immediately preceding such Distribution Date plus $8,605,000 by

      (2) the aggregate Certificate Principal Balance of the Group 5
Certificates immediately preceding such Distribution Date.

      "GROUP 5 PRIORITY PREPAYMENT DISTRIBUTION PERCENTAGE" means, with respect
to any Distribution Date, the Group 5 Priority Percentage multiplied by the
Group 5 Priority Stepdown Percentage for such Distribution Date.

      "GROUP 5 PRIORITY PRINCIPAL DISTRIBUTION AMOUNT" means for any
Distribution Date, the lesser of:

         (A) 98.00% of the Senior Optimal Principal Amount for Group 5; and

         (B) the sum of:

            (1) the aggregate of the Group 5 Priority Scheduled Distribution
         Percentage multiplied by each of the amounts referred to in clauses (1)
         through (5) of the definition "Senior Optimal Principal Amount" related
         to the Group 5 Certificates; and

            (2) the aggregate of the Group 5 Priority Prepayment Distribution
         Percentage multiplied by each of the amounts referred to in clauses (6)
         and (7) of the definition "Senior Optimal Principal Amount" related to
         the Group 5 Certificates;

provided, however, that if a Deficient Valuation or Debt Service Reduction that
is an Excess Loss is sustained with respect to a Group 5 Loan that is not a
Liquidated Loan, the Group 5 Priority Principal Distribution Amount will be
reduced on the related Distribution Date by the

                                     S-130


Group 5 Priority Scheduled Distribution Percentage multiplied by the Senior
Percentage relating to the Group 5 Certificates multiplied by the applicable
Non-PO Percentage relating to the Group 5 Loans of the principal portion of the
Deficient Valuation or Debt Service Reduction.

      "GROUP 5 PRIORITY SCHEDULED DISTRIBUTION PERCENTAGE" means with respect
to:

            (1) any Distribution Date prior to the Distribution Date in October
         2009, 0%; and

            (2) any Distribution Date on or after the Distribution Date in
         October 2009, the Group 5 Priority Percentage for that Distribution
         Date.

      "GROUP 5 PRIORITY STEPDOWN PERCENTAGE" means, with respect to any
Distribution Date, the percentage indicated below:

          DISTRIBUTION DATE OCCURRING                         %
------------------------------------------------------       ----
October 2004 through September 2009...................         0%
October 2009 through September 2010...................        30%
October 2010 through September 2011...................        40%
October 2011 through September 2012...................        60%
October 2012 through September 2013...................        80%
After September 2013..................................       100%

      "GROUP PO DEFERRED AMOUNT" means any of the Group 1 PO Deferred Amount,
Group 2 PO Deferred Amount, Group 3 PO Deferred Amount, Group 4 PO Deferred
Amount and Group 5 PO Deferred Amount, as applicable.

      "GROUP PO PRINCIPAL DISTRIBUTION AMOUNT" means, for each Loan Group and
any Distribution Date, the sum of:

            (1) the applicable PO Percentage of all scheduled monthly payments
         of principal due on each Loan in such Loan Group on the related due
         date without giving effect to any Deficient Valuation or Debt Service
         Reduction that occurred prior to the reduction of the Bankruptcy Loss
         Coverage Amount to zero;

            (2) the applicable PO Percentage of the principal portion of the
         Scheduled Principal Balance of each Loan in such Loan Group that was
         repurchased by the transferor or another person with respect to that
         Distribution Date;

            (3) the applicable PO Percentage of any Substitution Adjustment
         Amounts received in respect of Loans in such Loan Group and with
         respect to that Distribution Date;

            (4) the applicable PO Percentage of the amount of net insurance
         proceeds or net liquidation proceeds allocable to principal received on
         Loans in such Loan Group in the prior calendar month with respect to a
         Loan in such Loan Group that is not a Liquidated Loan;

            (5) with respect to each Loan in such Loan Group that became a
         Liquidated Loan during the prior calendar month, the lesser of:

               (a) the applicable PO Percentage of the Scheduled Principal
            Balance of that Loan; and

                                     S-131


               (b) the applicable PO Percentage of the amount of the net
            insurance or net liquidation proceeds allocable to principal
            received with respect to that Loan during the prior calendar month;
            and

            (6) the applicable PO Percentage of:

               (a) principal prepayments in full received in respect of Loans in
            such Loan Group during the related Prepayment Period; and

               (b) partial principal prepayments in respect of Loans in such
            Loan Group applied during the related Prepayment Period;

provided, however, that if a Deficient Valuation or Debt Service Reduction is
sustained with respect to a Discount Loan in such Loan Group that is not a
Liquidated Loan after the Bankruptcy Loss Coverage Amount has been reduced to
zero, the applicable Group PO Principal Distribution Amount will be reduced on
the related Distribution Date by the applicable PO Percentage of the principal
portion of the Deficient Valuation or Debt Service Reduction in respect of Loans
in such Loan Group.

      "GROUP SUBORDINATE AMOUNT" means, as to any Distribution Date, with
respect to any Loan Group, the amount equal to the excess of the aggregate
Scheduled Principal Balance of the Loans in such Loan Group (net of the PO
Percentage of each Loan in such Loan Group) over the aggregate Certificate
Principal Balance of the Senior Certificates (other than the Class PO
Certificates and the related Interest Only Certificates) of the related
Certificate Group immediately prior to such Distribution Date.

      "INTEREST ACCRUAL PERIOD" means, for any Distribution Date and each class
of offered certificates (other than the Class 5-A-1 and Class 5-A-2
certificates), the period from and including the first day of the calendar month
immediately preceding the month in which such Distribution Date occurs,
commencing September 1, 2004, to and including the last day of that month, on
the basis of a 360-day year consisting of twelve 30-day months. With respect to
any Distribution Date and the Class 5-A-1 and Class 5-A-2 certificates, the
period from and including the 25th day of the month preceding the month in which
such Distribution Date occurs to and including the 24th day of the month in
which such Distribution Date occurs, on the basis of a 360 day year consisting
of twelve 30-day months.

      "INTEREST ONLY CERTIFICATES" means the Class 5-A-2, Class 15-AX-1, Class
15-AX-2 and Class 30-AX certificates.

      "INTEREST SHORTFALL" means, with respect to a Loan and any Distribution
Date, "Interest Shortfall" as described under "Description of the Offered
Certificates--Interest" in this prospectus supplement.

      "LENDER PAID MORTGAGE INSURANCE LOANS" means those Loans that the Lender
Paid Mortgage Insurance Rate applies.

      "LENDER PAID MORTGAGE INSURANCE RATE" means, with respect to 3 Loans,
representing approximately 0.21% of the Cut-Off Date Pool Balance of all of the
Loans, the per annum rate

                                     S-132


set forth in the mortgage loan schedule attached to the Pooling and Servicing
Agreement that represents the portion of the interest payment due from the
related borrower that will be used by the related servicer to pay the premium
for the required primary mortgage guaranty insurance policy.

      "LIBOR" means on each LIBOR Determination Date, the interest rate
determined by the trust administrator for the succeeding Interest Accrual Period
on the basis of the British Bankers' Association "Interest Settlement Rate" for
one month deposits in U.S. dollars as found on Telerate page 3750 as of 11:00
A.M. London time on such LIBOR Determination Date. Such Interest Settlement
Rates currently are based on rates quoted by 16 British Bankers' Association
designated banks as being in the view of such banks, the offered rate at which
deposits are being quoted to prime banks in the London interbank market. Such
Interest Settlement Rates are calculated by eliminating the four highest rates
and the four lowest rates, averaging the eight remaining rates, carrying the
result (expressed as a percentage) out to six decimal places, and rounding to
five decimal places. As used herein "Telerate page 3750" means the display
designated as page 3750 on the Bridge Telerate Service.

      If on any LIBOR Determination Date the trust administrator is unable to
determine LIBOR on the basis of the method set forth in the preceding paragraph,
LIBOR for the next Interest Accrual Period will be the higher of (i) LIBOR as
determined on the previous LIBOR Determination Date or (ii) the Reserve Interest
Rate. The "Reserve Interest Rate" will be the rate per annum which the trust
administrator determines to be either (a) the arithmetic mean (rounding such
arithmetic mean upwards if necessary to the nearest whole multiple of 1/16%) of
the one month U.S. Dollar lending rate that New York City banks selected by the
trust administrator are quoting on the relevant LIBOR Determination Date to the
principal London offices of at least two leading banks in the London interbank
market or (b) in the event that the trust administrator can determine no such
arithmetic mean, the lowest one month U.S. Dollar lending rate that the New York
City banks selected by the trust administrator are quoting on such LIBOR
Determination Date to leading European banks.

      If on any LIBOR Determination Date the trust administrator is required,
but is unable, to determine the Reserve Interest Rate in the manner provided in
the preceding paragraph, LIBOR for the next Interest Accrual Period will be
LIBOR as determined on the previous LIBOR Determination Date or, in the case of
the first LIBOR Determination Date, 1.83%.

      The establishment of LIBOR on each LIBOR Determination Date by the trust
administrator and the trust administrator's calculation of the rate of interest
applicable to the LIBOR Certificates for the related Interest Accrual Period
shall (in the absence of manifest error) be final and binding. Each such rate of
interest may be obtained by telephoning the trust administrator at (301)
815-6600.

      "LIBOR CERTIFICATES" means the Class 5-A-1 and Class 5-A-2 certificates.

      "LIBOR DETERMINATION DATE" means for each Interest Accrual Period the
second London business day prior to the day on which such Interest Accrual
Period commences.

                                     S-133


      "LIQUIDATED LOAN" means any defaulted Loan as to which the master servicer
has determined that all amounts which it expects to recover from or on account
of such Loan have been recovered.

      "LOAN" means any of the loans included in the trust.

      "LOAN GROUP" means any of the Group 1 Loans, Group 2 Loans, Group 3 Loans,
Group 4 Loans or Group 5 Loans, as applicable.

      "LOAN SELLER" means each of Cendant Mortgage Corporation, Chase Manhattan
Mortgage Corporation, EverHome Mortgage Company, Wells Fargo Bank, National
Association, certain originators under the UBS Conduit and certain other loan
sellers, each of which represents less than 5% of the Cut-Off Date Pool Balance
of the Loans. See "Underwriting Standards" in this prospectus supplement.

      "LOAN-TO-VALUE OR LTV RATIO" means, with respect to a Loan at any given
time, a fraction, expressed as a percentage, the numerator of which is the
principal balance of the related Loan at the date of determination and the
denominator of which is (a) in the case of a purchase, the lesser of the selling
price of the related Mortgaged Property or its appraised value at the time of
sale, or (b) in the case of a refinance, the appraised value of the related
Mortgaged Property at the time of such refinance; provided, however, that for
purposes of determining whether primary mortgage insurance is required at
origination for any Loan, this calculation may vary depending on the state in
which the related mortgaged property is located.

      "LOSS ALLOCATION LIMITATION" means the limitation on reductions of the
Certificate Principal Balance of any class on any Distribution Date on account
of any Realized Loss to the extent that the reduction would have the effect of
reducing the aggregate Certificate Principal Balance of all of the certificates
(other than the Interest Only Certificates and Class PO Certificates) as of that
Distribution Date to an amount less than the Pool Balance for all of the Loan
Groups as of the following Distribution Date, less (i) any Deficient Valuations
applicable to each such Loan Group occurring before the Bankruptcy Loss Coverage
Amount has been reduced to zero and less (ii) the PO Percentage of the Scheduled
Principal Balance of any Discount Loans.

      "MASTER SERVICING FEE RATE" means, with respect to certain Loans, 0.030%
per annum.

      "MOODY'S" means Moody's Investors Service, Inc.

      "MORTGAGE INTEREST RATE" means, with respect to each Loan, the per annum
interest rate at which the Loan accrues interest.

      "MORTGAGE NOTE" is a document that evidences an interest in a Loan secured
by a mortgage or deed of trust.

      "MORTGAGED PROPERTY" means, with respect to any Loan, the property
securing the Loan.

      "NET INTEREST SHORTFALL" means, with respect to any Distribution Date,
"Net Interest Shortfall" as defined under "Description of the Offered
Certificates--Interest" in this prospectus supplement.

                                     S-134


      "NET MORTGAGE RATE" for each Loan is the applicable Mortgage Interest Rate
less (i) the Servicing Fee Rate, (ii) the Master Servicing Fee Rate, if
applicable and (iii) the Lender Paid Mortgage Insurance Rate, if applicable.

      "NET PREPAYMENT INTEREST SHORTFALL" means, with respect to any
Distribution Date, "Net Prepayment Interest Shortfall" as defined under
"Description of the Offered Certificates--Interest" in this prospectus
supplement.

      "NON-DISCOUNT LOAN" means any of the Group 1 Non-Discount Loans, Group 2
Non-Discount Loans, Group 3 Non-Discount Loans, Group 4 Non-Discount Loans or
Group 5 Non-Discount Loans, as applicable.

      "NON-EXCESS REALIZED LOSS" means any Realized Loss other than an Excess
Loss.

      "NON-PO PERCENTAGE" means, with respect to any Loan Group and:

            (1) any Discount Loan of such Group, the fraction, expressed as a
         percentage, equal to the Net Mortgage Rate divided by the Required
         Coupon for such Loan Group; and

            (2) any Non-Discount Loan of such Group, 100%.

      "NON-PO RECOVERIES" means, with respect to Recoveries and any Distribution
Date, an amount equal to the excess, if any, of (i) the amount of the
Recoveries, over (ii) the amount of the aggregate of the PO Recoveries for that
Distribution Date.

      "NOTIONAL AMOUNT" means:

         (a) with respect to any Distribution Date and the Class 15-AX-1
      certificates, an amount equal to the product of (i) the aggregate
      Scheduled Principal Balance for that Distribution Date of the outstanding
      Non-Discount Loans in Loan Group 1 and Loan Group 3 and (ii) a fraction,
      (a) the numerator of which is equal to the weighted average of the
      Stripped Interest Rates for the Non-Discount Loans in Loan Group 1 and
      Loan Group 3, and (b) the denominator of which is equal 5.00%. The
      Notional Amount of the Class 15-AX-1 certificates for the first Interest
      Accrual Period is expected to be approximately $3,433,154;

         (b) with respect to any Distribution Date and the Class 15-AX-2
      certificates, an amount equal to the product of (i) the aggregate
      Scheduled Principal Balance for that Distribution Date of the outstanding
      Non-Discount Loans in Loan Group 2 and Loan Group 4 and (ii) a fraction,
      (a) the numerator of which is equal to the weighted average of the
      Stripped Interest Rates for the Non-Discount Loans in Loan Group 2 and
      Loan Group 4, and (b) the denominator of which is equal to 5.50%. The
      Notional Amount of the Class 15-AX-2 certificates for the first Interest
      Accrual Period is expected to be approximately $3,492,392;

         (c) with respect to any Distribution Date and the Class 30-AX
      certificates, an amount equal to the product of (i) the aggregate
      Scheduled Principal Balance for that Distribution Date of the outstanding
      Non-Discount Loans in Loan Group 5 and (ii) a fraction, (a) the numerator
      of which is equal to the weighted average of the Stripped Interest Rates
      for the Non-Discount Loans in Loan Group 5, and (b) the denominator of
      which is equal to 5.750%.

                                     S-135


      The Notional Amount of the Class 30-AX certificates for the first Interest
      Accrual Period is expected to be approximately $2,226,918; and

         (d) with respect to any Distribution Date and the Class 5-A-2
      certificates, an amount equal to the Certificate Principal Balance of the
      Class 5-A-1 certificates immediately prior to such Distribution Date. The
      Notional Amount of the Class 5-A-2 certificates for the first Interest
      Accrual Period is expected to be approximately $13,068,000.

      "ORIGINAL SUBORDINATE PRINCIPAL BALANCE" means, with respect to the
Subordinate Certificates, the aggregate of the Certificate Principal Balances of
the Subordinate Certificates as of the date of issuance of the certificates.

      "PLAN" is any:

            (1) employee benefit plan as defined in Section 3(3) of ERISA;

            (2) plan described in Section 4975(e)(1) of the Code, including
         individual retirement accounts or Keogh plans; or

            (3) entity whose underlying assets include plan assets by reason of
         an investment in the entity by a plan described in clause (1) or (2)
         above.

      "PO PERCENTAGE" means, with respect to:

            (1) any Discount Loan, 100% minus the Non-PO Percentage for that
         Discount Loan; and

            (2) any Non-Discount Loan, 0%.

      "PO RECOVERY" means, with respect to Recoveries on Discount Loans, any
Distribution Date and any class of Class PO Certificates, an amount equal to:

            (1) with respect to the Class 15-PO certificates, the lesser of (a)
         the PO Percentage of each Recovery on a Discount Loan in Loan Group 1,
         Loan Group 2, Loan Group 3 and Loan Group 4 and (b) the aggregate of
         the Group 1 PO Deferred Amount, Group 2 PO Deferred Amount, Group 3 PO
         Deferred Amount, and Group 4 PO Deferred Amount for that Distribution
         Date; and

            (2) with respect to the Class 30 PO certificates, the lesser of (a)
         the PO Percentage of each Recovery on a Discount Loan in Loan Group 5
         and (b) the Group 5 PO Deferred Amount.

      "POOL BALANCE" means, with respect to any Loan Group or all Loan Groups in
the aggregate, and any Distribution Date, the aggregate Scheduled Principal
Balance of the Loans in such Loan Group or Groups for such Distribution Date.

      "POOLING AND SERVICING AGREEMENT" is the pooling and servicing agreement
dated as of September 1, 2004 among the depositor, the transferor, the master
servicer, the trust administrator, the custodians and the trustee.

                                     S-136


      "PREPAYMENT ASSUMPTION" means "Prepayment Assumption" as defined in
"Prepayment and Yield Considerations--Modeling Assumptions" in this prospectus
supplement.

      "PREPAYMENT CURVE" represents with respect to any Loan Group, an assumed
rate of prepayment each month relative to the then outstanding principal balance
of the related pool of loans in each Loan Group for the life of those loans as
described in "Prepayment and Yield Considerations--Modeling Assumptions" in this
prospectus supplement.

      "PREPAYMENT INTEREST SHORTFALL" means, with respect to any Distribution
Date and each Loan with respect to which a prepayment in full or a partial
prepayment has occurred during the month preceding such Distribution Date
(except with respect to any Mortgage Loan serviced by WMMSC for which a
prepayment in full is received by WMMSC on or after the 1st day and prior to the
15th day of the month preceding the month in which such Distribution Date
occurs), the difference between (a) one month's interest at the Net Mortgage
Rate on the Scheduled Principal Balance of the Loan or partial payment, as
applicable, and (b) the amount of interest at the Net Mortgage Rate actually
received with respect to the Loan principal prepayment.

      "PREPAYMENT PERIOD" means, (A) with respect to any prepayment of a Loan
serviced by any servicer, other than WMMSC, and any partial prepayment of a Loan
serviced by WMMSC, and any Distribution Date, the calendar month preceding the
month in which such Distribution Date occurs, and (B) with respect to any
prepayment in full of a Loan serviced by WMMSC and any Distribution Date, the
period beginning on the 15th day of the calendar month immediately preceding the
month in which such Distribution Date occurs and ending on the 14th day of the
calendar month in which such Distribution Date occurs.

      "PRINCIPAL ONLY CERTIFICATES" means the Class PO Certificates.

      "PURCHASE PRICE" means, with respect to each Loan required to be purchased
by the transferor, an amount generally equal to the sum of (a) 100% of the
unpaid principal balance of that Loan on the date of purchase, (b) accrued and
unpaid interest on that Loan at the applicable Mortgage Interest Rate from the
date through which interest was last paid by the related borrower, or the date
on which the applicable servicer or the master servicer, as the case may be,
made an advance in respect of such interest (which was not reimbursed), to the
due date in the month in which the purchase price is to be distributed to
certificateholders and (c) in the event that such Loan is repurchased by the
transferor due to a breach of the transferor's representations and warranties in
the Pooling and Servicing Agreement relating to applicable predatory and abusive
lending laws, any costs and damages incurred by the trust in connection with a
violation of a predatory or abusive lending law with respect to such Loan, less
(d) any amounts received in respect of such Loan which are being held for future
distribution.

      "RATING AGENCY" means either of S&P and Fitch.

      "REALIZED LOSS" means:

            (1) as to any Liquidated Loan, the unpaid principal balance thereof
         plus accrued and unpaid interest thereon at the Net Mortgage Rate
         through the last day of the month of liquidation, less the net proceeds
         from the liquidation of, and any insurance proceeds from, such Loan and
         the related Mortgaged Property; and

                                     S-137


            (2) as to any Loan, a Deficient Valuation.

      "RECORD DATE" means, (i) with respect to any Distribution Date and the
offered certificates (other than the Class 5-A-1 and Class 5-A-2 certificates),
the last business day of the month immediately preceding the month in which the
related Distribution Date occurs or (ii) with respect to any Distribution Date
and the Class 5-A-1 and Class 5-A-2 certificates, the business day immediately
preceding such Distribution Date.

      "RECOVERY" means, with respect to any Distribution Date and any Loan, an
amount, net of any reimbursable expenses, received in respect of principal on
that Loan during the related Prepayment Period that has previously been
allocated as a Realized Loss to a class of certificates.

      "REGULAR CERTIFICATES" means the certificates, other than the Residual
Certificates.

      "RELIEF ACT" means the Servicemembers Civil Relief Act or any comparable
state or local statute (including the comparable provisions under the California
Military and Veterans Code), in each case, as amended.

      "RELIEF ACT REDUCTION" means any reduction in the interest rate on a Loan
due to the application of the Relief Act. See "Certain Legal Aspects of
Residential Loans--Servicemembers Civil Relief Act and the California Military
and Veterans Code" in the prospectus.

      "REO PROPERTY" is a property acquired on behalf of the certificateholders
in respect of a defaulted Loan through foreclosure, deed-in-lieu of foreclosure,
repossession or otherwise.

      "REQUIRED COUPON" means, for Loan Group 1, 4.50% per annum; for Loan Group
2, 5.50% per annum; for Loan Group 3, 5.00% per annum; for Loan Group 4, 6.00%
per annum; and for Loan Group 5, 5.75% per annum.

      "RESIDUAL CERTIFICATES" means the Class A-LR and Class A-R certificates.

      "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.

      "SCHEDULED PRINCIPAL BALANCE" means, as to any Loan and any Distribution
Date, the unpaid principal balance of such Loan as of the due date in the month
preceding the month in which that Distribution Date occurs, as specified in the
amortization schedule at the time relating to that Loan (before any adjustment
to such amortization schedule by reason of any moratorium or similar waiver or
grace period) after giving effect to (i) any previous partial principal
prepayments, liquidation proceeds and insurance proceeds allocable to principal
received during the Prepayment Period for the prior Distribution Date and (ii)
the payment of principal due on that due date and irrespective of any
delinquency in payment by the related borrower.

      "SENIOR CERTIFICATES" means any of the Group 1, Group 2, Group 3, Group 4
and Group 5 Certificates and the Class 15-AX-1, Class 15-AX-2, Class 30-AX,
Class 15-PO and Class 30-PO certificates.

                                     S-138


      "SENIOR FINAL DISTRIBUTION DATE" means, as to any Certificate Group, the
Distribution Date on which the respective Certificate Principal Balances of the
Senior Certificates (other than the Class PO Certificates and Interest Only
Certificates) have each been reduced to zero.

      "SENIOR OPTIMAL PRINCIPAL AMOUNT" means, for a Group and any Distribution
Date, the sum of:

            (1) the Senior Percentage related to such Group of the sum for each
         Loan in such Group of the applicable Non-PO Percentage of all scheduled
         monthly payments of principal due on each Loan of such Group on the
         related due date without giving effect to any Deficient Valuation or
         Debt Service Reduction that occurred prior to the reduction of the
         Bankruptcy Loss Coverage Amount to zero;

            (2) the Senior Percentage related to such Group of the sum for each
         Loan in such Group of the applicable Non-PO Percentage of the principal
         portion of the Purchase Price of each Loan of such Group that was
         repurchased by the transferor or another person with respect to that
         Distribution Date;

            (3) the Senior Percentage related to such Group of the sum for each
         Loan in such Group of the applicable Non-PO Percentage of any
         Substitution Adjustment Amounts in respect of a Loan of such Group
         received with respect to that Distribution Date;

            (4) the Senior Percentage related to such Group of the sum for each
         Loan in such Group of the applicable Non-PO Percentage of the amount of
         net insurance proceeds or net liquidation proceeds allocable to
         principal received in the prior calendar month with respect to a Loan
         of such Group that is not a Liquidated Loan;

            (5) with respect to each Loan of such Group that became a Liquidated
         Loan during the prior calendar month, the lesser of:

               (a) the Senior Percentage related to such Group of the applicable
            Non-PO Percentage of the Scheduled Principal Balance of that Loan of
            such Group; and

               (b) either (A) the Senior Prepayment Percentage related to such
            Group or (B) if an Excess Loss was sustained with respect to any
            Liquidated Loan of such Group during the preceding calendar month,
            the Senior Percentage related to such Group, of the applicable
            Non-PO Percentage of the amount of the net insurance proceeds or net
            liquidation proceeds allocable to principal received with respect to
            that Loan during the prior calendar month;

            (6) the Senior Prepayment Percentage related to such Group of the
         sum for each Loan in such Group of the applicable Non-PO Percentage of:

               (a) principal prepayments in full in respect of a Loan of such
            Group received during the related Prepayment Period; and

               (b) partial principal prepayments in respect of a Loan of such
            Group applied during the related Prepayment Period;

                                     S-139


            (7) with respect to any Distribution Date prior to the Cross-Over
         Date only, the Senior Prepayment Percentage related to such Group of
         the Non-PO Recoveries for such Group received during the related
         Prepayment Period;

provided, however, that if a Deficient Valuation or Debt Service Reduction is
sustained with respect to a Loan of such Group that is not a Liquidated Loan
after the Bankruptcy Loss Coverage Amount has been reduced to zero, the Senior
Optimal Principal Amount for such Group will be reduced on the related
Distribution Date by the Senior Percentage related to such Group of the
applicable Non-PO Percentage of the principal portion of such Deficient
Valuation or Debt Service Reduction.

           "SENIOR PERCENTAGE" means, with respect to any Certificate Group and
any Distribution Date, the lesser of 100% and the percentage obtained by
dividing the aggregate Certificate Principal Balances of all the Senior
Certificates (other than the Class PO Certificates and the Interest Only
Certificates) of such Certificate Group immediately preceding that Distribution
Date by the Non-PO Percentage multiplied by the Scheduled Principal Balance of
the Loans in such Group for that Distribution Date.

           "SENIOR PREPAYMENT PERCENTAGE" means, with respect to any Certificate
Group and any Distribution Date, the percentage (not exceeding 100%) set forth
in the following table:



    DISTRIBUTION DATE OCCURRING                              SENIOR PREPAYMENT PERCENTAGE
-----------------------------------           -----------------------------------------------------------

October 2004 through September 2009           100%
October 2009 through September 2010           Senior Percentage of such Certificate Group plus 70% of the
                                                 Subordinate Percentage
October 2010 through September 2011           Senior Percentage of such Certificate Group plus 60% of the
                                                 Subordinate Percentage
October 2011 through September 2012           Senior Percentage of such Certificate Group plus 40% of the
                                                 Subordinate Percentage
October 2012 through September 2013           Senior Percentage of such Certificate Group plus 20% of the
                                                 Subordinate Percentage
After September 2013                          Senior Percentage of such Certificate Group


provided, however, that on any of the foregoing Distribution Dates if the Senior
Percentage for any Certificate Group exceeds the initial Senior Percentage for
such Certificate Group, the Senior Prepayment Percentage for each Certificate
Group will once again equal 100%. The reductions in the Senior Prepayment
Percentages for each Certificate Group described above will not occur, unless,
as of the last day of the month preceding the Distribution Date, both:

            (1) the aggregate Scheduled Principal Balance of Loans delinquent 60
         days or more (including for this purpose any of such Loans in
         bankruptcy or foreclosure and such Loans with respect to which the
         related Mortgaged Property has been acquired by the trust) does not
         exceed 50% of the aggregate Certificate Principal Balances of the
         Subordinate Certificates as of that date; and

            (2) cumulative Realized Losses with respect to the Loans do not
         exceed:

               (a) 30% of the Original Subordinate Principal Balance if such
            Distribution Date occurs between and including October 2009 and
            September 2010;

               (b) 35% of the Original Subordinate Principal Balance if such
            Distribution Date occurs between and including October 2010 and
            September 2011;

                                     S-140


               (c) 40% of the Original Subordinate Principal Balance if such
            Distribution Date occurs between and including October 2011 and
            September 2012;

               (d) 45% of the Original Subordinate Principal Balance if such
            Distribution Date occurs between and including October 2012 and
            September 2013; and

               (e) 50% of the Original Subordinate Principal Balance if such
            Distribution Date occurs after September 2013.

      Upon the reduction of a Senior Prepayment Percentage during one of the
periods described in the table above, such reduction will remain in effect for
the remainder of that period.

      "SERVICER REMITTANCE DATE" means the day of each month that a servicer is
required to remit funds to the master servicer (or the trust administrator in
the case of WMMSC) pursuant to the related Servicing Agreement. For each
servicer the Servicer Remittance Date is generally the 18th day (or, in the case
of WMMSC, the 24th day) of each month (or, if such day is not a business day,
the immediately preceding or immediately following business day (or, for WMMSC,
if that day is not a business day, the immediately preceding business day), as
the case may be).

      "SERVICING AGREEMENTS" means those certain servicing agreements relating
to the servicing of the Loans by the Servicers.

      "SERVICING FEE" for any Distribution Date is an amount equal to
one-twelfth of the Servicing Fee Rate for the Loan on the Scheduled Principal
Balance of the Loan.

      "SERVICING FEE RATE" means for each servicer the rate described in the
applicable Servicing Agreement, as described under the caption "The Pooling and
Servicing Agreement--Servicing and Master Servicing Compensation and Payment of
Expenses" in this prospectus supplement.

      "SIMILAR LAW" means any federal, state or local law materially similar to
Title I of ERISA or Section 4975 of the Code.

      "SPECIAL HAZARD LOSS" means a Realized Loss, as reported by the applicable
servicer to the master servicer, attributable to damage or a direct physical
loss suffered by a Mortgaged Property, including any Realized Loss due to the
presence or suspected presence of hazardous wastes or substances on a Mortgaged
Property, other than any such damage or loss covered by a hazard policy or a
flood insurance policy required to be maintained in respect of the Mortgaged
Property under the Servicing Agreements or the Pooling and Servicing Agreement
or any loss due to normal wear and tear or certain other causes.

      "SPECIAL HAZARD LOSS COVERAGE AMOUNT" means approximately $4,577,476
(approximately 1.09% of the aggregate Cut-Off Date Pool Balance of the Loans)
less, on each Distribution Date, the sum of (1) the aggregate amount of Special
Hazard Losses that would have been previously allocated to the Subordinate
Certificates in the absence of the Loss Allocation Limitation and (2) the
related Adjustment Amount. As of any Distribution Date on or after the
Cross-Over Date, the Special Hazard Loss Coverage Amount will be zero.

                                     S-141


      "STRIPPED INTEREST RATE" means, for each Non-Discount Loan in any
applicable Loan Group, the excess of the Net Mortgage Rate for that Loan over
the Required Coupon for such Loan Group.

      "SUBORDINATE CERTIFICATE WRITEDOWN AMOUNT" means, as of any Distribution
Date, with respect to the Subordinate Certificates, the amount by which:

            (1) the sum of the Certificate Principal Balances of the Senior
         Certificates (other than the Interest Only Certificates and Class PO
         Certificates) and the Subordinate Certificates, after giving effect to
         the distribution of principal and the allocation of Realized Losses in
         reduction of the Certificate Principal Balances of those certificates
         on that Distribution Date, exceeds

            (2) the aggregate Pool Balance of the Loans as of the following
         Distribution Date, less any Deficient Valuations related to each such
         Group occurring before the Bankruptcy Loss Coverage Amount has been
         reduced to zero and less the PO Percentage of any Discount Loan in each
         Loan Group.

      "SUBORDINATE CERTIFICATES" means the Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5 and Class B-6 certificates.

      "SUBORDINATE OPTIMAL PRINCIPAL AMOUNT" means, for each Group and any
Distribution Date in the aggregate, the sum of:

            (1) the Subordinate Percentage related to such Group of the sum for
         each Loan in such Group of the applicable Non-PO Percentage of all
         scheduled monthly payments of principal due on each Loan of such Group
         on the related due date without giving effect to any Deficient
         Valuation or Debt Service Reduction that occurred prior to the
         reduction of the Bankruptcy Loss Coverage Amount to zero;

            (2) the Subordinate Percentage related to such Group of the sum for
         each Loan in such Group of the applicable Non-PO Percentage of the
         principal portion of the Purchase Price of each Loan of such Group that
         was repurchased by the transferor or another person with respect to
         that Distribution Date;

            (3) the Subordinate Percentage related to such Group of the sum for
         each Loan in such Group of the applicable Non-PO Percentage of any
         Substitution Adjustment Amounts in respect of a Loan of such Group
         received with respect to that Distribution Date;

            (4) the Subordinate Percentage related to such Group of the sum for
         each Loan in such Group of the applicable Non-PO Percentage of the
         amount of net insurance proceeds or net liquidation proceeds allocable
         to principal received in the prior calendar month with respect to a
         Loan of such Group that is not a Liquidated Loan;

            (5) with respect to each Loan that became a Liquidated Loan during
         the prior calendar month, the portion of the applicable Non-PO
         Percentage of the amount of the net insurance proceeds or net
         liquidation proceeds allocable to principal received with

                                     S-142


         respect to that Loan during the prior calendar month that was not
         included in clause (5) of the definition of "Senior Optimal Principal
         Amount" for such Distribution Date; and

            (6) the Subordinate Prepayment Percentage related to such Group of
         the sum for each Loan in such Group of the applicable Non-PO Percentage
         of:

               (a) principal prepayments in full in respect of a Loan of such
            Group received during the related Prepayment Period; and

               (b) partial principal prepayments in respect of a Loan of such
            Group applied during the related Prepayment Period; and

            (7) with respect to any Distribution Date prior to the Cross-Over
         Date only, the Subordinate Prepayment Percentage related to such Group
         of the Non-PO Recoveries for such Group received during the related
         Prepayment Period;

provided, however, that if a Deficient Valuation or Debt Service Reduction is
sustained with respect to a Loan of such Group that is not a Liquidated Loan
after the Bankruptcy Loss Coverage Amount has been reduced to zero, the
Subordinate Optimal Principal Amount for such Group will be reduced on the
related Distribution Date by the Subordinate Percentage related to such Group of
the applicable Non-PO Percentage of the principal portion of such Deficient
Valuation or Debt Service Reduction.

      "SUBORDINATE PERCENTAGE" means, with respect to any Certificate Group and
any Distribution Date, 100% minus the Senior Percentage for such Certificate
Group.

      "SUBORDINATE PREPAYMENT PERCENTAGE" means, with respect to any Certificate
Group and any Distribution Date, 100% minus the related Senior Prepayment
Percentage, except that, on any Distribution Date after the Senior Final
Distribution Date, the Subordinate Prepayment Percentage for each Certificate
Group will equal 100%.

      "SUBORDINATE PRINCIPAL DISTRIBUTION AMOUNT" means the aggregate amount
payable as principal on the Subordinate Certificates from Available Funds for
each Loan Group in accordance with the priorities set forth in this prospectus
supplement under "Description of the Offered Certificates--Allocation of
Available Funds," after application of Available Funds for each such Loan Group
to make payments on the Senior Certificates as described in this prospectus
supplement under "Description of the Offered Certificates--Allocation of
Available Funds" (including amounts required to be paid as described in this
prospectus supplement under "Description of the Offered
Certificates--Subordination--Cross-Collateralization") and giving effect to
distributions of Accrued Certificate Interest to the Subordinate Certificates in
accordance with the priorities set forth in this prospectus supplement under
"Description of the Offered Certificates--Allocation of Available Funds."

      "SUBSTITUTION ADJUSTMENT AMOUNT" means, in connection with a substitution
of a defective Loan for a substitute loan, an amount equal to the excess of the
principal balance of the defective Loan over the aggregate of the principal
balance of the substitute loans.

      "UBS CONDUIT" has the meaning set forth under "Underwriting Standards" in
this prospectus supplement.

                                     S-143


      "UNDERCOLLATERALIZED GROUP" means, with respect to one or more Certificate
Groups, each particular Certificate Group on any Distribution Date for which the
Certificate Principal Balances of the Senior Certificates (other than the
related Class PO Certificates) of such Group (after giving effect to
distributions to be made on such Distribution Date) is greater than the Pool
Balance of the related Loan Group (net of the PO Percentage of any Discount
Loans in such Loan Group) as of the following Distribution Date.

      "WELLS FARGO" or "WFB" means Wells Fargo Bank, National Association.

      "WMMSC" means Washington Mutual Mortgage Securities Corp.



                                     S-144



                 ANNEX A - MORTGAGE LOAN STATISTICAL INFORMATION

     The information set forth in this Annex A has been based on information
provided by each of the Loan Sellers and tabulated by the depositor. None of the
depositor, the master servicer, the trust administrator, the custodians, the
underwriter or the trustee make any representation as to the accuracy or
completeness of that information. Due to rounding, the totals in the tables
below may not reflect the sum of the line items.


                                  GROUP 1 LOANS

                           ORIGINAL PRINCIPAL BALANCES





                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
      RANGE OF ORIGINAL PRINCIPAL BALANCES          NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 1 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

$25,001 - $50,000.............................               2          $      69,081                   0.18%
$50,001 - $75,000.............................               4                236,529                   0.63
$75,001 - $100,000............................               6                554,813                   1.47
$100,001 - $125,000...........................               9              1,050,185                   2.79
$125,001 - $150,000...........................               5                698,748                   1.86
$150,001 - $175,000...........................               7              1,128,201                   3.00
$175,001 - $200,000...........................               9              1,719,130                   4.56
$200,001 - $250,000...........................              15              3,423,536                   9.09
$250,001 - $300,000...........................              13              3,567,671                   9.47
$300,001 - $350,000...........................              15              4,869,147                  12.93
$350,001 - $400,000...........................              10              3,478,390                   9.23
$400,001 - $450,000...........................               8              3,329,200                   8.84
$450,001 - $500,000...........................               7              3,246,413                   8.62
$500,001 - $550,000...........................               3              1,569,059                   4.17
$550,001 - $600,000...........................               5              2,878,969                   7.64
$600,001 - $650,000...........................               4              2,498,659                   6.63
$650,001 - $700,000...........................               3              2,013,955                   5.35
$1,000,001 or more............................               1              1,336,565                   3.55
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             126          $  37,668,253                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the average original principal balance of the Group
1 Loans was approximately $306,804.


                               LOAN INTEREST RATES





                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
          RANGE OF LOAN INTEREST RATES              NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 1 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

4.126% - 4.250%...............................               1          $     193,354                   0.51%
4.376% - 4.500%...............................               6              1,199,884                   3.19
4.501% - 4.625%...............................               7              1,272,615                   3.38
4.626% - 4.750%...............................              17              4,767,020                  12.66
4.751% - 4.875%...............................              41             11,501,192                  30.53
4.876% - 5.000%...............................              51             17,593,228                  46.71
5.001% - 5.125%...............................               2                733,371                   1.95
5.501% - 5.625%...............................               1                407,589                   1.08
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             126          $  37,668,253                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the weighted average interest rate of the Group 1
Loans, by Cut-Off Date Pool Balance of the Group 1 Loans, was approximately
4.906% per annum.


                                      A-1


                                  GROUP 1 LOANS

                          ORIGINAL LOAN-TO-VALUE RATIOS





                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
     RANGE OF ORIGINAL LOAN-TO-VALUE RATIOS         NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 1 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

50.00% or less................................              55          $  16,670,345                  44.26%
50.01% - 55.00%...............................              12              3,373,274                   8.96
55.01% - 60.00%...............................              14              3,427,967                   9.10
60.01% - 65.00%...............................               9              2,922,727                   7.76
65.01% - 70.00%...............................              14              5,094,531                  13.52
70.01% - 75.00%...............................              12              2,347,714                   6.23
75.01% - 80.00%...............................               6              2,892,645                   7.68
80.01% - 85.00%...............................               1                154,636                   0.41
85.01% - 90.00%...............................               1                 48,735                   0.13
90.01% - 95.00%...............................               1                391,058                   1.04
95.01% - 100.00%..............................               1                344,620                   0.91
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             126          $  37,668,253                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the weighted average original LTV Ratio of the
Group 1 Loans, by Cut-Off Date Pool Balance of the Group 1 Loans, was
approximately 54.26%.


                                 PROPERTY TYPES





                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
                  PROPERTY TYPE                     NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 1 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

Single Family.................................              90          $  26,760,245                  71.04%
Planned Unit Development......................              18              6,370,861                  16.91
Condominium...................................              10              2,657,512                   7.06
Two- to Four-Family...........................               7              1,830,899                   4.86
Coop..........................................               1                 48,735                   0.13
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             126          $  37,668,253                 100.00%
                                                    ===============     =================    ============================




                                  LOAN PURPOSE



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
                  LOAN PURPOSE                      NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 1 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

Rate & Term Refinance.........................              58          $  19,385,029                  51.46%
Cash Out Refinance............................              54             13,782,761                  36.59
Purchase......................................              14              4,500,463                  11.95
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             126          $  37,668,253                 100.00%
                                                    ===============     =================    ============================


                                OCCUPANCY STATUS



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
                OCCUPANCY STATUS                    NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 1 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

Primary.......................................             116          $  35,151,726                  93.32%
Secondary.....................................              10              2,516,527                   6.68
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             126          $  37,668,253                 100.00%
                                                    ===============     =================    ============================



                                      A-2


                                  GROUP 1 LOANS

                           REMAINING TERMS TO MATURITY



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
  RANGE OF REMAINING TERM TO MATURITY (MONTHS)      NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 1 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

121 - 180.....................................             126          $  37,668,253                 100.00%
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             126          $  37,668,253                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the weighted average remaining term to maturity of
the Group 1 Loans, by Cut-Off Date Pool Balance of the Group 1 Loans, was
approximately 176 months.

                            GEOGRAPHIC DISTRIBUTION




                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
             GEOGRAPHIC DISTRIBUTION                NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 1 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

California....................................              43          $  14,715,683                  39.07%
New York......................................              12              3,981,656                  10.57
Illinois......................................              10              2,752,299                   7.31
Massachusetts.................................               6              2,168,169                   5.76
Maryland......................................               8              1,604,902                   4.26
Florida.......................................               6              1,480,224                   3.93
Virginia......................................               6              1,460,925                   3.88
Texas.........................................               4              1,359,062                   3.61
Arizona.......................................               3                969,006                   2.57
New Jersey....................................               3                938,116                   2.49
Missouri......................................               2                808,942                   2.15
Georgia.......................................               3                800,379                   2.12
Colorado......................................               2                574,171                   1.52
South Carolina................................               2                547,982                   1.45
Michigan......................................               2                524,257                   1.39
Connecticut...................................               2                476,608                   1.27
Oregon........................................               2                464,435                   1.23
Minnesota.....................................               2                400,876                   1.06
Wisconsin.....................................               1                400,640                   1.06
Nevada........................................               1                303,421                   0.81
Montana.......................................               1                221,577                   0.59
Vermont.......................................               1                212,565                   0.56
North Carolina................................               1                164,631                   0.44
Louisiana.....................................               1                147,694                   0.39
Maine.........................................               1                 98,479                   0.26
Pennsylvania..................................               1                 91,556                   0.24
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             126          $  37,668,253                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, no more than approximately 3.55% of the Group 1
Loans, by Cut-Off Date Pool Balance of the Group 1 Loans, will be secured by
properties located in any one zip code.

                                      A-3


                                  GROUP 1 LOANS

                               DOCUMENTATION TYPE



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
                  DOCUMENT TYPE                     NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 1 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

Reduced.......................................              70          $  17,995,103                  47.77%
Full..........................................              17              6,634,088                  17.61
Streamline....................................              11              4,925,639                  13.08
No Doc........................................              10              3,146,197                   8.35
No Ratio......................................              10              2,419,139                   6.42
Alternate.....................................               4              1,673,151                   4.44
Stated Doc....................................               4                874,935                   2.32
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             126          $  37,668,253                 100.00%
                                                    ===============     =================    ============================


                                  CREDIT SCORES



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
             RANGE OF CREDIT SCORES                 NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 1 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

551 - 600.....................................               4          $   1,872,221                   4.97%
601 - 650.....................................               9              3,588,925                   9.53
651 - 700.....................................              32             10,247,968                  27.21
701 - 750.....................................              39             10,218,719                  27.13
751 - 800.....................................              34              9,298,174                  24.68
801 - 850.....................................               3                219,435                   0.58
Not Available.................................               5              2,222,811                   5.90
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             126          $  37,668,253                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the weighted average credit score of the borrowers
with a credit score for the Group 1 Loans, by Cut-Off Date Pool Balance of the
Group 1 Loans, was approximately 707.


                                      A-4


                                  GROUP 2 LOANS

                           ORIGINAL PRINCIPAL BALANCES





                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
      RANGE OF ORIGINAL PRINCIPAL BALANCES          NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 2 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

$25,001 - $50,000.............................              13          $     544,081                   0.53%
$50,001 - $75,000.............................              31              1,941,940                   1.89
$75,001 - $100,000............................              36              3,188,591                   3.11
$100,001 - $125,000...........................              41              4,602,087                   4.49
$125,001 - $150,000...........................              22              2,960,107                   2.89
$150,001 - $175,000...........................              19              3,075,208                   3.00
$175,001 - $200,000...........................              27              4,976,225                   4.85
$200,001 - $250,000...........................              21              4,649,837                   4.53
$250,001 - $300,000...........................              13              3,560,185                   3.47
$300,001 - $350,000...........................              17              5,586,399                   5.45
$350,001 - $400,000...........................              43             16,153,554                  15.75
$400,001 - $450,000...........................              21              8,767,970                   8.55
$450,001 - $500,000...........................              22             10,362,746                  10.10
$500,001 - $550,000...........................              12              6,223,536                   6.07
$550,001 - $600,000...........................               7              4,038,835                   3.94
$600,001 - $650,000...........................              11              6,797,856                   6.63
$650,001 - $700,000...........................               5              3,337,104                   3.25
$700,001 - $750,000...........................               1                665,169                   0.65
$750,001 - $800,000...........................               1                788,797                   0.77
$850,001 - $900,000...........................               1                851,191                   0.83
$950,001 - $1,000,000.........................               1                992,884                   0.97
$1,000,001 or more............................               6              8,487,869                   8.28
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             371          $ 102,552,171                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the average original principal balance of the Group
2 Loans was approximately $280,972.


                               LOAN INTEREST RATES




                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
          RANGE OF LOAN INTEREST RATES              NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 2 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

5.501% - 5.625%...............................              88          $  29,232,295                  28.50%
5.626% - 5.750%...............................              75             21,133,110                  20.61
5.751% - 5.875%...............................             123             32,992,992                  32.17
5.876% - 6.000%...............................              85             19,193,774                  18.72
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             371          $ 102,552,171                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the weighted average interest rate of the Group 2
Loans, by Cut-Off Date Pool Balance of the Group 2 Loans, was approximately
5.798% per annum.

                                      A-5


                                  GROUP 2 LOANS

                          ORIGINAL LOAN-TO-VALUE RATIOS



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
     RANGE OF ORIGINAL LOAN-TO-VALUE RATIOS         NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 2 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

50.00% or less................................              97          $  18,282,025                  17.83%
50.01% - 55.00%...............................              30              9,098,712                   8.87
55.01% - 60.00%...............................              24              6,249,934                   6.09
60.01% - 65.00%...............................              27              8,414,812                   8.21
65.01% - 70.00%...............................              52             16,236,548                  15.83
70.01% - 75.00%...............................              45             14,576,856                  14.21
75.01% - 80.00%...............................              77             25,566,108                  24.93
80.01% - 85.00%...............................               7              1,199,328                   1.17
85.01% - 90.00%...............................               9              2,006,428                   1.96
90.01% - 95.00%...............................               2                472,985                   0.46
95.01% - 100.00%..............................               1                448,436                   0.44
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             371          $ 102,552,171                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the weighted average original LTV Ratio of the
Group 2 Loans, by Cut-Off Date Pool Balance of the Group 2 Loans, was
approximately 65.08%.



                                 PROPERTY TYPES


                                                                                               % OF CUT-OFF DATE POOL
                                                                            AGGREGATE          BALANCE OF THE GROUP 2
                  PROPERTY TYPE                     NUMBER OF LOANS     PRINCIPAL BALANCE              LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

Single Family.................................             282          $  73,369,232                  71.54%
Planned Unit Development......................              37             15,118,238                  14.74
Condominium...................................              24              7,535,039                   7.35
Two- to Four-Family...........................              20              5,500,889                   5.36
Townhouse.....................................               2                598,407                   0.58
Coop..........................................               6                430,367                   0.42
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             371          $ 102,552,171                 100.00%
                                                    ===============     =================    ============================


                                  LOAN PURPOSE



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
                  LOAN PURPOSE                      NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 2 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

Cash Out Refinance............................             164          $  39,128,499                  38.15%
Purchase......................................              96             37,681,224                  36.74
Rate & Term Refinance.........................             111             25,742,448                  25.10
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             371          $ 102,552,171                 100.00%
                                                    ===============     =================    ============================


                                OCCUPANCY STATUS



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
                OCCUPANCY STATUS                    NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 2 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

Primary.......................................             340          $  94,665,284                  92.31%
Secondary.....................................              25              5,492,234                   5.36
Investor......................................               6              2,394,653                   2.34
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             371          $ 102,552,171                 100.00%
                                                    ===============     =================    ============================


                                      A-6

                                  GROUP 2 LOANS


                           REMAINING TERMS TO MATURITY




                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
  RANGE OF REMAINING TERM TO MATURITY (MONTHS)      NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 2 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

121 - 180.....................................             371          $ 102,552,171                 100.00%
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             371          $ 102,552,171                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the weighted average remaining term to maturity of
the Group 2 Loans, by Cut-Off Date Pool Balance of the Group 2 Loans, was
approximately 176 months.

                             GEOGRAPHIC DISTRIBUTION



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
             GEOGRAPHIC DISTRIBUTION                NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 2 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

California....................................             101          $  32,037,762                  31.24%
New York......................................              51             13,347,242                  13.02
Florida.......................................              45              9,209,761                   8.98
New Jersey....................................              21              6,578,621                   6.41
Nevada........................................              13              5,349,456                   5.22
Texas.........................................              20              4,713,935                   4.60
Virginia......................................              12              3,717,996                   3.63
Connecticut...................................               6              3,699,539                   3.61
Maryland......................................              12              2,888,975                   2.82
Illinois......................................              11              2,666,055                   2.60
Oregon........................................               7              2,480,508                   2.42
Pennsylvania..................................               8              2,172,558                   2.12
Arizona.......................................              11              1,716,096                   1.67
Colorado......................................               4              1,366,501                   1.33
Georgia.......................................               3              1,073,497                   1.05
Massachusetts.................................               4                987,155                   0.96
Ohio..........................................               3                897,922                   0.88
Michigan......................................               4                792,860                   0.77
Wyoming.......................................               3                783,270                   0.76
Alaska........................................               1                644,557                   0.63
Wisconsin.....................................               2                552,737                   0.54
Maine.........................................               2                549,148                   0.54
Alabama.......................................               2                547,753                   0.53
Kentucky......................................               2                539,919                   0.53
District Of Columbia..........................               1                412,139                   0.40
South Carolina................................               1                389,039                   0.38
Tennessee.....................................               1                384,440                   0.37
Oklahoma......................................               4                378,366                   0.37
Louisiana.....................................               4                358,124                   0.35
Utah..........................................               2                261,002                   0.25
Montana.......................................               2                210,857                   0.21
Mississippi...................................               1                192,207                   0.19
Vermont.......................................               1                159,438                   0.16
North Carolina................................               1                124,659                   0.12
Missouri......................................               1                 95,297                   0.09
Rhode Island..................................               1                 91,352                   0.09
Washington....................................               1                 73,316                   0.07
Nebraska......................................               1                 58,958                   0.06
Arkansas......................................               1                 49,153                   0.05
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             371          $ 102,552,171                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, no more than approximately 1.72% of the Group 2
Loans, by Cut-Off Date Pool Balance of the Group 2 Loans, will be secured by
properties located in any one zip code.

                                      A-7


                                  GROUP 2 LOANS

                               DOCUMENTATION TYPE



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
                  DOCUMENT TYPE                     NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 2 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

Reduced.......................................             136          $  41,645,678                  40.61%
No Doc........................................             142             24,157,218                  23.56
Full..........................................              46             21,725,037                  21.18
Stated Doc....................................              23              6,532,819                   6.37
Streamline....................................              12              4,861,374                   4.74
Alternate.....................................               7              2,688,776                   2.62
No Ratio......................................               4                812,215                   0.79
Limited.......................................               1                129,054                   0.13
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             371          $ 102,552,171                 100.00%
                                                    ===============     =================    ============================



                                  CREDIT SCORES



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
             RANGE OF CREDIT SCORES                 NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 2 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

451 - 500.....................................               1          $     476,787                   0.46%
501 - 550.....................................               1                359,427                   0.35
551 - 600.....................................               2                455,774                   0.44
601 - 650.....................................              60             16,582,583                  16.17
651 - 700.....................................             130             34,237,625                  33.39
701 - 750.....................................             100             26,379,311                  25.72
751 - 800.....................................              65             19,351,661                  18.87
801 - 850.....................................               5                841,168                   0.82
Not Available.................................               7              3,867,835                   3.77
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             371          $ 102,552,171                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the weighted average credit score of the borrowers
with a credit score for the Group 2 Loans, by Cut-Off Date Pool Balance of the
Group 2 Loans, was approximately 700.



                                      A-8



                                  GROUP 3 LOANS

                           ORIGINAL PRINCIPAL BALANCES



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
      RANGE OF ORIGINAL PRINCIPAL BALANCES          NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 3 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

$25,001 - $50,000.............................               5          $     220,382                   0.21%
$50,001 - $75,000.............................              13                797,036                   0.76
$75,001 - $100,000............................              21              1,883,163                   1.80
$100,001 - $125,000...........................              14              1,524,133                   1.45
$125,001 - $150,000...........................              21              2,901,136                   2.77
$150,001 - $175,000...........................              24              3,852,656                   3.68
$175,001 - $200,000...........................              15              2,812,393                   2.68
$200,001 - $250,000...........................              30              6,874,685                   6.56
$250,001 - $300,000...........................              12              3,190,041                   3.04
$300,001 - $350,000...........................              23              7,533,131                   7.19
$350,001 - $400,000...........................              35             13,071,618                  12.47
$400,001 - $450,000...........................              27             11,430,520                  10.91
$450,001 - $500,000...........................              26             12,148,091                  11.59
$500,001 - $550,000...........................               7              3,545,976                   3.38
$550,001 - $600,000...........................               8              4,523,938                   4.32
$600,001 - $650,000...........................              10              6,252,446                   5.97
$650,001 - $700,000...........................               3              1,984,545                   1.89
$700,001 - $750,000...........................               2              1,461,537                   1.39
$850,001 - $900,000...........................               3              2,596,943                   2.48
$900,001 - $950,000...........................               2              1,848,309                   1.76
$950,001 - $1,000,000.........................               7              6,800,873                   6.49
$1,000,001 or more............................               4              7,561,335                   7.21
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             312          $ 104,814,884                 100.00%
                                                    ===============     =================    ============================



     As of the Cut-Off Date, the average original principal balance of the Group
3 Loans was approximately $341,972.


                               LOAN INTEREST RATES



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
          RANGE OF LOAN INTEREST RATES              NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 3 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

5.001% - 5.125%...............................              51          $  19,471,063                  18.58%
5.126% - 5.250%...............................              78             27,363,077                  26.11
5.251% - 5.375%...............................              84             28,662,620                  27.35
5.376% - 5.500%...............................              96             28,382,866                  27.08
5.501% - 5.625%...............................               3                935,257                   0.89
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             312          $ 104,814,884                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the weighted average interest rate of the Group 3
Loans, by Cut-Off Date Pool Balance of the Group 3 Loans, was approximately
5.330% per annum.

                                      A-9

                                  GROUP 3 LOANS

                          ORIGINAL LOAN-TO-VALUE RATIOS



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
     RANGE OF ORIGINAL LOAN-TO-VALUE RATIOS         NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 3 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

50.00% or less................................              92          $  28,404,175                  27.10%
50.01% - 55.00%...............................              20              6,827,463                   6.51
55.01% - 60.00%...............................              23              7,476,934                   7.13
60.01% - 65.00%...............................              34             13,401,340                  12.79
65.01% - 70.00%...............................              48             19,561,750                  18.66
70.01% - 75.00%...............................              31             10,655,866                  10.17
75.01% - 80.00%...............................              55             16,349,156                  15.60
80.01% - 85.00%...............................               3                428,731                   0.41
85.01% - 90.00%...............................               3                457,281                   0.44
90.01% - 95.00%...............................               2                309,056                   0.29
95.01% - 100.00%..............................               1                943,131                   0.90
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             312          $ 104,814,884                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the weighted average original LTV Ratio of the
Group 3 Loans, by Cut-Off Date Pool Balance of the Group 3 Loans, was
approximately 60.86%.

                                 PROPERTY TYPES



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
                  PROPERTY TYPE                     NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 3 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

Single Family.................................             221          $  75,856,470                  72.37%
Planned Unit Development......................              39             14,447,694                  13.78
Two- to Four-Family...........................              24              6,833,099                   6.52
Condominium...................................              22              6,706,468                   6.40
Coop..........................................               4                424,257                   0.40
34............................................               1                343,664                   0.33
Townhouse.....................................               1                203,231                   0.19
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             312          $ 104,814,884                 100.00%
                                                    ===============     =================    ============================


                                  LOAN PURPOSE




                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
                  LOAN PURPOSE                      NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 3 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

Cash Out Refinance............................             133          $  42,491,162                  40.54%
Rate & Term Refinance.........................             111             42,202,634                  40.26
Purchase......................................              66             19,527,960                  18.63
Construction to Perm..........................               2                593,128                   0.57
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             312          $ 104,814,884                 100.00%
                                                    ===============     =================    ============================



                                      A-10

                                  GROUP 3 LOANS


                                OCCUPANCY STATUS



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
                OCCUPANCY STATUS                    NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 3 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

Primary.......................................             292          $  98,754,251                  94.22%
Secondary.....................................              17              4,912,755                   4.69
Investor......................................               3              1,147,877                   1.10
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             312          $ 104,814,884                 100.00%
                                                    ===============     =================    ============================


                           REMAINING TERMS TO MATURITY



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
  RANGE OF REMAINING TERM TO MATURITY (MONTHS)      NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 3 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

121 - 180.....................................             312          $ 104,814,884                 100.00%
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             312          $ 104,814,884                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the weighted average remaining term to maturity of
the Group 3 Loans, by Cut-Off Date Pool Balance of the Group 3 Loans, was
approximately 176 months.


                                      A-11


                                  GROUP 3 LOANS

                             GEOGRAPHIC DISTRIBUTION




                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
             GEOGRAPHIC DISTRIBUTION                NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 3 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

California....................................             101          $  44,901,159                  42.84%
New York......................................              58             18,579,822                  17.73
Florida.......................................              26              6,889,825                   6.57
Texas.........................................              18              4,851,714                   4.63
Illinois......................................              14              4,443,119                   4.24
Maryland......................................               8              3,528,130                   3.37
New Jersey....................................              10              3,217,569                   3.07
Virginia......................................              11              2,229,005                   2.13
North Carolina................................               6              1,647,357                   1.57
Massachusetts.................................               7              1,578,468                   1.51
Arizona.......................................               3              1,245,593                   1.19
Louisiana.....................................               5              1,233,445                   1.18
Georgia.......................................               4              1,152,227                   1.10
Oregon........................................               3              1,092,099                   1.04
Utah..........................................               1                847,182                   0.81
Tennessee.....................................               4                688,910                   0.66
Colorado......................................               3                683,564                   0.65
Washington....................................               3                666,078                   0.64
Minnesota.....................................               2                661,061                   0.63
Pennsylvania..................................               2                510,179                   0.49
District Of Columbia..........................               1                485,758                   0.46
Hawaii........................................               2                457,202                   0.44
Connecticut...................................               1                456,900                   0.44
Alabama.......................................               2                447,152                   0.43
Nevada........................................               3                439,924                   0.42
Delaware......................................               3                390,736                   0.37
Iowa..........................................               2                288,850                   0.28
South Carolina................................               2                257,629                   0.25
Missouri......................................               2                223,208                   0.21
Ohio..........................................               1                171,433                   0.16
Arkansas......................................               1                150,720                   0.14
Maine.........................................               1                142,348                   0.14
Wisconsin.....................................               1                139,460                   0.13
Oklahoma......................................               1                117,063                   0.11
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             312          $ 104,814,884                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, no more than approximately 2.32% of the Group 3
Loans, by Cut-Off Date Pool Balance of the Group 3 Loans, will be secured by
properties located in any one zip code.

                               DOCUMENTATION TYPE



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
                  DOCUMENT TYPE                     NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 3 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

Reduced.......................................             144          $  48,126,976                  45.92%
Full..........................................              48             21,992,982                  20.98
No Doc........................................              69             15,867,630                  15.14
Streamline....................................              16              8,351,884                   7.97
Alternate.....................................              10              5,161,258                   4.92
No Ratio......................................              14              2,525,616                   2.41
Stated Doc....................................               9              2,263,992                   2.16
Limited.......................................               2                524,545                   0.50
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             312          $ 104,814,884                 100.00%
                                                    ===============     =================    ============================


                                      A-12



                                  GROUP 3 LOANS

                                  CREDIT SCORES



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
             RANGE OF CREDIT SCORES                 NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 3 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

501 - 550.....................................               1          $     147,808                   0.14%
551 - 600.....................................               2                618,243                   0.59
601 - 650.....................................              46             16,881,413                  16.11
651 - 700.....................................             103             37,000,391                  35.30
701 - 750.....................................              89             28,399,049                  27.09
751 - 800.....................................              63             19,459,410                  18.57
801 - 850.....................................               6                975,611                   0.93
Not Available.................................               2              1,332,959                   1.27
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             312          $ 104,814,884                 100.00%
                                                    ===============     =================    ============================



     As of the Cut-Off Date, the weighted average credit score of the borrowers
with a credit score for the Group 3 Loans, by Cut-Off Date Pool Balance of the
Group 3 Loans, was approximately 698.


                                      A-13


                                  GROUP 4 LOANS

                           ORIGINAL PRINCIPAL BALANCES



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
      RANGE OF ORIGINAL PRINCIPAL BALANCES          NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 4 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

$1 - $25,000..................................               6          $     112,215                   0.21%
$25,001 - $50,000.............................              29              1,115,546                   2.12
$50,001 - $75,000.............................              28              1,754,905                   3.33
$75,001 - $100,000............................              37              3,201,840                   6.07
$100,001 - $125,000...........................              30              3,312,704                   6.28
$125,001 - $150,000...........................              28              3,842,365                   7.29
$150,001 - $175,000...........................              25              3,865,303                   7.33
$175,001 - $200,000...........................              15              2,736,566                   5.19
$200,001 - $250,000...........................              24              5,209,461                   9.88
$250,001 - $300,000...........................               5              1,307,086                   2.48
$300,001 - $350,000...........................               3              1,020,124                   1.94
$350,001 - $400,000...........................              12              4,403,184                   8.35
$400,001 - $450,000...........................              11              4,622,055                   8.77
$450,001 - $500,000...........................               8              3,773,225                   7.16
$500,001 - $550,000...........................               5              2,625,789                   4.98
$550,001 - $600,000...........................               1                548,314                   1.04
$600,001 - $650,000...........................               7              4,452,811                   8.45
$700,001 - $750,000...........................               2              1,448,846                   2.75
$850,001 - $900,000...........................               1                850,161                   1.61
$1,000,001 or more............................               2              2,513,193                   4.77
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             279          $  52,715,691                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the average original principal balance of the Group
4 Loans was approximately $192,313.



                               LOAN INTEREST RATES



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
          RANGE OF LOAN INTEREST RATES              NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 4 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

6.001% - 6.125%...............................              56          $  12,212,890                  23.17%
6.126% - 6.250%...............................              50              9,190,567                  17.43
6.251% - 6.375%...............................              37              7,960,915                  15.10
6.376% - 6.500%...............................              30              6,490,214                  12.31
6.501% - 6.625%...............................              16              2,375,131                   4.51
6.626% - 6.750%...............................              22              5,025,483                   9.53
6.751% - 6.875%...............................              26              3,738,771                   7.09
6.876% - 7.000%...............................              20              2,823,310                   5.36
7.001% - 7.125%...............................               4                476,305                   0.90
7.126% - 7.250%...............................               6              1,454,751                   2.76
7.251% - 7.375%...............................               5                402,390                   0.76
7.501% - 7.625%...............................               4                197,519                   0.37
7.626% - 7.750%...............................               1                166,905                   0.32
7.751% - 7.875%...............................               1                 51,848                   0.10
8.126% - 8.250%...............................               1                148,693                   0.28
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             279          $  52,715,691                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the weighted average interest rate of the Group 4
Loans, by Cut-Off Date Pool Balance of the Group 4 Loans, was approximately
6.478% per annum.

                                      A-14


                                  GROUP 4 LOANS

                          ORIGINAL LOAN-TO-VALUE RATIOS



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
     RANGE OF ORIGINAL LOAN-TO-VALUE RATIOS         NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 4 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

50.00% or less................................              36          $   4,556,578                   8.64%
50.01% - 55.00%...............................              11              4,301,339                   8.16
55.01% - 60.00%...............................              16              4,135,799                   7.85
60.01% - 65.00%...............................               8              1,004,848                   1.91
65.01% - 70.00%...............................              20              5,379,058                  10.20
70.01% - 75.00%...............................              25              5,576,338                  10.58
75.01% - 80.00%...............................              56             12,523,765                  23.76
80.01% - 85.00%...............................              18              3,245,171                   6.16
85.01% - 90.00%...............................              57              7,637,690                  14.49
90.01% - 95.00%...............................              32              4,355,107                   8.26
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             279          $  52,715,691                 100.00%
                                                    ===============     =================    ============================



     As of the Cut-Off Date, the weighted average original LTV Ratio of the
Group 4 Loans, by Cut-Off Date Pool Balance of the Group 4 Loans, was
approximately 72.89%.

                                 PROPERTY TYPES





                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
                  PROPERTY TYPE                     NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 4 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

Single Family.................................             234          $  40,759,923                  77.32%
Two- to Four-Family...........................              20              4,669,602                   8.86
Planned Unit Development......................              13              4,620,522                   8.76
Condominium...................................              10              2,520,475                   4.78
Coop..........................................               2                145,169                   0.28
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             279          $  52,715,691                 100.00%
                                                    ===============     =================    ============================



                                  LOAN PURPOSE



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
                  LOAN PURPOSE                      NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 4 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

Cash Out Refinance............................             158          $  25,720,279                  48.79%
Purchase......................................              68             16,604,360                  31.50
Rate & Term Refinance.........................              53             10,391,052                  19.71
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             279          $  52,715,691                 100.00%
                                                    ===============     =================    ============================


                                OCCUPANCY STATUS



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
                OCCUPANCY STATUS                    NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 4 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

Primary.......................................             253          $  45,381,703                  86.09%
Investor......................................              10              5,185,243                   9.84
Secondary.....................................              16              2,148,745                   4.08
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             279          $  52,715,691                 100.00%
                                                    ===============     =================    ============================



                                      A-15

                                  GROUP 4 LOANS


                           REMAINING TERMS TO MATURITY



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
  RANGE OF REMAINING TERM TO MATURITY (MONTHS)      NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 4 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

121 - 180.....................................             279          $  52,715,691                 100.00%
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             279          $  52,715,691                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the weighted average remaining term to maturity of
the Group 4 Loans, by Cut-Off Date Pool Balance of the Group 4 Loans, was
approximately 175 months.

                                      A-16

                                  GROUP 4 LOANS

                             GEOGRAPHIC DISTRIBUTION



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
             GEOGRAPHIC DISTRIBUTION                NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 4 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

California....................................              41          $  12,397,330                  23.52%
New York......................................              17              4,042,678                   7.67
Florida.......................................              20              3,626,060                   6.88
Nevada........................................              10              2,797,664                   5.31
Texas.........................................              17              2,702,151                   5.13
Arizona.......................................              19              2,670,283                   5.07
New Jersey....................................              10              2,523,686                   4.79
Massachusetts.................................               5              1,644,491                   3.12
Pennsylvania..................................               8              1,463,770                   2.78
Connecticut...................................               2              1,439,864                   2.73
Washington....................................               5              1,383,087                   2.62
Michigan......................................               7              1,212,374                   2.30
Virginia......................................               9              1,153,537                   2.19
Maryland......................................               4              1,134,869                   2.15
Ohio..........................................               7              1,090,070                   2.07
Georgia.......................................               7                988,254                   1.87
Missouri......................................              10                960,647                   1.82
North Carolina................................               7                772,071                   1.46
Louisiana.....................................               7                604,164                   1.15
Minnesota.....................................               2                596,480                   1.13
Nebraska......................................               6                595,495                   1.13
Oregon........................................               4                556,675                   1.06
Arkansas......................................               5                533,606                   1.01
Utah..........................................               4                528,013                   1.00
Kentucky......................................               1                506,272                   0.96
Mississippi...................................               3                489,486                   0.93
Indiana.......................................               6                478,038                   0.91
District Of Columbia..........................               1                429,687                   0.82
Delaware......................................               1                388,631                   0.74
Wisconsin.....................................               4                375,334                   0.71
Tennessee.....................................               4                360,844                   0.68
Montana.......................................               4                339,244                   0.64
Wyoming.......................................               4                318,112                   0.60
New Mexico....................................               2                242,942                   0.46
Colorado......................................               2                235,322                   0.45
Oklahoma......................................               3                225,281                   0.43
Alaska........................................               1                205,843                   0.39
Iowa..........................................               2                178,230                   0.34
Illinois......................................               2                140,071                   0.27
Alabama.......................................               2                108,955                   0.21
Hawaii........................................               1                107,263                   0.20
South Dakota..................................               2                 96,948                   0.18
Idaho.........................................               1                 71,870                   0.14
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             279          $  52,715,691                 100.00%
                                                    ===============     =================    ============================



     As of the Cut-Off Date, no more than approximately 2.45% of the Group 4
Loans, by Cut-Off Date Pool Balance of the Group 4 Loans, will be secured by
properties located in any one zip code.


                                      A-17


                                  GROUP 4 LOANS

                               DOCUMENTATION TYPE



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
                  DOCUMENT TYPE                     NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 4 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

No Doc........................................             202          $  26,817,261                  50.87%
Reduced.......................................              38             13,017,710                  24.69
Full..........................................              22              7,528,033                  14.28
Streamline....................................               5              2,344,796                   4.45
Stated Doc....................................               8              1,904,827                   3.61
Alternate.....................................               2                805,159                   1.53
No Ratio......................................               2                297,904                   0.57
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             279          $  52,715,691                 100.00%
                                                    ===============     =================    ============================




                                  CREDIT SCORES



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
             RANGE OF CREDIT SCORES                 NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 4 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

551 - 600.....................................               9          $   1,169,640                   2.22%
601 - 650.....................................              65             11,219,571                  21.28
651 - 700.....................................             102             21,032,950                  39.90
701 - 750.....................................              72             12,750,770                  24.19
751 - 800.....................................              28              6,047,033                  11.47
801 - 850.....................................               3                495,727                   0.94
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             279          $  52,715,691                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the weighted average credit score of the borrowers
with a credit score for the Group 4 Loans, by Cut-Off Date Pool Balance of the
Group 4 Loans, was approximately 686.




                                      A-18

                                  GROUP 5 LOANS

                           ORIGINAL PRINCIPAL BALANCES




                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
      RANGE OF ORIGINAL PRINCIPAL BALANCES          NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 5 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

$25,001 - $50,000.............................               3          $     124,078                   0.10%
$50,001 - $75,000.............................              20              1,253,709                   1.02
$75,001 - $100,000............................              34              3,040,127                   2.47
$100,001 - $125,000...........................              29              3,268,652                   2.66
$125,001 - $150,000...........................              43              5,925,724                   4.82
$150,001 - $175,000...........................              27              4,376,181                   3.56
$175,001 - $200,000...........................              33              6,188,639                   5.03
$200,001 - $250,000...........................              42              9,557,564                   7.78
$250,001 - $300,000...........................              23              6,320,818                   5.14
$300,001 - $350,000...........................              36             11,900,441                   9.68
$350,001 - $400,000...........................              31             11,533,284                   9.38
$400,001 - $450,000...........................              27             11,457,391                   9.32
$450,001 - $500,000...........................              17              8,045,150                   6.54
$500,001 - $550,000...........................              15              7,947,677                   6.47
$550,001 - $600,000...........................              17              9,703,502                   7.89
$600,001 - $650,000...........................              10              6,328,074                   5.15
$650,001 - $700,000...........................               1                686,226                   0.56
$700,001 - $750,000...........................               5              3,680,668                   2.99
$950,001 - $1,000,000.........................               3              2,945,841                   2.40
$1,000,001 or more............................               6              8,642,286                   7.03
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             422          $ 122,926,033                 100.00%
                                                    ===============     =================    ============================



     As of the Cut-Off Date, the average original principal balance of the Group
5 Loans was approximately $293,188.


                               LOAN INTEREST RATES




                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
          RANGE OF LOAN INTEREST RATES              NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 5 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

5.751% - 5.875%...............................              93          $  23,682,625                  19.27%
5.876% - 6.000%...............................             219             44,167,676                  35.93
6.001% - 6.125%...............................              23             10,974,811                   8.93
6.126% - 6.250%...............................              34             18,096,273                  14.72
6.251% - 6.375%...............................              38             19,004,768                  15.46
6.376% - 6.500%...............................              15              6,999,880                   5.69
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             422          $ 122,926,033                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the weighted average interest rate of the Group 5
Loans, by Cut-Off Date Pool Balance of the Group 5 Loans, was approximately
6.106% per annum.



                                      A-19


                                  GROUP 5 LOANS

                          ORIGINAL LOAN-TO-VALUE RATIOS



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
     RANGE OF ORIGINAL LOAN-TO-VALUE RATIOS         NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 5 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

50.00% or less................................              23          $   5,888,185                   4.79%
50.01% - 55.00%...............................              16              4,618,512                   3.76
55.01% - 60.00%...............................              18              4,844,145                   3.94
60.01% - 65.00%...............................              30             10,325,331                   8.40
65.01% - 70.00%...............................              42             15,819,269                  12.87
70.01% - 75.00%...............................              45             18,181,520                  14.79
75.01% - 80.00%...............................             136             40,092,712                  32.62
80.01% - 85.00%...............................               3              1,038,853                   0.85
85.01% - 90.00%...............................              26              9,960,810                   8.10
90.01% - 95.00%...............................               9              1,378,243                   1.12
95.01% - 100.00%..............................              74             10,778,453                   8.77
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             422          $ 122,926,033                 100.00%
                                                    ===============     =================    ============================



     As of the Cut-Off Date, the weighted average original LTV Ratio of the
Group 5 Loans, by Cut-Off Date Pool Balance of the Group 5 Loans, was
approximately 74.48%.



                                 PROPERTY TYPES



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
                  PROPERTY TYPE                     NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 5 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

Single Family.................................             328          $  97,353,118                  79.20%
Condominium...................................              36              9,414,734                   7.66
Two- to Four-Family...........................              25              8,676,000                   7.06
Planned Unit Development......................              20              4,625,683                   3.76
Coop..........................................              12              2,218,173                   1.80
34............................................               1                638,325                   0.52
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             422          $ 122,926,033                 100.00%
                                                    ===============     =================    ============================


                                  LOAN PURPOSE


                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
                  LOAN PURPOSE                      NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 5 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

Purchase......................................             237          $  63,408,130                  51.58%
Cash Out Refinance............................             129             40,330,101                  32.81
Rate & Term Refinance.........................              56             19,187,802                  15.61
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             422          $ 122,926,033                 100.00%




                                OCCUPANCY STATUS



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
                OCCUPANCY STATUS                    NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 5 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

Primary.......................................             397          $ 113,579,861                  92.40%
Secondary.....................................              19              5,922,034                   4.82
Investor......................................               6              3,424,138                   2.79
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             422          $ 122,926,033                 100.00%
                                                    ===============     =================    ============================


                                      A-20


                                  GROUP 5 LOANS

                           REMAINING TERMS TO MATURITY



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
  RANGE OF REMAINING TERM TO MATURITY (MONTHS)      NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 5 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

301 - 360.....................................             422          $ 122,926,033                 100.00%
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             422          $ 122,926,033                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the weighted average remaining term to maturity of
the Group 5 Loans, by Cut-Off Date Pool Balance of the Group 5 Loans, was
approximately 356 months.


                                      A-21


                                  GROUP 5 LOANS

                             GEOGRAPHIC DISTRIBUTION



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
             GEOGRAPHIC DISTRIBUTION                NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 5 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

California....................................              98          $  38,909,540                  31.65%
New York......................................              57             20,904,466                  17.01
Florida.......................................              28              5,399,712                   4.39
New Jersey....................................              17              4,733,898                   3.85
Virginia......................................              17              4,623,171                   3.76
Minnesota.....................................              19              4,535,240                   3.69
Massachusetts.................................              11              4,297,674                   3.50
Maryland......................................              10              4,210,271                   3.43
Georgia.......................................               9              3,318,104                   2.70
Colorado......................................              13              3,234,000                   2.63
Washington....................................              13              3,090,284                   2.51
Pennsylvania..................................              18              2,942,420                   2.39
Arizona.......................................               7              1,852,800                   1.51
Montana.......................................               6              1,645,033                   1.34
Missouri......................................               5              1,380,864                   1.12
Connecticut...................................               5              1,250,866                   1.02
Nevada........................................               3              1,161,624                   0.94
Hawaii........................................               3              1,125,525                   0.92
Illinois......................................               4              1,016,682                   0.83
Oregon........................................               5                988,677                   0.80
Ohio..........................................               4                984,187                   0.80
District Of Columbia..........................               3                913,839                   0.74
Texas.........................................               7                858,178                   0.70
North Carolina................................               5                821,668                   0.67
Kentucky......................................               4                810,795                   0.66
Delaware......................................               2                787,955                   0.64
Wisconsin.....................................               4                777,214                   0.63
South Carolina................................               2                648,070                   0.53
Arkansas......................................               6                603,109                   0.49
Utah..........................................               4                578,602                   0.47
Indiana.......................................               4                559,377                   0.46
Idaho.........................................               3                463,137                   0.38
Kansas........................................               2                413,697                   0.34
Maine.........................................               2                403,105                   0.33
New Hampshire.................................               2                397,120                   0.32
Michigan......................................               2                352,036                   0.29
Alabama.......................................               3                292,834                   0.24
Rhode Island..................................               2                273,668                   0.22
Wyoming.......................................               2                270,912                   0.22
Tennessee.....................................               2                254,018                   0.21
West Virginia.................................               2                252,475                   0.21
Iowa..........................................               2                195,061                   0.16
Oklahoma......................................               2                163,009                   0.13
Mississippi...................................               1                 86,140                   0.07
Louisiana.....................................               1                 85,257                   0.07
Nebraska......................................               1                 59,716                   0.05
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             422          $ 122,926,033                 100.00%
                                                    ===============     =================    ============================



     As of the Cut-Off Date, no more than approximately 1.85% of the Group 5
Loans, by Cut-Off Date Pool Balance of the Group 5 Loans, will be secured by
properties located in any one zip code.

                                      A-22


                                  GROUP 5 LOANS

                               DOCUMENTATION TYPE




                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
                  DOCUMENT TYPE                     NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 5 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

Full..........................................             124          $  31,147,147                  25.34%
Stated Doc....................................              78             26,715,022                  21.73
No Doc........................................             101             26,142,767                  21.27
Reduced.......................................              79             25,542,502                  20.78
No Ratio......................................              31              9,932,141                   8.08
Alternate.....................................               6              2,706,610                   2.20
Limited.......................................               3                739,845                   0.60
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             422          $ 122,926,033                 100.00%
                                                    ===============     =================    ============================



                                  CREDIT SCORES



                                                                            AGGREGATE          % OF CUT-OFF DATE POOL
             RANGE OF CREDIT SCORES                 NUMBER OF LOANS     PRINCIPAL BALANCE    BALANCE OF THE GROUP 5 LOANS
----------------------------------------------      ---------------     -----------------    ----------------------------

501 - 550.....................................               1          $     129,470                   0.11%
551 - 600.....................................              14              2,800,259                   2.28
601 - 650.....................................              72             18,614,606                  15.14
651 - 700.....................................             128             35,456,280                  28.84
701 - 750.....................................             121             37,667,743                  30.64
751 - 800.....................................              81             26,940,444                  21.92
801 - 850.....................................               5              1,317,231                   1.07
                                                    ---------------     -----------------    ----------------------------
         Total:...............................             422          $ 122,926,033                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the weighted average credit score of the borrowers
with a credit score for the Group 5 Loans, by Cut-Off Date Pool Balance of the
Group 5 Loans, was approximately 704.




                                      A-23



                             LOANS IN THE AGGREGATE

                           ORIGINAL PRINCIPAL BALANCES


                                                                                                 % OF CUT-OFF DATE
                                                                            AGGREGATE           POOL BALANCE OF THE
      RANGE OF ORIGINAL PRINCIPAL BALANCES          NUMBER OF LOANS     PRINCIPAL BALANCE      LOANS IN THE AGGREGATE
----------------------------------------------      ---------------     -----------------    ----------------------------

$1 - $25,000..................................               6          $     112,215                   0.03%
$25,001 - $50,000.............................              52              2,073,169                   0.49
$50,001 - $75,000.............................              96              5,984,119                   1.42
$75,001 - $100,000............................             134             11,868,534                   2.82
$100,001 - $125,000...........................             123             13,757,760                   3.27
$125,001 - $150,000...........................             119             16,328,079                   3.88
$150,001 - $175,000...........................             102             16,297,550                   3.87
$175,001 - $200,000...........................              99             18,432,953                   4.38
$200,001 - $250,000...........................             132             29,715,082                   7.06
$250,001 - $300,000...........................              66             17,945,800                   4.27
$300,001 - $350,000...........................              94             30,909,242                   7.35
$350,001 - $400,000...........................             131             48,640,031                  11.56
$400,001 - $450,000...........................              94             39,607,136                   9.42
$450,001 - $500,000...........................              80             37,575,625                   8.93
$500,001 - $550,000...........................              42             21,912,038                   5.21
$550,001 - $600,000...........................              38             21,693,559                   5.16
$600,001 - $650,000...........................              42             26,329,846                   6.26
$650,001 - $700,000...........................              12              8,021,830                   1.91
$700,001 - $750,000...........................              10              7,256,219                   1.72
$750,001 - $800,000...........................               1                788,797                   0.19
$850,001 - $900,000...........................               5              4,298,295                   1.02
$900,001 - $950,000...........................               2              1,848,309                   0.44
$950,001 - $1,000,000.........................              11             10,739,597                   2.55
$1,000,001 or more............................              19             28,541,248                   6.78
                                                    ---------------     -----------------    ----------------------------
         Total:...............................           1,510          $ 420,677,032                 100.00%
                                                    ===============     =================    ============================



     As of the Cut-Off Date, the average original principal balance of the Loans
in the aggregate was approximately $282,764.



                                      A-24


                             LOANS IN THE AGGREGATE

                               LOAN INTEREST RATES



                                                                                                 % OF CUT-OFF DATE
                                                                            AGGREGATE           POOL BALANCE OF THE
          RANGE OF LOAN INTEREST RATES              NUMBER OF LOANS     PRINCIPAL BALANCE      LOANS IN THE AGGREGATE

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

4.126% - 4.250%...............................               1          $     193,354                   0.05%
4.376% - 4.500%...............................               6              1,199,884                   0.29
4.501% - 4.625%...............................               7              1,272,615                   0.30
4.626% - 4.750%...............................              17              4,767,020                   1.13
4.751% - 4.875%...............................              41             11,501,192                   2.73
4.876% - 5.000%...............................              51             17,593,228                   4.18
5.001% - 5.125%...............................              53             20,204,434                   4.80
5.126% - 5.250%...............................              78             27,363,077                   6.50
5.251% - 5.375%...............................              84             28,662,620                   6.81
5.376% - 5.500%...............................              96             28,382,866                   6.75
5.501% - 5.625%...............................              92             30,575,141                   7.27
5.626% - 5.750%...............................              75             21,133,110                   5.02
5.751% - 5.875%...............................             216             56,675,617                  13.47
5.876% - 6.000%...............................             304             63,361,450                  15.06
6.001% - 6.125%...............................              79             23,187,700                   5.51
6.126% - 6.250%...............................              84             27,286,840                   6.49
6.251% - 6.375%...............................              75             26,965,683                   6.41
6.376% - 6.500%...............................              45             13,490,094                   3.21
6.501% - 6.625%...............................              16              2,375,131                   0.56
6.626% - 6.750%...............................              22              5,025,483                   1.19
6.751% - 6.875%...............................              26              3,738,771                   0.89
6.876% - 7.000%...............................              20              2,823,310                   0.67
7.001% - 7.125%...............................               4                476,305                   0.11
7.126% - 7.250%...............................               6              1,454,751                   0.35
7.251% - 7.375%...............................               5                402,390                   0.10
7.501% - 7.625%...............................               4                197,519                   0.05
7.626% - 7.750%...............................               1                166,905                   0.04
7.751% - 7.875%...............................               1                 51,848                   0.01
8.126% - 8.250%...............................               1                148,693                   0.04
                                                    ---------------     -----------------    ----------------------------
         Total:...............................           1,510          $ 420,677,032                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the weighted average interest rate of the Loans in
the aggregate, by Cut-Off Date Pool Balance of the Loans in the aggregate, was
approximately 5.777% per annum.

                                      A-25


                             LOANS IN THE AGGREGATE

                          ORIGINAL LOAN-TO-VALUE RATIOS


                                                                                                 % OF CUT-OFF DATE
                                                                            AGGREGATE           POOL BALANCE OF THE
     RANGE OF ORIGINAL LOAN-TO-VALUE RATIOS         NUMBER OF LOANS     PRINCIPAL BALANCE      LOANS IN THE AGGREGATE
----------------------------------------------      ---------------     -----------------    ----------------------------

50.00% or less................................             303          $  73,801,308                  17.54%
50.01% - 55.00%...............................              89             28,219,300                   6.71
55.01% - 60.00%...............................              95             26,134,779                   6.21
60.01% - 65.00%...............................             108             36,069,058                   8.57
65.01% - 70.00%...............................             176             62,091,156                  14.76
70.01% - 75.00%...............................             158             51,338,293                  12.20
75.01% - 80.00%...............................             330             97,424,386                  23.16
80.01% - 85.00%...............................              32              6,066,718                   1.44
85.01% - 90.00%...............................              96             20,110,943                   4.78
90.01% - 95.00%...............................              46              6,906,451                   1.64
95.01% - 100.00%..............................              77             12,514,640                   2.97
                                                    ---------------     -----------------    ----------------------------
         Total:...............................           1,510          $ 420,677,032                 100.00%
                                                    ===============     =================    ============================



     As of the Cut-Off Date, the weighted average original LTV Ratio of the
Loans in the aggregate, by Cut-Off Date Pool Balance of the Loans in the
aggregate, was approximately 66.79%.



                                 PROPERTY TYPES


                                                                                                 % OF CUT-OFF DATE
                                                                            AGGREGATE           POOL BALANCE OF THE
                  PROPERTY TYPE                     NUMBER OF LOANS     PRINCIPAL BALANCE      LOANS IN THE AGGREGATE
----------------------------------------------      ---------------     -----------------    ----------------------------

Single Family.................................           1,155          $ 314,098,987                  74.67%
Planned Unit Development......................             127             45,182,998                  10.74
Condominium...................................             102             28,834,228                   6.85
Two- to Four-Family...........................              96             27,510,490                   6.54
Coop..........................................              25              3,266,701                   0.78
34............................................               2                981,989                   0.23
Townhouse.....................................               3                801,639                   0.19
                                                    ---------------     -----------------    ----------------------------
         Total:...............................           1,510          $ 420,677,032                 100.00%
                                                    ===============     =================    ============================



                                  LOAN PURPOSE


                                                                                                 % OF CUT-OFF DATE
                                                                            AGGREGATE           POOL BALANCE OF THE
                  LOAN PURPOSE                      NUMBER OF LOANS     PRINCIPAL BALANCE      LOANS IN THE AGGREGATE
----------------------------------------------      ---------------     -----------------    ----------------------------

Cash Out Refinance............................             638          $ 161,452,802                  38.38%
Purchase......................................             481            141,722,137                  33.69
Rate & Term Refinance.........................             389            116,908,965                  27.79
Construction to Perm..........................               2                593,128                   0.14
                                                    ---------------     -----------------    ----------------------------
         Total:...............................           1,510          $ 420,677,032                 100.00%
                                                    ===============     =================    ============================



                                      A-26

                             LOANS IN THE AGGREGATE

                                OCCUPANCY STATUS


                                                                                                 % OF CUT-OFF DATE
                                                                            AGGREGATE           POOL BALANCE OF THE
                OCCUPANCY STATUS                    NUMBER OF LOANS     PRINCIPAL BALANCE      LOANS IN THE AGGREGATE
----------------------------------------------      ---------------     -----------------    ----------------------------

Primary.......................................           1,398          $ 387,532,825                  92.12%
Secondary.....................................              87             20,992,296                   4.99
Investor......................................              25             12,151,911                   2.89
                                                    ---------------     -----------------    ----------------------------
         Total:...............................           1,510          $ 420,677,032                 100.00%
                                                    ===============     =================    ============================



                           REMAINING TERMS TO MATURITY


                                                                                                 % OF CUT-OFF DATE
                                                                            AGGREGATE           POOL BALANCE OF THE
  RANGE OF REMAINING TERM TO MATURITY (MONTHS)      NUMBER OF LOANS     PRINCIPAL BALANCE      LOANS IN THE AGGREGATE
----------------------------------------------      ---------------     -----------------    ----------------------------

121 - 180.....................................           1,088          $ 297,750,999                  70.78%
301 - 360.....................................             422            122,926,033                  29.22
                                                    ---------------     -----------------    ----------------------------
         Total:...............................           1,510          $ 420,677,032                 100.00%
                                                    ===============     =================    ============================



     As of the Cut-Off Date, the weighted average remaining term to maturity of
the Loans in the aggregate, by Cut-Off Date Pool Balance of the Loans in the
aggregate, was approximately 228 months.

                                      A-27


                             LOANS IN THE AGGREGATE

                             GEOGRAPHIC DISTRIBUTION


                                                                                                 % OF CUT-OFF DATE
                                                                            AGGREGATE           POOL BALANCE OF THE
             GEOGRAPHIC DISTRIBUTION                NUMBER OF LOANS     PRINCIPAL BALANCE      LOANS IN THE AGGREGATE
----------------------------------------------      ---------------     -----------------    ----------------------------

California....................................             384          $ 142,961,474                  33.98%
New York......................................             195             60,855,865                  14.47
Florida.......................................             125             26,605,581                   6.32
New Jersey....................................              61             17,991,890                   4.28
Texas.........................................              66             14,485,041                   3.44
Maryland......................................              42             13,367,147                   3.18
Virginia......................................              55             13,184,633                   3.13
Illinois......................................              41             11,018,226                   2.62
Massachusetts.................................              33             10,675,958                   2.54
Nevada........................................              30             10,052,089                   2.39
Arizona.......................................              43              8,453,778                   2.01
Georgia.......................................              26              7,332,460                   1.74
Connecticut...................................              16              7,323,777                   1.74
Pennsylvania..................................              37              7,180,484                   1.71
Minnesota.....................................              25              6,193,656                   1.47
Colorado......................................              24              6,093,558                   1.45
Oregon........................................              21              5,582,393                   1.33
Washington....................................              22              5,212,765                   1.24
North Carolina................................              20              3,530,385                   0.84
Missouri......................................              20              3,468,959                   0.82
Ohio..........................................              15              3,143,613                   0.75
Michigan......................................              15              2,881,527                   0.68
Louisiana.....................................              18              2,428,683                   0.58
Montana.......................................              13              2,416,712                   0.57
Wisconsin.....................................              12              2,245,384                   0.53
District Of Columbia..........................               6              2,241,423                   0.53
Utah..........................................              11              2,214,800                   0.53
Kentucky......................................               7              1,856,986                   0.44
South Carolina................................               7              1,842,720                   0.44
Hawaii........................................               6              1,689,990                   0.40
Tennessee.....................................              11              1,688,212                   0.40
Delaware......................................               6              1,567,323                   0.37
Alabama.......................................               9              1,396,694                   0.33
Wyoming.......................................               9              1,372,294                   0.33
Arkansas......................................              13              1,336,588                   0.32
Maine.........................................               6              1,193,079                   0.28
Indiana.......................................              10              1,037,415                   0.25
Oklahoma......................................              10                883,719                   0.21
Alaska........................................               2                850,400                   0.20
Mississippi...................................               5                767,832                   0.18
Nebraska......................................               8                714,169                   0.17
Iowa..........................................               6                662,142                   0.16
Idaho.........................................               4                535,007                   0.13
Kansas........................................               2                413,697                   0.10
New Hampshire.................................               2                397,120                   0.09
Vermont.......................................               2                372,003                   0.09
Rhode Island..................................               3                365,021                   0.09
West Virginia.................................               2                252,475                   0.06
New Mexico....................................               2                242,942                   0.06
South Dakota..................................               2                 96,948                   0.02
                                                    ---------------     -----------------    ----------------------------
         Total:...............................           1,510          $ 420,677,032                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, no more than approximately 1.09% of the Loans in
the aggregate, by Cut-Off Date Pool Balance of the Loans in the aggregate, will
be secured by properties located in any one zip code.

                                      A-28


                             LOANS IN THE AGGREGATE

                               DOCUMENTATION TYPE



                                                                                                 % OF CUT-OFF DATE
                                                                            AGGREGATE           POOL BALANCE OF THE
                  DOCUMENT TYPE                     NUMBER OF LOANS     PRINCIPAL BALANCE      LOANS IN THE AGGREGATE
----------------------------------------------      ---------------     -----------------    ----------------------------

Reduced.......................................             467          $ 146,327,969                  34.78%
No Doc........................................             524             96,131,073                  22.85
Full..........................................             257             89,027,288                  21.16
Stated Doc....................................             122             38,291,596                   9.10
Streamline....................................              44             20,483,694                   4.87
No Ratio......................................              61             15,987,015                   3.80
Alternate.....................................              29             13,034,954                   3.10
Limited.......................................               6              1,393,444                   0.33
                                                    ---------------     -----------------    ----------------------------
         Total:...............................           1,510          $ 420,677,032                 100.00%
                                                    ===============     =================    ============================



                                  CREDIT SCORES


                                                                                                 % OF CUT-OFF DATE
                                                                            AGGREGATE           POOL BALANCE OF THE
             RANGE OF CREDIT SCORES                 NUMBER OF LOANS     PRINCIPAL BALANCE      LOANS IN THE AGGREGATE
----------------------------------------------      ---------------     -----------------    ----------------------------

451 - 500.....................................               1          $     476,787                   0.11%
501 - 550.....................................               3                636,705                   0.15
551 - 600.....................................              31              6,916,137                   1.64
601 - 650.....................................             252             66,887,098                  15.90
651 - 700.....................................             495            137,975,215                  32.80
701 - 750.....................................             421            115,415,592                  27.44
751 - 800.....................................             271             81,096,721                  19.28
801 - 850.....................................              22              3,849,172                   0.91
Not Available.................................              14              7,423,605                   1.76
                                                    ---------------     -----------------    ----------------------------
         Total:...............................           1,510          $ 420,677,032                 100.00%
                                                    ===============     =================    ============================


     As of the Cut-Off Date, the weighted average credit score of the borrowers
with a credit score for the Loans in the aggregate, by Cut-Off Date Pool Balance
of the Loans in the aggregate, was approximately 700.


                                      A-29

PROSPECTUS
AUGUST 23, 2004

                MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.
                                    Depositor

                            ASSET-BACKED CERTIFICATES

                               ASSET-BACKED NOTES
                              (Issuable in Series)

         Mortgage Asset Securitization Transactions, Inc. from time to time will
offer asset-backed pass-through certificates or asset-backed notes. We will
offer the certificates or notes through this prospectus and a separate
prospectus supplement for each series.

         For each series we will establish a trust fund consisting primarily of

         o    a segregated pool of various types of single-family and
              multifamily residential mortgage loans, home improvement
              contracts, cooperative apartment loans or manufactured housing
              conditional sales contracts and installment loan agreements or
              beneficial interests in them; or

         o    pass-through or participation certificates issued or guaranteed by
              the Government National Mortgage Association, the Federal National
              Mortgage Association or the Federal Home Loan Mortgage
              Corporation.

         The certificates of a series will evidence beneficial ownership
interests in the trust fund. The notes of a series will evidence indebtedness of
the trust fund. The certificates or notes of a series may be divided into two or
more classes which may have different interest rates and which may receive
principal payments in differing proportions and at different times. In addition,
the rights of certain holders of classes may be subordinate to the rights of
holders of other classes to receive principal and interest.

--------------------------------------------------------------------------------
         YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 17 IN
THIS PROSPECTUS AND IN THE RELATED PROSPECTUS SUPPLEMENT.

         The securities will not represent obligations of Mortgage Asset
Securitization Transactions, Inc. or any of its affiliates. No governmental
agency will insure the certificates or the collateral securing the securities.

         You should consult with your own advisors to determine if the offered
securities are appropriate investments for you and to determine the applicable
legal, tax, regulatory and accounting treatment of the offered securities.
--------------------------------------------------------------------------------

         The Securities and Exchange Commission and state securities regulators
have not approved or disapproved of the offered certificates or notes or
determined if this prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.

         No secondary market will exist for a series of certificates or notes
prior to its offering. We cannot assure you that a secondary market will develop
for the certificates or notes, as applicable, of any series, or, if it does
develop, that it will continue.

                               UBS INVESTMENT BANK








         We may offer the certificates or notes, as applicable, through one or
more different methods, including offerings through underwriters, as more fully
described under "Plans of Distribution" in this prospectus and in the related
prospectus supplement. Our affiliates may from time to time act as agents or
underwriters in connection with the sale of the offered certificates or notes,
as applicable. We may retain or hold for sale, from time to time, one or more
classes of a series of certificates or notes, as applicable. We may offer
certain classes of the certificates or notes, as applicable, if so specified in
the related prospectus supplement, in one or more transactions exempt from the
registration requirements of the Securities Act of 1933, as amended. These
offerings will not be made pursuant to this prospectus or the related
registration statement.

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

         This prospectus may not be used to consummate sales of the offered
certificates or notes, as applicable, unless accompanied by a prospectus
supplement.



                                      -2-




                                TABLE OF CONTENTS

                                                PAGE
                                                ----

Summary of Terms.................................6
Risk Factors....................................17
   Limited Liquidity of Securities May
     Adversely Affect Market Value of
     Securities.................................17
   Assets of Trust Fund Are Limited.............17
   Credit Enhancement Is Limited in Amount and
     Coverage...................................18
   Yield Is Sensitive to Rate of Principal
     Prepayment.................................18
   Borrower May Be Unable to Make Balloon
     Payment....................................19
   Nature of Mortgages Could Adversely Affect
     Value of Properties........................19
   Violations of Environmental Laws May Reduce
     Recoveries on Properties...................21
   Violations of Federal Laws May Adversely
     Affect Ability to Collect on Loans.........22
   Rating of the Securities Are Limited and May
     be Withdrawn or Lowered....................23
   Adverse Conditions in the Residential Real
     Estate Markets May Result in a Decline in
     Property Values............................24
   Book-Entry System for Certain Classes May
     Decrease Liquidity and Delay Payment.......25
   Unsecured Home Improvement Contracts May
     Experience Relatively Higher Losses........25
   Mortgage Loans Underwritten as Non-Conforming
     Credits May Experience Relatively Higher
     Losses.....................................26
   Assets of the Trust Fund May Include
     Delinquent and Sub-Performing Residential
     Loans......................................26
   Changes in the Market Value of Properties
     May Adversely Affect Payments on the
     Securities.................................27
Defined Terms...................................27
The Trust Funds.................................27
   Residential Loans............................27
   Agency Securities............................35
   Stripped Agency Securities...................40
   Additional Information Concerning the Trust
     Funds......................................41
Use of Proceeds.................................43
Yield Considerations............................43
Maturity and Prepayment Considerations..........45
The Depositor...................................48
Residential Loans...............................49
   Underwriting Standards.......................49
   Representations by Unaffiliated Sellers;
     Repurchases................................49
   Sub-Servicing................................50
Description of the Securities...................51
   General......................................51
   Assignment of Assets of the Trust Fund.......53
   Deposits to the Trust Account................56
   Pre-Funding Account..........................57
   Payments on Residential Loans................57
   Payments on Agency Securities................58
   Distributions................................58
   Principal and Interest on the Securities.....60
   Available Distribution Amount................62
   Subordination................................62
   Advances.....................................65
   Statements to Holders of Securities..........65
   Book-Entry Registration of Securities........67
   Collection and Other Servicing Procedures....72
   Realization on Defaulted Residential Loans...73
   Retained Interest, Administration
     Compensation and Payment of Expenses.......75
   Evidence as to Compliance....................76
   Certain Matters Regarding the Master
     Servicer, the Depositor and the Trustee....77
   Deficiency Events............................81
   Events of Default............................82
   Amendment....................................86
   Termination..................................87
   Voting Rights................................88
Description of Primary Insurance Coverage.......88
   Primary Credit Insurance Policies............88
   FHA Insurance and VA Guarantees..............89
   Primary Hazard Insurance Policies............91
Description of Credit Support...................94
   Pool Insurance Policies......................94
   Special Hazard Insurance Policies............97
   Bankruptcy Bonds............................100
   Reserve Funds...............................100
   Cross-Support Provisions....................101
   Letter of Credit............................101
   Insurance Policies and Surety Bonds.........101
   Excess Spread...............................101
   Overcollateralization.......................102
Certain Legal Aspects of Residential Loans.....102
   General.....................................102
   Mortgage Loans..............................103
   Cooperative Loans...........................104
   Tax Aspects of Cooperative Ownership........105
   Manufactured Housing Contracts Other Than
     Land Contracts............................105


                                      -3-


   Foreclosure on Mortgages....................108
   Foreclosure on Cooperative Shares...........111
   Repossession with respect to Manufactured
     Housing Contracts that are not Land
     Contracts.................................112
   Rights of Redemption with respect to
     Residential Properties....................113
   Notice of Sale; Redemption Rights with
     respect to Manufactured Homes.............114
   Anti-Deficiency Legislation, Bankruptcy Laws
     and Other Limitations on Lenders..........114
   Consumer Compliance Laws and Regulations....117
   Homeownership Act and Similar State Laws....117
   Junior Mortgages............................119
   Consumer Protection Laws....................119
   Enforceability of Certain Provisions........121
   Prepayment Charges and Prepayments..........122
   Subordinate Financing.......................123
   Applicability of Usury Laws.................124
   Alternative Mortgage Instruments............124
   Environmental Legislation...................125
   Servicemembers Civil Relief Act and the
     California Military and Veterans Code.....126
   Forfeiture for Drug, RICO and Money
     Laundering Violations.....................127
Federal Income Tax Consequences................128
   General.....................................128
   REMICs......................................129
   General.....................................129
   Taxation of Owners of Regular Securities....133
   Taxation of Owners of Residual Securities...142
   Taxes That May Be Imposed on the REMIC Pool.153
   Liquidation of the REMIC Pool...............154
   Administrative Matters......................154
   Limitations on Deduction of Certain Expenses155
   Taxation of Certain Foreign Investors.......156
   Backup Withholding..........................157
   Reporting Requirements......................157
   Grantor Trust Funds.........................158
   Classification of Grantor Trust Funds.......158
   Standard Securities.........................159
   Stripped Securities.........................163
   Reporting Requirements and Backup Withholding167
   Partnership Trust Funds.....................167
   Classification of Partnership Trust Funds...167
   Characterization of Investments in
     Partnership Securities and Debt
     Securities................................168
   Taxation of Holder of Debt Securities.......168
   Taxation of Owners of Partnership
     Securities................................169
State and Other Tax Consequences...............174
ERISA Considerations...........................175
Legal Investment...............................179
Plans of Distribution..........................182
Incorporation of Certain Information by
  Reference....................................184
Legal Matters..................................184
Financial Information..........................185
Rating.........................................185
Glossary of Terms..............................187



                                      -4-



              Important Notice about Information Presented in this
             Prospectus and Each Accompanying Prospectus Supplement

         Two separate documents contain information about the offered
certificates or notes, as applicable. These documents progressively provide more
detail:

         (1) this prospectus, which provides general information, some of which
may not apply to the offered securities; and

         (2) the accompanying prospectus supplement for each series, which
describes the specific terms of the offered securities.

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

         You should rely only on the information contained in this prospectus
and the accompanying prospectus supplement. We have not authorized anyone to
provide you with information that is different from that contained in this
prospectus and the related prospectus supplement. The information in this
prospectus is accurate only as of the date of this prospectus.

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

         If you require additional information, the mailing address of our
principal executive offices is Mortgage Asset Securitization Transactions, Inc.,
1285 Avenue of the Americas, New York, NY 10019 and the telephone number is
(212) 713-2000.



                                      -5-


                                SUMMARY OF TERMS

         This summary highlights selected information from this document. It
does not contain all of the information that you need to consider in making an
investment decision. Please read this entire prospectus and the accompanying
prospectus supplement as well as the terms and provisions of the related pooling
and servicing agreement or trust agreement carefully to understand all of the
terms of a series of securities.

RELEVANT PARTIES

     Depositor............................  Mortgage Asset Securitization
                                            Transactions, Inc., the depositor,
                                            is a corporation organized under the
                                            laws of the State of Delaware. The
                                            depositor is a wholly owned limited
                                            purpose finance subsidiary of UBS
                                            Americas Inc.

     Master Servicer......................  The entity or entities named as
                                            master servicer in the related
                                            prospectus supplement.

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

     Issuer of Notes......................  The depositor or an owner trust
                                            established for the purpose of
                                            issuing the series of notes will
                                            issue each series of notes through a
                                            separate trust. The depositor, and
                                            the owner trustee will enter into a
                                            separate trust agreement to form
                                            each owner trust.

SECURITIES

     Description of Securities............  The depositor will offer
                                            asset-backed pass-through
                                            certificates or asset-backed notes
                                            from time to time. The depositor
                                            will offer these securities in one
                                            or more series. Each series of
                                            securities will include one or more
                                            classes representing either a
                                            beneficial ownership interest in, or
                                            indebtedness secured by, a trust
                                            fund. The trust fund will consist of
                                            a segregated pool of residential
                                            loans or agency securities, or
                                            beneficial interests in them, and
                                            certain other assets described
                                            below.

                                            A series of securities may include
                                            one or more classes of securities
                                            that may be entitled to, among other
                                            things:

                                            o  principal distributions, with
                                               disproportionate nominal or no
                                               interest distributions;

                                      -6-


                                            o  interest distributions, with
                                               disproportionate, nominal or no
                                               principal distributions;

                                            o  distributions only of prepayments
                                               of principal throughout the lives
                                               of the securities or during
                                               specified periods;

                                            o  subordinated distributions of
                                               scheduled payments of principal,
                                               prepayments of principal,
                                               interest or any combination of
                                               these payments;

                                            o  distributions only after the
                                               occurrence of events specified in
                                               the related prospectus
                                               supplement;

                                            o  distributions in accordance with
                                               a schedule or formula or on the
                                               basis of collections from
                                               designated portions of the assets
                                               in the related trust fund;

                                            o  interest at a fixed rate or a
                                               rate that is subject to change
                                               from time to time;

                                            o  distributions allocable to
                                               interest only after the
                                               occurrence of events specified in
                                               the related prospectus supplement
                                               and may accrue interest until
                                               these events occur.

                                            The related prospectus supplement
                                            will specify these entitlements.

                                            The timing and amounts of these
                                            distributions may vary among
                                            classes, over time. In addition, a
                                            series may include two or more
                                            classes of securities which differ
                                            as to timing, sequential order or
                                            amount of distributions of principal
                                            or interest, or both.

                                            The related prospectus supplement
                                            will specify if each class of
                                            securities

                                            o  has a stated principal amount;
                                               and

                                            o  is entitled to distributions of
                                               interest on the security
                                               principal balance based on a
                                               specified security interest rate.

     Interest............................. Interest on each class of securities
                                           for a series:

                                            o  will accrue at the applicable
                                               security interest rate on its
                                               outstanding security principal
                                               balance;



                                      -7-


                                            o  will be distributed to holders of
                                               the securities as provided in the
                                               related prospectus supplement on
                                               the related distribution date;
                                               and

                                            o  may be reduced to the extent of
                                               certain delinquencies or other
                                               contingencies described in the
                                               related prospectus supplement.

                                            Distributions with respect to
                                            accrued interest on accrual
                                            securities will be identified in the
                                            related prospectus supplement. This
                                            accrued interest will not be
                                            distributed but rather will be added
                                            to the security principal balance of
                                            each series prior to the time when
                                            accrued interest becomes payable.

                                            Distributions with respect to
                                            interest on interest-only securities
                                            with no or, in certain cases, a
                                            nominal security principal balance
                                            will be made on each distribution
                                            date on the basis of a notional
                                            amount as described in this
                                            prospectus and in the related
                                            prospectus supplement.

                                            See "Yield Considerations,"
                                            "Maturity and Prepayment
                                            Considerations" and "Description of
                                            the Securities" in this prospectus.

     Principal............................  The security principal balance of a
                                            security represents the maximum
                                            dollar amount, exclusive of
                                            interest, which you are entitled to
                                            receive as principal from future
                                            cash flow on the assets in the
                                            related trust fund. The related
                                            prospectus supplement will set forth
                                            the initial security principal
                                            balance of each class of securities.

                                            Generally, distributions of
                                            principal will be payable as set
                                            forth in the related prospectus
                                            supplement, which may be on a pro
                                            rata basis among all of the
                                            securities of the same class, in
                                            proportion to their respective
                                            outstanding security principal
                                            balances.

                                            If an interest-only security does
                                            not have a security principal
                                            balance, it will not receive
                                            distributions of principal. See "The
                                            Trust Funds," "Maturity and
                                            Prepayment Considerations" and
                                            "Description of the Securities" in
                                            this prospectus.



                                      -8-


ASSETS

     The Trust Funds......................  Each trust fund will consist of:

                                            o  a segregated pool of residential
                                               loans, agency securities and/or
                                               mortgage securities; and

                                            o  certain other assets as described
                                               in this prospectus and in the
                                               related prospectus supplement.

                                            The depositor will purchase all
                                            assets of the trust fund, either
                                            directly or through an affiliate,
                                            from unaffiliated sellers. The
                                            depositor will generally deposit the
                                            assets into the related trust fund
                                            as of the first day of the month in
                                            which the securities evidencing
                                            interests in the trust fund or
                                            collateralized by the assets of the
                                            trust fund are initially issued. See
                                            "Description of the
                                            Securities-Pre-Funding Account" in
                                            this prospectus.

         A. Residential Loans.............  The residential loans will consist
                                             of any combination of:

                                            o  mortgage loans secured by first
                                               or junior liens on one- to
                                               four-family residential
                                               properties;

                                            o  mortgage loans secured by first
                                               or junior liens on multifamily
                                               residential properties consisting
                                               of five or more dwelling units;

                                            o  home improvement installment
                                               sales contracts and installment
                                               loan agreements which may be
                                               unsecured or secured by a lien on
                                               the related mortgaged property;

                                            o  a manufactured home, which may
                                               have a subordinate lien on the
                                               related mortgaged property, as
                                               described in the related
                                               prospectus supplement;

                                            o  one- to four-family first or
                                               junior lien closed end home
                                               equity loans for property
                                               improvement, debt consolidation
                                               or home equity purposes;

                                            o  cooperative loans secured
                                               primarily by shares in a private
                                               cooperative housing corporation.
                                               The shares, together with the
                                               related proprietary lease or
                                               occupancy agreement give the
                                               owner of the shares the right to
                                               occupy a particular dwelling unit
                                               in the cooperative housing
                                               corporation; or



                                      -9-


                                            o  manufactured housing conditional
                                               sales contracts and installment
                                               loan agreements which may be
                                               secured by either liens on:

                                               o  new or used manufactured
                                                  homes; or

                                               o  the real property and any
                                                  improvements on it which may
                                                  include the related
                                                  manufactured home if deemed to
                                                  be part of the real property
                                                  under applicable state law
                                                  relating to a manufactured
                                                  housing contract; and

                                            o  in certain cases, new or used
                                               manufactured homes which are not
                                               deemed to be a part of the
                                               related real property under
                                               applicable state law.

                                            The mortgage properties, cooperative
                                            shares, together with the right to
                                            occupy a particular dwelling unit,
                                            and manufactured homes may be
                                            located in any one of the fifty
                                            states, the District of Columbia,
                                            the Commonwealth of Puerto Rico or
                                            the territories of Guam or the
                                            United States Virgin Islands.

                                            Each trust fund may contain any
                                            combination of the following types
                                            of residential loans:

                                            o  fully amortizing loans

                                            o  with a fixed rate of interest and

                                               o  level monthly payments to
                                                  maturity;

                                            o  fully amortizing loans with

                                               o  a fixed interest rate
                                                  providing for level monthly
                                                  payments, or

                                               o  for payments of interest that
                                                  increase annually at a
                                                  predetermined rate until the
                                                  loan is repaid or for a
                                                  specified number of years,

                                               o  after which level monthly
                                                  payments resume;

                                            o  fully amortizing loans

                                               o  with a fixed interest rate
                                                  providing for monthly payments
                                                  during the early years of the
                                                  term that are



                                      -10-


                                                  calculated on the basis of an
                                                  interest rate below the
                                                  interest rate,

                                               o  followed by monthly payments
                                                  of principal and interest that
                                                  increase annually by a
                                                  predetermined percentage over
                                                  the monthly payments payable
                                                  in the previous year until the
                                                  loan is repaid or for a
                                                  specified number of years,

                                               o  followed by level monthly
                                                  payments;

                                            o  fixed interest rate loans
                                               providing for

                                               o  level payments of principal
                                                  and interest on the basis of
                                                  an assumed amortization
                                                  schedule and

                                               o  a balloon payment of principal
                                                  at the end of a specified
                                                  term;

                                            o  fully amortizing loans with

                                               o  an interest rate adjusted
                                                  periodically, and

                                               o  corresponding adjustments in
                                                  the amount of monthly
                                                  payments, to equal the sum,
                                                  which may be rounded, of a
                                                  fixed margin and an index as
                                                  described in the related
                                                  prospectus supplement.

                                                  These loans may provide for an
                                                  election, at the borrower's
                                                  option during a specified
                                                  period after origination of
                                                  the loan, to convert the
                                                  adjustable interest rate to a
                                                  fixed interest rate, as
                                                  described in the related
                                                  prospectus supplement;

                                            o  fully amortizing loans with an
                                               adjustable interest rate
                                               providing for monthly payments
                                               less than the amount of interest
                                               accruing on the loan and for the
                                               amount of interest accrued but
                                               not paid currently to be added to
                                               the principal balance of the
                                               loan;

                                            o  adjustable interest rate loans
                                               providing for an election at the
                                               borrower's option to extend the
                                               term to maturity for a period
                                               that will result in level monthly
                                               payments to maturity if an
                                               adjustment to the interest rate
                                               occurs resulting in a higher
                                               interest rate than at
                                               origination; or



                                      -11-


                                            o  other types of residential loans
                                               as may be described in the
                                               related prospectus supplement.

                                            The related prospectus supplement
                                            may specify that the residential
                                            loans are covered by:

                                            o  primary mortgage insurance
                                               policies;

                                            o  insurance issued by the Federal
                                               Housing Administration; or

                                            o  partial guarantees of the
                                               Veterans Administration.

                                            See "Description of Primary
                                            Insurance Coverage" in this
                                            prospectus.

         B. Agency Securities.............  The agency securities may consist of
                                            any combination of:

                                            o  "fully modified pass-through"
                                               mortgage-backed certificates
                                               guaranteed by the Government
                                               National Mortgage Association;

                                            o  guaranteed mortgage pass-through
                                               securities issued by the Federal
                                               National Mortgage Association;
                                               and

                                            o  mortgage participation
                                               certificates issued by the
                                               Federal Home Loan Mortgage
                                               Corporation.

       C. Mortgage Securities...........    A trust fund may include previously
                                            issued:

                                            o  asset-backed certificates;

                                            o  collateralized mortgage
                                               obligations; or

                                            o  participation certificates
                                               evidencing interests in, or
                                               collateralized by, residential
                                               loans or agency securities.

       D. Trust Account.................    Each trust fund will include one or
                                            more trust accounts established and
                                            maintained on behalf of the holders
                                            of securities. To the extent
                                            described in this prospectus and in
                                            the related prospectus supplement,
                                            the master servicer or the trustee
                                            will deposit into the trust account
                                            all payments and collections
                                            received or advanced with respect to
                                            assets of the related trust fund. A
                                            trust account may be maintained as
                                            an interest bearing or a
                                            non-interest bearing account.
                                            Alternatively, funds held in the
                                            trust account may be invested in
                                            certain short-term high-quality
                                            obligations. See



                                      -12-


                                            "Description of the Securities
                                            -- Deposits to the Trust Account" in
                                            this prospectus.

         E. Credit Support................  One or more classes of securities
                                            within any series may be covered by
                                            any combination of:

                                            o  a surety bond;

                                            o  a guarantee;

                                            o  letter of credit;

                                            o  an insurance policy;

                                            o  a bankruptcy bond;

                                            o  a reserve fund;

                                            o  a cash account;

                                            o  reinvestment income;

                                            o  overcollateralization;

                                            o  subordination of one or more
                                               classes of securities in a series
                                               or, with respect to any series of
                                               notes, the related equity
                                               certificates, to the extent
                                               provided in the related
                                               prospectus supplement;

                                            o  cross-support between securities
                                               backed by different asset groups
                                               within the same trust fund; or

                                            o  another type of credit support to
                                               provide partial or full coverage
                                               for certain defaults and losses
                                               relating to the residential
                                               loans.

                                            The related prospectus supplement
                                            may provide that the coverage
                                            provided by one or more forms of
                                            credit support may apply
                                            concurrently to two or more separate
                                            trust funds. If applicable, the
                                            related prospectus supplement will
                                            identify the trust funds to which
                                            this credit support relates. The
                                            related prospectus supplement will
                                            also specify the manner of
                                            determining the amount of the
                                            coverage provided by the credit
                                            support and the application of this
                                            coverage to the identified trust
                                            funds. See "Description of Credit
                                            Support" and "Description of the
                                            Securities -- Subordination" in this
                                            prospectus.



                                      -13-


PRE-FUNDING ACCOUNT.......................  The related prospectus supplement
                                            may specify that funds on deposit in
                                            a pre-funding account will be used
                                            to purchase additional residential
                                            loans during the period specified in
                                            the related prospectus supplement.

SERVICING AND ADVANCES....................  The master servicer, directly or
                                            through sub-servicers:

                                            o  will service and administer the
                                               residential loans included in a
                                               trust fund; and

                                            o  if and to the extent the related
                                               prospectus supplement so
                                               provides, will be obligated to
                                               make certain cash advances with
                                               respect to delinquent scheduled
                                               payments on the residential
                                               loans. This advancing obligation
                                               will be limited to the extent
                                               that the master servicer
                                               determines that the advances will
                                               be recoverable.

                                            Advances made by the master servicer
                                            will be reimbursable to the extent
                                            described in the related prospectus
                                            supplement. The prospectus
                                            supplement with respect to any
                                            series may provide that the master
                                            servicer will obtain a cash advance
                                            surety bond, or maintain a cash
                                            advance reserve fund, to cover any
                                            obligation of the master servicer to
                                            make advances. The borrower on any
                                            surety bond will be named, and the
                                            terms applicable to a cash advance
                                            reserve fund will be described in
                                            the related prospectus supplement.
                                            See "Description of the Securities
                                            -- Advances." in this prospectus.

OPTIONAL TERMINATION......................  The related prospectus supplement
                                            may specify that the assets in the
                                            related trust fund may be sold,
                                            causing an early termination of a
                                            series of securities in the manner
                                            set forth in the related prospectus
                                            supplement. See "Description of the
                                            Securities -- Termination" in this
                                            prospectus and the related section
                                            in the related prospectus
                                            supplement.

TAX STATUS................................  The treatment of the securities for
                                            federal income tax purposes will
                                            depend on:

                                            o  whether a REMIC election is made
                                               with respect to a series of
                                               certificates; and

                                            o  if a REMIC election is made,
                                               whether the certificates are
                                               "regular" interest securities or
                                               "residual" interest securities.

                                      -14-


                                            Unless otherwise indicated in the
                                            related prospectus supplement, notes
                                            will represent indebtedness of the
                                            related trust fund. You are advised
                                            to consult your tax advisors.

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

ERISA CONSIDERATIONS......................  If you are a fiduciary of any
                                            employee benefit plan subject to the
                                            fiduciary responsibility provisions
                                            of the Employee Retirement Income
                                            Security Act of 1974, as amended,
                                            you should carefully review with
                                            your own legal advisors whether the
                                            purchase or holding of securities
                                            could give rise to a transaction
                                            prohibited or otherwise
                                            impermissible under ERISA or the
                                            Internal Revenue Code.

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

LEGAL INVESTMENT..........................  The applicable prospectus supplement
                                            will specify whether the securities
                                            offered will constitute "mortgage
                                            related securities" for purposes of
                                            the Secondary Mortgage Market
                                            Enhancement Act of 1984, as amended.
                                            If your investment activities are
                                            subject to legal investment laws and
                                            regulations, regulatory capital
                                            requirements, or review by
                                            regulatory authorities, then you may
                                            be subject to restrictions on
                                            investment in the securities. You
                                            should consult your own legal
                                            advisors for assistance in
                                            determining the suitability of and
                                            consequences to you of the purchase,
                                            ownership, and sale of the
                                            securities.

                                            See "Legal Investment" in this
                                            prospectus and in the related
                                            prospectus supplement.

USE OF PROCEEDS...........................  The depositor will use the net
                                            proceeds from the sale of each
                                            series for one or more of the
                                            following purposes:

                                            o  to purchase the related assets of
                                               the trust fund;

                                            o  to repay indebtedness which was
                                               incurred to obtain funds to
                                               acquire the assets of the trust
                                               fund;

                                            o  to establish any reserve funds
                                               described in the related
                                               prospectus supplement; and

                                            o  to pay costs of structuring,
                                               guaranteeing and issuing the
                                               securities.



                                      -15-


                                            See "Use of Proceeds" in this
                                            prospectus and in the related
                                            prospectus supplement.

RATINGS...................................  Prior to offering securities
                                            pursuant to this prospectus and the
                                            related prospectus supplement, each
                                            offered class must be rated upon
                                            issuance in one of the four highest
                                            applicable rating categories of at
                                            least one nationally recognized
                                            statistical rating organization. The
                                            rating or ratings applicable to the
                                            securities of each series offered by
                                            this prospectus and by the related
                                            prospectus supplement will be set
                                            forth in the related prospectus
                                            supplement.

                                            o  A security rating is not a
                                               recommendation to buy, sell or
                                               hold the securities of any
                                               series.

                                            o  A security rating is subject to
                                               revision or withdrawal at any
                                               time by the assigning rating
                                               agency.

                                            o  A security rating does not
                                               address the effect of prepayments
                                               on the yield you may anticipate
                                               when you purchase your
                                               securities.




                                      -16-



                                  RISK FACTORS

         Before making an investment decision, you should carefully consider the
following risks and the risks described under "Risk Factors" in the prospectus
supplement for the applicable series of securities. We believe these sections
describe the principal factors that make an investment in the securities
speculative or risky. In particular, distributions on your securities will
depend on payments received on and other recoveries with respect to the loans.
Therefore, you should carefully consider the risk factors relating to the loans
and the properties.

LIMITED LIQUIDITY OF SECURITIES MAY ADVERSELY AFFECT MARKET VALUE OF SECURITIES

         We cannot assure you that a secondary market for the securities of any
series will develop or, if it does develop, that it will provide you with
liquidity of investment or will continue for the life of your securities. The
market value of your securities will fluctuate with changes in prevailing rates
of interest. Consequently, if you sell your security in any secondary market
that develops, you may sell it for less than par value or for less than your
purchase price. You will have optional redemption rights only to the extent the
related prospectus supplement so specifies. The prospectus supplement for any
series may indicate that an underwriter intends to establish a secondary market
in the securities, but no underwriter must do so.

ASSETS OF TRUST FUND ARE LIMITED

         The trust fund for your series constitutes the sole source of payment
for your securities. The trust fund will consist of, among other things:

         o    payments with respect to the assets of the trust fund; and

         o    any amounts available pursuant to any credit enhancement for your
              series, for the payment of principal of and interest on the
              securities of your series.

         You will have no recourse to the depositor or any other person if you
do not receive distributions on your securities. Furthermore, certain assets of
the trust fund and/or any balance remaining in the trust account may be promptly
released or remitted to the depositor, the master servicer, any credit
enhancement provider or any other person entitled to these amounts immediately
after making

         o    all payments due on the securities of your series;

         o    adequate provision for future payments on certain classes of
              securities; and

         o    any other payments specified in the related prospectus supplement.

You will no longer receive payments from these trust fund assets.

         The securities will not represent an interest in or obligation of the
depositor, the master servicer or any of their respective affiliates.

                                      -17-


CREDIT ENHANCEMENT IS LIMITED IN AMOUNT AND COVERAGE

         Credit enhancement reduces your risk of delinquent payments or losses.
However, the amount of credit enhancement will be limited, as set forth in the
related prospectus supplement, and may decline and could be depleted under
certain circumstances before payment in full of your securities. As a result,
you may suffer losses. Moreover, the credit enhancement may not cover all
potential losses or risks. For example, it may or may not fully cover fraud or
negligence by a loan originator or other parties. See "Description of Credit
Support" in this prospectus.

YIELD IS SENSITIVE TO RATE OF PRINCIPAL PREPAYMENT

         The yield on the securities of each series will depend in part on the
rate of principal payment on the assets of the trust fund. In particular,
variations on this rate will include:

         o    the extent of prepayments of the residential loans and, in the
              case of agency securities, the underlying loans, comprising the
              trust fund;

         o    the allocation of principal and/or payment among the classes of
              securities of a series as specified in the related prospectus
              supplement;

         o    the exercise of any right of optional termination; and

         o    the rate and timing of payment defaults and losses incurred with
              respect to the assets of the trust fund.

         Material breaches of representations and warranties by sellers of
residential loans not affiliated with the depositor, the originator or the
master servicer may result in repurchases of assets of the trust fund. These
repurchases may lead to prepayments of principal. The rate of prepayment of the
residential loans comprising or underlying the assets of the trust fund may
affect the yield to maturity on your securities. See "Yield Considerations" and
"Maturity and Prepayment Considerations" in this prospectus.

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

         o    prevailing mortgage market interest rates;

         o    local and national interest rates;

         o    homeowner mobility; and

         o    the ability of the borrower to obtain refinancing.

         Interest payable on the securities on each distribution date will
include all interest accrued during the period specified in the related
prospectus supplement. If interest accrues over a period ending two or more days
before a distribution date, your effective yield will be reduced from the yield
you would have obtained if interest payable on the securities accrued through
the day immediately before each distribution date. Consequently, your effective
yield, at par, will be



                                      -18-


less than the indicated coupon rate. See "Description of the Securities --
Distributions" and "-- Principal Interest on the Securities" in this prospectus.

BORROWER MAY BE UNABLE TO MAKE BALLOON PAYMENT

         Some of the residential loans may not fully amortize over their terms
to maturity and, thus, may require principal payments, i.e. balloon payments, at
their stated maturity. Residential loans with balloon payments involve greater
risk because a borrower's ability to make a balloon payment typically will
depend on its ability to:

         o    timely refinance the loan; or

         o    timely sell the related residential property.

         A number of factors will affect a borrower's ability to accomplish
either of these goals, including:

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

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

         o    the financial condition of the borrower; and

         o    the tax laws.

A borrower's failure to make a balloon payment would increase the risk that you
might not receive all payments to which you are entitled.

NATURE OF MORTGAGES COULD ADVERSELY AFFECT VALUE OF PROPERTIES

         Several factors could adversely affect the value of the residential
properties. As a result, the outstanding balance of the related residential
loans, together with any senior financing on the residential properties, if
applicable, may equal or exceed the value of the residential properties. Among
these factors are:

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

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

         o    a decline in the general condition of the residential properties
              as a result of natural disasters that are not necessarily covered
              by insurance, such as earthquakes and floods.

A decline that affects residential loans secured by junior liens could
extinguish the value of the interest of a junior mortgagee in the residential
property before having any effect on the interest of the related senior
mortgagee. If a decline occurs, the actual rates of delinquencies,



                                      -19-


foreclosures and losses on all residential loans could be higher than those
currently experienced in the mortgage lending industry in general.

         Even if the residential properties provide adequate security for the
residential loans, the master servicer could encounter substantial delays in
liquidating the defaulted residential loans. These delays in liquidating the
loans could lead to delays in receiving your proceeds because:

         o    foreclosures on residential properties securing residential loans
              are regulated by state statutes and rules;

         o    foreclosures on residential properties are also subject to delays
              and expenses of other types of lawsuits if defenses or
              counterclaims are interposed, sometimes requiring several years to
              complete; and

         o    in some states an action to obtain a deficiency judgment is not
              permitted following a nonjudicial sale of residential properties.

Therefore, if a borrower defaults, the master servicer may be unable to
foreclose on or sell the residential property or obtain liquidation proceeds
sufficient to repay all amounts due on the related residential loan. In
addition, the master servicer will be entitled to deduct from related
liquidation proceeds all expenses reasonably incurred in attempting to recover
amounts due on defaulted residential loans and not yet reimbursed. These
expenses may include payments to senior lienholders, legal fees and costs of
legal action, real estate taxes and maintenance and preservation expenses.

         Liquidation expenses with respect to defaulted loans do not vary
directly with the outstanding principal balances of the loan at the time of
default. Therefore, assuming that a servicer took the same steps in realizing on
a defaulted loan having a small remaining principal balance as it would in the
case of a defaulted loan having a large remaining principal balance, the amount
realized after expenses of liquidation would be smaller as a percentage of the
outstanding principal of the small loan than would be the case with the larger
defaulted loan having a large remaining principal balance. The mortgages and
deeds of trust securing certain mortgage loans, multifamily loans and home
improvement contracts may be junior liens subordinate to the rights of the
senior lienholder. Consequently, the proceeds from the liquidation, insurance or
condemnation proceeds will be available to satisfy the junior loan amount only
to the extent that the claims of the senior mortgagees have been satisfied in
full, including any related foreclosure costs.

         In addition, a junior mortgagee may not foreclose on the property
securing a junior mortgage unless it forecloses subject to any senior mortgage.
If a junior mortgagee forecloses, it must either pay the entire amount due on
any senior mortgage at or prior to the foreclosure sale or undertake the
obligation to make payments on the senior mortgage if the borrower defaults
under the senior mortgage. The trust fund will not have any source of funds to
satisfy any senior mortgages or make payments due to any senior mortgagees.
However, the master servicer or sub-servicer may, at its option, advance these
amounts to the extent deemed recoverable and prudent.



                                      -20-


         If proceeds from a foreclosure or similar sale of the related mortgaged
property are insufficient to satisfy all senior liens and the junior lien in the
aggregate, the trust fund, as the holder of the junior lien, and, accordingly,
holders of one or more classes of the securities, to the extent not covered by
credit enhancement, are likely to:

         o    incur losses in jurisdictions in which a deficiency judgment
              against the borrower is not available; and

         o    incur losses if any deficiency judgment obtained is not realized
              on.

In addition, the rate of default of junior loans may be greater than that of
mortgage loans secured by first liens on comparable properties.

         Applicable state laws generally:

         o    regulate interest rates and other charges;

         o    require certain disclosures; and

         o    require licensing of certain originators and servicers of
              residential loans.

In addition, most states have other laws, public policy and general principles
of equity relating to the protection of consumers, unfair and deceptive
practices and practices which may apply to the origination, servicing and
collection of the residential loans. Violations of these laws, policies and
principles:

         o    may limit the ability of the master servicer to collect all or
              part of the principal of or interest on the residential loans;

         o    may entitle the borrower to a refund of amounts previously paid;
              and

         o    could subject the master servicer to damages and administrative
              sanctions.

See "Certain Legal Aspects of Residential Loans" in this prospectus.

VIOLATIONS OF ENVIRONMENTAL LAWS MAY REDUCE RECOVERIES ON PROPERTIES

         Real property pledged as security to a lender may be subject to certain
environmental risks. Under federal law and the laws of certain states,
contamination of a property may result in a lien on the property to assure the
costs of cleanup. In several states, this lien has priority over the lien of an
existing mortgage against the property. In addition, under the laws of some
states and under the federal Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, a lender may become liable, as an "owner or
operator," for costs of addressing releases or threatened releases of hazardous
substances that require remedy on a property. This liability could result if
agents or employees of the lender have become sufficiently involved in the
operations of the borrower, regardless of whether the environmental damage or
threat was caused by a prior owner. A lender also risks this liability on
foreclosure of the related property. If this liability is imposed on the trust
fund there would be an increased risk that you might not receive



                                      -21-


all payments to which you are entitled. See "Certain Legal Aspects of
Residential Loans -- Environmental Legislation" in this prospectus.

VIOLATIONS OF FEDERAL LAWS MAY ADVERSELY AFFECT ABILITY TO COLLECT ON LOANS

         The residential loans may also be subject to federal laws, including:

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

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

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

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

         Certain mortgage loans may be subject to the Home Ownership and Equity
Protection Act of 1994. These provisions may:

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

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

         o    affect the enforceability of the related loans.

In addition, any assignee of the creditor would generally be subject to all
claims and defenses that the consumer could assert against the creditor,
including, without limitation, the right to rescind the mortgage loan.

         The Home Improvement Contracts are also subject to the Preservation of
Consumers' Claims and Defenses regulations of the Federal Trade Commission and
other similar federal and state statutes and regulations. These laws

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



                                      -22-


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

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

         Violations of certain provisions of these federal laws may limit the
ability of the master servicer to collect all or part of the principal of or
interest on the residential loans. In addition, violations could subject the
trust fund to damages and administrative enforcement. Accordingly, violations of
these federal laws would increase the risk that you might not receive all
payments to which you are entitled. See "Certain Legal Aspects of Residential
Loans" in this prospectus.

RATING OF THE SECURITIES ARE LIMITED AND MAY BE WITHDRAWN OR LOWERED

         Each class of securities offered by this prospectus and the related
prospectus supplement must be rated upon issuance in one of the four highest
rating categories by one or more rating agencies. The rating will be based on,
among other things:

         o    the adequacy of the value of the assets of the trust fund;

         o    any credit enhancement with respect to the class; and

         o    the likelihood that you will receive payments to which you are
              entitled under the terms of your securities.

         The rating will not be based on:

         o    the likelihood that principal prepayments on the related
              residential loans will be made;

         o    the degree to which prepayments might differ from those originally
              anticipated; or

         o    the likelihood of early optional termination of the series of
              securities.

         You should not interpret the rating as a recommendation to purchase,
hold or sell securities, because it does not address market price or suitability
for a particular investor. The rating will not address:

         o    the possibility that prepayment at higher or lower rates than you
              anticipate may cause you to experience a lower than anticipated
              yield; or

         o    the possibility that if you purchase your security at a
              significant premium, then you might fail to recoup your initial
              investment under certain prepayment scenarios.



                                      -23-


         We cannot assure you that any rating will remain in effect for any
given period of time or that a rating agency will not lower or withdraw its
rating entirely in the future due to, among other reasons:

         o    if in the judgment of the rating agency, circumstances in the
              future so warrant;

         o    any erosion in the adequacy of the value of the assets of the
              trust fund or any credit enhancement with respect to a series; or

         o    an adverse change in the financial or other condition of a credit
              enhancement provider or a change in the rating of the credit
              enhancement provider's long term debt.

         Each rating agency rating the securities will establish criteria to
determine the amount, type and nature of credit enhancement, if any, established
with respect to a class of securities. Rating agencies often determine the
amount of credit enhancement required with respect to each class based on an
actuarial analysis of the behavior of similar loans in a larger group. With
respect to the rating, we cannot assure you:

         o    that the historical data supporting the actuarial analysis will
              accurately reflect future experience;

         o    that the data derived from a large pool of similar loans
              accurately predicts the delinquency, foreclosure or loss
              experience of any particular pool of residential loans; or

         o    that the values of any residential properties have remained or
              will remain at their levels on the respective dates of origination
              of the related residential loans. See "Rating" in this prospectus.

A rating agency's withdrawal or reduction of a rating on your securities would
increase the risk that the market value of your securities will decrease.

ADVERSE CONDITIONS IN THE RESIDENTIAL REAL ESTATE MARKETS MAY RESULT IN A
DECLINE IN PROPERTY VALUES

         The residential real estate markets may experience an overall decline
in property values. This decline could lead to a number of adverse results:

         o    the outstanding principal balances of the residential loans in a
              particular trust fund are equal to or greater than the value of
              the residential properties;

         o    any secondary financing on the related residential properties are
              equal to or greater than the value of the residential properties;
              and

         o    the rate of delinquencies, foreclosures and losses are higher than
              those now generally experienced in the mortgage lending industry.



                                      -24-


In addition, adverse economic conditions, which may or may not affect real
property values, may affect the timely payment by borrowers of scheduled
payments of principal and interest on the residential loans. Accordingly, these
factors may also affect the rates of delinquencies, foreclosures and losses with
respect to any trust fund. To the extent that these losses are not covered by
credit enhancement, these losses may be borne, at least in part, by you.

BOOK-ENTRY SYSTEM FOR CERTAIN CLASSES MAY DECREASE LIQUIDITY AND DELAY PAYMENT

         Transactions in the classes of book-entry securities of any series
generally can be effected only through The and its participating members,
financial intermediaries and certain banks. Therefore:

         o    the liquidity of book-entry securities in the secondary trading
              market that may develop may be limited because investors may be
              unwilling to purchase securities for which they cannot obtain
              physical securities;

         o    your ability to pledge a security to persons or entities that do
              not participate in the DTC system, or otherwise to take action in
              respect of the securities, may be limited due to lack of a
              physical security representing the securities; and

         o    you may experience some delay in receiving distributions of
              interest and principal on your securities because the trustee will
              make distributions to DTC or its participating members. DTC will
              then be required to credit the distributions to the accounts of
              the participating organizations. Only then will they be credited
              to your account either directly or indirectly through Financial
              Intermediaries.

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

UNSECURED HOME IMPROVEMENT CONTRACTS MAY EXPERIENCE RELATIVELY HIGHER LOSSES

         A borrower's obligations under an unsecured home improvement contract
will not be secured by an interest in the related real estate or otherwise. A
borrower's loan being unsecured would increase the risk that you might not
receive all payments to which you are entitled because:

         o    the related trust fund, as the owner of the unsecured home
              improvement contract, will be a general unsecured creditor to
              these obligations;

         o    if a default occurs under an unsecured home improvement contract,
              the related trust fund will have recourse only against the
              borrower's assets generally, along with all other general
              unsecured creditors of the borrower;

         o    in a bankruptcy or insolvency proceeding relating to a borrower on
              an unsecured home improvement contract, the borrower's obligations
              under this unsecured home improvement contract may be discharged
              in their entirety. This discharge may occur even if the portion of
              the borrower's assets made available to pay the amount due and



                                      -25-


              owing to the related trust fund as a general unsecured creditor
              are sufficient to pay these amounts in whole or part; and

         o    the borrower may not demonstrate the same degree of concern over
              performance of the borrower's obligations as if these obligations
              were secured by the real estate owned by the borrower.

MORTGAGE LOANS UNDERWRITTEN AS NON-CONFORMING CREDITS MAY EXPERIENCE RELATIVELY
HIGHER LOSSES

         The single family mortgage loans assigned and transferred to a trust
fund may include mortgage loans underwritten in accordance with the underwriting
standards for "non-conforming credits." These borrowers may include those whose
creditworthiness and repayment ability do not satisfy Fannie Mae or Freddie Mac
underwriting guidelines.

         A mortgage loan made to a "non-conforming credit" means a residential
loan that is:

         o    ineligible for purchase by Fannie Mae or Freddie Mac due to
              borrower credit characteristics, property characteristics, loan
              documentation guidelines or other characteristics that do not meet
              Fannie Mae or Freddie Mac underwriting guidelines;

         o    made to a borrower whose creditworthiness and repayment ability do
              not satisfy the Fannie Mae or Freddie Mac underwriting guidelines;
              or

         o    made to a borrower who may have a record of major derogatory
              credit items such as default on a prior residential loan, credit
              write-offs, outstanding judgments or prior bankruptcies.

         Mortgage loans made to borrowers who are characterized as
"non-conforming credits" may experience greater delinquency and foreclosure
rates than loans originated in accordance with the Fannie Mae or Freddie Mac
underwriting guidelines. This may occur because these borrowers are less
creditworthy than borrowers who meet the Fannie Mae or Freddie Mac underwriting
guidelines. As a result, if the values of the mortgaged properties decline, then
the rates of loss on mortgage loans made to "non-conforming credits" are more
likely to increase than the rates of loss on mortgage loans made in accordance
with the Fannie Mae or Freddie Mac guidelines and this increase may be
substantial. As a result you may suffer losses. See "Residential Loans --
Underwriting Standards" in this prospectus.

ASSETS OF THE TRUST FUND MAY INCLUDE DELINQUENT AND SUB-PERFORMING RESIDENTIAL
LOANS

         The assets of the trust fund may include residential loans that are
delinquent or sub-performing. The credit enhancement provided with respect to
your series of securities may not cover all losses related to these delinquent
or sub-performing residential loans. You should consider the risk that including
these residential loans in the trust fund could increase the risk that you will
suffer losses because:

         o    the rate of defaults and prepayments on the residential loans to
              increase; and



                                      -26-


         o    in turn, losses may exceed the available credit enhancement for
              the series and affect the yield on your securities.

         See "The Trust Funds -- Residential Loans" in this prospectus.

CHANGES IN THE MARKET VALUE OF PROPERTIES MAY ADVERSELY AFFECT PAYMENTS ON THE
SECURITIES

         We cannot assure you that the market value of the assets of the trust
fund or any other assets of a trust fund will at any time be equal to or greater
than the principal amount of the securities of the related series then
outstanding, plus accrued interest on it. If the assets in the trust fund have
to be sold for any reason, the net proceeds from the sale, after paying expenses
of sale and unpaid fees and other amounts owing to the master servicer and the
trustee, may be insufficient to pay in full the principal of and interest on
your securities.

                                  DEFINED TERMS

         We define and use capitalized terms in this prospectus to assist you in
understanding the terms of the offered securities and this offering. These terms
are defined under the section "Glossary of Terms" in this prospectus on page
187.

                                 THE TRUST FUNDS

         The depositor will select each asset of the trust fund to include in a
trust fund from among those purchased, either directly or through affiliates,
from unaffiliated sellers, or, from sellers affiliated with the depositor, as
provided in the related prospectus supplement.

RESIDENTIAL LOANS

         The residential loans may consist of any combination of:

         o    Mortgage loans secured by first or junior liens on one-to
              four-family residential properties;

         o    Multifamily Loans;

         o    Home Improvement Contracts;

         o    Home Equity Loans;

         o    Cooperative Loans; or

         o    Manufactured Housing Contracts

         The mortgaged properties, cooperative shares, the right to occupy
a particular cooperative unit in any of these cooperative shares and
manufactured homes may be located in any one of the fifty states, the District
of Columbia, the Commonwealth of Puerto Rico or the territories of



                                      -27-


Guam or the United States Virgin Islands. Each trust fund may contain, and any
participation interest in any of the foregoing will relate to, any combination
of the following types of residential loans:

         (1) Fully amortizing loans with a fixed rate of interest and level
monthly payments to maturity;

         (2) Fully amortizing loans with a fixed interest rate providing for
level monthly payments, or for payments of interest only during the early years
of the term, followed by monthly payments of principal and interest that
increase annually at a predetermined rate until the loan is repaid or for a
specified number of years, after which level monthly payments resume;

         (3) Fully amortizing loans with a fixed interest rate providing for
monthly payments during the early years of the term that are calculated on the
basis of an interest rate below the interest rate, followed by monthly payments
of principal and interest that increase annually by a predetermined percentage
over the monthly payments payable in the previous year until the loan is repaid
or for a specified number of years, followed by level monthly payments;

         (4) Fixed interest rate loans providing for level payments of principal
and interest on the basis of an assumed amortization schedule and a balloon
payment of principal at the end of a specified term;

         (5) Fully amortizing loans with an interest rate adjusted periodically,
with corresponding adjustments in the amount of monthly payments, to equal the
sum, that may be rounded, of a fixed margin and an index as described in the
related prospectus supplement. These loans may provide for an election, at the
borrower's option during a specified period after origination of the loan, to
convert the adjustable interest rate to a fixed interest rate, as described in
the related prospectus supplement;

         (6) Fully amortizing loans with an adjustable interest rate providing
for monthly payments less than the amount of interest accruing on the loan and
for the amount of interest accrued but not paid currently to be added to the
principal balance of the loan;

         (7) Fully amortizing loans with an adjustable interest rate providing
for an election at the borrower's option, if an adjustment to the interest rate
occurs resulting in an interest rate in excess of the interest rate at
origination of the loan, to extend the term to maturity for a period as will
result in level monthly payments to maturity; or

         (8) Any other types of residential loans as may be described in the
related prospectus supplement.

         The related prospectus supplement may specify that the trust fund
underlying a series of securities may include mortgage securities consisting of
previously issued asset-backed certificates, collateralized mortgage obligations
or participation certificates. The mortgage securities may:

          o    evidence interests in, or be collateralized by, residential loans
               or agency securities as described in this prospectus and in the
               related prospectus supplement; or



                                      -28-


         o    have been issued previously by:

              o    the depositor or an affiliate of the depositor;

              o    a financial institution; or

              o    another entity engaged generally in the business of lending
                   or a limited purpose corporation organized for the purpose
                   of, among other things, establishing trusts, acquiring and
                   depositing loans into the trusts, and selling beneficial
                   interests in these trusts.

         If the mortgage securities were issued by an entity other than the
depositor or its affiliates, the mortgage securities will have been:

         o    acquired in bona fide secondary market transactions from persons
              other than the issuer of the mortgage securities or its
              affiliates; and

               (1)  offered and distributed to the public pursuant to an
                    effective registration statement, or

               (2)  purchased in a transaction not involving any public offering
                    from a person who is not an affiliate of the issuer of those
                    securities at the time of sale nor an affiliate of the
                    issuer at any time during the preceding three months.
                    However, a period of two years must have elapsed since the
                    later of the date the securities were acquired from the
                    issuer or from an affiliate of the issuer.

         Generally, the mortgage securities will be similar to securities
offered by this prospectus. As to any series of securities that the Trust Fund
includes mortgage securities, the related prospectus supplement will include a
description of:

         o    the mortgage securities;

         o    any related credit enhancement;

         o    the residential loans underlying the mortgage securities; and

         o    any other residential loans included in the trust fund relating to
              the series.

References to advances to be made and other actions to be taken by the master
servicer in connection with the residential loans underlying the mortgage
securities, may include the advances made and other actions taken pursuant to
the terms of the mortgage securities.

         The related prospectus supplement may specify that residential loans
contain provisions prohibiting prepayments for a specified Lockout Period.

         The related prospectus supplement may specify that the assets of a
trust fund will include residential loans that are delinquent or sub-performing.
The inclusion of these residential loans in the trust fund for a series may
cause the rate of defaults and prepayments on the residential loans



                                      -29-


to increase. This, in turn, may cause losses to exceed the available credit
enhancement for the series and affect the yield on the securities of the series.

         MORTGAGE LOANS. The mortgage loans will be evidenced by promissory
notes secured by mortgages or deeds of trust creating first or junior liens on
the mortgaged properties. The mortgage loans will be secured by one- to
four-family residences, including:

         o    detached and attached dwellings;

         o    townhouses;

         o    rowhouses;

         o    individual condominium units;

         o    individual units in planned-unit developments; and

         o    individual units in de minimis planned-unit developments.

The related prospectus supplement may specify that the mortgage loans will be
insured by the FHA or partially guaranteed by the VA. See "The Trust Funds --
Residential Loans -- FHA Loans and VA Loans" and "Description of Primary
Insurance Coverage -- FHA Insurance and VA Guarantees" in this prospectus.

         Certain of the mortgage loans may be secured by junior liens, and the
related senior liens may not be included in the mortgage pool. The primary risk
to holders of mortgage loans secured by junior liens is the possibility that
adequate funds will not be received in connection with a foreclosure of the
related senior lien to satisfy fully both the senior lien and the junior lien.
This possibility could arise under any of a number of different circumstances:

         o    If a holder of a senior lien forecloses on a mortgaged property,
              the proceeds of the foreclosure or similar sale will be applied:

              o    first, to the payment of court costs and fees in connection
                   with the foreclosure;

              o    second, to real estate taxes; and

              o    third, in satisfaction of all principal, interest, prepayment
                   or acceleration penalties, if any, and any other sums due and
                   owing to the holder of the senior lien.

The claims of the holders of senior liens will be satisfied in full out of
proceeds of the liquidation of the mortgage loan, if the proceeds are
sufficient, before the trust fund as holder of the junior lien receives any
payments in respect of the mortgage loan.



                                      -30-


         o    If the master servicer forecloses on any mortgage loan, it would
              do so subject to any related senior liens.

              o    In order for the debt related to the mortgage loan included
                   in the Trust Fund to be paid in full at the sale, a bidder at
                   the foreclosure sale of the mortgage loan would have to bid
                   an amount sufficient to pay off all sums due under the
                   mortgage loan and any senior liens or purchase the related
                   mortgaged property subject to any senior liens.

              o    If the proceeds from a foreclosure or similar sale of the
                   related mortgaged property are insufficient to satisfy all
                   senior liens and the junior lien in the aggregate, the trust
                   fund, as the holder of the junior lien. As a result, holders
                   of one or more classes of the securities bear:

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

                   o    the risk of loss if the deficiency judgment is not
                        realized on; and o the risk that deficiency judgments
                        may not be available in certain jurisdictions.

         o    In addition, a junior mortgagee may not foreclose on the property
              securing a junior mortgage unless it forecloses subject to the
              senior mortgage.

         Liquidation expenses with respect to defaulted mortgage loans do not
vary directly with the outstanding principal balance of the loan at the time of
default. Therefore, assuming that a servicer took the same steps in realizing on
a defaulted mortgage loan having a small remaining principal balance as it would
in the case of a defaulted mortgage loan having a large remaining principal
balance, the amount realized after expenses of liquidation of a loan with a
smaller remaining balance would be smaller as a percentage of the loan amount
than would be the case with the defaulted mortgage loan having a larger
remaining balance.

         MULTIFAMILY LOANS. The Multifamily Loan will be evidenced by mortgage
notes secured by mortgages creating first or junior liens on rental apartment
buildings or projects containing five or more dwelling units. The related
prospectus supplement will specify the original terms to stated maturity of the
Multifamily Loans, which are generally not more than 30 years. The related
prospectus supplement may specify that the Multifamily Loans are FHA loans.
Mortgaged properties which secure Multifamily Loans may include high-rise,
mid-rise and garden apartments. See "The Trust Funds -- Residential Loans -- FHA
Loans and VA Loans" and "Description of Primary Insurance Coverage -- FHA
Insurance and VA Guarantees" in this prospectus.

         The related prospectus supplement may specify that the Multifamily
Loans:

         o    contain a Lockout Period;



                                      -31-


         o    prohibit prepayments entirely; or

         o    require the payment of a prepayment penalty if prepayment in full
              or in part occurs.

If you are entitled to all or a portion of any prepayment penalties collected in
respect of the related Multifamily Loans, the related prospectus supplement will
specify the method or methods by which the prepayment penalties are calculated.

         HOME EQUITY LOANS AND HOME IMPROVEMENT CONTRACTS. The Home Equity Loans
will be secured by first or junior liens on the related mortgaged properties for
property improvement, debt consolidation or home equity purposes. The Home
Improvement Contracts will either be unsecured or secured by mortgages on one-
to four-family, multifamily properties or manufactured housing which mortgages
are generally subordinate to other mortgages on the same property. The Home
Improvement Contracts may be fully amortizing or may have substantial balloon
payments due at maturity. They may also have fixed or adjustable rates of
interest and may provide for other payment characteristics. The related
prospectus supplement may specify that the Home Improvement Contracts are FHA
loans. See "The Trust Funds -- Residential Loans -- FHA Loans and VA Loans" and
"Description of Primary Insurance Coverage -- FHA Insurance and VA Guarantees"
in this prospectus.

         COOPERATIVE LOANS. The Cooperative Loans will be evidenced by
promissory notes secured by security interests in shares issued by cooperative
housing corporations and in the related proprietary leases or occupancy
agreements granting exclusive rights to occupy specific cooperative units in the
related buildings.

         MANUFACTURED HOUSING CONTRACTS. The Manufactured Housing Contracts will
consist of manufactured housing conditional sales contracts and installment loan
agreements each secured by a manufactured home, or in the case of a Land
Contract, by a lien on the real estate to which the manufactured home is deemed
permanently affixed and, in some cases, the related manufactured home which is
not real property under the applicable state law.

         The manufactured homes securing the Manufactured Housing Contracts will
generally consist of manufactured homes within the meaning of 42 United States
Code, Section 5402(6). Under Section 5402(6), a "manufactured home" is defined
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 in the manufactured home. However, the term "manufactured home" 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 related prospectus supplement may specify that the Manufactured
Housing Contracts are FHA loans or VA loans. See "The Trust Funds -- Residential
Loans -- FHA Loans and VA



                                      -32-


Loans" and "Description of Primary Insurance Coverage -- FHA Insurance and VA
Guarantees" in this prospectus.

         BUYDOWN LOANS. The related prospectus supplement may specify that
residential loans are subject to temporary buydown plans. The monthly payments
made by the borrower in the early years of these loans, known as the buydown
period, will be less than the scheduled payments on these loans. The resulting
difference will be recovered from:

         o    an amount contributed by the borrower, the seller of the
              residential property or another source and placed in a custodial
              account; and

         o    investment earnings on the buydown funds to the extent that the
              related prospectus supplement provides for these earnings.

Generally, the borrower under each of these loans will be eligible for at a
reduced interest rate. Accordingly, the repayment of these loans is dependent on
the ability of the borrowers to make larger monthly payments after the buydown
funds have been depleted and, for certain buydown loans, during the buydown
period. See "Residential Loans -- Underwriting Standards" in this prospectus.

         FHA LOANS AND VA LOANS. FHA loans will be insured by the FHA as
authorized under the National Housing Act of 1934, as amended, and the United
States Housing Act of 1937, as amended. One- to four-family 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 and the FHA 245
graduated payment mortgage program. The 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 balance
exceeding the applicable FHA limits at the time of origination of the FHA loan.
See "Description of Primary Insurance Coverage -- FHA Insurance and VA
Guarantees" in this prospectus.

         Home Improvement Contracts and Manufactured Housing Contracts that are
FHA loans are insured by the FHA pursuant to Title I of the Housing Act. As
described in the related prospectus supplement, these loans are insured up to an
amount equal to 90% of the sum of the unpaid principal of the FHA loan, a
portion of the unpaid interest and certain other liquidation costs.

         There are two primary FHA insurance programs that are available for
Multifamily Loans:

         o    Sections 221(d)(3) and (d)(4) of the Housing Act allow HUD to
              insure Multifamily Loans that are secured by newly constructed and
              substantially rehabilitated multifamily rental projects. Section
              244 of the Housing Act provides for co-insurance of the loans made
              under Sections 221(d)(3) and (d)(4) by HUD/FHA and a HUD-approved
              co-insurer. Generally the term of these Multifamily Loans may be
              up to 40 years and the ratio of the loan amount to property
              replacement cost can be up to 90%.

         o    Section 223(f) of the Housing Act allows HUD to insure Multifamily
              Loans made for the purchase or refinancing of existing apartment
              projects that are at least three years



                                      -33-


              old. Section 244 also provides for co-insurance of mortgage loans
              made under Section 223(f). Under Section 223(f), the loan
              proceeds cannot be used for substantial rehabilitation work.
              However, repairs may be made for up to, in general, the greater
              of 15% of the value of the project and a dollar amount per
              apartment unit established from time to time by HUD. In general
              the loan term may not exceed 35 years and a loan-to-value ratio
              of no more than 85% is required for the purchase of a project and
              70% for the refinancing of a project.

         VA loans will be partially guaranteed by the VA under the Servicemen's
Readjustment Act of 1944, as amended. The Servicemen's Readjustment Act permits
a veteran, or in certain 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 the VA under this program will be set forth in the related prospectus
supplement. See "Description of Primary Insurance Coverage -- FHA Insurance and
VA Guarantees" in this prospectus.

         LOAN-TO-VALUE RATIO. The prospectus supplement for a series backed by
residential loans will describe the Loan-to-Value Ratios of the loans.

         o    Generally, for purposes of calculating the Loan-to-Value Ratio of
              a Manufactured Housing Contract relating to a new manufactured
              home, the Collateral Value is no greater than the sum of:

              (1)   a fixed percentage of the list price of the unit actually
                    billed by the manufacturer to the dealer, exclusive of
                    freight to the dealer site, including "accessories"
                    identified in the invoice, plus

              (2)   the actual cost of any accessories purchased from the
                    dealer, a delivery and set-up allowance, depending on the
                    size of the unit, and the cost of state and local taxes,
                    filing fees and up to three years prepaid hazard insurance
                    premiums.

         o    Generally, with respect to used manufactured homes, the Collateral
              Value is the least of the sales price, appraised value, and
              National Automobile Dealer's Association book value plus prepaid
              taxes and hazard insurance premiums. The appraised value of a
              manufactured home is based on the age and condition of the
              manufactured housing unit and the quality and condition of the
              mobile home park in which it is situated, if applicable.

         Residential properties may be subject to subordinate financing at the
time of origination. As is customary in residential lending, subordinate
financing may be obtained with respect to a residential property after the
origination of the residential loan without the lender's consent.



                                      -34-



         We cannot assure you that values of the residential properties have
remained or will remain at their historic levels on the respective dates of
origination of the related residential loans. If the residential real estate
market experiences an overall decline in property values such that the
outstanding principal balances of the residential loans, and any other financing
on the related residential properties, become equal to or greater than the value
of the residential properties, the actual rates of delinquencies, foreclosures
and losses may be higher than those now generally experienced in the mortgage
lending industry. In addition, adverse economic conditions, which may or may not
affect real property values, may affect the timely payment by borrowers of
scheduled payments of principal and interest on the residential loans and,
accordingly, the actual rates of delinquencies, foreclosures and losses. To the
extent that the losses are not covered by the applicable insurance policies and
other forms of credit support described in this prospectus and in the related
prospectus supplement, the losses will be borne, at least in part, by you. See
"Description of the Securities" and "Description of Credit Support" in this
prospectus.


AGENCY SECURITIES

         The agency securities will consist of any combination of "fully
modified pass-through" mortgage-backed certificates guaranteed by the GNMA,
guaranteed mortgage pass-through securities issued by Fannie Mae and mortgage
participation certificates issued by Freddie Mac.

         GNMA. Government National Mortgage Association is a wholly owned
corporate instrumentality of the United States within the Department of Housing
and Urban Development. Section 306(g) of Title III of the Housing Act authorizes
GNMA to guarantee the timely payment of the principal of and interest on
certificates that are based on and backed by a pool of FHA loans, VA loans or by
pools of other eligible residential loans.

         Section 306(g) of the Housing Act provides that "the full faith and
credit of the United States is pledged to the payment of all amounts which may
be required to be paid under any guaranty under this subsection." In order to
meet its obligations under the guaranty, GNMA is authorized, under Section
306(d) of the Housing Act, to borrow from the United States Treasury with no
limitations as to amount, to perform its obligations under its guarantee.

         GNMA CERTIFICATES. Each GNMA Certificate will be a "fully modified
pass-through" mortgage-backed certificate issued and serviced by an issuer
approved by GNMA or Fannie Mae as a seller-servicer of FHA loans or VA loans,
except as described below with respect to Stripped Agency Securities. The loans
underlying GNMA Certificates may consist of FHA loans, VA loans and other loans
eligible for inclusion in loan pools underlying GNMA Certificates. GNMA
Certificates may be issued under either or both of the GNMA I program and the
GNMA II program, as described in the related prospectus supplement. The
prospectus supplement for certificates of each series evidencing interests in a
trust fund including GNMA Certificates will set forth additional information
regarding:

         o    the GNMA guaranty program;

         o    the characteristics of the pool underlying the GNMA Certificates;




                                      -35-



         o    the servicing of the related pool;

         o    the payment of principal and interest on GNMA Certificates to the
              extent not described in this prospectus; and

         o    other relevant matters with respect to the GNMA Certificates.

         Generally, with respect to Stripped Agency Securities, each GNMA
Certificate will provide for the payment, by or on behalf of the issuer, to the
registered holder of the GNMA Certificates. Generally, this payment shall be in
an amount of monthly payments of principal and interest equal to the holder's
proportionate interest in the aggregate amount of the monthly principal and
interest payments on each related FHA loan or VA loan, less servicing and
guaranty fees aggregating the excess of the interest on the FHA loan or VA loan
over the GNMA Certificates' pass-through rate. In addition, each payment to a
holder of a GNMA Certificate will include proportionate pass-through payments to
the holder of any prepayments of principal of the FHA loans or VA loans
underlying the GNMA Certificates and the holder's proportionate interest in the
remaining principal balance if a foreclosure or other disposition of any the FHA
loan or VA loan occurs.

         The GNMA Certificates do not constitute a liability of, or evidence any
recourse against, the issuer of the GNMA Certificates, the depositor or any of
their affiliates. The only recourse of a registered holder, such as the trustee,
is to enforce the guaranty of GNMA.

         GNMA will have approved the issuance of each of the GNMA Certificates
included in a trust fund in accordance with a guaranty agreement or contract
between GNMA and the issuer of the GNMA Certificates. Pursuant to the agreement,
the issuer, in its capacity as servicer, is required to perform customary
functions of a servicer of FHA loans and VA loans, including:

         o    collecting payments from borrowers and remitting the collections
              to the registered holder;

         o    maintaining escrow and impoundment accounts of borrowers for
              payments of taxes, insurance and other items required to be paid
              by the borrower;

         o    maintaining primary hazard insurance; and

         o    advancing from its own funds in order to make timely payments of
              all amounts due on the GNMA Certificates, even if the payments
              received by the issuer on the loans backing the GNMA Certificates
              are less than the amounts due on the loans.

If the issuer is unable to make payments on GNMA Certificates as they become
due, it must promptly notify GNMA and request GNMA to make the payment. After
the notification and request, GNMA will make the payments directly to the
registered holder of the GNMA Certificate. If no payment is made by the issuer
and the issuer fails to notify and request GNMA to make the payment, the
registered holder of the GNMA Certificate has recourse against only GNMA to
obtain the payment. The trustee or its nominee, as registered holder of the GNMA
Certificates included in a trust fund, is entitled to proceed directly against
GNMA under the



                                      -36-



terms of the guaranty agreement or contract relating to the GNMA Certificates
for any amounts that are not paid when due under each GNMA Certificate.

         The GNMA Certificates included in a trust fund may have other
characteristics and terms, different from those described above so long as the
GNMA Certificates and underlying residential loans meet the criteria of the
rating agency or agencies. The GNMA Certificates and underlying residential
loans will be described in the related prospectus supplement.

         FANNIE MAE. The Federal National Mortgage Association is a federally
chartered and stockholder-owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, as amended. Fannie Mae was
originally established in 1938 as a United States government agency to provide
supplemental liquidity to the mortgage market and was transformed into a
stockholder-owned and privately managed corporation by legislation enacted in
1968.

         Fannie Mae provides funds to the mortgage market by purchasing mortgage
loans from lenders. Fannie Mae acquires funds to purchase loans from many
capital market investors, thus expanding the total amount of funds available for
housing. Operating nationwide, Fannie Mae helps to redistribute mortgage funds
from capital-surplus to capital-short areas. In addition, Fannie Mae issues
mortgage-backed securities primarily in exchange for pools of mortgage loans
from lenders. Fannie Mae receives fees for its guaranty of timely payment of
principal and interest on its mortgage-backed securities.

         FANNIE MAE CERTIFICATES. Fannie Mae Certificates are guaranteed
mortgage pass-through certificates typically issued pursuant to a prospectus
which is periodically revised by Fannie Mae. Fannie Mae Certificates represent
fractional undivided interests in a pool of mortgage loans formed by Fannie Mae.
Each mortgage loan:

         o    must meet the applicable standards of the Fannie Mae purchase
              program;

         o    is either provided by Fannie Mae from its own portfolio or
              purchased pursuant to the criteria of the Fannie Mae purchase
              program; and

         o    is either a conventional mortgage loan, an FHA loan or a VA loan.

The prospectus supplement for securities of each series evidencing interests in
a trust fund including Fannie Mae Certificates will set forth additional
information regarding:

         o    the Fannie Mae program;

         o    the characteristics of the pool underlying the Fannie Mae
              Certificates;

         o    the servicing of the related pool;

         o    payment of principal and interest on the Fannie Mae Certificates
              to the extent not described in this prospectus; and

         o    other relevant matters with respect to the Fannie Mae
              Certificates.




                                      -37-



         Except as described below with respect to Stripped Agency Securities,
Fannie Mae guarantees to each registered holder of a Fannie Mae Certificate that
it will distribute amounts representing the holder's proportionate share of
scheduled principal and interest at the applicable pass-through rate provided
for by the Fannie Mae Certificate on the underlying mortgage loans, whether or
not received. In addition, Fannie Mae will distribute the holder's proportionate
share of the full principal amount of any prepayment or foreclosed or other
finally liquidated mortgage loan, whether or not that principal amount is
actually recovered.

         The obligations of Fannie Mae under its guarantees are obligations
solely of Fannie Mae and are not backed by, nor entitled to, the full faith and
credit of the United States. If Fannie Mae were unable to satisfy its
obligations, distributions to the holders of Fannie Mae Certificates would
consist solely of payments and other recoveries on the underlying loans.
Accordingly, monthly distributions to the holders of Fannie Mae Certificates
would be affected by delinquent payments and defaults on these loans. Fannie Mae
Certificates evidencing interests in pools of mortgage loans formed on or after
May 1, 1985, other than Fannie Mae Certificates backed by pools containing
graduated payment mortgage loans or Multifamily Loans, are available in
book-entry form only. With respect to a Fannie Mae Certificate issued in
book-entry form, distributions on that certificate will be made by wire. With
respect to a fully registered Fannie Mae Certificate, distributions on that
certificate will be made by check.

         The Fannie Mae Certificates included in a trust fund may have other
characteristics and terms, different from those described above, so long as the
Fannie Mae Certificates and underlying mortgage loans meet the criteria of the
rating agency or rating agencies rating the certificates of the related series.
These Fannie Mae Certificates and underlying mortgage loans will be described in
the related prospectus supplement.

         FREDDIE MAC. The Federal Home Loan Mortgage Corporation is a corporate
instrumentality of the United States created pursuant to Title III of the
Emergency Home Finance Act of 1970, as amended. Freddie Mac was established
primarily for the purpose of increasing the availability of mortgage credit for
the financing of needed housing. It seeks to provide an enhanced degree of
liquidity for residential mortgage investments primarily by assisting in the
development of secondary markets for conventional mortgages. The principal
activity of Freddie Mac currently consists of purchasing first lien,
conventional residential mortgage loans or participation interests in the
mortgage loans and reselling the mortgage loans so purchased in the form of
mortgage securities, primarily Freddie Mac Certificates. Freddie Mac is confined
to purchasing, so far as practicable, mortgage loans and participation interests
in those mortgage loans which it deems to be of a quality, type and class as to
meet generally the purchase standards imposed by private institutional mortgage
investors.

         FREDDIE MAC CERTIFICATES. Each Freddie Mac Certificate represents an
undivided interest in a pool of residential loans that may consist of first lien
conventional residential loans, FHA loans or VA loans. Each mortgage loan
securing an Freddie Mac Certificate must meet the applicable standards set forth
in Title III of the Emergency House Finance Act of 1970, as amended. A group of
Freddie Mac Certificates may include whole loans, participation interests in
whole loans and undivided interests in whole loans and/or participations
comprising another group of Freddie Mac Certificates. The prospectus supplement
for securities of each series



                                      -38-



evidencing interests in a trust fund including Freddie Mac Certificates will set
forth additional information regarding:

         o    the Freddie Mac guaranty program;

         o    the characteristics of the pool underlying the Freddie Mac
              Certificate;

         o    the servicing of the related pool;

         o    payment of principal and interest on the Freddie Mac Certificate
              to the extent not described in this prospectus; and

         o    other relevant matters with respect to the Freddie Mac
              Certificates.

         Except as described below with respect to Stripped Agency Securities:

         o    Freddie Mac guarantees to each registered holder of a Freddie Mac
              Certificate the timely payment of interest on the underlying
              mortgage loans. This guarantee is only to the extent of the
              applicable pass-through rate on the registered holder's pro rata
              share of the unpaid principal balance outstanding on the
              underlying mortgage loans in the group of Freddie Mac Certificates
              represented by the Freddie Mac Certificate, whether or not
              received.

         o    Freddie Mac also guarantees to each registered holder of a Freddie
              Mac Certificate collection by the holder of all principal on the
              underlying mortgage loans, without any offset or deduction, to the
              extent of the holder's pro rata share. Freddie Mac's guarantee of
              timely payment of scheduled principal will be limited to the
              extent set forth in the prospectus supplement.

         o    Freddie Mac also guarantees ultimate collection of scheduled
              principal payments, prepayments of principal and the remaining
              principal balance in the event of a foreclosure or other
              disposition of a mortgage loan. Freddie Mac may remit the amount
              due on account of its guarantee of collection of principal at any
              time after default on an underlying mortgage loan, but not later
              than 30 days following the latest of:

              o    foreclosure sale;

              o    payment of the claim by any mortgage insurer; and

              o    the expiration of any right of redemption; but in any event
                   no later than one year after demand has been made of the
                   borrower for accelerated payment of principal.

In taking actions regarding the collection of defaulted mortgage loans
underlying Freddie Mac Certificates, including the timing of demand for
acceleration, Freddie Mac reserves the right to exercise its servicing judgment
in the same manner used for mortgage loans which it has purchased but not sold.
The length of time necessary for Freddie Mac to determine that a




                                      -39-



mortgage loan should be accelerated varies with the particular circumstances of
each borrower. Freddie Mac has not adopted servicing standards that require that
the demand be made within any specified period.

         Freddie Mac Certificates are not guaranteed by the United States or by
any Federal Home Loan Bank. Freddie Mac Certificates do not constitute debts or
obligations of the United States or any Federal Home Loan Bank. The obligations
of Freddie Mac under its guarantee are obligations solely of Freddie Mac and are
not backed by, nor entitled to, the full faith and credit of the United States.
If Freddie Mac were unable to satisfy the obligations, distributions to holders
of Freddie Mac Certificates would consist solely of payments and other
recoveries on the underlying mortgage loans. Accordingly, monthly distributions
to holders of Freddie Mac Certificates would be affected by delinquent payments
and defaults on the mortgage loans.

         The Freddie Mac Certificates included in a trust fund may have other
characteristics and terms, different from those described above, so long as
those Freddie Mac Certificates and underlying mortgage loans meet the criteria
of the rating agency or rating agencies rating the securities of the related
series. The Freddie Mac Certificates and underlying mortgage loans will be
described in the related prospectus supplement.


STRIPPED AGENCY SECURITIES

         The GNMA Certificates, Fannie Mae Certificates or Freddie Mac
Certificates may be issued in the form of certificates, known as Stripped Agency
Securities, which represent:

         o    an undivided interest in all or part of either the principal
              distributions, but not the interest distributions, or the interest
              distributions, but not the principal distributions; or

         o    in some specified portion of the principal or interest
              distributions but not all of the distributions, on an underlying
              pool of mortgage loans or certain other GNMA Certificates, Fannie
              Mae Certificates or Freddie Mac Certificates.

         To the extent set forth in the related Prospectus Supplement, GNMA,
Fannie Mae or Freddie Mac, as applicable, will guarantee each Stripped Agency
Security to the same extent as the entity guarantees the underlying securities
backing the Stripped Agency Securities or to the extent described above with
respect to a Stripped Agency Security backed by a pool of mortgage loans. The
prospectus supplement for each series of Stripped Agency Securities will set
forth

         o    additional information regarding the characteristics of the assets
              underlying the Stripped Agency Securities,

         o    the payments of principal and interest on the Stripped Agency
              Securities and

         o    other relevant matters with respect to the Stripped Agency
              Securities.




                                      -40-



              ADDITIONAL INFORMATION CONCERNING THE TRUST FUNDS

         Each prospectus supplement relating to a series of securities will
contain information, as of the date of the prospectus supplement, if applicable
and to the extent specifically known to the depositor, with respect to the
residential loans or agency securities contained in the related trust fund,
including, but not limited to:

         o    the aggregate outstanding principal balance and the average
              outstanding principal balance of the assets of the trust fund as
              of the applicable Cut-Off Date;

         o    the types of related residential properties--e.g.,

              o    one- to four-family dwellings,

              o    multifamily residential properties,

              o    shares in cooperative housing corporations and the related
                   proprietary leases or occupancy agreements,

              o    condominiums and planned-unit development units,

              o    vacation and second homes, and

              o    new or used manufactured homes;

         o    the original terms to maturity;

         o    the outstanding principal balances;

         o    the years in which the loans were originated;

         o    with respect to Multifamily Loans, the Lockout Periods and
              prepayment penalties;

         o    the Loan-To-Value ratios or, with respect to residential loans
              secured by a junior lien, the combined Loan-To-Value ratios at
              origination;

         o    the interest rates or range of interest rates borne by the
              residential loans or residential loans underlying the agency
              securities;

         o    the geographical distribution of the residential properties on a
              state-by-state basis;

         o    with respect to fully amortizing loans with an adjustable interest
              rate, the adjustment dates, the highest, lowest and weighted
              average margin, and the maximum interest rate variations at the
              time of adjustments and over the lives of these loans; and

         o    information as to the payment characteristics of the residential
              loans.



                                      -41-



         If specific information respecting the assets of the trust fund is not
known to the depositor at the time a series of securities is initially offered,
more general information of the nature described above will be provided in the
related prospectus supplement. In addition, specific information will be set
forth in a report made available at or before the issuance of those securities.
This information will be included in a report on Form 8-K and will be available
to purchasers of the related securities at or before the initial issuance of
those securities. This report on Form 8-K will be filed with the SEC within
fifteen days after the initial issuance of those securities.

         The depositor will cause the residential loans comprising each trust
fund, or mortgage securities evidencing interests in the residential loans to be
assigned to the trustee for the benefit of the holders of the securities of the
related series. The master servicer will service the residential loans
comprising any trust fund, either directly or through other servicing
institutions, each a sub-servicer, pursuant to a pooling and servicing agreement
or servicing agreement among itself, the depositor, the trustee and the other
parties specified in the related prospectus supplement, and will receive a fee
for these services. See "Residential Loans" and "Description of the Securities"
in this prospectus. With respect to residential loans serviced through a
sub-servicer, the master servicer will remain liable for its servicing
obligations under the related servicing agreement as if the master servicer
alone were servicing the residential loans, unless the related prospectus
supplement provides otherwise.

         The depositor will assign the residential loans to the related trustee
on a non-recourse basis. The obligations of the depositor with respect to the
residential loans will be limited to certain representations and warranties made
by it, unless the related prospectus supplement provides that another party will
make the representations and warranties. See "Description of the Securities --
Assignment of Assets of the Trust Fund" in this prospectus. The obligations of
the master servicer with respect to the residential loans will consist
principally of its contractual servicing obligations under the related servicing
agreement, including its obligation to enforce purchases and other obligations
of sub-servicers or Unaffiliated Sellers, or both, as more fully described in
this prospectus under "Residential Loans -- Representations by Unaffiliated
Sellers; Repurchases"; "-- Sub-Servicing" and "Description of the Securities --
Assignment of Assets of the Trust Fund." In addition, the related prospectus
supplement may specify that the master servicer has an obligation to make
certain cash advances in the event of delinquencies in payments on or with
respect to the residential loans in amounts described in this prospectus under
"Description of the Securities -- Advances" or pursuant to the terms of any
mortgage securities. Any obligation of the master servicer to make advances may
be subject to limitations, to the extent provided in this prospectus and in the
related prospectus supplement.

         The depositor will cause the agency securities comprising each trust
fund to be registered in the name of the trustee or its nominee on the books of
the issuer or guarantor or its agent or, in the case of agency securities issued
only in book-entry form, through the Federal Reserve System. The depositor will
register the agency securities in accordance with the procedures established by
the issuer or guarantor for registration of these securities with a member of
the Federal Reserve System. Distributions on agency securities to which the
trust fund is entitled will be made directly to the trustee.




                                      -42-



         The trustee will administer the assets comprising any trust fund
including agency securities pursuant to a trust agreement between the depositor
and the trustee, and will receive a fee for these services. The agency
securities and any moneys attributable to distributions on the agency securities
will not be subject to any right, charge, security interest, lien or claim of
any kind in favor of the trustee or any person claiming through it. The trustee
will not have the power or authority to assign, transfer, pledge or otherwise
dispose of any assets of any trust fund to any person, except to a successor
trustee, to the depositor or the holders of the securities to the extent they
are entitled to those assets of the trust fund or to other persons specified in
the related prospectus supplement and except for its power and authority to
invest assets of the trust fund in certain permitted instruments in compliance
with the trust agreement. The trustee will have no responsibility for
distributions on the securities, other than to pass through all distributions it
receives with respect to the agency securities to the holders of the related
securities without deduction, other than for

         o    any applicable trust administration fee payable to the trustee,

         o    certain expenses of the trustee, if any, in connection with legal
              actions relating to the agency securities,

         o    any applicable withholding tax required to be withheld by the
              trustee, and

         o    as otherwise described in the related prospectus supplement.


                                 USE OF PROCEEDS

         The depositor will apply all or substantially all of the net proceeds
from the sale of each series of securities for one or more of the following
purposes:

         o    to purchase the related assets of the trust fund;

         o    to repay indebtedness which was incurred to obtain funds to
              acquire the assets of the trust fund;

         o    to establish any Reserve Funds or other funds described in the
              related prospectus supplement; and

         o    to pay costs of structuring, guaranteeing and issuing the
              securities, including the costs of obtaining credit support, if
              any.

The purchase of the assets of the trust fund for a series may be effected by an
exchange of securities with the seller of the assets of the trust fund.


                              YIELD CONSIDERATIONS

         The related prospectus supplement will specify the manner in which each
monthly or other periodic interest payment on an asset of the trust fund is
calculated--generally, one-twelfth of the applicable interest rate multiplied by
the unpaid principal balance of the asset. In the case




                                      -43-



of Accrual Securities and interest-only securities, the distributions of
interest will be made in the manner and amount described in the related
prospectus supplement. The securities of each series may bear a fixed, variable
or adjustable security interest rate.

         The effective yield to holders of the securities will be below the
yield otherwise produced by the applicable security interest rate, or with
respect to an interest-only security, the distributions of interest on the
security, and purchase price paid by the investors of these securities. This is
so because while interest will generally accrue on each asset of the trust fund
from the first day of each month, the distribution of the interest, or the
accrual of the interest in the case of Accrual Securities, will not be made
until the distribution date occurring:

         o    in the month or other periodic interval following the month or
              other period of accrual in the case of residential loans;

         o    in later months in the case of agency securities; or

         o    in intervals occurring less frequently than monthly in the case of
              series of securities having distribution dates occurring at
              intervals less frequently than monthly.

         When a full prepayment is made on a residential loan, the borrower is
generally charged interest only for the number of days actually elapsed from the
due date of the preceding monthly payment up to the date of the prepayment,
instead of for a full month. Accordingly, the effect of the prepayments is to
reduce the aggregate amount of interest collected that is available for
distribution to holders of the securities. However, the residential loans may
contain provisions limiting prepayments of the loans or requiring the payment of
a prepayment penalty if the loan is prepaid in full or in part. The related
prospectus supplement may specify that any prepayment penalty collected with
respect to the residential loans will be applied to offset the shortfalls in
interest collections on the related distribution date. Holders of agency
securities are entitled to a full month's interest in connection with
prepayments in full of the underlying residential loans. The related prospectus
supplement may specify that partial principal prepayments are applied on the
first day of the month following receipt, with no resulting reduction in
interest payable by the borrower for the month in which the partial principal
prepayment is made. The related prospectus supplement may specify that neither
the trustee, the master servicer nor the depositor will be obligated to fund
shortfalls in interest collections resulting from full prepayments. Full and
partial prepayments collected during the applicable Prepayment Period will be
available for distribution to holders of the securities on the related
distribution date. See "Maturity and Prepayment Considerations" and "Description
of the Securities" in this prospectus.

         Even assuming that the mortgaged properties provide adequate security
for the mortgage loans, substantial delays could be encountered in connection
with the liquidation of defaulted mortgage loans. Accordingly, corresponding
delays in the receipt of related proceeds by holders of the securities could
occur. An action to foreclose on a mortgaged property securing a mortgage loan
is regulated by state statutes and rules and is subject to many of the delays
and expenses of other lawsuits if defenses or counterclaims are interposed,
sometimes requiring several years to complete. Furthermore, in some states an
action to obtain a deficiency judgment is not permitted following a nonjudicial
sale of a property. If a default by a borrower occurs, these restrictions, among
other things, may impede the ability of the master servicer to foreclose




                                      -44-



on or sell the mortgaged property or to obtain liquidation proceeds sufficient
to repay all amounts due on the related mortgage loan. In addition, the master
servicer will be entitled to deduct from related liquidation proceeds all
expenses reasonably incurred in attempting to recover amounts due on defaulted
mortgage loans and not yet reimbursed, including

         o    payments to senior lienholders,

         o    legal fees and costs of legal action,

         o    real estate taxes, and

         o    maintenance and preservation expenses.

         Liquidation expenses with respect to defaulted mortgage loans do not
vary directly with the outstanding principal balance of the loan at the time of
default. Therefore, assuming that a servicer took the same steps in realizing on
a defaulted mortgage loan having a small remaining principal balance, the amount
realized after expenses of liquidation of a mortgage loan with a small remaining
balance would be smaller as a percentage of the loan than would be the case with
the other defaulted mortgage loan having a larger remaining principal balance.

         Applicable state laws generally regulate interest rates and other
charges, require certain disclosures, and require licensing of certain
originators and servicers of residential loans. In addition, most states have
other laws, public policy and general principles of equity relating to the
protection of consumers, unfair and deceptive practices and practices which may
apply to the origination, servicing and collection of the residential loans.
Depending on the provisions of the applicable law and the specific facts and
circumstances involved, violations of these laws, policies and principles may

         o    limit the ability of the master servicer to collect all or part of
              the principal of or interest on the residential loans,

         o    entitle the borrower to a refund of amounts previously paid, and

         o    subject the trustee or master servicer to damages and
              administrative sanctions which could reduce the amount of
              distributions available to holders of the securities.

         The prospectus supplement for each series of securities may set forth
additional information regarding yield considerations.


                     MATURITY AND PREPAYMENT CONSIDERATIONS

         The original terms to maturity of the assets of the trust fund in a
given trust fund may vary depending on the type of residential loans or the
residential loans underlying the agency securities included in the trust fund.
Each prospectus supplement will contain information with respect to the type and
maturities of the assets of the trust fund. The related prospectus supplement
may specify that the residential loans or residential loans underlying the
agency securities may be prepaid in full or in part at any time without penalty.
The prepayment




                                      -45-



experience on the residential loans or residential loans underlying the agency
securities will affect the life of the related securities.

         The average life of a security refers to the average amount of time
that will elapse from the date of issuance of a security until the principal
amount of the security is reduced to zero. The average life of the securities
will be affected by, among other things, the rate at which principal on the
related residential loans is paid, which may be in the form of scheduled
amortization payments or unscheduled prepayments and liquidations due to
default, casualty, insurance, condemnation and similar sources. If substantial
principal prepayments on the residential loans are received, the actual average
life of the securities may be significantly shorter than would otherwise be the
case. As to any series of securities, based on the public information with
respect to the residential lending industry, it may be anticipated that a
significant number of the related residential loans will be paid in full prior
to stated maturity.

         Prepayments on residential loans are commonly measured relative to a
prepayment standard or model. For certain series of securities comprised of more
than one class, or as to other types of series where applicable, the prospectus
supplement will describe the prepayment standard or model used in connection
with the offering of the related series. If applicable, the prospectus
supplement will also contain tables setting forth the projected weighted average
life of the securities of the related series and the percentage of the initial
security principal balance that would be outstanding on specified distribution
dates based on the assumptions stated in the prospectus supplement. These
assumptions include prepayments on the related residential loans or residential
loans underlying the agency securities are made at rates corresponding to
various percentages of the prepayment standard or model specified in the
prospectus supplement.

         It is unlikely that prepayment of the assets of the trust fund will
conform to any model specified in the related prospectus supplement. The rate of
principal prepayments on pools of residential loans is influenced by a variety
of economic, social, geographic, demographic and other factors, including:

         o    homeowner mobility;

         o    economic conditions;

         o    enforceability of due-on-sale clauses;

         o    market interest rates and the availability of funds;

         o    the existence of lockout provisions and prepayment penalties;

         o    the inclusion of delinquent or sub-performing residential loans in
              the assets of the trust fund;

         o    the relative tax benefits associated with the ownership of
              property; and

         o    in the case of Multifamily Loans, the quality of management of the
              property.




                                      -46-



The rate of prepayments of conventional residential loans has fluctuated
significantly in recent years. In general, however, if prevailing interest rates
fall significantly below the interest rates on the assets of the trust fund, the
assets of the trust fund are likely to be the subject of higher principal
prepayments than if prevailing rates remain at or above the interest rates borne
by the assets of the trust fund.

         Other factors that might be expected to affect the prepayment rate of
securities backed by junior lien mortgage loans or Home Improvement Contracts
include:

         o    the amounts of the underlying senior mortgage loans;

         o    the interest rates on the underlying senior mortgage loans;

         o    the use of first mortgage loans as long-term financing for home
              purchase; and

         o    the use of subordinate mortgage loans as shorter-term financing
              for a variety of purposes, including:

              o    home improvement;

              o    education expenses; and

              o    purchases of consumer durables such as automobiles.

In addition, any future limitations on the right of borrowers to deduct interest
payments on junior liens that are home equity loans for federal income tax
purposes may increase the rate of prepayments on the residential loans.

         In addition, acceleration of payments on the residential loans or
residential loans underlying the agency securities as a result of certain
transfers of the underlying properties is another factor affecting prepayment
rates. The related prospectus supplement may specify that the residential loans,
except for FHA loans and VA loans, contain or do not contain "due-on-sale"
provisions permitting the lender to accelerate the maturity of the residential
loan upon sale or certain transfers by the borrower with respect to the
underlying residential property. Conventional residential loans that underlie
Freddie Mac Certificates and Fannie Mae Certificates may contain, and in certain
cases must contain, "due-on-sale" clauses permitting the lender to accelerate
the unpaid balance of the loan upon transfer of the property by the borrower.
FHA loans and VA loans and all residential loans underlying GNMA Certificates
contain no clause of this type and may be assumed by the purchaser of the
property.

         In addition, Multifamily Loans may contain "due-on-encumbrance" clauses
permitting the lender to accelerate the maturity of the Multifamily Loan if
there is a further encumbrance by the borrower of the underlying residential
property. In general, where a "due-on-sale" or "due-on-encumbrance" clause is
contained in a conventional residential loan under a Freddie Mac or the Fannie
Mae program, the lender's right to accelerate the maturity of the residential
loan if there is a transfer or further encumbrance of the property must be
exercised, so long as the acceleration is permitted under applicable law.




                                      -47-



         With respect to a series of securities evidencing interests in a trust
fund including residential loans, the master servicer generally is required to
enforce any provision limiting prepayments and any due-on-sale or
due-on-encumbrance clause. The master servicer is required to enforce these
provisions only to the extent it has knowledge of the conveyance or encumbrance
or the proposed conveyance or encumbrance of the underlying residential property
and reasonably believes that it is entitled to do so under applicable law.
However, the master servicer will generally be prohibited from taking any
enforcement action that would impair or threaten to impair any recovery under
any related insurance policy. See "Description of the Securities -- Collection
and Other Servicing Procedures" and "Certain Legal Aspects of Residential Loans
-- Enforceability of Certain Provisions" and "--Prepayment Charges and
Prepayments" in this prospectus for a description of provisions of each pooling
and servicing agreement and legal developments that may affect the prepayment
experience on the residential loans. See also "Description of the Securities --
Termination" in this prospectus for a description of the possible early
termination of any series of securities. See also "Residential Loans --
Representations by Unaffiliated Sellers; Repurchases" and "Description of the
Securities -- Assignment of Assets of the Trust Fund" in this prospectus for a
description of the circumstances under which the Unaffiliated Sellers, the
master servicer and the depositor are generally obligated to repurchase
residential loans.

         With respect to a series of securities evidencing interests in a trust
fund including agency securities, principal prepayments may also result from
guaranty payments and from the exercise by the issuer or guarantor of the
related agency securities of any right to repurchase the underlying residential
loans. The prospectus supplement relating to each series of securities will
describe the circumstances and the manner in which the optional repurchase
right, if any, may be exercised.

         In addition, the mortgage securities included in the trust fund may be
backed by underlying residential loans having differing interest rates.
Accordingly, the rate at which principal payments are received on the related
securities will, to a certain extent, depend on the interest rates on the
underlying residential loans.

         The prospectus supplement for each series of securities may set forth
additional information regarding related maturity and prepayment considerations.


                                  THE DEPOSITOR

         Mortgage Asset Securitization Transactions, Inc., the depositor, is a
Delaware corporation organized on April 23, 1987, as a wholly owned limited
purpose finance subsidiary of UBS Americas Inc.. The depositor maintains its
principal office at 1285 Avenue of the Americas, New York, New York. Its
telephone number is (212) 713-2000.

         The depositor does not have, nor is it expected in the future to have,
any significant assets. We do not expect that the depositor will have any
business operations other than acquiring and pooling residential loans and
agency securities, offering securities or other mortgage- or asset-related
securities, and related activities.



                                      -48-



         Neither the depositor nor any of the depositor's affiliates will insure
or guarantee distributions on the securities of any series.


                                RESIDENTIAL LOANS


UNDERWRITING STANDARDS

         The residential loans will have been purchased by the depositor, either
directly or through affiliates, from loan sellers. The related prospectus
supplement will specify the underwriting criteria generally used to originate
the residential loans. The underwriting standards applicable to residential
loans underlying mortgage securities may vary substantially from the
underwriting standards set forth in the related prospectus supplement.


REPRESENTATIONS BY UNAFFILIATED SELLERS; REPURCHASES

         Each Unaffiliated Seller made representations and warranties in respect
of the residential loans sold by the Unaffiliated Seller. The related prospectus
supplement will specify these representations and warranties which may include,
among other things:

         o    that the Unaffiliated Seller had good title to each residential
              loan and the residential loan was subject to no offsets, defenses,
              counterclaims or rights of rescission except to the extent that
              any buydown agreement may forgive certain indebtedness of a
              borrower;

         o    if the trust fund includes mortgage loans, that each mortgage
              constituted a valid lien on the mortgaged property, subject only
              to permissible title insurance exceptions and senior liens, if
              any;

         o    if the trust fund includes manufactured housing contracts, each
              manufactured housing contract creates a valid, subsisting and
              enforceable first priority security interest in the manufactured
              home covered by the contract;

         o    that the residential property was free from damage and was in good
              repair;

         o    that there were no delinquent tax or assessment liens against the
              residential property;

         o    that each residential loan was current as to all required
              payments; and

         o    that each residential loan was made in compliance with, and is
              enforceable under, all applicable local, state and federal laws
              and regulations in all material respects.

         In certain cases, the representations and warranties of an Unaffiliated
Seller in respect of a residential loan may have been made as of the date on
which the Unaffiliated Seller sold the residential loan to the depositor or its
affiliate. A substantial period of time may have elapsed between that date and
the date of initial issuance of the series of securities evidencing an interest
in the residential loan. Since the representations and warranties of an
Unaffiliated Seller do not address events that may occur following the sale of a
residential loan by the Unaffiliated Seller,





                                      -49-



its repurchase obligation will not arise if the relevant event that would
otherwise have given rise to this type of obligation occurs after the date of
the sale to or on behalf of the depositor.

         The master servicer or the trustee will be required to promptly notify
the relevant Unaffiliated Seller of any breach of any representation or warranty
made by it in respect of a residential loan which materially and adversely
affects the interests of the holders of the securities in the residential loan.
If the Unaffiliated Seller cannot cure the breach, then the Unaffiliated Seller
will be obligated to repurchase this residential loan from the trustee at the
purchase price for the loan. The related prospectus supplement will specify this
purchase price, which is generally equal to the sum of:

         o    the unpaid principal balance of the residential loans;

         o    unpaid accrued interest on the unpaid principal balance from the
              date as to which interest was last paid by the borrower to the end
              of the calendar month in which the purchase is to occur at a rate
              equal to the net mortgage rate minus the rate at which the
              sub-servicer's servicing fee is calculated if the sub-servicer is
              the purchaser; and

         o    if applicable, any expenses reasonably incurred or to be incurred
              by the master servicer or the trustee in respect of the breach or
              defect giving rise to a purchase obligation.

         An Unaffiliated Seller, rather than repurchase a residential loan as to
which a breach has occurred, may have the option to cause the removal of the
breached residential loan from the trust fund and substitute in its place one or
more other residential loans. This option must be exercised within a specified
period after initial issuance of the related series of securities and be done in
accordance with the standards described in the related prospectus supplement.
The related prospectus supplement may specify that this repurchase or
substitution obligation will constitute the sole remedy available to holders of
securities or the trustee for a breach of representation by an Unaffiliated
Seller.

         Neither the depositor nor the master servicer unless the master
servicer is an Unaffiliated Seller will be obligated to purchase or substitute
for a residential loan if an Unaffiliated Seller defaults on its obligation to
do so. We cannot assure you that Unaffiliated Sellers will carry out their
repurchase and substitution obligations with respect to residential loans. Any
residential loan that is not repurchased or substituted for will remain in the
related trust fund. Any resulting losses on that residential loan will be borne
by holders of the securities, to the extent not covered by credit enhancement.


SUB-SERVICING

         Any master servicer may delegate its servicing obligations in respect
of a residential loan to sub-servicers pursuant to a sub-servicing agreement.
The sub-servicing agreement must be consistent with the terms of the servicing
agreement relating to the trust fund that includes the residential loan.
Although each sub-servicing agreement will be a contract solely between the
master servicer and the sub-servicer, the related pooling and servicing
agreement pursuant to which a series of securities is issued may provide that,
if for any reason the master servicer for




                                      -50-



the series of securities is no longer acting in that capacity, the trustee or
any successor master servicer must recognize the sub-servicer's rights and
obligations under any sub-servicing agreement.


                          DESCRIPTION OF THE SECURITIES


     GENERAL

         The certificates of each series evidencing interests in a trust fund
will be issued pursuant to a separate pooling and servicing agreement or trust
agreement. Each series of notes, or, in certain instances, two or more series of
notes, will be issued pursuant to an indenture, and the issuer of the notes will
be a trust established by the depositor pursuant to an owner trust agreement or
another entity as may be specified in the related prospectus supplement. As to
each series of notes where the issuer is an owner trust, the ownership of the
trust fund will be evidenced by equity certificates issued under the owner trust
agreement, which may be offered by the related prospectus supplement.

         Forms of each of the agreements referred to above are filed as exhibits
to the Registration Statement of which this prospectus is a part. The agreement
relating to each series of securities will be filed as an exhibit to a report on
Form 8-K to be filed with the SEC within fifteen days after the initial issuance
of the securities and a copy of the agreement will be available for inspection
at the corporate trust office of the trustee specified in the related prospectus
supplement.

         As to each series, the securities will be issued in authorized
denominations evidencing a portion of all of the securities of the related
series as set forth in the related prospectus supplement. Each trust fund will
consist of:

         o    residential loans, including any mortgage securities, or agency
              securities, exclusive of

              o    any portion of interest payments relating to the residential
                   loans retained by the depositor, any of its affiliates or its
                   predecessor in interest ("retained interest") and

              o    principal and interest due on or before the Cut-Off Date, as
                   from time to time are subject to the agreement;

         o    funds or assets as from time to time are deposited in the Trust
              Account described below and any other account held for the benefit
              of holders of the securities;

         o    with respect to trust funds that include residential loans:

              o    property acquired by foreclosure or deed in lieu of
                   foreclosure of mortgage loans on behalf of the holders of
                   the securities, or, in the case of Manufactured Housing
                   Contracts that are not Land Contracts, by repossession;




                                      -51-



              o    any Primary Credit Insurance Policies and Primary Hazard
                   Insurance;

              o    any combination of a Pool Insurance Policy, a Bankruptcy
                   Bond, a special hazard insurance policy or other type of
                   credit support; and

              o    the rights of the trustee to any cash advance reserve fund or
                   surety bond as described under "--Advances" in this
                   prospectus;

         o    if specified in the related prospectus supplement, the reserve
              fund; and

         o    any other assets as described in the related prospectus
              supplement.

The securities will be transferable and exchangeable for securities of the same
class and series in authorized denominations at the Corporate Trust Office. No
service charge will be made for any registration of exchange or transfer of
securities on the Security Register maintained by the Security Registrar.
However, the depositor or the trustee may require payment of a sum sufficient to
cover any tax or other governmental charge.

         Each series of securities may consist of any combination of:

         o    one or more classes of senior securities, one or more classes of
              which will be senior in right of payment to one or more of the
              other classes subordinate to the extent described in the related
              prospectus supplement.

         o    one or more classes of securities which will be entitled to:

              o    principal distributions, with disproportionate, nominal or no
                   interest distributions; or

              o    interest distributions, with disproportionate, nominal or no
                   principal distributions;

         o    two or more classes of securities that differ as to the timing,
              sequential order or amount of distributions of principal or
              interest or both, which may include one or more classes of Accrual
              Securities; or

         o    other types of classes of securities, as described in the related
              prospectus supplement.

         Each class of securities, other than certain interest-only securities,
will have a security principal balance and, generally will be entitled to
payments of interest based on a specified security interest rate as specified in
the related prospectus supplement. See "--Principal and Interest on the
Securities" in this Prospectus. The security interest rates of the various
classes of securities of each series may differ, and as to some classes may be
in excess of the lowest Net Interest Rate in a trust fund. The specific
percentage ownership interests of each class of securities and the minimum
denomination per security will be set forth in the related prospectus
supplement.





                                      -52-



ASSIGNMENT OF ASSETS OF THE TRUST FUND

         At the time of issuance of each series of securities, the depositor
will cause the assets comprising the related trust fund or mortgage securities
included in the related trust fund to be assigned to the trustee. The
residential loan or agency security documents described below will be delivered
to the trustee or to the custodian. The trustee will, concurrently with the
assignment, deliver the securities to the depositor in exchange for the assets
of the trust fund. Each asset of the trust fund will be identified in a schedule
appearing as an exhibit to the related agreement. The schedule will include,
among other things:

         o    information as to the outstanding principal balance of each trust
              fund asset after application of payments due on or before the
              Cut-Off Date;

         o    the maturity of the mortgage note, cooperative note, Manufactured
              Housing Contract or agency securities;

         o    any Retained Interest, with respect to a series of securities
              evidencing interests in a trust fund including agency securities;

         o    the pass-through rate on the agency securities;

         o    and with respect to a series of securities evidencing interests in
              residential loans, for each loan:

              o    information respecting its interest rate;

              o    its current scheduled payment of principal and interest;

              o    its Loan-to-Value Ratio; and o certain other information.

         If so specified in the related prospectus supplement, and in accordance
with the rules of membership of Merscorp, Inc. and/or Mortgage Electronic
Registration Systems, Inc. or, MERS, assignments of the mortgages for the
mortgage loans in the related trust will be registered electronically through
Mortgage Electronic Registration Systems, Inc., or MERS(R) System. With respect
to mortgage loans registered through the MERS(R) System, MERS shall serve as
mortgagee of record solely as a nominee in an administrative capacity on behalf
of the trustee and shall not have any interest in any of those mortgage loans.

         MORTGAGE LOANS AND MULTIFAMILY LOANS. The depositor will be required,
as to each mortgage loan, other than mortgage loans underlying any mortgage
securities, and Multifamily Loan, to deliver or cause to be delivered to the
trustee, or to the custodian, the mortgage file for each mortgage loan,
containing legal documents relating to the mortgage loan, including:

         o    the mortgage note endorsed without recourse to the order of the
              trustee or evidence that the Mortgage is held for the trustee
              through the MERS(R) System;





                                      -53-



         o    the mortgage with evidence of recording indicated, except for any
              mortgage not returned from the public recording office, in which
              case the depositor will deliver or cause to be delivered a copy of
              the mortgage certified by the related Unaffiliated Seller that it
              is a true and complete copy of the original of that Mortgage
              submitted for recording; and

         o    an assignment in recordable form of the mortgage to the trustee.

The related prospectus supplement may specify that the depositor or another
party will be required to promptly cause the assignment of each related mortgage
loan and Multifamily Loan (except for Mortgages held under the MERS(R) System)
to be recorded in the appropriate public office for real property records.
However, recording of assignments will not be required in states where, in the
opinion of counsel acceptable to the trustee, recording is not required to
protect the trustee's interest in the mortgage loan or the Multifamily Loan
against the claim of any subsequent transferee or any successor to or creditor
of the depositor or the originator of the mortgage loan.

         HOME EQUITY LOANS AND HOME IMPROVEMENT CONTRACTS. The related
prospectus supplement may specify that the depositor will:

         o    as to each Home Equity Loan and Home Improvement Contract, cause
              to be delivered to the trustee or to the custodian the note
              endorsed to the order of the trustee;

         o    with respect to Home Equity Loans and secured Home Improvement
              Contracts, the mortgage with evidence of recording indicated on
              it. If any mortgage is not returned from the public recording
              office, in which case the depositor will deliver or cause to be
              delivered a copy of the mortgage certified by the related
              Unaffiliated Seller that it is a true and complete copy of the
              original of the mortgage submitted for recording; and

         o    with respect to Home Equity Loans and secured Home Improvement
              Contracts, an assignment in recordable form of the mortgage to the
              trustee.

         The related prospectus supplement may specify that the depositor or
another party will be required to promptly cause the assignment of each related
Home Equity Loan and secured Home Improvement Contract to be recorded in the
appropriate public office for real property records. However, recording of
assignments will not be required in states where, in the opinion of counsel
acceptable to the trustee, recording is not required to protect the trustee's
interest in the Home Equity Loan and Home Improvement Contract against the claim
of any subsequent transferee or any successor to or creditor of the depositor or
the originator of a Home Equity Loan or Home Improvement Contract.

         With respect to unsecured Home Improvement Contracts, the depositor
will cause to be transferred physical possession of the Home Improvement
Contracts to the trustee or a designated custodian or, if applicable, the
Unaffiliated Seller may retain possession of the Home Improvement Contracts as
custodian for the trustee. In addition, the depositor will be required to cause
to be made, an appropriate filing of a UCC-1 financing statement in the
appropriate states





                                      -54-



to give notice of the trustee's ownership of or security interest in the Home
Improvement Contracts. The related prospectus supplement may specify that the
Home Improvement Contracts will not be stamped or otherwise marked to reflect
their assignment from the Unaffiliated Seller or the depositor, as the case may
be, to the trustee. Therefore, if through negligence, fraud or otherwise, a
subsequent purchaser were able to take physical possession of the contracts
without notice of an assignment, the trustee's interest in the contracts could
be defeated.

         COOPERATIVE LOANS. The depositor will, as to each Cooperative Loan,
deliver or cause to be delivered to the trustee or to the custodian:

         o    the related cooperative note; o the original security agreement;

         o    the proprietary lease or occupancy agreement;

         o    the related stock certificate and related stock powers endorsed in
              blank; and

         o    a copy of the original filed financing statement together with an
              assignment of the financing statement to the trustee in a form
              sufficient for filing.

The depositor or another party will cause the assignment and financing statement
of each related Cooperative Loan to be filed in the appropriate public office.
However, a filing is not required in states where in the opinion of counsel
acceptable to the trustee, filing is not required to protect the trustee's
interest in the Cooperative Loan against the claim of any subsequent transferee
or any successor to or creditor of the depositor or the originator of the
Cooperative Loan.

         MANUFACTURED HOUSING CONTRACTS. The related prospectus supplement may
specify that the depositor will be required, as to each Manufactured Housing
Contract, to deliver or cause to be delivered to the trustee or to the
custodian:

         o    the original Manufactured Housing Contract endorsed to the order
              of the trustee; and

         o    if applicable, copies of documents and instruments related to each
              Manufactured Housing Contract and the security interest in the
              manufactured home securing each Manufactured Housing Contract.

The related prospectus supplement may specify that in order to give notice of
the right, title and interest of the holders of securities to the Manufactured
Housing Contracts, the depositor will be required to cause to be executed and
delivered to the trustee a UCC-1 financing statement identifying the trustee as
the secured party and identifying all Manufactured Housing Contracts as
collateral of the trust fund.

         AGENCY SECURITIES. Agency securities will be registered in the name of
the trustee or its nominee on the books of the issuer or guarantor or its agent
or, in the case of agency securities issued only in book-entry form, through the
Federal Reserve System. Registration must be done in accordance with the
procedures established by the issuer or guarantor for registration of the




                                      -55-



securities with a member of the Federal Reserve System. Distributions on the
agency securities to which the trust fund is entitled will be made directly to
the trustee.

         REVIEW OF RESIDENTIAL LOANS. The trustee or the custodian will review
the residential loan documents after receipt, and the trustee or custodian will
hold the documents in trust for the benefit of the holders of securities.
Generally, if any document is found to be missing or defective in any material
respect, the trustee or custodian will immediately notify the master servicer
and the depositor. The master servicer will then immediately notify the
applicable Unaffiliated Seller. If the Unaffiliated Seller cannot cure the
omission or defect, the Unaffiliated Seller will be obligated to repurchase the
related residential loan from the trustee at the purchase price specified under
"Residential Loans--Representations by Unaffiliated Sellers; Repurchases," or,
in certain cases, substitute for the residential loan.

         We cannot assure you that an Unaffiliated Seller will fulfill this
repurchase or substitution obligation. Although the master servicer or trustee
is obligated to enforce this obligation to the extent described above under
"Residential Loans -- Representations by Unaffiliated Sellers; Repurchases"
neither the master servicer nor the depositor will be obligated to repurchase or
substitute for the residential loan if the Unaffiliated Seller defaults on its
obligation. Generally, this repurchase or substitution obligation, if
applicable, will constitute the sole remedy available to the holders of
securities or the trustee for omission of, or a material defect in, a
constituent document.

         The trustee will be authorized to appoint a custodian pursuant to a
custodial agreement to maintain possession of and review the documents relating
to the residential loans as agent of the trustee.


DEPOSITS TO THE TRUST ACCOUNT

         The master servicer or the trustee shall, as to each trust fund,
establish and maintain or cause to be established and maintained a separate
Trust Account or Trust Accounts for the collection of payments on the related
assets of the trust fund. The Trust Account(s) must be maintained with a federal
or state chartered depository institution, and in a manner, satisfactory to each
rating agency rating the securities of the related series at the time any
amounts are held on deposit in the Trust Account.

         The collateral eligible to secure amounts in the Trust Account is
limited to United States government securities and other high quality
investments. A Trust Account may be maintained as an interest bearing or
non-interest bearing account. Alternatively, the funds held in the Trust Account
may be invested pending the distribution on each succeeding distribution date in
United States government securities and other high quality investments. The
prospectus supplement will specify who is entitled to the interest or other
income earned on funds in the Trust Account. In respect of any series of
securities having distribution dates occurring less frequently than monthly, the
master servicer may obtain from an entity named in the related prospectus
supplement a guaranteed investment contract to assure a specified rate of return
on funds held in the Trust Account. If permitted by each rating agency rating
the securities of the series, a Trust Account may contain funds relating to more
than one series of securities.




                                      -56-



PRE-FUNDING ACCOUNT

         The master servicer or the trustee may establish and maintain a
pre-funding account, in the name of the related trustee on behalf of the related
holders of the securities, into which the depositor will deposit the pre-funded
amount on the related closing date. The pre-funded amount will be used by the
related trustee to purchase loans from the depositor from time to time during
the funding period. The funding period, if any, for a trust fund will begin on
the related closing date and will end on the date specified in the related
prospectus supplement, which in no event will be later than the date that is
three months after the closing date. Any amounts remaining in the pre-funding
account at the end of the funding period will be distributed to the related
holders of securities in the manner and priority specified in the related
prospectus supplement, as a prepayment of principal of the related securities.


PAYMENTS ON RESIDENTIAL LOANS

  The prospectus supplement may specify that the master servicer will be
required to deposit or cause to be deposited in a Trust Account for each trust
fund including residential loans or, in the case of advances on or before the
applicable distribution date, the following payments and collections received or
made by or on behalf of the master servicer subsequent to the Cut-Off Date.
These payments will not include payments due on or before the Cut-Off Date and
exclusive of any amounts representing a Retained Interest:

         (1) all payments on account of principal, including principal
prepayments, on the residential loans;

         (2) all payments on account of interest on the residential loans,
exclusive of any portion representing interest in excess of the Net Interest
Rate, unless the excess amount is required to be deposited pursuant to the
related agreement, and, if provided in the related prospectus supplement,
prepayment penalties;

         (3) all proceeds of

             o   any Primary Hazard Insurance Policies and any special hazard
                 insurance policy, to the extent the proceeds are not applied to
                 the restoration of the property or released to the borrower in
                 accordance with the master servicer's normal servicing
                 procedures, and

             o   any Primary Credit Insurance Policy, any FHA Insurance, VA
                 Guarantee, any Bankruptcy Bond and any Pool Insurance Policy,
                 other than proceeds that represent reimbursement of the master
                 servicer's costs and expenses incurred in connection with
                 presenting claims under the related insurance policies;

         (4) all other cash amounts received, by foreclosure, eminent domain,
condemnation or otherwise, in connection with the liquidation of defaulted
residential loans. These amounts will also include the net proceeds on a monthly
basis with respect to any properties acquired for the benefit of holders of
securities by deed in lieu of foreclosure or repossession

         (5) any advances made as described under "--Advances" in this
prospectus;



                                      -57-



         (6) all amounts required to be transferred to the Trust Account from a
Reserve Fund, if any, as described below under "--Subordination" in this
prospectus;

         (7) all proceeds of any residential loan or underlying mortgaged
property purchased by any Unaffiliated Seller as described under "Residential
Loans -- Representations by Unaffiliated Sellers; Repurchases," exclusive of any
Retained Interest applicable to the loan;

         (8) all proceeds of any residential loan repurchased as described under
"--Termination" in this prospectus;

         (9) any payments required to be deposited in the Trust Account with
respect to any deductible clause in any blanket insurance policy described under
"Description of Primary Insurance Coverage -- Primary Hazard Insurance Policies"
in this prospectus;

         (10) any amount required to be deposited by the trustee or the master
servicer in connection with losses realized on investments of funds held in the
Trust Account;

         (11) any amounts required to be transferred to the Trust Account
pursuant to any guaranteed investment contract; and

         (12) any distributions received on any mortgage securities included in
the related trust fund.


PAYMENTS ON AGENCY SECURITIES

         The agency securities included in a trust fund will be registered in
the name of the trustee so that all distributions on the agency securities will
be made directly to the trustee. The trustee will deposit or cause to be
deposited into the Trust Account as and when received, unless otherwise provided
in the related trust agreement, all distributions received by the trustee with
respect to the related agency securities. The trustee will not be required to
deposit payments due on or before the Cut-Off Date and any trust administration
fee and amounts representing the Retained Interest, if any.


DISTRIBUTIONS

         Distributions of principal and interest on the securities of each
series will be made by or on behalf of the trustee or the master servicer on the
distribution dates and at the intervals specified in the related prospectus
supplement. These intervals may be monthly, quarterly, semi-annual or as
specified in the related prospectus supplement. The trustee will make these
distributions to the persons in whose names the securities are registered at the
close of business on the record date specified in the related prospectus
supplement. The amount of each distribution will be determined as of the close
of business on each determination date specified in the related prospectus
supplement.

         Distributions will be made either:

         o    by wire transfer in immediately available funds to the account of
              a holder of securities at a bank or other entity having
              appropriate facilities for the transfer, if the holder of




                                      -58-



              securities has so notified the trustee or the master servicer and
              holds securities in any requisite amount specified in the related
              prospectus supplement, or

         o    by check mailed to the address of the person entitled to the check
              as it appears on the Security Register.

However, the final distribution in retirement of the securities will be made
only if presentation and surrender of the securities has occurred at the office
or agency of the Security Registrar specified in the notice to holders of
securities of the final distribution. The related prospectus supplement may
specify that distributions made to the holders of securities will be made on a
pro rata basis among the holders of securities of record on the related record
date, other than in respect of the final distribution, based on the aggregate
percentage interest represented by their respective securities.

         FINAL DISTRIBUTION DATE. If specified in the prospectus supplement for
any series consisting of classes having sequential priorities for distributions
of principal, the final distribution date for each class of securities is the
latest distribution date on which the security principal balance is expected to
be reduced to zero. The final distribution date will be based on various
assumptions, including the assumption that no prepayments or defaults occur with
respect to the related assets of the trust fund. Since the rate of distribution
of principal of any class of securities will depend on, among other things, the
rate of payment, including prepayments, of the principal of the assets of the
trust fund, the actual last distribution date for any class of securities could
occur significantly earlier than its final distribution date.

         The rate of payments on the assets of the trust fund for any series of
securities will depend on their particular characteristics, as well as on the
prevailing level of interest rates from time to time and other economic factors.
We cannot assure the actual prepayment experience of the assets of the trust
fund. See "Maturity and Prepayment Considerations" in this prospectus. In
addition, substantial losses on the assets of the trust fund in a given period,
even though within the limits of the protection afforded by the instruments
described under "Description of Credit Support," in this prospectus or by the
subordinate securities in the case of a senior/subordinate series, may cause the
actual last distribution date of certain classes of securities to occur after
their final distribution date.

         SPECIAL DISTRIBUTIONS. With respect to any series of securities with
distribution dates occurring at intervals less frequently than monthly, the
securities may be subject to special distributions under the circumstances and
in the manner described below if and to the extent provided in the related
prospectus supplement. If applicable, the master servicer may be required to
make or cause to be made special distributions allocable to principal and
interest on securities of a series out of, and to the extent of, the amount
available for the distributions in the related Trust Account. The related
prospectus supplement will specify the date the special distribution is to be
made. Special distributions may be made if, as a result of

         o    substantial payments of principal on the assets of the trust fund,

         o    low rates then available for reinvestment of payments on assets of
              the trust fund,



                                      -59-



         o    substantial Realized Losses or

         o    some combination of the foregoing, and

         o    based on the assumptions specified in the related agreement,

it is determined that the amount anticipated to be on deposit in the Trust
Account on the next distribution date, together with the amount available to be
withdrawn from any related Reserve Fund, may be insufficient to make required
distributions on the securities of the related series on the distribution date
or the intervening date as may be provided in the related prospectus supplement.

         The amount of any special distribution that is allocable to principal
will not exceed the amount that would otherwise be distributed as principal on
the next distribution date from amounts then on deposit in the Trust Account.
All special distributions will include interest at the applicable Trust Interest
Rate on the amount of the special distribution allocable to principal to the
date specified in the related prospectus supplement.

         All special distributions of principal will be made in the same
priority and manner as distributions in respect of principal on the securities
on a distribution date. Special distributions of principal with respect to
securities of the same class will be made on a pro rata basis. Notice of any
special distributions will be given by the master servicer or trustee prior to
the special distribution date.


PRINCIPAL AND INTEREST ON THE SECURITIES

         Each class of securities, other than certain classes of interest-only
securities, may have a different security interest rate, which may be a fixed,
variable or adjustable security interest rate. The related prospectus supplement
will specify the security interest rate for each class, or in the case of a
variable or adjustable security interest rate, the method for determining the
security interest rate. The related prospectus supplement will specify the basis
on which interest on the securities will be calculated.

         Some classes of securities will not be entitled to interest payments.

         With respect to each distribution date, the accrued interest with
respect to each security other than an interest-only security, will be equal to
interest on the outstanding security principal balance immediately prior to the
distribution date, at the applicable security interest rate, for a period of
time corresponding to the intervals between the distribution dates for the
related series. As to each interest-only security, the interest with respect to
any distribution date will equal the amount described in the related prospectus
supplement for the related period.

         The related prospectus supplement may specify that the Accrued Security
Interest on each security of a series will be reduced, if shortfalls in
collections of interest occur resulting from prepayments of residential loans
that are not covered by payments by the master servicer out of its servicing
fees or by application of prepayment penalties. This shortfall will be allocated
among all of the securities of that series in proportion to the respective
amounts of Accrued Security Interest that would have been payable on the
securities absent the reductions




                                      -60-



and absent any delinquencies or losses. The related prospectus supplement may
specify that neither the trustee, the master servicer nor the depositor will be
obligated to fund shortfalls in interest collections resulting from prepayments.
See "Yield Considerations" and "Maturity and Prepayment Considerations" in this
prospectus.

         Distributions of Accrued Security Interest that would otherwise be
payable on any class of Accrual Securities of a series will be added to the
security principal balance of the Accrual Securities on each distribution date
until the time specified in the related prospectus supplement on and after which
payments of interest on the Accrual Securities will be made. See
"--Distributions--Final Distribution Date" in this prospectus.

         Some securities will have a security principal balance that, at any
time, will equal the maximum amount that the holder will be entitled to receive
in respect of principal out of the future cash flow on the assets of the trust
fund and other assets included in the related trust fund. With respect to each
of those securities, distributions generally will be applied to accrued and
currently payable interest, and then to principal. The outstanding security
principal balance of a security will be reduced to the extent of distributions
in respect of principal, and in the case of securities evidencing interests in a
trust fund that includes residential loans, by the amount of any Realized Losses
allocated to the securities.

         Some securities will not have a security principal balance and will not
be entitled to principal payments. The initial aggregate security principal
balance of a series and each class of the related series will be specified in
the related prospectus supplement. The initial aggregate security principal
balance of all classes of securities of a series may be based on the aggregate
principal balance of the assets in the related trust fund. Alternatively, the
initial security principal balance for a series of securities may equal the
initial aggregate Cash Flow Value of the related assets of the trust fund as of
the applicable Cut-Off Date.

         The aggregate of the initial Cash Flow Values of the assets of the
trust fund included in the trust fund for a series of securities will be at
least equal to the aggregate security principal balance of the securities of
that series at the date of initial issuance of that series.

         With respect to any series as to which the initial security principal
balance is calculated on the basis of Cash Flow Values of the assets of the
trust fund, the amount of principal distributed for the series on each
distribution date will be calculated in the manner set forth in the related
prospectus supplement, which may be on the basis of:

         o    the decline in the aggregate Cash Flow Values of the assets of the
              trust fund during the related Due Period, calculated in the manner
              prescribed in the related agreement; minus

         o    with respect to any Realized Loss incurred during the related Due
              Period and not covered by any of the instruments described under
              "Description of Credit Support" in this prospectus, the portion of
              the Cash Flow Value of the assets of the trust fund corresponding
              to the Realized Loss.




                                      -61-



         Generally, distributions in respect of principal will be made on each
distribution date to the class or classes of security entitled to distributions
of principal until the security principal balance of the class has been reduced
to zero. In the case of two or more classes of securities in a series, the
timing, sequential order and amount of distributions, including distributions
among multiple classes of senior securities or subordinate securities, in
respect of principal on each class will be as provided in the related prospectus
supplement. Distributions in respect of principal of any class of securities
will be made on a pro rata basis among all of the securities of the class.


AVAILABLE DISTRIBUTION AMOUNT

  As more specifically set forth in the related prospectus supplement, all
distributions on the securities of each series on each distribution date will
generally be made from the "Available Distribution Amount" which consists of the
following amounts:

         (1) the total amount of all cash on deposit in the related Trust
Account as of a determination date specified in the related prospectus
supplement, exclusive of certain amounts payable on future distribution dates
and certain amounts payable to the master servicer, any applicable sub-servicer,
the trustee or another person as expenses of the trust fund;

         (2) any principal and/or interest advances made with respect to the
distribution date, if applicable;

         (3) any principal and/or interest payments made by the master servicer
out of its servicing fee in respect of interest shortfalls resulting from
principal prepayments, if applicable; and

         (4) all net income received in connection with the operation of any
residential property acquired on behalf of the holders of securities through
deed in lieu of foreclosure or repossession, if applicable.

         On each distribution date for a series of securities, the trustee or
the master servicer will be required to withdraw or cause to be withdrawn from
the Trust Account the entire Available Distribution Amount. The trustee or
master servicer will then be required to distribute the withdrawn amount or
cause the withdrawn amount to be distributed to the related holders of
securities in the manner set forth in this prospectus and in the related
prospectus supplement.


SUBORDINATION

         A senior/subordinate series will consist of one or more classes of
securities senior in right of payment to one or more classes of subordinate
securities, as specified in the related prospectus supplement. Subordination of
the subordinate securities of any series will be effected by either of the two
following methods, or by any other alternative method as may be described in the
related prospectus supplement.

         SHIFTING INTEREST SUBORDINATION. With respect to any series of
securities as to which credit support is provided by shifting interest
subordination, the rights of the holders of certain classes of subordinate
securities to receive distributions with respect to the residential loans will
be subordinate to the rights of the holders of certain classes of senior
securities. With respect to




                                      -62-



any defaulted residential loan that is finally liquidated, the amount of any
Realized Loss will generally equal the portion of the unpaid principal balance
remaining after application of all principal amounts recovered, net of amounts
reimbursable to the master servicer for related expenses. With respect to
certain residential loans the principal balances of which have been reduced in
connection with bankruptcy proceedings, the amount of the reduction will be
treated as a Realized Loss.

         All Realized Losses will be allocated first to the most subordinate
securities of the related series as described in the related prospectus
supplement, until the security principal balance of the most subordinate
securities has been reduced to zero. Any additional Realized Losses will then be
allocated to the more senior securities or, if the series includes more than one
class of more senior securities, either on a pro rata basis among all of the
more senior securities in proportion to their respective outstanding security
principal balances, or as provided in the related prospectus supplement. With
respect to certain Realized Losses resulting from physical damage to residential
properties which are generally of the same type as are covered under a special
hazard insurance policy, the amount that may be allocated to the subordinate
securities of the related series may be limited to an amount specified in the
related prospectus supplement. See "Description of Credit Support -- Special
Hazard Insurance Policies" in this prospectus. If so, any Realized Losses which
are not allocated to the subordinate classes may be allocated among all
outstanding classes of securities of the related series, either on a pro rata
basis in proportion to their outstanding security principal balances, regardless
of whether any subordinate securities remain outstanding, or as provided in the
related prospectus supplement.

         As set forth above, the rights of holders of the various classes of
securities of any series to receive distributions of principal and interest is
determined by the aggregate security principal balance of each class. The
security principal balance of any security will be reduced by all amounts
previously distributed on the security in respect of principal, and, if so
provided in the related prospectus supplement, by any Realized Losses allocated
to the security. However, to the extent so provided in the related prospectus
supplement, holders of senior securities may be entitled to receive a
disproportionately larger amount of prepayments received in certain
circumstances. This will have the effect, in the absence of offsetting losses,
of accelerating the amortization of the senior securities and increasing the
respective percentage interest evidenced by the subordinate securities in the
related trust fund, with a corresponding decrease in the percentage interest
evidenced by the senior securities, as well as preserving the availability of
the subordination provided by the subordinate securities. In addition, the
Realized Losses will be first allocated to subordinate securities by reduction
of their security principal balance, which will have the effect of increasing
the respective ownership interest evidenced by the senior securities in the
related trust fund. If there were no Realized Losses or prepayments of principal
on any of the residential loans, the respective rights of the holders of
securities of any series to future distributions would not change.

         CASH FLOW SUBORDINATION. With respect to any series of securities as to
which credit support is provided by cash flow subordination, if losses on the
residential loans occur not in excess of the Available Subordination Amount, the
rights of the holders of subordinate securities to receive distributions of
principal and interest with respect to the residential loans will be subordinate
to the rights of the holders of senior securities.




                                      -63-



         The protection afforded to the holders of senior securities from the
subordination provisions may be effected both by the preferential right of the
holders of senior securities to receive current distributions from the trust
fund, subject to the limitations described in this prospectus, and by the
establishment and maintenance of any Reserve Fund. The Reserve Fund may be
funded by an initial cash deposit on the date of the initial issuance of the
related series of securities and by deposits of amounts otherwise due on the
subordinate securities to the extent set forth in the related prospectus
supplement.

         Amounts in the Reserve Fund, if any, other than earnings on the Reserve
Funds, will be withdrawn for distribution to holders of senior securities as may
be necessary to make full distributions to those holders on a particular
distribution date, as described above. If on any distribution date, after giving
effect to the distributions to the holders of senior securities on this date,
the amount of the Reserve Fund exceeds the amount required to be held in the
Reserve Fund, the excess will be withdrawn and distributed in the manner
specified in the related prospectus supplement.

         If any Reserve Fund is depleted before the Available Subordination
Amount is reduced to zero, the holders of senior securities will nevertheless
have a preferential right to receive current distributions from the trust fund
to the extent of the then Available Subordination Amount. However, under these
circumstances, if current distributions are insufficient, the holders of senior
securities could suffer shortfalls of amounts due to them. The holders of senior
securities will bear their proportionate share of any losses realized on the
trust fund in excess of the Available Subordination Amount.

         Amounts remaining in any Reserve Fund after the Available Subordination
Amount is reduced to zero will no longer be subject to any claims or rights of
the holders of senior securities of the series.

         Funds in any Reserve Fund may be invested in United States government
securities and other high quality investments. The earnings or losses on those
investments will be applied in the manner described in the related prospectus
supplement.

         The time necessary for any Reserve Fund to reach the required Reserve
Fund balance will be affected by the prepayment, foreclosure, and delinquency
experience of the residential loans and therefore cannot accurately be
predicted.

         SUBORDINATION AND CASH FLOW VALUES. The security principal balances of
the various classes of securities comprising a senior/subordinate series may be
based on the Cash Flow Value of the residential loans. If the percentage
allocated to the senior securities of the decline in the Cash Flow Value of the
residential loans during the related Deposit Period exceeds the remaining amount
of collections and advances in respect of the residential loans after paying
interest on the senior securities, the holders of the senior securities may not
receive all amounts to which they are entitled. In addition, this may result in
a loss being borne by the holders of the subordinate securities.

         Because the Cash Flow Value of a residential loan will never exceed the
outstanding principal balance of the residential loan, prepayments in full and
liquidations of the residential



                                      -64-



loans may result in proceeds attributable to principal in excess of the
corresponding Cash Flow Value decline. Any excess will be applied to offset
losses realized during the related Deposit Period, such as those described in
the immediately preceding paragraph, in respect of other liquidated residential
loans without affecting the remaining subordination. This excess may also be
deposited in a Reserve Fund for future distributions.


ADVANCES

         The related prospectus supplement, with respect to any series of
securities evidencing interests in a trust fund that includes residential loans
may specify that the master servicer will be obligated to advance on or before
each distribution date, from its own funds, or from amounts held for future
distribution in the Trust Account that are not included in the Available
Distribution Amount for the distribution date. The amount of the advance will be
equal to the aggregate of payments of principal and/or interest, adjusted to the
applicable Net Interest Rate, on the residential loans that were due during the
related Due Period and that were delinquent, and not advanced by any
sub-servicer, on the applicable determination date. Any amounts held for future
distribution and so used will be replaced by the master servicer on or before
any future distribution date to the extent that funds in the Trust Account on
the distribution date will be less than payments to holders of securities
required to be made on the distribution date.

         The related prospectus supplement may specify that the obligation of
the master servicer to make advances may be subject to the good faith
determination of the master servicer that the advances will be reimbursable from
related late collections, Insurance Proceeds or Liquidation Proceeds. See
"Description of Credit Support" in this prospectus. As specified in the related
prospectus supplement with respect to any series of securities as to which the
trust fund includes mortgage securities, the master servicer's advancing
obligations, if any, will be pursuant to the terms of the mortgage securities.

         Advances are intended to maintain a regular flow of scheduled interest
and principal payments to holders of securities, rather than to guarantee or
insure against losses. The related prospectus supplement may specify that
advances will be reimbursable to the master servicer, with interest, out of
related recoveries on the residential loans respecting which amounts were
advanced, or, to the extent that the master servicer determines that any advance
previously made will not be ultimately recoverable from Insurance Proceeds or
Liquidation Proceeds, a nonrecoverable advance, from any cash available in the
Trust Account. The related prospectus supplement may specify that the
obligations of the master servicer to make advances may be secured by a cash
advance reserve fund or a surety bond. Information regarding the characteristics
of, and the identity of any borrower of, any surety bond, will be set forth in
the related prospectus supplement.


STATEMENTS TO HOLDERS OF SECURITIES

  On each distribution date, the master servicer or the trustee will forward or
cause to be forwarded to each holder of securities of the related series and to
the depositor a statement including the information specified in the related
prospectus supplement. This information may include the following:




                                      -65-



         (1) the amount of the distribution, if any, allocable to principal,
separately identifying the aggregate amount of principal prepayments and, if
applicable, related prepayment penalties received during the related Prepayment
Period;

         (2) the amount of the distribution, if any, allocable to interest;

         (3) the amount of administration and servicing compensation received by
or on behalf of the trustee, master servicer and any sub-servicer with respect
to the distribution date and other customary information as the master servicer
or the trustee deems necessary or desirable to enable holders of securities to
prepare their tax returns or which a holder of securities reasonably requests
for this purpose;

         (4) if applicable, the aggregate amount of any advances included in
this distribution and the aggregate amount of any unreimbursed advances as of
the close of business on the distribution date;

         (5) the security principal balance of a minimum denomination security,
and the aggregate security principal balance of all of the securities of that
series, after giving effect to the amounts distributed on the distribution date;

         (6) the number and aggregate principal balance of any residential loans
in the related trust fund (a) delinquent one month, (b) delinquent two or more
months and (c) as to which repossession or foreclosure proceedings have been
commenced;

         (7) with respect to any residential property acquired through
foreclosure, deed in lieu of foreclosure or repossession during the preceding
calendar month, the loan number and principal balance of the related residential
loan as of the close of business on the distribution date in the month and the
date of acquisition;

         (8) the book value of any residential property acquired through
foreclosure, deed in lieu of foreclosure or repossession as of the close of
business on the last business day of the calendar month preceding the
distribution date;

         (9) the aggregate unpaid principal balance of the mortgage loans at the
close of business on the related distribution date;

         (10) in the case of securities with a variable security interest rate,
the security interest rate applicable to the distribution date, as calculated in
accordance with the method specified in the prospectus supplement relating to
the related series;

         (11) in the case of securities with an adjustable security interest
rate, for statements to be distributed in any month in which an adjustment date
occurs, the adjusted security interest rate applicable to the next succeeding
distribution date;

         (12) as to any series including one or more classes of Accrual
Securities, the interest accrued on each class with respect to the related
distribution date and added to the security principal balance;




                                      -66-



         (13) the amount remaining in the Reserve Fund, if any, as of the close
of business on the distribution date, after giving effect to distributions made
on the related distribution date;

         (14) as to any senior/subordinate series, information as to the
remaining amount of protection against losses afforded to the holders of senior
securities by the subordination provisions and information regarding any
shortfalls in payments to the holder of senior securities which remain
outstanding; and

         (15) with respect to any series of securities as to which the trust
fund includes mortgage securities, certain additional information as required
under the related pooling and servicing agreement or trust agreement, as
applicable.

Information furnished pursuant to clauses (1), (2) and (3) above may be
expressed as a dollar amount per minimum denomination security.

         Within a reasonable period of time after the end of each calendar year,
the master servicer or the trustee will furnish or cause to be furnished a
report to every person who was a holder of record of a security at any time
during the calendar year. This report will set forth the aggregate of amounts
reported pursuant to clauses (1), (2) and (3) of the immediately preceding
paragraph for the related calendar year or if the person was a holder of record
during a portion of the calendar year, for the applicable portion of that year.

         The related prospectus supplement may provide that additional
information with respect to a series of securities will be included in these
statements. In addition, the master servicer or the trustee will file with the
Internal Revenue Service and furnish to holders of securities the statements or
information as may be required by the Code or applicable procedures of the IRS.


BOOK-ENTRY REGISTRATION OF SECURITIES

         If not issued in fully registered form, each class of securities will
be registered as book-entry securities. Persons acquiring beneficial ownership
interests in the securities will hold their securities through the Depository
Trust Company in the United States, or, if provided in the related prospectus
supplement, Clearstream Banking, societe anonyme or Euroclear Bank, as operator
of the Euroclear System in Europe, or indirectly through organizations that are
Participants in these systems. The Depository Trust Company is referred to as
"DTC." Clearstream Banking, societe anonyme is referred to as "Clearstream." The
Euroclear System is referred to as "Euroclear."

         The book-entry securities will be issued in one or more certificates
which equal the aggregate principal balance of the securities and will initially
be registered in the name of Cede & Co., the nominee of DTC or one of the
relevant depositories. If the aggregate principal amount of any book-entry
security exceeds $500 million, one certificate will be issued with respect to
each $500 million of principal amount and an additional certificate will be
issued with respect to any remaining principal amount. Clearstream and Euroclear
will hold omnibus positions on behalf of their Participants through customers'
securities accounts in Clearstream's and Euroclear's names on the books of their
respective depositaries which in turn will hold these positions in customers'
securities accounts in the depositaries' names on the books of DTC. Except as
described below, no Security Owner will be entitled to receive a Definitive
Security.




                                      -67-



Unless and until Definitive Securities are issued, we anticipate that the only
"holders" of the securities will be Cede & Co., as nominee of DTC or one of the
relevant depositories. Security Owners are only permitted to exercise their
rights indirectly through the Participants and DTC.

         DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its Participants deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Participants include
securities brokers and dealers, banks, trust companies, clearing corporations,
and certain other organizations. DTC is owned by a number of its Participants
and Members of the National Securities Clearing Corporation, Government
Securities Clearing Corporation, MBS Clearing Corporation, and Emerging Markets
Clearing Corporation, as well as by the New York Stock Exchange, Inc., the
American Stock Exchange LLC, and the National Association of Securities Dealers,
Inc. Access to the DTC system is also available to others such as securities
brokers and dealers, banks, and trust companies that clear through or maintain a
custodial relationship with a Direct Participant, either directly or indirectly.
The Rules applicable to DTC and its Participants and indirect participants are
on file with the Securities and Exchange Commission.

         Purchases of book-entry securities under the DTC system must be made by
or through Participants, which will receive a credit for the book-entry
securities on DTC's records. The ownership interest of each Security Owner is in
turn to be recorded on the Participants' or Financial Intermediaries' records.
The Financial Intermediary's ownership of the book-entry security will be
recorded on the records of DTC or of a participating firm that acts as agent for
the Financial Intermediary, whose interest will in turn be recorded on the
records of DTC, if the Security Owner's Financial Intermediary is not a
Participant and on the records of Clearstream or Euroclear, as appropriate).
Security Owners will not receive written confirmation from DTC of their
purchase, but Security Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the Participant or indirect participant through which the
Security Owner entered into the transaction. Transfers of ownership interests in
the book-entry securities are to be accomplished by entries made on the books of
Participants and indirect participants acting on behalf of Security Owners.
Security Owners will not receive certificates representing their ownership
interests in the book-entry securities, except in the event that use of the
book-entry system for the book-entry securities is discontinued.

         To facilitate subsequent transfers, all book-entry securities deposited
by Participants with DTC are registered in the name of DTC's partnership
nominee, Cede & Co. or such other name as may be requested by an authorized
representative of DTC. The deposit of book-entry securities with DTC and their
registration in the name of Cede & Co. or such other nominee do not effect any
change in beneficial ownership. DTC has no knowledge of the actual Security
Owners of the book-entry securities; DTC's records reflect only the identity of
the Participants to whose accounts such book-entry securities are credited,
which may or may not be the Security




                                      -68-



Owners. The Participants and indirect participants will remain responsible for
keeping account of their holdings on behalf of their customers.

           Conveyance of notices and other communications by DTC to
Participants, by Participants to indirect participants, and by Participants and
indirect participants to Security Owners will be governed by arrangements among
them, subject to any statutory or regulatory requirements as may be in effect
from time to time.

         Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or
vote with respect to the book-entry securities. Under its usual procedures, DTC
mails an omnibus proxy to the issuer as soon as possible after the record date.
The omnibus proxy assigns Cede & Co.'s consenting or voting rights to those
Participants to whose accounts the book-entry securities are credited on the
record date (identified in a listing attached to the omnibus proxy).

         Distributions on the book-entry securities will be made to Cede & Co.,
or such other nominee as may be requested by an authorized representative of
DTC. DTC's practice is to credit Participants' accounts, upon DTC's receipt of
funds and corresponding detail information from the issuer or agent on the
payable date in accordance with their respective holdings shown on DTC's
records. Payments by Participants to Security Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of DTC, agent,
or issuer, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of distributions to Cede & Co. (or such other
nominee as may be requested by an authorized representative of DTC) is the
responsibility of issuer or agent, disbursement of such payments to Participants
shall be the responsibility of DTC, and disbursement of such payments to the
Security Owners shall be the responsibility of Participants and indirect
participants.

         Because of time zone differences, it is possible that credits of
securities received in Clearstream or Euroclear as a result of a transaction
with a Participant will be made during subsequent securities settlement
processing and dated the business day following the DTC settlement date. The
credits or any transactions in the securities settled during this processing
will be reported to the relevant Euroclear or Clearstream Participants on that
business day. Cash received in Clearstream or Euroclear as a result of sales of
securities by or through a Clearstream Participant or Euroclear Participant to a
DTC Participant will be received with value on the DTC settlement date but, due
to different time zones, may be available in the relevant Clearstream or
Euroclear cash account only as of the business day following settlement in DTC.

         Transfers between Participants will occur in accordance with the rules
creating and affecting DTC and its operations. Transfers between Clearstream
Participants and Euroclear Participants will occur in accordance with their
respective rules and operating procedures.

     Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Clearstream
Participants or Euroclear Participants, on the other, will be effected in DTC in
accordance with DTC rules on behalf of the relevant European international
clearing system by the relevant depositary, each of which is a participating
member of DTC. However, such cross-market transactions will require delivery of






                                      -69-



instructions to the relevant European international clearing system by the
counterparty in such system in accordance with its rules and procedures and
within its established deadlines. The relevant European international clearing
system will, if the transaction meets its settlement requirements, deliver
instructions to the relevant depositary to take action to effect final
settlement on its behalf by delivering or receiving securities in DTC, and
making or receiving distribution in accordance with normal procedures for same
day funds settlement applicable to DTC. Clearstream Participants and Euroclear
Participants may not deliver instructions directly to the relevant depositories
for Clearstream or Euroclear.

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

     Euroclear was created to hold securities for its Participants and to clear
and settle transactions between its Participants through simultaneous electronic
book-entry delivery against payment, thereby eliminating the need for physical
movement of certificates and any risk from lack of simultaneous transfers of
securities and cash. The Euroclear System is owned by Euroclear plc and operated
through a license agreement by Euroclear Bank S.A./N.V., a bank incorporated
under the laws of the Kingdom of Belgium (the "Euroclear Operator"). The
Euroclear Operator holds securities and book-entry interests in securities for
participating organizations and facilitates the clearance and settlement of
securities transactions between Euroclear Participants, and between Euroclear
Participants and Participants of certain other securities intermediaries through
electronic book-entry changes in accounts of such Participants or other
securities intermediaries. Non-Participants of Euroclear may hold and transfer
book-entry interests in the offered certificates through accounts with a direct
Participant of Euroclear or any other securities intermediary that holds a
book-entry interest in the offered certificates through one or more securities
intermediaries standing between such other securities intermediary and the
Euroclear Operator. Securities clearance accounts and cash accounts with the
Euroclear Operator are governed by the Terms and Conditions Governing Use of
Euroclear and the related Operating Procedures of the Euroclear System, and
applicable Belgian law. All securities in Euroclear are held on a fungible basis
without attribution of specific certificates to specific securities clearance
accounts. The Euroclear Operator acts only on behalf of Euroclear Participants
and has no record of or relationship with persons holding through Euroclear
Participants.

         Under a book-entry format, beneficial owners of the book-entry
securities may experience some delay in their receipt of payments, since the
trustee will forward payments to Cede & Co. Distributions with respect to
securities held through Clearstream or Euroclear will be credited to the cash
accounts of Clearstream Participants or Euroclear Participants in







                                      -70-




accordance with the relevant system's rules and procedures, to the extent
received by the relevant depositary. These distributions will be subject to tax
reporting in accordance with the relevant United States tax laws and
regulations. See "Federal Income Tax Consequences" in this prospectus. Because
DTC can only act on behalf of Financial Intermediaries, the ability of a
beneficial owner to pledge book-entry securities to persons or entities that do
not participate in the depository system, or otherwise take actions in respect
of the book-entry securities, may by limited due to the lack of physical
certificates for the book-entry securities. In addition, issuance of the
book-entry securities in book-entry form may reduce the liquidity of the
securities in the secondary market since certain potential investors may be
unwilling to purchase securities for which they cannot obtain physical
certificates.

         The related prospectus supplement may specify that Cede & Co. will
provide monthly and annual reports on the trust fund as nominee of DTC. Cede &
Co. may make these reports available to beneficial owners if requested, 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 securities of the beneficial owners are credited.

         We understand that, unless and until Definitive Securities are issued,
DTC will take any action permitted to be taken by the holders of the book-entry
securities under the terms of the securities only at the direction of one or
more Financial Intermediaries to whose DTC accounts the book-entry securities
are credited, to the extent that these actions are taken on behalf of Financial
Intermediaries whose holdings include these book-entry securities. Clearstream
or Euroclear, as the case may be, will take any other action permitted to be
taken by a holder of securities under the terms of the securities 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 the actions on its behalf through DTC. DTC may take
actions, at the direction of the related Participants, with respect to some
securities which conflict with actions taken with respect to other securities.

Definitive Securities will be delivered to beneficial owners of securities (or
their nominees) only if:

         (1) DTC is no longer willing or able properly to discharge its
responsibilities as depository with respect to the securities, and the depositor
is unable to locate a qualified successor,

         (2) the depositor or trustee notifies DTC of its intent to terminate
the book-entry system through DTC and, upon receipt of notice of such intent
from DTC, the Participants holding beneficial interests in the securities agree
to initiate such termination, or

         (3) after the occurrence of an event of default under the pooling and
servicing agreement, Security Owners representing a majority in principal amount
of the securities of any class then outstanding advise DTC through a Participant
of DTC in writing that the continuation of a book-entry system through DTC or a
successor thereto is no longer in the best interest of the Security Owners.




                                      -71-



         If any of the events described in the immediately preceding paragraph
occur, the trustee will notify all beneficial owners of the occurrence of the
event and the availability through DTC of Definitive Securities. If the global
certificate or certificates representing the book-entry securities and
instructions for reregistration are surrendered by DTC, the trustee will issue
Definitive Securities. The trustee will then recognize the holders of the
Definitive Securities as holders of securities under the applicable agreement.

         Although DTC, Clearstream and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of securities among Participants of
DTC, Clearstream and Euroclear, they are under no obligation to perform or
continue to perform the procedures and may discontinue the procedures at any
time.

         None of the master servicer, the depositor or the trustee will have any
responsibility for any aspect of the records relating, to or payments made on
account of beneficial ownership interests of the book-entry securities held by
Cede & Co., as nominee for DTC, or for maintaining, supervising or reviewing any
records relating to the beneficial ownership interests. WE CANNOT ASSURE YOU
THAT CEDE & CO., DTC OR ANY FINANCIAL INTERMEDIARY WILL PROVIDE INFORMATION TO
YOU OR ACT IN ACCORDANCE WITH THEIR RESPECTIVE RULES, REGULATIONS, AND
PROCEDURES.

         The information in this section concerning DTC, Clearstream, Euroclear
and DTC's book-entry system has been obtained from sources that we believe to be
reliable, but we take no responsibility for the accuracy thereof.


COLLECTION AND OTHER SERVICING PROCEDURES

         RESIDENTIAL LOANS. The master servicer, directly or through
sub-servicers, will be required to

         o    make reasonable efforts to collect all required payments under the
              residential loans and

         o    follow or cause to be followed the collection procedures as it
              would follow with respect to the servicing of residential loans
              that are comparable to the residential loans and held for its own
              account. However, these procedures must be consistent with any
              insurance policy, bond or other instrument described under
              "Description of Primary Insurance Coverage" or "Description of
              Credit Support" in this prospectus.

With respect to any series of securities as to which the trust fund includes
mortgage securities, the master servicer's servicing and administration
obligations, if any, will be pursuant to the terms of these mortgage securities.

         In any case in which a residential property has been, or is about to
be, conveyed, or in the case of a multifamily residential property, encumbered,
by the borrower, the master servicer will, to the extent it has knowledge of the
conveyance, encumbrance, or proposed conveyance or encumbrance, exercise or
cause to be exercised its rights to accelerate the maturity of the residential
loan under any applicable due-on-sale or due-on-encumbrance clause. The master
servicer will accelerate the maturity only if the exercise of the rights is
permitted by applicable



                                      -72-



law and will not impair or threaten to impair any recovery under any related
Insurance Instrument. If these conditions are not met or if the master servicer
or sub-servicer reasonably believes it is unable under applicable law to enforce
the due-on-sale or due-on-encumbrance clause, the master servicer or
sub-servicer will enter into or cause to be entered into an assumption and
modification agreement with the person to whom the property has been conveyed,
encumbered or is proposed to be conveyed or encumbered. Pursuant to the
assumption and modification agreement, the person to whom the property has been
conveyed becomes liable under the mortgage note, cooperative note, Home
Improvement Contract or Manufactured Housing Contract. To the extent permitted
by applicable law, the borrower remains liable on the mortgage note, cooperative
note, Home Improvement Contract or Manufactured Housing Contract, provided that
coverage under any Insurance Instrument with respect to the residential loan is
not adversely affected.

         The master servicer can enter into a substitution of liability
agreement with the person to whom the property is conveyed, pursuant to which
the original borrower is released from liability and the person is substituted
as the borrower and becomes liable under the mortgage note, cooperative note,
Home Improvement Contract or Manufactured Housing Contract. In connection with
any assumption, the interest rate, the amount of the monthly payment or any
other term affecting the amount or timing of payment on the residential loan may
not be changed. Any fee collected by or on behalf of the master servicer for
entering into an assumption agreement may be retained by or on behalf of the
master servicer as additional compensation for administering of the assets of
the trust fund. See "Certain Legal Aspects of Residential Loans --
Enforceability of Certain Provisions" and "-- Prepayment Charges and
Prepayments" in this prospectus. The master servicer will be required to notify
the trustee and any custodian that any assumption or substitution agreement has
been completed.

         AGENCY SECURITIES. The trustee will be required, if it has not received
a distribution with respect to any agency security by the date specified in the
related prospectus supplement in accordance with the terms of its agency
security, to request the issuer or guarantor, if any, of the agency security to
make this payment as promptly as possible. The trustee will be legally permitted
to take legal action against the issuer or guarantor as the trustee deems
appropriate under the circumstances, including the prosecution of any claims in
connection with the agency securities. The reasonable legal fees and expenses
incurred by the trustee in connection with the prosecution of the legal action
will be reimbursable to the trustee out of the proceeds of the action and will
be retained by the trustee prior to the deposit of any remaining proceeds in the
Trust Account pending distribution to holders of securities of the related
series. If the proceeds of the legal action may be insufficient to reimburse the
trustee for its legal fees and expenses, the trustee will be entitled to
withdraw from the Trust Account an amount equal to the expenses incurred by it,
in which event the trust fund may realize a loss up to the amount so charged.


REALIZATION ON DEFAULTED RESIDENTIAL LOANS

         As servicer of the residential loans, the master servicer, on behalf of
itself, the trustee and the holders of securities, will present claims to the
insurer under each Insurance Instrument, to the extent specified in the related
prospectus supplement. The master servicer will be required to take reasonable
steps as are necessary to receive payment or to permit recovery under the
Insurance Instrument with respect to defaulted residential loans. The related
prospectus



                                      -73-



supplement may specify that the master servicer will not receive payment under
any letter of credit included as an Insurance Instrument with respect to a
defaulted residential loan unless all Liquidation Proceeds and Insurance
Proceeds which it deems to be finally recoverable have been realized. However,
the master servicer may be entitled to reimbursement for any unreimbursed
advances and reimbursable expenses for the defaulted residential loan.

         If any property securing a defaulted residential loan is damaged and
proceeds, if any, from the related Primary Hazard Insurance Policy are
insufficient to restore the damaged property to a condition sufficient to permit
recovery under the related Primary Credit Insurance Policy, if any, the master
servicer will not be required to expend its own funds to restore the damaged
property unless it determines:

         (1) that the restoration will increase the proceeds to holders of
securities on liquidation of the residential loan after reimbursement of the
master servicer for its expenses; and

         (2) that the expenses will be recoverable by it from related Insurance
Proceeds or Liquidation Proceeds.

         If recovery on a defaulted residential loan under any related Primary
Credit Insurance Policy is not available for the reasons set forth in the
preceding paragraph, or for any other reason, the master servicer nevertheless
will be obligated to follow or cause to be followed the normal practices and
procedures as it deems necessary, and appropriate for the type of defaulted
residential loan, or advisable to realize on the defaulted residential loan. If
the proceeds of any liquidation of the property securing the defaulted
residential loan are less than:

         o    the outstanding principal balance of the defaulted residential
              loan, or the Cash Flow Value of the mortgage loan if the security
              principal balances are based on Cash Flow Values);

         o    the amount of any liens senior to the defaulted residential loan
              plus interest accrued on the defaulted residential loan at the Net
              Interest Rate; plus

         o    the aggregate amount of expenses incurred by the master servicer
              in connection with the proceedings and which are reimbursable
              under the related agreement

the trust fund will realize a loss in the amount of this difference.

         If the master servicer recovers Insurance Proceeds which, when added to
any related Liquidation Proceeds and after deduction of certain expenses
reimbursable to the master servicer, exceed the outstanding principal balance of
the defaulted residential loan together with accrued interest at the Net
Interest Rate, the master servicer will be entitled to withdraw or cause to be
withdrawn from the Trust Account amounts representing its normal administration
compensation on the related residential loan. If the master servicer has
expended its own funds to restore damaged property and these funds have not been
reimbursed under any Insurance Instrument, it will be entitled to withdraw from
the Trust Account out of related Liquidation Proceeds or Insurance Proceeds an
amount equal to the expenses incurred by it, in which event the trust fund may
realize a loss up to the amount charged. Because Insurance Proceeds cannot
exceed




                                      -74-



deficiency claims and certain expenses incurred by the master servicer, no
payment or recovery will result in a recovery to the trust fund which exceeds
the principal balance of the defaulted residential loan together with accrued
interest on the defaulted residential loan at the Net Interest Rate.

         In addition, when property securing a defaulted residential loan can be
resold for an amount exceeding the outstanding principal balance of the related
residential loan together with accrued interest and expenses, it may be expected
that, if retention of any amount is legally permissible, the insurer will
exercise its right under any related pool insurance policy to purchase the
property and realize for itself any excess proceeds. See "Description of Primary
Insurance Coverage" and "Description of Credit Support" in this prospectus.

         With respect to collateral securing a Cooperative Loan, any prospective
purchaser will generally have to obtain the approval of the board of directors
of the relevant cooperative housing corporation before purchasing the shares and
acquiring rights under the proprietary lease or occupancy agreement securing
that Cooperative Loan. See "Certain Legal Aspects of Residential Loans --
Foreclosure on Cooperative Shares" in this prospectus. This approval is usually
based on the purchaser's income and net worth and numerous other factors. The
necessity of acquiring approval could limit the number of potential purchasers
for those shares and otherwise limit the master servicer's ability to sell, and
realize the value of, those shares.


RETAINED INTEREST, ADMINISTRATION COMPENSATION AND PAYMENT OF EXPENSES

         If the related prospectus supplement provides for Retained Interests,
they may be established on a loan-by-loan or security-by-security basis and will
be specified in the related agreement or in an exhibit to the related agreement.
A Retained Interest in an asset of the trust fund represents a specified portion
of the interest payable on the asset. The Retained Interest will be deducted
from related payments as received and will not be part of the related trust
fund. Any partial recovery of interest on a residential loan, after deduction of
all applicable administration fees, may be allocated between Retained Interest,
if any, and interest at the Net Interest Rate on a pro rata basis.

         The related prospectus supplement may specify that the primary
administration compensation of the master servicer or the trustee with respect
to a series of securities will generally come from the monthly payment to it,
with respect to each interest payment on a trust fund asset. The amount of the
compensation may be at a rate equal to one-twelfth of the difference between the
interest rate on the asset and the sum of the Net Interest Rate and the Retained
Interest Rate, if any, times the scheduled principal balance of the trust fund
asset.

         With respect to a series of securities as to which the trust fund
includes mortgage securities, the compensation payable to the master servicer
for servicing and administering these mortgage securities on behalf of the
holders of the securities may be based on a percentage per annum described in
the related prospectus supplement of the outstanding balance of these mortgage
securities and may be retained from distributions on the mortgage securities.
Any sub-servicer may receive a portion of the master servicer's primary
compensation as its sub-servicing compensation. Since any Retained Interest and
the primary compensation of the master servicer





                                      -75-



or the trustee are percentages of the outstanding principal balance of each
trust fund asset, these amounts will decrease as the assets of the trust fund
amortize.

         As additional compensation in connection with a series of securities
relating to residential loans, the master servicer or the sub-servicers may be
entitled to retain all assumption fees and late payment charges and any
prepayment fees collected from the borrowers and any excess recoveries realized
on liquidation of a defaulted residential loan. Any interest or other income
that may be earned on funds held in the Trust Account pending monthly,
quarterly, semiannual or other periodic distributions, as applicable, or any
sub-servicing account may be paid as additional compensation to the trustee, the
master servicer or the sub-servicers, as the case may be. The prospectus
supplement will further specify any allocations for these amounts.

         With respect to a series of securities relating to residential loans,
the master servicer will pay from its administration compensation its regular
expenses incurred in connection with its servicing of the residential loans,
other than expenses relating to foreclosures and disposition of property
acquired in foreclosure.

         We anticipate that the administration compensation will in all cases
exceed these expenses. The master servicer is entitled to reimbursement for
certain expenses incurred by it in connection with the liquidation of defaulted
residential loans. The reimbursement includes under certain circumstances
reimbursement of expenditures incurred by it in connection with the restoration
of residential properties, this right of reimbursement being prior to the rights
of holders of securities to receive any related Liquidation Proceeds. The master
servicer may also be entitled to reimbursement from the Trust Account for
advances, if applicable. With respect to a series of securities relating to
agency securities, the trustee will be required to pay all of its anticipated
recurring expenses.


EVIDENCE AS TO COMPLIANCE

         Each agreement will generally provide that on or before a specified
date in each year, beginning with the first date that occurs at least six months
after the Cut-Off Date, the master servicer, or the trustee, at its expense
shall cause a firm of independent public accountants which is a member of the
American Institute of Certified Public Accountants to furnish a statement to the
trustee. In the statement, the accounting firm will be required to state that
they have performed tests in accordance with generally accepted accounting
principles regarding the records and documents relating to residential loans or
agency securities serviced, as part of their examination of the financial
statements of the master servicer or the trustee, as the case may be. Based on
the examination, the accountants will be required to state that there were no
exceptions that, in their opinion, were material, or provide a list of the
exceptions. In rendering that statement, the firm may rely, as to matters
relating to direct servicing of residential loans by sub-servicers, on
comparable statements for examinations conducted substantially in compliance
with generally accepted accounting principles in the residential loan servicing
industry, rendered within one year of the statement, of independent public
accountants with respect to the related sub-servicer.

         Each applicable servicing agreement or trust agreement will also
provide for delivery to the trustee, on or before a specified date in each year,
of an annual statement signed by an officer



                                      -76-



of the master servicer, in the case of a pool of agency securities or mortgage
securities, or of the trustee, in the case of a trust agreement. This statement
will be to the effect that, to the best of the officer's knowledge, the master
servicer or the trustee, as the case may be, has fulfilled its obligations under
the related agreement throughout the preceding year.


CERTAIN MATTERS REGARDING THE MASTER SERVICER, THE DEPOSITOR AND THE TRUSTEE

         THE MASTER SERVICER. The master servicer under each servicing agreement
will be identified in the related prospectus supplement. Each pooling and
servicing agreement or servicing agreement will generally provide that:

         o    the master servicer may resign from its obligations and duties
              under the related agreement under circumstances set forth in the
              related agreement, which may include a determination by the master
              servicer that it will no longer engage in the business of
              servicing mortgage loans; and

         o    the master servicer shall resign if a determination is made that
              its duties under the related agreement are no longer permissible
              under applicable law; and

         o    the resignation of the master servicer will not become effective
              until a successor master servicer meeting the eligibility
              requirements set forth in the servicing agreement has assumed, in
              writing, the master servicer's obligations and responsibilities
              under the servicing agreement.

         Each servicing agreement will further provide that neither the master
servicer nor any director, officer, employee, or agent of the master servicer
shall be under any liability to the related trust fund or holders of securities
for any action taken or for refraining from the taking of any action in good
faith pursuant to the servicing agreement, or for errors in judgment. However,
neither the master servicer nor any person shall be protected:

         o    against any liability for any breach of warranties or
              representations made in the servicing agreement;

         o    against any specific liability imposed on the master servicer;

         o    by the terms of the servicing agreement;

         o    by reason of willful misfeasance, bad faith or gross negligence in
              the performance of duties under the agreement; or

         o    by reason of reckless disregard of obligations and duties under
              the related servicing agreement.

The master servicer and any director, officer, employee or agent of the master
servicer will be entitled to rely in good faith on any document of any kind
prima facie properly executed and submitted by any person respecting any matters
arising under the related servicing agreement. Each servicing agreement may
further provide that the master servicer and any director, officer, employee or
agent of the master servicer will be




                                      -77-



         o    entitled to indemnification by the trust fund and

         o    will be held harmless against any loss, liability, or expense
              incurred in connection with any legal action relating to the
              servicing agreement or the securities, any representation or
              warranty regarding the mortgage loans, the Pool Insurance Policy,
              the special hazard insurance policy and the Bankruptcy Bond, if
              any, other than:

              o    any loss, liability, or expense related to any specific
                   residential loan or residential loans,

              o    any loss, liability, or expense otherwise reimbursable
                   pursuant to the servicing agreement, and

              o    any loss, liability, or expense incurred by reason of willful
                   misfeasance, bad faith or gross negligence in the performance
                   of duties under the agreement or by reason of reckless
                   disregard of obligations and duties under the agreement.

         In addition, each servicing agreement will provide that the master
servicer will be under no obligation to appear in, prosecute, or defend any
legal action which is not incidental to its duties under the servicing agreement
and which in its opinion may involve it in any expense or liability. The master
servicer may be permitted, however, in its discretion to undertake any action
which it may deem necessary or desirable with respect to the servicing agreement
and the rights and duties of the parties to the servicing agreement and the
interests of the holders of securities under the servicing agreement. In that
event, the legal expenses and costs of the action and any liability resulting
from taking the actions will be expenses, costs and liabilities of the trust
fund. The master servicer will be entitled to be reimbursed for these expenses
out of the Trust Account. This right of reimbursement is prior to the rights of
holders of securities to receive any amount in the Trust Account.

         Any entity into which the master servicer may be merged, consolidated
or converted, or any entity resulting from any merger, consolidation or
conversion to which the master servicer is a party, or any entity succeeding to
the business of the master servicer, will be the successor of the master
servicer under each servicing agreement. However, the successor or surviving
entity must meet the qualifications specified in the related prospectus
supplement.

         The related prospectus supplement may specify that the master
servicer's duties may be terminated if a termination fee is paid, and the master
servicer may be replaced with a successor meeting the qualifications specified
in the related prospectus supplement.

         THE DEPOSITOR. Each applicable agreement will provide that neither the
depositor nor any director, officer, employee, or agent of the depositor shall
be under any liability to the related trust fund or holders of securities for
any action taken or for refraining from the taking of any action in good faith
pursuant to the agreement, or for errors in judgment. However, neither the
depositor nor any person will be protected against any liability for any breach
of warranties or representations made in the agreement or against any specific
liability imposed on the depositor by the terms of the agreement or by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
under the agreement or by reason of reckless disregard of




                                      -78-



obligations and duties under the agreement. The depositor and any director,
officer, employee or agent of the depositor will be entitled to rely in good
faith on any document of any kind prima facie properly executed and submitted by
any person respecting any matters arising under the related agreement.

         Each agreement will further provide that the depositor and any
director, officer, employee or agent of the depositor will be entitled to
indemnification by the trust fund and will be held harmless against any loss,
liability, or expense incurred in connection with any legal action relating to:

         o    the agreement or the securities;

         o    any representation or warranty regarding the mortgage loans;

         o    any Pool Insurance Policy;

         o    any special hazard insurance policy and the Bankruptcy Bond; or o
              any agency securities,

other than any loss, liability, or expense incurred by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties under
the related agreement or by reason of reckless disregard of obligations and
duties under the related agreement.

         In addition, each agreement will provide that the depositor will be
under no any obligation to appear in, prosecute, or defend any legal action
which is not incidental to its duties under the related agreement and which in
its opinion may involve it in any expense or liability. The depositor may be
permitted, however, in its discretion to undertake any action which it may deem
necessary or desirable with respect to the related agreement and the rights and
duties of the parties to the related agreement and the interests of the holders
of securities under the related agreement. In that event, the legal expenses and
costs of the action and any liability resulting from taking these actions will
be expenses, costs and liabilities of the trust fund. The depositor will be
entitled to be reimbursed for those expenses out of the Trust Account. This
right of reimbursement will be prior to the rights of holders of securities to
receive any amount in the Trust Account.

         Any entity into which the depositor may be merged, consolidated or
converted, or any entity resulting from any merger, consolidation or conversion
to which the depositor is a party, or any entity succeeding to the business of
the depositor will be the successor of the depositor under each agreement.

         THE TRUSTEES. Each trustee for any series of securities will be
required to be an entity possessing corporate trust powers having a combined
capital and surplus of at least $50,000,000 and subject to supervision or
examination by federal or state authority as identified in the related
prospectus supplement. The commercial bank or trust company serving as trustee
may have normal banking relationships with the depositor and its affiliates and
the master servicer, if any, and its affiliates. For the purpose of meeting the
legal requirements of certain local jurisdictions,




                                      -79-



the depositor or the trustee may have the power to appoint co-trustees or
separate trustees of all or any part of the trust fund. If the appointment
occurs, all rights, powers, duties and obligations conferred or imposed on the
trustee by the agreement relating to the series shall be conferred or imposed on
the trustee and the separate trustee or co-trustee jointly. In any jurisdiction
in which the trustee shall be incompetent or unqualified to perform certain
acts, the rights, powers and duties shall be conferred or imposed on the
separate trustee or co-trustee singly. The separate trustee or co-trustee will
be required to exercise and perform these rights, powers, duties and obligations
solely at the direction of the trustee.

         The trustee may resign at any time, in which event the depositor or the
other party specified in the related agreements will be obligated to appoint a
successor trustee. The depositor or the other party specified in the related
agreements may also remove the trustee if the trustee ceases to be eligible to
continue as such under the agreement or if the trustee becomes insolvent,
incapable of acting or a receiver or similar person shall be appointed to take
control of its affairs. In these circumstances, the depositor or the other party
specified in the related agreements will be obligated to appoint a successor
trustee. The holders of securities evidencing not less than a majority of the
voting rights allocated to the securities may at any time remove the trustee and
appoint a successor trustee by written instrument in accordance with additional
procedures set forth in the related agreement. Any resignation or removal of the
trustee and appointment of a successor trustee does not become effective until
acceptance of the appointment by a successor trustee.

         DUTIES OF THE TRUSTEES. The trustee will make no representations as to
the validity or sufficiency of any agreement, the securities, any asset of the
trust fund or related document other than the certificate of authentication on
the forms of securities, and will not assume any responsibility for their
correctness. The trustee under any agreement will not be accountable for the use
or application by or on behalf of the master servicer of any funds paid to the
master servicer in respect of the securities, the assets of the trust fund, or
deposited into or withdrawn from the Trust Account or any other account by or on
behalf of the depositor or the master servicer. If no event of default has
occurred and is continuing, the trustee will be required to perform only those
duties specifically required under the related agreement. However, when the
trustee receives the various certificates, reports or other instruments required
to be furnished to it under an agreement, the trustee will be required to
examine those documents and to determine whether they conform to the
requirements of the agreement.

         Each agreement may further provide that neither the trustee nor any
director, officer, employee, or agent of the trustee shall be under any
liability to the related trust fund or holders of securities for any action
taken or for refraining from the taking of any action in good faith pursuant to
the agreement, or for errors in judgment. However, neither the trustee nor any
person shall be protected against specific liability imposed on the trustee by
the terms of the agreement or by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties under the related agreement or by
reason of reckless disregard of obligations and duties under the related
agreement. The trustee and any director, officer, employee or agent of the
trustee may rely in good faith on any document of any kind prima facie properly
executed and submitted by any person respecting any matters arising under the
related agreement.




                                      -80-



         Each agreement may further provide that the trustee and any director,
officer, employee or agent of the trustee will be entitled to indemnification by
the trust fund and will be held harmless against any loss, liability, or expense
incurred in connection with any legal action relating to the agreement, the
securities or the agency securities. However, the trustee may not be held
harmless against any loss, liability, or expense incurred by reason of willful
misfeasance, bad faith or gross negligence in the performance of duties under
the related agreement or by reason of reckless disregard of obligations and
duties under the related agreement.


DEFICIENCY EVENTS

         With respect to each series of securities with distribution dates
occurring at intervals less frequently than monthly, and with respect to each
series of securities including two or more classes with sequential priorities
for distribution of principal, the following provisions may apply if specified
in the related prospectus supplement.

         A deficiency event with respect to the securities of any of the series
is the inability to distribute to holders of one or more classes of securities
of these series, in accordance with the terms of the securities and the related
agreement, any distribution of principal or interest on these securities when
and as distributable, in each case because of the insufficiency for the purpose
of the funds then held in the related trust fund.

         If a deficiency event occurs, the trustee or master servicer, as may be
set forth in the related prospectus supplement, may be required to determine the
sufficiency of funds available to make future required distributions on the
securities.

         The trustee or master servicer may obtain and rely on 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 the distributions on the securities, which opinion or report will be
conclusive evidence as to sufficiency. Prior to making this determination,
distributions on the securities shall continue to be made in accordance with
their terms.

         If the trustee or master servicer makes a positive determination, the
trustee or master servicer will apply all amounts received in respect of the
related trust fund, after payment of expenses of the trust fund, to
distributions on the securities of the series in accordance with their terms.
However, these distributions will be made monthly and without regard to the
amount of principal that would otherwise be distributable on any distribution
date. Under certain circumstances following the positive determination, the
trustee or master servicer may resume making distributions on the securities
expressly in accordance with their terms.

         If the trustee or master servicer is unable to make the positive
determination described above, the trustee or master servicer will apply all
amounts received in respect of the related trust fund, after payment of
expenses, to monthly distributions on the securities of the series pro rata,
without regard to the priorities as to distribution of principal set forth in
these securities. Also, these securities will, to the extent permitted by
applicable law, accrue interest at the highest security interest rate borne by
any security of the series. Alternatively, if any class of the series shall have
an adjustable or variable security interest rate, interest will accrue at the
weighted average security interest rate, calculated on the basis of the maximum
security interest rate



                                      -81-



applicable to the class having the initial security principal balance of the
securities of that class. In this case, the holders of securities evidencing a
majority of the voting rights allocated to the securities may direct the trustee
to sell the related trust fund. Any direction to sell the trust fund will be
irrevocable and binding on the holders of all securities of the series and on
the owners of any residual interests in the trust fund. In the absence of this
direction, the trustee may not sell all or any portion of the trust fund.


EVENTS OF DEFAULT

         POOLING AND SERVICING AGREEMENTS. Events of default under each pooling
and servicing agreement will be specified in the related prospectus supplement
and will generally consist of:

         o    any failure by the master servicer to distribute or cause to be
              distributed to holders of the certificates, or the failure of the
              master servicer to remit funds to the trustee for this
              distribution, which continues unremedied for five days or another
              period specified in the servicing agreement after the giving of
              written notice of the failure in accordance with the procedures
              described in the agreement;

         o    any failure by the master servicer duly to observe or perform in
              any material respect any of its other covenants or agreements in
              the agreement which continues unremedied for sixty days or another
              period specified in the pooling and servicing agreement after the
              giving of written notice of the failure in accordance with the
              procedures described in the agreement;

         o    certain events of insolvency, readjustment of debt, marshalling of
              assets and liabilities or similar proceedings and certain actions
              by or on behalf of the master servicer indicating its insolvency
              or inability to pay its obligations; and

         o    any other event of default specified in the pooling and servicing
              agreement.

A default pursuant to the terms of any mortgage securities included in any trust
fund will not constitute an event of default under the related pooling and
servicing agreement.

         So long as an event of default under a pooling and servicing agreement
remains unremedied, the depositor or the trustee may, and at the direction of
holders of certificates evidencing a percentage of the voting rights allocated
to the certificates as may be specified in the pooling and servicing agreement
will be required to terminate all of the rights and obligations of the master
servicer under the pooling and servicing agreement and in and to the residential
loans and the proceeds of the residential loans. The trustee or another
successor servicer will then succeed to all responsibilities, duties and
liabilities of the master servicer and will be entitled to similar compensation
arrangements.

         If the trustee would be obligated to succeed the master servicer but is
unwilling to act as master servicer, it may, or if it is unable so to act, it
shall, appoint, or petition a court of competent jurisdiction for the
appointment of, an approved mortgage servicing institution with a net worth of
at least $10,000,000, or other amount as may be specified in the related
agreement, to act as successor to the master servicer under the pooling and
servicing agreement. Pending the






                                      -82-



appointment, the trustee is obligated to act in this capacity. The trustee and
the successor may agree on the administration compensation to be paid, which in
no event may be greater than the compensation to the master servicer under the
pooling and servicing agreement.

         No holder of the certificate will have the right under any pooling and
servicing agreement to institute any proceeding with respect to its certificates
unless permitted in the related agreement and:

         o    the holder previously has given to the trustee written notice of
              an event of default or of a default by the depositor or the
              trustee in the performance of any obligation under the pooling and
              servicing agreement, and of the continuance of the event of
              default;

         o    the holders of certificates evidencing not less than 25% of the
              voting rights allocated to the certificates, or other percentages
              specified in the agreement, have made written request to the
              trustee to institute the proceeding in its own name as trustee and
              have offered to the trustee reasonable indemnity as it may require
              against the costs, expenses and liabilities to be incurred by
              instituting the proceedings; and

         o    the trustee for sixty days after receipt of notice, request and
              offer of indemnity has neglected or refused to institute any
              proceeding.

The trustee, however, is generally under no obligation to

         o    exercise any of the trusts or powers vested in it by any pooling
              and servicing agreement or to make any investigation of matters
              arising under the pooling and servicing agreement, or

         o    institute, conduct, or defend any litigation under, or in relation
              to, the pooling and servicing agreement, at the request, order or
              direction of any of the holders of certificates covered by the
              pooling and servicing agreement,

unless the holders of the certificates have offered to the trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred in the undertaking.

         SERVICING AGREEMENT. Servicing defaults under the related servicing
agreement will be specified in the related prospectus supplement and will
generally include:

         o    any failure by the master servicer to pay or cause to be paid to
              holders of the notes, or the failure of the master servicer to
              remit funds to the trustee for the payment which continues
              unremedied for the period specified in the servicing agreement
              after the giving of written notice of the failure in accordance
              with the procedures described in the agreement;

         o    any failure by the master servicer duly to observe or perform in
              any material respect any of its other covenants or agreements in
              the agreement which continues unremedied for the period specified
              in the pooling and servicing agreement after the



                                      -83-



              giving of written notice of the failure in accordance with the
              procedures described in the agreement;

         o    certain events of insolvency, readjustment of debt, marshalling of
              assets and liabilities or similar proceedings and certain actions
              by or on behalf of the master servicer indicating its insolvency
              or inability to pay its obligations; and

         o    any other servicing default specified in the servicing agreement.

         So long as a servicing default remains unremedied, either the depositor
or the trustee may, by written notification to the master servicer and to the
issuer or the trustee or trust fund, as applicable, terminate all of the rights
and obligations of the master servicer under the servicing agreement. However,
the right of the master servicer as noteholder or as holder of the Equity
Certificates and the right to receive servicing compensation and expenses for
servicing the mortgage loans during any period prior to the date of the
termination may not be terminated. The trustee or another successor servicer
will then succeed to all responsibilities, duties and liabilities of the master
servicer and will be entitled to similar compensation arrangements.

         If the trustee would be obligated to succeed the master servicer but is
unwilling so to act, it may appoint, or if it is unable so to act, it shall
appoint, or petition a court of competent jurisdiction for the appointment of an
approved mortgage servicing institution with a net worth of an amount specified
in the related agreement, to act as successor to the master servicer under the
servicing agreement. Pending this appointment, the trustee is obligated to act
in that capacity. The trustee and the successor may agree on the servicing
compensation to be paid, which in no event may be greater than the compensation
to the initial master servicer under the servicing agreement.

         INDENTURE. Events of default under the indenture will be specified in
the related prospectus supplement and will generally include:

         o    a default for five days or more, or another period of time
              specified in the related indenture, in the payment of any
              principal of or interest on any note of the related series;

         o    failure to perform any other covenant of the issuer or the trust
              fund in the indenture which continues for the period specified in
              the related indenture, after notice of the event of default is
              given in accordance with the procedures described in the related
              indenture;

         o    any representation or warranty made by the issuer or the trust
              fund in the indenture or in any other writing delivered in
              connection with the indenture having been incorrect in a material
              respect as of the time made, and the breach is not cured within
              the period specified in the related indenture, after notice of the
              breach is given in accordance with the procedures described in the
              related indenture;

         o    certain events of bankruptcy, insolvency, receivership or
              liquidation of the issuer or the trust fund; and




                                      -84-



         o    any other event of default provided with respect to notes of that
              series.

         If an event of default with respect to the notes of any series at the
time outstanding occurs and is continuing, the trustee or the holders of a
majority of the voting rights allocable to the notes, or another percentage
specified in the indenture, may declare the principal amount of all the notes of
the series to be due and payable immediately. This declaration may, under
certain circumstances, be rescinded and annulled by the holders of a majority in
aggregate outstanding amount of the related notes.

         If following an event of default with respect to any series of notes,
the notes of the series have been declared to be due and payable, the trustee
may, in its discretion, regardless of acceleration, elect to

         o    maintain possession of the collateral securing the notes of the
              series and

         o    continue to apply payments on the collateral as if there had been
              no declaration of acceleration.

The trustee may only do so 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 trustee may not sell or otherwise liquidate the
collateral securing the notes of a series following an event of default, unless

         o    the holders of 100% of the voting rights allocated to 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,

         o    the trustee determines that the collateral would not be sufficient
              on an ongoing basis to make all payments on the notes as the
              payments would have become due if the related notes had not been
              declared due and payable, and the trustee obtains the consent of
              the holders of 66 2/3 % of the then aggregate outstanding amount
              of the notes of the series, or

         o    the trustee satisfies the other requirements as may be set forth
              in the related indenture.

         If the trustee liquidates the collateral in connection with an event of
default under the indenture, the indenture provides that the trustee will have a
prior lien on the proceeds of any liquidation for unpaid fees and expenses. As a
result, if an event of default occurs under the indenture, the amount available
for payments to the noteholders would be less than would otherwise be the case.
However, the trustee will not be permitted to institute a proceeding for the
enforcement of its lien except in connection with a proceeding for the
enforcement of the lien of



                                      -85-



the indenture for the benefit of the noteholders after the occurrence of an
event of default under the indenture.

         If the principal of the notes of a series is declared due and payable,
the holders of any 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
related note less the amount of the discount that is unamortized.

         No noteholder generally will have any right under an indenture to
institute any proceeding with respect to the related agreement unless permitted
by the indenture and

         o    the holder previously has given to the trustee written notice of
              default and the continuance of a default;

         o    the holders of notes or Equity Certificates of any class
              evidencing not less than 25% of the voting rights allocated to the
              notes, or another percentage specified in the indenture:

              o    have made written request to the trustee to institute the
                   proceeding in its own name as trustee; and

              o    have offered to the trustee reasonable indemnity;

         o    the trustee has neglected or refused to institute any proceeding
              for 60 days after receipt of a request and indemnity; and

         o    no direction inconsistent with the written request has been given
              to the trustee during the 60 day period by the holders of a
              majority of the note principal balances of the related class.

However, the trustee will generally be under no obligation to

         o    exercise any of the trusts or powers vested in it by the
              indenture, or

         o    institute, conduct or defend any litigation under the indenture or
              in relation to the indenture at the request, order or direction of
              any of the holders of notes covered by the agreement,

unless those holders have offered to the trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred in
this undertaking.


AMENDMENT

         With respect to each series of securities, each agreement governing the
rights of the holders of the securities may generally be amended by the parties
to the agreement, without the consent of any of the holders of securities:

         (1) to cure any ambiguity;




                                      -86-



         (2) to correct or supplement any provision in any agreement which may
be inconsistent with any other provision in any agreement;

         (3) to make any other provisions with respect to matters or questions
arising under the agreement; and


         (4) if the amendment, as evidenced by an opinion of counsel, is
reasonably necessary to comply with any requirements imposed by the Code or any
successor or mandatory statutes or any temporary or final regulation, revenue
ruling, revenue procedure or other written official announcement or
interpretation relating to federal income tax law or any proposed action which,
if made effective, would apply retroactively to the trust fund at least from the
effective date of the amendment,

provided, that, the required action, other than an amendment described in clause
(4) above, will not adversely affect in any material respect the interests of
any holder of the securities covered by the agreement, as evidenced by either an
opinion of counsel or a confirmation by the rating agencies that such amendment
will not result in the downgrading of the securities. No amendment will be
deemed to adversely affect in any material respect the interests of any
Certificateholder who shall have consented thereto, and no opinion of counsel or
written notice from the rating agencies will be required to address the effect
of any such amendment on any such consenting Certificateholder. Each agreement
may also be amended, subject to certain restrictions to continue favorable tax
treatment of the entity by the parties to this agreement, with the consent of
the holders of securities evidencing not less than 51% of the voting rights
allocated to the securities, or another percentage specified in the indenture,
for any purpose. However, no amendment may

                  (a) reduce in any manner the amount of, or delay the timing
         of, payments received on assets of the trust fund which are required to
         be distributed on any security without the consent of the holder of the
         security; or

                  (b) reduce the aforesaid percentage of voting rights required
         for the consent to the amendment (as evidenced by either an opinion of
         counsel or a confirmation by the rating agencies that such amendment
         will not result in the downgrading of the securities).


TERMINATION

         The obligations created by the agreement for each series of securities
will generally terminate when any of the following first occurs

         o    the payment to the holders of securities of that series of all
              amounts held in the Trust Account and required to be paid to the
              holders of securities pursuant to the agreement,

         o    the final payment or other liquidation, including the disposition
              of all property acquired upon foreclosure or repossession, of the
              last trust fund asset remaining in the related trust fund or,




                                      -87-



         o    the purchase of all of the assets of the trust fund by the party
              entitled to effect the termination,

in each case, under the circumstances and in the manner set forth in the related
prospectus supplement.

         In no event, however, will the trust created by the agreement continue
beyond the period specified in the related prospectus supplement. Written notice
of termination of the agreement will be given to each holder of securities. The
final distribution will be made only after surrender and cancellation of the
securities at an office or agency appointed by the trustee which will be
specified in the notice of termination.

         The exercise of the right to purchase the assets of the trust fund as
set forth in the preceding paragraph will effect early retirement of the
securities of that series.


VOTING RIGHTS

         Voting rights allocated to securities of a series will generally be
based on security principal balances. Any other method of allocation will be
specified in the related prospectus supplement. The prospectus supplement may
specify that a provider of credit support may be entitled to direct certain
actions of the master servicer and the trustee or to exercise certain rights of
the master servicer, the trustee or the holders of securities.


                    DESCRIPTION OF PRIMARY INSURANCE COVERAGE

         The prospectus supplement may specify that each residential loan may be
covered by a Primary Hazard Insurance Policy and, if required as described in
the related prospectus supplement, a Primary Credit Insurance Policy. In
addition, the prospectus supplement may specify that a trust fund may include
any combination of a Pool Insurance Policy, a special Hazard Insurance Policy, a
bankruptcy bond or another form of credit support, as described under
"Description of Credit Support."

         The following is only a brief description of certain insurance policies
and does not purport to summarize or describe all of the provisions of these
policies. This insurance is subject to underwriting and approval of individual
residential loans by the respective insurers.


PRIMARY CREDIT INSURANCE POLICIES

         The prospectus supplement will specify whether the master servicer will
be required to maintain or cause to be maintained in accordance with the
underwriting standards adopted by the depositor a Primary Credit Insurance
Policy with respect to each residential loan, other than Multifamily Loans, FHA
loans, and VA loans, for which this insurance is required, as described under
"Description of the Securities -- Realization on Defaulted Residential Loans" in
this prospectus.

         The master servicer will be required to cause to be paid the premium
for each Primary Credit Insurance Policy to be paid on a timely basis. The
master servicer, or the related sub-





                                      -88-



servicer, if any, will be required to exercise its best reasonable efforts to be
named the insured or a loss payee under any Primary Credit Insurance Policy. The
ability to assure that Insurance Proceeds are appropriately applied may be
dependent on its being so named, or on the extent to which information in this
regard is furnished by borrowers. All amounts collected by the master servicer
under any policy will be required to be deposited in the Trust Account. The
master servicer will generally not be permitted to cancel or refuse to renew any
Primary Credit Insurance Policy in effect at the time of the initial issuance of
the securities that is required to be kept in force under the related agreement.
However, the master servicer may cancel or refuse to renew any Primary Credit
Insurance Policy, if it uses its best efforts to obtain a replacement Primary
Credit Insurance Policy for the canceled or nonrenewed policy maintained with an
insurer the claims-paying ability of which is acceptable to the rating agency or
agencies for pass-through certificates or notes having the same rating as the
securities on their date of issuance.

         As conditions precedent to the filing or payment of a claim under a
Primary Credit Insurance Policy, the insured typically will be required, if a
default by the borrower occurs, among other things, to:

         o    advance or discharge:

              o    hazard insurance premiums; and

              o    as necessary and approved in advance by the insurer, real
                   estate taxes, protection and preservation expenses and
                   foreclosure and related costs;

         o    if any physical loss or damage to the residential property occurs,
              have the residential property restored to at least its condition
              at the effective date of the Primary Credit Insurance Policy, with
              ordinary wear and tear excepted; and

         o    tender to the insurer good and merchantable title to, and
              possession of, the residential property.


FHA INSURANCE AND VA GUARANTEES

         Residential loans designated in the related prospectus supplement as
insured by the FHA will be insured by the FHA as authorized under the United
States Housing Act of 1934, as amended. Certain residential loans will be
insured under various FHA programs including the standard FHA 203(b) program to
finance the acquisition of one- to four-family housing units, the FHA 245
graduated payment mortgage program and the FHA Title I Program. These programs
generally limit the principal amount and interest rates of the mortgage loans
insured. The prospectus supplement relating to securities of each series
evidencing interests in a trust fund including FHA loans will set forth
additional information regarding the regulations governing the applicable FHA
insurance programs. The following, together with any further description in the
related prospectus supplement, describes FHA insurance programs and regulations
as generally in effect with respect to FHA loans.

         The insurance premiums for FHA loans are collected by lenders approved
by the Department of Housing and Urban Development or by the master servicer or
any sub-servicer






                                      -89-



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 mortgage
premises to the United States of America or upon assignment of the defaulted
loan to the United States of America. With respect to a defaulted FHA-insured
residential loan, the master servicer or any sub-servicer will be limited in its
ability to initiate foreclosure proceedings. When it is determined, either by
the master servicer or any sub-servicer or HUD, that default was caused by
circumstances beyond the borrower's control, the master servicer or any
sub-servicer is expected to make an effort to avoid foreclosure by entering, if
feasible, into one of a number of available forms of forbearance plans with the
borrower. These forbearance plans may involve the reduction or suspension of
regular mortgage payments for a specified period, with the payments to be made
on or before the maturity date of the mortgage, or the recasting of payments due
under the mortgage up to or, other than residential loans originated under the
Title I Program of the FHA, beyond the maturity date. In addition, when a
default caused by circumstances beyond a borrower's control is accompanied by
certain other criteria, HUD may provide relief by making payments. These
payments are to be repaid to HUD by borrower, to the master servicer or any
sub-servicer in partial or full satisfaction of amounts due under the
residential loan or by accepting assignment of the loan from the master servicer
or any sub-servicer. With certain exceptions, at least three full monthly
installments must be due and unpaid under the FHA loan, and HUD must have
rejected any request for relief from the borrower before the master servicer or
any sub-servicer may initiate foreclosure proceedings.

         HUD has the option, in most cases, to pay insurance claims in cash or
in debentures issued by HUD. Currently, claims are being paid in cash, and
claims have not been paid in debentures since 1965. HUD debentures issued in
satisfaction of FHA insurance claims bear interest at the applicable HUD
debentures interest rate. The master servicer or any sub-servicer of each
FHA-insured single family loan will generally be obligated to purchase any
debenture issued in satisfaction of the residential loan if a default occurs for
an amount equal to the principal amount of any debenture.

         Other than in relation to the Title I Program of the FHA, the amount of
insurance benefits generally paid by the FHA is equal to the entire unpaid
principal amount of the defaulted residential loan adjusted to reimburse the
master servicer or sub-servicer for certain costs and expenses and to deduct
certain amounts received or retained by the master servicer or sub-servicer
after default. When entitlement to insurance benefits results from foreclosure
or other acquisition of possession and conveyance to HUD, the master servicer or
sub-servicer will be compensated for no more than two-thirds of its foreclosure
costs, and will be compensated for interest accrued and unpaid prior to this
date but in general only to the extent it was allowed pursuant to a forbearance
plan approved by HUD. When entitlement to insurance benefits results from
assignment of the residential loan to HUD, the insurance payment will include
full compensation for interest accrued and unpaid to the assignment date. The
insurance payment itself, upon foreclosure of an FHA-insured residential loan,
bears interest from a date 30 days after the borrower's first uncorrected
failure to perform any obligation to make any payment due under the mortgage
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.




                                      -90-



         Residential loans designated in the related prospectus supplement as
guaranteed by the VA will be partially guaranteed by the VA under the
Serviceman's Readjustment Act of 1944, as amended. The Serviceman's Readjustment
Act of 1944, as amended, permits a veteran, or in certain 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 purchaser and permits the guarantee of mortgage loans of
up to 30 years' duration. However, no residential loan guaranteed by the VA will
have an original principal amount greater than five times the partial VA
guarantee for the related residential loan. The prospectus supplement relating
to securities of each series evidencing interests in a trust fund including VA
loans will set forth additional information regarding the regulations governing
the applicable VA insurance programs.

         With respect to a defaulted VA guaranteed residential loan, the master
servicer or sub-servicer will be, 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 will be submitted after
liquidation of the residential property.

         The amount payable under the guarantee will be the percentage of the
VA-insured residential loan originally guaranteed applied to indebtedness
outstanding as of the applicable date of computation specified in the VA
regulations. Payments under the guarantee will generally be equal to the unpaid
principal amount of the residential loan, interest accrued on the unpaid balance
of the residential loan to the appropriate date of computation and limited
expenses of the mortgagee, but in each case only to the extent that these
amounts have not been recovered through liquidation of the residential property.
The amount payable under the guarantee may in no event exceed the amount of the
original guarantee.


PRIMARY HAZARD INSURANCE POLICIES

         The related prospectus supplement may specify that the related
servicing agreement will require the master servicer to cause the borrower on
each residential loan to maintain a Primary Hazard Insurance Policy. This
coverage will be specified in the related prospectus supplement, and in general
will equal the lesser of the principal balance owing on the residential loan and
the amount necessary to fully compensate for any damage or loss to the
improvements on the residential property on a replacement cost basis. In either
case, the coverage may not be less than the amount necessary to avoid the
application of any co-insurance clause contained in the policy. The master
servicer, or the related sub-servicer, if any, will be required to exercise its
best reasonable efforts to be named as an additional insured under any Primary
Hazard Insurance Policy and under any flood insurance policy referred to below.
The ability to assure that hazard Insurance Proceeds are appropriately applied
may be dependent on its being so named, or on the extent to which information in
this regard is furnished by borrowers. All amounts collected by the master
servicer under any policy, except for amounts to be applied to the restoration
or repair of the residential property or released to the borrower in accordance
with the master servicer's normal servicing procedures, subject to the terms and
conditions of the related mortgage and mortgage note, will be deposited in the
Trust Account.




                                      -91-



         Each servicing agreement provides that the master servicer may satisfy
its obligation to cause each borrower to maintain a hazard insurance policy by
the master servicer's maintaining a blanket policy insuring against hazard
losses on the residential loans. If the blanket policy contains a deductible
clause, the master servicer will generally be required to deposit in the Trust
Account all sums which would have been deposited in the Trust Account but for
this clause. The master servicer will also generally be required to maintain a
fidelity bond and errors and omissions policy with respect to its officers and
employees. This policy will generally provide coverage against losses that may
be sustained as a result of an officer's or employee's misappropriation of funds
or errors and omissions in failing to maintain insurance, subject to limitations
as to amount of coverage, deductible amounts, conditions, exclusions and
exceptions.

         In general, the standard form of fire and extended coverage policy
covers physical damage to or destruction of the improvements of the property by
fire, lightning, explosion, smoke, windstorm and hail, and riot, strike and
civil commotion, subject to the conditions and exclusions specified in each
policy. The policies relating to the residential loans will be underwritten by
different insurers under different state laws in accordance with different
applicable state forms. Therefore, the policies will not contain identical terms
and conditions. The basic terms of those policies are dictated by respective
state laws, and most policies typically do not cover any physical damage
resulting from the following:

         o    war,

         o    revolution,

         o    governmental actions,

         o    floods and other water-related causes,

         o    earth movement, including earthquakes, landslides and mudflows,

         o    nuclear reactions,

         o    wet or dry rot,

         o    vermin, rodents, insects or domestic animals,

         o    theft, and

         o    in certain cases, vandalism.

The foregoing list is merely indicative of certain kinds of uninsured risks and
is not intended to be all-inclusive.





                                      -92-



     When a residential property is located at origination in a federally
designated flood area, each servicing agreement may require the master servicer
to cause the borrower to acquire and maintain flood insurance in an amount equal
in general to the lesser of:

         (1) the amount necessary to fully compensate for any damage or loss to
the improvements which are part of the residential property on a replacement
cost basis; and

         (2) the maximum amount of insurance available under the federal flood
insurance program, whether or not the area is participating in the program.

                  The hazard insurance policies covering the residential
properties typically contain a co-insurance clause that in effect requires the
insured at all times to carry insurance of a specified percentage of the full
replacement value of the improvements on the property in order to recover the
full amount of any partial loss. If the insured's coverage falls below this
specified percentage, this clause generally provides that the insurer's
liability if a partial loss occurs does not exceed the greater of:

         (1) the replacement cost of the improvements less physical
depreciation; and

         (2) that proportion of the loss as the amount of insurance carried
bears to the specified percentage of the full replacement cost of the
improvements.

         The related agreement will generally not require that a hazard or flood
insurance policy be maintained for any Cooperative Loan. Generally, the
cooperative housing corporation is responsible for maintenance of hazard
insurance for the property owned by it and the tenant-stockholders of that
cooperative housing corporation do not maintain individual hazard insurance
policies. To the extent, however, that a cooperative housing corporation and the
related borrower on a cooperative note do not maintain similar insurance or do
not maintain adequate coverage or any insurance proceeds are not applied to the
restoration of the damaged property, damage to the borrower's cooperative
apartment or the building could significantly reduce the value of the collateral
securing the cooperative note.

         The effect of co-insurance if a partial loss occurs on improvements
securing residential loans may be that hazard Insurance Proceeds may be
insufficient to restore fully the damaged property because:

         (1) the amount of hazard insurance the master servicer will be required
to cause to be maintained on the improvements securing the residential loans
will decline as the principal balances owing on them decrease, and

         (2) residential properties have historically appreciated in value over
time.

Under the terms of the residential loans, borrowers are generally required to
present claims to insurers under hazard insurance policies maintained on the
residential properties.

         The master servicer, on behalf of the trustee and holders of
securities, is obligated to present or cause to be presented claims under any
blanket insurance policy insuring against hazard losses on residential
properties. The ability of the master servicer to present or cause to be




                                      -93-



presented these claims is dependent on the extent to which information in this
regard is furnished to the master servicer by borrowers. However, the related
prospectus supplement may specify that to the extent of the amount available to
cover hazard losses under the special hazard insurance policy for a series,
holders of securities may not suffer loss by reason of delinquencies or
foreclosures following hazard losses, whether or not subject to co-insurance
claims.


                          DESCRIPTION OF CREDIT SUPPORT

         The related prospectus supplement will specify if the trust fund that
includes residential loans for a series of securities may include credit support
for this series or for one or more classes of securities comprising this series,
which credit support may consist of any combination of the following separate
components, any of which may be limited to a specified percentage of the
aggregate principal balance of the residential loans covered by this credit
support or a specified dollar amount:

         o    a Pool Insurance Policy;

         o    a special hazard insurance policy;

         o    a Bankruptcy Bond;

         o    a reserve fund;

         o    or a similar credit support instrument.

Alternatively, the prospectus supplement relating to a series of securities will
specify if credit support may be provided by subordination of one or more
classes of securities or by overcollateralization, in combination with or in
lieu of any one or more of the instruments set forth above. See "Description of
the Securities -- Subordination" and "Description of Credit Support--
Overcollateralization" in this prospectus. The amount and type of credit support
with respect to a series of securities or with respect to one or more classes of
securities comprising the related series, and the borrowers on the credit
support, will be set forth in the related prospectus supplement.

         To the extent provided in the related prospectus supplement and the
agreement, credit support may be periodically reduced based on the aggregate
outstanding principal balance of the residential loans covered by the credit
support.


POOL INSURANCE POLICIES

         The prospectus supplement relating to a series of securities may
specify that the master servicer will exercise its best reasonable efforts to
maintain or cause to be maintained a Pool Insurance Policy in full force and
effect, unless coverage under the Pool Insurance Policy has been exhausted
through payment of claims. The Pool Insurance Policy for any series of
securities will be issued by the pool insurer named in the related prospectus
supplement. The master servicer will be required to pay the premiums for each
Pool Insurance Policy on a timely basis unless, as described in the related
prospectus supplement, the payment of these fees is otherwise




                                      -94-



provided. The master servicer will be required to present or cause to be
presented claims under each Pool Insurance Policy to the pool insurer on behalf
of itself, the trustee and the holders of securities. Pool Insurance Policies,
however, are not blanket policies against loss, since claims under these
policies may be made only if certain conditions are satisfied, as described
below and, if applicable, in the related prospectus supplement.

         Pool Insurance Policies do not cover losses arising out of the matters
excluded from coverage under Primary Credit Insurance Policies, FHA Insurance or
VA Guarantees or losses due to a failure to pay or denial of a claim under a
Primary Credit Insurance Policy, FHA Insurance or VA Guarantee, irrespective of
the reason for the failure.

         Pool Insurance Policies in general provide that no claim may be validly
presented under Pool Insurance Policies with respect to a residential loan
unless:

         o    an acceptable Primary Credit Insurance Policy, if the initial
              Collateral Value of the residential loan exceeded 80%, has been
              kept in force until the Collateral Value is reduced to 80%;

         o    premiums on the Primary Hazard Insurance Policy have been paid by
              the insured and real estate taxes (if applicable) and foreclosure,
              protection and preservation expenses have been advanced by or on
              behalf of the insured, as approved by the pool insurer;

         o    if there has been physical loss or damage to the residential
              property, it has been restored to its physical condition at the
              time the residential loan became insured under the Pool Insurance
              Policy, subject to reasonable wear and tear; and

         o    the insured has acquired good and merchantable title to the
              residential property, free and clear of all liens and
              encumbrances, except permitted encumbrances, including any right
              of redemption by or on behalf of the borrower, and if required by
              the pool insurer, has sold the property with the approval of the
              pool insurer.

Assuming the satisfaction of these conditions, the pool insurer typically has
the option to either

         (1) acquire the property securing the defaulted residential loan for a
payment equal to the principal balance of the loan plus accrued and unpaid
interest at its interest rate to the date of acquisition and certain expenses
described above advanced by or on behalf of the insured. This option is
conditioned on the pool insurer being provided with good and merchantable title
to the residential property, unless the property has been conveyed pursuant to
the terms of the applicable Primary Credit Insurance Policy; or

         (2) pay the amount by which the sum of the principal balance of the
defaulted residential loan and accrued and unpaid interest at its interest rate
to the date of the payment of the claim and these expenses exceeds the proceeds
received from a sale of the residential property that the pool insurer has
approved.

In both (1) and (2), the amount of payment under a Pool Insurance Policy will
generally be reduced by the amount of the loss paid under any Primary Credit
Insurance Policy.




                                      -95-



         Unless earlier directed by the pool insurer, a claim under a Pool
Insurance Policy generally must be filed

         (1) in the case when a Primary Credit Insurance Policy is in force,
within a specified number of days after the claim for loss has been settled or
paid under a Primary Credit Insurance Policy, or after acquisition by the
insured or a sale of the property approved by the pool insurer, whichever is
later; or

         (2) in the case when a Primary Credit Insurance Policy is not in force,
within a specified number of days after acquisition by the insured or a sale of
the property approved by the pool insurer.

A claim must be paid within a specified period after the claim is made by the
insured.

         The prospectus supplement relating to a series of securities will
specify whether the amount of coverage under each Pool Insurance Policy will be
reduced over the life of the securities of the 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 acquired properties. The amount of claims paid
will generally include certain expenses incurred by the master servicer as well
as accrued interest on delinquent residential loans to the date of payment of
the claim. However, holders of securities may experience a shortfall in the
amount of interest distributed in connection with the payment of claims under a
Pool Insurance Policy. This shortfall may result because the pool insurer will
be required to remit only unpaid interest through the date a claim is paid,
rather than unpaid interest through the end of the month in which the claim is
paid.

         In addition, holders of securities may experience losses in connection
with payments made under a Pool Insurance Policy to the extent that the master
servicer expends funds for the purpose of enabling it to make a claim under the
Pool Insurance Policy. These expenditures by the master servicer could include
amounts necessary to cover real estate taxes and to repair the related
residential property. The master servicer will be reimbursed for the
expenditures from amounts that otherwise would be distributed to holders of
securities, and the expenditures will not be covered by payments made under the
related Pool Insurance Policy. See "Certain Legal Aspects of Residential
Loans--Foreclosure on Mortgages" and "--Repossession with respect to
Manufactured Housing Contracts that are not Land Contracts" in this prospectus.
Accordingly, if aggregate net claims paid under a Pool Insurance Policy reach
the applicable policy limit, coverage under that Pool Insurance Policy will be
exhausted. As a result, any further losses will be borne by holders of
securities of the related series.

         If a pool insurer ceases to be a Qualified Insurer, the master servicer
will be required to use its best reasonable efforts to obtain or cause to be
obtained from another Qualified Insurer a replacement insurance policy
comparable to the Pool Insurance Policy with a total coverage equal to the then
outstanding coverage of the Pool Insurance Policy. However, the related
prospectus supplement will specify whether if the cost of the replacement policy
is greater than the cost of the Pool Insurance Policy, the coverage of the
replacement policy may be reduced to a level such that its premium rate does not
exceed the premium rate on the Pool Insurance Policy. However, if the pool
insurer ceases to be a Qualified Insurer solely because it ceases to be approved
as an insurer by Freddie Mac, Fannie Mae, or any successor entity, the master
servicer




                                      -96-



will be required to review, or cause to be reviewed, the financial condition of
the pool insurer with a view towards determining whether recoveries under the
Pool Insurance Policy are jeopardized for reasons related to the financial
condition of the pool insurer. If the master servicer determines that recoveries
are so jeopardized, it will be required to exercise its best reasonable efforts
to obtain from another Qualified Insurer a replacement policy as described
above, subject to the same cost limitation.

         Because each Pool Insurance Policy will require that the property
subject to a defaulted residential loan be restored to its original condition
prior to claiming against the pool insurer, this policy will not provide
coverage against hazard losses. As set forth under "Description of Primary
Insurance Coverage--Primary Hazard Insurance Policies" in this prospectus, the
Primary Hazard Insurance Policies covering the residential loans typically
exclude from coverage physical damage resulting from a number of causes. Even
when the damage is covered, the Primary Hazard Insurance Policies may afford
recoveries that are significantly less than full replacement cost of the losses.
Further, a special hazard insurance policy will not cover all risks, and the
coverage under this type of policy will be limited in amount. Certain hazard
risks will, as a result, be uninsured and will therefore be borne by you.


SPECIAL HAZARD INSURANCE POLICIES

         The prospectus supplement with respect to a series of securities may
specify that the master servicer will be required to obtain a special hazard
insurance policy for the series. This policy will be issued by the special
hazard insurer specified in the prospectus supplement and cover any special
hazard amount as described in the immediately succeeding paragraph. The master
servicer will be obligated to exercise its best reasonable efforts to keep or
cause to be kept a special hazard insurance policy in full force and effect,
unless coverage under the policy has been exhausted through payment of claims.
However, the master servicer will be under no obligation to maintain the policy
if a Pool Insurance Policy covering the series is no longer in effect. The
master servicer will be obligated to pay the premiums on each special hazard
insurance policy on a timely basis unless, as described in the related
prospectus supplement, payment of these premiums is otherwise provided for.

         Claims under each special hazard insurance policy will generally be
limited to:

         (1) a percentage set forth in the related prospectus supplement, which
is generally not greater than 1%, of the aggregate principal balance as of the
Cut-Off Date of the residential loans comprising the related trust fund;

         (2) twice the unpaid principal balance as of the Cut-Off Date of the
largest residential loan in the trust fund; or

         (3) the greatest aggregate principal balance of residential loans
secured by residential properties located in any one California postal zip code
area, whichever is the greatest.




                                      -97-



         As more specifically provided in the related prospectus supplement,
each special hazard insurance policy will, subject to limitations of the kind
described below, typically protect holders of securities of the related series
from:

         o    loss by reason of damage to residential properties caused by
              certain hazards, including earthquakes and mudflows, not insured
              against under the Primary Hazard Insurance Policies or a flood
              insurance policy if the property is in a federally designated
              flood area; and

         o    loss from partial damage caused by reason of the application of
              the co-insurance clause contained in the Primary Hazard Insurance
              Policies.

Special hazard insurance policies will typically not cover losses such as those
occasioned by

         o    normal wear and tear,

         o    war,

         o    civil insurrection,

         o    certain governmental actions,

         o    errors in design,

         o    faulty workmanship or materials,

         o    except under certain circumstances, nuclear or chemical reaction
              or contamination,

         o    flood, if the property is located in a federally designated flood
              area, and

         o    certain other risks.

         Subject to the foregoing limitations, each special hazard insurance
policy will typically provide that, when there has been damage to property
securing a defaulted residential loan acquired by the insured and to the extent
the damage is not covered by the related Primary Hazard Insurance Policy or
flood insurance policy, the insurer will pay the lesser of:

         (1) the cost of repair to the property; and

         (2) when transfer of the property to the insurer occurs, the unpaid
principal balance of the residential loan at the time of acquisition of the
property by foreclosure, deed in lieu of foreclosure or repossession, plus

                  (a) accrued interest at the interest rate to the date of claim
         settlement and

                  (b) certain expenses incurred by or on behalf of the master
         servicer with respect to the property.




                                      -98-



The amount of coverage under the special hazard insurance policy will be reduced
by the sum of:

                  (a) the unpaid principal balance plus accrued interest and
         certain expenses paid by the insurer, less any net proceeds realized by
         the insurer from the sale of the property, plus

                  (b) any amount paid as the cost of repair of the property.

         Typically, restoration of the property with the proceeds described
under clause (1) of the immediately preceding paragraph will satisfy the
condition under a Pool Insurance Policy that the property be restored before a
claim under this type of policy may be validly presented with respect to the
defaulted residential loan secured by the property. The payment described under
clause (2) of the immediately preceding paragraph will render unnecessary
presentation of a claim in respect of the residential loan under a Pool
Insurance Policy. Therefore, so long as the Pool Insurance Policy remains in
effect, the payment by the insurer of either of the above alternative amounts
will not affect the total Insurance Proceeds paid to holders of securities, but
will affect the relative amounts of coverage remaining under any special hazard
insurance policy and any Pool Insurance Policy.

         The special hazard insurer must typically approve the sale of a
residential property under any special hazard insurance policy. The funds
received by the insured in excess of the unpaid principal balance of the
residential loan plus interest on that balance to the date of sale, plus certain
expenses incurred by or on behalf of the master servicer with respect to the
property, not to exceed the amount actually paid by the special hazard insurer,
must be refunded to the special hazard insurer. To the extent funds are refunded
to the special hazard insurer, coverage under the special hazard insurance
policy will be restored. If aggregate claim payments under a special hazard
insurance policy reach the policy limit, coverage under the policy will be
exhausted and any further losses will be borne by the holders of securities.

         A claim under a special hazard insurance policy generally must be filed
within a specified number of days after the insured has acquired good and
merchantable title to the property, and a claim payment is generally payable
within a specified number of days after a claim is accepted by the special
hazard insurer. Special hazard insurance policies generally provide that no
claim may be paid unless

         o    Primary Hazard Insurance Policy premiums,

         o    flood insurance premiums, if the property is located in a
              federally designated flood area, and, as approved by the special
              hazard insurer,

         o    real estate property taxes, if applicable,

         o    property protection and preservation expenses, and

         o    foreclosure costs

have been paid by or on behalf of the insured, and unless the insured has
maintained the Primary Hazard Insurance Policy.





                                      -99-



         If a special hazard insurance policy is canceled or terminated for any
reason, other than the exhaustion of total policy coverage, the master servicer
will be obligated to use its best reasonable efforts to obtain or cause to be
obtained from another insurer a replacement policy comparable to the special
hazard insurance policy. The replacement policy must have total coverage that is
equal to the then existing coverage of the special hazard insurance policy.
However, if the cost of the replacement policy is greater than the cost of the
special hazard insurance policy, the coverage of the replacement policy may be
reduced to a level so that the premium rate does not exceed the premium rate on
the special hazard insurance policy as provided in the related prospectus
supplement.

         Each special hazard insurance policy is designed to permit full
recoveries under a Pool Insurance Policy in circumstances in which the
recoveries would otherwise be unavailable because property has been damaged by a
cause not insured against by a Primary Hazard Insurance Policy and thus would
not be restored. Therefore, each pooling and servicing agreement will generally
provide that, if the related Pool Insurance Policy shall have lapsed or
terminated or been exhausted through payment of claims, the master servicer will
be under no further obligation to maintain the special hazard insurance policy.


BANKRUPTCY BONDS

         The prospectus supplement with respect to a series of securities may
specify that the master servicer will be required to obtain a Bankruptcy Bond
for the series. The obligor on, and the amount of coverage of, any Bankruptcy
Bond will be set forth in the related prospectus supplement. The master servicer
will be required to exercise its best reasonable efforts to maintain or cause to
be maintained the Bankruptcy Bond in full force and effect, unless coverage
under the Bankruptcy Bond has been exhausted through payment of claims. The
master servicer will be required to pay or cause to be paid the premiums for
each Bankruptcy Bond on a timely basis, unless, as described in the related
prospectus supplement, payment of the premiums is otherwise provided for.


RESERVE FUNDS

         The related prospectus supplement may specify that the depositor will
deposit or cause to be deposited in an account any combination of cash, one or
more irrevocable letters of credit or one or more United States government
securities and other high quality investments in specified amounts, or any other
instrument satisfactory to the rating agency or agencies. These deposits will be
applied and maintained in the manner and under the conditions specified in the
prospectus supplement. In the alternative or in addition to the deposit, to the
extent described in the related prospectus supplement, a Reserve Fund may be
funded through application of a portion of the interest payment on each mortgage
loan or of all or a portion of amounts otherwise payable on the subordinate
securities. Amounts in a Reserve Fund may be distributed to holders of
securities, or applied to reimburse the master servicer for outstanding
advances, or may be used for other purposes, in the manner and to the extent
specified in the related prospectus supplement. The related prospectus
supplement may specify that any Reserve Fund will not be deemed to be part of
the related trust fund.





                                     -100-



         Amounts deposited in any Reserve Fund for a series will be invested in
certain permitted Instruments by, or at the direction of, the master servicer or
any other person named in the related prospectus supplement.


CROSS-SUPPORT PROVISIONS

         The related prospectus supplement may specify that the residential
loans for a series of securities may be divided into separate groups, each
supporting a separate class or classes of securities of a series. In addition,
credit support may be provided by cross-support provisions requiring that
distributions be made on securities evidencing interests in one group of
mortgage loans prior to distributions on securities evidencing interests in a
different group of mortgage loans within the trust fund. The prospectus
supplement relating to a series that includes a cross-support provision will
describe the manner and conditions for applying the provisions.

         The coverage provided by one or more forms of credit support may apply
concurrently to two or more related trust funds. If applicable, the related
prospectus supplement will identify the trust funds to which the credit support
relates and the manner of determining the amount of the coverage provided by the
credit support and of the application of the coverage to the identified trust
funds.


LETTER OF CREDIT

         The prospectus supplement relating to a series of securities may
specify that the residential loans in the related trust fund may be covered by
one or more letters of credit, issued by a bank or financial institution
specified in the prospectus supplement. Under a letter of credit, the issuing
bank or financial institution will be obligated to honor draws in an aggregate
fixed dollar amount, net of unreimbursed payments, equal to the percentage
specified in the related prospectus supplement of the aggregate principal
balance of the residential loans on the related Cut-Off Date or one or more
classes of securities. Any letter of credit may permit draws only if certain
types of losses occur. The amount available under the letter of credit will, in
all cases, be reduced to the extent of the unreimbursed payments under the
letter of credit.


INSURANCE POLICIES AND SURETY BONDS

         The prospectus supplement relating to a series of securities may
specify that one or more classes of securities of the series will be covered by
insurance policies and/or surety bonds provided by one or more insurance
companies or sureties. The instruments may cover timely distributions of
interest and/or full distributions of principal on the basis of a schedule of
principal distributions set forth in or determined in the manner specified in
the related prospectus supplement.


EXCESS SPREAD

         The prospectus supplement may specify that a portion of the interest
payments on residential loans may be applied to reduce the principal balance of
one or more classes of securities to provide or maintain a cushion against
losses on the residential loans.





                                     -101-



OVERCOLLATERALIZATION

         The related prospectus supplement may specify that the subordination
provisions of a trust fund may be used to accelerate to a limited extent the
amortization of one or more classes of securities relative to the amortization
of the related assets of the trust fund. The accelerated amortization is
achieved by the application of certain excess interest to the payment of
principal of one or more classes of securities. This acceleration feature
creates, with respect to the assets of the trust fund, overcollateralization
which results from the excess of the aggregate principal balance of the related
assets of the trust fund, over the principal balance of the related class or
classes of securities. This acceleration may continue for the life of the
related security, or may be limited. In the case of limited acceleration, once
the required level of overcollateralization is reached, and subject to certain
provisions specified in the related prospectus supplement, the limited
acceleration feature may cease, unless necessary to maintain the required level
of overcollateralization.


                   CERTAIN LEGAL ASPECTS OF RESIDENTIAL LOANS

         The following discussion contains general summaries of certain legal
aspects of loans secured by residential properties. Because the legal aspects
are governed by applicable state law, which 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 residential loans is situated. The summaries are qualified in their
entirety by reference to the applicable federal and state laws governing the
residential loans. In this regard, the following discussion does not fully
reflect federal regulations with respect to FHA loans and VA loans. See "The
Trust Funds--Residential Loans" and "Description of Primary Insurance
Coverage--FHA Insurance and VA Guarantees" in this prospectus.


GENERAL

  All of the residential loans are generally loans to homeowners. All of the
mortgage loans and Multifamily Loans are evidenced by notes or bonds and secured
by instruments which may be mortgages, deeds of trust, security deeds or deeds
to secure debt, depending on the type of security instrument customary to grant
a security interest in real property in the state in which the residential
property is located. The prospectus supplement relating to a series of
securities may specify that a trust fund also contains:

         (1) Home Improvement Contracts evidenced by promissory notes, which may
be secured by an interest in the related mortgaged property or may be unsecured;

         (2) Cooperative Loans evidenced by promissory notes secured by security
interests in shares issued by private, cooperative housing corporations and in
the related proprietary leases or occupancy agreements granting exclusive rights
to occupy specific dwelling units in the related buildings; or









                                     -102-



         (3) Manufactured Housing Contracts evidencing both

             o    the obligation of the borrower to repay the loan evidenced by
                  the Manufactured Housing Contract; and

             o    the grant of a security interest in the related manufactured
                  home or with respect to Land Contracts, a lien on the real
                  estate to which the related manufactured homes are deemed to
                  be affixed, and including in some cases a security interest in
                  the related manufactured home, to secure repayment of this
                  loan.

Generally, any of the foregoing types of encumbrance will create a lien on, or
grant a title interest in, the subject property. The priority of the lien will
depend on the terms of the particular security instrument, if any, the knowledge
of the parties to the instruments, as well as the order of recordation or filing
of the instrument in the appropriate public office. This lien is generally not
prior to the lien for real estate taxes and assessments and other charges
imposed under governmental police powers.


MORTGAGE LOANS

         The mortgage loans and Multifamily Loans will generally be secured by
either mortgages, deeds of trust, security deeds or deeds to secure debt
depending on the type of security instrument customary to grant a security
interest according to the prevailing practice in the state in which the property
subject to a mortgage loan or Multifamily Loan is located. Any of the foregoing
types of encumbrance creates a lien on or conveys title to the real property
encumbered by this instrument and represents the security for the repayment of
an obligation that is customarily evidenced by a promissory note. This lien is
generally not prior to the lien for real estate taxes and assessments and other
charges imposed under governmental police powers. Priority with respect to these
security instruments depends on their terms 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 usually the owner of the subject property or the land trustee, and the
mortgagee, who is the lender. Under the mortgage instrument, the mortgagor
delivers to the mortgagee a note or bond and the mortgage. However, in the case
of a land trust, title to the property is held by a land trustee under a land
trust agreement, while the owner is the beneficiary of the land trust; at
origination of a mortgage loan, the borrower executes a separate undertaking to
make payments on the mortgage note.

         Although a deed of trust is similar to a mortgage, a deed of trust
normally has three parties, the trustor, who is similar to a mortgagor and who
is the owner of the subject property and may or may not be the borrower, the
beneficiary who is similar to a mortgagee and who is the lender, and the
trustee, a third-party grantee. Under a deed of trust, the trustor grants the
property, irrevocably until the debt is paid, in trust, generally with a power
of sale, to the trustee to secure payment of the obligation. A security deed and
a deed to secure debt are special types of deeds which indicate on their face
that they are granted to secure an underlying debt. By executing a security deed
or deed to secure debt, the grantor conveys title to, as opposed to merely
creating a lien on, the subject property to the grantee until a time when the
underlying



                                     -103-



debt is repaid. The mortgagee's authority under a mortgage and the trustee's
authority under a deed of trust, security deed or deed to secure debt are
governed by

         o    the law of the state in which the real property is located,

         o    the express provisions of the mortgage, deed of trust, security
              deed or deed to secure debt, and

         o    in some cases, with respect to deeds of trust, the directions of
              the beneficiary.


COOPERATIVE LOANS

         The Cooperative owns all the real property or some interest in the real
property sufficient to permit it to own the building and all separate dwelling
units in the building. The Cooperative is directly responsible for property
management and, in most cases, payment of real estate taxes, other governmental
impositions and hazard and liability insurance. If there is a blanket mortgage
on the cooperative apartment building and/or underlying land, or an underlying
lease of the land, the Cooperative, as mortgagor, or lessee, as the case may be,
is also responsible for meeting these blanket mortgage or rental obligations. A
blanket mortgage is ordinarily incurred by the Cooperative in connection with
either the construction or purchase of the Cooperative's apartment building or
the obtaining of capital by the Cooperative. The interests of the occupants
under proprietary leases or occupancy agreements as to which the Cooperative is
the landlord are generally subordinate to the interests of the holder of the
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 its blanket mortgage, the mortgagee holding the
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 landlord's interest
under the land lease could terminate it and all subordinate proprietary leases
and occupancy agreements.

Also, a blanket mortgage on a Cooperative may provide financing in the form of a
mortgage that does not fully amortize, with a significant portion of principal
being due in one final payment at final maturity. The inability of the
Cooperative to refinance the 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. In either event, foreclosure by the holder of
the blanket mortgage or the termination of the underlying lease could eliminate
or significantly diminish the value of any collateral held by the lender that
financed the purchase by an individual tenant-stockholder of Cooperative shares
or, in the case of the trust fund, the collateral securing the Cooperative
Loans.

         The Cooperative is owned by tenant-stockholders who, through ownership
of stock, shares or membership certificates in the corporation, receive
proprietary leases or occupancy




                                     -104-



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 is financed through
a Cooperative share loan evidenced by a promissory note and secured by an
assignment of and a security interest in the occupancy agreement or proprietary
lease and in the related Cooperative shares. The lender generally takes
possession of the share certificate and a counterpart of the proprietary lease
or occupancy agreement and a financing statement covering the proprietary lease
or occupancy agreement and the Cooperative shares is filed in the appropriate
state and local offices to perfect the lender's interest in its collateral. If a
default of the tenant-stockholder occurs, the lender may generally sue for
judgment on the promissory note, dispose of the collateral at a public or
private sale or otherwise proceed against the collateral or tenant-stockholder
as an individual as provided in the security agreement covering the assignment
of the proprietary lease or occupancy agreement and the pledge of Cooperative
shares. See "--Foreclosure on Cooperative Shares" below.


TAX ASPECTS OF COOPERATIVE OWNERSHIP

         In general, a "tenant-stockholder," as defined in Section 216(b)(2) of
the Code, of 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. These amounts paid or accrued represent his
proportionate share of certain interest expenses and certain 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, this section requires, among other
things, that at least 80% of the gross income of the corporation be derived from
its tenant-stockholders. By virtue of this requirement, the status of a
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 this section for any
particular year. If a Cooperative of this type 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 this failure would be permitted to continue over a
period of years appears remote.


MANUFACTURED HOUSING CONTRACTS OTHER THAN LAND CONTRACTS

         Under the laws of most states, manufactured housing constitutes
personal property and is subject to the motor vehicle registration laws of the
state or other jurisdiction in which the unit is located. In a few states, where
certificates of title are not required for the perfection of security interests
in manufactured homes, security interests are perfected by the filing of a
financing statement under Article 9 of the UCC which has been adopted by all
states. The financing statements are effective for five years and must be
renewed at the end of each five years. The certificate of title laws adopted by
the majority of states provide that ownership of motor



                                     -105-



vehicles and manufactured housing shall be evidenced by a certificate of title
issued by the motor vehicles department, or a similar entity, of the responsible
state. In the states which have enacted certificate of title laws, a security
interest in a unit of manufactured housing, so long as it is not attached to
land in so permanent a fashion as to become a fixture, is generally perfected by
the recording of the interest on the certificate of title to the unit in the
appropriate motor vehicle registration office or by delivery of the required
documents and payment of a fee to the office, depending on state law.

         The master servicer will generally be required to obtain possession of
the certificate of title, but, the related prospectus supplement may specify if
it will not be required to effect the notation or delivery of the required
documents and fees. The failure to effect the notation or delivery, or the
taking of action under the wrong law, under a motor vehicle title statute rather
than under the UCC, is likely to cause the trustee not to have a perfected
security interest in the manufactured home securing a Manufactured Housing
Contract.

         As manufactured homes have become larger and often have been attached
to their sites without any apparent intention to move them, courts in many
states have held that manufactured homes may, under certain circumstances,
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, including a trustee in bankruptcy claiming an interest in the
home under applicable state real estate law, regardless of compliance with the
requirements described above. In order to perfect a security interest in a
manufactured home under real estate laws, the holder of the security interest
must file either a "fixture filing" under the provisions of the UCC or a real
estate mortgage under the real estate laws of the state where the home is
located. These filings must be made in the real estate records office of the
county where the home is located.

         Generally, Manufactured Housing Contracts will contain provisions
prohibiting the borrower from permanently attaching the manufactured home to its
site. So long as the borrower does not violate this agreement, a security
interest in the manufactured home will be governed by the certificate of title
laws or the UCC, and the notation of the security interest on the certificate of
title or the filing of a UCC financing statement will be effective to perfect
the security interest in the manufactured home. If, however, a manufactured home
is permanently attached to its site, other parties, including a trustee in
bankruptcy, could obtain an interest in the manufactured home which is prior to
the security interest originally retained by the seller and transferred to the
depositor.

         The depositor will assign or cause to be assigned a security interest
in the manufactured homes to the trustee, on behalf of the holders of
securities. The related prospectus supplement may specify that neither the
depositor, the master servicer nor the trustee will amend the certificates of
title to identify the trustee, on behalf of the holders of securities, as the
new secured party. Accordingly, the depositor or the Unaffiliated Seller 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, therefore, succeeds to
the depositor'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 depositor or the Unaffiliated Seller.






                                     -106-



         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 following actions should be sufficient
to protect the trustee against the rights of subsequent purchasers of a
manufactured home or subsequent lenders who take a security interest in the
manufactured home:

         o    the notation of the lien of the depositor on the certificate of
              title or delivery of the required documents and fees, or

         o    in states where a security interest in manufactured homes is
              perfected pursuant to Article 9 of the UCC, the filing of a
              financing statement, and continuation statements before the end of
              each five year period.

If there are any manufactured homes as to which the depositor has failed to
perfect or cause to be perfected the security interest assigned to the trust
fund, the security interest would be subordinate to, among others, subsequent
purchasers for value of manufactured homes, holders of perfected security
interests, and a trustee in bankruptcy. There also exists a risk in not
identifying the trustee, on behalf of the holders of securities as the new
secured party on the certificate of title that, through fraud or negligence, the
security interest of the trustee could be released.

         If 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 period until the
owner re-registers the manufactured home in the new state. If the owner were to
relocate a manufactured home to another state and re-register the manufactured
home in the other state, and if the depositor did not take steps to re-perfect
its security interest in the new 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, if the depositor holds
the certificate of title to this manufactured home, it must surrender possession
of the certificate. In the case of manufactured homes registered in states which
provide for notation of lien, the depositor would receive notice of surrender if
the security interest in the manufactured home is noted on the certificate of
title. Accordingly, the depositor could 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. Similarly, when a borrower under a manufactured housing
conditional sales contract sells a manufactured home, the lender must surrender
possession of the certificate of title or it will receive notice as a result of
its lien noted thereon. Accordingly, the lender will have an opportunity to
require satisfaction of the related manufactured housing conditional sales
contract before release of the lien. The master servicer 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, statutory liens, such as liens for
repairs performed on a manufactured home and liens for personal property taxes
take priority even over a perfected security interest. In addition, certain
liens arising as a matter of federal law, such as federal tax





                                     -107-



liens, also take priority over a perfected security interest. The depositor will
obtain the representation of the Unaffiliated Seller that it has no knowledge of
any liens with respect to any manufactured home securing a contract. However,
these types of liens could arise at any time during the term of a mortgage note
or Manufactured Housing Contract. No notice will be given to the trustee or
holders of securities if this type of a lien arises.


FORECLOSURE ON MORTGAGES

         Foreclosure of a mortgage is generally accomplished by judicial action.
Generally, the action is initiated by serving legal pleadings on all parties
having an interest of record in the real property. Delays in completion of the
foreclosure may occasionally result from difficulties in locating necessary
party defendants. When the mortgagee's right to foreclose is contested, the
legal proceedings necessary to resolve the issue can be time consuming. After
the completion of a judicial foreclosure, the court generally issues a judgment
of foreclosure and appoints a referee or other court officer to conduct the sale
of the property.

         An action to foreclose a mortgage is an action to recover the mortgage
debt by enforcing the mortgagee's rights under the mortgage in and to the
mortgaged property. It is regulated by statutes and rules and subject throughout
to the court's equitable powers. Generally, a borrower is bound by the terms of
the mortgage note and the mortgage as made and cannot be relieved from its own
default. A foreclosure action is equitable in nature and is addressed to a court
of equity. Accordingly, the court may relieve a borrower of a default and deny
the mortgagee foreclosure on proof that the borrower's default was neither
willful nor in bad faith and that the mortgagee's action was meant to establish
a waiver, or fraud, bad faith, oppressive or unconscionable conduct to warrant a
court of equity to refuse affirmative relief to the mortgagee. Under certain
circumstances a court of equity may relieve the borrower from an entirely
technical default where the default was not willful.

         A foreclosure action or sale pursuant to a power of sale is subject to
most of the delays and expenses of other lawsuits if defenses or counterclaims
are interposed, sometimes requiring up to several years to complete. Moreover, a
non-collusive, regularly conducted foreclosure sale or sale pursuant to a power
of sale may be challenged as a fraudulent conveyance, regardless of the parties'
intent. The challenge could be successful if a court determines that the sale
was for less than fair consideration and the sale occurred while the borrower
was insolvent and within one year, or within the state statute of limitations if
the trustee in bankruptcy elects to proceed under state fraudulent conveyance
law, of the filing of bankruptcy. Similarly, a suit against the debtor on the
mortgage note may take several years and, generally, is a remedy alternative to
foreclosure, the mortgagee being precluded from pursuing both at the same time.
In some states, mortgages may also be foreclosed by advertisement in accordance
with 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
nonjudicial power of sale.

         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
which authorizes the trustee to sell the property if the borrower defaulted
under the terms of the note or deed of trust. In some states, prior to the sale,
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





                                     -108-



addition, in some states the trustee must provide notice to any other individual
having an interest in the real property, including any junior lienholder. In
some states, the trustor, borrower, or any 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 to the extent allowed by applicable law. Generally, state law
controls the amount of foreclosure expenses and costs, including attorneys'
fees, which may be recovered by a lender. Certain states require that a notice
of sale must be posted in a public place and, in most states, published for a
specific period of time in a specified manner prior to the date of the trustee's
sale. In addition, some state laws require posting of a copy of the notice of
sale on the property, recording and sending the notice to all parties having an
interest in the real property. In certain states, foreclosure under a deed of
trust may also be accomplished by judicial action in the manner provided for
foreclosure of mortgages.

         In case of foreclosure under either a mortgage or a deed of trust, the
sale by the referee or other designated officer or by the trustee is generally a
public sale. It is uncommon for a third party to purchase the property at the
foreclosure sale because:

         (1) of the difficulty potential third party purchasers at the sale
might have in determining the exact status of title, and

         (2) the physical condition of the property may have deteriorated during
the foreclosure proceedings.

         In some states, potential buyers may be further unwilling to purchase a
property at a foreclosure sale as a result of the 1980 decision of the United
States Court of Appeals for the Fifth Circuit in Durrett v. Washington National
Insurance Company. The court in Durrett held that even a non-collusive,
regularly conducted foreclosure sale was a fraudulent transfer under section 67
of the former Bankruptcy Act and section 548 of the current Bankruptcy Code,
and, therefore, could be rescinded in favor of the bankrupt's estate, if:

         (1) the foreclosure sale was held while the debtor was insolvent and
not more than one year prior to the filing of the bankruptcy petition; and

         (2) the price paid for the foreclosed property did not represent "fair
consideration," which is "reasonably equivalent value" under the Bankruptcy
Code.

However, on May 23, 1994, Durrett was effectively overruled by the United States
Supreme Court in BFP v. Resolution Trust Corporation, as Receiver for Imperial
Federal Savings and Loan Association, et al., in which the Court held that
"`reasonably equivalent value', for foreclosed property, is the price in fact
received at the foreclosure sale, so long as all the requirements of the State's
foreclosure law have been complied with." The Supreme Court decision, however,
may not be controlling as to whether a non-collusive, regularly conducted
foreclosure can be avoided as a fraudulent conveyance under applicable state
law, if a court determines that the sale was for less than "fair consideration"
under applicable state law. For these reasons, it is common for the lender to
purchase the property from the trustee or referee for an amount equal to the
principal amount of the mortgage or deed of trust plus accrued and unpaid
interest and the expenses of foreclosure.





                                     -109-



         Generally, state law controls the amount of foreclosure costs and
expenses, including attorneys' and trustee's fees, which may be recovered by a
lender. In some states there is a statutory minimum purchase price which the
lender may offer for the property. Thereafter, subject to the right of the
borrower in some states to remain in possession during the redemption period,
the lender will assume ownership of the mortgaged property. The burdens of
ownership include obtaining casualty insurance, paying taxes and making repairs
at the lender's own expense as are necessary to render the property suitable for
sale. Depending on market conditions, the ultimate proceeds of the sale of the
property may not equal the lender's investment in the property. Any loss may be
reduced by the receipt of any mortgage Insurance Proceeds, if any.

         A junior mortgagee may not foreclose on the property securing a junior
mortgage unless it forecloses subject to the senior mortgages. If it does
foreclose, the junior mortgagee must either pay the entire amount due on the
senior mortgages to the senior mortgagees prior to or at the time of the
foreclosure sale or undertake the obligation to make payments on the senior
mortgages if the borrower is in default under the senior mortgage. In either
event the junior mortgagee would add the amounts expended to the balance due on
the junior loan, and it may be subrogated to the rights of the senior
mortgagees. In addition, if the foreclosure of a junior mortgage triggers the
enforcement of a "due-on-sale" clause, the junior mortgagee may be required to
pay the full amount of the senior mortgages to the senior mortgagees.
Accordingly, with respect to those mortgage loans which are junior mortgage
loans, if the lender purchases the property, the lender's title will be subject
to all senior liens and claims and certain governmental liens.

         The proceeds received by the referee or trustee from the sale are
applied first to the costs, fees and expenses of sale and then in satisfaction
of the indebtedness secured by the mortgage or deed of trust under which the
sale was conducted. Any remaining proceeds are generally payable to the holders
of junior mortgages or deeds of trust and other liens and claims in order of
their priority, whether or not the borrower is in default. Any additional
proceeds are generally payable to the borrower or trustor. The payment of the
proceeds to the holders of junior mortgages may occur in the foreclosure action
of the senior mortgagee or may require the institution of separate legal
proceedings.

         In foreclosure, courts have imposed general equitable principles. The
equitable principles are generally designed to relieve the borrower from the
legal effect of his defaults under the loan documents. Examples of judicial
remedies that have been fashioned include judicial requirements that the lender
undertake affirmative and expensive actions to determine the causes for the
borrower's default and the likelihood that the borrower will be able to
reinstate the loan. The courts have taken a number of different approaches:

         o    in some cases, courts have substituted their judgment for the
              lender's judgment and have required that lenders reinstate loans
              or recast payment schedules in order to accommodate borrowers who
              are suffering from temporary financial disability;

         o    in other cases, courts have limited the right of a lender to
              foreclose if the default under the mortgage instrument is not
              monetary, such as the borrower's failure to



                                     -110-



              adequately maintain the property or the borrower's execution
              of a second mortgage or deed of trust affecting the property;

         o    finally, some courts have been faced with the issue of whether or
              not federal or state constitutional provisions reflecting due
              process concerns for adequate notice require that borrowers under
              deeds of trust or mortgages receive notices in addition to the
              statutorily-prescribed minimums. 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.

         In addition, certain states impose a statutory lien for associated
costs on property that is the subject of a cleanup action by the state on
account of hazardous wastes or hazardous substances released or disposed of on
the property. This statutory lien may have priority over all subsequent liens on
the property and, in certain of these states, will have priority over prior
recorded liens, including the lien of a mortgage. In addition, under federal
environmental law and possibly under state law in a number of states, a secured
party that takes a deed in lieu of foreclosure or acquires a mortgaged property
at a foreclosure sale may become liable for the costs of cleaning up a
contaminated site. Although these costs could be substantial, it is unclear when
they would be imposed on a secured lender on residential properties. If title to
a residential property was acquired on behalf of holders of securities and
cleanup costs were incurred in respect of the residential property, the holders
of securities might realize a loss if these costs were required to be paid by
the related trust fund.


FORECLOSURE ON COOPERATIVE SHARES

         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. These agreements may be canceled by the Cooperative, even
while pledged, 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 on 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 this lease or agreement if the
tenant-stockholder fails to make payments or defaults in the performance of
covenants required under the related agreement. Typically, the lender and the
Cooperative enter into a recognition agreement which, together with any lender
protection provisions contained in the proprietary lease, establishes the rights
and obligations of both parties if a default by the tenant-stockholder occurs 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.





                                     -111-



         The recognition agreement generally provides that, if the
tenant-stockholder has defaulted under the proprietary lease or occupancy
agreement, the Cooperative will take no action to terminate the proprietary
lease or agreement until the lender has been provided with notice of and 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. However, the Cooperative will retain its right to sums
due under the proprietary lease or occupancy agreement or which 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 if a foreclosure occurs on a
Cooperative Loan, the lender must obtain the approval or consent of the
Cooperative as required by the proprietary lease before transferring the
Cooperative shares or assigning the proprietary lease. Generally, the lender is
not limited in any rights it may have to dispossess the tenant-stockholders.

         Foreclosure on the Cooperative shares is accomplished by a sale in
accordance with the provisions of Article 9 of the UCC and the security
agreement relating to those shares. Article 9 of the UCC requires that a sale be
conducted in a "commercially reasonable" manner. Whether a 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 similar parties
selling similar collateral will be considered reasonably conducted.

         Article 9 of the UCC provides that the proceeds of the sale will be
applied first to pay the costs and expenses of the sale and then to satisfy the
indebtedness secured by the lender's security interest. The recognition
agreement, however, generally provides that the lender's right to reimbursement
is subject to the right of the Cooperative to receive sums due under the
proprietary lease or occupancy agreement. If there are proceeds remaining, the
lender must account to the tenant-stockholder for the surplus. Conversely, if a
portion of the indebtedness remains unpaid, the tenant-stockholder is generally
responsible for the deficiency. See "--Anti-Deficiency Legislation and Other
Limitations on Lenders" below.


REPOSSESSION WITH RESPECT TO MANUFACTURED HOUSING CONTRACTS THAT ARE NOT LAND
  CONTRACTS

  Repossession of manufactured housing is governed by state law. So long as a
manufactured home has not become so attached to real estate that it would be
treated as a part of the real estate under the law of the state where it is
located, repossession of the home, if a default occurs by the borrower, will
generally be governed by the UCC. Article 9 of the UCC provides the statutory
framework for the repossession of manufactured housing. While the UCC as adopted
by the various states may vary in certain small particulars, the general
repossession procedure established by the UCC is as follows:







                                     -112-



         (1) Except in those few states where the debtor must receive notice of
his right to cure his default -typically 30 days to bring the account
current-repossession can commence immediately when a default occurs without
prior notice. Repossession may be effected either through self-help, which is
the peaceable retaking without court order, voluntary repossession or through
judicial process, which is the repossession pursuant to court-issued writ of
replevin. The self-help and/or voluntary repossession methods are more commonly
employed, and are accomplished simply by retaking possession of the manufactured
home. In cases where the debtor objects or raises a defense to repossession, a
court order must be obtained from the appropriate state court, and the
manufactured home must then be repossessed in accordance with that order.
Whether the method employed is self-help, voluntary repossession or judicial
repossession, the repossession can be accomplished either by an actual physical
removal of the manufactured home to a secure location for refurbishment and
resale or by removing the occupants and their belongings from the manufactured
home and maintaining possession of the manufactured home on the location where
the occupants were residing. Various factors may affect whether the manufactured
home is physically removed or left on location, such as the nature and term of
the lease of the site on which it is located and the condition of the unit. In
many cases, leaving the manufactured home on location is preferable, if the home
is already set up, because the expenses of retaking and redelivery will be
saved. However, in those cases where the home is left on location, expenses for
site rentals will usually be incurred.

         (2) Once repossession has been achieved, preparation for the subsequent
disposition of the manufactured home can commence. The disposition may be by
public or private sale, if notice to the debtor is given, and the method,
manner, time, place and terms of the sale must be commercially reasonable. The
UCC and consumer protection laws in most states place restrictions on
repossession sales, including requiring prior notice to the debtor.

         (3) Sale proceeds are to be applied first to repossession expenses--
expenses incurred in retaking, storage, preparing for sale to include
refurbishing costs and selling-- and then to satisfaction of the indebtedness.
While some states impose prohibitions or limitations on deficiency judgments if
the net proceeds from resale do not cover the full amount of the indebtedness,
the deficiency may be sought from the debtor in the form of a deficiency
judgment in those states which do not prohibit or limit judgments. The
deficiency judgment is a personal judgment against the debtor for the shortfall.
Occasionally, after resale of a manufactured home and payment of all expenses
and indebtedness, there is a surplus of funds. In that case, the UCC requires
the party suing for the deficiency judgment to remit the surplus to the debtor.
Because the defaulting owner of a manufactured home generally has very little
capital or income available following repossession, a deficiency judgment may
not be sought in many cases or, if obtained, will be settled at a significant
discount in light of the defaulting owner's strained financial condition.


RIGHTS OF REDEMPTION WITH RESPECT TO RESIDENTIAL PROPERTIES

         The purposes of a foreclosure action are to enable the mortgagee to
realize on its security and to bar the borrower, and all persons who have an
interest in the property which is subordinate to the foreclosing mortgagee, from
exercising their "equity of redemption." The doctrine of equity of redemption
provides that, until the property covered by a mortgage has been sold in
accordance with a properly conducted foreclosure and foreclosure sale, parties
having an




                                     -113-



interest which is subordinate to that of the foreclosing mortgagee may redeem
the property by paying the entire debt with interest. In addition, in some
states, when a foreclosure action has been commenced, the redeeming party must
pay certain costs of the foreclosure action. Parties having an equity of
redemption must generally be made parties and duly summoned to the foreclosure
action in order for their equity of redemption to be barred.

         Equity of redemption which is a non-statutory right that must be
exercised prior to foreclosure sale, should be distinguished from statutory
rights of redemption. In some states, after sale pursuant to a deed of trust or
foreclosure of a mortgage, the trustor or borrower and certain foreclosed junior
lienors are given a statutory period in which to redeem the property from the
foreclosure sale. In some states, redemption may occur only after payment of the
foreclosure sales price, accrued interest and expenses of foreclosure. In other
states, redemption may be authorized if the former borrower pays only a portion
of the sums due. The effect of a statutory right of redemption is to diminish
the ability of the lender to sell the foreclosed property. The exercise of a
right of redemption would defeat the title of any purchaser subsequent to
foreclosure or sale under a deed of trust. Consequently, the practical effect of
a right of redemption is to force the lender to retain the property and pay the
expenses of ownership and maintenance of the property until the redemption
period has expired. In some states, there is no right to redeem property after a
trustee's sale under a deed of trust.


NOTICE OF SALE; REDEMPTION RIGHTS WITH RESPECT TO MANUFACTURED HOMES

         While state laws do not usually require notice to be given debtors
prior to repossession, many states do require delivery of a notice of default
and of the debtor's right to cure defaults before repossession. The law in most
states also requires that the debtor be given notice of sale prior to the resale
of the home so that the owner may redeem at or before resale. In addition, the
sale must comply with the requirements, including the notice requirements, of
the UCC.


ANTI-DEFICIENCY LEGISLATION, BANKRUPTCY LAWS AND OTHER LIMITATIONS ON LENDERS

         States have taken a number of approaches to anti-deficiency and related
legislation:

         o    Certain states have imposed statutory prohibitions which limit the
              remedies of a beneficiary under a deed of trust or a mortgagee
              under a mortgage.

         o    In some states, statutes limit the right of the beneficiary or
              mortgagee to obtain a deficiency judgment against the borrower
              following foreclosure or sale under a deed of trust. A deficiency
              judgment is a personal judgment against the former borrower equal
              in most cases to the difference between the net amount realized
              from the public sale of the real property and the amount due to
              the lender.

         o    Other statutes require the beneficiary or mortgagee to exhaust the
              security afforded under a deed of trust or mortgage by foreclosure
              in an attempt to satisfy the full debt before bringing a personal
              action against the borrower.

         o    In certain other states, the lender has the option of bringing a
              personal action against the borrower on the debt without first
              exhausting its security. However in some of



                                     -114-



              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, in those states permitting election, is that
              lenders will usually proceed against the security first rather
              than bringing a personal action against the borrower.

         o    Finally, other statutory provisions limit any deficiency judgment
              against the former borrower following a judicial sale to the
              excess of the outstanding debt over the fair market value of the
              property at the time of the public sale. The purpose of these
              statutes is generally to prevent a beneficiary or a mortgagee from
              obtaining a large deficiency judgment against the former borrower
              as a result of low or no bids at the judicial sale.

         In addition to anti-deficiency and related legislation, numerous other
federal and state statutory provisions, including the Bankruptcy Code and state
laws affording relief to debtors, may interfere with or affect the ability of a
secured mortgage lender to obtain payment of a mortgage loan, to realize on
collateral and/or enforce a deficiency judgment. For example, under the
Bankruptcy Code, virtually all actions, including foreclosure actions and
deficiency judgment proceedings, are automatically stayed when a bankruptcy
petition is filed, and, usually, no interest or principal payments are made
during the course of the bankruptcy case. Foreclosure of an interest in real
property of a debtor in a case under the Bankruptcy Code can typically occur
only if the bankruptcy court vacates the stay; an action the bankruptcy court
may be reluctant to take, particularly if the debtor has the prospect of
restructuring his or her debts and the mortgage collateral is not deteriorating
in value. The delay and the consequences caused by the automatic stay can be
significant. Also, under the Bankruptcy Code, the filing of a petition in
bankruptcy by or on behalf of a subordinate lender secured by a mortgage on the
property may stay the senior lender from taking action to foreclose out the
junior lien.

         A homeowner may file for relief under the Bankruptcy Code under any of
three different chapters of the Bankruptcy Code. Under Chapter 7, the assets of
the debtor are liquidated and a lender secured by a lien may "bid in," i.e., bid
up to the amount of the debt, at the sale of the asset. See "--Foreclosure on
Mortgages" above. A homeowner may also file for relief under Chapter 11 of the
Bankruptcy Code and reorganize his or her debts through his or her
reorganization plan. Alternatively, a homeowner may file for relief under
Chapter 13 of the Bankruptcy Code and address his or her debts in a
rehabilitation plan. Chapter 13 is often referred to as the "wage earner
chapter" or "consumer chapter" because most individuals seeking to restructure
their debts file for relief under Chapter 13 rather than under Chapter 11.

         A reorganization plan under Chapter 11 and a rehabilitation plan under
Chapter 13 of the Bankruptcy Code may each allow a debtor to cure a default with
respect to a mortgage loan on the debtor's residence by paying arrearages within
a reasonable time period and to deaccelerate and reinstate the original mortgage
loan payment schedule. This cure is allowed even though the lender accelerated
the loan and a final judgment of foreclosure had been entered in state court
provided no sale of the property had yet occurred, prior to the filing of the
debtor's petition under the Bankruptcy Code. Courts have approved Chapter 11
plans that have allowed curing of defaults over a number of years. In certain
circumstances, defaults may be cured over a number of years even if the full
amount due under the original loan is never repaid, even if the mortgagee





                                     -115-



objects. Under a Chapter 13 plan, curing of defaults must be accomplished within
the five year maximum term permitted for repayment plans.

         Generally, a repayment plan filed in a case under Chapter 13 may not
modify the claim of a mortgage lender if the borrower elects to retain the
property, the property is the borrower's principal residence and the property is
the lender's only collateral. If the last payment on the original payment
schedule of a mortgage loan secured only by the debtor's principal residence is
due before the final date for payment under a debtor's Chapter 13 plan --which
date could be up to five years after the debtor emerges from bankruptcy--under a
case recently decided by an intermediate appellate court, the debtor's
rehabilitation plan could modify the terms of the loan by bifurcating an
undersecured lender's claim into a secured and an unsecured component in the
same manner as if the debtor were a debtor in a case under Chapter 11. While
this decision is contrary to a prior decision of a more senior appellate court
in another jurisdiction, it is possible that the intermediate court's decision
will become the accepted interpretation in view of the language of the
applicable statutory provision. If this interpretation is adopted by a court
considering the treatment in a Chapter 13 repayment plan of a home equity loan,
the home equity loan could be restructured as if the bankruptcy case were under
Chapter 11 if the final payment is due within five years of the debtor's
emergence from bankruptcy.

         In a case under Chapter 11, provided certain substantive and procedural
safeguards are met, the amount and terms of a mortgage loan secured by property
of the debtor, including the debtor's principal residence, may be modified.
Under the Bankruptcy Code, the outstanding amount of a loan secured by the real
property may be reduced to the then-current value of the property as determined
by the court, with a corresponding partial reduction of the amount of the
lender's security interest, if the value is less than the amount due on the
loan. This reduction will leave the lender a general unsecured creditor for the
difference between the value of the collateral and the outstanding balance of
the loan. A borrower's unsecured indebtedness will typically be discharged in
full when payment of a substantially reduced amount is made.

         Other modifications may include a reduction in the amount of each
scheduled payment, and/or an extension or reduction of the final maturity date.
State statutes and general principles of equity may also provide a borrower with
means to halt a foreclosure proceeding or sale and to force a restructuring of a
mortgage loan on terms a lender would not otherwise accept. Because many of the
mortgage loans will have loan-to-value ratios in excess of 100% at origination,
or the loan-to-value ratios otherwise may exceed 100% in cases where the market
value declined subsequent to origination, a potentially significant portion of
the unpaid principal amount of the related mortgage loan would likely be treated
as unsecured indebtedness in a case under Chapter 11.

         In a bankruptcy or similar proceeding of a borrower, action may be
taken seeking the recovery, as a preferential transfer or on other grounds, of
any payments made by the borrower under the related mortgage loan. Payments on
long-term debt may be protected from recovery as preferences if they are
payments in the ordinary course of business made on debts incurred in the
ordinary course of business or if the value of the collateral exceeds the debt
on the date the case is commenced if within the applicable preference period.
Whether any particular payment would be protected depends on the facts specific
to a particular transaction.




                                     -116-



         A trustee in bankruptcy, in some cases, may be entitled to collect its
costs and expenses in preserving or selling the mortgaged property ahead of
payment to the lender. In certain circumstances, subject to the court's
approval, a debtor in a case under Chapter 11 of the Bankruptcy Code may have
the power to grant liens senior to the lien of a mortgage. Moreover, the laws of
certain states also give priority to certain tax and mechanics liens over the
lien of a mortgage. Under the Bankruptcy Code, if the court finds that actions
of the mortgagee have been unreasonable and inequitable, the lien of the related
mortgage may be subordinated to the claims of unsecured creditors.

         Various proposals to amend the Bankruptcy Code in ways that could
adversely affect the value of the mortgage loans have been considered by
Congress, and more proposed legislation may be considered in the future. No
assurance can be given that any particular proposal will or will not be enacted
into law, or that any provision so enacted will not differ materially from the
proposals described above.

         The Code provides priority to certain tax liens over the lien of the
mortgage. This may have the effect of delaying or interfering with the
enforcement of rights in respect of a defaulted mortgage loan.


CONSUMER COMPLIANCE LAWS AND REGULATIONS

         In addition, substantive requirements are imposed upon lenders in
connection with the origination and the servicing of mortgage loans by numerous
federal and some state consumer protection laws. These laws include the federal
Truth-in-Lending Act, or TILA, as implemented by Regulation Z, Real Estate
Settlement Procedures Act, as implemented by Regulation X, Equal Credit
Opportunity Act, as implemented by Regulation B, Fair Credit Billing Act, Fair
Credit Reporting Act and related statutes. These federal laws impose specific
statutory liabilities upon lenders who originate mortgage loans and who fail to
comply with the provisions of the law. In some cases, this liability may affect
assignees of the mortgage loans. In particular, an originator's failure to
comply with certain requirements of the federal TILA, as implemented by
Regulation Z, could subject both originators and assignees of such obligations
to monetary penalties and could result in obligors' rescinding the mortgage
loans either against the originators or assignees.


HOMEOWNERSHIP ACT AND SIMILAR STATE LAWS

         Some of the mortgage loans, known as High Cost Loans, may be subject to
the Home Ownership and Equity Protection Act of 1994, or Homeownership Act,
which amended TILA to provide new requirements applicable to loans that exceed
certain interest rates and/or points and fees thresholds. Purchasers or
assignees of any High Cost Loan, including any trust, could be liable under
federal law for all claims and subject to all defenses that the borrower could
assert against the originator of the High Cost Loan. Remedies available to the
borrower include monetary penalties, as well as rescission rights if the
appropriate disclosures were not given as required. The maximum damages that may
be recovered under these provisions from an assignee, including the trust, is
the remaining amount of indebtedness plus the total amount paid by the borrower
in connection with the mortgage loan.




                                     -117-



         In addition to the Homeownership Act, a number of legislative proposals
have been introduced at both the federal and state level that are designed to
discourage predatory lending practices. Some states have enacted, and other
states or local governments may enact, laws that impose requirements and
restrictions greater than those in the Homeownership Act. These laws prohibit
inclusion of some provisions in mortgage loans that have interest rates or
origination costs in excess of prescribed levels, and require that borrowers be
given certain disclosures prior to the consummation of the mortgage loans.
Purchasers or assignees of a mortgage loan, including the related trust, could
be exposed to all claims and defenses that the mortgagor could assert against
the originator of the mortgage loan for a violation of state law. Claims and
defenses available to the borrower could include monetary penalties, rescission
and defenses to a foreclosure action or an action to collect.

         Some of the mortgage loans in a mortgage pool that were originated
between October 1, 2002 and March 6, 2003 may be "home loans" and also may be
"covered home loans" under the Georgia Fair Lending Act, or Georgia Act. The
Georgia Act applies to any mortgage loan that is secured by a property located
in the State of Georgia that is the mortgagor's principal residence and has a
principal amount not in excess of the conforming loan balance limit established
by Fannie Mae. These loans are referred to under the Georgia Act as "home
loans." Certain home loans, which are referred to as "covered home loans," have
met certain fee and finance-charge criteria. Certain covered home loans, which
are referred to as "Georgia high-cost home loans," have met higher limits
regarding fees and finance charges. The Georgia Act prohibits certain activities
and charges in connection with home loans. Additional prohibitions apply to
covered home loans and further prohibitions apply to Georgia high-cost home
loans. Except in the case of a transaction in which the mortgage loans are
provided by an unaffiliated seller or unless otherwise specified in the
accompanying prospectus supplement, the Depositor will represent and warrant
that all of the mortgage loans in the mortgage pool complied in all materials
respects with all applicable local, state and federal laws at the time of
origination.

         Purchasers or assignees of a Georgia high-cost home loan, including the
related trust, could be exposed to all claims and defenses that the mortgagor
could assert against the originator of the home loan. Purchasers or assignees of
a covered home loan, including the related trust, could be subject to defenses
to foreclosure or an action to collect or to counterclaims by a mortgagor if the
loan is in violation of the Georgia Act. Remedies available to a mortgagor
include actual, statutory and punitive damages, costs and attorneys' fees,
rescission rights and other, unspecified equitable remedies. No maximum penalty
has been set with respect to violations of the Georgia Act, and courts have been
given discretion under the statute to fashion equitable remedies as they deem
appropriate.

         With respect to loans originated during the period between October 1,
2002 and March 6, 2003, there are some uncertainties in making a determination
as to whether a particular Georgia loan is a covered home loan or a Georgia
high-cost home loan, and in determining whether a loan complies with all of the
provisions of the Georgia Act. Although the Depositor will be obligated to
repurchase any mortgage loan as to which a breach of its representation and
warranty has occurred if that breach is material and adverse to the interests of
the certificateholders, the repurchase price of those mortgage loans could be
less than the damages and/or equitable remedies imposed pursuant to the Georgia
Act.





                                     -118-



         The Georgia Act was amended on March 7, 2003. Mortgage loans originated
on or after that date are subject to a less stringent version of the Georgia
Act.

         Lawsuits have been brought in various states making claims against
assignees of High Cost Loans for violations of federal and state law allegedly
committed by the originator. Named defendants in these cases include numerous
Participants within the secondary mortgage market, including some securitization
trusts.

         FOR COOPERATIVE LOANS. Generally, Article 9 of the UCC governs
foreclosure on Cooperative shares and the related proprietary lease or occupancy
agreement. Some courts have interpreted section 9-504 of the UCC to prohibit a
deficiency award unless the creditor establishes that the sale of the
collateral, which, in the case of a Cooperative Loan, would be the shares of the
Cooperative and the related proprietary lease or occupancy agreement, was
conducted in a commercially reasonable manner.


JUNIOR MORTGAGES

         Some of the mortgage loans, Multifamily Loans and Home Improvement
Contracts may be secured by junior mortgages or deeds of trust, which are junior
to senior mortgages or deeds of trust which are not part of the trust fund. The
rights of the holders of securities as the holders of a junior deed of trust or
a junior mortgage are subordinate in lien priority and in payment priority to
those of the holder of the senior mortgage or deed of trust. These rights
include the prior rights of the senior mortgagee or beneficiary to receive and
apply hazard insurance and condemnation proceeds and, if the borrower defaults,
to cause a foreclosure on the property. When the foreclosure proceedings are
completed by the holder of the senior mortgage or the sale pursuant to the deed
of trust, the junior mortgagee's or junior beneficiary's lien will be
extinguished unless the junior lienholder satisfies the defaulted senior loan or
asserts its subordinate interest in a property in foreclosure proceedings. See
"-- Foreclosure" in this prospectus.

         Furthermore, the terms of the junior mortgage or deed of trust are
subordinate to the terms of the senior mortgage or deed of trust. If a conflict
exists between the terms of the senior mortgage or deed of trust and the junior
mortgage or deed of trust, the terms of the senior mortgage or deed of trust
will govern generally. If the borrower or trustor fails to perform any of its
obligations, the senior mortgagee or beneficiary, subject to the terms of the
senior mortgage or deed of trust, may have the right to perform the obligation
itself. Generally, all sums so expended by the mortgagee or beneficiary become
part of the indebtedness secured by the mortgage or deed of trust. To the extent
a senior mortgagee makes these expenditures, the expenditures will generally
have priority over all sums due under the junior mortgage.


CONSUMER PROTECTION LAWS

         Numerous federal consumer protection laws impose substantial
requirements on creditors involved in consumer finance. These laws include

         o    the federal Truth-in-Lending Act and Regulation Z,

         o    Real Estate Settlement Procedures Act and Regulation X,




                                     -119-



         o    Equal Credit Opportunity Act and Regulation B,

         o    Fair Credit Billing Act,

         o    Fair Credit Reporting Act,

         o    Fair Housing Act, Housing and Community Development Act,

         o    Home Mortgage Disclosure Act,

         o    Federal Trade Commission Act,

         o    Fair Debt Collection Practices Act,

         o    Uniform Consumer Credit Code,

         o    Consumer Credit Protection Act,

         o    Riegle Act, and

         o    related statutes and regulations.

         In addition state consumer protection laws also impose substantial
requirements on creditors involved in consumer finance. The applicable state
laws generally regulate:

         o    the disclosures required to be made to borrowers,

         o    licensing of originators of residential loans,

         o    debt collection practices,

         o    origination practices, and

         o    servicing practices.

         These federal and state laws can impose specific statutory liabilities
on creditors who fail to comply with their provisions and may affect the
enforceability of a residential loan. In particular, a violation of these
consumer protection laws may:

         o    limit the ability of the master servicer to collect all or part of
              the principal of or interest on the loan,

         o    subject the trust, as an assignee of the loans, to liability for
              expenses, damages and monetary penalties resulting from the
              violation,

         o    subject the trust to an administrative enforcement action,

         o    provide the borrower with the right to rescind the loan, and






                                     -120-



         o    provide the borrower with set-off rights against the trust.

         Residential loans often contain provisions obligating the borrower to
pay late charges if payments are not timely made. In certain cases, federal and
state law may specifically limit the amount of late charges that may be
collected. The related prospectus supplement may specify that late charges will
be retained by the master servicer as additional servicing compensation, and any
inability to collect these amounts will not affect payments to holders of
securities.

         Courts have imposed general equitable principles upon repossession and
litigation involving deficiency balances. These equitable principles are
generally designed to relieve a consumer from the legal consequences of a
default.

         In several cases, consumers have asserted that the remedies provided
secured parties under the UCC and related laws violate the due process
protections provided under the 14th Amendment to the Constitution of the United
States. For the most part, courts have upheld the notice provisions of the UCC
and related laws as reasonable or have found that the repossession and resale by
the creditor does not involve sufficient state action to afford constitutional
protection to consumers.

         The so-called "Holder-in-Due-Course" Rules of the Federal Trade
Commission have the effect of subjecting a seller, and certain related creditors
and their assignees in a consumer credit transaction and any assignee of the
creditor to all claims and defenses which the debtor in the transaction could
assert against the seller of the goods. Liability under the Holder-in-Due-Course
Rules is subject to any applicable limitations implied by the Riegle Act and is
limited to the amounts paid by a debtor on the residential loan, and the holder
of the residential loan may also be unable to collect amounts still due under
those rules.

         If a residential loan is subject to the requirements of the
Holder-in-Due-Course-Rules, the trustee will be subject to any claims or
defenses that the debtor may assert against the seller.


ENFORCEABILITY OF CERTAIN PROVISIONS

         Generally, residential loans, except for FHA loans and VA loans,
contain due-on-sale clauses. These clauses permit the lender to accelerate the
maturity of the loan if the borrower sells, transfers, or conveys the property
without the prior consent of the mortgagee. The enforceability of these clauses
has been impaired in various ways in certain states by statute or decisional
law. The ability of mortgage lenders and their assignees and transferees to
enforce due-on-sale clauses was addressed by the Garn-St. Germain Depository
Institutions Act of 1982 which was enacted on October 15, 1982. Section 341(b)
of the Garn-St. Germain Act permits a lender, subject to certain conditions, to
"enter into or enforce a contract containing a due-on-sale clause with respect
to a real property loan," notwithstanding any contrary state law. The Garn-St.
Germain Act gave states that previously had enacted "due-on-sale" restrictions a
three-year window to reenact the previous restrictions or enact new
restrictions. Only six states acted within this window period: Arizona, Florida,
Michigan, Minnesota, New Mexico and Utah. Consequently, due-on-sale provisions
in documents governed by the law of those states are not preempted by federal
law.



                                     -121-



         The Garn-St. Germain Act also sets forth nine specific instances in
which a mortgage lender covered by the Garn-St. Germain Act, including federal
savings and loan associations and federal savings banks, may not exercise a
due-on-sale clause, regardless of the fact that a transfer of the property may
have occurred. These include intra-family transfers, certain transfers by
operation of law, leases of fewer than three years, the creation of a junior
encumbrance and other instances where regulations promulgated by the Director of
the Office of Thrift Supervision, successor to the Federal Home Loan Bank Board,
prohibit the enforcement of due-on-sale clauses. To date none of these
regulations have been issued. Regulations promulgated under the Garn-St. Germain
Act prohibit the imposition of a prepayment penalty if a loan is accelerated
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. As a result, this inability to
enforce due-on-sale clauses may have an impact on the average life of the
mortgage loans related to a series and the number of those mortgage loans which
may be outstanding until maturity.

         TRANSFER OF MANUFACTURED HOMES. Generally, Manufactured Housing
Contracts contain provisions prohibiting the sale or transfer of the related
manufactured homes without the consent of the lender on the contract and
permitting the acceleration of the maturity of the related contracts by the
lender on the contract if any sale or transfer occurs that is not consented to.
The related prospectus supplement may specify that the master servicer will, to
the extent it has knowledge of this conveyance or proposed conveyance, exercise
or cause to be exercised its rights to accelerate the maturity of the related
Manufacturing Housing Contracts through enforcement of "due-on-sale" clauses,
subject to applicable state law. In certain cases, the transfer may be made by a
delinquent borrower in order to avoid a repossession proceeding with respect to
a manufactured home.

         In the case of a transfer of a manufactured home as to which the master
servicer desires to accelerate the maturity of the related Manufactured Housing
Contract, the master servicer'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 certain exceptions and conditions, state laws
prohibiting enforcement of "due-on-sale" clauses applicable to the manufactured
homes. Consequently, some states may prohibit the master servicer from enforcing
a "due-on-sale" clause in respect of certain manufactured homes.


PREPAYMENT CHARGES AND PREPAYMENTS

         Generally, conventional mortgage loans, Cooperative Loans, Home
Improvement Contracts and Manufactured Housing Contracts, residential owner
occupied FHA loans and VA loans may be prepaid in full or in part without
penalty. Generally, multifamily residential loans, including multifamily FHA
loans, may contain provisions limiting prepayments on these loans, including:

         o    prohibiting prepayment for a specified period after origination,

         o    prohibiting partial prepayments entirely, or




                                     -122-



         o    requiring the payment of a prepayment penalty if a prepayment in
              full or in part occurs.

         The laws of certain states may:

         o    render prepayment fees unenforceable after a mortgage loan is
              outstanding for a certain number of years, or

         o    limit the amount of any prepayment fee to a specified percentage
              of the original principal amount of the mortgage loan, to a
              specified percentage of the outstanding principal balance of a
              mortgage loan, or to a fixed number of months' interest on the
              prepaid amount.

In certain states, prepayment fees payable on default or other involuntary
acceleration of a residential loan may not be enforceable against the related
borrower. Some state statutory provisions may also treat certain prepayment fees
as usurious if in excess of statutory limits.

         Some state laws restrict the imposition of prepayment charges and late
fees even when the loans expressly provide for the collection of those charges.
Although the Alternative Mortgage Transaction Parity Act 1982, or the Parity
Act, permits the collection of prepayment charges and late fees in connection
with some types of eligible loans preempting any contrary state law
prohibitions, some states may not recognize the preemptive authority of the
Parity Act or have formally opted of the Parity Act. As a result, it is possible
that prepayment charges and late fees may not be collected even on loans that
provide for the payment of those charges unless otherwise specified in the
accompanying prospectus supplement. The master servicer or another entity
identified in the accompanying prospectus supplement will be entitled to all
prepayment charges and late payment charges received on the loans and these
amounts will not be available for payment on the certificates. Effective July 1,
2003, the Office of Thrift Supervision ("OTS"), the agency that administers the
Parity Act for unregulated housing creditors, has withdrawn its favorable Parity
Act regulations and Chief Counsel Opinions that have authorized lenders to
charge prepayment charges and late fees in certain circumstances notwithstanding
contrary state law. However, the OTS's ruling does not have retroactive effect
on loans originated before July 1, 2003.


SUBORDINATE FINANCING

         When the borrower encumbers mortgaged property with one or more junior
liens, the senior lender is subjected to additional risk. First, the borrower
may have difficulty servicing and repaying multiple loans. In addition, if the
junior loan permits recourse to the borrower - as junior loans often do - and
the senior loan does not, a borrower may be more likely to repay sums due on the
junior loan than those on the senior loan. Second, acts of the senior lender
that prejudice the junior lender or impair the junior lender's security may
create a superior equity in favor of the junior lender. For example, if the
borrower and the senior lender agree to an increase in the principal amount of
or the interest rate payable on the senior loan, the senior lender may lose its
priority to the extent an existing junior lender is harmed or the borrower is
additionally burdened. Third, if the borrower defaults on the senior loan and/or
any junior loan or loans, the existence of junior loans and actions taken by
junior lenders can impair the security available to







                                     -123-



the senior lender and can interfere with or delay the taking of action by the
senior lender. Moreover, the bankruptcy of a junior lender may operate to stay
foreclosure or similar proceedings by the senior lender.


APPLICABILITY OF USURY LAWS

         Title V of the Depository Institutions Deregulation and Monetary
Control Act of 1980, enacted in March 1980, provides that state usury
limitations shall not apply to certain types of residential first mortgage loans
originated by certain lenders after March 31, 1980. A similar federal statute
was in effect with respect to mortgage loans made during the first three months
of 1980. The statute authorized any state to reimpose interest rate limits by
adopting, before April 1, 1983, a law or constitutional provision which
expressly rejects application of the federal law. In addition, even where Title
V is not so rejected, any state is authorized by the law to adopt a provision
limiting discount points or other charges on mortgage loans covered by Title V.
Certain states have taken action to reimpose interest rate limits and/or to
limit discount points or other charges.

         The depositor believes that a court interpreting Title V would hold
that mortgage loans related to a series originated on or after January 1, 1980
are subject to federal preemption. Therefore, in a state that has not taken the
requisite action to reject application of Title V or to adopt a provision
limiting discount points or other charges prior to origination of the mortgage
loans, any limitation under the state's usury law would not apply to the
mortgage loans.

         In any state in which application of Title V has been expressly
rejected or a provision limiting discount points or other charges is adopted, no
mortgage loans originated after the date of this state action will be eligible
for inclusion in a trust fund if the mortgage loans bear interest or provide for
discount points or charges in excess of permitted levels. No mortgage loan
originated prior to January 1, 1980 will bear interest or provide for discount
points or charges in excess of permitted levels.


ALTERNATIVE MORTGAGE INSTRUMENTS

  Adjustable rate mortgage loans originated by non-federally chartered lenders
have historically been subject to a variety of restrictions. These restrictions
differed from state to state, resulting in difficulties in determining whether a
particular alternative mortgage instrument originated by a state-chartered
lender complied with applicable law. These difficulties were simplified
substantially as a result of the enactment of Title VIII of the Garn-St. Germain
Act. Title VIII of the Garn-St. Germain Act which provides that, regardless of
any state law to the contrary,

         (1) state-chartered banks may originate "alternative mortgage
instruments," including adjustable rate mortgage loans, in accordance with
regulations promulgated by the Comptroller of the Currency with respect to
origination of alternative mortgage instruments by national banks;

         (2) state-chartered credit unions may originate alternative mortgage
instruments in accordance with regulations promulgated by the National Credit
Union Administration with respect to origination of alternative mortgage
instruments by federal credit unions; and



                                     -124-



         (3) all other non-federally chartered housing creditors, including
without limitation

               o    state-chartered savings and loan associations,

               o    savings banks and mutual savings banks and

               o    mortgage banking companies

may originate alternative mortgage instruments in accordance with the
regulations promulgated by the Federal Home Loan Bank Board, predecessor to the
Office of Thrift Supervision, with respect to origination of alternative
mortgage instruments by federal savings and loan associations.

         Title VIII of the Garn-St. Germain Act further provides that a state
does not need to apply the provisions of Title VIII by adopting, prior to
October 15, 1985, a law or constitutional provision expressly rejecting the
applicability of these provisions. Certain states have done this.


ENVIRONMENTAL LEGISLATION

         Under the federal Comprehensive Environmental Response, Compensation,
and Liability Act, as amended, and under state law in certain states, a secured
party which takes a deed-in-lieu of foreclosure, purchases a mortgaged property
at a foreclosure sale, or operates a mortgaged property may become liable in
certain circumstances for the costs of cleaning up hazardous substances
regardless of whether the secured party contaminated the property. CERCLA
imposes strict, as well as joint and several, liability on several classes of
potentially responsible parties, including current owners and operators of the
property who did not cause or contribute to the contamination. Furthermore,
liability under CERCLA is not limited to the original or unamortized principal
balance of a loan or to the value of the property securing a loan. Lenders may
be held liable under CERCLA as owners or operators unless they qualify for the
secured creditor exemption to CERCLA. This exemption exempts from the definition
of owners and operators those who, without participating in the management of a
facility, hold indicia of ownership primarily to protect a security interest in
the facility.

         Recent amendments to CERCLA help clarify the actions that may be
undertaken by a lender holding security in a contaminated facility without
exceeding the bounds of the secured creditor exemption. The amendments offer
protection to lenders by defining certain activities in which a lender can
engage and still have the benefit of the secured creditor exemption. A lender
will be deemed to have participated in the management of a mortgaged property,
and will lose the secured creditor exemption, if it actually participates in the
management or operational affairs of the property of the borrower. The
amendments provide that "merely having the capacity to influence, or the
unexercised right to control" operations does not constitute participation in
management. A lender will lose the protection of the secured creditor exemption
if it exercises decision-making control over the borrower's environmental
compliance or hazardous substance handling and disposal practices, or assumes
management of substantially all operational functions of the mortgaged property.
The amendments also provide that a lender may continue to have the benefit of
the secured creditor exemption even if it forecloses on a mortgaged property,
purchases it at a foreclosure sale, or accepts a deed-in-lieu of foreclosure




                                     -125-



provided that the lender seeks to sell the mortgaged property at the earliest
practicable commercially reasonable time on commercially reasonable terms.
However, the protections afforded lenders under the amendments are subject to
conditions that have not been clarified by the courts.

         Other federal and state laws in certain circumstances may impose
liability on a secured party which takes a deed-in-lieu of foreclosure,
purchases a mortgaged property at a foreclosure sale, or operates a mortgaged
property on which contaminants or other substances are present, including
petroleum, agricultural chemicals, hazardous wastes, asbestos, radon, and
lead-based paint. The cleanup costs or other liabilities may be substantial. It
is possible that the costs could become a liability of a trust fund and reduce
the amounts otherwise distributable to the holders of the related series of
securities. Moreover, certain federal statutes and certain states by statute
impose an environmental lien for any cleanup costs incurred by the government on
the property that is the subject of these types of cleanup costs. All subsequent
liens on the property generally are subordinated to the environmental lien. In
some states, even prior recorded liens are subordinated to environmental liens.
In the latter states, the security interest of the trustee in a related parcel
of real property that is subject to an environmental lien could be adversely
affected.

..............The related prospectus supplement may specify that the mortgage
loan seller will make representations as to the material compliance of the
related residential property with applicable environmental laws and regulations
as of the date of transfer and assignment of the mortgage loan to the trustee.
In addition, the related agreement may provide that the master servicer and any
special servicer acting on behalf of the trustee, may not acquire title to a
residential property or take over its operation unless the master servicer or
special servicer has previously determined, based on a report prepared by a
person who regularly conducts environmental audits, that:

                  (a) there are no circumstances present at the residential
         property relating to substances for which some action relating to their
         investigation or clean-up could be required or that it would be in the
         best economic interest of the trust fund to take these actions with
         respect to the affected residential property; and

                  (b) that the residential property is in compliance with
         applicable environmental laws or that it would be in the best economic
         interest of the trust fund to take the actions necessary to comply with
         these laws.

See "Description of the Securities--Realization on Defaulted Mortgage Loans" in
this prospectus.


SERVICEMEMBERS CIVIL RELIEF ACT AND THE CALIFORNIA MILITARY AND VETERANS CODE

         Generally, under the terms of the Servicemembers Civil Relief Act, a
borrower who enters military service after the origination of the borrower's
residential loan, including a borrower who was in reserve status and is called
to active duty after origination of the mortgage loan, upon notification by such
borrower, shall not be charged interest, including fees and charges, in excess
of 6% per annum during the period of the borrower's active duty status. In




                                     -126-



addition to adjusting the interest, the lender must forgive any such interest in
excess of 6%, unless a court or administrative agency orders otherwise upon
application of the lender. In addition, the Relief Act provides broad discretion
for a court to modify a mortgage loan upon application by the borrower. The
Relief Act applies to borrowers who are members of the Army, Navy, Air Force,
Marines, National Guard, Reserves, Coast Guard, and officers of the U.S. Public
Health Service or the National Oceanic and Atmospheric Administration assigned
to duty with the military. The California Military and Veterans Code provides
protection equivalent to that provided by the Relief Act to California national
guard members called up to active service by the Governor, California national
guard members called up to active service by the President and reservists called
to active duty. Because the Relief Act and the California Military Code apply to
borrowers who enter military service, no information can be provided as to the
number of mortgage loans that may be affected by the Relief Act or the
California Military Code. Application of the Relief Act or the California
Military Code would adversely affect, for an indeterminate period of time, the
ability of the master servicer to collect full amounts of interest on certain of
the mortgage loans.

         Any shortfalls in interest collections resulting from the application
of the Relief Act or the California Military Code would result in a reduction of
the amounts distributable to the holders of the related series of securities,
and the prospectus supplement may specify that the shortfalls would not be
covered by advances or, any form of credit support provided in connection with
the securities. In addition, the Relief Act and the California Military Code
impose limitations that impair the ability of the master servicer to foreclose
on an affected mortgage loan or enforce rights under a Home Improvement Contract
or Manufactured Housing Contract during the borrower's period of active duty
status, and, under certain circumstances, during an additional three month
period after that period. Thus, if a mortgage loan or Home Improvement Contract
or Manufactured Housing Contract goes into default, there may be delays and
losses occasioned as a result.


FORFEITURE FOR DRUG, RICO AND MONEY LAUNDERING VIOLATIONS

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

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






                                     -127-



                         FEDERAL INCOME TAX CONSEQUENCES


GENERAL

         The following is a general discussion of the anticipated material
federal income tax consequences of the purchase, ownership and disposition of
the securities offered by this prospectus. This discussion is directed solely to
holders of securities that hold the securities as capital assets within the
meaning of Section 1221 of the Code. This discussion does not purport to discuss
all federal income tax consequences that may be applicable to particular
categories of investors, some of which, such as banks, insurance companies and
foreign investors, may be subject to special rules. Further, the authorities on
which this discussion, and the opinion referred to below, are based are subject
to change or differing interpretations, which could apply retroactively. In
addition to the federal income tax consequences described in this prospectus,
potential investors should consider the state and local tax consequences, if
any, of the purchase, ownership and disposition of the securities. See "State
and Other Tax Consequences" in this prospectus. Holders of securities are
advised to consult their own tax advisors concerning the federal, state, local
or other tax consequences to them of the purchase, ownership and disposition of
the securities offered under this prospectus.

         The following discussion addresses securities of four general types:

         (1) REMIC Securities,

         (2) Grantor Trust Securities,

         (3) Partnership Securities, and

         (4) Debt Securities.

The prospectus supplement relating to each series of securities will indicate
which of the foregoing treatments will apply to the series. If a REMIC election
or elections will be made for the related trust fund, the prospectus supplement
will identify all "regular interests" and "residual interests" in the REMIC. For
purposes of this tax discussion:

         (1) references to a "holder of securities" or a "holder" are to the
beneficial owner of a security,

         (2) references to "REMIC Pool" are to an entity or portion of an entity
as to which a REMIC election will be made and

         (3) references to mortgage loans include agency securities and private
mortgage-backed securities as specified in the related prospectus supplement.

         The following discussion is based in part on the OID Regulations, and
in part on the REMIC Provisions. The OID Regulations do not adequately address
certain issues relevant to, and in some instances provide that they are not
applicable to, debt instruments such as the securities.





                                     -128-



                                     REMICS


  GENERAL

  CLASSIFICATION OF REMICS. When each series of REMIC Securities is issued,
Cadwalader, Wickersham & Taft LLP, McKee Nelson LLP, Thacher Proffitt & Wood or
such other counsel to the depositor, specified in the related prospectus
supplement ("Tax Counsel"), will deliver an opinion. This opinion will generally
be to the effect that, assuming compliance with all provisions of the related
pooling and servicing agreement,

         (1) the related trust fund, or each applicable portion of the related
trust fund, will qualify as a REMIC and

         (2) the REMIC securities offered with respect to the related trust fund
will be considered to evidence ownership of "regular interests" or "residual
interests" in that REMIC within the meaning of the REMIC Provisions.

         In order for the REMIC Pool to qualify as a REMIC, there must be
ongoing compliance on the part of the REMIC Pool with the requirements set forth
in the Code. The REMIC Pool must fulfill an asset test, which requires that no
more than a de minimis portion of the assets of the REMIC Pool, as of the close
of the third calendar month beginning after the Startup Day and at all times
after that date, may consist of assets other than "qualified mortgages" and
"permitted investments." The REMIC Regulations provide a safe harbor pursuant to
which the de minimis requirement will be met if at all times the aggregate
adjusted basis of the nonqualified assets is less than 1% of the aggregate
adjusted basis of all the REMIC Pool's assets. An entity that fails to meet the
safe harbor may nevertheless demonstrate that it holds no more than a de minimis
amount of nonqualified assets. A REMIC Pool also must provide "reasonable
arrangements" to prevent its residual interests from being held by "disqualified
organizations" or their agents and must furnish applicable tax information to
transferors or agents that violate this requirement. The pooling and servicing
agreement with respect to each series of REMIC certificates will contain
provisions meeting these requirements. See "--Taxation of Owners of Residual
Securities--Tax-Related Restrictions on Transfer of Residual
Securities--Disqualified Organizations" in this prospectus.

         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
after that date pursuant to a fixed price contact 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
and shares held by a tenant stockholder in a cooperative housing corporation 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



                                     -129-



                  (i) in exchange for any qualified mortgage within a
         three-month period after that date; or

                  (ii) in exchange for a "defective obligation" within a
         two-year period thereafter.

         A "defective obligation" includes

                  (i) a mortgage in default or as to which default is reasonably
         foreseeable;

                  (ii) a mortgage as to which a customary representation or
         warranty made at the time of transfer to the REMIC Pool has been
         breached;

                  (iii) a mortgage that was fraudulently procured by the
         borrower; and

                  (iv) a mortgage that was not in fact principally secured by
         real property, but only if that mortgage is disposed of within 90 days
         of discovery.

         A mortgage loan that is "defective" as described in clause (iv) that is
not sold or, if within two years of the Startup Day, exchanged, within 90 days
of discovery, ceases to be a qualified mortgage after the 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 if defaults occur, including delinquencies, on the qualified
mortgages, lower than expected reinvestment returns, prepayment interest
shortfalls and certain other contingencies. The Reserve Fund will be
disqualified if more than 30% of the gross income from the assets in 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.
Foreclosure property is generally not held beyond the close of the third
calendar year following the year of acquisition, with one extension available
from the Internal Revenue Service.

         In addition to the foregoing requirements, the various interests in a
REMIC Pool also must meet certain requirements. All of the interests in a REMIC
Pool must be either of the following:

         (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.







                                     -130-



A regular interest is an interest in a REMIC Pool that is

         o    issued on the Startup Day with fixed terms,

         o    designated as a regular interest,

         o    unconditionally entitles the holder to receive a specified
              principal amount, or other similar amount, and

         o    provides that interest payments, or other similar amounts, if any,
              at or before maturity either are payable based on a fixed rate or
              a qualified variable rate, or consist of a specified, nonvarying
              portion of the interest payments on qualified mortgages. The
              specified portion may consist of a fixed number of basis points, a
              fixed percentage of the total interest, or a qualified variable
              rate, inverse variable rate or difference between two fixed or
              qualified variable rates on some or all of the qualified
              mortgages. The specified principal amount of a regular interest
              that provides for interest payments consisting of a specified,
              nonvarying portion of interest payments on qualified mortgages may
              be zero.

A residual interest is an interest in a REMIC Pool other than a regular interest
that is issued on the Startup Day and that is designated as a residual interest.
An interest in a REMIC Pool may be treated as a regular interest even if
payments of principal with respect to 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, the Regular Securities of a series will
constitute one or more classes of regular interests, and the Residual Securities
with respect to that series will constitute a single class of residual interests
with respect to each REMIC Pool.

         If an entity electing to be treated as a REMIC fails to comply with one
or more of the ongoing requirements of the Code for REMIC status during any
taxable year, the Code provides that the entity will not be treated as a REMIC
for that year and after that year. In that event, the entity may be taxable as a
corporation under Treasury regulations, and the related REMIC Securities may not
be accorded the status or given the tax treatment described below. Although the
Code authorizes the Treasury Department to issue regulations providing relief in
the event of an inadvertent termination of REMIC status, no regulations have
been issued. Any relief, moreover, may be accompanied by sanctions, such as the
imposition of a corporate tax on all or a portion of the trust fund's income for
the period in which the requirements for REMIC status are not satisfied. The
agreement pursuant to which each REMIC Pool is formed will include provisions
designed to maintain the trust fund's status as a REMIC under the REMIC
Provisions. We do not anticipate that the status of any trust fund as a REMIC
will be terminated.

         CHARACTERIZATION OF INVESTMENTS IN REMIC SECURITIES. In general, the
REMIC Securities will be treated as "real estate assets" within the meaning of
Section 856(c)(5)(B) 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
REMIC Securities would be treated. Moreover, if 95% or






                                     -131-



more of the assets of the REMIC Pool qualify for either of the foregoing
treatments at all times during a calendar year, the REMIC Securities will
qualify for the corresponding status in their entirety for that calendar year.
If the assets of the REMIC Pool include Buydown Loans, it is possible that the
percentage of assets constituting "loans . . . secured by an interest in real
property which is . . . residential real property" for purposes of Code Section
7701(a)(19)(C)(v) may be required to be reduced by the amount of the related
funds paid on those loans. 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
those securities are treated as "real estate assets" within the meaning of
Section 856(c)(5)(B) of the Code.

         In addition, the Regular Securities 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, and will be "permitted assets" within the meaning of Section 860L(c) for
a financial asset securitization investment trust. The determination as to the
percentage of the REMIC Pool's assets that constitute assets described in the
foregoing sections of the Code will be made with respect to each calendar
quarter based on the average adjusted basis of each category of the assets held
by the REMIC Pool during that calendar quarter. The REMIC will report those
determinations to holders of securities in the manner and at the times required
by applicable Treasury regulations.

         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 that property, 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 will qualify as "real estate assets" under Section 856(c)(5)(B) of the
Code.

         TIERED REMIC STRUCTURES. For certain series of REMIC Securities, tiered
REMICs may be effected by two or more separate elections being made to treat
designated portions of the related trust fund as REMICs for federal income tax
purposes. When any series of REMIC Securities is issued, Tax Counsel will
deliver an opinion. This opinion will generally be to the effect that, assuming
compliance with all provisions of the related agreement governing the REMIC
Securities, the tiered REMICs will each qualify as a REMIC and the REMIC
Securities issued by the tiered REMICs, respectively, 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)(5)(B) 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




                                     -132-



securities is interest described in Section 856(c)(3)(B) of the Code, the tiered
REMICs will be treated as one REMIC.


                    TAXATION OF OWNERS OF REGULAR SECURITIES

         GENERAL. Regular securities will be treated as newly originated debt
instruments for federal income tax purposes. In general, interest, original
issue discount, and market discount on a Regular Security will be treated as
ordinary income to a Regular Securityholder. In addition, principal payments on
a Regular Security will generally 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 the Regular Securityholder.

         ORIGINAL ISSUE DISCOUNT. 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 purpose as it accrues. Original issue discount is determined 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 income. The
following discussion is based in part on the OID Regulations and in part on the
legislative history of the 1986 Act. Regular Securityholders should be aware,
however, that the OID Regulations do not adequately address certain issues
relevant to prepayable securities, such as the Regular Securities. To the extent
certain issues are not addressed in the regulations, it is anticipated that the
trustee will apply the methodology described in the conference committee report
to the 1986 Act. We cannot assure you 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 in light of the
applicable statutory provisions. A tax result will not be considered
unreasonable under the anti-abuse rule in the absence of a substantial effect on
the present value of a taxpayer's tax liability. Investors are advised to
consult their own tax advisors as to the discussion in the OID Regulations and
the appropriate method for reporting interest and original issue discount with
respect to the Regular Securities.

         Each Regular Security, except to the extent described below with
respect to a Non-Pro rata 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 a particular class is sold to the public,
excluding bond houses, brokers and underwriters. Although unclear under the OID
Regulations, it is anticipated that the trustee will treat the issue price of a
class as to which there is no substantial sale as of the issue date or that is
retained by the depositor as the fair market value of the class as of the issue
date. The issue price of a Regular Security also includes any amount paid by an
initial Regular Securityholder for accrued interest that relates to a period
prior to the issue date of the Regular Security, unless the Regular
Securityholder elects on its federal income tax return to exclude that amount
from the





                                     -133-



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 provided
that interest payments are unconditionally payable at intervals of one year or
less during the entire term of the Regular Security. Because there is no penalty
or default remedy in the case of nonpayment of interest with respect to a
Regular Security, it is possible that no interest on any class of Regular
Securities will be treated as qualified stated interest. However, except as
provided in the following three sentences or in the related prospectus
supplement, because the underlying mortgage loans provide for remedies if a
default occurs, it is anticipated that the trustee will treat interest with
respect to the Regular Securities as qualified stated interest. Distributions of
interest on Regular Securities with respect to which deferred interest will
accrue, will not constitute qualified stated interest, in which case the stated
redemption price at maturity of those Regular Securities includes all
distributions of interest as well as principal on them. 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 and
shorter than the number of days of interest due on such distribution date, 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, 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
distributions should be determined in accordance with the Prepayment Assumption
and the anticipated reinvestment rate, if any, relating to the Regular
Securities. The Prepayment Assumption with respect to a series of Regular
Securities will be set forth in the related prospectus supplement. Holders
generally must report de minimis original issue discount pro rata as principal
payments are received, and that income will be capital gain if the Regular
Security is held as a capital asset. Under the OID Regulations, however, Regular
Securityholders may elect to accrue all de minimis original issue discount as
well as market discount and market premium, under the constant yield method. See
"--Election to Treat All Interest Under the Constant Yield Method" 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,




                                     -134-



including the date of purchase but excluding the date of disposition. The
trustee will treat the monthly period ending on the day before each distribution
date as the accrual period. With respect to each Regular Security, a calculation
will be made of the original issue discount that accrues during each successive
full accrual period, or shorter period from the date of original issue, that
ends on the day before the related distribution date on the Regular Security.
The Conference Committee Report to the Code 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:

              (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:

         (1)  the yield to maturity of the Regular Security at the issue date,

         (2)  events, including actual prepayments, that have occurred prior to
the end of the accrual period, and

         (3)  the Prepayment Assumption.

         For these purposes, the adjusted issue price of a Regular Security at
the beginning of any accrual period equals the issue price of the Regular
Security, increased by the aggregate amount of original issue discount with
respect to the Regular Security that accrued in all prior accrual periods and
reduced by the amount of distributions included in the Regular Security's stated
redemption price at maturity that were made on the Regular security in prior
periods. The original issue discount accruing during any accrual period, as
determined in this paragraph, will then be divided by the number of days in the
period to determine the daily portion of original issue discount for each day in
the period. With respect to an initial accrual period shorter than a full
accrual period, the daily portions of original issue discount must be determined
according to an appropriate allocation under any reasonable method.

         Under the method described above, the daily portions of original issue
discount required to be included in income by a Regular Securityholder generally
will increase to take into account prepayments on the Regular Securities as a
result of prepayments on the mortgage loans that exceed the Prepayment
Assumption, and generally will decrease, but not below zero for any period, if
the prepayments are slower than the Prepayment Assumption. An increase in
prepayments on the mortgage loans with respect to a series of Regular Securities
can result in both a change in the priority of principal payments with respect
to certain classes of Regular



                                     -135-



Securities and either an increase or decrease in the daily portions of original
issue discount with respect to those Regular Securities.

         In the case of a Non-Pro Rata Security, we anticipate that the trustee
will determine the yield to maturity of this type of Security based on the
anticipated payment characteristics of the class as a whole under the Prepayment
Assumption. In general, the original issue discount accruing on each Non-Pro
Rata Security in a full accrual period would be its allocable share of the
original issue discount with respect to the entire class, as determined in
accordance with the preceding paragraph. However, in the case of a distribution
in retirement of the entire unpaid principal balance of any Non-Pro Rata
Security, or portion of its unpaid principal balance:

         (1) the remaining unaccrued original issue discount allocable to the
security, or to that portion, will accrue at the time of distribution, and

         (2) the accrual of original issue discount allocable to each remaining
security of that class will be adjusted by reducing the present value of the
remaining payments on that class and the adjusted issue price of that class to
the extent attributable to the portion of the unpaid principal balance of that
security that was distributed.

         The depositor believes that the foregoing treatment is consistent with
the "pro rata prepayment" rules of the OID Regulations, but with the rate of
accrual of original issue discount determined based on the Prepayment Assumption
for the class as a whole. You are advised to consult your tax advisors as to
this treatment.

         ACQUISITION PREMIUM. A purchaser of a Regular Security at a price
greater than its adjusted issue price but less than its stated redemption price
at maturity must include in gross income the daily portions of the original
issue discount on the Regular Security reduced pro rata by a fraction,

         (1) the numerator of which is the excess of its purchase price over the
adjusted issue price, and

         (2) the denominator of which is the excess of the remaining stated
redemption price at maturity over the adjusted issue price.

Alternatively, a subsequent purchaser may elect to treat all acquisition premium
under the constant yield method, as described below under the heading
"--Election to Treat All Interest Under the Constant Yield Method."

     VARIABLE RATE REGULAR SECURITIES. Regular Securities may provide for
interest based on a variable rate. Under the OID Regulations, interest is
treated as payable at a variable rate if, generally:

         (1) the issue price does not exceed the original principal balance by
more than a specified amount and





                                     -136-



         (2) 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, where the rate is subject to a fixed multiple that is
greater that 0.65 but not more than 1.35. This floating rate may also be
increased or decreased by a fixed spread or 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.

         A qualified inverse floating rate is a rate equal to a fixed rate minus
a qualified floating rate that inversely reflects contemporaneous variations in
the cost of newly borrowed funds. An inverse floating rate that is not a
qualified inverse floating rate may nevertheless be an objective rate. A class
of Regular Securities may be issued under this prospectus that does not have a
variable rate under the foregoing rules, for example, a class that bears
different rates at different times during the period it is outstanding such that
it is considered significantly "front-loaded" or "back-loaded" within the
meaning of the OID Regulations. It is possible that this type of class may be
considered to bear "contingent interest" within the meaning of the OID
Regulations. The OID Regulations, as they relate to the treatment of contingent
interest, are by their terms not applicable to Regular Securities. However, if
final regulations dealing with contingent interest with respect to Regular
Securities apply the same principles as the OID Regulations, these regulations
may lead to different timing of income inclusion than would be the case under
the OID Regulations. Furthermore, application of these principles could lead to
the characterization of gain on the sale of contingent interest Regular
Securities as ordinary income. Investors should consult their tax advisors
regarding the appropriate treatment of any Regular Security that does not pay
interest at a fixed rate or variable rate as described in this paragraph.

         Under the REMIC Regulations, a Regular Security bearing the following
interest rates will qualify as a regular interest in a REMIC:

         (1) (a) a rate that qualifies as a variable rate under the OID
Regulations that is tied to current values of a variable rate, or



                                     -137-




                  (b) the highest, lowest or average of two or more variable
         rates, including a rate based on the average cost of funds of one or
         more financial institutions, or

                  (c) a positive or negative multiple of that rate, plus or
         minus a specified number of basis points, or that represents a weighted
         average of rates on some or all of the mortgage loans, including a rate
         that is subject to one or more caps or floors, or

         (2) one or more variable rates for one or more periods, or one or more
fixed rates for one or more periods, and a different variable rate or fixed rate
for other periods.

         Accordingly, it is anticipated that the trustee will treat Regular
Securities that qualify as regular interests under this rule in the same manner
as obligations bearing a variable rate for original issue discount reporting
purposes.

         The amount of original issue discount with respect to a Regular
Security bearing a variable rate of interest will accrue in the manner described
above under "--Original Issue Discount." The yield to maturity and future
payments on the Regular Security will generally be determined by assuming that
interest will be payable for the life of the Regular Security based on the
initial rate or, if different, the value of the applicable variable rate as of
the pricing date, for the relevant class. Unless required otherwise by
applicable final regulations, it is anticipated that the trustee will treat
variable interest as qualified stated interest, other than variable interest on
an interest-only or super-premium class, which will be treated as non-qualified
stated interest includible in the stated redemption price at maturity. Ordinary
income reportable for any period will be adjusted based on subsequent changes in
the applicable interest rate index.

         Although unclear under the OID Regulations, unless required otherwise
by applicable final regulations, we anticipate that the trustee will treat
Regular Securities bearing an interest rate that is a weighted average of the
net interest rates on mortgage loans as having qualified stated interest, except
to the extent that initial "teaser" rates cause sufficiently "back-loaded"
interest to create more than de minimis original issue discount. The yield on
Regular Securities for purposes of accruing original issue discount will be a
hypothetical fixed rate based on the fixed rates, in the case of fixed rate
mortgage loans, and initial "teaser rates" followed by fully indexed rates, in
the case of adjustable rate mortgage loans. In the case of adjustable rate
mortgage loans, the applicable index used to compute interest on the mortgage
loans in effect on the pricing date or possibly the issue date will be deemed to
be in effect beginning with the period in which the first weighted average
adjustment date occurring after the issue date occurs. Adjustments will be made
in each accrual period either increasing or decreasing the amount of ordinary
income reportable to reflect the actual Pass-Through Rate on the Regular
Securities.

         MARKET DISCOUNT. A 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 then-current principal amount of the 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.






                                     -138-



         Any purchaser generally will be required to recognize ordinary income
to the extent of accrued market discount on Regular Security as distributions
includible in the stated redemption price at maturity of the Regular Securities
are received, in an amount not exceeding any distribution. Any 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 the regulations are issued, 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 the period plus the remaining interest as of the end
of the 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 the period plus the
remaining original issue as of the end of the period.

Any 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. Any 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 that security. The deferred portion of interest expense in any
taxable year generally will not exceed the accrued market discount on the
Regular Security for the year. 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
an election may be deemed to be made.

         By analogy to the OID Regulations, market discount with respect to 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 multiplied by the weighted average maturity of the Regular Security,
determined as described in the fourth paragraph under "--Original Issue
Discount," remaining after the date of purchase. It appears that de minimis
market discount would be reported in a manner similar to de minimis original
issue discount. See "--Original Issue Discount" above. Treasury regulations
implementing the market discount rules have not yet been issued. Therefore
investors should consult their own tax advisors regarding the application of
these rules. Investors should also consult Revenue Procedure 92-67 concerning
the elections to include market discount in income currently and to accrue
market discount on the basis of the constant yield method.

         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





                                     -139-



Securityholder holds a 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 the constant yield method. This election will
apply to all debt obligations acquired by the Regular Securityholder at a
premium held in that taxable year or after that taxable year, unless revoked
with the permission of the Internal Revenue Service. Final Treasury regulations
with respect to amortization of bond premiums do not by their terms apply to
obligations, such as the Regular Securities, which are prepayable as described
in Code Section 1272(a)(6). However, the conference committee report to the 1986
Act indicates a Congressional intent that the same rules that apply to the
accrual of market discount on installment obligations will also apply to
amortizing bond premium under Code Section 171 on installment obligations such
as the Regular Securities. It is unclear whether the alternatives to the
constant interest method described above under "--Market Discount" are
available. Amortizable bond premium 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.

         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 with respect to a debt instrument
with amortizable bond premium or with market discount, the holder is deemed to
have made elections to amortize bond premium or to report market discount income
currently as it accrues under the constant yield method, respectively, for all
premium bonds held or market discount bonds acquired by the holder in the same
taxable year or thereafter. The election is made on the holder's federal income
tax return for the year in which the debt instrument is acquired and is
irrevocable except with the approval of the Internal Revenue Service. You should
consult your own tax advisors regarding the advisability of making this type of
an election.

         TREATMENT OF LOSSES. Regular Securityholders will be required to report
income with respect to Regular Securities on the accrual method of accounting,
without giving effect to delays or reductions in distributions attributable to
defaults or delinquencies on the mortgage loans, except to the extent it can be
established that those 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.
However, the holder of a




                                     -140-



Regular Security 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.

         Under Code Section 166, it appears that Regular Securityholders that
are corporations or that otherwise hold the Regular Securities in connection
with a trade or business should in general be allowed to deduct as an ordinary
loss a loss with respect to principal sustained during the taxable year on
account of any Regular Securities becoming wholly or partially worthless. 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, the non-corporate Regular
Securityholders should be allowed a bad debt deduction at a time when 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 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 deductions for all holders, such as reducing future
cashflow for purposes of computing original issue discount. This may have the
effect of creating "negative" original issue discount which would be deductible
only against future positive original issue discount or otherwise if the class
is terminated. Regular Securityholders are urged to consult their own tax
advisors regarding the appropriate timing, amount and character of any loss
sustained with respect to 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 are
applicable to banks and thrift institutions, including rules regarding reserves
for bad debts. You are advised to consult your tax advisors regarding the
treatment of losses on Regular Securities.

         SALE OR EXCHANGE OF REGULAR SECURITIES. If a Regular Securityholder
sells or exchanges a Regular Security, the Regular Securityholder will recognize
gain or loss equal to the difference, if any, between the amount received and
its adjusted basis in the Regular Security. The adjusted basis of a Regular
Security generally will equal

         (1) the cost of the Regular Security to the seller,

         (2) increased by any original issue discount or market discount
previously included in the seller's gross income with respect to the Regular
Security and



                                     -141-



         (3) reduced by amounts included in the stated redemption price at
maturity of the Regular Security that were previously received by the seller, by
any amortized premium and by any recognized losses.

         Except as described above with respect to market discount, and except
as provided in this paragraph, any gain or loss on the sale or exchange of a
Regular Security realized by an investor who holds the Regular Security as a
capital asset will be capital gain or loss and will be long-term or short-term
depending on whether the Regular Security has been held for the applicable
holding period described below. 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 under Code
Section 1274(d) in effect at the time the taxpayer entered into the transaction
minus any amount previously treated as ordinary income with respect to any prior
disposition of property that was held as part of the transaction,

         (2) in the case of a non-corporate taxpayer, to the extent 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 the 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 with respect to the Regular Security.

         In addition, gain or loss recognized from the sale of a Regular
Security by certain banks or thrift institutions will be treated as ordinary
income or loss pursuant to Code Section 582(c). Capital gains of non-corporate
taxpayers generally are subject to a lower maximum tax rate than ordinary income
of those taxpayers for capital assets held for more than one year. The maximum
tax rate for corporations is the same with respect to both ordinary income and
capital gains.

         Holders that recognize a loss on a sale or exchange of a Regular
Security for federal income tax purposes in excess of certain threshold amounts
should consult their tax advisors as to the need to file IRS Form 8886
(disclosing certain potential tax shelters) on their federal income tax returns.


TAXATION OF OWNERS OF RESIDUAL SECURITIES

  TAXATION OF REMIC INCOME. Generally, the "daily portions" of REMIC taxable
income or net loss will be includible as ordinary income or loss in determining
the federal taxable income of holders of Residual Securities, 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




                                     -142-



day in the quarter and by allocating each 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:

         (1) interest, original issue discount income and market discount
income, if any, on the mortgage loans,

         (2) reduced by amortization of any premium on the mortgage loans,

         (3) plus income from amortization of issue premium, if any, on the
Regular Securities,

         (4) plus income on reinvestment of cash flows and reserve assets, and

         (5) plus any cancellation of indebtedness income if realized losses are
allocated to the Regular Securities.

         The REMIC Pool's deductions include:

         (1) interest and original issue discount expense on the Regular
Securities,

         (2) servicing fees on the mortgage loans,

         (3) other administrative expenses of the REMIC Pool, and

         (4) realized losses on the mortgage loans.

The requirement that Residual Holders report their pro rata share of taxable
income or net loss of the REMIC Pool will continue until there are no securities
of any class of the related series outstanding.

         The taxable income recognized by a Residual Holder in any taxable year
will be affected by, among other factors, the relationship between the timing of
recognition of interest, original issue discount or market discount income or
amortization of premium with respect to the mortgage loans, on the one hand, and
the timing of deductions for interest, including original issue discount, or
income from amortization of issue premium on the Regular Securities, on the
other hand. If an interest in the mortgage loans is acquired by the REMIC Pool
at a discount, and one or more of the mortgage loans is prepaid, the prepayment
may be used in whole or in part to




                                     -143-



make distributions in reduction of principal on the Regular Securities. The
discount on the mortgage loans which is includible in income may exceed the
deduction allowed upon distributions on those Regular Securities on account of
any unaccrued original issue discount relating to those Regular Securities. When
more than one class of Regular Securities distributes 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 a mismatching is realized, in
general, losses would be allowed in later years as distributions on the later
maturing classes of Regular Securities are made. Taxable income may also be
greater in earlier years than in later years as a result of the fact that
interest expense deductions, expressed as a percentage of the outstanding
principal amount of a series of Regular Securities, may increase over time as
distributions in reduction of principal are made on the lower yielding classes
of Regular Securities. By contrast, to the extent the REMIC Pool consists of
fixed rate mortgage loans, interest income with respect to any given mortgage
loan will remain constant over time as a percentage of the outstanding principal
amount of that loan. Consequently, Residual Holders must have sufficient other
sources of cash to pay any federal, state, or local income taxes due as a result
of any mismatching or unrelated deductions against which to offset income,
subject to the discussion of "excess inclusions" below under "-- Limitations on
Offset or Exemption of REMIC Income." The timing of any mismatching of income
and deductions described in this paragraph, if present with respect to a series
of securities, may have a significant adverse effect on a Residual Holder's
after-tax rate of return.

         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 the 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,

         (1) first, by a cash distribution from the REMIC Pool, and

         (2) 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 a 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, the taxable income will not include cash received
by the REMIC Pool that represents a recovery of the REMIC Pool's basis in its
assets. This recovery of basis by the REMIC Pool will have the effect of
amortization of the issue price of the Residual Securities over their life.
However, in




                                     -144-



view of the possible acceleration of the income of Residual Holders described
above under "--Taxation of REMIC Income," the period of time over which the
issue price is effectively amortized may be longer than the economic life of the
Residual Securities.

         A Residual Security may have a negative value if the net present value
of anticipated tax liabilities exceeds the present value of anticipated cash
flows. The REMIC Regulations appear to treat the issue price of a residual
interest as zero rather than a negative amount for purposes of determining the
REMIC Pool's basis in its assets. Regulations have been issued addressing the
federal income tax treatment of "inducement fees" received by transferees of
non-economic Residual Securities. These regulations require inducement fees to
be included in income over a period reasonably related to the period in which
the related Residual Security is expected to generate taxable income or net loss
to its holder. Under two safe harbor methods, inducement fees are permitted to
be included in income (i) in the same amounts and over the same period that the
taxpayer uses for financial reporting purposes, provided that such period is not
shorter than the period the REMIC Pool is expected to generate taxable income or
(ii) ratably over the remaining anticipated weighted average life of all the
regular and residual interests issued by the REMIC Pool, determined based on
actual distributions projected as remaining to be made on such interests under
the Prepayment Assumption. If the holder of a non-economic Residual Security
sells or otherwise disposes of the non-economic residual interest, any
unrecognized portion of the inducement fee would be required to be taken into
account at the time of the sale or disposition. The regulations also provide
that inducement fees constitute income from sources within the United States.
Prospective purchasers of the Residual Securities should consult with their tax
advisors regarding the effect of these regulations.

         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 that basis 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 on termination of the REMIC Pool as
a capital loss.

         TREATMENT OF CERTAIN ITEMS OF REMIC INCOME AND EXPENSE. Although it is
anticipated that the trustee will compute REMIC income and expense in accordance
with the Code and applicable regulations, the authorities regarding the
determination of specific items of income and expense are subject to differing
interpretations. The depositor makes no representation as to the specific method
that will be used for reporting income with respect to the mortgage loans and
expenses with respect to the Regular Securities. 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 issue
premium or the Regular Securities 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



                                     -145-



Discount" and "-- Variable Rate Regular Securities," without regard to the de
minimis rule described in this prospectus, and "-- Premium," below.

         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 the
mortgage loans is exceeded by their unpaid principal balances. The REMIC Pool's
basis in the 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 in the REMIC Pool's basis in the mortgage
loans is equal in the aggregate to the issue prices of all regular and residual
interests in the REMIC Pool. The accrued portion of the market discount would be
recognized currently as an item of ordinary income in a manner similar to
original issue discount. Market discount income generally should accrue in the
manner described above under "--Taxation of Owners of Regular Securities--Market
Discount."

         PREMIUM. Generally, if the basis of the REMIC Pool in the mortgage
loans exceeds their unpaid principal balances, the REMIC Pool will be considered
to have acquired the mortgage loans at a premium equal to the amount of the
excess. As stated above, the REMIC Pool's basis in mortgage loans is the fair
market value of the mortgage loans, based on the aggregate of the issue prices
of the regular and residual interests in the REMIC Pool immediately after the
transfer of the mortgage loans to the REMIC Pool. In a manner analogous to the
discussion above under "--Taxation of Owners of Regular Securities--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 expected to be individuals, Code Section 171
will not be available for premium on mortgage loans originated on or prior to
September 27, 1985. Premium with respect to those mortgage loans may be
deductible in accordance with a reasonable method regularly employed by the
holder of the mortgage loans. The allocation of a premium pro rata among
principal payments should be considered a reasonable method. However, the
Internal Revenue Service may argue that a premium should be allocated in a
different manner, such as allocating the premium entirely to the final payment
of principal.

         LIMITATIONS ON OFFSET OR EXEMPTION OF REMIC INCOME. A portion or all of
the REMIC taxable income 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 each 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 each quarterly period.






                                     -146-



         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 the daily accruals of REMIC income described in this paragraph for all
prior quarters, decreased by any distributions made with respect to the Residual
Security prior to the beginning of each quarterly period. Accordingly, the
portion of the REMIC Pool's taxable income that will be treated as excess
inclusions will be a larger portion of income as the adjusted issue price of the
Residual Securities diminishes.

         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 that
Residual Holder for purposes of Code Section 511. In addition, REMIC taxable
income is subject to 30% withholding tax with respect to certain persons who are
not U.S. Persons and the portion of the REMIC taxable income 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

         (1) could not be offset by net operating losses of its shareholders,

         (2) would constitute unrelated business taxable income for tax-exempt
shareholders, and

         (3) would be ineligible for reduction of withholding to certain persons
who are not U.S. Persons.

         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. A Residual Holder's alternative minimum taxable
income for a taxable year cannot be less than the excess inclusions for the
year. The amount of any alternative minimum tax net operating loss deduction
must be computed without regard to any excess inclusions.

         TAX-RELATED RESTRICTIONS ON TRANSFER OF RESIDUAL SECURITIES.
Disqualified Organizations. If any legal or beneficial interest in a Residual
Security is transferred to a Disqualified Organization, a tax would be imposed
in an amount equal to the product of:

         (1) the present value of the total anticipated excess inclusions with
respect to a 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




                                     -147-



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.
This 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.
This tax generally would be imposed on the transferor of the Residual Security,
except that where a 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 this tax with respect to a transfer if the transferee
furnished to the transferor an affidavit stating that the transferee is not a
Disqualified Organization and, as of the time of the transfer, the transferor
does not have actual knowledge that the affidavit is false. The tax also may be
waived by the Internal Revenue Service if the Disqualified Organization promptly
disposes of the Residual Security and the transferor pays income tax at the
highest corporate rate on the excess inclusion for the period the Residual
Security is actually held by the Disqualified Organization.

         In addition, if a "Pass-Through Entity," as defined in the second
succeeding paragraph, has excess inclusion income with respect to a Residual
Security during a taxable year and a Disqualified Organization is the record
holder of an equity interest in that entity, then a tax is imposed on that
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 it received an
affidavit from the record holder that it is not a Disqualified Organization or
stating the holder's taxpayer identification number and, during the period the
person is the record holder of the Residual Security, the Pass-Through Entity
does not have actual knowledge that the affidavit is false.

         If an "electing large partnership," as defined in the immediately
succeeding paragraph, holds a Residual Security, all interests in the electing
large partnership are treated as held by Disqualified Organizations for purposes
of the tax imposed on a Pass-Through Entity by Section 860E(c) of the Code. An
exception to this tax, otherwise available to a Pass-Through Entity that is
furnished certain affidavits by record holders of interests in the entity and
that does not know the affidavits are false, is not available to an electing
large partnership.

         For these purposes,

         (1) "Disqualified Organization" means:

                  (a) the United States,

                  (b) any state or political subdivision of the United States or
         any state,

                  (c) any foreign government,




                                     -148-



                  (d) any international organization,

                  (e) any agency or instrumentality of any of the foregoing,

                  (f) any cooperative organization furnishing electric energy or
         providing telephone service or persons in rural areas as described in
         Code Section 1381(a)(2)(C), and

                  (g) 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.

However, the term does not include an instrumentality if all of its activities
are subject to tax and a majority of its board of directors is not selected by
the governmental entity.

         (2) "Pass-Through Entity" means any regulated investment company, real
estate investment trust, common trust fund, partnership, trust or estate and
certain corporations operating on a cooperative basis. Except as may be provided
in Treasury regulations, any person holding an interest in a Pass-Through Entity
as a nominee for another will, with respect to the interest, be treated as a
Pass-Through Entity; and

         (3) an "electing large partnership" means any partnership having more
than 100 members during the preceding tax year, other than certain service
partnerships and commodity pools, which elects to apply certain simplified
reporting provisions under the Code.

         The applicable agreement with respect to 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 of the
Disqualified Organization; 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 related agreement will provide that any attempted or
purported transfer in violation of these transfer restrictions will be null and
void and will vest no rights in any purported transferee. Each Residual Security
with respect to a series will bear a legend referring to the restrictions on
transfer. Each Residual Holder will be deemed to have agreed, as a condition of
ownership of a Residual Security, to any amendments to the related 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 depositor or the trustee may charge
a fee for computing and providing this information.








                                     -149-



         NONECONOMIC RESIDUAL INTERESTS. The REMIC Regulations would disregard
certain transfers of Residual Securities, in which case the transferor would
continue to be treated as the owner of the Residual Securities and thus would
continue to be subject to tax on its allocable portion of the net income of the
REMIC Pool. Under the REMIC Regulations, a transfer of a "noneconomic residual
interest," as defined in the following sentence, to a Residual Holder, other
than a Residual Holder who is not a U.S. Person, is disregarded for all federal
income tax purposes if a significant purpose of the transferor 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 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

                  (a) conducted, at the time of the transfer, a reasonable
         investigation of the financial condition of the transferee,

                  (b) found that the transferee historically paid its debts as
         they came due, and

                  (c) 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) the transferee represents to the transferor that it will not cause
income from the Residual Security to be attributable to a foreign permanent
establishment or fixed base, within the meaning of an applicable income tax
treaty, of the transferee or any other person, and the Residual Security, is, in
fact, not transferred to such permanent establishment or fixed base, and



                                     -150-




         (4) one of the following two tests is satisfied: either

                  (a) the present value of the anticipated tax liabilities
         associated with holding the noneconomic residual interest does not
         exceed the sum of:

                           (i) the present value of any consideration given to
                  the transferee to acquire the interest;

                           (ii) the present value of the expected future
                  distributions on the interest; and

                           (iii) the present value of the anticipated tax
                  savings associated with holding the interest as the REMIC
                  generates losses.

         For purposes of the computations under this alternative, the transferee
is presumed to pay tax at the highest corporate rate (currently 35%) or, in
certain circumstances the alternative minimum tax rate. Further, present values
generally are computed using a discount rate equal to the short-term federal
rate set forth in Section 1274(d) of the Code, for the month of such transfer
and the compounding period used by the transferee; or

                  (b) (i) the transferee must be a domestic "C" corporation
         (other than a corporation exempt from taxation or a regulated
         investment company or real estate investment trust) that meets certain
         gross and net asset tests (generally, $100 million of gross assets and
         $10 million of net assets for the current year and the two preceding
         fiscal years);

                      (ii) the transferee must agree in writing that it will
         transfer the residual interest only to a subsequent transferee that is
         an eligible corporation and meets the requirements for a safe harbor
         transfer; and

                      (iii) the facts and circumstances known to the transferor
         on or before the date of the transfer must not reasonably indicate
         that the taxes associated with ownership of the residual interest will
         not be paid by the transferee.

         Because these rules are not mandatory but would provide safe harbor
protection, the related pooling and servicing agreement will not require that
clause (a) or (b) be met as a condition to transfer of a Residual Security.
Holders of Residual Securities are advised to consult their tax advisors as to
whether or in what amount any such payment should be make upon transfer thereof.

         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, unless that 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:

         (1) the future value of expected distributions equals at least 30% of
the anticipated excess inclusions after the transfer, and




                                     -151-



         (2) the transferor reasonably expects that the transferee will receive
sufficient distributions from the REMIC Pool at or after the time at which the
excess inclusions accrue and prior to the end of the next succeeding taxable
year for the accumulated withholding tax liability to be paid.

         If the non-U.S. Person transfers the Residual Security back to a U.S.
Person, the transfer will be disregarded and the foreign transferor will
continue to be treated as the owner unless arrangements are made so that the
transfer does not have the effect of allowing the transferor to avoid tax on
accrued excess inclusions.

         The prospectus supplement relating to the securities 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 a transfer may be made.

         SALE OR EXCHANGE OF A RESIDUAL SECURITY. If the sale or exchange of a
Residual Security occurs, 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 a Residual Holder in a Residual Security at the time of the sale or
exchange. In addition to reporting the taxable income of the REMIC Pool, a
Residual Holder will have taxable income to the extent that any cash
distribution to it from the REMIC Pool exceeds the adjusted basis on that
distribution date. Income will be treated as gain from the sale or exchange of
the Residual Holder's Residual Security. As a result, if the Residual Holder has
an adjusted basis in its Residual Security remaining when its interest in the
REMIC Pool terminates, and if it holds the Residual Security as a capital asset
under Code Section 1221, then it will recognize a capital loss at that time in
the amount of 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 with respect to any prior disposition of
property that was held as a part of the transaction or

         (2) in the case of a non-corporate taxpayer, to the extent that
taxpayer has made an election under Code Section 163(d)(4) to have net capital
gains taxed as investment income at ordinary income rates.

In addition, gain or loss recognized from the sale of a Residual Security by
certain banks or thrift institutions will be treated as ordinary income or loss
pursuant to Code Section 582(c).

         The conference committee report to the 1986 Act provides that, except
as provided in Treasury regulations yet to be issued, the wash sale rules of
Code Section 1091 will apply to dispositions of Residual Securities. These wash
sale rules will apply 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 of the Residual
Security, acquires, or enters into any other transaction that results in the
application of Code Section 1091,




                                     -152-



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.

         MARK TO MARKET REGULATIONS. Regulations under Code Section 475 relating
to the requirement that a securities dealer mark to market securities held for
sale to customers provide that a Residual Security is not treated as a security
and thus may not be marked to market.


TAXES THAT MAY BE IMPOSED ON THE REMIC POOL

  PROHIBITED TRANSACTIONS. Income from certain 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 mortgage other than for:

                  (a) substitution within two years of the Startup Day for a
         defective, including a defaulted, obligation, or repurchase in lieu of
         substitution of a defective, including a defaulted, obligation at any
         time, or for any qualified mortgage within three months of the Startup
         Day,

                  (b) foreclosure, default, or imminent default of a qualified
         mortgage,

                  (c) bankruptcy or insolvency of the REMIC Pool, or

                  (d) a qualified (complete) liquidation,

         (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.

                  Regardless of clauses (1) and (4) above, it is not a
prohibited transaction to sell REMIC Pool property to prevent a default on
Regular Securities as a result of a default on qualified mortgages or to
facilitate a clean-up call --generally, an optional termination to save
administrative costs when no more than a small percentage of the securities is
outstanding. The REMIC Regulations indicate that the modification of a mortgage
loan generally will not be treated as a disposition if it is occasioned by

         (1) a default or reasonably foreseeable default,

         (2) an assumption of the mortgage loan,

         (3) the waiver of a due-on-sale or due-on-encumbrance clause, or



                                     -153-



         (4) the conversion of an interest rate by a borrower pursuant to the
terms of a convertible adjustable rate mortgage loan.

         CONTRIBUTIONS TO THE REMIC POOL AFTER THE STARTUP DAY. In general, the
REMIC Pool will be subject to a tax at a 100% rate on the value of any property
contributed to the REMIC Pool after the Startup Day. Exceptions are provided for
cash contributions to the REMIC Pool

         (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. We
do not anticipate that there will be any contributions to the REMIC Pool after
the Startup Day.

         NET INCOME FROM FORECLOSURE PROPERTY. The REMIC Pool will be subject to
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 following the year of acquisition, with a possible extension. Net income
from foreclosure property generally means gain from the sale of a foreclosure
property that is inventory property and gross income from foreclosure property
other than qualifying rents and other qualifying income for a real estate
investment trust. We do not anticipate that the REMIC Pool will have any taxable
net income from foreclosure property.


LIQUIDATION OF THE REMIC POOL

         If a REMIC Pool adopts a plan of complete liquidation, within the
meaning of Code Section 860F(a)(4)(A)(i), which may be accomplished by
designating in the REMIC Pool's final tax return a date on which the 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.


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 REMIC 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,




                                     -154-



deduction, or credit in a unified administrative proceeding. The master servicer
will be obligated to act as "tax matters person," as defined in applicable
Treasury regulations, with respect to the REMIC Pool as agent of the Residual
Holder 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 the other person specified pursuant to Treasury regulations
will be required to act as tax matters person.


LIMITATIONS ON DEDUCTION OF CERTAIN EXPENSES

  An investor who is an individual, estate, or trust will be subject to
limitation with respect to certain itemized deductions described in Code Section
67, to the extent that these itemized deductions, in the aggregate, do not
exceed 2% of the investor's adjusted gross income. In addition, Code Section 68
provides that itemized deductions otherwise allowable for a taxable year of an
individual taxpayer will be reduced by the lesser of:

         (1) 3% of the excess, if any, of adjusted gross income over a threshold
amount adjusted annually for inflation, or

         (2) 80% of the amount of itemized deductions otherwise allowable for
the year.

However, the Code Section 68 reduction of allowable itemized deductions will be
phased out beginning in 2006 and eliminated after 2009.

         In the case of a REMIC Pool, these deductions may include deductions
under Code Section 212 for the Servicing Fee and all administrative and other
expenses relating to the REMIC Pool, or any similar expenses allocated to the
REMIC Pool with respect to a regular interest it holds in another REMIC. These
investors who hold REMIC Securities either directly or indirectly through
certain Pass-Through Entities may have their pro rata share of expenses
allocated to them as additional gross income, but may be subject to a limitation
on deductions. In addition, these expenses are not deductible at all for
purposes of computing the alternative minimum tax, and may cause investors of
this type 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. However, this
additional gross income and limitation on deductions will apply to the allocable
portion of these expenses to holders of Regular Securities, as well as holders
of Residual Securities, where Regular Securities are issued in a manner that is
similar to pass-through certificates in a fixed investment trust. Generally, all
these expenses will be allocable to the Residual Securities. In general, the
allocable portion will be determined based on the ratio that a REMIC Holder's
income, determined on a daily basis, bears to the income of all holders of
Regular Securities and Residual Securities with respect to a REMIC Pool. As a
result, individuals, estates or trusts holding REMIC Securities, either directly
or indirectly through a grantor trust, partnership, S corporation, REMIC, or
certain other Pass-Through Entities described in the foregoing temporary
Treasury regulations, may have taxable income in excess of the interest income
at the pass-through rate on Regular Securities that are




                                     -155-



issued in a single class or otherwise consistently with fixed investment trust
status or in excess of cash distributions for the related period on Residual
Securities.


TAXATION OF CERTAIN FOREIGN INVESTORS

         REGULAR SECURITIES. Interest, including original issue discount,
distributable to Regular Securityholders who are non-resident aliens, foreign
corporations, or other non-U.S. Persons, will be considered "portfolio interest"
and, therefore, generally will not be subject to 30% United States withholding
tax, provided that the non-U.S. Person:

         (1) 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

         (2) provides the trustee, or the person who would otherwise be required
to withhold tax from the distributions under Code Section 1441 or 1442, with an
appropriate statement, signed under penalties of perjury, identifying the
beneficial owner and stating, among other things, that the beneficial owner of
the Regular Security is a non-U.S. Person.

         If the signed statement, or any other required statement, is not
provided, 30% withholding will apply unless reduced or eliminated pursuant to an
applicable tax treaty or unless the interest on the Regular Security is
effectively connected with the conduct of a trade or business within the United
States by the non-U.S. Person. In the latter case, the non-U.S. Person will be
subject to United States federal income tax at regular rates.

         In the case of Regular Securities held by a foreign partnership,
Treasury Regulations require that:

         (1) the certification described above be provided by the partners
rather than by the foreign partnership and

         (2) the partnership provide certain information, including a United
States taxpayer identification number.

         In addition, a look-through rule applies in the case of tiered
partnerships. Investors who are non-U.S. Persons should consult their own tax
advisors regarding the specific tax consequences to them of owning a Regular
Security and the certification requirements of the Code and Regulations.

         RESIDUAL SECURITIES. The Conference Committee Report to the 1986 Act
indicates that amounts paid to Residual Holders who are non-U.S. Persons
generally should be treated as interest for purposes of the 30%, or lower treaty
rate, United States withholding tax. Treasury regulations provide that amount
distributed to Residual Holders may qualify as "portfolio interest," subject to
the conditions described in "Regular Securities" above, but only to the extent
that:

         (1) the mortgage loans were issued after July 18, 1984 and



                                     -156-



         (2) the trust fund or segregated pool of assets in that 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" in
this prospectus. 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 non-U.S. Persons, 30% or lower treaty rate withholding will
not apply. Instead, the amounts paid to the non-U.S. Persons will be subject to
United States federal income tax at regular rates. If 30% or lower treaty rate
withholding is applicable, those amounts generally will be taken into account
for purposes of withholding only when paid or otherwise distributed, or when the
Residual security is disposed of, under rules similar to withholding upon
disposition of debt instruments that have original issue discount. See
"--Tax-Related Restrictions on Transfer of Residual Securities--Foreign
Investors" above concerning the disregard of certain transfers having "tax
avoidance potential." Investors who are non-U.S. Persons should consult their
own tax advisors regarding the specific tax consequences to them of owning
Residual Securities.


BACKUP WITHHOLDING

         Distributions made on the Regular Securities, and proceeds from the
sale of the Regular Securities to or through certain brokers, may be subject to
a "backup" withholding tax under Code Section 3406 of 28% (which rate will be
increased to 31% after 2010) on "reportable payments." Reportable payments
include interest distributions, original issue discount, and, under certain
circumstances, principal distributions, unless the Regular Holder complies with
certain reporting and/or certification procedures. These reporting and/or
certification procedures include the provision of its taxpayer identification
number to the trustee, its agent or the broker who effected the sale of the
Regular Security, or the holder is otherwise an exempt recipient under
applicable provisions of the Code. Any amounts to be withheld from distribution
on the Regular Securities would be refunded by the Internal Revenue Service or
allowed as a credit against the Regular Holder's federal income tax liability.
The New Regulations change certain of the rules relating to certain presumptions
relating to information reporting and backup withholding. Investors are urged to
contact their own tax advisors regarding the application to them of backup
withholding and information reporting.


REPORTING REQUIREMENTS

         Reports of accrued interest, original issue discount and information
necessary to compute the accrual of market discount will be made annually to the
Internal Revenue Service and to individuals, estates, non-exempt and
non-charitable trusts, and partnerships who are either holders of record of
Regular Securities or beneficial owners who own Regular Securities through a
broker or middleman as nominee. All brokers, nominees and all other non-exempt
holders of record of Regular Securities, including



                                     -157-



         o    corporations,

         o    non-calendar year taxpayers,

         o    securities or commodities dealers,

         o    real estate investment trusts,

         o    investment companies,

         o    common trust funds,

         o    thrift institutions and

         o    charitable trusts,

may request information for any calendar quarter by telephone or in writing by
contacting the person designated in Internal Revenue Service Publication 938
with respect to a particular series of Regular Securities. Holders through
nominees must request information from the nominee.

         The Internal Revenue Service's Form 1066 has an accompanying Schedule
Q, Quarterly Notice to Residual Interest Holders of REMIC Taxable Income or Net
Loss Allocation.

         Treasury regulations require that Schedule Q be furnished by the REMIC
Pool to each Residual Holder by the end of the month following the close of each
calendar quarter --41 days after the end of a quarter under proposed Treasury
regulations-- in which the REMIC Pool is in existence. Treasury regulations
require that, in addition to the foregoing requirements, information must be
furnished quarterly to Residual Holders, furnished annually, if applicable, to
holders of Regular Securities, and filed annually with the Internal Revenue
Service concerning Code Section 67 expenses as, as described under
"--Limitations on Deduction of Certain Expenses" above, allocable to the
holders. Furthermore, under the regulations, information must be furnished
quarterly to Residual Holders, furnished annually to holders of Regular
Securities, and filed annually with the Internal Revenue Service concerning the
percentage of the REMIC Pool's assets meeting the qualified asset tests
described above under "--Characterization of Investments in REMIC Securities."


                               GRANTOR TRUST FUNDS


CLASSIFICATION OF GRANTOR TRUST FUNDS

         With respect to each series of Grantor Trust Securities, Tax Counsel
will deliver an opinion. The opinion will be to the effect that, assuming
compliance with all provisions of the applicable agreement, the related Grantor
Trust Fund will be classified as a grantor trust under subpart E, part I of
subchapter J of Chapter 1 of Subtitle A of the Code and not as a partnership, an
association taxable as a corporation, or a "taxable mortgage pool" within the
meaning of Code Section 7701(i). Accordingly, each holder of a Grantor Trust
Security generally will be treated as the beneficial owner of an undivided
interest in the mortgage loans included in the Grantor Trust Fund.







                                     -158-



STANDARD SECURITIES

  GENERAL. Where there is no Retained Interest with respect to the mortgage
loans underlying the securities of a series, and where these securities are not
designated as "Stripped Securities," the holder of each security in the series,
referred to in this Prospectus as "Standard Securities," will be treated as the
owner of a pro rata undivided interest in the ordinary income and corpus
portions of the Grantor Trust Fund represented by its Standard Security. As a
result, the holder of these securities will be considered the beneficial owner
of a pro rata undivided interest in each of the mortgage loans, subject to the
discussion below under "--Recharacterization of Servicing Fees." Accordingly,
the holder of a Standard Security of a particular series will be required to
report on its federal income tax return, in accordance with the holder's method
of accounting, its pro rata share of the entire income from the mortgage loans
represented by its Standard Security, including:

         (1)  interest at the coupon rate on the mortgage loans,

         (2)  original issue discount, if any,

         (3)  prepayment fees,

         (4)  assumption fees, and

         (5)  late payment charges received by the servicer.

         A holder of securities generally will be able to deduct its share of
the servicing fee and all administrative and other expenses of the trust fund in
accordance with its method of accounting, provided that the amounts are
reasonable compensation for services rendered to that Grantor Trust Fund.
However, investors who are individuals, estates or trusts who own securities,
either directly or indirectly through certain pass-through entities, will be
subject to limitation with respect to certain itemized deductions described in
Code Section 67, including deductions under Code Section 212 for the servicing
fee and all administrative and other expenses of the Grantor Trust Fund, to the
extent that the deductions, in the aggregate, do not exceed two percent of an
investor's adjusted gross income. In addition, Code Section 68 provides that
itemized deductions otherwise allowable for a taxable year of an individual
taxpayer will be reduced by the lesser of:

         (1) 3% of the excess, if any, of adjusted gross income over a threshold
amount adjusted annually for inflation, or

         (2) 80% of the amount of itemized deductions otherwise allowable for
that year.

However, the Code Section 68 reduction of allowable itemized deductions will be
phased out beginning in 2006 and eliminated after 2009.

As a result, investors holding Standard Securities, directly or indirectly
through a Pass-Through Entity, may have aggregate taxable income in excess of
the aggregate amount of cash received on those Standard Securities with respect
to interest at the pass-through rate or as discount income on those Standard
Securities. In addition, the expenses are not deductible at all for purposes of
computing the alternative minimum tax, and may cause the investors to be subject
to




                                     -159-



significant additional tax liability. Moreover, where there is Retained Interest
with respect to the mortgage loans underlying a series of securities or where
the servicing fees are in excess of reasonable servicing compensation, the
transaction will be subject to the application of the "stripped bond" and
"stripped coupon" rules of the Code, as described below under "--Stripped
Securities" and "--Recharacterization of Servicing Fees," respectively.

         TAX STATUS. Tax Counsel has advised the depositor that:

         (1) A Standard Security owned by a "domestic building and loan
association" within the meaning of Code Section 7701(a)(19) will be considered
to represent "loans. . . secured by an interest in real property which is. . .
residential real property" within the meaning of Code Section 7701(a)(19)(C)(v),
provided that the real property securing the mortgage loans represented by that
Standard Security is of the type described in that section of the Code.

         (2) A Standard Security owned by a real estate investment trust will be
considered to represent "real estate assets" within the meaning of Code Section
856(c)(5)(B) to the extent that the assets of the related Grantor Trust Fund
consist of qualified assets. Interest income on the 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).

         (3) A Standard Security owned by a REMIC will be considered to
represent an "obligation, including any participation or certificate of
beneficial ownership in the REMIC, 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).

         (4) A Standard Security owned by a "financial asset securitization
investment trust" within the meaning of Code Section 860L(a) will be considered
to represent "permitted assets" within the meaning of Code Section 860L(c) to
the extent that the assets of related Grantor Trust Fund consist of "debt
instruments" or other permitted assets within the meaning of Code Section
860L(c).

         PREMIUM AND DISCOUNT. We advise you to consult with your tax advisors
as to the federal income tax treatment of premium and discount arising either at
the time of initial issuance of Standard Securities or subsequent acquisition.

         Premium. The treatment of premium incurred at the time of the purchase
of a Standard Security will be determined generally as described above under
"--REMICs--Taxation of Owners of Residual Securities --Premium."

         Original Issue Discount. The original issue discount rules of Code
Section 1271 through 1275 will be applicable to a holder's interest in those
mortgage loans as to which the conditions for the application of those sections
are met. Rules regarding periodic inclusion of original issue discount income
are applicable to mortgages of corporations originated after May 27, 1969,
mortgages of noncorporate borrowers, other than individuals, originated after
July 1, 1982, and mortgages of individuals originated after March 2, 1984. Under
the OID Regulations, an original issue discount could arise by the charging of
points by the originator of the mortgages in an amount greater than the
statutory de minimis exception, including a payment of points that is




                                     -160-



currently deductible by the borrower under applicable Code provisions or, under
certain circumstances, by the presence of "teaser" rates on the mortgage loans.
See "--Stripped Securities" below regarding original issue discount on Stripped
Securities.

         Original issue discount generally must be reported as ordinary gross
income as it accrues under a constant interest method that takes into account
the compounding of interest, in advance of the cash attributable to the income.
Unless indicated otherwise in the related prospectus supplement, no prepayment
assumption will be assumed for purposes of the accrual. However, Code Section
1272 provides for a reduction in the amount of original issue discount
includible in the income of a holder of an obligation that acquires the
obligation after its initial issuance at a price greater than the sum of the
original issue price and the previously accrued original issue discount, less
prior payments of principal. Accordingly, if the mortgage loans acquired by a
holder of securities are purchased at a price equal to the then unpaid principal
amount of those mortgage loans, no original issue discount attributable to the
difference between the issue price and the original principal amount of those
mortgage loans, i.e., points, will be includible by the related holder.

         Market Discount. Holders of securities also will be subject to the
market discount rules to the extent that the conditions for application of those
sections are met. Market discount on the mortgage loans will be determined and
will be reported as ordinary income generally in the manner described above
under "--REMICs -- Taxation of Owners of Regular Securities -- Market Discount,"
except that the ratable accrual methods described in those sections will not
apply. Rather, the holder will accrue market discount pro rata over the life of
the mortgage loans, unless the constant yield method is elected. The related
prospectus supplement will specify what, if any, prepayment assumption will be
assumed for purposes of accrual.

         RECHARACTERIZATION OF SERVICING FEES. If the servicing fees paid to a
servicer were deemed to exceed reasonable servicing compensation, the amount of
excess would represent neither income nor a deduction to holders of securities.
In this regard, there are no authoritative guidelines for federal income tax
purposes as to either the maximum amount of servicing compensation that may be
considered reasonable in the context of this or similar transactions or whether,
in the case of Standard Securities, the reasonableness of servicing compensation
should be determined on a weighted average or loan-by-loan basis. If a
loan-by-loan basis is appropriate, the likelihood that the applicable amount
would exceed reasonable servicing compensation as to some of the mortgage loans
would be increased. Internal Revenue Service guidance indicates that a servicing
fee in excess of reasonable compensation --"excess servicing"-- will cause the
mortgage loans to be treated under the "stripped bond" rules. This guidance
provides safe harbors for servicing deemed to be reasonable and requires
taxpayers to demonstrate that the value of servicing fees in excess of these
applicable amounts is not greater than the value of the services provided.

         Accordingly, if the Internal Revenue Service's approach is upheld, a
Servicer who receives a servicing fee in excess of those amounts would be viewed
as retaining an ownership interest in a portion of the interest payments on the
mortgage loans. Under the rules of Code Section 1286, the separation of
ownership of the right to receive some or all of the interest payments on an
obligation from the right to receive some or all of the principal payments on
the obligation would result in treatment of those mortgage loans as "stripped
coupons" and "stripped





                                     -161-



bonds." Subject to the de minimis rule discussed below under "--Stripped
Securities," each stripped bond or stripped coupon could be considered for this
purpose as a non-interest bearing obligation issued on the date of issue of the
Standard Securities, and the original issue discount rules of the Code would
apply to the holder of those securities. While holders of securities would still
be treated as owners of beneficial interests in a grantor trust for federal
income tax purposes, the corpus of the trust could be viewed as excluding the
portion of the mortgage loans the ownership of which is attributed to the
servicer, or as including the portion as a second class of equitable interest.
Applicable Treasury regulations treat an arrangement of this type as a fixed
investment trust, since the multiple classes of trust interests should be
treated as merely facilitating direct investments in the trust assets and the
existence of multiple classes of ownership interests is incidental to that
purpose. In general, a recharacterization should not have any significant effect
on the timing or amount of income reported by a holder of securities, except
that the income reported by a cash method holder may be slightly accelerated.
See "--Stripped Securities" below for a further description of the federal
income tax treatment of stripped bonds and stripped coupons.

         SALE OR EXCHANGE OF STANDARD SECURITIES. If a sale or exchange of a
Standard Security occurs, a holder of securities will recognize gain or loss
equal to the difference between the amount realized on the sale and its
aggregate adjusted basis in the mortgage loans and other assets represented by
the security. In general, the aggregate adjusted basis will equal the holder's
cost for the Standard Security, exclusive of accrued interest, increased by the
amount of any income previously reported with respect to the Standard Security
and decreased by the amount of any losses previously reported with respect to
the Standard Security and the amount of any distributions other than accrued
interest received on those securities. Except as provided above with respect to
market discount on any mortgage loans, and except for certain financial
institutions subject to the provisions of Code Section 582(c), any gain or loss
generally would be capital gain or loss if the Standard Security was held as a
capital asset. However, gain on the sale of a Standard Security will be treated
as ordinary income:

         (1) if a Standard Security is held as part of a "conversion
transaction" as defined in Code Section 1258(c), up to the amount of interest
that would have accrued on the holder's net investment in the conversion
transaction at 120% of the appropriate applicable federal rate in effect at the
time the taxpayer entered into the transaction minus any amount previously
treated as ordinary income with respect to any prior disposition of property
that was held as part of that transaction or

         (2) in the case of a non-corporate taxpayer, to the extent 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.

         Capital gains of noncorporate taxpayers generally are subject to a
lower maximum tax rate than ordinary income of the taxpayers for capital assets
held for more than one year. The maximum tax rate for corporations is the same
with respect to both ordinary income and capital gains.

         Holders that recognize a loss on a sale or exchange of a Standard
Security for federal income tax purposes in excess of certain threshold amounts
should consult their tax advisors as




                                     -162-



to the need to file IRS Form 8886 (disclosing certain potential tax shelters) on
their federal income tax returns.


STRIPPED SECURITIES

  GENERAL. Pursuant to Code Section 1286, the separation of ownership of the
right to receive some or all of the principal payments on an obligation from
ownership of the right to receive some or all of the interest payments results
in the creation of "stripped bonds" with respect to principal payments and
"stripped coupons" with respect to interest payments. For purposes of this
discussion, securities that are subject to those rules will be referred to as
"Stripped Securities." The securities will be subject to those rules if:

         (1) the Depositor or any of its affiliates retains, for its own account
or for purposes of resale, in the form of Retained Interest, or otherwise, an
ownership interest in a portion of the payments on the mortgage loans,

         (2) the depositor or any of its affiliates is treated as having an
ownership interest in the mortgage loans to the extent it is paid or retains
servicing compensation in an amount greater than reasonable consideration for
servicing the mortgage loans (see "--Standard Securities -- Recharacterization
of Servicing Fees"), and

         (3) a class of securities are issued in two or more classes or
subclasses representing the right to non-pro-rata percentages of the interest
and principal payments on the mortgage loans.

         In general, a holder of a Stripped Security will be considered to own
"stripped bonds" with respect to its pro rata share of all or a portion of the
principal payments on each mortgage loan and/or "stripped coupons" with respect
to its pro rata share of all or a portion of the interest payments on each
mortgage loan, including the Stripped Security's allocable share of the
servicing fees paid to a servicer, to the extent that those fees represent
reasonable compensation for services rendered. See the discussion above under
"--Standard Securities--Recharacterization of Servicing Fees." Although not free
from doubt, for purposes of reporting to holders of Stripped Securities, the
servicing fees will be allocated to the classes of Stripped Securities in
proportion to the distributions to the classes for the related period or
periods. The holder of a Stripped Security generally will be entitled to a
deduction each year in respect of the servicing fees, as described above under
"--Standard Securities--General," subject to the limitation described in that
section.

              Code Section 1286 treats a stripped bond or a stripped coupon
generally as an obligation issued on the date that the stripped interest is
purchased. Although the treatment of Stripped Securities for federal income tax
purposes is not clear in certain respects, particularly where Stripped
Securities are issued with respect to a mortgage pool containing variable-rate
mortgage loans, the depositor has been advised by counsel that:

         (1) the Grantor Trust Fund will be treated as a grantor trust under
subpart E, Part I of subchapter J of Chapter 1 of Subtitle A the Code and not as
an association taxable as a corporation or a "taxable mortgage pool" within the
meaning of Code Section 7701(i), and




                                     -163-



         (2) each Stripped Security should be treated as a single installment
obligation for purposes of calculating original issue discount and gain or loss
on disposition.

         This treatment is based on the interrelationship of Code Section 1286,
Code Sections 1272 through 1275, and the OID Regulations. Although it is
possible that computations with respect to Stripped Securities could be made in
one of the ways described below under "--Possible Alternative
Characterizations," the OID Regulations state, in general, that two or more debt
instruments issued by a single issuer to a single investor in a single
transaction should be treated as a single debt instrument. Accordingly, for
original issue discount purposes, all payments on any Stripped Securities should
be aggregated and treated as though they were made on a single debt instrument.
The applicable agreement will require that the trustee make and report all
computations described below using this aggregate approach, unless substantial
legal authority requires otherwise.

         Furthermore, Treasury regulations provide for treatment of a Stripped
Security as a single debt instrument issued on the date it is purchased for
purposes of calculating any original issue discount. In addition, under those
regulations, a Stripped Security that represents a right to payments of both
interest and principal may be viewed either as issued with original issue
discount or market discount, as described below, at a de minimis original issue
discount, or, presumably, at a premium. This treatment indicates that the
interest component of a Stripped Security of this type would be treated as
qualified stated interest under the OID Regulations, assuming it is not an
interest-only or super-premium Stripped Security. Further, these regulations
provide that the purchaser of a Stripped Security will be required to account
for any discount as market discount rather than original issue discount if
either:

         (1) the initial discount with respect to the Stripped Security was
treated as zero under the de minimis rule, or

         (2) no more than 100 basis points in excess of reasonable servicing is
stripped off the related mortgage loans. Any market discount would be reportable
as described above under "--REMICs--Taxation of Owners of Regular
Securities--Market Discount," without regard to the de minimis rule described in
this prospectus, assuming that a prepayment assumption is employed in that
computation.

         STATUS OF STRIPPED SECURITIES. No specific legal authority exists as to
whether the character of the Stripped Securities, for federal income tax
purposes, will be the same as that of the mortgage loans. Although the issue is
not free from doubt, counsel has advised the depositor that Stripped Securities
owned by applicable holders should be considered to represent

         (1) "real estate assets" within the meaning of Code Section
856(c)(4)(A),

         (2) "obligation[s]. . . principally secured by an interest in real
property" within the meaning of Code Section 860G(a)(3)(A), and

         (3) "loans. . . secured by an interest in real property" within the
meaning of Code Section 7701(a)(19)(C)(v).






                                     -164-



Interest including original issue discount income attributable to Stripped
Securities should be considered to represent "interest on obligations secured by
mortgages on real property" within the meaning of Code Section 856(c)(3)(B),
provided that in each case the mortgage loans and interest on those mortgage
loans qualify for this tax treatment. See "--Standard Securities -- Tax Status"
above.

         TAXATION OF STRIPPED SECURITIES. Original Issue Discount. Except as
described above under "General," each Stripped Security will be considered to
have been issued at an original issue discount for federal income tax purposes.
Original issue discount with respect to a Stripped Security must be included in
ordinary income as it accrues, in accordance with a constant yield method that
takes into account the compounding of interest, which may be prior to the
receipt of the cash attributable to that income. Based in part on the issue
discount required to be included in the income of a holder of a Stripped
Security in any taxable year likely will be computed generally as described
above under "--REMICs--Taxation of Owner of Regular Securities -- Original Issue
Discount" and "-- Variable Rate Regular Securities." However, with the apparent
exception of a Stripped Security qualifying as a market discount obligation as
described above under "-- General," the issue price of a Stripped Security will
be the purchase price paid by each holder of the Stripped Security. The stated
redemption price at maturity will include the aggregate amount of the payments
to be made on the Stripped Security to the holder of securities, presumably
under the Prepayment Assumption, other than qualified stated interest.

         If the mortgage loans prepay at a rate either faster or slower than
that under the Prepayment Assumption, a holder's recognition of original issue
discount will be either accelerated or decelerated and the amount of the
original issue discount will be either increased or decreased depending on the
relative interests in principal and interest on each mortgage loan represented
by the holder's Stripped Security. While the matter is not free from doubt, the
holder of a Stripped Security should be entitled in the year that it becomes
certain, assuming no further prepayments, that the holder will not recover a
portion of its adjusted basis in that Stripped Security to recognize a loss,
which may be a capital loss, equal to that portion of unrecoverable basis.

         As an alternative to the method described above, the fact that some or
all of the interest payments with respect to the Stripped Securities will not be
made if the mortgage loans are prepaid could lead to the interpretation that
those interest payments are "contingent" 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 prepayable securities such as the
Stripped Securities. However, if final regulations dealing with contingent
interest with respect to the Stripped Securities apply the same principles as
the OID Regulations, those regulations may lead to different timing of income
inclusion that 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 Stripped Securities as ordinary income.
Investors should consult their tax advisors regarding the appropriate tax
treatment of Stripped Securities.

         SALE OR EXCHANGE OF STRIPPED SECURITIES. Sale or exchange of a Stripped
Security prior to its maturity will result in gain or loss equal to the
difference, if any, between the amount received and the holder's adjusted basis
in that Stripped Security, as described above under "--REMICs--Taxation of
Owners of Regular Securities -- Sale or Exchange of Regular Securities." To the





                                     -165-



extent that a subsequent purchaser's purchase price is exceeded by the remaining
payments on the Stripped Securities, the subsequent purchaser will be required
for federal income tax purposes to accrue and report the excess as if it were
original issue discount in the manner described above. It is not clear for this
purpose whether the assumed prepayment rate that is to be used in the case of a
holder of securities other than an original holder of securities should be the
Prepayment Assumption or a new rate based on the circumstances at the date of
subsequent purchase.

         Holders that recognize a loss on a sale or exchange of a Stripped
Security for federal income tax purposes in excess of certain threshold amounts
should consult their tax advisors as to the need to file IRS Form 8886
(disclosing certain potential tax shelters) on their federal income tax returns.

         PURCHASE OF MORE THAN ONE CLASS OF STRIPPED SECURITIES. When an
investor purchases more than one class of Stripped Securities, it is currently
unclear whether for federal income tax purposes the classes of Stripped
Securities should be treated separately or aggregated for purposes of the rules
described above.

         POSSIBLE ALTERNATIVE CHARACTERIZATIONS. The characterizations of the
Stripped Securities discussed above are not the only possible interpretations of
the applicable Code provisions. For example, the holder of securities may be
treated as the owner of:

         (1) one installment obligation consisting of the Stripped Security's
pro rata share of the payments attributable to principal on each mortgage loan
and a second installment obligation consisting of the respective Stripped
Security's pro rata share of the payments attributable to interest on each
mortgage loan,

         (2) as many stripped bonds or stripped coupons as there are scheduled
payments of principal and/or interest on each mortgage loan, or

         (3) a separate installment obligation for each mortgage loan,
representing the Stripped Security's pro rata share of payments of principal
and/or interest to be made with respect to that Stripped Security.

         Alternatively, the holder of one or more classes of Stripped Securities
may be treated as the owner of a pro rata fractional undivided interest in each
mortgage loan to the extent that the related Stripped Security, or classes of
Stripped Securities in the aggregate, represent the same pro rata portion of
principal and interest on each mortgage loan, and a stripped bond or stripped
coupon, as the case may be, treated as an installment obligation or contingent
payment obligation, as to the remainder. Treasury regulations regarding original
issue discount on stripped obligations make the foregoing interpretations less
likely to be applicable. The preamble to these regulations states that they are
premised on the assumption that an aggregation approach is appropriate for
determining whether original issue discount on a stripped bond or stripped
coupon is de minimis, and solicits comments on appropriate rules for aggregating
stripped bonds and stripped coupons under Code Section 1286.

         Because of these possible varying characterizations of Stripped
Securities and the resultant differing treatment of income recognition, holders
of securities are urged to consult




                                     -166-



their own tax advisors regarding the proper treatment of Stripped Securities for
federal income tax purposes.


REPORTING REQUIREMENTS AND BACKUP WITHHOLDING

         The trustee will furnish, within a reasonable time after the end of
each calendar year, to each holder of Grantor Trust Securities at any time
during that calendar year, information, prepared on the basis described above,
as is necessary to enable the holder of those securities to prepare its federal
income tax returns. The information will include the amount of original issue
discount accrued on Grantor Trust Securities held by persons other than holders
of securities exempted from the reporting requirements. However, the amount
required to be reported by the trustee may not be equal to the proper amount of
original issue discount required to be reported as taxable income by a holder of
Grantor Trust Securities, other than an original holder of securities that
purchased at the issue price. In particular, in the case of Stripped Securities,
the reporting will be based on a representative initial offering price of each
class of Stripped Securities or some price as set forth in the related
prospectus supplement. The trustee will also file original issue discount
information with the Internal Revenue Service. If a holder of securities fails
to supply an accurate taxpayer identification number or if the Secretary of the
Treasury determines that a holder of securities has not reported all interest
and dividend income required to be shown on his federal income tax return, 28%
backup withholding (which rate will be increased to 31% after 2010) may be
required in respect of any reportable payments, as described above under
"--REMICs--Backup Withholding."

         TAXATION OF CERTAIN FOREIGN INVESTORS. To the extent that a Grantor
Trust Security evidences ownership in mortgage loans that are issued on or
before July 18, 1984, interest or original issue discount paid by the person
required to withhold tax under Code Section 1441 or 1442 to nonresident aliens,
foreign corporations, or other non-U.S. Persons generally will be subject to 30%
United States withholding tax, or any lower rate as may be provided for interest
by an applicable tax treaty. Accrued original issue discount recognized by the
holder of Grantor Trust Securities on the sale or exchange of that security also
will be subject to federal income tax at the same rate.

         Treasury regulations provide that interest or original issue discount
paid by the trustee or other withholding agent to a non-U.S. Person evidencing
ownership interest in mortgage loans issued after July 18, 1984 will be
"portfolio interest" and will be treated in the manner, and these persons will
be subject to the same certification requirements, described above under
"--REMICs--Taxation of Certain Foreign Investors--Regular Securities."


                            PARTNERSHIP TRUST FUNDS


CLASSIFICATION OF PARTNERSHIP TRUST FUNDS

         With respect to each series of Partnership Securities or Debt
Securities, 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 applicable agreement and related
documents will be complied with, and on counsel's conclusion that the nature of
the income of




                                     -167-



the trust fund will exempt it from the rule that certain publicly traded
partnerships are taxable as corporations.


CHARACTERIZATION OF INVESTMENTS IN PARTNERSHIP SECURITIES AND DEBT SECURITIES

         For federal income tax purposes:

         (1) Partnership Securities and Debt Securities held by a thrift
institution taxed as a domestic building and loan association will not
constitute "loans . . . secured by an interest in real property which is . . .
residential real property" within the meaning of Code Section 7701(a)(19)(C)(v)
and

         (2) interest on Debt Securities held by a real estate investment trust
will not be treated as "interest on obligations secured by mortgages on real
property or on interests in real property" within the meaning of Code Section
856(c)(3)(B), and Debt Securities held by a real estate investment trust will
not constitute "real estate assets" within the meaning of Code Section
856(c)(5)(B). However, Partnership Securities held by a real estate investment
trust will qualify under those sections based on the real estate investments
trust's proportionate interest in the assets of the Partnership Trust Fund based
on capital accounts unless the Partnership Security is not treated as equity in
the issuing trust.


TAXATION OF HOLDER OF DEBT SECURITIES

         Treatment of the Debt Securities as Indebtedness. The Depositor will
agree, and the holders of securities will agree by their purchase of Debt
Securities, to treat the Debt Securities as debt for federal income tax
purposes. No regulations, published rulings, or judicial decisions exist that
discuss the characterization for federal income tax purposes of securities with
terms substantially the same as the Debt Securities. However, with respect to
each series of Debt Securities, Tax Counsel will deliver its opinion that,
unless otherwise specified in the related prospectus supplement, 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 IRS successfully asserted
that the Debt Securities were not debt for federal income tax purposes, the Debt
Securities might be treated as equity interests in the Partnership Trust Fund.
As a result, the timing and amount of income allocable to holders of the Debt
Securities may be different than as described in the following paragraph.

         Debt Securities generally will be subject to the same rules of taxation
as Regular Securities issued by a REMIC, as described above, except that:

         (1) income reportable on Debt Securities is not required to be reported
under the accrual method unless the holder otherwise uses the accrual method,

         (2) the special rule treating a portion of the gain on sale or exchange
of a Regular Security as ordinary income is inapplicable to Debt Securities. See
"--REMICs--Taxation of Owners of Regular Securities--Sale or Exchange of Regular
Securities" above, and






                                     -168-



         (3) the character and timing of any Realized Losses may be governed by
Code Section 165(g) relating to worthless securities rather than by Code Section
166 relating to bad debts if the Debt Securities are considered issued by a
corporation. This could occur, for example, if the issuing trust were
disregarded as separate from a single holder of the residual interest in the
trust that was a corporation.


TAXATION OF OWNERS OF PARTNERSHIP SECURITIES

  TREATMENT OF THE PARTNERSHIP TRUST FUND AS A PARTNERSHIP. The prospectus
supplement may specify that the Depositor will agree, and the holders of
Partnership Securities will agree by their purchase of Partnership Securities,
to treat the Partnership Trust Fund:

         (1) 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 holders of Partnership Securities,
including the depositor, and the Debt Securities, if any, being debt of the
partnership or

         (2) if a single beneficial owner owns all of the Partnership Securities
in a trust fund, the trust fund will be ignored for federal income tax purposes
and the assets and Debt Securities of the trust fund will be treated as assets
and indebtedness of this beneficial owner.

         A variety of alternative characterizations are possible. For example,
because one or more of the classes of Partnership Securities have certain
features characteristic of debt, the Partnership Securities might be considered
debt of the depositor or the Partnership Trust Fund. A characterization of this
type would not result in materially adverse tax consequences to holders of
securities as compared to the consequences from treatment of the Partnership
Securities as equity in a partnership, described below. The following discussion
assumes that the Partnership Securities represent equity interests in a
partnership.

         PARTNERSHIP TAXATION. As a partnership, the Partnership Trust Fund will
not be subject to federal income tax. Rather, each holder of Partnership
Securities will be required to separately take into account each holder's
allocated share of income, gains, losses, deductions and credits of the
Partnership Trust Fund. We anticipate that the Partnership Trust Fund's income
will consist primarily of interest earned on the mortgage loans, including
appropriate adjustments for market discount, original issue discount and bond
premium, as described above under "--Grantor Trust Funds--Standard
Securities--General," and "--Premium and Discount" and any gain upon collection
or disposition of mortgage loans. The Partnership Trust Fund's deductions will
consist primarily of interest and original issue discount accruing with respect
to the Debt Securities and servicing and other fees.

              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 applicable governing agreement and related documents. The partnership
agreement will provide, in general, that the holders of securities will be
allocated gross income of the Partnership Trust Fund for each Due Period equal
to the sum of:




                                     -169-



         (1) the interest that accrues on the Partnership Securities in
accordance with their terms for the Due Period, including interest accruing at
the applicable pass-through rate for the applicable Due Period and interest on
amounts previously due on the Partnership Securities but not yet distributed;

         (2) any Partnership Trust Fund income attributable to discount on the
mortgage loans that corresponds to any excess of the principal amount of the
Partnership Securities over their initial issue price; and

         (3) any other amounts of income payable to the holders of securities
for the applicable Due Period.

         That allocation will be reduced by any amortization by the Partnership
Trust Fund of premium on mortgage loans that corresponds to any excess of the
issue price of Partnership Securities over their principal amount. All remaining
taxable income or net loss of the Partnership Trust Fund will be allocated to
the depositor and any remaining net loss will be allocated to the depositor to
the extent of the depositor's capital account and then will be allocated to
holders of Partnership Securities in the order in which they bear losses. Based
on the economic arrangement of the parties, this approach for allocating
Partnership Trust Fund income should be permissible under applicable Treasury
regulations. No assurance can be given that the IRS would not require a greater
amount of income to be allocated to Partnership Securities. Moreover, even under
the foregoing method of allocation, holders of Partnership Securities may be
allocated income equal to the entire pass-through rate plus the other items
described above even though the trust fund might not have sufficient cash to
make current cash distributions of that amount. Thus, cash basis holders will in
effect be required to report income from the Partnership Securities on the
accrual basis and holders of Partnership Securities may become liable for taxes
on Partnership Trust Fund income even if they have not received cash from the
Partnership Trust Fund to pay these taxes.

         All of the taxable income allocated to a holder of Partnership
Securities 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 a holder under the
Code.

         A share of expenses of the Partnership Trust Fund, including fees of
the master servicer but not interest expense, allocable to an individual, estate
or trust holder of Partnership Securities would be miscellaneous itemized
deductions subject to the limitations described above under "--Grantor Trust
Funds--Standard Securities -- General." Accordingly, these deductions might be
disallowed to the individual in whole or in part and might result in the holder
of the Partnership Securities being taxed on an amount of income that exceeds
the amount of cash actually distributed to the holder of the securities over the
life of the Partnership Trust Fund.

         Discount income or premium amortization with respect to each mortgage
loan would be calculated in a manner similar to the description above under
"--Grantor Trust Funds--Standard Securities -- General" and "-- Premium and
Discount." Regardless of that description, it is intended that the Partnership
Trust Fund will make all tax calculations relating to income and allocations to
holders of Partnership Securities on an aggregate basis with respect to all
mortgage




                                     -170-



loans held by the Partnership Trust Fund rather than on a mortgage
loan-by-mortgage loan basis. If the IRS required calculations to be made
separately for each mortgage loan, the Partnership Trust Fund might be required
to incur additional expense, but we believe that there would not be a material
adverse effect on holders of Partnership Securities.

         DISCOUNT AND PREMIUM. The prospectus supplement may provide that the
mortgage loans will have been issued with original discount. However, it is not
anticipated that the mortgage loans will have been issued with original issue
discount and, therefore, the Partnership Trust Fund should not have original
issue discount income. However, the purchase price paid by the Partnership Trust
Fund for the mortgage loans may be greater or less than the remaining principal
balance of the mortgage loans at the time of purchase. If so, the mortgage loans
will have been acquired at a premium or discount, as the case may be. See
"--Grantor Trust Funds--Standard Securities--Premium and Discount" in this
prospectus. As previously indicated above, the Partnership Trust Fund will make
this calculation on an aggregate basis, but might be required to recompute it on
a mortgage loan-by-mortgage loan basis.

         If the Partnership Trust Fund acquires the mortgage loans at a market
discount or premium, the Partnership Trust Fund will elect to include any
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 any market discount income or premium deduction
may be allocated to holders of Partnership Securities.

         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. A termination of this type would cause a
deemed contribution of the assets of a Partnership Trust Fund --the "old
partnership"-- to a new Partnership Trust Fund --the "new partnership"-- in
exchange for interests in the new partnership. The interests in a new
Partnership Trust Fund would be deemed distributed to the partners of the old
partnership in liquidation of the old partnership, which would not constitute a
sale or exchange. The Partnership Trust Fund will not comply with certain
technical requirements that might apply when a constructive termination occurs.
As a result, the Partnership Trust Fund may be subject to certain tax penalties
and may incur additional expenses if it is required to comply with those
requirements. Furthermore, the Partnership Trust Fund might not be able to
comply due to lack of data.

         DISPOSITION OF SECURITIES. Generally, capital gain or loss will be
recognized on a sale of Partnership Securities in an amount equal to the
difference between the amount realized and the seller's tax basis in the
Partnership Securities sold. A holder's tax basis in a Partnership Security will
generally equal the holder's cost increased by the holder's share of Partnership
Trust Fund income (includible in income) and decreased by any distributions
received with respect to a Partnership Security. In addition, both the tax basis
in the Partnership Securities and the amount realized on a sale of a Partnership
Security would include the holder's share of the Debt Securities and other
liabilities of the Partnership Trust Fund. A holder acquiring Partnership
Securities at different prices may be required to maintain a single aggregate
adjusted tax basis in the Partnership Securities. If a sale or other disposition
of some of the Partnership Securities occurs, the holder may be required to
allocate a portion of the aggregate tax basis to the




                                     -171-



Partnership Securities sold, rather than maintaining a separate tax basis in
each Partnership Security for purposes of computing gain or loss on a sale of
that Partnership Security.

         Any gain on the sale of a Partnership Security attributable to the
holder's share of unrecognized accrued market discount on the mortgage loans
would generally be treated as ordinary income to the holder and would give rise
to special tax reporting requirements. The Partnership Trust Fund does not
expect to have any other assets that would give rise to similar special
reporting considerations. Thus, to avoid those special reporting requirements,
the Partnership Trust Fund will elect to include market discount in income as it
accrues.

         If a holder of Partnership Securities is required to recognize an
aggregate amount of income, not including income attributable to disallowed
itemized deductions described above, over the life of the Partnership Securities
that exceeds the aggregate cash distributions with respect to those Partnership
Securities, the excess will generally give rise to a capital loss if the
retirement of the Partnership Securities occurs.

         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 holders of securities in proportion to the principal amount of Partnership
Securities owned by them as of the close of the last day of the related Due
Period. As a result, a holder purchasing Partnership Securities may be allocated
tax items attributable to periods before the actual transaction, which will
affect its tax liability and tax basis.

         The use of this Due Period convention may not be permitted by existing
regulations. If a Due Period convention is not allowed, or only applies to
transfers of less than all of the partner's interest, taxable income or losses
of the Partnership Trust Fund might be reallocated among the holders of
Partnership Securities. The depositor will be authorized to revise the
Partnership Trust Fund's method of allocation between transferors and
transferees to conform to a method permitted by future regulations.

         SECTION 731 DISTRIBUTIONS. In the case of any distribution to a holder
of Partnership Securities, no gain will be recognized to that holder of
securities to the extent that the amount of any money distributed with respect
to that holder's Partnership Security exceeds the adjusted basis of that
holder's interest in the security. To the extent that the amount of money
distributed exceeds that holder's adjusted basis, gain will be currently
recognized. In the case of any distribution to a holder of Partnership
Securities, no loss will be recognized except if a distribution in liquidation
of a holder's interest occurs. Any gain or loss recognized by a holder of
Partnership Securities will be capital gain or loss.

         SECTION 754 ELECTION. If a holder of Partnership Securities sells its
securities at a profit or loss, the purchasing holder of Partnership Securities
will have a higher or lower basis, as applicable, in the Partnership Securities
than the selling holder of Partnership Securities had. The tax basis of the
Partnership Trust Fund's assets would not be adjusted to reflect that higher or
lower basis unless the Partnership Trust Fund were to file an election under
Section 754 of the Code. In order to avoid the administrative complexities that
would be involved in keeping accurate accounting records, as well as potentially
onerous information reporting requirements,




                                     -172-



the Partnership Trust Fund will not make that election. As a result, holders of
Partnership Securities might be allocated a greater or lesser amount of
Partnership Trust Fund income than would be appropriate based on their own
purchase price for Partnership Securities.

         ADMINISTRATIVE MATTERS. The trustee is required to keep or have kept
complete and accurate books of the Partnership Trust Fund. The books will be
maintained for financial reporting and tax purposes on an accrual basis and the
fiscal year of the Partnership Trust Fund will be the calendar year. The trustee
will file a partnership information return on IRS Form 1065 with the IRS for
each taxable year of the Partnership Trust Fund and will report each holder's
allocable share of items of Partnership Trust Fund income and expense to holders
and the IRS on Schedule K-1 to Form 1065. The trustee will provide the Schedule
K-1 information to nominees that fail to provide the Partnership Trust Fund with
the information statement described below and those nominees will be required to
forward the information to the beneficial owners of the Partnership Securities.
Generally, holders must file tax returns that are consistent with the
information return filed by the Partnership Trust Fund or be subject to
penalties unless the holder notifies the IRS of all inconsistencies.

         Under Section 6031 of the Code, any person that holds Partnership
Securities as a nominee at any time during a calendar year is required to
furnish the Partnership Trust Fund with a statement containing certain
information on the nominee, the beneficial owners and the Partnership Securities
so held. This information includes:

         (1)   the name, address and taxpayer identification number of the
               nominee and

         (2)   as to each beneficial owner:

               (x)   the name, address and identification number of the
                     beneficial owner,

               (y)   whether the beneficial owner is a U.S. Person, a
                     tax-exempt entity or a foreign government, an
                     international organization, or any wholly owned agency or
                     instrumentality of either of the foregoing, and

               (z)   certain information on Partnership Securities that were
                     held, bought or sold on behalf of the beneficial owner
                     throughout the year.

         In addition, brokers and financial institutions that hold Partnership
Securities through a nominee are required to furnish directly to the trustee
information as to themselves and their ownership of Partnership Securities. A
clearing agency registered under Section 17A of the Exchange Act is not required
to furnish any information statement of this type to the Partnership Trust Fund.
The information referred to above for any calendar year must be furnished to the
Partnership Trust Fund on or before the following January 31. Nominees, brokers
and financial institutions that fail to provide the Partnership Trust Fund with
the information described above may be subject to penalties.

         The person specified in the applicable agreement as the tax matters
partner will be responsible for representing the holders of securities in any
dispute with the IRS. The Code provides for administrative examination of a
partnership as if the partnership were a separate and distinct taxpayer.
Generally, the statute of limitations for partnership items does not expire
until



                                     -173-



three years after the date on which the partnership information return is filed.
Any adverse determination following an audit of the return of the Partnership
Trust Fund by the appropriate taxing authorities could result in an adjustment
of the returns of the holders of Partnership Securities, and, under certain
circumstances, a holder of securities 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 holder's returns and adjustments
of items not related to the income and losses of the Partnership Trust Fund.

         TAX CONSEQUENCES TO FOREIGN HOLDERS OF PARTNERSHIP SECURITIES. It is
not clear whether the Partnership Trust Fund would be considered to be engaged
in a trade or business in the United States for purposes of federal withholding
taxes with respect to non-U.S. Persons. This is so because there is no clear
authority dealing with that issue under facts substantially similar to those
described in this prospectus. However, for taxable years of a Partnership Trust
Fund commencing on or after January 1, 1998, securityholders who are non-U.S.
Persons would in any event not be treated as engaged in a trade or business in
the United States if holding the Partnership Security, or other investing or
trading in stock or securities for the holder's own account, is the only
activity of the securityholder within the United States and the securityholder
is not a dealer in securities. Accordingly, the securityholders will not be
subject to withholding tax pursuant to Section 1446 of the Code, at the highest
marginal rate applicable to U.S. corporations for non-U.S. Persons that are
taxable as corporations and at the highest marginal rate applicable to U.S.
individuals for all other foreign holders. The prospectus supplement relating to
an applicable series will describe whether an exception to the 30% United States
withholding tax on interest may apply to securityholders.

         BACKUP WITHHOLDING. Distributions made on the Partnership Securities
and proceeds from the sale of the Partnership Securities will be subject to a
"backup" withholding tax of 28% (which rate will be increased to 31% after 2010)
if, in general, the holder of Partnership Securities fails to comply with
certain identification procedures, unless the holder is an exempt recipient
under applicable provisions of the Code.

         The federal tax discussions set forth above are included for general
information only and may not be applicable depending on a securityholder's
particular tax situation. Prospective purchasers should consult their tax
advisors with respect to the tax consequences to them of the purchase, ownership
and disposition of REMIC Securities, Grantor Trust Securities, Partnership
Securities and Debt Securities, including the tax consequences under state,
local, foreign and other tax laws and the possible effects of changes in federal
or other tax laws.


                        STATE AND OTHER TAX CONSEQUENCES

         In addition to the federal income tax consequences described in
"Federal Income Tax Consequences" in this prospectus, potential investors should
consider the state and local tax consequences of the acquisition, ownership, and
disposition of the securities 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 with respect to the various tax consequences of investments in the
securities offered under this prospectus.



                                     -174-



                              ERISA CONSIDERATIONS

         Title I of ERISA and Section 4975 of the Code impose certain
requirements on ERISA Plans and on persons who are fiduciaries with respect to
ERISA Plans. Certain employee benefit plans, such as governmental plans as
defined in Section 3(32) of ERISA, and, if no election has been made under
Section 410(d) of the Code, church plans as defined in Section 3(33) of ERISA,
are not subject to the ERISA requirements discussed in this prospectus. However,
assets of such plans (collectively with ERISA Plans, "Plans") may be subject to
the provisions of applicable federal, state or local law that is materially
similar to the foregoing provisions of ERISA or the Code. Any such plan which is
qualified and exempt from taxation under Sections 401(a) and 501(a) of the Code,
however, is subject to the prohibited transaction rules set forth in Section 503
of the Code.

         In addition to the imposition of general fiduciary requirements,
including those of investment prudence and diversification and the requirement
that a Plan's investment be made in accordance with the documents governing the
Plan, Section 406(a) of ERISA and Section 4975(c)(1)(A), (B), (C) and (D) of the
Code prohibit a broad range of transactions involving assets of a Plan and
persons who have certain specified relationships to the Plan. In addition,
Section 406(b) of ERISA and Section 4975(c)(1)(E) and (F) of the Code impose
certain prohibitions on Parties in Interest who are fiduciaries with respect to
the Plan. Certain Parties in Interest that participate in a prohibited
transaction may be subject to a penalty imposed under Section 502(i) of ERISA or
an excise tax pursuant to Sections 4975(a) and (b) of the Code, unless a
statutory or administrative exemption is available.

         Certain transactions involving a trust fund might be deemed to
constitute prohibited transactions under ERISA and Section 4975 of the Code with
respect to a Plan that purchases securities if the residential loans, agency
securities, mortgage securities and other assets included in the trust fund are
deemed to be assets of the Plan. The U.S. Department of Labor has promulgated
regulations at 29 C.F.R. ss. 2510.3-101 defining the term "plan assets" for
purposes of applying the general fiduciary responsibility provisions of ERISA
and the prohibited transaction provisions of ERISA and the Code. Under these
regulations, generally, when a Plan acquires an equity interest in an entity
such as a trust fund, the Plan's assets include the investment in the entity and
an undivided interest in each of the underlying assets of the entity, unless
certain exceptions not applicable here apply, or unless the equity participation
in the entity by "Benefit Plan Investors" is not significant. For this purpose,
in general, equity participation is considered "significant" on any date if 25%
or more of the value of any class of equity interests is held by "Benefit Plan
Investors." "Benefit Plan Investors" include ERISA Plans, as well as any
"employee benefit plan," as defined in Section 3(3) of ERISA, which is not
subject to Title I of ERISA, such as governmental plans, as defined in Section
3(32) of ERISA, and church plans, as defined in Section 3(33) of ERISA, which
have not made an election under Section 410(d) of the Code, and any entity whose
underlying assets include plan assets by reason of a Plan's investment in the
entity. Because of the factual nature of certain of the rules set forth in these
regulations, neither Plans nor persons investing plan assets should acquire or
hold securities in reliance on the availability of any exception under the
regulations.

         In addition, the regulations provide that the term "equity interest"
means any interest in an entity other than an instrument which is treated as
indebtedness under applicable local law




                                     -175-



and which has no "substantial equity features." If notes of a particular series
are deemed to be indebtedness under applicable local law without any substantial
equity features, an investing Plan's assets would include notes of this type,
but would not, by reason of the purchase, include the underlying assets of the
related trust fund. However, without regard to whether notes of this type are
treated as an equity interest for these purposes, the purchase or holding of
notes by or on behalf of a Plan could be considered to result in a prohibited
transaction. A prohibited transaction may result if the Issuer, the holder of an
Equity Certificate or any of their respective affiliates is or becomes a Party
in Interest with respect to the Plan, or if the depositor, the master servicer,
any sub-servicer or any trustee has investment authority with respect to the
assets of the Plan.

         Any person who has discretionary authority or control respecting the
management or disposition of plan assets, and any person who provides investment
advice with respect to the assets for a fee, is a fiduciary of the investing
Plan. If the residential loans, agency securities, mortgage securities and other
assets included in a trust fund constitute plan assets, then any party
exercising management or discretionary control regarding those assets, such as
the master servicer or any sub-servicer, may be deemed to be a Plan "fiduciary"
subject to the fiduciary requirements of ERISA and the prohibited transaction
provisions of ERISA and the Code or similar provisions of Similar Law with
respect to the investing Plan. In addition, if the assets included in a trust
fund constitute plan assets, the purchase or holding of securities by a Plan, as
well as the operation of the related trust fund, may constitute or involve a
prohibited transaction under ERISA, the Code or Similar Law.

         Some of the transactions involving the securities that might otherwise
constitute prohibited transactions under ERISA or the Code might qualify for
relief from the prohibited transaction rules under certain administrative
exemptions, which may be individual or class exemptions. The United States
Department of Labor issued an individual exemption, Prohibited Transaction
Exemption 91-22, referred to as the "Exemption," on April 18, 1991 to UBS
Securities LLC. The Exemption, together with similar exemptions issued to other
underwriters, has been amended by Prohibited Transaction Exemption 97-34,
Prohibited Transaction Exemption 2000-58 and Prohibited Transaction Exemption
2002-41. The Exemption generally exempts from the application of the prohibited
transaction provisions of Section 406 of ERISA, and the excise taxes and civil
penalties imposed on the prohibited transactions pursuant to Section 4975(a) and
(b) of the Code and Section 502(i) of ERISA, certain transactions, among others,
relating to the servicing and operation of mortgage pools and the purchase, sale
and holding of pass-through certificates underwritten by an underwriter,
provided that certain conditions set forth in the Exemption are satisfied. For
purposes of this Section "ERISA Considerations," the term "underwriter" shall
include:

         (1) UBS Securities LLC,

         (2) any person directly or indirectly, through one or more
intermediaries, controlling, controlled by or under common control with UBS
Securities LLC and

         (3) any member of the underwriting syndicate or selling group of which
a person described in (a) or (b) is a manager or co-manager with respect to a
class of certificates.



                                     -176-



         The Exemption sets forth five general conditions which must be
satisfied for a transaction involving the purchase, sale and holding of
certificates of the type issued pursuant to this prospectus to be eligible for
exemptive relief under the Exemption:

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

         (2) the certificates at the time of acquisition by the ERISA Plan must
be rated in one of the four highest generic rating categories by Standard &
Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., Moody's
Investors Service, Inc. or Fitch, Inc.;

         (3) the trustee cannot be an affiliate of any other member of the
"restricted group" other than an underwriter. The "restricted group" consists of
any underwriter, the depositor, the trustee, the master servicer, any
sub-servicer, the obligor on credit support and any borrower with respect to
assets of the trust fund constituting more than 5% of the aggregate unamortized
principal balance of the assets of the trust fund in the related trust fund as
of the date of initial issuance of the certificates;

         (4) (a) the sum of all payments made to and retained by the
underwriter(s) must represent not more than reasonable compensation for
underwriting the certificates;

             (b) the sum of all payments made to and retained by the depositor
pursuant to the assignment of the assets of the trust fund to the related trust
fund must represent not more than the fair market value of those obligations;
and

             (c) the sum of all payments made to and retained by the master
servicer and any sub-servicer must represent not more than reasonable
compensation for that person's services and reimbursement of that person's
reasonable expenses in connection with those services;

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

         The Exemption also requires that the trust fund meet the following
requirements:

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

         (2) certificates evidencing interests in such other investment pools
must have been rated in one of the four highest categories of one of Standard &
Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., Moody's
Investors Service, Inc. or Fitch, Inc. for at least one year prior to the
acquisition of certificates by or on behalf of an ERISA Plan or with plan
assets; and

         (3) certificates evidencing interests in those other investment pools
must have been purchased by investors other than ERISA Plans for at least one
year prior to any acquisition of certificates by or on behalf of an ERISA Plan
or with plan assets.




                                     -177-



         A fiduciary of an ERISA Plan contemplating purchasing a certificate
must make its own determination that the general conditions set forth above will
be satisfied with respect to its certificate. The Exemption will not apply to an
investment by a Plan during a Funding Period unless certain additional
conditions specified in the related prospectus supplement are satisfied.

         If the general conditions of the Exemption are satisfied, the Exemption
may provide an exemption from the restrictions imposed by Sections 406(a) and
407(a) of ERISA, as well as the excise taxes imposed by Sections 4975(a) and (b)
of the Code by reason of Section 4975(c) of the Code, in connection with the
direct or indirect sale, exchange, transfer, holding or the direct or indirect
acquisition or disposition in the secondary market of certificates by ERISA
Plans. However, no exemption is provided from the restrictions of Sections
406(a)(1)(E), 406(a)(2) and 407 of ERISA for the acquisition or holding of a
certificate on behalf of an "Excluded Plan" by any person who has discretionary
authority or renders investment advice with respect to the assets of the
"Excluded Plan." For purposes of the certificates, an Excluded Plan is an ERISA
Plan sponsored by any member of the Restricted Group.

         If certain specific conditions of the Exemption are also satisfied, the
Exemption may provide an exemption from the restrictions imposed by Sections
406(b)(1) and (b)(2) of ERISA and the taxes imposed by Section 4975(c)(1)(E) of
the Code in connection with:

         (1) the direct or indirect sale, exchange or transfer of certificates
in the initial issuance of certificates between UBS Securities LLC or another
underwriter and an ERISA Plan when the person who has discretionary authority or
renders investment advice with respect to the investment of ERISA Plan assets in
the certificates is

                  (a) a borrower with respect to 5% or less of the fair market
         value of the assets of the trust fund or

                  (b) an affiliate of that person,

         (2) the direct or indirect acquisition or disposition in the secondary
market of certificates by an ERISA Plan and

         (3) the holding of certificates by an ERISA Plan.

         Further, if certain specific conditions of the Exemption are satisfied,
the Exemption may provide an exemption from the restrictions imposed by Sections
406(a), 406(b) and 407(a) of ERISA, and the taxes imposed by Sections 4975(a)
and (b) of the Code by reason of Section 4975(c) of the Code for transactions in
connection with the servicing, management and operation of the related trust
fund. The depositor expects that the specific conditions of the Exemption
required for this purpose will be satisfied with respect to the certificates,
although prospective investors should consult the relevant prospectus supplement
in this regard. Satisfaction of these conditions would provide an exemption from
the restrictions imposed by Sections 406(a) and (b) of ERISA, as well as the
excise taxes imposed by Sections 4975(a) and (b) of the Code by reason of
Section 4975(c) of the Code, for transactions in connection with the servicing,
management and operation of the related trust fund, provided that the general
conditions of the Exemption are satisfied.






                                     -178-



         The Exemption also may provide an exemption from the restrictions
imposed by Sections 406(a) and 407(a) of ERISA, and the taxes imposed by
Sections 4975(a) and (b) of the Code by reason of Section 4975(c) of the Code if
the restrictions are deemed to otherwise apply merely because a person is deemed
to be a Party in Interest with respect to an investing ERISA Plan by virtue of
providing services to the ERISA Plan, or by virtue of having certain specified
relationships to a person of that type, solely as a result of the ERISA Plan's
ownership of certificates.

         Before purchasing a certificate, a fiduciary of an ERISA Plan should
itself confirm:

         (1) that the certificates constitute "certificates" for purposes of the
Exemption and

         (2) that the specific and general conditions and other applicable
requirements set forth in the Exemption would be satisfied. In addition to
making its own determination as to the availability of the exemptive relief
provided in the Exemption, the ERISA Plan fiduciary should consider its general
fiduciary obligations under ERISA in determining whether to purchase any
certificates on behalf of an ERISA Plan.

         In addition, based on the reasoning of the United States Supreme
Court's decision in John Hancock Life Ins. Co. v. Harris Trust and Sav. Bank,
510 U.S. 86 (1993), under certain circumstances assets in the general account of
an insurance company may be deemed to be plan assets for certain purposes, and
under such reasoning a purchase of investor certificates with assets of an
insurance company's general account might be subject to the prohibited
transaction rules described above. Insurance companies investing assets of their
general accounts should also consider the potential effects of the enactment of
Section 401(c) of ERISA, PTCE 95-60, Labor Department Regulation 29 CFR ss.
2550.401c-1, and the fact that the Exemption (discussed above) has been
designated by the Department of Labor as an "Underwriter Exemption" for purposes
of Section V(h) of Prohibited Transaction Exemption 95-60.

         Any plan fiduciary which proposes to cause an ERISA Plan to purchase
securities should consult with its counsel with respect to the potential
applicability of ERISA, Section 4975 of the Code and Similar Law to that
investment and the availability of the Exemption or any other exemption in
connection with that investment. We cannot assure you that the Exemption or any
other individual or class exemption will apply with respect to any particular
ERISA Plan that acquires or holds securities or, even if all of the conditions
specified in the Exemption or class exemption were satisfied, that the exemption
would apply to all transactions involving the trust fund. The prospectus
supplement with respect to a series of securities may contain additional
information regarding the application of the Exemption or any other exemption
with respect to the securities offered.


                                LEGAL INVESTMENT

         The prospectus supplement relating to each series of securities will
specify which, if any, of the classes of securities offered constitute "mortgage
related securities" for purposes of the Secondary Mortgage Market Enhancement
Act of 1984, as amended, which we refer to as SMMEA. Generally, any class of
securities offered by this prospectus and by the related prospectus supplement
that is not initially rated in one of the two highest rating categories by at





                                     -179-



least one nationally recognized statistical rating organization, or that
represents an interest in a trust fund that includes junior real estate loans or
loans originated by originators not qualifying under SMMEA, will not constitute
"mortgage related securities" for purposes of SMMEA. The appropriate
characterization of those securities not qualifying as "mortgage related
securities", which we refer to as non-SMMEA securities, under various legal
investment restrictions, and thus the ability of investors subject to these
restrictions to purchase these securities, may be subject to significant
interpretive uncertainties. Accordingly, all investors whose investment
activities are subject to legal investment laws and regulations, regulatory
capital requirements, or review by regulatory authorities should consult with
their own legal advisors in determining whether and to what extent the non-SMMEA
securities constitute legal investments for them.

         Classes of securities qualifying as "mortgage related securities" will
constitute legal investments for persons, trusts, corporations, partnerships,
associations, business trusts and business entities, including, but not limited
to,

         (1) depository institutions,

         (2) insurance companies, and

         (3) trustees and pension funds,

created pursuant to or existing under the laws of the United States or of any
state, including the District of Columbia and Puerto Rico, whose authorized
investments are subject to state 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 of its agencies or instrumentalities constitute
legal investments for these types of entities.

         Pursuant to SMMEA, a number of states enacted legislation, on or before
the October 3, 1991 cutoff for those enactments, limiting to varying extents the
ability of certain entities, in particular, insurance companies, to invest in
"mortgage related securities" secured by liens on residential, or mixed
residential and commercial properties, in most cases by requiring the affected
investors to rely solely on existing state law, and not SMMEA. Accordingly, the
investors affected by any state legislation overriding the preemptive effect of
SMMEA will be authorized to invest in securities qualifying as "mortgage related
securities" only to the extent provided in that legislation.

         SMMEA also amended the legal investment authority of
federally- chartered depository institutions as follows:

         (1) 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 by these "mortgage
related securities,"

         (2) federal credit unions may invest in "mortgage related securities,"
and

         (3) national banks may purchase "mortgage related securities" for their
own account without regard to the limitations generally applicable to investment
securities set forth in 12 U.S.C. ss. 24 (Seventh),





                                     -180-



subject in each case to those regulations as the applicable federal regulatory
authority may prescribe. In this connection, the Office of the Comptroller of
the Currency (the "OCC") amended 12 C.F.R. Part 1 to authorize national banks to
purchase and sell for their own account, without limitation as to a percentage
of the bank's capital and surplus (but subject to compliance with certain
general standards in 12 C.F.R. ss. 1.5 concerning "safety and soundness" and
retention of credit information), certain "Type IV securities," defined in 12
C.F.R. ss. 1.2(m) to include certain "residential mortgage-related securities."
As so defined, "residential mortgage-related security" means, in relevant part,
"mortgage related security" within the meaning of SMMEA. The National Credit
Union Administration (the "NCUA") has adopted rules, codified at 12 C.F.R. Part
703, which permit federal credit unions to invest in "mortgage related
securities," other than stripped mortgage related securities (unless the credit
union complies with the requirements of 12 C.F.R. Part 703.16(e) for investing
in stripped mortgage related securities) and residual interests in mortgage
related securities, subject to compliance with general rules governing
investment policies and practices; however, credit unions approved for the
NCUA's "investment pilot program" under 12 C.F.R. ss. 703.19 may be able to
invest in those prohibited forms of securities. The Office of Thrift Supervision
(the "OTS") has issued Thrift Bulletins 73a, entitled "Investing in Complex
Securities" ("TB 73a"), which is effective as of December 18, 2001, and 13a,
entitled "Management of Interest Rate Risk, Investment Securities, and
Derivatives Activities" ("TB 13a"), which is effective as of December 1, 1998,
which thrift institutions subject to the jurisdiction of the OTS should consider
before investing in any of the securities.

         All depository institutions considering an investment in the securities
should review the "Supervisory Policy Statement on Investment Securities and
End-User Derivatives Activities" -- the "1998 Policy Statement" -- of the
Federal Financial Institutions Examination Council, which has been adopted by
the Board of Governors of the Federal Reserve System, the Federal Deposit
Insurance Corporation, the OCC and the OTS effective May 26, 1998, and by the
NCUA, effective October 1, 1998. The 1998 Policy Statement sets forth general
guidelines which depository institutions must follow in managing risks,
including market, credit, liquidity, operational (transaction), and legal risks,
applicable to all securities, including mortgage pass-through securities and
mortgage-derivative products, used for investment purposes.

         Investors whose investment activities are subject to regulation by
federal or state authorities should review rules, policies and guidelines
adopted from time to time by federal and state authorities before purchasing any
securities because certain series or classes may be deemed unsuitable
investments, or may otherwise be restricted, under these rules, policies or
guidelines, in certain instances irrespective of SMMEA.

         The foregoing does not take into consideration the applicability of
statutes, rules, regulations, orders, guidelines or agreements generally
governing investments made by a particular investor, including, but not limited
to,

         (1) "prudent investor" provisions,

         (2) percentage-of-assets limits,




                                     -181-



         (3) provisions which may restrict or prohibit investment in securities
which are not "interest bearing" or "income paying," and

         (4) with regard to any securities issued in book-entry form, provisions
which may restrict or prohibit investments in securities which are issued in
book-entry form.

         Except as to the status of certain classes of securities as "mortgage
related securities," no representations are made as to the proper
characterization of the securities for legal investment purposes, financial
institution regulatory purposes, or other purposes, or as to the ability of
particular investors to purchase securities under applicable legal investment
restrictions. The uncertainties described above, and any unfavorable future
determinations concerning legal investment or financial institution regulatory
characteristics of the securities, may adversely affect the liquidity of the
securities.

         Accordingly, all investors whose investment activities are subject to
legal investment laws and regulations, regulatory capital requirements or review
by regulatory authorities should consult with their own legal advisors in
determining:

         (1) whether and to what extent the securities constitute legal
investments or are subject to investment, capital or other restrictions, and

         (2) if applicable, whether SMMEA has been overridden in any
jurisdiction relevant to the investor.


                              PLANS OF DISTRIBUTION

         The securities offered by this prospectus and by the supplements to
this prospectus will be offered in series. The distribution of the securities
may be effected from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices
to be determined at the time of sale or at the time of commitment for a sale.
The related prospectus supplement will specify whether the securities will be
distributed in a firm commitment underwriting, subject to the terms and
conditions of the underwriting agreement, by UBS Securities LLC acting as
underwriter with other underwriters, if any, named in the related underwriting
agreement. If it is a firm commitment underwriting, the related prospectus
supplement may also specify that the underwriters will not be obligated to pay
for any securities agreed to be purchased by purchasers pursuant to purchase
agreements acceptable to the depositor. In connection with the sale of the
securities, underwriters may receive compensation from the depositor or from
purchasers of the securities in the form of discounts, concessions or
commissions. The related prospectus supplement will describe any compensation
paid by the depositor to the underwriters.

         Alternatively, the related prospectus supplement may specify that the
securities will be distributed by UBS Securities LLC acting as agent or in some
cases as principal with respect to securities which it has previously purchased
or agreed to purchase. If UBS Securities LLC acts as agent in the sale of
securities, UBS Securities LLC will receive a selling commission with respect to
each series of securities, depending on market conditions, expressed as a
percentage of the aggregate principal balance of the related residential loans
as of the Cut-Off Date. The exact




                                     -182-



percentage for each series of securities will be disclosed in the related
prospectus supplement. To the extent that UBS Securities LLC elects to purchase
securities as principal, UBS Securities LLC may realize losses or profits based
on the difference between its purchase price and the sales price. The prospectus
supplement with respect to any series offered other than through underwriters
will contain information regarding the nature of the offering and any agreements
to be entered into between the depositor and purchasers of securities of the
related series.

         The depositor will indemnify UBS Securities LLC and any underwriters
against certain civil liabilities, including liabilities under the Securities
Act of 1933, or will contribute to payments UBS Securities LLC and any
underwriters may be required to make in respect of any liability.

         The related prospectus supplement relating to securities of a
particular series offered by this prospectus will specify whether the depositor
or any other person or persons specified in the prospectus supplement may
purchase some or all of the securities from the underwriter or underwriters or
other person or persons specified in the related prospectus supplement. A
purchaser may thereafter from time to time offer and sell, pursuant to this
prospectus and the related prospectus supplement, some or all of the securities
so purchased, directly, through one or more underwriters to be designated at the
time of the offering of these securities, through dealers acting as agent and/or
principal or in any other manner as may be specified in the related prospectus
supplement. The related offering may be restricted in the manner specified in
the related prospectus supplement. The related transactions may be effected at
market prices prevailing at the time of sale, at negotiated prices or at fixed
prices. Any underwriters and dealers participating in the purchaser's offering
of the related securities may receive compensation in the form of underwriting
discounts or commissions from a purchaser and dealers may receive commissions
from the investors purchasing the related securities for whom they may act as
agent. The discounts or commissions will not exceed those customary in those
types of transactions involved. Any dealer that participates in the distribution
of the related securities may be deemed to be an "underwriter" within the
meaning of the Securities Act of 1933. Any commissions and discounts received by
a dealer and any profit on the resale or the securities by that dealer might be
deemed to be underwriting discounts and commissions under the Securities Act of
1933.

         In the ordinary course of business, UBS Securities LLC and the
depositor, or their affiliates, may engage in various securities and financing
transactions. These financing transactions include repurchase agreements to
provide interim financing of the depositor's residential loans pending the sale
of residential loans or interests in residential loans, including the
securities.

         The depositor anticipates that the securities will be sold primarily to
institutional investors. Purchasers of securities, including dealers, may,
depending on the facts and circumstances of the related purchases, be deemed to
be "underwriters" within the meaning of the Securities Act of 1933 in connection
with reoffers and sales by them of securities. Holders of securities should
consult with their legal advisors in this regard prior to any reoffer or sale.

         As to each series of securities, only those classes rated in one of the
four highest rating categories by any rating agency will be offered by this
prospectus. Any unrated class may be




                                     -183-



initially retained by the depositor, and may be sold by the depositor at any
time to one or more institutional investors.


                INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

         With respect to each series of securities offered by this prospectus,
there are incorporated in this prospectus and in the related prospectus
supplement by reference all documents and reports filed or caused to be filed by
the depositor pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, prior to the termination of the offering of the related
series of securities, that relate specifically to the related series of
securities. The depositor will provide or cause to be provided without charge to
each person to whom this prospectus and a related prospectus supplement is
delivered in connection with the offering of one or more classes of series of
securities, if written or oral request of any person is made, a copy of any or
all reports incorporated in this prospectus by reference. The depositor will be
required to provide these reports only to the extent reports relate to one or
more of classes of the related series of securities, other than the exhibits to
these documents, unless these exhibits are specifically incorporated by
reference in these documents. Requests should be directed in writing to Mortgage
Asset Securitization Transactions, Inc., 1285 Avenue of the Americas, New York,
New York 10019, Attention: General Counsel, or by telephone at (212) 713-2000.

         The depositor filed a registration statement relating to the securities
with the SEC. This prospectus is part of the registration statement, but the
registration statement includes additional information.

         Copies of the registration statement and any other materials filed with
the SEC in connection with the securities offered by this prospectus and the
related prospectus supplement may be obtained from, or read at, the Public
Reference Room of the SEC located at 450 Fifth Street N.W., Washington, D.C.
20549. You may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. The SEC also maintains a site on the World
Wide Web at "http://www.sec.gov" at which you can view and download copies of
reports, proxy and information statements and other information filed
electronically through the Electronic Data Gathering, Analysis and Retrieval --
EDGAR -- system. The depositor filed the registration statement, including all
exhibits to the registration statement, through the EDGAR system and therefore
these materials should be available by logging onto the SEC's Web site. The SEC
maintains computer terminals providing access to the EDGAR system at each of the
offices referred to above.


                                  LEGAL MATTERS

         The validity of the securities and certain federal income tax matters
in connection with the securities will be passed on for the depositor by
Cadwalader, Wickersham & Taft LLP, New York, New York, McKee Nelson LLP, New
York, New York, Thacher Proffitt & Wood, New York, New York or such other
counsel for the depositor as specified in the related prospectus supplement.





                                     -184-



                              FINANCIAL INFORMATION

         A new trust fund will be formed with respect to each series of
securities and no trust fund will engage in any business activities or have any
assets or obligations prior to the issuance of the related series of securities.
Accordingly, no financial statements with respect to any trust fund will be
included in this prospectus or in the related prospectus supplement.


                                     RATING

         It will be a condition to the issuance of the securities of each series
offered by this prospectus and by the related prospectus supplement that they
shall have been rated in one of the four highest rating categories by the
nationally recognized statistical rating agency or agencies specified in the
related prospectus supplement.

         Any rating would be based on, among other things, the adequacy of the
value of the assets of the trust fund and any credit enhancement with respect to
the related class. A rating will reflect the specified rating agency's
assessment solely of the likelihood that holders of a class of securities of the
related class will receive payments to which holders of securities are entitled
by their terms. The rating will not constitute

         (1) an assessment of the likelihood that principal prepayments on the
related residential loans will be made,

         (2) the degree to which the rate of prepayments might differ from that
originally anticipated, or

         (3) the likelihood of early optional termination of the series of
securities. The rating should not be deemed a recommendation to purchase, hold
or sell securities, inasmuch as it does not address market price or suitability
for a particular investor.

The rating will not address the possibility that prepayment at higher or lower
rates than anticipated by an investor may cause the investor to experience a
lower than anticipated yield. The rating will not address that an investor
purchasing a security at a significant premium might fail to recoup its initial
investment under certain prepayment scenarios.

         We cannot assure you that any rating will remain in effect for any
given period of time or that it may not be lowered or withdrawn entirely by the
rating agency in the future if in its judgment circumstances in the future so
warrant. A rating may be lowered or withdrawn due to any erosion in the adequacy
of the value of the assets of the trust fund or any credit enhancement with
respect to a series. The rating might also be lowered or withdrawn among other
reasons, because of an adverse change in the financial or other condition of a
credit enhancement provider or a change in the rating of the credit enhancement
provider's long term debt.

         The amount, type and nature of credit enhancement, if any, established
with respect to a series of securities will be determined on the basis of
criteria established by each rating agency rating classes of the related series.
These criteria are sometimes based on an actuarial analysis of the behavior of
mortgage loans in a larger group. The foregoing analysis is often the basis on




                                     -185-



which each rating agency determines the amount of credit enhancement required
with respect to each class. We cannot assure you that the historical data
supporting any actuarial analysis will accurately reflect future experience. In
addition, we cannot assure you that the data derived from a large pool of
mortgage loans accurately predicts the delinquency, foreclosure or loss
experience of any particular pool of residential loans. We cannot assure you
that values of any residential properties have remained or will remain at their
levels on the respective dates of origination of the related residential loans.

         If the residential real estate markets should experience an overall
decline in property values and the outstanding principal balances of the
residential loans in a particular trust fund and any secondary financing on the
related residential properties become equal to or greater than the value of the
residential properties, the rates of delinquencies, foreclosures and losses
could be higher than those now generally experienced in the mortgage lending
industry. In addition, adverse economic conditions, which may or may not affect
real property values, may affect the timely payment by borrowers of scheduled
payments of principal and interest on the residential loans. Accordingly, the
rates of delinquencies, foreclosures and losses with respect to any trust fund
may be affected. To the extent that these losses are not covered by credit
enhancement, these losses will be borne, at least in part, by the holders of one
or more classes of the security of the related series.





                                     -186-



                                GLOSSARY OF TERMS

         "1986 ACT" is the Tax Reform Act of 1986.

         "ACCRUAL SECURITIES" are one or more classes of securities with respect
to which accrued interest will not be distributed but rather will be added to
the security principal balance of the securities on each distribution date for
the period described in the related prospectus supplement.

         "ACCRUED SECURITY INTEREST" is the interest accruing with respect to
each class of securities related to a series, in an amount equal to interest on
the outstanding security principal balance, or notional amount with respect to
interest-only securities, immediately prior to the distribution date, at the
applicable security interest rate, for a period of time corresponding to the
intervals between the distribution dates for the series.

         "AVAILABLE DISTRIBUTION AMOUNT" is the amount which will be available
for distribution on the securities of each series on each distribution date as
may be specified in the related prospectus supplement and generally includes:

         (1) the total amount of all cash on deposit in the related Trust
Account as of a determination date specified in the related prospectus
supplement, exclusive of amounts payable on future distribution dates and
amounts payable to the master servicer, any applicable sub-servicer, the trustee
or another person as expenses of the trust fund;

         (2) any principal and/or interest advances made with respect to the
distribution date, if applicable;

         (3) any principal and/or interest payments made by the master servicer
out of its servicing fee in respect of interest shortfalls resulting from
principal prepayments, if applicable; and

         (4) all net income received in connection with the operation of any
residential property acquired on behalf of the holders of securities through
deed in lieu of foreclosure or repossession, if applicable.

         "AVAILABLE SUBORDINATION AMOUNT" is an amount equal to the difference
between

         (1) the applicable percentage amount of the aggregate initial principal
balance of the residential loans in the related trust fund as specified in the
related prospectus supplement and

         (2) the amounts paid to the holders of senior securities that but for
the subordination provisions would have been payable to the holders of
subordinate securities.

         "BANKRUPTCY BOND" is a bond insuring residential loans which covers

         (1) certain losses resulting from

                  (a) an extension of the maturity of a residential loan, or




                                     -187-



                  (b) a reduction by the bankruptcy court of the principal
         balance of or the interest rate on a residential loan, and

         (2) the unpaid interest on the amount of a principal reduction during
the pendency of a proceeding under the United States Bankruptcy Code, 11 U.S.C.
Sections 101 et seq.

         "BUYDOWN FUNDS" are funds paid on the related Buydown Loans.

         "BUYDOWN LOANS" are residential loans subject to temporary buydown
plans. The monthly payments made by the borrower in the early years of the
Buydown Loan will be less than the scheduled payments on the Buydown Loan.
Generally, the borrower under a Buydown Loan will be eligible for a reduced
interest rate on the loan.

         "CALIFORNIA MILITARY CODE" is the California Military and Veterans
Code, as amended.

         "CASH FLOW VALUE" is the security principal balance of the securities
of the related series which, based on certain assumptions, including the
assumption that no defaults occur on the assets of the trust fund, can be
supported by either:

         (1) the future scheduled payments on the assets of the trust fund, with
the interest on the assets adjusted to the Net Interest Rate;


         (2) the proceeds of the prepayment of the assets of the trust fund,
together with reinvestment earnings on the assets of the trust fund, if any, at
the applicable Assumed Reinvestment Rate; or

         (3) amounts available to be withdrawn from any Reserve Fund for the
series, as further specified in the related prospectus supplement relating to a
series of securities.

         "CERCLA" is the Comprehensive Environmental Response, Compensation and
Liability Act, as amended.

         "CODE" is the Internal Revenue Code of 1986, as amended.

         "COLLATERAL VALUE" is

         (1) with respect to a residential property or cooperative unit, it is
the lesser of:

                  (a) the appraised value determined in an appraisal obtained by
         the originator at origination of the loan; and

                  (b) the sales price of the property.

         (2) with respect to residential property securing a Refinance Loan, it
is the appraised value of the residential property determined at the time of the
origination of the Refinance Loan.

         "CONSERVATION ACT" is the Asset Conservation, Lender Liability and
Deposit Insurance Act of 1996, as amended.






                                     -188-



         "COOPERATIVE" is a private cooperative housing corporation, the shares
of which secure Cooperative Loans.

         "COOPERATIVE LOANS" are loans secured primarily by shares in a
Cooperative which with the related proprietary lease or occupancy agreement give
the owners the right to occupy a particular dwelling unit in the Cooperative.

         "CUT-OFF DATE" is the date specified in the related prospectus
supplement which generally represents the first date after which payments on the
residential loans in a pool will begin to be paid to the trust.

         "DEBT SECURITIES" are securities which represent indebtedness of a
Partnership Trust Fund for federal income tax purposes.

         "DEFINITIVE SECURITY" is a physical certificate representing a security
issued in the name of the beneficial owner of the security rather than DTC.

         "DEPOSIT PERIOD" is the period specified in the related prospectus
supplement which is generally the period commencing on the day following the
determination date immediately preceding the related determination date and
ending on the related determination date.

         "DUE PERIOD" is the period of time specified in the related prospectus
supplement.

         "EQUITY CERTIFICATES" are certificates, with respect to a series of
notes where the issuer is an owner trust, issued under an owner trust agreement
which evidence the equity ownership of the related trust.

         "ERISA PLANS" are retirement plans and other employee benefit plans and
arrangements, including for this purpose individual retirement accounts and
annuities and Keogh plans, which are subject to ERISA or Section 4975 of the
Code, and bank collective investment funds and insurance company general and
separate accounts holding assets of such plans, accounts or arrangements.

         "FANNIE MAE CERTIFICATES" are guaranteed mortgage pass-through
securities issued by the Fannie Mae.

         "FHA INSURANCE" is insurance issued by the FHA to insure residential
loans as authorized under the United States Housing Act of 1934, as amended. The
residential loans will be insured under various FHA programs including the
standard FHA 203(b) program to finance the acquisition of one- to four-family
housing units, the FHA 245 graduated payment mortgage program and the FHA Title
I Program.

         "FINANCIAL INTERMEDIARY" is an entity that maintains the Security
Owner's account and records the Security Owner's ownership of securities on that
account.

         "FREDDIE MAC CERTIFICATES" are mortgage participation certificates
issued by the Freddie Mac.




                                     -189-



         "GARN-ST. GERMAIN ACT" is the Garn-St. Germain Depository Institutions
Act of 1982, enacted on October 15, 1982.

         "GNMA CERTIFICATES" are fully modified pass-through mortgage-backed
certificates guaranteed by the GNMA.

         "GRANTOR TRUST SECURITIES" are securities which represent interests in
a grantor trust as to which no REMIC election will be made.

         "HOME EQUITY LOANS" are one- to four-family first or junior lien closed
end home equity loans for property improvement, debt consolidation or home
equity purposes.

         "HOME IMPROVEMENT CONTRACTS" are home improvement installment sales
contracts and installment loan agreements which may be unsecured or secured by a
lien on the related mortgaged property or a manufactured home. This lien may be
subordinated to one or more senior liens on the related mortgaged property.

         "INSURANCE INSTRUMENT" is any Primary Hazard Insurance Policy or
Primary Credit Insurance Policy.

         "INSURANCE PROCEEDS" are all proceeds of any Primary Credit Insurance
Policy, any FHA Insurance, any VA Guarantee, any Bankruptcy Bond and any Pool
Insurance Policy, minus proceeds that represent reimbursement of the master
servicer's costs and expenses incurred in connection with presenting claims
under the related insurance policies.

         "LAND CONTRACTS" are Manufactured Housing Contracts that are secured by
mortgages on the related mortgaged property.

         "LIQUIDATION PROCEEDS" are cash proceeds received by foreclosure,
eminent domain, condemnation or otherwise, excluding any proceeds from any
insurance policies along with the net proceeds on a monthly basis with respect
to any properties acquired for the benefit of the security holders by deed in
lieu of foreclosure or repossession.

         "LOAN-TO-VALUE RATIO" is the ratio at a given time, expressed as a
percentage of the then outstanding principal balance of the residential loan,
plus, in the case of a mortgage loan secured by a junior lien, the outstanding
principal balance of the related senior liens, to the Collateral Value of the
related residential property.

         "LOCKOUT PERIOD" is a period after the origination of certain
residential loans during which prepayments are entirely prohibited or require
payment of a prepayment penalty if a prepayment in full or in part occurs.

              "MANUFACTURED HOUSING CONTRACTS" are manufactured housing
conditional sales contracts and installment loan agreements which may be secured
by a lien on:

         (1) new or used manufactured homes;




                                     -190-



         (2) the real property and any improvements on the real property which
may include the related manufactured home if deemed to be part of the real
property under applicable state law; or

         (3) in certain cases, a new or used manufactured home which is not
deemed to be a part of the related real property under applicable state law.

         "MULTIFAMILY LOANS" are mortgage loans secured by first or junior liens
on multifamily residential properties consisting of five or more dwelling units.

         "NET INTEREST RATE" with respect to any residential loan is the rate
specified in the related prospectus supplement which is generally the interest
rate on the residential loan minus the sum of the fee rate payable to the
servicer and the trustee and Retained Interest Rate with respect to any mortgage
loan.

         "NON-PRO RATA SECURITY" is a Regular Security on which principal is
distributed in a single installment or by lots of specified principal amounts if
requested by a holder of securities or by random lot.

         "OID REGULATIONS" are sections 1271-1273 and 1275 of the Code and the
Treasury regulations issued under those sections that set forth the rules
governing original issue discount.

         "PARTICIPANTS" are participating organizations through which a Security
Owner can hold its book-entry security.

         "PARTNERSHIP SECURITIES" are securities which represent interests in a
Partnership Trust Fund.

         "PARTNERSHIP TRUST FUND" is a trust fund which is treated as a
partnership or, if owned by a single beneficial owner, ignored for federal
income tax purposes.

         "PLANS" are retirement plans and other employee benefit plans and
arrangements, including for this purpose individual retirement accounts and
annuities and Keogh plans, which are subject to ERISA, Section 4975 of the Code
or Similar Law, and bank collective investment funds and insurance company
general and separate accounts holding assets of such plans, accounts or
arrangements.

         "POOL INSURANCE POLICY" is an insurance policy, which provides coverage
in an amount equal to a percentage, specified in the related prospectus
supplement, of the aggregate principal balance of the residential loans on the
Cut-Off Date, subject to any limitations specified in the related prospectus
supplement.

         "PREPAYMENT ASSUMPTION" is the assumed rate of prepayment of the
mortgage loans as set forth in the related prospectus supplement.



                                     -191-



         "PREPAYMENT PERIOD" is a period that may be particularly specified in
the related prospectus supplement which may commence on:

         (1) the first day of the preceding calendar month with respect to
securities that have monthly distribution dates, or

         (2) the first day of the month in which the immediately preceding
distribution date occurred with respect to securities with distribution dates
that occur less frequently than monthly, or the first day of the month in which
the Cut-Off Date occurred with respect to the first Prepayment Period;

and will end in both cases on the last day of the preceding calendar month.

         "PRIMARY CREDIT INSURANCE POLICY" is an insurance policy which covers
losses on residential loans up to an amount equal to the excess of the
outstanding principal balance of a defaulted residential loan, plus accrued and
unpaid interest on the related defaulted residential loan and designated
approved expenses, over a specified percentage of the Collateral Value of the
related residential property.

         "PRIMARY HAZARD INSURANCE POLICY" is an insurance policy which provides
coverage on residential loans of the standard form of fire and hazard insurance
policy with extended coverage customary in the state in which the residential
property is located.

         "PTCE" is the Prohibited Transaction Class Exemption.

         "QUALIFIED INSURER" is a private mortgage guaranty insurance company
duly qualified under applicable laws and approved as an insurer by Freddie Mac,
Fannie Mae, or any successor entity, which has a claims-paying ability
acceptable to the rating agency or agencies.

         "REALIZED LOSS" is the amount of loss realized on a defaulted
residential loan that is finally liquidated. This amount generally equals the
portion of the unpaid principal balance remaining after application of all
principal amounts recovered, net of amounts reimbursable to the master servicer
for related expenses. With respect to residential loans for which the principal
balances were reduced in connection with bankruptcy proceedings, the amount of
that reduction.

         "REFINANCE LOAN" are loans made to refinance existing loans or loans
made to a borrower who was a tenant in a building prior to its conversion to
cooperative ownership.

         "REGULAR SECURITIES" are securities which constitute one or more
classes of regular interests with respect to each REMIC Pool.

         "REGULAR SECURITYHOLDER" is a holder of a Regular Security.

         "RELIEF ACT" is the Servicemembers Civil Relief Act.

         "REMIC POOL" is an entity or portion of an entity as to which a REMIC
election will be made.




                                     -192-



         "REMIC PROVISIONS" are Sections 860A through 860G of the Code and
Treasury regulations issued pursuant to those sections.

         "REMIC REGULATIONS" are the Treasury regulations issued under the REMIC
Provisions.

         "REMIC SECURITIES" are securities which represent interests in a trust
fund, or a portion of a trust fund, that the trustee will elect to have treated
as a REMIC under the REMIC Provisions of the Code.

         "RESERVE FUND" is an account which includes a combination of specified
amounts of cash, a combination of one or more irrevocable letters of credit, or
one or more United States government securities and other high quality
investments, or any other instrument satisfactory to the rating agency or
agencies, which will be applied and maintained in the manner and under the
conditions specified in the prospectus supplement. In addition or in
alternative, an account funded through application of a portion of the interest
payment on each mortgage loan or of all or a portion of amounts otherwise
payable on the subordinate securities.

         "RESIDUAL SECURITIES" are Securities which constitute one or more
classes of residual interests with respect to each REMIC Pool.

         "RESTRICTED GROUP" consist of any underwriter, the depositor, the
trustee, the master servicer, any subservicer, the obligor on credit support and
any borrower with respect to assets of the trust fund constituting more than 5%
of the aggregate unamortized principal balance of the assets of the trust fund
as of the date of initial issuance of the certificates.

         "RETAINED INTEREST" are interest payments relating to residential
loans, including any mortgage securities, or agency securities included in the
trust fund which are retained by the depositor, any of its affiliates or its
predecessor in interest.

         "RETAINED INTEREST RATE" is the rate at which interest payments
relating to residential loans, including any mortgage securities or agency
securities retained by the Depositor, any of it affiliates or its predecessor in
interest, are calculated.

         "SECURITY OWNER" is a person who has beneficial ownership interests in
a security.

         "SECURITY REGISTER" is a record where exchanges or transfers of
securities are registered by the Security Registrar.

         "SECURITY REGISTRAR" is one who registers exchanges or transfers of
securities in the Security Register.

         "SIMILAR LAW" is any applicable federal, state or local law materially
similar to Title I of ERISA or Section 4975 of the Code.

         "SMMEA" is the Secondary Mortgage Market Enhancement Act of 1984, as
amended.

         "STARTUP DAY" is the date the REMIC securities are issued.





                                     -193-



         "STRIPPED AGENCY SECURITIES" are GNMA Certificates, Fannie Mae
Certificates or Freddie Mac Certificates issued in the form of certificates
which represent:

         (1) undivided interests in all or part of either the principal
distributions, but not the interest distributions, or the interest
distributions, but not the principal distributions, of the certificates; or

         (2) interests in some specified portion of the principal or interest
distributions, but not all distributions, on an underlying pool of mortgage
loans or other GNMA Certificates, Fannie Mae Certificates or Freddie Mac
Certificates.

         "TITLE V" is Title V of the Depository Institutions Deregulation and
Monetary Control Act of 1980, enacted in March 1980.

         "TRUST ACCOUNTS" are one or more accounts included in each trust fund
established and maintained on behalf of the holders of securities into which the
master servicer or the trustee will be required to, deposit all payments and
collections received or advanced with respect to assets of the related trust
fund. A Trust Account may be maintained as an interest bearing or a non-interest
bearing account, or funds held in the Trust Account may be invested in certain
short-term high-quality obligations

         "UNAFFILIATED SELLERS" are sellers of residential loans to the
depositor that are not affiliated with the depositor.

         "U.S. PERSON" is

         (1) A citizen or resident of the United States,

         (2) a corporation or partnership or other entity created or organized
in or under the laws of the United States, any State of the United States or the
District of Columbia, unless, in the case of a partnership, Treasury regulations
are adopted that provide otherwise, including any entity treated as a
corporation or partnership for federal income tax purposes,

         (3) an estate that is subject to U.S. federal income tax regardless of
the source of its income, or

         (4) a trust if a court within the United States is able to exercise
primary supervision over the administration of that trust, and one or more U.S.
Persons have the authority to control all substantial decisions of that trust
or, to the extent provided in applicable Treasury regulations, certain trusts in
existence on August 20, 1996, which are eligible to elect to be treated as U.S.
Persons.

         "VA GUARANTEE" is a guarantee of residential loans by the VA under the
Serviceman's Readjustment of 1944, as amended.












                                     -194-

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

YOU SHOULD RELY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO
PROVIDE YOU WITH DIFFERENT INFORMATION.

WE ARE NOT OFFERING THESE CERTIFICATES IN ANY STATE WHERE THE OFFER IS NOT
PERMITTED.

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

                                TABLE OF CONTENTS


                              PROSPECTUS SUPPLEMENT


                                                                           PAGE
                                                                           -----
Summary ...............................................................    S-7
Risk Factors ..........................................................    S-18
Forward-Looking Statements ............................................    S-30
Defined Terms .........................................................    S-30
Description of the Loans ..............................................    S-30
Underwriting Standards ................................................    S-32
The Master Servicer and the Servicers .................................    S-45
Description of the Offered Certificates ...............................    S-56
Prepayment and Yield Considerations ...................................    S-74
The Pooling and Servicing Agreement ...................................    S-99
Federal Income Tax Consequences .......................................    S-114
State and Other Taxes .................................................    S-117
ERISA Considerations ..................................................    S-117
Legal Investment ......................................................    S-120
Use of Proceeds .......................................................    S-120
Underwriting ..........................................................    S-120
Ratings ...............................................................    S-121
Legal Matters .........................................................    S-122
Glossary of Terms .....................................................    S-123


                                   PROSPECTUS

                                                                           PAGE
                                                                           -----

Summary of Terms ......................................................       6
Risk Factors ..........................................................      17
Defined Terms .........................................................      27
The Trust Funds .......................................................      27
Use of Proceeds .......................................................      43
Yield Considerations ..................................................      43
Maturity and Prepayment Considerations ................................      45
The Depositor .........................................................      48
Residential Loans .....................................................      49
Description of the Securities .........................................      51
Description of Primary Insurance Coverage .............................      88
Description of Credit Support .........................................      94
Certain Legal Aspects of Residential Loans ............................     102
Federal Income Tax Consequences .......................................     128
State and Other Tax Consequences ......................................     174
ERISA Considerations ..................................................     175
Legal Investment ......................................................     179
Plans of Distribution .................................................     182
Incorporation of Certain Information by Reference .....................     184
Legal Matters .........................................................     184
Financial Information .................................................     184
Rating ................................................................     185
Glossary of Terms .....................................................     187


DEALERS WILL BE REQUIRED TO DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS WHEN
ACTING AS UNDERWRITERS OF THESE CERTIFICATES AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS. IN ADDITION, ALL DEALERS SELLING THESE CERTIFICATES
WILL DELIVER A PROSPECTUS SUPPLEMENT AND PROSPECTUS UNTIL 90 DAYS FOLLOWING THE
CLOSING DATE.

                                  $417,731,685
                                  (Approximate)

                                  [MASTR LOGO]



                             MASTR Alternative Loan
                                  Trust 2004-10
                                    (Issuer)



                          Mortgage Asset Securitization
                               Transactions, Inc.
                                   (Depositor)



                         UBS Real Estate Securities Inc.
                                  (Transferor)



                           Wells Fargo Bank, National
                                   Association
                    (Master Servicer and Trust Administrator)



              Mortgage Pass-Through Certificates, Series 2004-10




                              ---------------------
                              PROSPECTUS SUPPLEMENT
                              ---------------------

                           [UBS INVESTMENT BANK LOGO]


                               SEPTEMBER 28, 2004


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