[Banc of America Securities LOGO]

                                   ----------

     THE ASSET-BACKED SECURITIES REFERRED TO IN THESE MATERIALS, AND THE ASSET
POOLS BACKING THEM, ARE SUBJECT TO MODIFICATION OR REVISION (INCLUDING THE
POSSIBILITY THAT ONE OR MORE CLASSES OF SECURITIES MAY BE SPLIT, COMBINED OR
ELIMINATED AT ANY TIME PRIOR TO ISSUANCE OR AVAILABILITY OF A FINAL PROSPECTUS)
AND ARE OFFERED ON A "WHEN, AS AND IF ISSUED" BASIS. YOU UNDERSTAND THAT, WHEN
YOU ARE CONSIDERING THE PURCHASE OF THESE SECURITIES, A CONTRACT OF SALE WILL
COME INTO BEING NO SOONER THAN THE DATE ON WHICH THE RELEVANT CLASS HAS BEEN
PRICED AND WE HAVE CONFIRMED THE ALLOCATION OF SECURITIES TO BE MADE TO YOU; ANY
"INDICATIONS OF INTEREST" EXPRESSED BY YOU, AND ANY "SOFT CIRCLES" GENERATED BY
US, WILL NOT CREATE BINDING CONTRACTUAL OBLIGATIONS FOR YOU OR US.

     BECAUSE THE ASSET-BACKED SECURITIES ARE BEING OFFERED ON A "WHEN, AS AND IF
ISSUED" BASIS, ANY SUCH CONTRACT WILL TERMINATE, BY ITS TERMS, WITHOUT ANY
FURTHER OBLIGATION OR LIABILITY BETWEEN US, IF THE SECURITIES THEMSELVES, OR THE
PARTICULAR CLASS TO WHICH THE CONTRACT RELATES, ARE NOT ISSUED. BECAUSE THE
ASSET-BACKED SECURITIES ARE SUBJECT TO MODIFICATION OR REVISION, ANY SUCH
CONTRACT ALSO IS CONDITIONED UPON THE UNDERSTANDING THAT NO MATERIAL CHANGE WILL
OCCUR WITH RESPECT TO THE RELEVANT CLASS OF SECURITIES PRIOR TO THE CLOSING
DATE. IF A MATERIAL CHANGE DOES OCCUR WITH RESPECT TO SUCH CLASS, OUR CONTRACT
WILL TERMINATE, BY ITS TERMS, WITHOUT ANY FURTHER OBLIGATION OR LIABILITY
BETWEEN US (THE "AUTOMATIC TERMINATION"). IF AN AUTOMATIC TERMINATION OCCURS, WE
WILL PROVIDE YOU WITH REVISED OFFERING MATERIALS REFLECTING THE MATERIAL CHANGE
AND GIVE YOU AN OPPORTUNITY TO PURCHASE SUCH CLASS. TO INDICATE YOUR INTEREST IN
PURCHASING THE CLASS, YOU MUST COMMUNICATE TO US YOUR DESIRE TO DO SO WITHIN
SUCH TIMEFRAME AS MAY BE DESIGNATED IN CONNECTION WITH YOUR RECEIPT OF THE
REVISED OFFERING MATERIALS.

MBS NEW ISSUE TERM SHEET - DISCLOSURE SUPPLEMENT

MORTGAGE PASS-THROUGH CERTIFICATES

BANC OF AMERICA FUNDING CORPORATION
DEPOSITOR

BANK OF AMERICA, NATIONAL ASSOCIATION
SPONSOR

JULY 26, 2006

                                   ----------

Neither the Offered Certificates nor the mortgage loans are insured or
guaranteed by any governmental agency or instrumentality or any other entity.

The Offered Certificates will represent interests in the Issuing Entity only and
will not be obligations of the Depositor, the Sponsor or any other entity.

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

                                   ----------

BANC OF AMERICA SECURITIES LLC

The depositor has filed a registration statement (including a prospectus) with
the SEC for the offering to which this communication relates. Before you invest,
you should read the prospectus in that registration statement and other
documents the depositor has filed with the SEC for more complete information
about the depositor, the issuing entity and this offering. You may get these
documents for free by visiting EDGAR on the SEC Web site at www.sec.gov.
Alternatively, the depositor, any underwriter or any dealer participating in the
offering will arrange to send you the prospectus if you request it by calling
toll-free 1-800-294-1322 or you e-mail a request to
dg.prospectus_distribution@bofasecurities.com. The securities may not be
suitable for all investors. Banc of America Securities LLC and its affiliates
may acquire, hold or sell positions in these securities, or in related
derivatives, and may have an investment or commercial banking relationship with
the depositor.

The information contained in these materials may be based on assumptions
regarding market conditions and other matters as reflected herein. Banc of
America Securities LLC (the "Underwriter") makes no representation regarding the
reasonableness of such assumptions or the likelihood that any such assumptions
will coincide with actual market conditions or events, and these materials
should not be relied upon for such purposes. The Underwriter and its affiliates,
officers, directors, partners and employees, including persons involved in the
preparation or issuance of these materials, may, from time to time, have long or
short positions in, and buy and sell, the securities mentioned herein or
derivatives thereof (including options). Information in these materials is
current as of the date appearing on the material only. Information in these
materials regarding any securities discussed herein supersedes all prior
information regarding such securities. These materials are not to be construed
as an offer to sell or the solicitation of any offer to buy any security in any
jurisdiction where such an offer or solicitation would be illegal.



                                   DISCLAIMER

          This free writing prospectus is being delivered to you solely to
provide you with information about the offering of the securities referred to in
your term sheet and to solicit an offer to purchase the securities, when, as and
if issued. Any such offer to purchase made by you will not be accepted and will
not constitute a contractual commitment by you to purchase any of the securities
until we have accepted your offer to purchase securities. You may withdraw your
offer to purchase securities at any time prior to our acceptance of your offer.

          The information in this free writing prospectus supersedes information
contained in any prior similar free writing prospectus relating to these
securities prior to the time of your commitment to purchase.

          This free writing prospectus is not an offer to sell or solicitation
of an offer to buy the securities referred to in your term sheet in any state
where such offer, solicitation or sale is not permitted.

                             IRS CIRCULAR 230 NOTICE

               TO ENSURE COMPLIANCE WITH REQUIREMENTS IMPOSED BY THE INTERNAL
               REVENUE SERVICE, WE INFORM YOU THAT (A) ANY UNITED STATES FEDERAL
               TAX ADVICE CONTAINED HEREIN (INCLUDING ANY ATTACHMENTS OR
               ENCLOSURES) WAS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE
               USED, FOR THE PURPOSE OF AVOIDING UNITED STATES FEDERAL TAX
               PENALTIES, (B) ANY SUCH ADVICE WAS WRITTEN TO SUPPORT THE
               PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED
               HEREIN AND (C) ANY TAXPAYER TO WHOM THE TRANSACTIONS OR MATTERS
               ARE BEING PROMOTED, MARKETED OR RECOMMENDED SHOULD SEEK ADVICE
               BASED ON ITS PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX
               ADVISOR.

ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW THIS DOCUMENT ARE NOT
APPLICABLE TO THIS COMMUNICATION AND SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR
OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS COMMUNICATION
BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.


                                        2



                             EUROPEAN ECONOMIC AREA

          In relation to each Member State of the European Economic Area which
has implemented the Prospectus Directive (each, a "RELEVANT MEMBER STATE"), the
Underwriter has represented and agreed that with effect from and including the
date on which the Prospectus Directive is implemented in that Relevant Member
State (the "RELEVANT IMPLEMENTATION DATE") it has not made and will not make an
offer of securities to the public in that Relevant Member State prior to the
publication of a prospectus in relation to the securities which has been
approved by the competent authority in that Relevant Member State or, where
appropriate, approved in another Relevant Member State and notified to the
competent authority in that Relevant Member State, all in accordance with the
Prospectus Directive, except that it may, with effect from and including the
Relevant Implementation Date, make an offer of securities to the public in that
Relevant Member State at any time:

               (a) to legal entities which are authorized or regulated to
          operate in the financial markets or, if not so authorized or
          regulated, whose corporate purpose is solely to invest in securities;

               (b) to any legal entity which has two or more of (1) an average
          of at least 250 employees during the last financial year; (2) a total
          balance sheet of more than (euro)43,000,000 and (3) an annual net
          turnover of more than (euro)50,000,000, as shown in its last annual or
          consolidated accounts; or

               (c) in any other circumstances which do not require the
          publication by the Depositor of a prospectus pursuant to Article 3 of
          the Prospectus Directive.

          For the purposes of this provision, the expression an "offer of
securities to the public" in relation to any securities in any Relevant Member
State means the communication in any form and by any means of sufficient
information on the terms of the offer and the securities to be offered so as to
enable an investor to decide to purchase or subscribe the securities, as the
same may be varied in that Member State by any measure implementing the
Prospectus Directive in that Member State and the expression "Prospectus
Directive" means Directive 2003/71/EC and includes any relevant implementing
measure in each Relevant Member State.

                                 UNITED KINGDOM

          The Underwriter has represented and agreed that:

               (a) it has only communicated or caused to be communicated and
          will only communicate or cause to be communicated an invitation or
          inducement to engage in investment activity (within the meaning of
          Section 21 of the Financial Services and Markets Act) received by it
          in connection with the issue or sale of the securities in
          circumstances in which Section 21(1) of the Financial Services and
          Markets Act does not apply to the issuing entity; and

               (b) it has complied and will comply with all applicable
          provisions of the Financial Services and Markets Act with respect to
          anything done by it in relation to the securities in, from or
          otherwise involving the United Kingdom.

                       NOTICE TO UNITED KINGDOM INVESTORS

          The distribution of this free writing prospectus if made by a person
who is not an authorized person under the Financial Services and Markets Act, is
being made only to, or directed only at persons who (1) are outside the United
Kingdom or (2) are persons falling within Article 49(2)(a) through (d) ("high
net worth companies, unincorporated associations, etc.") or 19 (Investment
Professionals) of the Financial Services and Market Act 2000 (Financial
Promotion) Order 2005 (all such persons together being referred to as the
"Relevant Persons"). This free writing prospectus must not be acted on or relied
on by persons who are not Relevant Persons. Any investment or investment
activity to which this free writing prospectus relates, including the offered
certificates, is available only to Relevant Persons and will be engaged in only
with Relevant Persons.

          Potential investors in the United Kingdom are advised that all, or
most, of the protections afforded by the United Kingdom regulatory system will
not apply to an investment in the trust fund and that compensation will not be
available under the United Kingdom Financial Services Compensation Scheme.


                                        3



                                  INTRODUCTION

          As indicated in the accompanying term sheet, the related transaction
may include various structures and multiple loan groups of mortgage loans. This
disclosure supplement will be used in connection with a transaction that
includes one or more loan groups (each, a "SHIFTING INTEREST LOAN GROUP")
related to one or more groups or subgroups of senior certificates and one or
more groups or subgroups of subordinate certificates (each, a "SHIFTING INTEREST
GROUP") with a shifting interest payment structure (a "SHIFTING INTEREST
TRANSACTION"). In addition, the related transaction may include multiple loan
groups that are cross-collateralized (a "CROSSED LOAN GROUP," the related senior
certificates, a "CROSSED GROUP" and the structure, a "CROSS COLLATERALIZED
STRUCTURE") or multiple loan groups that are not cross-collateralized (each, a
"STACKED LOAN GROUP," the related senior and subordinate certificates, a
"STACKED GROUP" and the structure, a "STACKED STRUCTURE"). The related
transaction may also include one or multiple loan groups that are
overcollateralized (each, an "OVERCOLLATERALIZED LOAN GROUP," the related
certificates, an "OVERCOLLATERALIZED GROUP" and the structure, an
"OVERCOLLATERALIZED STRUCTURE"). References in this disclosure supplement and/or
the accompanying term sheet to a "LOAN GROUP" includes the Mortgage Pool, a
Shifting Interest Loan Group, a Crossed Loan Group, a Stacked Loan Group and a
Overcollateralized Loan Group, as applicable to the related transaction. The
term "GROUP" in this disclosure supplement and/or the accompanying term sheet
refers to a Shifting Interest Group, a Crossed Group, a Stacked Group and an
Overcollateralized Group, as applicable to the related transaction.

                                   ----------


                                        4



                                TABLE OF CONTENTS

DISCLAIMER ...............................................................     2
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS DISCLOSURE
   SUPPLEMENT AND THE PROSPECTUS .........................................     7
RISK FACTORS .............................................................     8
   Mortgage Loans Paying Interest Only During the Related Interest Only
      Period May Have a Higher Risk of Delinquency, Default or Rates of
      Prepayment .........................................................     8
   Inclusion of Mortgage Loans that Have
      Been Delinquent in the Past May Increase Risk of Loss ..............     8
   The Rate of Principal Payments on the
      Mortgage Loans Will Affect the Yield on the Offered Certificates         8
   Delinquencies and Losses on the Mortgage
      Loans Will Adversely Affect Your Yield .............................    10
   Alternative Underwriting Standards May
      Increase Risk of Loss ..............................................    10
   The Rate of Default on Mortgage Loans
      that Are Secured by Investor Properties May be Higher than
      on Other Mortgage Loans ............................................    11
   Credit Scores May Not Accurately Predict
      the Likelihood of Default ..........................................    11
   Decrement and Sensitivity Tables Are
      Based Upon Assumptions and Models ..................................    11
   There Is a Risk that Interest Payments on
      the Mortgage Loans May Be Insufficient to Pay Interest
      on Your Certificates ...............................................    12
   Subordination of Super Senior Support
      and Subordinate Certificates Increases Risk of Loss ................    12
   Subordinate Certificates Provide
      Subordination for the Senior Certificates of the Related
      Group of Certificates ..............................................    13
   The Timing of Changes in the Rate of
      Prepayments May Significantly Affect the Actual Yield to You,
      Even If the Average Rate of Principal Prepayments is Consistent
      with Your Expectations .............................................    13
   Yield Maintenance Agreements are Subject
      to Counterparty Risk ...............................................    13
   Variable Rate of Interest on Offered Certificates Will Affect
      Your Yield .........................................................    13
   Adjustable Rate Mortgage Loan Borrowers
      May Be More Likely to Prepay .......................................    14
   Minimum Monthly Payment on Option
      ARM Mortgage Loans May be Less than the Actual Interest Due,
      Even if the Index Remains Constant, Thereby Increasing the
      Likelihood of Negative Amortization During the Early Years
      of Option ARM Mortgage Loans .......................................    14
   Negative Amortization May Increase
      Losses Applied to Your Certificates ................................    14
   Allocations of Net Negative Amortization
      May Affect Your Yield ..............................................    15
   Limited Source of Payments - No Recourse to Depositor, Sponsor,
      Master Servicer, Servicers, Securities Administrator or Trustee ....    15
   Residential Real Estate Values May
      Fluctuate and Adversely Affect Your Investment .....................    15
   Rights of Beneficial Owners May Be Limited by Book-Entry System .......    16
   Recording of the Mortgages in the Name of MERS May Affect
      the Yield on the Certificates ......................................    16
   An Originator May Not Be Able to Repurchase Defective
      Mortgage Loans .....................................................    16
   Tax Consequences of Residual Certificate ..............................    17
   United States Military Operations May Increase Risk of
      Relief Act Shortfalls ..............................................    17
   The Interest Rate Swap Agreement and the Swap Provider ................    17
   There is a Risk that Interest Payments on the Mortgage Loans
      May Be Insufficient to Maintain Overcollateralization ..............    18
   The Rights of any NIMS Insurer Could Adversely Affect
      Offered Certificates ...............................................    19
   There is a Risk that Interest Payments on the Mortgage Loans
      May be Insufficient to Maintain Overcollateralization ..............    19
   Effect of Mortgage Interest Rates and Other
      Factors on the Pass-Through Rates of the Offered Certificates ......    20
   Credit Enhancement for Senior Certificates
      May Increase the Risk of Loss for Mezzanine
      and Subordinate Certificates .......................................    20
THE MORTGAGE POOL ........................................................    22
MORTGAGE LOAN UNDERWRITING STANDARDS .....................................    24
THE ORIGINATORS ..........................................................    24
THE SPONSOR ..............................................................    24
STATIC POOL INFORMATION ..................................................    24
THE DEPOSITOR ............................................................    25
THE ISSUING ENTITY .......................................................    25
SERVICING OF MORTGAGE LOANS ..............................................    25
   The Servicers .........................................................    25
   The Master Servicer and Securities Administrator ......................    26
THE POOLING and Servicing AGREEMENT AND THE SERVICING AGREEMENTS .........    26
   Assignment of Mortgage Loans ..........................................    26
   Repurchases of Mortgage Loans .........................................    27


                                       5



                                TABLE OF CONTENTS

   Payments on Mortgage Loans; Accounts ..................................    28
   Compensating Interest .................................................    29
   Advances ..............................................................    29
   Optional Termination ..................................................    30
   The Trustee ...........................................................    30
   Compensation and Payment of Expenses of the Transaction Parties .......    31
   Voting Rights .........................................................    32
DESCRIPTION OF CERTIFICATES ..............................................    32
   Denominations and Form ................................................    32
   Distributions--General ................................................    32
   Distributions on the Shifting Interest Certificates ...................    33
   Distributions on the Overcollateralized Certificates ..................    42
   The Yield Maintenance Agreement .......................................    47
   The Reserve Fund ......................................................    48
   Restrictions on Transfer of the Residual Certificate ..................    48
   Interest Rate Swap Agreement and the Swap Account .....................    51
   The Supplemental Interest Trust Trustee ...............................    53
PREPAYMENT AND YIELD CONSIDERATIONS ......................................    54
   Prepayment Considerations and Risks ...................................    54
   Assumptions Relating to Tables ........................................    56
   Weighted Average Lives of the Offered Certificates ....................    56
   Yield on the Residual Certificate .....................................    57
   Yield on the Subordinate Certificates .................................    57
   Yield Considerations with Respect to the Offered Subordinate
      Certificates .......................................................    57
CREDIT SUPPORT ...........................................................    58
USE OF PROCEEDS ..........................................................    58
FEDERAL INCOME TAX CONSEQUENCES ..........................................    58
   Regular Interests .....................................................    58
   Taxation of the Notional Principal Contract Arrangements ..............    59
   Residual Certificate ..................................................    61
   Backup Withholding and Reporting Requirements .........................    61
STATE TAXES ..............................................................    62
ERISA CONSIDERATIONS .....................................................    62
REPORTS TO CERTIFICATEHOLDERS ............................................    63
LEGAL MATTERS ............................................................    63
INDEX OF DEFINED TERMS ...................................................    64

Appendix A: Transaction Parties Appendix .................................   A-1


                                       6



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

          The offered certificates are described in several separate documents
that progressively provide more detail: (i) the accompanying prospectus (the
"PROSPECTUS"), which provides general information, some of which may not apply
to a particular series of certificates such as your certificates; (ii) this
disclosure supplement (the "DISCLOSURE SUPPLEMENT"), which incorporates and
includes the transaction parties appendix (the "APPENDIX") and (iii) the term
sheet (together with any structural summaries relating to one or more classes of
offered certificates, the "TERM SHEET"), which generally describes the principal
terms of the offered certificates and also describes the specific terms of one
or more classes of offered certificates, including decrement and yield tables
related to such class or classes of offered certificates and the related
collateral annex (the "COLLATERAL ANNEX").

          Information regarding certain entities that are not affiliates of the
Depositor has been provided in the Appendix. The information contained in the
Appendix was prepared solely by the party described in the related section in
the Appendix without any input from the Depositor.

          Cross-references are included in this Disclosure Supplement and the
Prospectus to captions in these materials where you can find additional
information. The "Table of Contents" in this Disclosure Supplement and the
"Table of Contents" in the Prospectus provide the locations of these captions.

          The "Index to Defined Terms" beginning on page [61] of this Disclosure
Supplement and the "Index of Defined Terms" beginning on page [125] of the
Prospectus direct you to the locations of the definitions of capitalized terms
used in each of the documents. Any capitalized terms that are not defined in
this Disclosure Supplement and that do not have obvious meanings are defined in
the Prospectus.

          Banc of America Funding Corporation's principal offices are located at
214 North Tryon Street, Charlotte, North Carolina 28255, and its phone number is
(704) 386-2400.

                                   ----------

          This Disclosure Supplement, the Term Sheet and the accompanying
Prospectus contain forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended. Specifically, forward-looking
statements, together with related qualifying language and assumptions, are found
in the material (including tables) under the headings "Risk Factors" and
"Prepayment and Yield Considerations." Forward-looking statements are also found
in other places throughout this Disclosure Supplement and the Prospectus, and
may be identified by, among other things, accompanying language such as
"expects," "intends," "anticipates," "estimates" or analogous expressions, or by
qualifying language or assumptions. These statements involve known and unknown
risks, uncertainties and other important factors that could cause the actual
results or performance to differ materially from the forward-looking statements.
These risks, uncertainties and other factors include, among others, general
economic and business conditions, competition, changes in political, social and
economic conditions, regulatory initiatives and compliance with governmental
regulations, customer preference and various other matters, many of which are
beyond the depositor's control. These forward-looking statements speak only as
of the date of this Disclosure Supplement. The Depositor expressly disclaims any
obligation or undertaking to disseminate any updates or revisions to any
forward-looking statements to reflect changes in the Depositor's expectations
with regard to those statements or any change in events, conditions or
circumstances on which any forward-looking statement is based.


                                       7



                                  RISK FACTORS

o    The risk factors discussed below and under the heading "Risk Factors" in
     the prospectus describe the material risks of an investment in the offered
     certificates and should be carefully considered by all potential investors.

o    The offered certificates are not suitable investments for all investors.

o    The offered certificates are complex financial instruments, so you should
     not purchase any offered certificates unless you or your financial advisor
     possess the necessary expertise to analyze the potential risks associated
     with an investment in mortgage-backed securities.

o    You should not purchase any offered certificates unless you understand, and
     are able to bear, the prepayment, credit, liquidity and market risks
     associated with those offered certificates.

MORTGAGE LOANS PAYING INTEREST ONLY DURING THE RELATED INTEREST ONLY PERIOD MAY
HAVE A HIGHER RISK OF DELINQUENCY, DEFAULT OR RATES OF PREPAYMENT

          Certain of the mortgage loans, as indicated in the term sheet related
to the offered certificates and as described in the collateral annex to the term
sheet related to the offered certificates, may have an initial interest only
period after the date of origination. During these interest only periods, the
payment due from the related mortgagor will be less than that of a traditional
mortgage loan. In addition, the principal balance of such a mortgage loan will
not be reduced (except in the case of prepayments) because there will be no
scheduled monthly payments of principal during this period. Accordingly, no
principal payments will be distributed to the related certificates from these
mortgage loans during their interest only period except in the case of a
prepayment.

          After the initial interest only period, payments on those mortgage
loans will be recalculated to amortize fully its unpaid principal balance over
its remaining life and the mortgagor will be required to make scheduled payments
of both principal and interest. The required payment of principal will increase
the burden on the mortgagor and may increase the risk of delinquency, default or
prepayment under the related mortgage loan. In underwriting mortgage loans with
interest only periods, the originators generally do not consider the ability of
mortgagors to make payments of principal at the end of the interest only period.
Higher scheduled monthly payments may induce the related mortgagors to refinance
their mortgage loans, which would result in higher prepayments. In addition, in
default situations losses may be greater on these mortgage loans because they do
not amortize during the related interest only period. Losses, to the extent not
covered by credit enhancement, will be allocated to the related certificates.

          Mortgage loans with an initial interest only period are relatively new
in the secondary mortgage market. The performance of these mortgage loans may be
significantly different from mortgage loans that amortize from origination. In
particular these mortgagors may be more likely to refinance their mortgage
loans, which may result in higher prepayment speeds than would otherwise be the
case.

INCLUSION OF MORTGAGE LOANS THAT HAVE BEEN DELINQUENT IN THE PAST MAY INCREASE
RISK OF LOSS

          Certain of the mortgage loans, as indicated in the term sheet related
to the offered certificates, may have been 30 days delinquent more than once
during the previous twelve months. A mortgage loan that has been delinquent more
than once in the recent past may be more likely than other mortgage loans to
become delinquent in the future.

THE RATE OF PRINCIPAL PAYMENTS ON THE MORTGAGE LOANS WILL AFFECT THE YIELD ON
THE OFFERED CERTIFICATES

          Because principal prepayments on the mortgage loans may be distributed
currently on the senior certificates and the subordinate certificates, depending
on the applicable structure, the rate of distributions of principal and the
yield to maturity on your certificates will be directly related to (i) the rate
of payments of principal on the mortgage loans and (ii) the amount and timing of
defaults by borrowers that result in losses on the mortgage loans. Borrowers are
permitted to prepay their mortgage loans, in whole or in part, at any time. The
principal


                                       8



payments on the mortgage loans may be in the form of scheduled principal
payments or principal prepayments (for this purpose, the term "principal
prepayment" includes prepayments and any other recovery of principal in advance
of the scheduled due date, including repurchases and liquidations due to
default, casualty, condemnation and the like). Any of these prepayments will
result in distributions to you of amounts that would otherwise be distributed
over the remaining term of the mortgage loans.

          The rate of principal payments on the mortgage loans will be affected
by the following:

o    the amortization schedules of the mortgage loans;

o    the rate of partial prepayments and full prepayments by borrowers due to
     refinancing, job transfer, changes in property values or other factors;

o    liquidations of the properties that secure defaulted mortgage loans;

o    repurchases of mortgage loans by the Depositor, the Sponsor or an
     Originator, as applicable, as a result of defective documentation or
     breaches of representations or warranties;

o    the exercise of due-on-sale clauses by each Servicer in connection with
     transfers of mortgaged properties;

o    the optional repurchase of all the mortgage loans to effect a termination
     of the trust under certain circumstances as described in your term sheet;
     and

o    general and targeted solicitations for refinancing by mortgage originators.

          The rate of principal payments on the mortgage loans will depend
greatly on the level of mortgage interest rates:

o    If prevailing interest rates for similar mortgage loans fall below the
     interest rates on the mortgage loans in the trust, the rate of prepayment
     is likely to increase.

o    Conversely, if prevailing interest rates for similar mortgage loans rise
     above the interest rates on the mortgage loans in the trust, the rate of
     prepayment is likely to decrease.

          Mortgage originators (including the Originators) make general and, in
some cases, targeted solicitations for refinancings. Any such solicited
refinancings may result in a rate of prepayment that is higher than you might
otherwise expect.

          If you are purchasing offered certificates at a discount, and
specifically if you are purchasing a Principal-Only Certificate, you should
consider the risk that if principal payments on the related mortgage loans occur
at a rate slower than you expected, your yield will be lower than you expected.
See "Prepayment and Yield Considerations" in this disclosure supplement for a
more detailed description of risks associated with the purchase of
Principal-Only Certificates.

          If you are purchasing offered certificates at a premium, or are
purchasing an Interest-Only Certificate (none of which will have a class
balance), you should consider the risk that if principal payments on the related
mortgage loans occur at a rate faster than you expected, your yield may be lower
than you expected. If you are purchasing Interest-Only Certificates, you should
consider the risk that a rapid rate of principal payments on the applicable
mortgage loans could result in your failure to recover your initial investment.
See "Prepayment and Yield Considerations" in this disclosure supplement for a
more detailed description of risks associated with the purchase of Interest-Only
Certificates.

          If you are purchasing Inverse Floating Rate Certificates, you should
also consider the risk that a high rate of LIBOR may result in a lower actual
yield than you expected or a negative yield. If these Inverse Floating Rate
Certificates are also Interest-Only Certificates, the yield on the Inverse
Floating Rate Certificates will also be highly


                                       9



sensitive to the rate of principal payment on the Mortgage Loans. In particular,
you should consider the risk that high constant rates of LIBOR or high constant
prepayment rates on the Mortgage Loans may result in the failure to recover your
initial investment. See "Prepayment and Yield Considerations" in this disclosure
supplement for a more detailed description of the risks associated with the
purchase of Inverse Floating Rate Certificates.

          In an Overcollateralized Structure, certain of the mortgage loans, as
indicated in the term sheet related to the offered certificates and as described
in the collateral annex to the term sheet related to the offered certificates,
may have, as of the cut-off date, an aggregate principal balance in excess of
the aggregate class balance of the related offered certificates, resulting in
overcollateralization. If you are purchasing such offered certificates, you
should consider the risk that if the level of overcollateralization falls below
the targeted overcollateralization amount, excess interest from the related
mortgage loans (if any) will be paid to such offered certificates as principal.
This will have the effect of reducing the aggregate class balance of such
offered certificates faster than the aggregate principal balance of the related
mortgage loans until the required level of overcollateralization is reached.

          Certain of the mortgage loans, as indicated in the term sheet related
to the offered certificates and as described in the collateral annex to the term
sheet related to the offered certificates, may require the mortgagor to pay to
the lender a penalty under certain circumstances on certain prepayments equal to
a percentage of the principal amount prepaid. The rate of prepayments on the
mortgage loans may be affected by such prepayment premiums. These premiums may
discourage a mortgagor from prepaying its mortgage loan during the applicable
period.

          The yield to maturity on the subordinate classes of certificates will
also be extremely sensitive to losses due to defaults on the related mortgage
loans (and the timing of those losses), to the extent such losses are not
covered by a class of subordinate certificates with a lower payment priority,
overcollateralization, excess interest or some other form of credit support
specified in the related term sheet. Furthermore, the timing of receipt of
principal and interest by the subordinate certificates may be adversely affected
by losses even if such classes of certificates do not ultimately bear such loss.

          See "Prepayment and Yield Considerations" in this disclosure
supplement.

DELINQUENCIES AND LOSSES ON THE MORTGAGE LOANS WILL ADVERSELY AFFECT YOUR YIELD

          Delinquencies on the mortgage loans which are not advanced by or on
behalf of the related Servicer (because that Servicer has determined that these
amounts, if advanced, would be nonrecoverable), will adversely affect the yield
on the senior certificates and the subordinate certificates. Each Servicer will
determine that a proposed advance is nonrecoverable when, in the good faith
exercise of its servicing judgment, it believes the proposed advance would not
be ultimately recoverable from the related mortgagor, related liquidation
proceeds or other recoveries in respect of the mortgage loan. Because of the
priority of distributions, shortfalls resulting from delinquencies that are not
covered by advances (to the extent not covered by any applicable credit support)
will be borne first by the subordinate certificates (beginning with the
certificate with the lowest payment priority) of the related group and then by
the senior certificates of such group.

          Net interest shortfalls will adversely affect the yields on the
offered certificates. In addition, losses generally will be borne by the
subordinate certificates of the related group, as described in the term sheet
related to the offered certificates. As a result, the yields on the offered
certificates will depend on the rate and timing of realized losses on the
mortgage loans in the related loan group.

ALTERNATIVE UNDERWRITING STANDARDS MAY INCREASE RISK OF LOSS

          Certain of the mortgage loans, as indicated in the term sheet related
to the offered certificates and as described in the transaction parties appendix
to this disclosure supplement, may have been originated using an Originator's
alternative underwriting guidelines. These underwriting guidelines are different
from and, in certain respects, less stringent than the general underwriting
guidelines employed by that Originator. For example, certain of the mortgage
loans may have been originated with less than standard documentation or with
higher maximum loan-to-value ratios. Accordingly, the mortgage loans may
experience rates of delinquencies, defaults, foreclosure,


                                       10



bankruptcy and loss that are higher than those experienced by mortgage loans
underwritten using that Originator's general underwriting standards.

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

          Certain of the mortgage loans, as indicated in the collateral annex to
the term sheet related to the offered certificates, may be secured by investor
properties. An investor property is a property which, at the time of
origination, the mortgagor represented would not be used as the mortgagor's
primary residence or second home. Because the mortgagor is not living on the
property, the mortgagor may be more likely to default on the mortgage loan than
on a comparable mortgage 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 mortgagor from other sources. Should this income not
materialize, it is possible the mortgagor would not have sufficient resources to
make payments on the mortgage loan.

CREDIT SCORES MAY NOT ACCURATELY PREDICT THE LIKELIHOOD OF DEFAULT

          Each Originator generally uses credit scores as part of its
underwriting process. The tables in the collateral annex to the term sheet
related to the offered certificates show credit scores for the mortgagors
obtained at the time of origination of their mortgage loans or later. A credit
score purports only to be a measurement of the relative degree of risk a
borrower represents to a lender, i.e., that a borrower with a higher score is
statistically expected to be less likely to default in payment than a borrower
with a lower score. In addition, it should be noted that credit scores were
developed to indicate a level of default probability over a two-year period,
which does not correspond to the life of most mortgage loans. Furthermore,
credit scores were not developed specifically for use in connection with
mortgage loans, but for consumer loans in general. Therefore, credit scores do
not address particular mortgage loan characteristics that influence the
probability of repayment by the borrower. None of the Originators, the Depositor
or the Sponsor makes any representations or warranties as to any borrower's
current credit score or the actual performance of any mortgage loan or that a
particular credit score should be relied upon as a basis for an expectation that
a borrower will repay its mortgage loan according to its terms.

DECREMENT AND SENSITIVITY TABLES ARE BASED UPON ASSUMPTIONS AND MODELS

          The decrement tables and the sensitivity tables that you will receive
in the term sheet related to the offered certificates have been prepared on the
basis of the modeling assumptions described in your term sheet. There will
likely be discrepancies between the characteristics of the actual mortgage loans
included in a loan group and the characteristics of the assumed mortgage loans
used in preparing the related decrement tables and the sensitivity tables. Any
such discrepancy may have an effect upon the percentages of initial class
balances outstanding set forth in the decrement tables (and the weighted average
lives on the offered certificates) and the yields to maturity set forth in the
yield tables. In addition, to the extent that the mortgage loans that actually
are included in a loan group have characteristics that differ from those assumed
in preparing the related decrement tables and the sensitivity tables, the class
balance of a related class of offered certificates could be reduced to zero
earlier or later than indicated by the related decrement tables and the yield to
maturity may be higher or lower than indicated in the related sensitivity
tables.

          The models used in the term sheet related to the offered certificates
for prepayments and defaults also do not purport to be a historical description
of prepayment or default experience or a prediction of the anticipated rate of
prepayment or default of any pool of mortgage loans, including the mortgage
loans contained in the trust. It is highly unlikely that the mortgage loans will
prepay or liquidate at any of the rates specified or that losses will be
incurred according to one particular pattern. The assumed percentages of CPR or
any other applicable prepayment model and the loss severity percentages are for
illustrative purposes only. For a description of CPR, see "Prepayment and Yield
Considerations" in this disclosure supplement. The actual rates of prepayment
and liquidation and loss severity experience of the mortgage loans may not
correspond to any of the assumptions made in this disclosure supplement. For
these reasons, the weighted average lives of the offered certificates may differ
from the weighted average lives shown in the decrement tables and the
sensitivity tables that you will receive in the term sheet related to the
offered certificates.


                                       11



THERE IS A RISK THAT INTEREST PAYMENTS ON THE MORTGAGE LOANS MAY BE INSUFFICIENT
TO PAY INTEREST ON YOUR CERTIFICATES

          When a mortgage loan is prepaid in full, the mortgagor is charged
interest only up to the date on which payment is made, rather than for an entire
month. When a mortgagor makes a partial principal prepayment on a mortgage loan,
the mortgagor is not charged interest on the prepayment for the month in which
the principal prepayment was received. This may result in a shortfall in
interest collections available for payment on the next distribution date.
Servicers are generally required to cover a portion of the shortfall in interest
collections that are attributable to prepayments in full and partial prepayments
on the mortgage loans, but in each case only up to the amount of compensating
interest for such distribution date as described herein under "The Pooling and
Servicing Agreement and the Servicing Agreements--Compensating Interest." To the
extent these shortfalls from the mortgage loans are not covered by the amount of
compensating interest, they will be allocated pro rata to the classes of
interest-bearing certificates and components as described herein under
"Description of the Certificates--Interest" or, in the case of an
Overcollateralized Structure, to the most subordinate class of certificates to
the extent the applicable credit enhancements are insufficient. See "Description
of Certificates" in this disclosure supplement.

SUBORDINATION OF SUPER SENIOR SUPPORT AND SUBORDINATE CERTIFICATES INCREASES
RISK OF LOSS

          If you purchase subordinate certificates, you are more likely to
suffer losses as a result of losses or delinquencies on the applicable mortgage
loans than are holders of the senior certificates of the related groups.

o    The rights of each class of subordinate certificates to receive
     distributions of interest and principal are subordinated to the rights of
     the senior certificates of the related group and each class of subordinate
     certificates with a lower numerical designation. For example, a subordinate
     class designated with final suffix of "2" will not receive principal or
     interest on a distribution date until the senior certificates of the
     related group and the subordinate class designated with final suffix of "1"
     have received the amounts to which they are entitled on that distribution
     date.

o    Losses that are realized on the mortgage loans in a loan group will be
     allocated first to the related subordinate certificates designated with
     highest numerical final suffix, then to the related subordinate
     certificates designated with a numerical final suffix that is one less than
     the highest numerical final suffix and so on, in reverse numerical order,
     until the outstanding balances of those classes have been reduced to zero.

          If your certificates are subordinate certificates and the related
senior certificates include ratio strip Principal-Only Certificates, a
percentage of losses (which percentage described in the term sheet related to
the offered certificates and referred to therein as the "Non-PO Percentage")
that are realized on the mortgage loans in the loan group related to your
subordinate certificates will be allocated first to the related subordinate
certificates designated with highest numerical final suffix, then to the related
subordinate certificates designated with a numerical final suffix that is one
less than the highest numerical final suffix and so on, in reverse numerical
order, until the outstanding balances of those classes have been reduced to
zero.

          If your certificates are subordinate certificates and the related
senior certificates include ratio strip Principal-Only Certificates, each
related PO Component or class of ratio strip Principal-Only Certificates will be
entitled to reimbursement for certain losses allocated to them from amounts
otherwise distributable as principal on those subordinate certificates in
reverse order of their numerical class designations.

          If your certificates are a class of Super Senior Support Certificates,
you should consider the risk that after the related subordinate certificates are
no longer outstanding, the principal portion of losses realized on the mortgage
loans in the related loan group that is allocated to the related class of Super
Senior Certificates will be borne by your class of Super Senior Support
Certificates, rather than the related class of Super Senior Certificates, for so
long as your class of Super Senior Support Certificates is outstanding.


                                       12



SUBORDINATE CERTIFICATES PROVIDE SUBORDINATION FOR THE SENIOR CERTIFICATES OF
THE RELATED GROUP OF CERTIFICATES

          Because the subordinate certificates provide credit support for the
senior certificates of the related group or, in the case of a Crossed Structure,
for several groups of senior certificates, the outstanding class balances of the
subordinate certificates could be reduced to zero as a result of a
disproportionate amount of realized losses on the mortgage loans in the related
loan group or loan groups. Therefore, in a Crossed Structure, realized losses on
the mortgage loans in any of the Crossed Groups will reduce the subordination
provided by the related subordinate certificates to all of the related senior
certificates and increase the likelihood that realized losses may be allocated
to those senior certificates.

          In addition, under certain circumstances principal otherwise payable
to the subordinate certificates of a Crossed Group may, if described in the term
sheet related to the offered certificates, be paid to the senior certificates
related to those subordinate certificates, as described under "Description of
the Certificates--Cross-Collateralization" in this disclosure supplement.

THE TIMING OF CHANGES IN THE RATE OF PREPAYMENTS MAY SIGNIFICANTLY AFFECT THE
ACTUAL YIELD TO YOU, EVEN IF THE AVERAGE RATE OF PRINCIPAL PREPAYMENTS IS
CONSISTENT WITH YOUR EXPECTATIONS

          In general, the earlier the payment of principal of the mortgage
loans, the greater the effect on your yield to maturity. As a result, the effect
on your yield of principal prepayments occurring at a rate higher (or lower)
than the rate you anticipate during the period immediately following the
issuance of the certificates will not be offset by a subsequent like reduction
(or increase) in the rate of principal prepayments.

YIELD MAINTENANCE AGREEMENTS ARE SUBJECT TO COUNTERPARTY RISK

          If described in the term sheet related to the offered certificates,
the trustee or securities administrator on behalf of the Issuing Entity will
enter into a yield maintenance agreement with a counterparty (to be described in
the term sheet related to the offered certificates), for the benefit of one or
more classes of certificates identified in the term sheet related to the offered
certificates. Each such yield maintenance agreement will require the
counterparty to make certain payments in the circumstances set forth herein
under "Description of the Certificates--The Yield Maintenance Agreement" the one
or more classes of offered certificates. To the extent that payments on the any
class of certificates depend in part on payments to be received by the trustee
or securities administrator under a yield maintenance agreement, the ability of
the trustee or securities administrator to make such payments on such
certificates will be subject to the credit risk of the counterparty to such
yield maintenance agreement.

VARIABLE RATE OF INTEREST ON OFFERED CERTIFICATES WILL AFFECT YOUR YIELD

          If your certificates accrue interest at a variable rate of interest
and if the mortgage interest rates on the mortgage loans related thereto bear
interest at a fixed interest rate for an initial period from its date of
origination, then you should consider that after the applicable fixed-rate
period, the mortgage interest rate on those mortgage loans will adjust every
periodically (as set forth in the term sheet related to the offered certificates
and as described in the collateral annex to the term sheet related to the
offered certificates), based upon on or more indices described in the term sheet
related to the offered certificate, to equal the sum of applicable index and a
gross margin. Mortgage interest rate adjustments, if set forth in the term sheet
related to the offered certificates and as described in the collateral annex to
the term sheet related to the offered certificates, may be subject to the
limitations stated in the mortgage note on increases and decreases for any
adjustment (i.e., a "periodic cap"). In addition, the mortgage interest rate, if
set forth in the term sheet related to the offered certificates and as described
in the related collateral annex, may be subject to an overall rate ceiling and
rate floor. The pass through rate on each certificate that accrues interest at a
variable rate of interest may decrease, and may decrease significantly, after
the mortgage interest rates on the applicable mortgage loans begin to adjust as
a result of, among other factors, the dates of adjustment, the gross margins and
changes in the applicable index increases, a rate ceiling or a periodic cap may
limit the mortgage interest rate, which could adversely affect the yield on the
related certificates.


                                       13



ADJUSTABLE RATE MORTGAGE LOAN BORROWERS MAY BE MORE LIKELY TO PREPAY

          The mortgage loans may consist of adjustable rate mortgage loans
and/or hybrid mortgage loans, which are mortgage loans that bear interest for an
initial period at a fixed rate of interest and thereafter bear interest at a
rate that periodically resets based upon one or more indices. If the mortgage
loans in a loan group are hybrid mortgage loans, mortgage interest rates on
those mortgage loans at any time may not equal the prevailing mortgage interest
rates for similar adjustable rate mortgage loans, and accordingly the prepayment
rate may be lower or higher than would otherwise be anticipated. Moreover, some
mortgagors who prefer the certainty provided by fixed-rate mortgage loans may
nevertheless obtain adjustable rate mortgage loans at a time when they regard
the mortgage interest rates (and, therefore, the payments) on fixed-rate
mortgage loans as unacceptably high. These mortgagors may be induced to
refinance adjustable rate mortgage loans when the mortgage interest rates and
monthly payments on comparable fixed-rate mortgage loans decline to levels which
these mortgagors regard as acceptable, even though these mortgage interest rates
and monthly payments may be significantly higher than the current mortgage
interest rates and monthly payments on the mortgagors' adjustable rate mortgage
loans. The ability to refinance a mortgage loan will depend on a number of
factors prevailing at the time refinancing is desired, such as, among other
things, real estate values, the mortgagor's financial situation, prevailing
mortgage interest rates, the mortgagor's equity in the related mortgaged
property, tax laws and prevailing general economic conditions. Further, because
the pass through rates on the certificates related to these mortgage loans
generally will be based on the weighted average of the net mortgage interest
rates of the related mortgage loans, disproportionate principal payments on the
related mortgage loans having net mortgage interest rates higher or lower than
the then current pass through rates on the certificates will affect the pass
through rates for these certificates for future periods and the yields on these
certificates.

MINIMUM MONTHLY PAYMENT ON OPTION ARM MORTGAGE LOANS MAY BE LESS THAN THE ACTUAL
INTEREST DUE, EVEN IF THE INDEX REMAINS CONSTANT, THEREBY INCREASING THE
LIKELIHOOD OF NEGATIVE AMORTIZATION DURING THE EARLY YEARS OF OPTION ARM
MORTGAGE LOANS

          The mortgage loans may include Option ARM Mortgage Loans, to the
extent described in the term sheet related to the offered certificates and as
set forth in the collateral annex to the term sheet related to the offered
certificates. The minimum monthly payment for the initial period (as described
in the term sheet related to the offered certificates and as set forth in
collateral annex to the term sheet related to the offered certificates)
following origination of those mortgage loans reflects the fixed rate in effect
during that initial fixed-rate period, which will generally be lower than the
fully indexed rate in effect at any time during the related initial period. At
the end of the initial period the mortgagor may choose to make payments based
upon one of several payment options, including in the amount of the initial
minimum monthly payment. Therefore, even if the index does not increase, the
minimum monthly payment may not be enough to pay the amount of interest due on
the mortgage loan at the fully indexed rate, which is calculated based on the
sum of the index and the margin.

          If the mortgagor chooses to pay the minimum monthly payment rather
than the other higher payment options, this will lead to an increase in the
outstanding principal balance of the mortgage loan in the form of negative
amortization. Even if the minimum monthly payment increases, this adjustment may
not be enough to raise the minimum monthly payment to the amount necessary to
pay the interest due on the mortgage loan based on the sum of the index and the
margin in effect during the following year. If the new minimum monthly payment
is still less than the fully indexed rate during the following year, there will
continue to be negative amortization if the mortgagor chooses to pay the minimum
monthly payment.

          Therefore the effect of the initial fixed rate at the beginning of the
life of the mortgage loan may continue to cause the minimum monthly payment to
be less than the monthly interest due on the mortgage loan until such date when
the minimum monthly payment will be reset to a fully-amortizing payment
regardless of any limit.

NEGATIVE AMORTIZATION MAY INCREASE LOSSES APPLIED TO YOUR CERTIFICATES

          The mortgage loans may include Option ARM Mortgage Loans and/or
Graduated Pay Mortgage Loans. In certain cases, payments by mortgagors on Option
ARM Mortgage Loans may result in negative amortization (see, "Risk
Factors--Minimum Monthly Payment on Option ARM Mortgage Loans May be Less than
the Actual Interest


                                       14



Due, Even if the Index Remains Constant, Thereby Increasing the Likelihood of
Negative Amortization During the Early Years of Option ARM Mortgage Loans" in
this disclosure supplement). In addition, Graduated Pay mortgage loans result in
negative amortization (see "The Trust Estates--The Mortgage Loans" in the
prospectus). When interest due on a mortgage loan is added to the principal
balance of the mortgage loan through negative amortization, the mortgaged
property provides proportionally less security for the repayment of the mortgage
loan. Therefore, if the mortgagor defaults on such a mortgage loan there is a
greater likelihood that a loss will be incurred upon the liquidation of the
mortgaged property. Furthermore, the loss will be larger than would otherwise
have been recognized in the absence of negative amortization. Certificateholders
will bear these losses as described in "Description of the
Certificates--Allocation of Losses" in the term sheet related to the offered
certificates.

ALLOCATIONS OF NET NEGATIVE AMORTIZATION MAY AFFECT YOUR YIELD

          The amount of negative amortization, if any, with respect to the
mortgage loans in a loan group for a given month will reduce the amount of
interest collected on the mortgage loans in that loan group and available to be
distributed as interest in the related certificates. The reduction in interest
collections will be offset, in part, by applying certain prepayments received on
the related mortgage loans to interest distributions on those certificates. For
any distribution date, the excess, if any, of negative amortization on the
mortgage loans in a loan group over the prepayments received on the mortgage
loans in that group, or net negative amortization, will be deducted from the
interest payable to the related certificates as described in the term sheet
related to the offered certificates. The amount of the reduction of accrued
interest distributable to each class of certificates attributable to net
negative amortization will be added to the class principal balance of any class
of certificates will have the effect of increasing the applicable investors'
exposure to realized losses on the related mortgage loans. In addition, because
the allocation of principal prepayments between the senior certificates and the
related subordinate certificates may be determined based on the relationship
between the aggregate class principal balance of the senior certificates and the
aggregate class principal balance of the subordinate certificates, this method
of allocating net negative amortization may affect the rate and timing of
distributions of principal prepayments among the classes of certificates. See
"Description of Certificates--Principal Prepayments" in the term sheet related
to the offered certificates.

LIMITED SOURCE OF PAYMENTS - NO RECOURSE TO DEPOSITOR, SPONSOR, MASTER SERVICER,
SERVICERS, SECURITIES ADMINISTRATOR OR TRUSTEE

          Proceeds of the mortgage loans will be the primary source of payments
on the Certificates. The Certificates do not represent an interest in or
obligation of the Depositor, the Sponsor, the Master Servicer, the Servicers,
the Securities Administrator, the Trustee or any of their affiliates. There are,
however, limited obligations of the Depositor, the Sponsor and Originators with
respect to certain breaches of representations and warranties, and limited
obligations of the Servicers with respect to their servicing obligations and the
Master Servicer with respect to its master servicing obligations.

          Neither the certificates nor the mortgage loans will be guaranteed by
or insured by any governmental agency or instrumentality, the Depositor, the
Sponsor, the Master Servicer, any of the Originators, any of the Servicers, the
Securities Administrator, the Trustee or any of their affiliates. Consequently,
if payments on the mortgage loans are insufficient or otherwise unavailable to
make all payments required on the certificates, there will be no recourse to the
Depositor, the Sponsor, the Master Servicer, any of the Originators, any of the
Servicers, the Securities Administrator, the Trustee or any of their affiliates.

RESIDENTIAL REAL ESTATE VALUES MAY FLUCTUATE AND ADVERSELY AFFECT YOUR
INVESTMENT

          There can be no assurance that values of the mortgaged properties have
remained or will remain at their levels on the dates of origination of the
related mortgage loans. The value of any mortgaged property generally will
change over time from its value on the appraisal or sales date. If residential
real estate values generally or in a particular geographic area decline, the
loan-to-value ratios shown in the collateral annex to the term sheet related to
the offered certificates might not be a reliable indicator of the rates of
delinquencies, foreclosures and losses that could occur on the mortgage loans.
If the residential real estate market should experience an overall decline in
property values large enough to cause the outstanding balances of the mortgage
loans and any secondary financing on the related mortgaged properties to equal
or exceed the value of the mortgaged properties, delinquencies,


                                       15



foreclosures and losses could be higher than those now generally experienced in
the mortgage lending industry or in the Sponsor's prior securitizations
involving the Depositor.

          In addition, adverse economic conditions and other factors (which may
or may not affect real property values) may affect the mortgagors' timely
payment of scheduled payments of principal and interest on the mortgage loans
and, accordingly, the actual rates of delinquencies, foreclosures and losses
with respect to the Mortgage Pool. These other factors could include excessive
building resulting in an oversupply of housing in a particular area or a
decrease in employment reducing the demand for housing in an area. To the extent
that credit enhancements do not cover such losses, your yield may be adversely
impacted.

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

          Transactions in Book-Entry Certificates generally can be effected only
through DTC and Participants. As a result:

o    your ability to pledge Book-Entry Certificates to entities that do not
     participate in the DTC system, or to otherwise act with respect to
     Book-Entry Certificates, may be limited due to the lack of a physical
     certificate for your certificates; and

o    under a book-entry format, you may experience delays in the receipt of
     payments, since distributions will be made by the trustee or securities
     administrator to DTC, and not directly to you.

          For a more detailed discussion of Book-Entry Certificates, see
"Description of Certificates" in this disclosure supplement.

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 mortgage
loans may have been recorded in the name of Mortgage Electronic Registration
Systems, Inc., or MERS, solely as nominee for the related Originator and its
successors and assigns, including the Issuing Entity. 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, any related expenses will be paid by the
Issuing Entity and will reduce the amount available to make distributions on the
related certificates.

          The recording of mortgages in the name of MERS is a relatively 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 mortgage loans. In that regard, a Florida court recently
ruled that MERS lacked standing to pursue foreclosure proceedings on behalf of
the beneficial owners of several mortgage notes who were not named parties to
the proceedings.

AN ORIGINATOR MAY NOT BE ABLE TO REPURCHASE DEFECTIVE MORTGAGE LOANS

          Each of the Originators have made or will make various representations
and warranties related to the mortgage loans.

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


                                       16



TAX CONSEQUENCES OF RESIDUAL CERTIFICATE

o    The Residual Certificate will be the sole "residual interest" in each REMIC
     for federal income tax purposes.

o    The holder of the Residual Certificate must report as ordinary income or
     loss the net income or the net loss of each REMIC whether or not any cash
     distributions are made to it. This allocation of income or loss may result
     in a zero or negative after-tax return. No cash distributions are expected
     to be made with respect to the Residual Certificate other than the
     distribution of its class balance and interest on that balance.

o    Treasury regulations require a seller of the Residual Certificate to either
     pay the buyer an amount designed to compensate the buyer for assuming the
     tax liability or transfer only to certain eligible transferees should the
     seller wish to qualify for "safe harbor" protection from possible disregard
     of such a transfer.

o    Due to its tax consequences, the Residual Certificate will be subject to
     restrictions on transfer that may affect its liquidity. In addition, the
     Residual Certificate may not be acquired by Plans.

          See "Description of Certificates--Restrictions on Transfer of the
Residual Certificate," "Prepayment and Yield Considerations--Yield on the
Residual Certificate," "ERISA Considerations" and "Federal Income Tax
Consequences" in this disclosure supplement.

UNITED STATES MILITARY OPERATIONS MAY INCREASE RISK OF RELIEF ACT SHORTFALLS

          As a result of military operations in Afghanistan and Iraq, the United
States 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 may
remain at high levels for an extended time. 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. This may result in interest shortfalls on the
mortgage loans in the trust, which will be borne by all classes of
interest-bearing Certificates. Neither the Sponsor nor the Depositor has taken
any action to determine whether any of the mortgage loans would be affected by
these interest rate limitations. See "Description of Certificates--Interest" in
this disclosure supplement and "Certain Legal Aspects of the Mortgage
Loans--Servicemembers Civil Relief Act and Similar Laws" in the prospectus.

          RISKS SPECIFIC TO OVERCOLLATERALIZED STRUCTURES

THE INTEREST RATE SWAP AGREEMENT AND THE SWAP PROVIDER

          If described in the term sheet related to the offered certificates, a
supplemental interest trust trustee will enter into an interest rate swap on
behalf of the issuing entity with a swap provider. Any amounts received by the
supplemental interest trust trustee from the swap provider under the interest
rate swap agreement will be applied as described in the related term sheet to
pay certain amounts, including, to the extent specified therein, interest
shortfalls and cap carryover amounts, to maintain overcollateralization and to
pay realized loss amortization amounts. However, no amounts will be payable by
the swap provider unless the floating amount owed by the swap provider on a
distribution date exceeds the fixed amount owed by the supplemental interest
trust for the benefit of the swap provider on such distribution date. No
assurance can be made that any amounts will be received by the supplemental
interest trust trustee under the interest rate swap agreement, or that any such
amounts that are received will be sufficient to maintain required
overcollateralization or to cover interest shortfalls, cap carryover amounts and
realized loss amortization amounts. Any net swap payment payable to the
supplemental interest trust for the benefit of the swap provider under the terms
of the interest rate swap agreement will reduce amounts available for
distribution to holders of the offered certificates in an Overcollateralized
Group, and may reduce the pass-through rates of the offered certificates in an
Overcollateralized Group. If the rate of prepayments on the Mortgage Loans in an
Overcollateralized Loan Group is faster than anticipated, the schedule on which
payments due under the interest rate swap agreement are calculated may exceed
the aggregate principal balance of the Mortgage Loans in an Overcollateralized
Loan Group, thereby increasing the relative proportion of interest collections
on the Mortgage


                                       17



Loans in an Overcollateralized Loan Group that must be applied to make net swap
payments to the supplemental interest trust for the benefit of the swap
provider. The combination of a rapid rate of prepayment and low prevailing
interest rates could adversely affect the yields on the offered certificates in
an Overcollateralized Group. In addition, any termination payment payable by the
supplemental interest trust trustee to the swap provider (other than a
termination payment resulting from a swap provider trigger event) in the event
of early termination of the interest rate swap agreement will reduce amounts
available for distribution to holders of the offered certificates in an
Overcollateralized Group.

          Upon early termination of the interest rate swap agreement, the
supplemental interest trust or the swap provider may be liable to make a swap
termination payment to the other party (regardless of which party caused the
termination). The swap termination payment will be computed in accordance with
the procedures set forth in the interest rate swap agreement. In the event that
a swap termination payment to the swap provider is required, that payment will
be paid to the supplemental interest trust and then to the swap account for
payment to the swap provider on the related distribution date, and on any
subsequent distribution dates until paid in full, generally prior to
distributions to holders of the offered certificates in an Overcollateralized
Group. This feature may result in losses on the offered certificates in an
Overcollateralized Group. Due to the priority of the applications of the
available funds, the senior most subordinate certificates will bear the effects
of any shortfalls resulting from a net swap payment or swap termination payment
by the supplemental interest trust before such effects are borne by the senior
certificates in an Overcollateralized Group and one or more classes of the
subordinate certificates may suffer a loss as a result of such payment.

          To the extent that distributions on the senior most subordinate
certificates depend in part on payments to be received by the supplemental
interest trust under the interest rate swap agreement from the swap provider,
the ability of the supplemental interest trust trustee to make such
distributions on such certificates will be subject to the credit risk of the
swap provider to the interest rate swap agreement. In addition, no assurance can
be made that in the event of an early termination of the interest rate swap
agreement, the depositor will be able to obtain a replacement interest rate swap
agreement.

THERE IS A RISK THAT INTEREST PAYMENTS ON THE MORTGAGE LOANS MAY BE INSUFFICIENT
TO MAINTAIN OVERCOLLATERALIZATION

          With respect to an Overcollateralized Structure, because the weighted
average of the mortgage interest rates on the mortgage loans in an
Overcollateralized Loan Group is expected to be higher than the weighted average
of the pass-through rates on the related offered certificates, such mortgage
loans are expected to generate more interest than is needed to pay interest owed
on the related offered certificates as well as certain fees and expenses of the
Issuing Entity allocable to the related offered certificates. After these
financial obligations of the Issuing Entity are covered, the available excess
interest will be used to maintain overcollateralization. Any remaining interest
will then be used to compensate for losses that occur on such mortgage loans.
There can be no assurance, however, that enough excess interest will be
generated to maintain the overcollateralization level required by the rating
agencies. The factors described below will affect the amount of excess interest
that such mortgage loans will generate:

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

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

               o    If the rates of delinquencies, defaults or losses on such
                    mortgage loans are higher than expected, excess interest
                    will be reduced by the amount necessary to compensate for
                    any shortfalls in cash available on such date to pay holders
                    of related offered certificates.


                                       18



THE RIGHTS OF ANY NIMS INSURER COULD ADVERSELY AFFECT OFFERED CERTIFICATES

          On or after the closing date, a separate entity may be established to
issue net interest margin securities secured by all or a portion of the Class CE
and Class P Certificates. A NIMS Insurer may issue a financial guaranty
insurance policy that guarantees payments on those securities. If the net
interest margin securities are so insured, the NIMS Insurer will have a number
of rights under the pooling agreement that could adversely affect holders of the
offered certificates. Pursuant to the pooling agreement, unless the NIMS Insurer
fails to make a required payment under the policy insuring the net interest
margin securities or the NIMS Insurer is the subject of a bankruptcy proceeding,
the NIMS Insurer will be entitled to exercise, among others, the following
rights of the holders of the Offered Certificates, without their consent, and
the holders of the Offered Certificates will be able to exercise such rights
only with the prior written consent of the NIMS Insurer. Rights of the NIMS
Insurer under the pooling agreement may include, but are not limited to, the
following:

o    the right to control the voting rights of the certificates in directing the
     trustee to terminate the rights and obligations of a servicer under the
     pooling agreement upon a default by such servicer;

o    the right to control the voting rights of the certificates in directing the
     removal of the trustee, securities administrator, any co-trustee or the
     custodian pursuant to the pooling agreement for failure of such party to
     perform its obligations thereunder; and

o    the right to control the voting rights of the certain of the certificates
     in directing the trustee to make investigations and take actions pursuant
     to the pooling agreement.

          In addition, unless the NIMS Insurer fails to make a required payment
under the policy insuring the net interest margin securities or the NIMS Insurer
is the subject of a bankruptcy proceeding, the NIMS Insurer's consent will be
required before, among other things, any amendment to the pooling agreement
affecting the certificates.

          Investors in the offered certificates should note that:

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

o    the rights granted to the NIMS Insurer are extensive;

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

o    the NIMS Insurer's exercise of its rights and consents may negatively
     affect the offered certificates and the existence of the NIMS Insurer's
     rights, whether or not exercised, may adversely affect the liquidity of the
     offered certificates, relative to other mortgage pass-through certificates
     backed by comparable mortgage loans and with comparable payment priorities
     and ratings.

THERE IS A RISK THAT INTEREST PAYMENTS ON THE MORTGAGE LOANS MAY BE INSUFFICIENT
TO MAINTAIN OVERCOLLATERALIZATION

          Because the weighted average of the mortgage interest rates on the
mortgage loans in an Overcollateralized Loan Group is expected to be higher than
the weighted average of the pass-through rates on the related offered
certificates, such mortgage loans will be expected to generate more interest
than is needed to pay interest owed on the related offered certificates as well
as certain fees and expenses of the Issuing Entity. After these financial
obligations of the Issuing Entity are covered, the available excess interest
will be used to maintain overcollateralization. Any remaining interest will then
be used to compensate for losses that occur on the mortgage loans in the
Overcollateralized Loan Group. There can be no assurance, however, that enough
excess interest will be generated to maintain the overcollateralization level
required by the rating agencies. The factors described below, as


                                       19



well as the factors described in the next risk factor, will affect the amount of
excess interest that the mortgage loans in an Overcollateralized Loan Group will
generate:

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

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

o    If the rates of delinquencies, defaults or losses on the mortgage loans are
     higher than expected, excess interest will be reduced by the amount
     necessary to compensate for any shortfalls in cash available on such date
     to pay holders of the offered certificates.

o    The pass-through rates of the offered certificates may be based on an index
     while the mortgage loans may have mortgage interest rates that are
     adjustable based on a different index. As a result, the pass-through rates
     on the offered certificates may increase relative to interest rates on the
     mortgage loans, thus requiring that more of the interest generated by the
     mortgage loans be applied to cover interest on the offered certificates.

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

          The yields to maturity on the offered certificates in an
Overcollateralized Group may be affected by the resetting of the mortgage
interest rates on the mortgage loans in the related Overcollateralized Loan
Group on their related adjustment dates due to the factors set forth below. The
mortgage interest rates on such Mortgage Loans may be based on varying indices,
may not adjust for significant periods after the dates of their origination, and
thereafter adjust less frequently than the related offered certificates, while
the pass-through rates on the offered certificates may be based on a different
index, may be subject to caps and generally will be adjusted monthly. This
mismatch of indices and adjustment frequency may cause the pass-through rates on
the offered certificates to increase relative to the mortgage interest rates on
the mortgage loans, which would require a greater portion of the interest
generated by the Mortgage Loans to be applied to cover interest accrued on the
offered certificates, and could result in the limitation of the pass-through
rates on some or all of the offered certificates by an applicable rate cap and
could therefore adversely affect the yield to maturity on such offered
certificates. Caps on offered certificates generally will decrease if the
mortgage loans with relatively high mortgage interest rates prepay at a faster
rate than the other mortgage loans in the related Overcollateralized Loan Group
with relatively low mortgage interest rates, which will increase the likelihood
that the caps will apply to limit the pass-through rates on one or more classes
of the offered certificates.

          If the pass-through rate on any class of offered certificates is
limited by a cap based on the mortgage interest rates of the related mortgage
loans for any distribution date, the resulting cap carryover amounts may be
recovered by the holders of the affected class or classes of certificates on
that same distribution date or on future distribution dates, to the extent that
on that distribution date or future distribution dates there are any available
funds remaining after certain other distributions on the offered certificates
and the payment of certain fees and expenses of the Issuing Entity. These cap
carryover amounts may also be covered by amounts payable under a yield
maintenance agreement or an interest rate swap.

CREDIT ENHANCEMENT FOR SENIOR CERTIFICATES MAY INCREASE THE RISK OF LOSS FOR
MEZZANINE AND SUBORDINATE CERTIFICATES

          The protections afforded the senior certificates in an
Overcollateralized Structure create risks for the mezzanine and subordinate
certificates. Prior to any purchase of any mezzanine or subordinate
certificates, consider the following factors that may adversely impact your
yield:

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


                                       20



          If a servicer determines not to advance a delinquent payment on a
mortgage loan in an Overcollateralized Loan Group because such amount is not
recoverable from a mortgagor, there may be a shortfall in distributions on the
related certificates which may impact the mezzanine and subordinate
certificates.

          The portion of the shortfalls in the amount of interest collections on
mortgage loans in an Overcollateralized Loan Group that are attributable to
prepayments in full or partial prepayments and are not covered by a servicer may
result in a shortfall in distributions on the certificates, which will impact
the mezzanine and subordinate certificates.

          The mezzanine and subordinate certificates are not expected to receive
principal distributions until, at the earliest, three years from the applicable
closing date (unless the senior certificates are reduced to zero prior to such
date).

          Losses resulting from the liquidation of defaulted mortgage loans will
first reduce monthly excess cashflow and then reduce the level of
overcollateralization, if any, for the offered certificates of an
Overcollateralized Group. If there is no overcollateralization, losses will be
allocated to the subordinate certificates in reverse order of payment priority
and then to the mezzanine certificates in reverse order of payment priority. No
principal or interest will be distributable on the amount by which the class
balance of a class has been reduced by a realized loss allocated to a mezzanine
or subordinate certificate (except where a class balance has been increased by a
recovery). A loss allocation results in a reduction in a class balance without a
corresponding distribution of cash to the holder. A lower class balance will
result in less interest accruing on the certificate. The earlier in the
transaction that a loss on a mortgage loan occurs, the greater the impact on
yield.


                                       21



                                THE MORTGAGE POOL

          The following descriptions of, and the information provided in the
Collateral Annex regarding the Mortgage Loans and the mortgaged properties are
based upon the expected characteristics of the Mortgage Loans as of the close of
business on the Cut-off Date. The balances shown have been adjusted for the
scheduled principal payments due on or before the Cut-off Date. Prior to the
closing date, Mortgage Loans may be removed from a Loan Group and other Mortgage
Loans may be substituted for them. Unless the context requires otherwise,
references in the Collateral Annex to percentages of the Mortgage Loans in each
Loan Group are approximate percentages of the aggregate Stated Principal Balance
of the Mortgage Loans in such Loan Group as of the Cut-off Date.

          The Issuing Entity will consist primarily of a pool (the "MORTGAGE
POOL") of adjustable-rate conventional fully-amortizing mortgage loans (the
"MORTGAGE LOANS") secured by first liens on one- to four-family residential
properties. The Mortgage Loans may be divided into Loan Groups. The Mortgage
Loans in each Loan Group have the characteristics set forth in the tables in the
Collateral Annex.

          The Mortgage Pool consists of Mortgage Loans either originated by the
Sponsor or purchased by the Sponsor from other Originators and either (i)
originated by the Originators or (ii) purchased by the Originators from various
entities that either originated the Mortgage Loans or acquired the Mortgage
Loans pursuant to mortgage loan purchase programs operated by such entities.

          The Mortgage Loans will be sold by the Sponsor to the Depositor on the
closing date pursuant to a mortgage loan purchase agreement between the Sponsor
and the Depositor (the "MORTGAGE LOAN PURCHASE AGREEMENT"). See "The Pooling and
Servicing Agreement and the Servicing Agreements--Repurchases of Mortgage Loans"
in this Disclosure Supplement.

          Certain of the Mortgage Loans may have been originated using
underwriting standards that are different from, and in certain respects, less
stringent than the general underwriting standards of the applicable Originators.
See "Risk Factors--Alternative Underwriting Standards May Increase Risk of
Loss," and the underwriting standards described in the Appendix.

          The Mortgage Loans will have scheduled monthly payments of interest
and, except for those with initial interest only periods (which Mortgage Loans
will have no scheduled payments of principal during such initial interest only
period) principal due on the first day of each month. Each Mortgage Loan bears
interest initially at a fixed rate and then at a variable rate of interest,
based upon the related Index.

          The Mortgage Loans were selected by the Sponsor, with advice from Banc
of America Securities LLC as to the characteristics of the Mortgage Loans that
will optimize marketability of the Certificates, from the Sponsor's originated
and acquired portfolio of first lien, closed-end, adjustable-rate mortgage
loans, and were chosen to meet the requirements imposed by the rating agencies
to achieve the desired credit support percentages.

          As of the Cut-off Date, certain of the Mortgage Loans may be covered
by existing primary mortgage insurance policies (each, a "PMI POLICY"). The
related premium will be paid by the applicable Servicer from a portion of the
interest payment due from the related borrower and the per annum premium rate
will be set forth in the mortgage loan schedule attached to the Pooling and
Servicing Agreement.

          The "LOAN-TO-VALUE RATIO" of a Mortgage Loan generally means the
ratio, expressed as a percentage, of (i) the principal balance of the Mortgage
Loan at origination divided by (ii) the lesser of (a) the value of the related
mortgaged property, based on the lesser of any appraisal (or in certain cases,
an automated valuation model or tax assessed value) made at the time of
origination of the Mortgage Loan or the purchase price; provided, however, that
in the case of a refinanced Mortgage Loan, the value will be based solely on the
appraisal (or automated valuation model or tax assessed value) made in
connection with the origination of such refinanced Mortgage Loan. The value of
any mortgaged property generally will change from the level that existed on the
appraisal or sales date. If residential real estate values generally or in a
particular geographic area decline, the Loan-to-Value Ratios might not be a
reliable indicator of the rates of delinquencies, foreclosures and losses that
could occur with respect to the


                                       22



Mortgage Loans. For more information on the Loan-to-Value Ratios of the Mortgage
Loans, see the "Original Loan-to-Value Ratios" tables in the Collateral Annex.
Subject to minor exceptions permitted in the discretion of the Originator of the
Mortgage Loan, each Mortgage Loan with a Loan-to-Value Ratio at origination in
excess of 80% will be covered by a primary mortgage guaranty insurance policy
which conforms to the standards of Fannie Mae or Freddie Mac. No such primary
mortgage insurance policy will be required with respect to any such Mortgage
Loan after the date on which the related Loan-to-Value Ratio is less than 80%.
Notwithstanding the foregoing, a Mortgage Loan which at origination was covered
by a primary mortgage guaranty insurance policy may no longer be covered by such
policy as a result of the mortgagor obtaining an appraisal after origination
indicating a loan-to-value ratio at the time of such appraisal of less than 80%.

          The Originators may have used Credit Scores as part of their
origination processes. "CREDIT SCORES" are statistical credit scores obtained by
many mortgage lenders in connection with the loan application to help assess a
borrower's credit-worthiness. Credit Scores are generated by models developed by
a third party and are made available to lenders through three national credit
bureaus, Experian (FICO), Equifax (Beacon) and TransUnion (Empirica). The models
were derived by analyzing data on consumers in order to establish patterns which
are believed to be indicative of the borrower's probability of default. A Credit
Score is based on a borrower's historical credit data, including, among other
things, payment history, delinquencies on accounts, levels of outstanding
indebtedness, length of credit history, types of credit and bankruptcy
experience. Credit Scores range from approximately 300 to approximately 850,
with higher scores indicating an individual with a more favorable credit history
compared to an individual with a lower score. However, a Credit Score purports
only to be a measurement of the relative degree of risk a borrower represents to
a lender, i.e., that a borrower with a higher score is statistically expected to
be less likely to default in payment than a borrower with a lower score. In
addition, it should be noted that Credit Scores were developed to indicate a
level of default probability over a two-year period which does not correspond to
the life of a mortgage loan. Furthermore, Credit Scores were not developed
specifically for use in connection with mortgage loans, but for consumer loans
in general. Therefore, a Credit Score does not take into consideration the
effect of mortgage loan characteristics on the probability of repayment by the
borrower. The Credit Scores set forth in the tables in the Collateral Annex were
obtained at either the time of origination of the Mortgage Loan or more
recently. None of the Depositor, the Sponsor or any Originator makes any
representations or warranties as to the actual performance of any Mortgage Loan
or that a particular Credit Score should be relied upon as a basis for an
expectation that a borrower will repay its Mortgage Loan according to its terms.

          Each mortgage note provides for adjustments to the mortgage interest
rate thereon at the end of the initial fixed-rate period set forth in the Term
Sheet and adjusts annually or semi-annually thereafter (each, an "ADJUSTMENT
DATE"). Each Mortgage Loan will be fully-amortized by the maturity of such
Mortgage Loan.

          On each Adjustment Date, the mortgage interest rate of each Mortgage
Loan will adjust to the sum of the applicable Index (as defined below) and the
number of basis points specified in the applicable mortgage note (the "GROSS
MARGIN"), rounded up as specified in the related note, subject to the limitation
that with respect to each Adjustment Date, the interest rate after such
adjustment may not vary from the mortgage interest rate in effect prior to such
adjustment by more than the amount specified in the mortgage note (the "PERIODIC
CAP"). The range of the Periodic Caps for the Mortgage Loans with Periodic Caps
are described in your Term Sheet. In addition, adjustments to the interest rate
for each Mortgage Loan are subject to a lifetime maximum mortgage interest rate
(a "RATE CEILING") and a lifetime minimum mortgage interest rate (a "RATE
FLOOR"). On the first due date following each Adjustment Date for each Mortgage
Loan, the monthly payment for the Mortgage Loan will be adjusted, if necessary,
to an amount that will fully amortize such Mortgage Loan at the adjusted
mortgage interest rate over its remaining scheduled term to maturity. See the
tables in Collateral Annex for certain statistical information on Rate Ceilings
applicable to the Mortgage Loans in each Loan Group.

          The index for certain of the Mortgage Loans may be the arithmetic mean
of the London interbank offered rate quotations for one year U.S.
Dollar-denominated deposits, as published in The Wall Street Journal and most
recently available either (i) as of the first business day in the month
preceding the month of the applicable Adjustment Date or (ii) up to forty-five
days before the applicable Adjustment Date ("ONE-YEAR LIBOR"). In the event
One-Year LIBOR is no longer available, the applicable Servicer of such Mortgage
Loans will select a substitute index in accordance with the terms of the related
mortgage note in compliance with federal and state law.


                                       23



          The index for certain of the Mortgage Loans may be the arithmetic mean
of the London interbank offered rate quotations for six-month U.S.
Dollar-denominated deposits, as published in The Wall Street Journal and most
recently available either (i) as of the first business day in the month
preceding the month of the applicable Adjustment Date or (ii) up to forty-five
days before the applicable Adjustment Date ("SIX-MONTH LIBOR"). In the event
Six-Month LIBOR is no longer available, the applicable Servicer of such Mortgage
Loans will select a substitute index in accordance with the terms of the related
mortgage note in compliance with federal and state law.

          The index for certain of the Mortgage Loans may be the weekly average
yield on United States Treasury Securities adjusted to a constant maturity of
one year, as made available by the Federal Reserve Board, published in Federal
Reserve Statistical Release H.15 (519) ("ONE-YEAR CMT" and together with
One-Year LIBOR and Six-Month LIBOR, an "INDEX") and most recently available as
of the date 45 days before the applicable Adjustment Date. In the event One-Year
CMT is no longer available, the applicable Servicer of such Mortgage Loans will
select a substitute index in accordance with the terms of the related mortgage
note in compliance with federal and state law.

          The index for certain of the Mortgage Loans may not be One-Year LIBOR,
Six-Month LIBOR or One-Year CMT. In such case, the relevant index will be
described in your Term Sheet.

          The tables in Collateral Annex set forth certain statistical
information with respect to the Mortgage Loans in each of the Loan Groups. Due
to rounding, the percentages shown may not total 100.00%.

                      MORTGAGE LOAN UNDERWRITING STANDARDS

          The Depositor will purchase the Mortgage Loans from Bank of America,
as Sponsor. The Mortgage Loans will have been either (i) originated by Bank of
America or (ii) purchased by Bank of America from various entities that either
originated the Mortgage Loans or acquired the Mortgage Loans pursuant to
mortgage loan purchase programs operated by these entities. The Mortgage Loans
will have been underwritten materially in accordance with the underwriting
standards described in the Appendix.

                                 THE ORIGINATORS

          The Mortgage Loans will be originated by certain originators (the
"ORIGINATORS") as described in the Appendix. Additionally, information regarding
the origination practices of certain Originators is described in the Appendix.

                                   THE SPONSOR

          The Sponsor, Bank of America, National Association, is an indirect
wholly-owned subsidiary of Bank of America Corporation.

          See "The Sponsor, " "Mortgage Purchase Program," "Servicing of the
Mortgage Loans" and "The Pooling and Servicing Agreement" in the Prospectus for
more information about the Sponsor, its securitization programs and its material
roles and duties in this securitization.

                             STATIC POOL INFORMATION

          Information concerning the Sponsor's prior residential mortgage loan
securitizations related to the Depositor involving fixed- and adjustable-rate
first lien mortgage loans and information regarding certain of the Originators'
prior residential mortgage loan securitizations or prior loan originations is
available on the internet at www.bofa.com/bafc. On this website, you can view,
as applicable, summary pool information as of the applicable securitization
cut-off date and delinquency, cumulative loss, and prepayment information as of
each distribution date by securitization for the past five years, or since the
applicable securitization closing date if the applicable securitization closing
date occurred less than five years from the date of this free writing
prospectus. Each of the mortgage loan securitizations or Originator portfolios
identified on this website is unique, and the characteristics of each
securitized mortgage loan pool or Originator portfolio varies from each other as
well as from the mortgage


                                       24



loans to be included in the trust that will issue the certificates offered by
this free writing prospectus. In addition, the performance information relating
to the prior securitizations or Originator portfolios described above may have
been influenced by factors beyond the Sponsor's or Originator's control, such as
housing prices and market interest rates. Therefore, the performance of these
prior mortgage loan securitizations or Originator portfolios is likely not to be
indicative of the future performance of the mortgage loans to be included in the
trust related to this offering. The Originator information referred to above was
prepared solely by the applicable Originator.

          The static pool data referred to above relating to securitized pools
issued prior to January 1, 2006 will not form a part of this Disclosure
Supplement, the accompanying Prospectus or the Depositor's registration
statement.

          The performance of prior residential mortgage loan pools may not be
indicative of the future performance of the Mortgage Loans.

                                  THE DEPOSITOR

          The Depositor, Banc of America Funding Corporation, is an indirect
subsidiary of Bank of America Corporation.

          See "The Depositor," "Mortgage Purchase Program" and "The Pooling and
Servicing Agreement" in the Prospectus for more information about the Depositor
and its material roles and duties in this securitization.

                               THE ISSUING ENTITY

          The issuing entity will be a New York common law trust (the "ISSUING
ENTITY"), formed on the closing date pursuant to the Pooling and Servicing
Agreement. The Mortgage Loans will be deposited by the Depositor into the
Issuing Entity under the Pooling and Servicing Agreement as described in the
Prospectus under "The Pooling and Servicing Agreement--Assignment of Mortgage
Loans to the Trustee." The Issuing Entity will have no officers or directors and
no activities or continuing duties other than to hold the assets underlying the
Certificates and to issue the Certificates. The fiscal year end of the Issuing
Entity will be December 31 of each year.

          The Issuing Entity will be administered by the Trustee pursuant to the
terms of the Pooling and Servicing Agreement as described under "The Pooling and
Servicing Agreement and the Servicing Agreements" in this Disclosure Supplement.
The Trustee, on behalf of the Issuing Entity, is, prior to an Event of Default,
only permitted to take the actions specifically provided in the Pooling and
Servicing Agreement. Under the Pooling and Servicing Agreement, the Trustee on
behalf of the Issuing Entity will not have the power to issue additional
certificates representing interests in the Issuing Entity, borrow money on
behalf of the Issuing Entity or make loans from the assets of the Issuing Entity
to any person or entity.

          The Issuing Entity, as a common law trust, may not be eligible to be a
debtor in a bankruptcy proceeding, unless it can be characterized as a "business
trust" for purposes of federal bankruptcy laws. Bankruptcy courts consider
various factors in making a determination as to whether an entity is a business
trust, therefore it is not possible to predict with any certainty whether or not
the Issuing Entity would be considered a "business trust." In addition, in the
event of bankruptcy of the Sponsor, the Depositor or any other party to the
transaction, it is not anticipated that the trust fund would become part of the
bankruptcy estate or subject to the bankruptcy of a third party. See "Risk
Factors--Special Power of the FDIC in the Event of Insolvency of the Sponsor
Could Delay or Reduce Distributions on the Certificates" and "--Insolvency of
the Depositor May Delay or Reduce Collections on Mortgage Loans" in the
Prospectus.

                           SERVICING OF MORTGAGE LOANS

          THE SERVICERS

          The Mortgage Loans will be serviced by one or more servicers (the
"SERVICERS") as described in the Appendix. Additionally, information regarding
the servicing practices of certain Servicers is described in the Appendix.


                                       25



          The Servicers may perform any of their obligations under the Servicing
Agreements (as defined in the Appendix) through one or more subservicers.
Despite the existence of subservicing arrangements, each Servicer will be liable
for its servicing duties and obligations under the related Servicing Agreement
as if such Servicer alone were servicing the related Mortgage Loans.

          THE MASTER SERVICER AND SECURITIES ADMINISTRATOR

          In the event that there is more than one Servicer of the Mortgage
Loans, the Mortgage Loans may be master serviced by a master servicer (the
"MASTER SERVICER") in accordance with the terms of the related Pooling and
Servicing Agreement. The Master Servicer will be required to monitor and oversee
the performance of the Servicers, but will not be directly responsible for the
servicing of the Mortgage Loans. In the event of a default by a Servicer (so
long as such Servicer is not the same legal entity or an affiliate of the Master
Servicer) under the related Servicing Agreement, the Master Servicer will be
required to enforce any remedies against such Servicer and will be required to
either find a successor servicer or assume the primary servicing obligations of
the related Mortgage Loans. In the event the default is by a Servicer that is
the same legal entity or an affiliate of the Master Servicer, the Trustee will
be required to enforce any remedies against that Servicer and either appoint a
successor servicer or assume the primary servicing obligations of the related
Mortgage Loans.

          To the extent your Term Sheet identifies a Master Servicer or
securities administrator (the "SECURITIES ADMINISTRATOR"), certain information
regarding such parties is described in the Appendix. If no Securities
Administrator is so identified, references in this Disclosure Supplement to the
Securities Administrator should be understood to include the Servicer, the
Master Servicer and/or the Trustee.

          THE POOLING AND SERVICING AGREEMENT AND THE SERVICING AGREEMENTS

          The certificates (the "CERTIFICATES") will be issued pursuant to a
Pooling and Servicing Agreement (the "POOLING AND SERVICING AGREEMENT") to be
dated the closing date, among the Depositor, the Master Servicer, the Securities
Administrator and the Trustee. The Prospectus contains important additional
information regarding the terms and conditions of the Pooling and Servicing
Agreement and the Certificates. See "The Pooling and Servicing Agreement" in the
Prospectus.

          The following summaries do not purport to be complete and are subject
to the provisions of the Pooling and Servicing Agreement which are incorporated
by reference. The Depositor plans to file a final copy of the Pooling and
Servicing Agreement with the Securities and Exchange Commission pursuant to a
Current Report on Form 8-K after the closing date.

          ASSIGNMENT OF MORTGAGE LOANS

          In connection with the transfer and assignment of the Mortgage Loans
to the Trustee, the Depositor will deliver or cause to be delivered to the
Trustee, or a custodian for the Trustee, among other things, with respect to
each Mortgage Loan (collectively, the "MORTGAGE FILE"):

o    the original Mortgage Note endorsed without recourse in blank or to the
     order of the Trustee (or its nominee) or a certificate signed by an officer
     of the Depositor certifying that the related original Mortgage Note has
     been lost;

o    the original or a certified copy of the Mortgage with evidence of recording
     indicated thereon (except for any Mortgage not returned from the public
     recording office, which will be delivered to the Trustee or a custodian as
     soon as the same is available to the Depositor);

o    except as described below, an assignment in recordable form of the Mortgage
     (or a copy, if such assignment has been submitted for recording);

o    if applicable, any riders or modifications to such Mortgage Note and
     Mortgage;


                                       26



          provided, however, that if Wells Fargo Bank, N.A. is a Servicer, it
will retain possession of certain items in the Mortgage File, including but not
limited to the original or certified copy of the Mortgage and any intervening
assignments, for each of the Mortgage Loans serviced by it.

          Assignments of the Mortgage Loans to the Trustee (or its nominee) will
be recorded in the appropriate public office for real property records, except
in states where, in the opinion of counsel acceptable to the Securities
Administrator and the Trustee, such recording is not required to protect the
Trustee's interests in the Mortgage Loan against the claim of any subsequent
transferee or any successor to or creditor of the Depositor or the Sponsor and
except with respect to any Mortgage which has been recorded in the name of
Mortgage Electronic Registration Systems, Inc. ("MERS") or its designee. With
respect to any Mortgage that has been recorded in the name of MERS or its
designee, no mortgage assignment in favor of the Trustee will be required to be
prepared or delivered. Instead, each servicer will be required to take all
actions as are necessary to cause the Issuing Entity to be shown as the owner of
the related Mortgage Loan on the records of MERS for purposes of the system of
recording transfers of beneficial ownership of mortgages maintained by MERS. The
Trustee, or a custodian on behalf of the Trustee will promptly review each
Mortgage File after the closing date (or promptly after the Trustee's or
custodian's receipt of any document permitted to be delivered after the closing
date) to determine if any of the foregoing documents is missing. If any portion
of the Mortgage File is not delivered to the Trustee, or a custodian on behalf
of the Trustee, and the Depositor does not cure such omission or defect within
90 days, the Depositor will be required to repurchase the related Mortgage Loan
(or any property acquired in respect thereof) at the Purchase Price described
below to the extent such omission or defect materially and adversely affects the
value of such Mortgage Loan.

          REPURCHASES OF MORTGAGE LOANS

          The Sponsor acquired the Mortgage Loans not originated by it from the
Originators pursuant to the related Servicing Agreements. Under the Servicing
Agreements, the Originators made certain representations and warranties with
respect to the related Mortgage Loans, as of the date of transfer of those
Mortgage Loans to the Sponsor, which will be assigned by the Sponsor to the
Depositor, and by the Depositor to the Trustee for the benefit of the
certificateholders. To the extent that any fact, condition or event with respect
to a Mortgage Loan constitutes a breach of any of these representations made by
an Originator with respect thereto and such breach materially and adversely
affects the value of a Mortgage Loan or the interest of the purchaser therein,
that Originator will be obligated to cure such breach. If the related Originator
or the Sponsor, as applicable, does not cure such breach in accordance with the
Servicing Agreements or the Mortgage Loan Purchase Agreement, as the case may
be, that Originator or the Sponsor, as applicable, will be required to
repurchase such Mortgage Loan (or any property acquired in respect thereof) at a
price (the "PURCHASE PRICE") equal to 100% of the unpaid principal balance of
such Mortgage Loan plus accrued and unpaid interest on such principal balance at
the related mortgage interest rate minus, so long as the entity repurchasing
such Mortgage Loan is each servicer of such Mortgage Loan, the related Servicing
Fee Rate. In addition, in the case of the breach of the representation made by
an Originator or the Sponsor that a Mortgage Loan complied with any applicable
federal, state or local predatory or abusive lending laws, that Originator or
the Sponsor, as applicable, will be required to pay any costs or damages
incurred by the Issuing Entity as a result of a violation of such laws.

          Pursuant to the Mortgage Loan Purchase Agreement, the Sponsor will
make to the Depositor (and the Depositor will assign to the Trustee for the
benefit of certificateholders) certain limited representations and warranties as
of the closing date generally intended to address the accuracy of the mortgage
loan schedule and the payment and delinquency status of each Mortgage Loan
acquired by the Sponsor pursuant to the Servicing Agreements. In the event of a
breach of any such representation or warranty that does not constitute a breach
of any representation or warranty made by an Originator under a Servicing
Agreement as described above, the Sponsor will be required to either (i)
repurchase the related Mortgage Loan (or any property acquired in respect
thereof) at the Purchase Price or (ii) substitute an Eligible Substitute
Mortgage Loan; however, such substitution is permitted only within two years of
the closing date. Any Mortgage Loan repurchased or subject to a substitution as
described in this section is referred to as a "DELETED MORTGAGE LOAN." In the
case of the breach of the representation made by the Sponsor that a Mortgage
Loan complied with any applicable federal, state or local predatory or abusive
lending laws, the Sponsor will be required to pay any costs or damages incurred
by the Issuing Entity as a result of a violation of such laws.


                                       27



          An "ELIGIBLE SUBSTITUTE MORTGAGE LOAN" generally will:

o    have a principal balance, after deduction of all Monthly Payments due in
     the month of substitution, not in excess of the Stated Principal Balance of
     the Deleted Mortgage Loan (the amount of any shortfall to be delivered to
     the Master Servicer by the entity obligated to repurchase such Mortgage
     Loan and held for distribution to the certificateholders on the related
     Distribution Date (a "SUBSTITUTION ADJUSTMENT AMOUNT");

o    have a Net Mortgage Rate not less than, and not more than 2% greater than,
     that of the Deleted Mortgage Loan;

o    be of the same type as the Deleted Mortgage Loan;

o    have a Loan-to-Value Ratio not higher than that of the Deleted Mortgage
     Loan;

o    have a Credit Score not less than that of the Deleted Mortgage Loan;

o    have a credit grade not lower in quality than that of the Deleted Mortgage
     Loan;

o    have the same lien priority as the Deleted Mortgage Loan;

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

o    comply with all of the applicable representations and warranties in the
     Servicing Agreements, the Mortgage Loan Purchase Agreement and the Pooling
     and Servicing Agreement as of the date of substitution.

          To the extent that any fact, condition or event with respect to a
Mortgage Loan constitutes a breach of both a representation and warranty of an
Originator under the applicable Servicing Agreement and a breach of a
representation and warranty of the Sponsor under the Mortgage Loan Purchase
Agreement, the only right or remedy of the Trustee or any certificateholder will
be the Trustee's right to enforce the obligations of that Originator under the
applicable Servicing Agreement, and there will be no remedy against the Sponsor
for such breach (other than the Sponsor's obligation to pay any costs or damages
incurred by the Issuing Entity as a result of violation of any applicable
federal, state or local predatory or abusive lending laws, to the extent not
paid by the applicable Originator).

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

          PAYMENTS ON MORTGAGE LOANS; ACCOUNTS

          Each Servicing Agreement requires the related Servicer to establish a
trust account, which account may contain funds relating to other mortgage loans
serviced by such Servicer (each, a "SERVICER CUSTODIAL ACCOUNT"). With respect
to each Servicer, funds credited to a Servicer Custodial Account may be invested
for the benefit of and at the risk of the related Servicer in certain eligible
investments, as described in the applicable Servicing Agreements. On the 18th
day of each month (or if such day is not a business day, the preceding business
day) (the "REMITTANCE DATE"), each Servicer will withdraw from the applicable
Servicer Custodial Account all amounts required to be remitted by such Servicer
for such month pursuant to the applicable Servicing Agreement and will remit
such amount to the Master Servicer, if any, for deposit in an account
established by the Master Servicer on or prior to the closing date (the "MASTER
SERVICER CUSTODIAL ACCOUNT"). The Master Servicer Custodial Account will be
maintained as a separate trust account by the Master Servicer in trust for the
benefit of certificateholders. Funds credited to the Master Servicer Custodial
Account may be invested at the direction of the Master Servicer and for the
benefit and at the risk of the Master Servicer in certain eligible investments,
as described in the Pooling and Servicing Agreement, that are scheduled to
mature on or prior to the Distribution Date. If there is no Master Servicer,
funds will be remitted directly to the Securities Administrator or Trustee.


                                       28



          Not later than the business day prior to each Distribution Date
(subject to the immediately following sentence), the Master Servicer will cause
all amounts required to be remitted for such month pursuant to the Pooling and
Servicing Agreement to be deposited into an account established by the
Securities Administrator or Trustee on or prior to the closing date (the
"CERTIFICATE ACCOUNT"). For as long as the Securities Administrator is the same
as, or an affiliate of, the Master Servicer, the Master Servicer has until each
Distribution Date (instead of the business day prior to each Distribution Date,
as described in the immediately preceding sentence) to remit funds to the
Securities Administrator. The Certificate Account will be maintained as a
separate trust account by the Securities Administrator in trust for the benefit
of certificateholders. Funds credited to the Certificate Account may be invested
at the direction of the Securities Administrator and for the benefit and risk of
the Securities Administrator in certain eligible investments, as described in
the Pooling and Servicing Agreement, that are scheduled to mature on or prior to
the Distribution Date.

          COMPENSATING INTEREST

          When a mortgagor prepays a Mortgage Loan in full between due dates for
the Mortgage Loan, the mortgagor pays interest on the amount prepaid only to the
date of prepayment instead of for the entire month. Also, when a partial
prepayment is made on a Mortgage Loan together with the scheduled monthly
payment for a month on or after the related due date, the Stated Principal
Balance of the Mortgage Loan is reduced by the amount of the partial prepayment
as of that due date, but the principal is not distributed to the related
certificateholders until the Distribution Date in the next month; therefore, one
month of interest shortfall accrues on the amount of such partial prepayment.

          To reduce the adverse effect on certificateholders from the deficiency
in interest payable as a result of prepayments on a Mortgage Loan, the Servicers
will pass through Compensating Interest to the certificateholders to the limited
extent and in the manner described below.

          Pursuant to the applicable Servicing Agreement, the aggregate
Servicing Fee payable to a Servicer for any Distribution Date will be reduced
(but not below zero) by an amount (such amount, "COMPENSATING INTEREST") as
described in the Term Sheet.

          A "PREPAYMENT INTEREST SHORTFALL" on a Mortgage Loan for any
Distribution Date is equal to the excess of (x) 30 days' interest at the
mortgage interest rate (less the Servicing Fee Rate) on the amount of each
prepayment on such Mortgage Loan over (y) the amount of interest actually paid
by the related mortgagor on the amount of such prepayments during the calendar
month preceding the month of that Distribution Date.

          Any Prepayment Interest Shortfalls on the Mortgage Loans in excess of
the amount of Compensating Interest paid by the Servicers will reduce the amount
of interest available to be distributed on the Certificates from what would have
been the case in the absence of such Prepayment Interest Shortfalls. See
"Description of Certificates" in this Disclosure Supplement.

          ADVANCES

          Subject to the following limitations, each Servicer is required
pursuant to the related Servicing Agreement to advance (any such advance, an
"ADVANCE") prior to each Remittance Date an amount equal to the aggregate of
payments of principal and interest (net of the related Servicing Fee) which were
due on the related due date on the Mortgage Loans serviced by such Servicer and
which were delinquent on the related Determination Date. Advances made by each
Servicer will be made from its own funds or funds in the related Servicer
Custodial Account that do not constitute a portion of the applicable Pool
Distribution Amount (or Available Funds, in the case of an Overcollateralized
Loan Group) for such Distribution Date. The obligation to make an Advance with
respect to any Mortgage Loan will continue until the ultimate disposition of the
REO Property or mortgaged property relating to such Mortgage Loan. An "REO
PROPERTY" is a mortgaged property that has been acquired by the Issuing Entity
through foreclosure or grant of a deed in lieu of foreclosure. With respect to
any Distribution Date, the "DETERMINATION DATE" will be the 16th day of the
month in which such Distribution Date occurs (or if such day is not a business
day, the immediately preceding business day).


                                       29



          Advances are intended to maintain a regular flow of scheduled interest
and principal payments on the Certificates rather than to guarantee or insure
against losses. Each Servicer is obligated to make Advances if the Advances are,
in its good faith judgment, recoverable from future payments and collections or
insurance payments or proceeds of liquidation of the related Mortgage Loan. If a
Servicer determines on any Determination Date to make an Advance, such Advance
will be included with the distribution to certificateholders on the related
Distribution Date. In the event that a Servicer determines that an Advance
previously made is not recoverable from future payments and collections, it is
entitled to reimbursement from funds in the related Servicer Custodial Account
relating to any Mortgage Loans serviced by such Servicer. In the event a
Servicer fails to make an Advance as required under the related Servicing
Agreement, such failure will constitute an event of default under such agreement
and the Master Servicer will be obligated to make the Advance, in accordance
with the terms of the Pooling and Servicing Agreement.

          OPTIONAL TERMINATION

          The circumstances under which the obligations created by the Pooling
and Servicing Agreement will terminate in respect of the Certificates are
described in "The Pooling and Servicing Agreement--Termination; Repurchase of
Mortgage Loans and Mortgage Certificates" in the Prospectus. Additional
provisions relating to optional termination that will apply in relation to the
Mortgage Loans are set forth in the Term Sheet.

          Distributions in respect of an optional termination will be paid to
certificateholders in order of their priority of distribution as described below
under "Description of Certificates--Priority of Distributions." The proceeds
from such a distribution may not be sufficient to distribute the full amount to
which each class is entitled if the purchase price is based in part on the fair
market value of the REO Property and such fair market value is less than the
scheduled balance of the related Mortgage Loan.

          In no event will the Issuing Entity created by the Pooling and
Servicing Agreement continue beyond the later of (a) the repurchase described
above, (b) the expiration of 21 years from the death of the survivor of the
person named in the Pooling and Servicing Agreement and (c) the final
distribution to certificateholders of amounts received in respect of the assets
of the Issuing Entity. The termination of the Issuing Entity will be effected in
a manner consistent with applicable federal income tax regulations and the REMIC
status of the Issuing Entity.

          THE TRUSTEE

          Certain information regarding the Trustee under the Pooling and
Servicing Agreement will be described in the Appendix.

          The Trustee will perform administrative functions on behalf of the
Issuing Entity and for the benefit of the certificateholders pursuant to the
terms of the Pooling and Servicing Agreement. The Trustee's duties are limited
solely to its express obligations under the Pooling and Servicing Agreement
which generally include: (i) reviewing resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments; (ii) appointing any
co-trustee or separate trustee; (iii) executing and delivering to the applicable
Servicer any request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such instrument releasing the lien of the mortgage
(as furnished by that Servicer); (iv) terminating any custodian; (v) providing
any notifications of default; (vi) waiving any permitted defaults; and (vii) all
other administrative functions as set forth under the Pooling and Servicing
Agreement. See "The Pooling and Servicing Agreement and the Servicing
Agreements" in this Disclosure Supplement.

          In the case of any appointment of a co-trustee, all rights, powers,
duties and obligations conferred or imposed upon the Trustee will be conferred
or imposed upon and exercised or performed by the Trustee and the co-trustee
jointly, unless the law of a jurisdiction prohibits the Trustee from performing
its duties under the Pooling and Servicing Agreement, in which event such
rights, powers, duties and obligations (including the holding of title to the
Issuing Entity or any portion of the Issuing Entity in any such jurisdiction)
shall be exercised and performed by the co-trustee at the direction of the
Trustee.


                                       30



          The Trustee may hold the Mortgage Files held by it in one of its
custodial vaults or through one or more custodians, as described in the
Appendix.

          Each such custodian and the Trustee, in its capacity as custodian,
will be responsible to hold and safeguard the Mortgage Notes and other contents
of the Mortgage Files on behalf of the certificateholders.

          See "The Pooling and Servicing Agreement--The Trustee" in the
Prospectus for more information about the Trustee and its obligations under the
Pooling and Servicing Agreement.

          COMPENSATION AND PAYMENT OF EXPENSES OF THE TRANSACTION PARTIES

          The Term Sheet you will receive relating to the Offered Certificates
will provide information regarding the compensation and payment of expenses to
the transaction parties, including the applicable Servicing Fee (the "SERVICING
FEE") and the applicable Servicing Fee Rate (the "SERVICING FEE RATE") payable
to each Servicer, and other related fees (in the aggregate, the "ADMINISTRATIVE
FEES").

          The Securities Administrator will be entitled, as compensation for its
duties under the Pooling and Servicing Agreement, to any income from investment
of amounts on deposit in the Certificate Account. The Securities Administrator
is obligated to pay certain ongoing expenses associated with the Issuing Entity
and incurred by the Securities Administrator in connection with its
responsibilities under the Pooling and Servicing Agreement. Those amounts will
be paid by the Securities Administrator from the Securities Administrator's
compensation. The Master Servicer is obligated to pay certain ongoing expenses
associated with the Issuing Entity and incurred by the Master Servicer in
connection with its responsibilities under the Pooling and Servicing Agreement
without reimbursement from the Issuing Entity. Each Servicer is obligated to pay
certain ongoing expenses incurred by such Servicer in connection with its
responsibilities under the related Servicing Agreement. Those amounts including
the fees of any subservicer hired by a Servicer will be paid by each Servicer
out of its Servicing Fee. For each Mortgage Loan, the amount of the Servicing
Fee for each Servicer is subject to adjustment with respect to certain
prepayments, as described below under "--Compensating Interest." In the event
the Master Servicer succeeds to the role of a Servicer, it will be entitled to
the same Servicing Fee as the related predecessor servicer, and if the Master
Servicer appoints a successor servicer under the Pooling and Servicing
Agreement, the Master Servicer may make such arrangements for the compensation
of such successor out of the payments on the Mortgage Loans serviced by the
related predecessor Servicer as it and such successor shall agree, not to exceed
the Servicing Fee Rate. Each Servicer is also entitled to receive (i) all late
payment fees, assumption fees, prepayment premiums and other similar charges,
(ii) all investment income earned on amounts on deposit in the related Servicer
Custodial Account and (iii) the excess of the amount by which Liquidation
Proceeds on a Liquidated Mortgage Loan exceeds the unpaid principal balance
thereof plus accrued interest thereon at the Mortgage Interest Rate (such
excess, "FORECLOSURE PROFITS"). Each Servicer is entitled to be reimbursed from
collections on the Mortgage Loans for any Advances previously made by it, as
described under "The Pooling and Servicing Agreement--Periodic Advances and
Servicing Advances" in the Prospectus.

          Compensation payable to the Trustee for its responsibilities under the
Pooling and Servicing Agreement will be payable by the Securities Administrator,
without reimbursement from the Issuing Entity. Any co-trustee, if applicable,
will be paid by the Trustee, with reimbursement therefor from the Issuing
Entity. The Master Servicer will be entitled, as compensation for its duties
under the Pooling and Servicing Agreement, to any income from investments of
funds on deposit in the Master Servicer Custodial Account. The Securities
Administrator, the Master Servicer and the Trustee are entitled to be reimbursed
from and indemnified by the Issuing Entity prior to distributions for
certificateholders for certain expenses incurred by such parties, in connection
with their respective responsibilities under the Pooling and Servicing
Agreement.

          The Depositor, the Master Servicer, each Servicer and the Sponsor are
entitled to indemnification and reimbursement of certain expenses from the
Issuing Entity under the Pooling and Servicing Agreement as discussed in the
Prospectus under the headings "The Depositor," "Servicing of the Mortgage
Loans--The Servicers," and "The Pooling and Servicing Agreement--Certain Matters
Regarding the Depositor, the Sponsor and the Master Servicer."


                                       31



          VOTING RIGHTS

          Voting rights for certain actions specified in the Pooling and
Servicing Agreement will be described in the base prospectus.

          The voting rights allocated to each class will be allocated among the
Certificates of such class based on their Percentage Interests.

          The "PERCENTAGE INTEREST" of a Certificate of a class is the
percentage obtained by dividing the initial principal balance of such
Certificate by the initial class balance of such class.

                           DESCRIPTION OF CERTIFICATES

          The Certificates will be described generally in the Term Sheet and the
terms of any class of Senior Certificates will be described in the Term Sheet.
Certain classes of the Subordinate Certificates will be Offered Certificates, as
described in the Term Sheet. Such classes of Subordinate Certificates may be
referred to as the "Offered Subordinate Certificates."

          The "FINAL SCHEDULED DISTRIBUTION DATE" for the Offered Certificates
will be as set forth in the Term Sheet. The Final Scheduled Distribution Date
represents the Distribution Date in the month following the latest maturity date
of any Mortgage Loan. The actual final payment on your Certificates could occur
earlier or later than the Final Scheduled Distribution Date.

          DENOMINATIONS AND FORM

          Except as otherwise provided in the Term Sheet, the Offered
Certificates (other than the Residual Certificate) will be issuable in
book-entry form only (the "BOOK-ENTRY CERTIFICATES"). The Residual Certificate
will be issued in definitive, fully-registered form (such form, the "DEFINITIVE
CERTIFICATES"). The Term Sheet will set forth the original Certificate form, the
minimum denomination and the incremental denomination of each class of Offered
Certificates. The Offered Certificates are not intended to be and should not be
directly or indirectly held or beneficially owned in amounts lower than their
minimum denominations. A single certificate of each class may be issued in an
amount different than (but not less than) the applicable minimum denomination
described in the Term Sheet.

          DISTRIBUTIONS--GENERAL

          Distributions on the Certificates will be made on the Distribution
Date set forth in the Term Sheet (or, if not a business day, the next business
day, each such date being a "DISTRIBUTION DATE"), to the persons in whose names
such Certificates are registered at the close of business on the last business
day of the month preceding the month of such Distribution Date (the "RECORD
DATE") or such other Record Date as is set forth in the Term Sheet.

          Distributions on each Distribution Date will be made by check mailed
to your address as it appears on the applicable certificate register or, if you
have notified the Securities Administrator or certificate registrar, as
applicable, in writing in accordance with the pooling and servicing agreement,
by wire transfer in immediately available funds to your account at a bank or
other depository institution having appropriate wire transfer facilities.
However, the final distribution in retirement of a Certificate will be made only
upon presentment and surrender of the Certificate at the Corporate Trust Office
of the Trustee or Securities Administrator, as applicable. If you own a
Book-Entry Certificate, distributions will be made to you through the facilities
of DTC, as described under "Description of the Certificates--Book-entry Form" in
the Prospectus.


                                       32



          DISTRIBUTIONS ON THE SHIFTING INTEREST CERTIFICATES

          Pool Distribution Amount

          The "POOL DISTRIBUTION AMOUNT" for each Loan Group, other than an
Overcollateralized Loan Group, with respect to any Distribution Date will be
determined by reference to amounts received in connection with the Mortgage
Loans in such Loan Group, less certain reimbursable expenses and indemnity
payments pursuant to the pooling and servicing agreement or the related
servicing agreement, unless otherwise provided in the Term Sheet, and will
generally be equal to the sum of:

          (a)  all scheduled installments of interest (net of the related
               Administrative Fees) and principal due on the Mortgage Loans in
               such Loan Group on the due date in the calendar month in which
               such Distribution Date occurs and received prior to the related
               Determination Date, together with any Advances in respect thereof
               or any Compensating Interest allocable to the Mortgage Loans in
               such Loan Group;

          (b)  all proceeds of any primary mortgage guaranty insurance policies
               and any other insurance policies with respect to the Mortgage
               Loans in such Loan Group, to the extent such proceeds are not
               applied to the restoration of the related mortgaged property or
               released to the mortgagor in accordance with the related
               Servicer's normal servicing procedures and all other cash amounts
               received and retained in connection with the liquidation of
               defaulted Mortgage Loans in such Loan Group, by foreclosure or
               otherwise (collectively, "LIQUIDATION PROCEEDS"), during the
               calendar month preceding the month of such Distribution Date (in
               each case, net of unreimbursed expenses incurred in connection
               with a liquidation or foreclosure and unreimbursed Advances, if
               any);

          (c)  all partial or full prepayments received on the Mortgage Loans in
               such Loan Group during the calendar month preceding the month of
               that Distribution Date;

          (d)  amounts received with respect to such Distribution Date as the
               Substitution Adjustment Amount or Purchase Price in respect of
               any Deleted Mortgage Loan in such Loan Group or amounts received
               in connection with the optional termination of the Issuing Entity
               by the Master Servicer as of such Distribution Date, reduced by
               amounts in reimbursement for Advances previously made and other
               amounts as to which each applicable Servicer is entitled to be
               reimbursed pursuant to the applicable Servicing Agreement; and

          (e)  any amounts required to be paid by an Originator or the Sponsor
               to the Issuing Entity during the prior calendar month with
               respect to the Mortgage Loans in such Loan Group as a result of a
               breach of certain representations and warranties regarding
               compliance with predatory or abusive lending laws (the
               "REIMBURSEMENT AMOUNT"), net of any portion thereof used to
               reimburse any class of Certificates that previously bore a loss
               as a result of such breach.

          Priority of Distributions

          The aggregate amount available for distribution to the Certificates of
any Group, other than an Overcollateralized Loan Group, on a Distribution Date
(except, in the case of any Group that is part of a Crossed Group, to the extent
of cross-collateralization payments) will be the Pool Distribution Amount for
the related Loan Group. The Subordinate Certificates related to a Stacked Group
will be entitled to distributions from the Pool Distribution Amount for the
related Loan Group and the Subordinate Certificates related to a Crossed Group
will be entitled to distributions from the Pool Distribution Amounts for the
related Loan Groups.

          Unless otherwise described in the Term Sheet, on each Distribution
Date, the Pool Distribution Amount for each Loan Group, other than an
Overcollateralized Loan Group, will be allocated in the following order of
priority (the "POOL DISTRIBUTION AMOUNT ALLOCATION"):

          (a)  to the Senior Certificates of the related Group to pay interest;


                                       33



          (b)  to the classes of Senior Certificates of such Group, based on the
               applicable Senior Principal Distribution Amount, as described
               below under "--Principal," to pay principal;

          (c)  in the case of a Stacked Group, to each class of related
               Subordinate Certificates, first to pay interest and then to pay
               principal, in each case in the order of their seniority
               (beginning with the class of such Subordinate Certificates with
               the highest payment priority then outstanding) and, in the case
               of any Crossed Group, subject to any payments described under
               "--Cross Collateralization," to each class of related Subordinate
               Certificates, first to pay interest and then to pay principal, in
               each case in the order of their seniority (beginning with the
               class of such Subordinate Certificates with the highest payment
               priority then outstanding); and

          (d)  to the Residual Certificate, any remaining amounts, subject to
               the limitations set forth below under "--Interest" and
               "--Principal."

          Interest

          The pass-through rate for each class or component of the Offered
Certificates for each Distribution Date will be as set forth in the Term Sheet.

          Unless otherwise described in the Term Sheet, interest will accrue on
each class of interest-bearing Certificates (other than any Interest-Only
Certificates comprised of Components and LIBOR-based Certificates) and each
interest-bearing Component during each one-month period ending on the last day
of the month preceding the month in which each Distribution Date occurs (each, a
"REGULAR INTEREST ACCRUAL PERIOD"). Interest which accrues on each such class of
Certificates or Component during a Regular Interest Accrual Period will be
calculated on the assumption that distributions in reduction of the class
balances or reductions in the notional amounts thereof on the Distribution Date
in that Regular Interest Accrual Period are made on the first day of the Regular
Interest Accrual Period. Interest will accrue on LIBOR-based Certificates during
each one-month period as specified in the Term Sheet (each a "LIBOR-BASED
INTEREST ACCRUAL PERIOD" and, together with a Regular Interest Accrual Period,
an "INTEREST ACCRUAL PERIOD"). The initial LIBOR-Based Interest Accrual Period
will be deemed to have commenced on the date specified in the Term Sheet.

          On each Distribution Date, to the extent of the applicable Pool
Distribution Amount, each class of Certificates in a Shifting Interest Loan
Group (other than Principal-Only Certificates, if any) and each interest-bearing
Component, if any, will be entitled to receive interest (as to each such class
or component, the "INTEREST DISTRIBUTION AMOUNT") with respect to the related
Interest Accrual Period. The Interest Distribution Amount for any class of
Certificates (other than Principal-Only Certificates, if any) and each
interest-bearing Component, if any, will be equal to the sum of (i) interest
accrued during the related Interest Accrual Period at the applicable
pass-through rate on the related class or component balance or, in the case of
any Interest-Only Certificate, the applicable notional amount, reduced by the
applicable portion of any Net Interest Shortfall as described below, and (ii)
the sum of the amounts, if any, by which the amount described in clause (i)
above on each prior Distribution Date exceeded the amount actually distributed
in respect of interest on such prior Distribution Dates and not subsequently
distributed.

          Any Principal-Only Certificates will not bear interest.

          The interest entitlement described in clause (i) of the Interest
Distribution Amount for each class of Certificates (other than Principal-Only
Certificates, if any) and each interest-bearing Component, if any, will be
reduced by the amount of Net Interest Shortfalls for such Distribution Date
allocated to such class or component as described below.

          Unless otherwise described in the Term Sheet, with respect to any
Distribution Date, the "NET INTEREST SHORTFALL" for any Loan Group is equal to
the sum of (i) the shortfall in interest received with respect to any Mortgage
Loan in such Loan Group as a result of a Relief Act Reduction, and (ii) any
Non-Supported Interest Shortfalls relating to such Loan Group. Unless otherwise
described in the Term Sheet, the Net Interest Shortfall for a Stacked Group on
any Distribution Date will be allocated pro rata among all classes of related
Senior Certificates,


                                       34



Components and Subordinate Certificates based on the amount of interest accrued
on each such class or component before taking into account any reduction in such
amount resulting from such Net Interest Shortfall. Unless otherwise described in
the Term Sheet, the Net Interest Shortfall for Loan Groups comprising a Crossed
Group on any Distribution Date will be allocated pro rata among all classes of
Senior Certificates and Components for all Groups related to such Crossed Group
and the related Subordinate Certificates based on the amount of interest accrued
on each such class or component before taking into account any reduction in such
amount resulting from such Net Interest Shortfall. A "RELIEF ACT REDUCTION" is a
reduction in the amount of the monthly interest payment on a Mortgage Loan
pursuant to the Servicemembers Civil Relief Act or similar state legislation.
With respect to any Distribution Date, the "NON-SUPPORTED INTEREST SHORTFALL"
for any Loan Group is the amount by which the aggregate of Prepayment Interest
Shortfalls for the Mortgage Loans in such Loan Group for such Distribution Date
exceeds the applicable Compensating Interest allocable to such Loan Group for
such Distribution Date. See "The Pooling and Servicing Agreement and the
Servicing Agreements--Compensating Interest" in this Disclosure Supplement and
"Certain Legal Aspects of the Mortgage Loans--Servicemembers Civil Relief Act
and Similar Laws" in the Prospectus.

          Allocations of the interest portion of Realized Losses on the Mortgage
Loans in a Loan Group first to the related Subordinated Certificates (in reverse
order of seniority beginning with the class of such Subordinate Certificates
with the lowest payment priority) will result from the priority of distributions
first to the Senior Certificates of the related Group and then to the related
classes of Subordinated Certificates (in order of seniority), of the applicable
Pool Distribution Amount as described above under "--Priority of Distributions."

          After the applicable Senior Credit Support Depletion Date, the Senior
Certificates of a Group will bear the risk of loss for the interest portion of
any Realized Losses on the Mortgage Loans in the related Loan Group pro rata
based on the interest entitlement described in clause (i) of the applicable
Interest Distribution Amount.

          Accrued interest to be distributed on any Distribution Date will be
calculated for each class of Certificates on the basis of the related class
balance immediately prior to such Distribution Date.

          If on a particular Distribution Date, the applicable Pool Distribution
Amount or Amounts applied in the order described above under "-- Priority of
Distributions" or in the Term Sheet is not sufficient to make a full
distribution of the Interest Distribution Amount for each class entitled to
distributions therefrom, interest will be distributed on each class of equal
priority pro rata based on the Interest Distribution Amount the class would
otherwise have been entitled to receive in the absence of such shortfall. Any
unpaid amount will be carried forward and added to the Interest Distribution
Amount of that class on the next Distribution Date. No amounts will be payable
on any class that is no longer outstanding. Such a shortfall could occur, for
example, if Realized Losses on the Mortgage Loans in a Loan Group were
exceptionally high or were concentrated in a particular month. Any such unpaid
amount will not bear interest.

          Under certain circumstances, the unpaid interest amounts for a Group
of Senior Certificates in a Crossed Group will be payable from amounts otherwise
distributable as principal on the related Subordinated Certificates in reverse
order of seniority. See "--Cross-Collateralization" in this Disclosure
Supplement.

          Interest-Only Certificates will have no class balance. The Components
related to any class of Interest-Only Certificates will have no component
balance. The notional amount of any class of Interest-Only Certificates
comprised of components will be equal to the sum of the notional amounts of the
related Components. The notional amount of any other class of Interest-Only
Certificates and the notional amounts of any Components will be as set forth in
the Term Sheet.

          Prior to the applicable Accretion Termination Date, interest in an
amount equal to the Interest Distribution Amount for any accreting class of
Certificates will accrue on such class, but all or a portion of such amount may
not be distributed as interest to such class. Prior to such time, an amount
equal to the accrued and unpaid interest on such class will be added to the
class balance thereof and distributed as described the Term Sheet.

          The "ACCRETION TERMINATION DATE" for any accreting class of
Certificates will be the earlier to occur of (i) the Distribution Date following
the Distribution Date on which the class balance of the related
accretion-directed classes of Certificates has been reduced to zero and (ii) the
related Senior Credit Support Depletion Date.


                                       35



          The "COMPONENT BALANCE" of each PO Component at any time will equal
its initial component balance less (i) all distributions of principal made to
such Component and (ii) losses allocated to such Component.

          The "CLASS BALANCE" of a class of Certificates at any time will equal
its initial class balance less (i) all distributions of principal made to such
class, and (ii) losses allocated to such class as described under "--Allocation
of Losses."

          The "GROUP SUBORDINATE AMOUNT" for any Distribution Date and any Loan
Group is equal to the excess of the Pool Principal Balance for such Loan Group
over the aggregate class balance of the Senior Certificates of the related Group
immediately prior to such date.

          The "NET MORTGAGE INTEREST RATE" of a Mortgage Loan is the excess of
its mortgage interest rate over the applicable Administrative Fee Rate.

          LIBOR

          LIBOR will be determined for any class of Certificates described in
the Term Sheet as bearing interest at pass-through rates based on LIBOR by the
Securities Administrator as described below. The Securities Administrator will
determine LIBOR and the respective pass-through rates for such Certificates for
each related Interest Accrual Period (after the first such Interest Accrual
Period) on the second London business day prior to the day on which such
Interest Accrual Period commences (each, a "LIBOR DETERMINATION DATE").

          On each LIBOR Determination Date, the Securities Administrator will
determine LIBOR for the succeeding LIBOR-Based Interest Accrual Period on the
basis of the British Bankers' Association ("BBA") "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 BBA 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 results (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 Reuters Telerate Service.

          If on any LIBOR Determination Date the Securities Administrator is
unable to determine LIBOR on the basis of the method set forth in the preceding
paragraph, LIBOR for the next LIBOR-Based 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 Securities 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 Securities 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 Securities 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
Securities Administrator are quoting on such LIBOR Determination Date to leading
European banks.

          If on any LIBOR Determination Date the Securities Administrator is
required but is unable to determine the Reserve Interest Rate in the manner
provided in the preceding paragraph, LIBOR for the next LIBOR-Based Interest
Accrual Period will be LIBOR as determined on the previous LIBOR Determination
Date or, in the case of the first LIBOR Determination Date for which the
Securities Administrator is required to determine LIBOR, such percentage as set
forth in the Term Sheet.

          The establishment of LIBOR on each LIBOR Determination Date by the
Securities Administrator and its calculation of the rate of interest applicable
to the LIBOR-based 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 Securities Administrator.


                                       36



          Principal

          Unless otherwise described in the Term Sheet, on each Distribution
Date, the Principal Amount for a Loan Group, other than an Overcollateralized
Loan Group, will be distributed (i) as principal of the Senior Certificates of
the related Group in an amount up to the Senior Principal Distribution Amount
for such Loan Group and (ii) as principal of the related Subordinate
Certificates in an amount up to the Subordinate Principal Distribution Amount
for such Loan Group.

          Unless otherwise described in the Term Sheet, the "PRINCIPAL AMOUNT"
for any Distribution Date and any Loan Group, other than an Overcollateralized
Loan Group, will equal the sum of:

          (a)  all monthly payments of principal due on each Mortgage Loan in
               such Loan Group on the related due date;

          (b)  the principal portion of the Purchase Price (net of unreimbursed
               Advances and other amounts as to which the related Servicer is
               entitled to be reimbursed pursuant to the applicable Servicing
               Agreement) of each Mortgage Loan in such Loan Group that was
               purchased by the Depositor, the Sponsor or an Originator as of
               that Distribution Date and the principal portion of any amount
               allocated to such Loan Group in connection with the optional
               termination of the Issuing Entity as described under "The Pooling
               and Servicing Agreement and Servicing Agreements--Optional
               Termination" in this Disclosure Supplement and in the Term Sheet;

          (c)  any Substitution Adjustment Amount (net of unreimbursed Advances
               and other amounts as to which the related Servicer is entitled to
               be reimbursed pursuant to the applicable Servicing Agreement) in
               connection with a Deleted Mortgage Loan in such Loan Group
               received in the calendar month preceding the month of that
               Distribution Date;

          (d)  any Liquidation Proceeds allocable to recoveries of principal of
               Mortgage Loans in such Loan Group that are not yet Liquidated
               Mortgage Loans received during the calendar month preceding the
               month of that Distribution Date;

          (e)  with respect to each Mortgage Loan in such Loan Group that became
               a Liquidated Mortgage Loan during the calendar month preceding
               the month of that Distribution Date, the amount of the
               Liquidation Proceeds (other than Foreclosure Profits) allocable
               to principal received with respect to that Mortgage Loan during
               the calendar month preceding the month of that Distribution Date;
               and

          (f)  all full and partial principal prepayments by mortgagors on the
               Mortgage Loans in such Loan Group received during the calendar
               month preceding the month of that Distribution Date.

          The amounts described in clauses (a) through (d) are referred to as
"SCHEDULED PRINCIPAL PAYMENTS." The amounts described in clauses (e) and (f) are
referred to as "UNSCHEDULED PRINCIPAL PAYMENTS."

          Senior Principal Distribution Amount

          Unless otherwise described in the Term Sheet, on each Distribution
Date, an amount equal to the lesser of (a) the Senior Principal Distribution
Amount for each Loan Group, other than an Overcollateralized Loan Group, for
such Distribution Date and (b) the Pool Distribution Amount for such Loan Group
remaining after distributions of interest on the Senior Certificates of the
related Group will be distributed as principal to such Senior Certificates as
summarized in the Term Sheet. The distribution priorities for the Senior
Certificates of any Group, other than an Overcollateralized Loan Group, will not
apply on any Distribution Date on or after the related Senior Credit Support
Depletion Date. On each Distribution Date on or after the Senior Support
Depletion Date for a Group, other than an Overcollateralized Loan Group, the
amount to be distributed as principal of the related Senior Certificates will be
distributed concurrently to such Senior Certificates, pro rata, in accordance
with their respective class balances immediately prior to such Distribution
Date.


                                       37



          The "SENIOR CREDIT SUPPORT DEPLETION DATE" for a Group, other than an
Overcollateralized Loan Group, is the date on which the aggregate class balance
of the Subordinate Certificates related to such Group have been reduced to zero.

          The "SENIOR PRINCIPAL DISTRIBUTION AMOUNT" for a Loan Group, other
than an Overcollateralized Loan Group, for any Distribution Date will equal the
sum of:

          (a)  the Senior Percentage for such Loan Group of the Scheduled
               Principal Payments for that Distribution Date; and

          (b)  the Senior Prepayment Percentage for such Loan Group of the
               Unscheduled Principal Payments for that Distribution Date.

          "STATED PRINCIPAL BALANCE" means, as to any Mortgage Loan and due
date, the unpaid principal balance of such Mortgage Loan as of such due date, as
specified in the amortization schedule at the time relating thereto (before any
adjustment to such amortization schedule by reason of any moratorium or similar
waiver or grace period), after giving effect to any previous partial principal
prepayments and Liquidation Proceeds (net of unreimbursed expenses and
unreimbursed Advances) allocable to principal received and to the payment of
principal due on such due date and irrespective of any delinquency in payment by
the related mortgagor and after giving effect to any Deficient Valuation.

          The "POOL PRINCIPAL BALANCE" for a Loan Group with respect to any
Distribution Date equals the aggregate Stated Principal Balances of the Mortgage
Loans in such Loan Group outstanding on the due date in the month preceding the
month of such Distribution Date.

          The "SENIOR PERCENTAGE" for a Loan Group, other than an
Overcollateralized Loan Group, for any Distribution Date will equal (i) the sum
of the aggregate class balance of the Senior Certificates of the related Group
immediately prior to such date, divided by (ii) the Pool Principal Balance of
the such Loan Group for such date.

          The "SUBORDINATE PERCENTAGE" for a Loan Group, other than an
Overcollateralized Loan Group, for any Distribution Date will equal 100% minus
the Senior Percentage for such Loan Group for such date.

          If a Loan Group is a Shifting Interest Loan Group, the Term Sheet will
describe the calculation of the related "SENIOR PREPAYMENT PERCENTAGE" for each
Distribution Date. Subject to the description thereof in the Term Sheet, such
Senior Prepayment Percentage will provide that all or a portion of the related
Subordinate Percentage of Unscheduled Principal Payments on the Mortgage Loans
in such Loan Group for a Distribution Date will be distributed to the Senior
Certificates of the related Group. Generally, the portion of such Subordinate
Percentage of Unscheduled Principal Payments distributed to such Senior
Certificates will decrease over time, which decreases will be summarized in the
Term Sheet. However, unless otherwise described in the Term Sheet, no decrease
in the Senior Prepayment Percentage for a Loan Group will occur if as of any
Distribution Date as to which any such decrease applies (x) the outstanding
principal balance of all Mortgage Loans in such Loan Group or, in the case of a
Loan Group that is part of a Crossed Group, such Crossed Group (including, for
this purpose, any Mortgage Loans in foreclosure, any REO Property and any
Mortgage Loan for which the mortgagor has filed for bankruptcy protection after
the Closing Date) delinquent 60 days or more (averaged over the preceding
six-month period), as a percentage of the aggregate class balance of the related
Subordinate Certificates, is equal to or greater than 50% or (ii) cumulative
Realized Losses with respect to the Mortgage Loans in such Loan Group, or in the
case of a Loan Group that is part of a Crossed Group, such Crossed Group exceed
the percentages of the aggregate class balance of the related Subordinate
Certificates, as of the Closing Date (the "ORIGINAL SUBORDINATE PRINCIPAL
BALANCE") indicated below:


                                       38



                                                              PERCENTAGE OF
                                                                ORIGINAL
                                                               SUBORDINATE
DISTRIBUTION DATE OCCURRING IN                              PRINCIPAL BALANCE
---------------------------------------------------------   -----------------
The first 36 months following the Closing Date...........           20%
37th month through the 96th month following the Closing
   Date .................................................           30%
97th month through the 108th month following the Closing
   Date .................................................           35%
109th month through the 120th month following the Closing
   Date .................................................           40%
121st month through the 132nd month following the Closing
   Date .................................................           45%
133rd month following the Closing Date and thereafter....           50%

          This disproportionate allocation of certain unscheduled payments in
respect of principal will have the effect of accelerating the amortization of
the Senior Certificates of a Group while, in the absence of Realized Losses on
the Mortgage Loans in the related Loan Group (or, in the case of a Loan Group
that is part of a Crossed Group, such Crossed Group), increasing the relative
interest in the related Pool Principal Balance evidenced by the related
Subordinate Certificates. Increasing the interest of such Subordinate
Certificates relative to that of the applicable Senior Certificates is intended
to preserve the availability of the subordination provided by such Subordinate
Certificates.

          The "SUBORDINATE PREPAYMENT PERCENTAGE" for a Loan Group, other than
an Overcollateralized Loan Group, as of any Distribution Date will equal 100%
minus the Senior Prepayment Percentage for such Loan Group for such date.

          If on any Distribution Date the allocation to any class of Senior
Certificates then entitled to distributions of full and partial principal
prepayments and other amounts to be allocated in accordance with the applicable
Senior Prepayment Percentage, as described above, would reduce the outstanding
class balance of such class below zero, the distribution to that class of the
applicable Senior Prepayment Percentage of those amounts for such Distribution
Date will be limited to the percentage necessary to reduce the related class
balance to zero.

          Subordinate Principal Distribution Amount

          Unless otherwise described in the Term Sheet, on each Distribution
Date, each class of Subordinate Certificates that is entitled to receive a
principal distribution will receive its pro rata share (based on the class
balances of all the related Subordinate Certificates in respect of clause (a) of
the Subordinate Principal Distribution Amount and the class balances of all such
Subordinate Certificates that are entitled to receive a principal distribution
in respect of clause (b) of the Subordinate Principal Distribution Amount) of
the aggregate Subordinate Principal Distribution Amount for the related Loan
Group or, with respect to a Crossed Group, such Crossed Groups, to the extent
that the remaining aggregate Pool Distribution Amount for such Loan Group or,
with respect to a Crossed Group, such Crossed Group, is, sufficient therefor.
With respect to each class of Subordinate Certificates, if on any Distribution
Date the related Fractional Interest is less than the Fractional Interest for
that class on the Closing Date, no classes of related Subordinate Certificates
with a payment priority lower than such class will be entitled to receive a
principal distribution in respect of clause (b) of the aggregate Subordinate
Principal Distribution Amounts for the related Loan Group or, with respect to a
Crossed Group, such Crossed Group.

          Distributions of principal on each class of Subordinate Certificates
that is entitled to receive a principal distribution on a Distribution Date will
be made sequentially to each such class of Subordinate Certificates in the order
of their seniority until each such class has received its respective pro rata
share for such Distribution Date.

          The "FRACTIONAL INTEREST" with respect to any Distribution Date and
each class of Subordinate Certificates will equal (i) the aggregate of the class
balances immediately prior to such Distribution Date of all classes of related
Subordinate Certificates that are more senior than such class, divided by (ii)
(A) the Pool Principal Balance for the related Loan Group or, with respect to a
Crossed Group, such Crossed Group immediately prior to such Distribution Date.

          The approximate Fractional Interests for the Subordinate Certificates
on the Closing Date will be set forth in the Term Sheet.


                                       39



          The "SUBORDINATE PRINCIPAL DISTRIBUTION AMOUNT" for a Loan Group,
other than an Overcollateralized Loan Group, for any Distribution Date will
equal the sum of:

          (a)  the Subordinate Percentage for such Loan Group of the Scheduled
               Principal Payments for such Distribution Date; and

          (b)  the Subordinate Prepayment Percentage for such Loan Group of the
               Unscheduled Principal Payments for such Distribution Date.

          Residual Certificate

          The Residual Certificate will remain outstanding for so long as the
Issuing Entity exists, whether or not it is receiving current distributions of
principal or interest. In addition to distributions of interest and principal as
described above, on each Distribution Date, the holder of the Residual
Certificate will be entitled to receive any Pool Distribution Amount for a Loan
Group remaining after the payment of (i) interest and principal on the Senior
Certificates of the related Group and (ii) interest and principal on the
applicable Subordinate Certificates, as described above. It is not anticipated
that there will be any significant amounts remaining for any such distribution.

          Cross-Collateralization

          The Term Sheet may indicate that one or more of the Loan Groups in an
Issuing Entity may be cross collateralized. Unless otherwise specified in the
Term Sheet, on each Distribution Date prior to the Senior Credit Support
Depletion Date for a Crossed Group but on or after the date on which the class
balances of the Senior Certificates of a Group in such Crossed Group have been
reduced to zero, amounts otherwise distributable as Unscheduled Principal
Payments with respect to the related Loan Group on the related Subordinate
Certificates will be paid as principal to the remaining classes of Senior
Certificates of the other Group or Groups in such Crossed Group in accordance
with the priorities set forth for the applicable Group in the Term Sheet;
provided that on such Distribution Date (a) the Subordinate Percentage for the
related Loan Group for such Distribution Date is less than twice the initial
Subordinate Percentage for such Loan Group or (b) the average outstanding
principal balance of the Mortgage Loans in such Loan Group (including, for this
purpose, any Mortgage Loan in such Loan Group in foreclosure, any REO Property
in such Loan Group and any Mortgage Loan in such Loan Group for which the
mortgagor has filed for bankruptcy after the Closing Date) delinquent 60 days or
more over the last six months as a percentage of the aggregate class balance of
the related Subordinate Certificates is greater than or equal to 50%. If the
Senior Certificates of two or more Groups in a Crossed Group remain outstanding,
the distributions described above will be made to the Senior Certificates of
such Groups, pro rata, in proportion to the aggregate class balance of the
Senior Certificates of each such Group.

          In addition, unless otherwise specified in the Term Sheet, if on any
Distribution Date, after giving effect to the preceding paragraph, the aggregate
class balance of the Senior Certificates of a Group in a Crossed Group (after
giving effect to distributions to be made on such Distribution Date) is greater
than the Adjusted Pool Amount of the related Loan Group (any such Group, the
"AGGREGATE CROSSED GROUP UNDERCOLLATERALIZED GROUP" and any such excess, the
"AGGREGATE CROSSED GROUP UNDERCOLLATERALIZED AMOUNT"), all amounts otherwise
distributable as principal on the Subordinate Certificates related to such
Crossed Group in reverse order of their payment priority), will be paid as
principal to the Senior Certificates of the related Aggregate Crossed Group
Undercollateralized Group together with the applicable Senior Principal
Distribution Amount in accordance with the priorities set forth in the Term
Sheet, until the aggregate class balance of the Senior Certificates of the
Aggregate Crossed Group Undercollateralized Group equals the Adjusted Pool
Amount of the related Loan Group. If two or more Groups in a Crossed Group are
Aggregate Crossed Group Undercollateralized Groups, the distributions described
above will be made, pro rata, in proportion to the amount by which the aggregate
class balance of the Senior Certificates of each such Group exceeds the Pool
Principal Balance of the related Loan Group.

          Also, unless otherwise specified in the Term Sheet, the amount of any
unpaid interest shortfall amounts described in clause (ii) of the definition of
Interest Distribution Amount with respect to an Aggregate Crossed Group
Undercollateralized Group (including any interest shortfall amount for such
Distribution Date) will be paid to the Aggregate Crossed Group
Undercollateralized Group in accordance with the priorities set forth in the
Term Sheet prior to the payment of any Aggregate Crossed Group
Undercollateralized Amount from amounts otherwise


                                       40



distributable as principal on the Subordinate Certificates related to such
Crossed Group, in reverse order of their payment priority.

          Allocation of Losses

          Unless otherwise specified in the Term Sheet, on each Distribution
Date, (i) any Realized Loss on a Mortgage Loan in a Loan Group, other than an
Overcollateralized Loan Group, will be allocated first to the Subordinate
Certificates of the related Group or Crossed Group, in the reverse order of
their seniority (beginning with the class of Subordinate Certificates with the
lowest payment priority), in each case until the class balance of the respective
class of Certificates has been reduced to zero, and then to the Senior
Certificates of the related Group pro rata based on their respective class
balances.

          Unless otherwise specified in the Term Sheet, such allocation will be
effected for a Loan Group, other than an Overcollateralized Loan Group, on each
Distribution Date by reducing the class balance of the class of related
Subordinate Certificates then outstanding with the lowest payment priority, if
and to the extent that the sum of the class balances of all classes of related
Senior Certificates (including, with respect to a Crossed Group, all classes of
Senior Certificates related to such Crossed Group) and such Subordinate
Certificates (after taking into account the amount of all distributions to be
made on such Distribution Date) exceeds the Adjusted Pool Amount for such
Distribution Date for such Loan Group or, with respect to a Crossed Group, the
sum of the Adjusted Pool Amounts for all Loan Groups comprising such Crossed
Group.

          After the applicable Senior Credit Support Depletion Date, unless
otherwise specified in the Term Sheet, on each Distribution Date, the aggregate
of the class balances of all classes of Senior Certificates of each related
Group then outstanding will be reduced if and to the extent that such aggregate
class balance (after taking into account the amount of all distributions to be
made on such Distribution Date) exceeds the Adjusted Pool Amount for the related
Loan Group for such Distribution Date. The amount of any such reduction will be
allocated among the Senior Certificates of such Group pro rata based on their
respective class balances.

          If your Certificate is part of a class of Super Senior Support
Certificate, then, after the applicable Senior Credit Support Depletion Date,
the class balance of such class of Super Senior Support Certificates will be
reduced not only by the principal portion of Realized Losses allocated to such
class as provided in the preceding paragraph but also by the principal portion
of Realized Losses allocated to the related class or classes of Super Senior
Certificates that are indicated in the Term Sheet.

          In the event an amount is received with respect to a Mortgage Loan in
a Loan Group, other than an Overcollateralized Loan Group, as to which a
Realized Loss had previously been allocated to a class of Certificates (a
"RECOVERY"), such Recovery will be distributed to the Senior Certificates of the
related Group and the then-outstanding Subordinate Certificates of such Group or
any related Crossed Group in the same manner as Liquidation Proceeds are
distributed.

          In general, a "REALIZED LOSS" means, (a) with respect to a Liquidated
Mortgage Loan, the amount by which the remaining unpaid principal balance of the
Mortgage Loan exceeds the amount of Liquidation Proceeds applied to the
principal balance of the related Mortgage Loan and (b) a Bankruptcy Loss.

          "BANKRUPTCY LOSSES" are losses that are incurred as a result of Debt
Service Reductions or Deficient Valuations. As used in this Disclosure
Supplement, a "DEFICIENT VALUATION" occurs when a bankruptcy court establishes
the value of a mortgaged property at an amount less than the then-outstanding
principal balance of the Mortgage Loan secured by such mortgaged property or
reduces the then-outstanding principal balance of a Mortgage Loan. In the case
of a reduction in the value of the related mortgaged property, the amount of the
secured debt could be reduced to such value, and the holder of such Mortgage
Loan thus would become an unsecured creditor to the extent the then-outstanding
principal balance of such Mortgage Loan exceeds the value so assigned to the
mortgaged property by the bankruptcy court. In addition, certain other
modifications of the terms of a Mortgage Loan can result from a bankruptcy
proceeding, including the reduction (a "DEBT SERVICE REDUCTION") of the amount
of the Monthly Payment on the related Mortgage Loan. However, none of these
events will be considered a Debt Service Reduction or Deficient Valuation so
long as the applicable Servicer is pursuing any other remedies that may be
available with respect to the related Mortgage Loan and (i) such Mortgage Loan
is not in default with respect to


                                       41



any payment due thereunder or (ii) scheduled Monthly Payments are being advanced
by the applicable Servicer without giving effect to any Debt Service Reduction.

          A "LIQUIDATED MORTGAGE LOAN" is a defaulted Mortgage Loan as to which
the applicable Servicer has determined that all recoverable Liquidation Proceeds
have been received.

          With respect to any Distribution Date, the "ADJUSTED POOL AMOUNT" for
a Loan Group will equal the aggregate unpaid principal balance of the Mortgage
Loans in such Loan Group as of the Cut-off Date minus the sum of (i) all amounts
in respect of principal received in respect of the Mortgage Loans in such Loan
Group (including amounts received as Advances, principal prepayments and
Liquidation Proceeds in respect of principal) and distributed on the
Certificates on such Distribution Date and all prior Distribution Dates and (ii)
the principal portion of all Realized Losses (other than Debt Service
Reductions) incurred on the Mortgage Loans in such Loan Group from the Cut-off
Date through the end of the month preceding such Distribution Date.

          DISTRIBUTIONS ON THE OVERCOLLATERALIZED CERTIFICATES

          Distributions to holders of each class of Certificates in an
Overcollateralized Loan Group will be made on each Distribution Date from
Available Funds. "AVAILABLE FUNDS" means with respect to any Distribution Date,
the amount equal to (A) the sum (less certain amounts (without duplication)
available for reimbursement of Advances relating to Mortgage Loans in an
Overcollateralized Loan Group and servicing advances relating to Mortgage Loans
in an Overcollateralized Loan Group as described above under "The Pooling and
Servicing Agreement and the Servicing Agreements--Advances" and certain other
reimbursable expenses and indemnities relating Mortgage Loans in an
Overcollateralized Loan Group pursuant to the Pooling and Servicing Agreement or
the related Servicing Agreement) of the following amounts (without duplication)
with respect to the Mortgage Loans in an Overcollateralized Loan Group: (i) each
payment of principal or interest on such Mortgage Loan due on the due date in
the month of such Distribution Date and received by the Servicers on or prior to
the Determination Date for such Distribution Date, including any Advances made
by the related Servicer relating to such Mortgage Loans with respect thereto or
Compensating Interest paid by the related Servicer relating to such Mortgage
Loans with respect thereto, (ii) all full and partial principal prepayments on
such Mortgage Loans received by the Servicers during the prior calendar month,
(iii) the insurance proceeds, Recoveries and liquidation proceeds (net of
certain expenses) actually collected by the Servicers with respect to such
Mortgage Loans during the prior calendar month, (iv) the Purchase Price of all
repurchased defective Mortgage Loans in an Overcollateralized Loan Group with
respect to the prior calendar month, (v) any Substitution Adjustment Amounts or
Reimbursement Amounts with respect to such Mortgage Loans received during the
prior calendar month and (vi) any amounts received in connection with the
optional termination of such Mortgage Loans and related property of the Issuing
Entity as of such Distribution Date less (B) any amounts payable to the
Supplemental Interest Trust for payment to the Swap Provider (including any Net
Swap Payment and any Swap Termination Payment owed to the Swap Provider but
excluding any Swap Termination Payment owed to the Swap Provider resulting from
a Swap Provider Trigger Event).

          Interest

          On each Distribution Date, based upon the information provided to it
in a remittance report prepared by the Master Servicer, the Securities
Administrator will distribute the Overcollateralized Interest Remittance Amount
in the order of priority, to the extent available, set forth in the Term Sheet.

          "ACCRUED CERTIFICATE INTEREST" for each class of Certificates in an
Overcollateralized Loan Group and each Distribution Date means an amount equal
to the interest accrued during the related Interest Accrual Period on the class
balance of such class of Certificates at the applicable pass-through rate
described in the Term Sheet, minus each class' Interest Percentage of Relief Act
Reductions related to any Mortgage Loans in an Overcollateralized Loan Group for
such Distribution Date.

          The "OVERCOLLATERALIZED INTEREST REMITTANCE AMOUNT" means as of any
Distribution Date, (A) the sum, without duplication, of (i) all interest
collected or advanced with respect to the payment due on the Mortgage Loans in
an Overcollateralized Loan Group on the due date of the calendar month in which
such Distribution Date occurs and received by the Servicers on or prior to the
Determination Date for such Distribution Date (less the Administrative Fees for
such Mortgage Loans, certain amounts available for reimbursement of Advances and


                                       42



servicing advances with respect to such Mortgage Loans as described above under
"The Pooling and Servicing Agreement and the Servicing Agreements--Advances" and
certain other reimbursable expenses and indemnities pursuant to the Pooling and
Servicing Agreement or the related Servicing Agreement), (ii) all Compensating
Interest paid by the Servicers for such Distribution Date with respect to the
Mortgage Loans in an Overcollateralized, (iii) the portion of any payment in
connection with any principal prepayment, substitution, Purchase Price,
liquidation proceeds (net of certain expenses) or insurance proceeds relating to
interest with respect to the Mortgage Loans in an Overcollateralized Loan Group
received during the prior calendar month and (iv) any Reimbursement Amounts
received with respect to the Mortgage Loans in an Overcollateralized Loan Group
during the prior calendar month less (B) any amounts payable to the Supplemental
Interest Trust for payment to the Swap Provider (including any Net Swap Payment
and any Swap Termination Payment owed to the Swap Provider but excluding any
Swap Termination Payment owed to the Swap Provider resulting from a Swap
Provider Trigger Event).

          The "INTEREST CARRY FORWARD AMOUNT" means for any class of Offered
Certificates in an Overcollateralized Loan Group and any Distribution Date, the
sum of (a) the excess, if any, of the Accrued Certificate Interest and any
Interest Carry Forward Amount for the prior Distribution Date, over the amount
in respect of interest actually distributed on such class on such prior
Distribution Date and (b) interest on such excess at the applicable pass-through
rate for the related Interest Accrual Period.

          The "INTEREST PERCENTAGE" is, with respect to any class of Offered
Certificates in an Overcollateralized Loan Group and any Distribution Date, the
ratio (expressed as a decimal carried to six places) of the Accrued Certificate
Interest for such class to the Accrued Certificate Interest for all classes of
Offered Certificates in an Overcollateralized Loan Group with respect to such
Distribution Date and without regard to Relief Act Reductions.

          LIBOR

          The Offered Certificates in an Overcollateralized Loan Group will bear
interest at pass-through rates based on LIBOR by the Securities Administrator as
described above in "Description of Certificates--Distributions on the Shifting
Interest Certificates--LIBOR."

          Principal

          With respect to each Distribution Date (a) before the Stepdown Date or
(b) as to which a Trigger Event is in effect, the Overcollateralized Principal
Distribution Amount will be allocated among and distributed in reduction of the
class balances of the Overcollateralized Certificates in the order of priority
set forth in the Term Sheet.

          "60+ DAY DELINQUENT LOAN" means each Mortgage Loan in an
Overcollateralized Loan Group (including each Mortgage Loan in an
Overcollateralized Loan Group in foreclosure and each Mortgage Loan in an
Overcollateralized Loan Group for which the mortgagor has filed for bankruptcy
after the Closing Date) with respect to which any portion of a Monthly Payment
is, as of the due date in the month prior to such Distribution Date, two months
or more past due and each Mortgage Loan in an Overcollateralized Loan Group
relating to an REO Property.

          "EXTRA PRINCIPAL DISTRIBUTION AMOUNT" means as of any Distribution
Date, the lesser of (x) the Monthly Excess Interest Amount for such Distribution
Date and (y) the Overcollateralization Deficiency for such Distribution Date.

          "OVERCOLLATERALIZATION AMOUNT" means as of any Distribution Date the
excess, if any, of (x) the aggregate Stated Principal Balance of the Mortgage
Loans in an Overcollateralized Loan Group as of the due date in the month of
such Distribution Date over (y) the aggregate class balance of all classes of
Certificates in an Overcollateralized Loan Group (after taking into account all
distributions of principal on such Distribution Date and the increase of any
class balance as a result of Recoveries related to the Mortgage Loans in an
Overcollateralized Loan Group).

          "OVERCOLLATERALIZATION DEFICIENCY" means as of any Distribution Date,
the excess, if any, of (x) the Targeted Overcollateralization Amount over (y)
the Overcollateralization Amount for such Distribution Date, calculated for this
purpose after taking into account the reduction on such Distribution Date of the
class balances of


                                       43



all classes of Certificates in an Overcollateralized Loan Group resulting from
the distribution of the Overcollateralized Principal Distribution Amount (but
not the Extra Principal Distribution Amount) on such Distribution Date, but
prior to taking into account any Applied Realized Loss Amounts on such
Distribution Date.

          "OVERCOLLATERALIZATION RELEASE AMOUNT" means with respect to any
Distribution Date on or after the Stepdown Date on which a Trigger Event is not
in effect, the lesser of (x) the Overcollateralized Principal Remittance Amount
for such Distribution Date and (y) the excess, if any, of (i) the
Overcollateralization Amount for such Distribution Date, assuming that 100% of
the Overcollateralized Principal Remittance Amount is applied as a principal
payment on the Certificates in an Overcollateralized Loan Group on such
Distribution Date over (ii) the Targeted Overcollateralization Amount. With
respect to any Distribution Date on which a Trigger Event is in effect, the
Overcollateralization Release Amount will be zero.

          "OVERCOLLATERALIZED PRINCIPAL DISTRIBUTION AMOUNT" means as of any
Distribution Date, the sum of (i) the Overcollateralized Principal Remittance
Amount (minus the Overcollateralization Release Amount, if any) and (ii) the
Extra Principal Distribution Amount, if any.

          "OVERCOLLATERALIZED PRINCIPAL REMITTANCE AMOUNT" means with respect to
any Distribution Date, to the extent of funds available therefor as described
herein, the amount equal to (A) the sum (less certain amounts (without
duplication) available for reimbursement of Advances relating to Mortgage Loans
in an Overcollateralized Loan Group and servicing advances relating to Mortgage
Loans in an Overcollateralized Loan Group as described above under "The Pooling
and Servicing Agreement and the Servicing Agreements--Advances" and certain
other reimbursable expenses and indemnities relating to Mortgage Loans in an
Overcollateralized Loan Group pursuant to the Pooling and Servicing Agreement or
the related Servicing Agreement) of the following amounts (without duplication)
with respect to the Mortgage Loans in an Overcollateralized Loan Group: (i) each
payment of principal on a Mortgage Loan in an Overcollateralized Loan Group due
on the due date in the month of such Distribution Date and received by the
Servicers on or prior to the Determination Date for such Distribution Date,
including any Advances made by the related Servicer relating to such Mortgage
Loans with respect thereto, (ii) all full and partial principal prepayments on
such Mortgage Loans received by the Servicers during the prior calendar month,
(iii) the insurance proceeds, Recoveries and liquidation proceeds (net of
certain expenses) allocable to principal actually collected by the Servicers
with respect to such Mortgage Loans during the prior calendar month, (iv) the
portion of the Purchase Price allocable to principal of all repurchased
defective Mortgage Loans in an Overcollateralized Loan Group with respect to the
prior calendar month, (v) any Substitution Adjustment Amounts with respect to
the Mortgage Loans in an Overcollateralized Loan Group received during the prior
calendar month and (vi) the principal portion of amounts received in connection
with the optional termination of such Mortgage Loans and related property of the
Issuing Entity as of such Distribution Date less (B) to the extent any amounts
payable to the Supplemental Interest Trust for payment to the Swap Provider
(including any Net Swap Payment and any Swap Termination Payment owed to the
Swap Provider but excluding any Swap Termination Payment owed to the Swap
Provider resulting from a Swap Provider Trigger Event) exceed the Interest
Remittance Amount for such Distribution Date (without giving effect to clause
(B) of the definition of Overcollateralized Interest Remittance Amount), the
amount of such excess.

          "OVERCOLLATERALIZED SENIOR PRINCIPAL DISTRIBUTION AMOUNT" means as of
any Distribution Date (i) before the Stepdown Date or as to which a Trigger
Event is in effect, the lesser of (a) the aggregate class balance of the Senior
Certificates in an Overcollateralized Loan Group immediately prior to such
Distribution Date and (b) the Overcollateralized Principal Distribution Amount
and (ii) on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (a) the aggregate class balance of the Senior Certificates
in an Overcollateralized Loan Group immediately prior to such Distribution Date
over (b) the lesser of (x) the product of (1) a percentage set forth in the
prospectus supplement and (2) the aggregate Stated Principal Balance for an
Overcollateralized Loan Group as of the due date in the month of such
Distribution Date and (y) the amount by which the aggregate Stated Principal
Balance for an Overcollateralized Loan Group as of the due date in the month of
such Distribution Date exceeds the product of (1) a percentage, set forth in the
prospectus supplement and (2) the aggregate Stated Principal Balance of the
Mortgage Loans in an Overcollateralized Loan Group on the Cut-off Date.

          "SENIOR ENHANCEMENT PERCENTAGE" for any Distribution Date is the
percentage obtained by dividing (x) the sum of (i) the aggregate class balance
of the senior most Subordinate Certificates before taking into account the
distribution of the Overcollateralized Principal Distribution Amount on such
Distribution Date and (ii) the


                                       44



Overcollateralization Amount as of the prior Distribution Date by (y) the
aggregate Stated Principal Balance of the Mortgage Loans in an
Overcollateralized Loan Group as of the due date in the month of such
Distribution Date.

          "SENIOR SPECIFIED ENHANCEMENT PERCENTAGE"" will be set forth in the
Term Sheet.

          "STEPDOWN DATE" means the earlier to occur of (i) the Distribution
Date on which the aggregate class balance of the Senior Certificates in an
Overcollateralized Loan Group is reduced to zero and (ii) the later to occur of
(x) the Distribution Date set forth in the Term Sheet and (y) the Distribution
Date on which the Senior Enhancement Percentage is greater than or equal to the
Senior Specified Enhancement Percentage.

          "TARGETED OVERCOLLATERALIZATION AMOUNT" means as of any Distribution
Date, (x) prior to the Stepdown Date, a percentage, set forth in the prospectus
supplement, of the aggregate Stated Principal Balance of the Mortgage Loans in
an Overcollateralized Loan Group on the Cut-off Date and (y) on and after the
Stepdown Date, (i) if a Trigger Event has not occurred, the greater of (a) a
percentage, set forth in the prospectus supplement, of the aggregate Stated
Principal Balance of the Mortgage Loans in an Overcollateralized Loan Group as
of due date in the month of such Distribution Date and (b) a percentage, set
forth in the prospectus supplement, of the aggregate Stated Principal Balance of
the Mortgage Loans in an Overcollateralized Loan Group on the Cut-off Date and
(ii) if a Trigger Event has occurred, the Targeted Overcollateralization Amount
for the immediately preceding Distribution Date.

          A "TRIGGER EVENT" has occurred on a Distribution Date if (i) the
three-month rolling average of 60+ Day Delinquent Loans equals or exceeds a
percentage, set forth in the prospectus supplement, of the Senior Enhancement
Percentage or (ii) the aggregate amount of Realized Losses on the Mortgage Loans
in an Overcollateralized Loan Group incurred since the Cut-off Date through the
due date in the month of such Distribution Date (reduced by the aggregate amount
of Recoveries related to the Mortgage Loans in an Overcollateralized Loan Group
received since the Cut-off Date through the due date in the month of such
Distribution Date) divided by the aggregate Stated Principal Balance of the
Mortgage Loans in an Overcollateralized Loan Group on the Cut-off Date exceeds
the applicable percentages set forth in the Term Sheet.

          Application of Monthly Excess Cashflow Amounts

          The weighted average Net Mortgage Interest Rate for the Mortgage Loans
in an Overcollateralized Loan Group is generally expected to be higher than the
weighted average of the pass-through rates on the Certificates in an
Overcollateralized Loan Group, thus generating certain excess interest
collections which, in the absence of losses, will not be necessary to fund
interest distributions on such Certificates. The "MONTHLY EXCESS INTEREST
AMOUNT" for any Distribution Date will be the amount by which the
Overcollateralized Interest Remittance Amount for such Distribution Date exceeds
the aggregate amount distributed on such Distribution Date to the Certificates
in an Overcollateralized Loan Group in respect of Accrued Certificate Interest
and Interest Carryforward Amounts.

          If Realized Losses occur that are not covered by the Monthly Excess
Cashflow Amount, such Realized Losses will result in an Overcollateralization
Deficiency (since they will reduce the aggregate Stated Principal Balance of the
Mortgage Loans in an Overcollateralized Loan Group without giving rise to a
corresponding reduction of the aggregate class balance of the Offered
Certificates in an Overcollateralized Loan Group). The cashflow priorities for
the Offered Certificates in an Overcollateralized Loan Group in this situation
increase the Extra Principal Distribution Amount (subject to the availability of
any Monthly Excess Cashflow Amount in subsequent months) for the purpose of
re-establishing the Overcollateralization Amount at the then-required Targeted
Overcollateralization Amount.

          On and after the Stepdown Date and assuming that a Trigger Event is
not in effect, the Targeted Overcollateralization Amount may be permitted to
decrease or "stepdown." If the Targeted Overcollateralization Amount is
permitted to stepdown on a Distribution Date, a portion of the
Overcollateralized Principal Remittance Amount for such Distribution Date will
not be passed through as a distribution of principal on the Offered Certificates
in an Overcollateralized Loan Group on such Distribution Date. This has the
effect of decelerating the amortization of the Offered Certificates in an
Overcollateralized Loan Group relative to the aggregate Stated Principal Balance
of the Mortgage Loans in an Overcollateralized Loan Group, thereby reducing the
actual level of the Overcollateralization Amount to the new, lower Targeted
Overcollateralization Amount. This portion of the


                                       45



Overcollateralized Principal Remittance Amount not distributed as principal on
the Offered Certificates in an Overcollateralized Loan Group therefore releases
a limited portion of the overcollateralization from the Issuing Entity.

          On any Distribution Date, the sum of the Monthly Excess Interest
Amount, the Overcollateralization Release Amount and any portion of the
Overcollateralized Principal Distribution Amount (without duplication) remaining
after principal distributions on the Offered Certificates in an
Overcollateralized Loan Group is the "MONTHLY EXCESS CASHFLOW AMOUNT," which is
required to be applied in the order of priority (the "MONTHLY EXCESS CASHFLOW
ALLOCATION") on such Distribution Date, set forth in the Term Sheet.

          Allocation of Losses

          Unless otherwise specified in the Term Sheet, after giving effect to
the distribution of the Overcollateralized Principal Distribution Amount on any
Distribution Date and the increase of any class balance as a result of
Recoveries, the aggregate class balance of the Certificates in an
Overcollateralized Loan Group exceeds the aggregate Stated Principal Balance of
the Mortgage Loans in an Overcollateralized Loan Group as of the due date in the
month of such Distribution Date, such excess (the "APPLIED REALIZED LOSS
AMOUNT") will be allocated in reduction of the class balances of the Subordinate
Certificates of the related Group, in the reverse order of their seniority
(beginning with the class of Subordinate Certificates with the lowest payment
priority), in each case until their respective class balances are reduced to
zero. In addition, after the class balances of the senior most Subordinate
Certificates have been reduced to zero, if after giving effect to the
distribution of the Overcollateralized Principal Distribution Amount and the
increase of any class balance as a result of Recoveries, the aggregate class
balance of the Senior Certificates in an Overcollateralized Loan Group exceeds
the aggregate Stated Principal Balance of the Mortgage Loans in an
Overcollateralized Loan Group as of the due date in the month of such
Distribution Date, such excess will be allocated in reduction of the class
balance of the junior most Senior Certificate. Any such reduction of a class
balance will not be reversed or reinstated (except in the case of Recoveries).
However, on future Distribution Dates, Certificateholders of the related class
may receive amounts in respect of prior reductions in the related class balances
as described below or from a Supplemental Interest Trust, according to the
priorities set forth in the Term Sheet. Such subsequent payments will be applied
sequentially to the Subordinate Certificates in order of their priority. The
class balances of the Senior Certificates will not be reduced by any Applied
Realized Loss Amounts; however, under certain loss scenarios, there will not be
enough interest and principal on the Mortgage Loans in an Overcollateralized
Loan Group to pay the Senior Certificates all interest and principal amounts to
which they are entitled.

          Unless otherwise specified in the Term Sheet, if Recoveries are
received on the Mortgage Loans in an Overcollateralized Loan Group, they will be
included as part of the Overcollateralized Principal Remittance Amount for the
Distribution Date in the calendar month after they are received and distributed
in accordance with the priorities described herein. In addition, after giving
effect to all distributions on a Distribution Date, the Unpaid Realized Loss
Amounts for the class then outstanding with the highest distribution priority
will be decreased by the amount of such Recoveries until reduced to zero (with
any remaining Recoveries applied to reduce the Unpaid Realized Loss Amount of
the class with the next highest distribution priority), and the class balance of
such class will be increased by the same amount.

          Overcollateralized Certificate Interest Rates

          Interest for each Distribution Date on or prior to the Optional
Termination Date for the Mortgage Loans in an Overcollateralized Loan Group will
accrue on the Offered Certificates in an Overcollateralized Loan Group during
the related Interest Accrual Period at a per annum rate set forth in the Term
Sheet (the "PASS-THROUGH RATE"). During each Interest Accrual Period relating to
the Distribution Dates after the Optional Termination Date with respect to the
Mortgage Loans in an Overcollateralized Loan Group, each of the certificate
margins on the Certificates in an Overcollateralized Loan Group will be
"stepped-up" to the applicable margin set forth in the Term Sheet if the
optional termination right is not exercised.

          The "OVERCOLLATERALIZED CAP" or "CAP" for any Distribution Date and
for the Certificates in an Overcollateralized Loan Group will be a per annum
rate (subject to adjustment based on the actual number of days elapsed in the
related Interest Accrual Period) equal to (x) the average of the Net Mortgage
Interest Rates for the


                                       46



Mortgage Loans in an Overcollateralized Loan Group, weighted on the basis of the
Stated Principal Balances of the Mortgage Loans in an Overcollateralized Loan
Group on the due date in the month preceding the month of such Distribution Date
less, in the case of a transaction with an Interest Rate Swap Agreement, (y) any
Net Swap Payment or Swap Termination Payment, if any, deposited into the
Supplemental Interest Trust for payment to the Swap Provider (only if such Swap
Termination Payment is not due to a Swap Provider Trigger Event) expressed as a
percentage, equal to a fraction, the numerator of which is equal to the Net Swap
Payment or Swap Termination Payment deposited into the Supplemental Interest
Trust for payment to the Swap Provider multiplied by 12, and the denominator of
which is equal to the Stated Principal Balances of the Mortgage Loans as of the
due date in the month preceding the month of such Distribution Date.

          If on any Distribution Date, the Accrued Certificate Interest for any
Offered Certificate in an Overcollateralized Loan Group is based on the Cap, the
excess of (i) the amount of interest such class would have been entitled to
receive on such Distribution Date based on its Pass-Through Rate (without regard
to the Cap) over (ii) the amount of interest such class received on such
Distribution Date based on the Cap, together with the unpaid portion of any such
excess from prior Distribution Dates (and interest accrued thereon at the
then-applicable Pass-Through Rate on such class) will be the "CAP CARRYOVER
AMOUNT." On the Closing Date, any Cap Carryover Amount will be paid from amounts
in the Cap Carryover Reserve Account, the Swap Account or other account as
specified in the Term Sheet.

          On the Closing Date, the Securities Administrator will establish the
Cap Carryover Reserve Account ("CAP CARRYOVER RESERVE ACCOUNT") pursuant to the
Pooling and Servicing Agreement from which distributions in respect of Cap
Carryover Amounts on the Offered Certificates in an Overcollateralized Loan
Group will be made. Distributions in respect of Cap Carryover Amounts may also
be made from the Supplemental Interest Trust. The Cap Carryover Reserve Account
will be an asset of the Issuing Entity but not of any REMIC.

          THE YIELD MAINTENANCE AGREEMENT

          If the Term Sheet provides for a yield maintenance agreement, the
Securities Administrator, on behalf of the Issuing Entity, will enter into a
yield maintenance agreement (the "YIELD MAINTENANCE AGREEMENT") with a
counterparty (the "COUNTERPARTY"), which will be primarily for the benefit of
the class or classes of Certificates specified in the Term Sheet (each, a "YIELD
MAINTENANCE CLASS"). Certain information regarding the Counterparty will be
described in the Term Sheet.

          With respect to each Distribution Date described in the Term Sheet, if
LIBOR, as calculated for the Interest Accrual Period related to such
Distribution Date, exceeds a rate per annum set forth the Term Sheet (the
"STRIKE RATE"), the Counterparty will be obligated to pay to the Securities
Administrator the Yield Maintenance Agreement Payment. The "YIELD MAINTENANCE
AGREEMENT PAYMENT" for any Distribution Date will be an amount specified in the
Term Sheet.

          Amounts received on the Yield Maintenance Agreement will not be
available to make distributions on any class of Certificates other than a
specified Yield Maintenance Class.

          The Yield Maintenance Agreement will be subject to early termination
upon a failure of the Counterparty to make a Yield Maintenance Agreement Payment
when due, after a grace period expires, or upon the occurrence of certain
bankruptcy or insolvency events with respect to the Counterparty. The Yield
Maintenance Agreement also will be subject to early termination upon the
occurrence of certain termination events set forth therein, including certain
events causing it to become unlawful to make or receive a Yield Maintenance
Agreement Payment or requiring the Counterparty to pay withholding or other tax
amounts to the Securities Administrator in respect of Yield Maintenance
Agreement Payments and certain additional termination events.

          If a Ratings Event occurs and is continuing with respect to the
Counterparty, then the Counterparty will be required to use reasonable efforts
to transfer its rights and obligations under the Yield Maintenance Agreement to
a replacement counterparty, subject to satisfaction of the related Rating Agency
Condition. Unless such a transfer has occurred within twenty Business Days after
the occurrence of a Ratings Event, the Counterparty will be required to post
collateral to secure its obligations under the Yield Maintenance Agreement. A
"RATINGS EVENT" will occur with respect to the Counterparty if the long-term and
short-term senior unsecured debt ratings of the Counterparty


                                       47



cease to be as required by each Rating Agency. "RATING AGENCY CONDITION" means,
with respect to any action taken or to be taken, a condition that is satisfied
when each Rating Agency has confirmed that such action would not result in the
downgrade, qualification (if applicable) or withdrawal of the rating then
assigned by such Rating Agency to the related Certificates.

          Any failure by the Counterparty to post such collateral or to transfer
its rights and obligations to a replacement will be an additional termination
event as to which the Securities Administrator may terminate the Yield
Maintenance Agreement. In addition, it will be an additional termination event,
as to which the Counterparty may terminate the Yield Maintenance Agreement, if
any amendment or supplement to the pooling and servicing agreement or any other
document pertaining to a Yield Maintenance Class is made without the prior
written consent of the Counterparty, unless such amendment or supplement would
not (i) adversely affect any of the Counterparty's rights or obligations under
the Yield Maintenance Agreement or (ii) modify the Securities Administrator's
obligations, or impair the ability of the Securities Administrator to fully
perform any of its obligations, under the Yield Maintenance Agreement.

          Upon an early termination of the Yield Maintenance Agreement, the
Securities Administrator will be required to use reasonable efforts to replace
the Yield Maintenance Agreement with one furnished by a replacement
counterparty. The Securities Administrator will hold in trust any amount that is
paid to it by the Counterparty upon an early termination of the Yield
Maintenance Agreement and will apply such amount to the purchase of the
replacement yield maintenance agreement. If any portion of such amount cannot be
so used (either because a replacement yield maintenance agreement is not
available or such amount exceeds the amount necessary to purchase such
replacement), the Securities Administrator will deposit such portion in the
Reserve Fund.

          The Yield Maintenance Agreement will be governed by and construed in
accordance with the laws of the State of New York. The obligations of the
Counterparty are limited to those specifically set forth in the Yield
Maintenance Agreement, and the Counterparty may assign its rights and
obligations under the Yield Maintenance Agreement to any entity so long as the
Rating Agency Condition is satisfied. The Yield Maintenance Class will not
represent obligations of the Counterparty. The holders of the Yield Maintenance
Class are not parties to or beneficiaries under the Yield Maintenance Agreement
and will not have any right to proceed directly against the Counterparty in
respect of its obligations under the Yield Maintenance Agreement.

THE RESERVE FUND

          If the Term Sheet provides for a Yield Maintenance Agreement, the
Securities Administrator will establish a separate trust account (the "RESERVE
FUND"), or other account as specified in the term sheet, for deposit of any
Yield Maintenance Agreement Payments that it may receive under the Yield
Maintenance Agreement. The Reserve Fund will be owned by the Issuing Entity but
will not be an asset of any REMIC.

          On or before each Distribution Date, the Securities Administrator will
deposit in the Reserve Fund any Yield Maintenance Agreement Payment for the
related Interest Accrual Period. Such Yield Maintenance Agreement Payment
received on or before a Distribution Date will be distributed to the related
Yield Maintenance Class on such Distribution Date.

          The Yield Maintenance Agreement Payment will be set forth in the
Term Sheet.

RESTRICTIONS ON TRANSFER OF THE RESIDUAL CERTIFICATE

          The Residual Certificate will be subject to the following restrictions
on transfer and will contain a legend describing such restrictions.

          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 (as defined in the Prospectus) and (ii)
certain Pass-Through Entities (as defined in the Prospectus) that have
Disqualified Organizations as beneficial owners. No tax will be imposed on a
Pass-Through Entity (other than an "electing large partnership" (as defined in
the


                                       48



Prospectus)) with respect to the Residual Certificate to the extent it has
received an affidavit from the owner thereof 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 the Residual Certificate may be transferred to or
registered in the name of any person unless:

o    the proposed purchaser provides to the Securities Administrator an
     affidavit to the effect that, among other items, such transferee is not a
     Disqualified Organization and is not purchasing the Residual Certificate as
     an agent for a Disqualified Organization (i.e., as a broker, nominee or
     other middleman thereof); and

o    the transferor states in writing to the Securities Administrator that it
     has no actual knowledge that such affidavit is false.

          Further, such affidavit will require the transferee to affirm that it
(a) historically has paid its debts as they have come due and intends to do so
in the future, (b) understands that it may incur tax liabilities with respect to
the Residual Certificate in excess of cash flows generated thereby, (c) intends
to pay taxes associated with holding the Residual Certificate as such taxes
become due and (d) will not transfer the Residual Certificate to any person or
entity that does not provide a similar affidavit. The transferor must certify in
writing to the Securities Administrator that, as of the date of the transfer, it
had no knowledge or reason to know that the affirmations made by the transferee
pursuant to the preceding sentence were false.

          Treasury regulations applicable to REMICs (the "REMIC REGULATIONS")
disregard certain transfers of residual interests, in which case the transferor
would continue to be treated as the owner of a residual interest and thus would
continue to be subject to tax on its allocable portion of the net income of the
applicable REMIC. Under the REMIC Regulations, a transfer of a "noneconomic
residual interest" (as defined below) to a holder generally is disregarded for
all federal income tax purposes if a significant purpose of the transfer is to
impede the assessment or collection of tax. A residual interest in a REMIC
(including a residual interest with a positive value at issuance) is a
"noneconomic residual interest" unless, at the time of the transfer, (i) 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 (ii) the transferor reasonably expects that the
transferee will receive distributions from the REMIC at or after the time at
which taxes accrue on the anticipated excess inclusions in an amount sufficient
to satisfy the accrued taxes on each excess inclusion. 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. Under the REMIC Regulations, a
safe harbor is provided if (i) the transferor conducted, at the time of the
transfer, a reasonable investigation of the financial condition of the
transferee and found that the transferee historically had paid its debts as they
came due and found no significant evidence to indicate that the transferee would
not continue to pay its debts as they came due in the future, (ii) the
transferee represents to the transferor that it understands that, as the holder
of the 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 (iii) the transferee represents to the transferor that it will
not cause income from the residual interest to be attributable to a foreign
permanent establishment or fixed base, within the meaning of an applicable
income tax treaty, and the residual interest is, in fact, not transferred to
such a permanent establishment or fixed base of the transferee or any other
person. The Pooling and Servicing Agreement will require a transferee of the
Residual Certificate to certify to the matters in the preceding sentence as part
of the affidavit described above.

          In addition to the three conditions set forth above for the transferor
of a noneconomic residual interest to be presumed not to have knowledge that the
transferee would be unwilling or unable to pay taxes due on its share of the
taxable income of the REMIC, the REMIC Regulations contain a fourth condition
for the transferor to be presumed to lack such knowledge. This fourth condition
requires that one of the two following tests be satisfied:

          (a)  the present value of the anticipated tax liabilities associated
               with holding the noneconomic residual interest not exceed the sum
               of:


                                       49



               (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 applicable REMIC generates
                     losses; 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 asset
               tests;

               (ii)  the transferee must agree in writing that any subsequent
                     transfer of the residual interest would be to an eligible
                     "C" corporation and would meet 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.

          For purposes of the computations in clause (a) the transferee is
assumed to pay tax at the highest corporate rate of tax specified in the Code
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 the
transfer and the compounding period used by the transferee.

          The Pooling and Servicing Agreement will not require that transfers of
the Residual Certificate meet the fourth requirement above, and therefore such
transfers may not meet the safe harbor. The holder of the Residual Certificate
is advised to consult its tax advisor regarding the advisability of meeting the
safe harbor.

          In addition, the Residual Certificate may not be purchased by or
transferred to any person that is not a U.S. Person, unless:

o    such person holds the Residual Certificate in connection with the conduct
     of a trade or business within the United States and furnishes the
     transferor and the Securities Administrator with an effective Internal
     Revenue Service Form W-8ECI; or

o    the transferee delivers to both the transferor and the Securities
     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 Certificate 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 (unless, in the case of a partnership,
Treasury regulations are adopted that provide otherwise) created or organized in
or under the laws of the United States, any state thereof or the District of
Columbia, including an entity treated as a corporation or partnership for
federal income tax purposes, an estate whose income is subject to United States
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, certain trusts in existence on August 20, 1996 which are
eligible to elect to be treated as U.S. Persons).

          THE POOLING AND SERVICING AGREEMENT WILL PROVIDE THAT ANY ATTEMPTED OR
PURPORTED TRANSFER IN VIOLATION OF THESE TRANSFER RESTRICTIONS WILL BE NULL AND
VOID AND WILL VEST NO RIGHTS IN ANY PURPORTED TRANSFEREE.

          Any transferor or agent to whom the Securities Administrator provides
information as to any applicable tax imposed on such transferor or agent may be
required to bear the cost of computing or providing such information.


                                       50



          See "Federal Income Tax Consequences--Federal Income Tax Consequences
for REMIC Certificates--Taxation of Residual Certificates--Tax-Related
Restrictions on Transfer of Residual Certificates" in the Prospectus.

          THE RESIDUAL CERTIFICATE MAY NOT BE PURCHASED BY OR TRANSFERRED TO ANY
PLAN OR ANY PERSON ACTING ON BEHALF OF OR INVESTING THE ASSETS OF SUCH PLAN.

          See "Benefit Plan Considerations" in this Disclosure Supplement and
"Benefit Plan Considerations" in the Prospectus.

INTEREST RATE SWAP AGREEMENT AND THE SWAP ACCOUNT

          The Interest Rate Swap Agreement

          On or before the Closing Date, if specified in the related Term Sheet,
the Supplemental Interest Trust Trustee may enter into the Interest Rate Swap
Agreement with the Swap Provider. Such Interest Rate Swap Agreement will be
administered by the Supplemental Interest Trust Trustee pursuant to the Pooling
and Servicing Agreement. The Swap Account will be an asset of the Supplemental
Interest Trust but not of any REMIC.

          Under the Interest Rate Swap Agreement, on or before each Distribution
Date (beginning with the first Distribution Date), the Supplemental Interest
Trust will be obligated to pay to the Swap Provider from amounts available
therefor pursuant to the Pooling and Servicing Agreement. A net payment will be
required to be made on or before each Distribution Date (each such net payment,
a "NET SWAP PAYMENT") (a) by the Supplemental Interest Trust to the Swap
Provider, to the extent that the fixed amount exceeds the corresponding floating
amount, or (b) by the Swap Provider to the Supplemental Interest Trust to the
extent that the floating amount exceeds the corresponding fixed amount.

          The initial Swap Notional Amount will be set forth in the Term Sheet.
The Interest Rate Swap Agreement will terminate immediately after the
Distribution Date set forth in the Term Sheet, unless terminated earlier upon
the occurrence of a Swap Default or a Termination Event.

          The respective obligations of the Swap Provider and the Supplemental
Interest Trust Trustee to pay specified amounts due under the Interest Rate Swap
Agreement will be subject to conditions precedent set forth in the Interest Rate
Swap Agreement.

          Upon the occurrence of any Swap Default under the Interest Rate Swap
Agreement, the non-defaulting party will have the right to designate an Early
Termination Date. With respect to Termination Events, an Early Termination Date
may be designated by one or both of the parties (as specified in the Interest
Rate Swap Agreement), all as set forth in the Interest Rate Swap Agreement.

          Upon any Swap Early Termination, the Supplemental Interest Trust or
the Swap Provider may be liable to make a Swap Termination Payment to the other
(regardless of which of the parties has caused the termination). The Swap
Termination Payment will be based on the value of the Interest Rate Swap
Agreement computed in accordance with the procedures set forth in the Interest
Rate Swap Agreement taking into account the present value of the unpaid amounts
that would have been owed to and by the Swap Provider under the remaining
scheduled term of the Interest Rate Swap Agreement. In the event that the
Supplemental Interest Trust is required to make a Swap Termination Payment, that
payment will be paid from the Supplemental Interest Trust on the related
Distribution Date and on any subsequent Distribution Dates until paid in full,
generally prior to distributions to the holders of the Certificates in an
Overcollateralized Group.

          Upon a Swap Early Termination, the Supplemental Interest Trust
Trustee, at the direction of the Depositor will seek a replacement swap provider
to enter into a replacement interest rate swap agreement or similar agreement.
To the extent the Supplemental Interest Trust receives a Swap Termination
Payment from the Swap Provider, the Supplemental Interest Trust will apply, as
set forth in the Pooling and Servicing Agreement, all or such portion of such
Swap Termination Payment as may be required to the payment of amounts due to a
replacement swap provider under a replacement interest rate swap agreement or
similar agreement. Furthermore, to the extent the Supplemental


                                       51



Interest Trust is required to pay a Swap Termination Payment to the Swap
Provider, the Supplemental Interest Trust will apply all or a portion of such
amount received from a replacement swap provider upon entering into a
replacement interest rate swap agreement or similar agreement to the Swap
Termination Payment amount owing to the Swap Provider.

          Upon the occurrence of a Downgrade Provision, the Swap Provider will
be required to (1) post collateral securing its obligations under the Interest
Rate Swap Agreement, (2) obtain a substitute Swap Provider or credit support
provider or (3) establish any other arrangement acceptable to the Rating
Agencies and the Supplemental Interest Trust Trustee (such consent by such
Supplemental Interest Trust Trustee not to be unreasonably withheld), unless the
Rating Agencies confirm their then current ratings on the Certificates.

          The "DOWNGRADE PROVISION" of the Interest Rate Swap Agreement will be
triggered if the Swap Provider's short-term or long-term credit ratings fall
below the levels specified in the Interest Rate Swap Agreement.

          "EVENTS OF DEFAULT" under the Interest Rate Swap Agreement (each a
"SWAP DEFAULT") include the following standard events of default under the 1992
Master Agreement (Multicurrency-Cross Border) as published by the International
Swaps and Derivative Association, Inc. (the "ISDA MASTER AGREEMENT"), as
modified by the Interest Rate Swap Agreement:

          o    "Failure to Pay or Deliver,"

          o    "Bankruptcy" and

          o    "Merger without Assumption",

as described in Sections 5(a)(i), 5(a)(vii) and 5(a)(viii) of the ISDA Master
Agreement.

          The "SWAP ACCOUNT" means a segregated trust account for the benefit of
the holders of the Certificates in an Overcollateralized Group in which payments
owed to or received from the Swap Provider will be deposited.

          A "SWAP DEFAULT" means an Event of Default under the Interest Rate
Swap Agreement.

          A "SWAP EARLY TERMINATION" means the occurrence of an Early
Termination Date under the Interest Rate Swap Agreement.

          The "SWAP PROVIDER" is set forth in the Interest Rate Swap Agreement.

          A "SWAP PROVIDER TRIGGER EVENT" means a Swap Termination Payment that
is triggered upon: (i) an Event of Default under the Interest Rate Swap
Agreement with respect to which the Swap Provider is a Defaulting Party (as
defined in the Interest Rate Swap Agreement) or (ii) a Termination Event under
the Interest Rate Swap Agreement with respect to which the Swap Provider is the
sole Affected Party (as defined in the Interest Rate Swap Agreement).

          The "SWAP TERMINATION PAYMENT" means the amount, if any, owed by the
trust or the Swap Provider upon a Swap Early Termination.

          A "TERMINATION EVENT" under the Interest Rate Swap Agreement consists
of the following standard events under the ISDA Master Agreement and the
Additional Termination Events described below:

          o    "Illegality" (which generally relates to changes in law causing
               it to become unlawful for either party to perform its obligations
               under the Interest Rate Swap Agreement),

          o    "Tax Event" (which generally relates to either party to the
               Interest Rate Swap Agreement, as a result of changes in law,
               receiving a payment under the Interest Rate Swap Agreement from
               which


                                       52



               an amount has been deducted or withheld for or on account of
               taxes or making an additional payment of any such amount) and

          o    "Tax Event Upon Merger" (which generally relates to either party
               to the Interest Rate Swap Agreement, as a result of a merger or
               similar transaction, receiving a payment under the Interest Rate
               Swap Agreement from which an amount has been deducted or withheld
               for or on account of taxes or making an additional payment of any
               such amount), as described in Sections 5(b)(i), 5(b)(ii) and
               5(b)(iii) of the ISDA Master Agreement.

          In addition, there are "Additional Termination Events" (as defined in
the Interest Rate Swap Agreement), including if the trust should terminate, if
the Pooling and Servicing Agreement is amended or modified without the prior
written consent of the Swap Provider where written consent is required or if,
pursuant to the terms of the Pooling and Servicing Agreement, the Master
Servicer exercises the option to purchase the Mortgage Loans in an
Overcollateralized Loan Group and any failure to comply with the Downgrade
Provisions.

          The Supplemental Interest Trust will not be required to make any
gross-up payments to the Swap Provider on account of any tax withholding.

          The Sponsor believes that the maximum probable exposure to the Swap
Provider under any Interest Rate Swap Agreement will be less than 10% of the
initial class balances of the Certificates in the Overcollateralized Loan Group.
If such exposure equals or exceeds 10%, appropriate disclosure will be provided
in the Term Sheet.

          The Swap Account

          On or before the Closing Date, if specified in the related Term Sheet,
the Securities Administrator, in its capacity as trustee (the "SUPPLEMENTAL
INTEREST TRUST TRUSTEE") of the supplemental interest trust, a separate trust
created under the Pooling and Servicing Agreement (the "SUPPLEMENTAL INTEREST
TRUST") will enter into an Interest Rate Swap Agreement with the Swap Provider
for the benefit of the holders of Certificates in an Overcollateralized Loan
Group only. Any Net Swap Payments made by the Swap Provider will be distributed
in accordance with the Pooling and Servicing Agreement. The Supplemental
Interest Trust Trustee will be required to deposit into the Swap Account an
amount equal to the Net Swap Payment, if any, payable by the Supplemental
Interest Trust Trustee to the Swap Provider on such Distribution Date. Also, on
each Distribution Date, the Supplemental Trust Trustee shall deposit into the
Swap Account the Net Swap Payment, if any, received by the Supplemental Interest
Trust Trustee from the Swap Provider on such Distribution Date.

          On each Distribution Date, to the extent required, following the
distribution of the Monthly Excess Cashflow and withdrawals from the Cap
Carryover Reserve Account, the Supplemental Interest Trust Trustee will withdraw
from amounts in the Swap Account to distribute to the Certificates in an
Overcollateralized Loan Group, amounts in the order of priority set forth in the
Interest Rate Swap Agreement.

THE SUPPLEMENTAL INTEREST TRUST TRUSTEE

          The Supplemental Interest Trust Trustee will perform all of the
obligations of the trustee under the Interest Rate Swap Agreement. With regard
to the Supplemental Interest Trust, the Supplemental Interest Trust Trustee will
only be obligated to make payments to the Issuing Entity under the Interest Rate
Swap Agreement to the extent that the Supplemental Interest Trust receives the
related funds from the Swap Provider, and will only be obligated to make
payments to the Swap Provider under the Interest Rate Swap Agreement to the
extent that the Supplemental Interest Trust receives the related funds from the
Issuing Entity. The Supplemental Interest Trust Trustee will be entitled to
reimbursement or indemnification by the Issuing Entity for any loss, liability
or expense arising out of or in connection with the Supplemental Interest Trust
as set forth in the Pooling and Servicing Agreement except any such loss,
liability or expense as may arise from its bad faith, willful misconduct or
negligence.


                                       53



                       PREPAYMENT AND YIELD CONSIDERATIONS

          Delinquencies on the Mortgage Loans in a Loan Group which are not
advanced by or on behalf of a Servicer (because amounts, if advanced, would be
nonrecoverable), will adversely affect the yield on the Senior Certificates of
the related Group and the Subordinate Certificates. Because of the priority of
distributions, shortfalls resulting from delinquencies on the Mortgage Loans of
a Loan Group not so advanced will be borne first by the related Subordinate
Certificates (beginning with the class of Subordinate Certificates with the
lowest payment priority) and then by the Senior Certificates of the related
Group.

          Net Interest Shortfalls will adversely affect the yields on the Senior
Certificates entitled to distributions of interest and the Subordinate
Certificates of the related Group. In addition, losses generally will be borne
first by the Subordinate Certificates of the related Group, as described in this
Disclosure Supplement under "Description of the Certificates--Allocation of
Losses." The yields on the Offered Certificates will depend on the rate and
timing of Realized Losses on the applicable Mortgage Loans in the related Loan
Group or Loan Groups.

          Except with respect to Floating Rate Certificates and Inverse Floating
Rate Certificates, the effective yields to investors will be lower than the
yields otherwise produced by the applicable rate at which interest is passed
through to investors and the purchase price of their Certificates because
monthly distributions will not be payable to investors until the distribution
date (or, if not a business day, the next business day) set forth in the Term
Sheet of the month following the month in which interest accrues on the Mortgage
Loans (without any additional distribution of interest or earnings thereon in
respect of such delay).

PREPAYMENT CONSIDERATIONS AND RISKS

          Because principal payments on the Mortgage Loans in a Loan Group will
be distributed currently on the Senior Certificates of the related Group
entitled to payments of principal and the Subordinate Certificates of the
related Group, the rate of principal payments on the Offered Certificates
entitled to payments of principal, the aggregate amount of each interest payment
on the Offered Certificates entitled to interest payments, and the yield to
maturity of Offered Certificates purchased at a price other than par are
directly related to the rate of payments of principal on the applicable Mortgage
Loans in the related Loan Group or Loan Groups. The principal payments on the
Mortgage Loans may be in the form of scheduled principal payments or principal
prepayments (for this purpose, the term "principal prepayment" includes
prepayments and any other recovery of principal in advance of its scheduled due
date, including repurchases and liquidations due to default, casualty,
condemnation and the like). Any such prepayments will result in distributions to
you of amounts that would otherwise be distributed over the remaining term of
the Mortgage Loans. See "Prepayment and Yield Considerations" in the Prospectus.

          The rate at which mortgage loans in general prepay may be influenced
by a number of factors, including general economic conditions, mortgage market
interest rates, availability of mortgage funds and homeowner mobility.

o    In general, if prevailing mortgage interest rates fall significantly below
     the mortgage interest rates on the Mortgage Loans, the Mortgage Loans are
     likely to prepay at higher rates than if prevailing mortgage interest rates
     remain at or above the mortgage interest rates on the Mortgage Loans.

o    Conversely, if prevailing mortgage interest rates rise above the mortgage
     interest rates on the Mortgage Loans, the rate of prepayment would be
     expected to decrease.

o    Certain of the Mortgage Loans may be Interest-Only Mortgage Loans. At the
     end of the interest only period, the payments on such Mortgage Loans will
     be recalculated to fully amortize over the remaining life of the loan and
     the mortgagor will be required to make payments of principal and interest
     which may increase the burden of the mortgagor and may increase the risk of
     default under the Mortgage Loan.

          The timing of changes in the rate of prepayments may significantly
affect the actual yield to you, even if the average rate of principal
prepayments is consistent with your expectations. In general, the earlier the
payment of principal of the Mortgage Loans the greater the effect on your yield
to maturity. As a result, the effect on your yield


                                       54



of principal prepayments occurring at a rate higher (or lower) than the rate you
anticipate during the period immediately following the issuance of the
Certificates will not be offset by a subsequent like reduction (or increase) in
the rate of principal prepayments. You should also consider the risk, in the
case of an Offered Certificate purchased at a discount, particularly any
Principal-Only Certificate, that a slower than anticipated rate of payments in
respect of principal (including prepayments) on the Mortgage Loans in the
related Loan Group (or on any Discount Mortgage Loans, in the case of any
Principal-Only Certificates) will have a negative effect on the yield to
maturity of such Offered Certificate. You should also consider the risk, in the
case of an Offered Certificate purchased at a premium, particularly an
Interest-Only Certificate (which has no class balance), that a faster than
anticipated rate of payments in respect of principal (including prepayments) on
the related Mortgage Loans in the related Loan Group will have a negative effect
on the yield to maturity of such Offered Certificate. You must make your own
decisions as to the appropriate prepayment assumptions to be used in deciding
whether to purchase Offered Certificates.

          Mortgagors are permitted to prepay the Mortgage Loans, in whole or in
part, at any time. Certain of the Mortgage Loans may require that the mortgagor
pay to the lender a penalty under certain circumstances on certain prepayments
equal to a percentage of the principal amount prepaid. These premiums may
discourage a mortgagor from prepaying its Mortgage Loan during the applicable
period. Prepayment premiums will be retained by the applicable Servicer as
additional compensation. The rate of payment of principal may also be affected
by any repurchase of the Mortgage Loans permitted or required by the Pooling and
Servicing Agreement, including any termination. See "The Pooling and Servicing
Agreement and the Servicing Agreements--Optional Termination" in this Disclosure
Supplement and in the Term Sheet for a description of optional termination of
the Mortgage Loans. The Depositor, the Sponsor or an Originator may be required
to repurchase Mortgage Loans because of defective documentation or material
breaches in its representations and warranties with respect to such Mortgage
Loans. Any repurchases will shorten the weighted average lives of the related
classes of Offered Certificates.

          All of the Mortgage Loans will include "due-on-sale" clauses which
allow the holder of the Mortgage Loan to demand payment in full of the remaining
principal balance upon sale or certain transfers of the property securing such
Mortgage Loan. To the extent that the applicable Servicer has knowledge of the
conveyance or proposed conveyance of the underlying mortgaged property, such
Servicer generally will be required to enforce "due-on-sale" clauses to the
extent permitted by applicable law. However, the applicable Servicer will not
take any action in relation to the enforcement of any "due-on-sale" provisions
which would impair or threaten to impair any recovery under any related primary
mortgage insurance policy. See "Prepayment and Yield Considerations" in the
Prospectus. Acceleration of Mortgage Loans as a result of enforcement of such
"due-on-sale" provisions in connection with transfers of the related mortgaged
properties or the occurrence of certain other events resulting in acceleration
would affect the level of prepayments on the Mortgage Loans, thereby affecting
the weighted average lives of the related classes of Offered Certificates.

          In an Overcollateralized Group, the weighted average life and yield to
maturity of each class of Certificates will also be influenced by the amount of
Monthly Excess Cashflow Amounts generated by the Mortgage Loans and applied in
reduction of the class balances of such Certificates. The level of Monthly
Excess Cashflow Amounts available on any Distribution Date to be applied in
reduction of the class balances of the Certificates will be influenced by, among
other factors, (i) the overcollateralization level of the Mortgage Loans at such
time (i.e., the extent to which interest on the Mortgage Loans is accruing on a
higher principal balance than the aggregate class balance of the Certificates);
(ii) the delinquency and default experience of the Mortgage Loans; and (iii) the
levels of the indices for the Mortgage Loans. To the extent that greater amounts
of Monthly Excess Cashflow Amounts are distributed in reduction of the class
balance of a class of Certificates, the weighted average life thereof can be
expected to shorten. No assurance can be given as to the amount of Monthly
Excess Cashflow Amounts distributed at any time or in the aggregate.

          The mezzanine and subordinate Certificates are not expected to receive
any principal distributions until at least the Distribution Date three years
from the closing date (unless the class balances of the Senior Certificates are
reduced to zero prior thereto). As a result, the weighted average lives of the
mezzanine and subordinate certificates will be longer than would have been the
case if principal distributions were to be made on a pro rata basis. The longer
weighted average lives may increase the risk that an applied realized loss
amount will be allocated to one or more classes of mezzanine or Subordinate
Certificates.


                                       55



          ASSUMPTIONS RELATING TO TABLES

          Certain tables set forth in the Term Sheet (the "DECREMENT TABLES")
have been prepared on the basis of specified assumptions (the "MODELING
ASSUMPTIONS") described in the your Term Sheet.

          Although the characteristics of the mortgage loans for the Decrement
Tables have been prepared on the basis of the weighted average characteristics
of the Mortgage Loans which are expected to be in the Mortgage Pool, there is no
assurance that the Modeling Assumptions will reflect the actual characteristics
or performance of the Mortgage Loans or that the performance of the Offered
Certificates will conform to the results set forth in the tables.

          WEIGHTED AVERAGE LIVES OF THE OFFERED CERTIFICATES

          Weighted average life of a class of Offered Certificates refers to the
average amount of time that will elapse from the date of issuance of the
Certificate until each dollar in reduction of its balance is distributed to
investors. The weighted average lives of classes of Offered Certificates will be
influenced by, among other things, the rate at which principal of the Mortgage
Loans in the related Loan Group or Loan Groups is paid, which may be in the form
of scheduled principal payments or principal prepayments (for this purpose, the
term "prepayments" includes prepayments and liquidations due to default,
casualty, condemnation and the like), the timing of changes in such rate of
principal payments and the priority sequence of distributions of principal of
such Offered Certificates. The interaction of the foregoing factors may have
different effects on each class of Offered Certificates and the effects on any
such class may vary at different times during the life of such class.
Accordingly, no assurance can be given as to the weighted average life of any
such class of Offered Certificates. For an example of how the weighted average
lives of the Offered Certificates are affected by the foregoing factors at
various constant percentages of CPR, see the Decrement Tables in your Term
Sheet.

          Prepayments on mortgage loans are commonly measured relative to a
prepayment standard or model. The prepayment model used in this Disclosure
Supplement is the Constant Prepayment Rate ("CPR"), which represents an assumed
rate of principal prepayment each year relative to the then-outstanding
principal balance of a pool of mortgage loans for the life of such mortgage
loans. A prepayment assumption of 0% CPR assumes constant prepayment rates of 0%
per annum, a prepayment assumption of 5% CPR assumes constant prepayment rates
of 5% per annum, a prepayment rate of 25% CPR assumes constant prepayment rates
of 25% per annum and so forth, each of the then-outstanding principal balance of
such mortgage loans. CPR does not purport to be a historical description of
prepayment experience or a prediction of the anticipated rate of prepayment of
any pool of mortgage loans, including the Mortgage Loans. The Depositor believes
that no existing statistics of which it is aware provide a reliable basis for
investors to predict the amount or the timing of receipt of prepayments on the
Mortgage Loans.

          The Decrement Tables have been prepared on the basis of the Modeling
Assumptions described in the Term Sheet. There will likely be discrepancies
between the characteristics of the actual Mortgage Loans included in each Loan
Group and the characteristics of the mortgage loans assumed in preparing the
Decrement Tables. Any such discrepancy may have an effect upon the percentages
of initial class balances outstanding set forth in the Decrement Tables (and the
weighted average lives of the Offered Certificates). In addition, to the extent
that the Mortgage Loans that actually are included in a Loan Group have
characteristics that differ from those assumed in preparing the Decrement
Tables, the class balance of a class of Offered Certificates could be reduced to
zero earlier or later than indicated by such Decrement Tables.

          Furthermore, the information contained in the Decrement Tables with
respect to the weighted average life of any Offered Certificate is not
necessarily indicative of the weighted average life of that class of Offered
Certificates that might be calculated or projected under different or varying
prepayment assumptions.

          It is not likely that (i) all of the Mortgage Loans in a Loan Group
will have the interest rates or remaining terms to maturity assumed or (ii) the
Mortgage Loans in a Loan Group will prepay at the indicated percentage of CPR
until maturity. In addition, the diverse remaining terms to maturity of the
Mortgage Loans in a Loan Group (which include many recently originated Mortgage
Loans) could produce slower or faster reductions of the class balances than
indicated in the Decrement Tables at the various percentages of CPR specified.


                                       56



          Based upon the Modeling Assumptions, the Decrement Tables indicate the
projected weighted average life of each class of the Offered Certificates and
set forth the percentages of the initial class balance of each class that would
be outstanding after each of the dates shown at various constant percentages of
CPR.

          YIELD ON THE RESIDUAL CERTIFICATE

          The after-tax rate of return to the holder of the Residual Certificate
will reflect its pre-tax rate of return, reduced by the taxes required to be
paid with respect to such Certificate. If you hold the Residual Certificate, you
may have tax liabilities during the early years of each 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 expected
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 Certificate may be negative or may be otherwise significantly adversely
affected. The timing and amount of taxable income attributable to the Residual
Certificate will depend on, among other things, the timing and amounts of
prepayments and losses experienced with respect to the Mortgage Loans.

          If you own the 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 Disclosure Supplement
and in the Prospectus.

          YIELD ON THE SUBORDINATE CERTIFICATES

          The weighted average life of, and the yield to maturity on, the
Subordinate Certificates (in increasing order of their seniority beginning with
the Subordinate Certificate with the highest payment priority then outstanding),
will be progressively more sensitive to the rate and timing of mortgagor
defaults and the severity of ensuing losses on the Mortgage Loans in the related
Loan Group or Loan Groups. If the actual rate and severity of losses on the
Mortgage Loans in the related Loan Group or Loans Groups is higher than those
you assumed, the actual yield to maturity of your Subordinate Certificate may be
lower than the yield you expected. The timing of losses on Mortgage Loans in the
related Loan Group or Loans Groups will also affect your actual yield to
maturity, even if the rate of defaults and severity of losses over the life of
the Issuing Entity are consistent with your expectations. In general, the
earlier a loss occurs, the greater the effect on an investor's yield to
maturity. The Realized Losses on the Mortgage Loans in a Loan Group will be
allocated to reduce the class balance of the applicable class of Subordinate
Certificates (as described in this Disclosure Supplement under "Description of
the Certificates--Allocation of Losses"), without the receipt of cash equal to
the reduction. In addition, shortfalls in cash available for distributions on
the Subordinate Certificates will result in a reduction in the class balance of
the class of Subordinate Certificates then outstanding (beginning with the class
of Subordinate Certificates with the lowest payment priority) if and to the
extent that the aggregate class balance of Certificates, following all
distributions and the allocation of Realized Losses on a Distribution Date,
exceeds the sum of the Adjusted Pool Amount. As a result of such reductions,
less interest will accrue on that class of Subordinate Certificates than
otherwise would be the case. In addition, in a Shifting Interest Transaction,
the yield to maturity of the Subordinate Certificates will also be affected by
the disproportionate allocation of principal prepayments to the related Senior
Certificates entitled to receive payments of principal, Net Interest Shortfalls,
other cash shortfalls in the Pool Distribution Amounts and distribution of funds
to the Senior Certificates of a Group in related to the Shifting Interest Loan
Group.

          YIELD CONSIDERATIONS WITH RESPECT TO THE OFFERED SUBORDINATE
CERTIFICATES

          Defaults on mortgage loans may be measured relative to a default
standard or model. The model used in the Term Sheet, the standard default
assumption ("SDA"), represents an assumed rate of default each month relative to
the outstanding performing principal balance of a pool of new mortgage loans. A
default assumption of 100% SDA assumes constant default rates of 0.02% per annum
of the outstanding principal balance of such mortgage loans in the first month
of the life of the mortgage loans and an additional 0.02% per annum in each
month thereafter until the 30th month. Beginning in the 30th month and in each
month thereafter through the 60th month of the life of the mortgage loans, 100%
SDA assumes a constant default rate of 0.60% per annum each month. Beginning in
the 61st month and in each month thereafter through the 120th month of the life
of the mortgage loans, 100% SDA assumes that the constant default rate declines
each month by 0.0095% per annum, and that the constant default rate remains at
0.03% per annum in each month after the 120th month. For the related tables in
your Term


                                       57



Sheet, it is assumed that there is no delay between the default and liquidation
of the mortgage loans. As used in the related tables, "0% SDA" assumes no
defaults. SDA is not a historical description of default experience or a
prediction of the rate of default of any pool of mortgage loans.

                                 CREDIT SUPPORT

          The Term Sheet will describe the credit support to be provided for the
classes of Offered Certificates.

                                 USE OF PROCEEDS

          The Depositor will apply the net proceeds of the sale of the Offered
Certificates against the purchase of the Mortgage Loans from the Sponsor.

                         FEDERAL INCOME TAX CONSEQUENCES

          Elections will be made to treat certain segregated portions of the
Issuing Entity (exclusive of any Reserve Fund, any Interest Rate Swap Agreement,
any Swap Account, any Supplemental Interest Trust, any Cap Carryover Reserve
Account and any Yield Maintenance Agreement and payments thereunder) as one or
more separate "real estate mortgage investment conduits" (each, a "REMIC") for
federal income tax purposes under the Code. Any Reserve Fund, Interest Rate Swap
Agreement, Swap Account, Supplemental Interest Trust, Cap Carryover Reserve
Account or Yield Maintenance Agreement will not be an asset of any REMIC elected
by the Issuing Entity.

o    The Offered Certificates (other than as described below) other than any
     offered Residual Certificate will constitute "regular interests" in a
     REMIC.

o    Generally, for any Class of Offered Certificates that is a Component
     Certificate, each Component, rather than the Class itself, will constitute
     the "regular interest" in the related REMIC.

o    A Residual Certificate will represent the sole "residual interest" in each
     related REMIC elected by the Issuing Entity.

o    An Offered Certificate that has a right to receive payments in respect of
     Cap Carryover Amounts will represent two separate assets for federal income
     tax purposes: (i) a "regular interest" in a REMIC and (ii) the right to
     receive payments in respect of such Cap Carryover Amounts and in certain
     circumstances the obligation to make payments to a Swap Account or a
     Supplemental Interest Trust.

          For purposes of the following discussion, (i) the "regular interest"
portion of a Certificate is a "REGULAR INTEREST" and (ii) the right to receive
payments in respect of any Cap Carryover Amounts and in certain circumstances
the obligation to make payments to a Swap Account or a Supplemental Interest
Trust is a "NOTIONAL PRINCIPAL ARRANGEMENT."

          Upon the issuance of the Offered Certificates, Hunton & Williams LLP
will deliver its opinion to the effect that, assuming compliance with the
Pooling and Servicing Agreement, for federal income tax purposes, each REMIC
elected by the Issuing Entity will qualify as a REMIC within the meaning of
Section 860D of the Code.

          See "Federal Income Tax Consequences--Federal Income Tax Consequences
for REMIC Certificates" in the Prospectus.

          REGULAR INTERESTS

          The Regular Interests generally will be treated as debt instruments
issued by a REMIC for federal income tax purposes. Income on the Regular
Interest must be reported under an accrual method of accounting.

          Certain of the Offered Certificates may, depending on their respective
issue prices, be treated for federal income tax purposes as having been issued
with original issue discount. Any Interest-Only Certificate or Principal-


                                       58



Only Certificate will be issued with original issue discount. See "Federal
Income Tax Consequences--Federal Income Tax Consequences for REMIC
Certificates--Taxation of Regular Certificates--Original Issue Discount" in the
Prospectus. Certain Regular Interests may be treated for federal income tax
purposes as having been issued at a premium. Whether any holder of such a
Regular Interest will be treated as holding a Regular Interest with amortizable
bond premium will depend on such holder's purchase price and the distributions
remaining to be made on such Regular Interest at the time of its acquisition by
such holder. Holders of such Regular Interest should consult their own tax
advisors regarding the possibility of making an election to amortize such
premium. See "Federal Income Tax Consequences--Federal Income Tax Consequences
for REMIC Certificates--Taxation of Regular Certificates--Premium" in the
Prospectus. For purposes of determining the amount and the rate of accrual of
original issue discount and market discount, the Depositor intends to assume
that there will be prepayments on the Mortgage Loans at such rate or rates as
set forth in the Term Sheet. No representation is made as to the actual rate at
which the Mortgage Loans will be prepaid.

          Holders of the Certificates in an Overcollateralized Group subject to
a Notional Principal Arrangement must allocate their basis between their Regular
Interest and their Notional Principal Contract Arrangement as set forth below
under "-- Taxation of Notional Principal Contract Arrangements." The Regular
Interest will be entitled to receive interest and principal payments at the
times and in the amounts equal to those made on the Offered Certificate in an
Overcollateralized Group to which it corresponds. As a result of the foregoing,
the amount of distributions on the Regular Interest may exceed the actual amount
of distributions on the Offered Certificate in an Overcollateralized Group.

          The Regular Interest (but not the Notional Principal Contract
Arrangement) portion of an Offered Certificate will be treated as regular
interests in a REMIC under Section 860G of the Code as stated above.
Accordingly, to the extent described in the Prospectus:

o    such Regular Interests will be treated as assets described in Section
     7701(a)(19)(C) of the Code;

o    such Regular Interests will be treated as "real estate assets" within the
     meaning of Section 856(c)(4)(A) of the Code;

o    such Regular Interests will be treated as interest on obligations secured
     by mortgages on real property within the meaning of Section 856(c)(3)(B) of
     the Code; and

o    such Regular Interests will be treated as "qualified mortgages" within the
     meaning of Section 860G(a)(3) of the Code.

          However, in an Overcollateralized Group, no portion of an Offered
Certificateholder's basis or income allocable to a Notional Principal Contract
Arrangement will qualify for such treatment. As a result, the Offered
Certificates in an Overcollateralized Group subject to a Notional Principal
Arrangement generally are not suitable investments for inclusion in another
REMIC.

          See "Federal Income Tax Consequences--Federal Income Tax Consequences
for REMIC Certificates--Status of REMIC Certificates" in the Prospectus.

          TAXATION OF THE NOTIONAL PRINCIPAL CONTRACT ARRANGEMENTS

          General

          Each holder of an Offered Certificate in an Overcollateralized Group
subject to a Notional Principal Arrangement will be treated for federal income
tax purposes as having entered into a notional principal contract on the date it
purchases its Certificate.

          In general, any such holders must allocate the price they pay for such
Offered Certificates in an Overcollateralized Group between the Regular Interest
and the Notional Principal Contract Arrangement based on their relative fair
market values. To the extent rights to receive payments are determined to have a
value on the Closing Date that is greater than zero, a portion of such purchase
price will be allocable to such rights, and such portion will be treated as a
cap premium (the "CAP PREMIUM") paid or received by such holders. Any such
holder


                                       59



will be required to amortize the Cap Premium under a level payment method as if
the Cap Premium represented the present value of a series of equal payments made
over the life of the applicable Notional Principal Contract Arrangement
(adjusted to take into account decreases in notional principal amount),
discounted at a rate equal to the rate used to determine the amount of the Cap
Premium (or some other reasonable rate). Prospective purchasers of Offered
Certificates in an Overcollateralized Group are encouraged to consult their own
tax advisors regarding the appropriate method of amortizing any Cap Premium. The
regulations governing notional principal contracts (the "NOTIONAL PRINCIPAL
CONTRACT REGULATIONS") treat a nonperiodic payment made under a notional
principal contract as a loan for federal income tax purposes if the payment is
"significant." It is not known whether any Cap Premium would be treated in part
as a loan under the Notional Principal Contract Regulations.

          Under the Notional Principal Contract Regulations (i) all taxpayers
must recognize periodic payments with respect to a notional principal contract
under the accrual method of accounting, and (ii) any periodic payments received
under the applicable Notional Principal Contract Arrangement must be netted
against payments, if any, deemed made as a result of the Cap Premiums over the
recipient's taxable year, rather than accounted for on a gross basis. Net income
or deduction with respect to net payments under a notional principal contract
for a taxable year should constitute ordinary income or ordinary deduction. The
Internal Revenue Service could contend the amount is capital gain or loss, but
such treatment is unlikely, at least in the absence of further regulations. Any
regulations requiring capital gain or loss treatment presumably would apply only
prospectively. Individuals may be limited in their ability to deduct any such
net deduction and are encouraged to consult their tax advisors prior to
investing in the Offered Certificates in an Overcollateralized Group.

          Any payments in excess of the amounts payable on the corresponding
Regular Interest made to a beneficial owner of an Offered Certificate in an
Overcollateralized Group that is subject to a Notional Principal Arrangement
will be treated as having been received as a payment on a notional principal
contract. To the extent the sum of such periodic payments for any year exceeds
that year's amortized cost of any Cap Carryover Amounts, such excess represents
net income for that year. Conversely, to the extent that the amount of that
year's amortized cost exceeds the sum of the periodic payments, such excess
shall represent a net deduction for that year. In addition, any amounts payable
on such Regular Interest in excess of the amount of payments on the Offered
Certificate in an Overcollateralized Group to which it relates will be treated
as having been received by the beneficial owners of such Certificates and then
paid by such owners to the related Reserve Fund, Swap Account, Cap Carryover
Account or Supplemental Interest Trust, as applicable, pursuant to the Interest
Rate Swap Agreement or Yield Maintenance Agreement, as applicable, and such
excess should be treated as a periodic payment on a notional principal contract
that is made by the beneficial owner during the applicable taxable year and that
is taken into account in determining the beneficial owner's net income or net
deduction with respect to any Cap Carryover Amounts for such taxable year.
Although not clear, net income or a net deduction with respect to the Cap
Carryover Amount should be treated as ordinary income or as an ordinary
deduction. Holders of the Offered Certificates in an Overcollateralized Group
that is subject to a Notional Principal Arrangement are advised to consult their
own tax advisors regarding the tax characterization and timing issues relating
to payments and obligations under the Notional Principal Contract Arrangement.

          A Certificateholder's ability to recognize a net deduction with
respect to the Notional Principal Contract Arrangement is limited under Sections
67 and 68 of the Code in the case of (i) estates and trusts and (ii) individuals
owning an interest in such component directly or through a "pass-through entity"
(other than in connection with such individual's trade or business).
Pass-through entities include partnerships, S corporations, grantor trusts and
non-publicly offered regulated investment companies, but do not include estates,
nongrantor trusts, cooperatives, real estate investment trusts and publicly
offered regulated investment companies. Further, such a Certificateholder will
not be able to recognize a net deduction with respect the Notional Principal
Contract Arrangement in computing the Certificateholder's alternative minimum
tax liability.

          It is possible that the right to receive payments in respect of the
Notional Principal Contract Arrangement could be treated as a partnership among
the applicable holders of the Certificates in an Overcollateralized Group that
are subject to the Notional Principal Arrangement, in which case holders of such
Certificates potentially would be subject to different timing of income and
foreign holders of such Certificates could be subject to withholding in respect
of any related Cap Carryover Amount. Holders of the Offered Certificates in an
Overcollateralized Group that is subject to a Notional Principal Arrangement are
advised to consult their own tax advisors regarding the


                                       60



allocation of issue price, timing, character and source of income and deductions
resulting from the ownership of their Certificates.

          Any amount of proceeds from the sale, redemption or retirement of an
Offered Certificate in an Overcollateralized Group that is considered to be
allocated to rights under a Notional Principal Contract Arrangement would be
considered a "termination payment" under the Notional Principal Contract
Regulations. It is anticipated that the related Trustee will account for any
termination payments for reporting purposes in accordance with the Notional
Principal Contract Regulations, as described below.

          Termination Payments

          Any amount of sales proceeds that is considered to be allocated to the
selling Certificateholder's rights under the applicable Notional Principal
Contract Arrangement in connection with the sale or exchange of an Offered
Certificate in an Overcollateralized Group would be considered a "termination
payment" under the Notional Principal Contract Regulations allocable to that
Offered Certificate in an Overcollateralized Group. Such holder of an Offered
Certificate will have gain or loss from such a termination of a Notional
Principal Contract Arrangement equal to (i) any termination payment it received
or is deemed to have received minus (ii) the unamortized portion of any Cap
Premium paid (or deemed paid) by such Certificateholder upon entering into or
acquiring its interest in a Notional Principal Contract Arrangement.

          Gain or loss realized upon the termination of a Notional Principal
Contract Arrangement will generally be treated as capital gain or loss.
Moreover, in the case of a bank or thrift institution, Code Section 582(c) would
likely not apply to treat such gain or loss as ordinary.

          See "Federal Income Tax Consequences--Federal Income Tax Consequences
for REMIC Certificates--Status of REMIC Certificates" in the Prospectus.

          RESIDUAL CERTIFICATE

          If you hold the Residual Certificate, you must include the taxable
income of each of the REMICs in determining your federal taxable income. Your
resulting tax liability may exceed cash distributions to you during certain
periods. In addition, all or a portion of the taxable income you recognize from
the Residual Certificate may be treated as "excess inclusion" income, which,
among other consequences, will result in your inability to use net operating
losses to offset such income from each of the REMICs. The Holder of the Residual
Certificate generally must account separately for its interest in each REMIC and
may not offset income from one REMIC with losses from another REMIC.

          You should consider carefully the tax consequences of any investment
in the Residual Certificate discussed in the Prospectus and should consult your
tax advisors with respect to those consequences. See "Federal Income Tax
Consequences" in the Prospectus. Specifically, you should consult your tax
advisors regarding whether, at the time of acquisition, the Residual Certificate
will be treated as a "noneconomic" residual interest and "tax avoidance
potential" residual interest. See "Federal Income Tax Consequences--Federal
Income Tax Consequences for REMIC Certificates--Taxation of Residual
Certificates--Tax-Related Restrictions on Transfer of Residual
Certificates--Noneconomic Residual Interests," "--Foreign Investors" and "--Mark
to Market Regulations" in the Prospectus. Additionally, for information
regarding Prohibited Transactions, see "Federal Income Tax Consequences--Federal
Income Tax Consequences for REMIC Certificates--Taxes That May Be Imposed on the
REMIC Pool--Prohibited Transactions" in the Prospectus.

          BACKUP WITHHOLDING AND REPORTING REQUIREMENTS

          Certain holders or other beneficial owners of Offered Certificates may
be subject to backup withholding with respect to interest paid on the Offered
Certificates if those holders or beneficial owners, upon issuance, fail to
supply the Securities Administrator or their broker with their taxpayer
identification number, furnish an incorrect taxpayer identification number, fail
to report interest, dividends or other "reportable payments" (as defined in the
Code) properly, or, under certain circumstances, fail to provide the Securities
Administrator or their broker with a


                                       61



certified statement, under penalty of perjury, that they are not subject to
backup withholding. See "Federal Income Tax Consequences--Federal Income Tax
Consequences for REMIC Certificates--Backup Withholding" in the Prospectus.

          The Trustee or Securities Administrator, on behalf of the Issuing
Entity, will be required to report annually to the IRS and to each
certificateholder of record, the amount of interest paid (and original issue
discount accrued, if any) on the Regular Certificates and the amount of interest
withheld for federal income taxes, if any, for each calendar year, except as to
exempt holders (generally, holders that are corporations, certain tax-exempt
organizations or nonresident aliens who provide certification as to their status
as nonresidents). As long as the only certificateholder of record of the Offered
Certificates (other than the Residual Certificate) is Cede & Co., as nominee for
DTC, beneficial owners of the Offered Certificates and the IRS will receive tax
and other information including the amount of interest paid on such Certificates
from DTC Participants rather than from the Trustee or Securities Administrator.
(The Trustee or Securities Administrator, however, will respond to requests for
necessary information to enable Participants and certain other persons to
complete their reports.) See "Federal Income Tax Consequences--Federal Income
Tax Consequences for REMIC Certificates--Reporting Requirements" in the
Prospectus.

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

                                   STATE 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. Investors considering an investment in the Offered
Certificates should consult their tax advisors regarding such tax consequences.

                              ERISA CONSIDERATIONS

          A fiduciary or other person acting on behalf of any employee benefit
plan or arrangement, including an individual retirement account (an "IRA"),
subject to ERISA, the Code or any federal, state or local law ("SIMILAR LAW")
which is similar to ERISA or the Code (collectively, a "BENEFIT PLAN") should
carefully review with its legal advisors whether the purchase or holding of an
Offered Certificate could give rise to a transaction prohibited or not otherwise
permissible under ERISA, the Code or Similar Law. See "Benefit Plan
Considerations" in the Prospectus.

          The U.S. Department of Labor has extended to Banc of America
Securities LLC ("BANC OF AMERICA SECURITIES") an administrative exemption (the
"EXEMPTION") from certain of the prohibited transaction rules of ERISA and the
related excise tax provisions of Section 4975 of the Code for the initial
purchase, the holding and the subsequent resale by certain Benefit Plans of
certificates in pass-through trusts that consist of certain receivables, loans
and other obligations that meet the conditions and requirements of the
Exemption. The Exemption applies to mortgage loans such as the Mortgage Loans,
but does not cover certain IRAs and certain employee benefit plans covering only
self-employed individuals which are subject to the prohibited transaction
provisions of the Code.

          For a general description of the Exemption and the conditions that
must be satisfied for the Exemption to apply, see "Benefit Plan Considerations"
in the Prospectus.

          The Exemption may cover the acquisition and holding of the Offered
Certificates (other than the Residual Certificate and exclusive of any right of
the Offered Certificates in an Overcollateralized Group to receive payments from
a Supplemental Interest Trust) by the Benefit Plans to which it applies,
provided, that all conditions of the Exemption other than those within the
control of the investors will be met.

          For so long as the holder of an Offered Certificate in an
Overcollateralized Group also holds an interest in a Supplemental Interest
Trust, the holder will be deemed to have acquired and be holding the Offered
Certificate in an Overcollateralized Group without the right to receive payments
from the Supplemental Interest Trust and, separately, the right to receive
payments from the Supplemental Interest Trust. The Exemption is not applicable
to the acquisition, holding and transfer of an interest in the Supplemental
Interest Trust. In addition, while the


                                       62



Supplemental Interest Trust is in existence, it is possible that not all of the
requirements for the Exemption to apply to the acquisition, holding and transfer
of Offered Certificates in an Overcollateralized Group will be satisfied.
However, if the Exemption is not available, there may be other exemptions that
apply. Accordingly, no Benefit Plan or other person acting on behalf of or using
assets of a Benefit Plan may acquire or hold generally an Offered Certificate in
an Overcollateralized Group subject to a Notional Principal Arrangement
involving an Interest Rate Swap Agreement while the related Supplemental
Interest Trust is in existence, unless (1) such Benefit Plan is an accredited
investor within the meaning of the Exemption and (2) such acquisition or holding
is eligible for the exemptive relief available under Department of Labor
Prohibited Transaction Class Exemption 84-14 (for transactions by independent
"qualified professional asset managers"), 91-38 (for transactions by bank
collective investment funds), 90-1 (for transactions by insurance company pooled
separate accounts), 95-60 (for transactions by insurance company general
accounts) or 96-23 (for transactions effected by "in-house asset managers"). For
so long as any such Supplemental Interest Trust is in existence, each beneficial
owner of an Offered Certificate in an Overcollateralized Group subject to a
Notional Principal Arrangement involving an Interest Rate Swap Agreement or any
interest therein, shall be deemed to have represented, by virtue of its
acquisition or holding of the Offered Certificate in an Overcollateralized
Group, or interest therein, that either (i) it is not a Benefit Plan or other
person acting on behalf of or using the assets of a Benefit Plan or (ii) (A) it
is an accredited investor within the meaning of the Exemption and (B) the
acquisition and holding of such Certificate and the separate right to receive
payments from the Supplemental Interest Trust are eligible for the exemptive
relief available under one of the five prohibited transaction class exemptions
enumerated above.

          Benefit Plan investors are encouraged to consult with their legal
advisors concerning the impact of ERISA, the Code and Similar Law, the
applicability of the Exemption, and the potential consequences in their specific
circumstances, prior to making an investment in the Offered Certificates.
Moreover, each Benefit Plan fiduciary should determine whether under the
governing plan instruments and the applicable fiduciary standards of investment
prudence and diversification, an investment in the Offered Certificates is
appropriate for the Benefit Plan, taking into account the overall investment
policy of the Benefit Plan and the composition of the Benefit Plan's investment
portfolio.

          The Residual Certificate may not be purchased by or transferred to a
Benefit Plan or a person acting on behalf of or investing assets of a Benefit
Plan. See "Description of Certificates--Restrictions on Transfer of the Residual
Certificate" in this Disclosure Supplement.

                          REPORTS TO CERTIFICATEHOLDERS

          The Securities Administrator will prepare on a monthly basis a
statement containing, among other things, information relating to principal and
interest distributions on the Certificates, the status of the Mortgage Pool and
certain other information, as set forth in the Pooling and Servicing Agreement,
required under Item 1121 of Regulation AB (17 C.F.R. Section 229.1121), as
described under "Description of Certificates--Reports to Certificateholders" in
the Prospectus. In addition, the Master Servicer, each Servicer and certain
other parties will furnish to the Securities Administrator, and the Securities
Administrator will furnish to the Depositor, the compliance statements
assessments and attestation reports in accordance with Items 1122 and 1123 of
Regulation AB (17 C.F.R. Sections 229.1122 and 229.1123) detailed under
"Servicing of the Mortgage Loans--Evidence as to Compliance" in the Prospectus.

          Copies of these statements and reports will be filed on Form 10-D and
10-K with the Securities and Exchange Commission through its EDGAR system
located at http://www.sec.gov under the name of the Issuing Entity for so long
as the Issuing Entity is subject to the reporting requirement of the Securities
Exchange Act of 1934, as amended.

                                  LEGAL MATTERS

          The validity of and certain federal income tax matters relating to the
Offered Certificates will be passed upon for the Depositor and the Underwriter
by Hunton & Williams LLP, Charlotte, North Carolina.


                                       63



                             INDEX OF DEFINED TERMS

60+ Day Delinquent Loan.................................................      43
Accretion Termination Date..............................................      35
Accrued Certificate Interest............................................      42
Adjusted Pool Amount....................................................      42
Adjustment Date.........................................................      23
Administrative Fees.....................................................      31
Advance.................................................................      29
Aggregate Crossed Group Undercollateralized Amount......................      40
Aggregate Crossed Group Undercollateralized Group.......................      40
Appendix................................................................       7
Applied Realized Loss Amount............................................      46
Available Funds.........................................................      42
Banc of America Securities..............................................      62
Bankruptcy Losses.......................................................      41
BBA.....................................................................      36
Benefit Plan............................................................      62
Book-Entry Certificates.................................................      32
Cap.....................................................................      46
Cap Carryover Amount....................................................      47
Cap Carryover Reserve Account...........................................      47
Cap Premium.............................................................      59
Certificate Account.....................................................      29
Certificates............................................................      26
class balance...........................................................      36
Collateral Annex........................................................       7
Compensating Interest...................................................      29
component balance.......................................................      36
Counterparty............................................................      47
CPR.....................................................................      56
Credit Scores...........................................................      23
Cross Collateralized Structure..........................................       4
Crossed Group...........................................................       4
Crossed Loan Group......................................................       4
Debt Service Reduction..................................................      41
Decrement Tables........................................................      56
Deficient Valuation.....................................................      41
Definitive Certificates.................................................      32
Deleted Mortgage Loan...................................................      27
Determination Date......................................................      29
Disclosure Supplement...................................................       7
Distribution Date.......................................................      32
Downgrade Provision.....................................................      52
Eligible Substitute Mortgage Loan.......................................      28
Events of Default.......................................................      52
Exemption...............................................................      62
Extra Principal Distribution Amount.....................................      43
Final Scheduled Distribution Date.......................................      32
Foreclosure Profits.....................................................      31
Fractional Interest.....................................................      39
Gross Margin............................................................      23
Group...................................................................       4
Group Subordinate Amount................................................      36
Index...................................................................      24
Interest Accrual Period.................................................      34
Interest Carry Forward Amount...........................................      43
Interest Distribution Amount............................................      34
Interest Percentage.....................................................      43
Interest Settlement Rate................................................      36
IRA.....................................................................      62
ISDA Master Agreement...................................................      52
Issuing Entity..........................................................      25
LIBOR Determination Date................................................      36
LIBOR-Based Interest Accrual Period.....................................      34
Liquidated Mortgage Loan................................................      42
Liquidation Proceeds....................................................      33
Loan Group..............................................................       4
Loan-to-Value Ratio.....................................................      22
Master Servicer.........................................................      26
Master Servicer Custodial Account.......................................      28
MERS....................................................................      27
Modeling Assumptions....................................................      56
Monthly Excess Cashflow Allocation......................................      46
Monthly Excess Cashflow Amount..........................................      46
Monthly Excess Interest Amount..........................................      45
Mortgage File...........................................................      26
Mortgage Loan Purchase Agreement........................................      22
Mortgage Loans..........................................................      22
Mortgage Pool...........................................................      22
Net Interest Shortfall..................................................      34
Net Mortgage Interest Rate..............................................      36
Net Swap Payment........................................................      51
Non-Supported Interest Shortfall........................................      35
Notional Principal Arrangement..........................................      58
Notional Principal Contract Regulations.................................      60
Offered Subordinate Certificates........................................      32
One-Year CMT............................................................      24
One-Year LIBOR..........................................................      23
Original Subordinate Principal Balance..................................      38
Originators.............................................................      24
Overcollateralization Amount............................................      43
Overcollateralization Deficiency........................................      43
Overcollateralization Release Amount....................................      44
Overcollateralized Cap..................................................      46
Overcollateralized Group................................................       4
Overcollateralized Interest Remittance Amount...........................      42
Overcollateralized Loan Group...........................................       4
Overcollateralized Principal Distribution Amount........................      44
Overcollateralized Principal Remittance Amount..........................      44
Overcollateralized Senior Principal Distribution Amount.................      44
Overcollateralized Structure............................................       4
Pass-Through Rate.......................................................      46
Percentage Interest.....................................................      32
Periodic Cap............................................................      23


                                       64



PMI Policy..............................................................      22
Pool Distribution Amount................................................      33
Pool Distribution Amount Allocation.....................................      33
Pool Principal Balance..................................................      38
Pooling Agreement.......................................................      26
Prepayment Interest Shortfall...........................................      29
Principal Amount........................................................      37
Prospectus..............................................................       7
Purchase Price..........................................................      27
Rate Ceiling............................................................      23
Rate Floor..............................................................      23
Rating Agency Condition.................................................      48
Ratings Event...........................................................      47
Realized Loss...........................................................      41
Record Date.............................................................      32
Recovery................................................................      41
Regular Interest........................................................      58
Regular Interest Accrual Period.........................................      34
Reimbursement Amount....................................................      33
Relief Act Reduction....................................................      35
REMIC...................................................................      58
REMIC Regulations.......................................................      49
Remittance Date.........................................................      28
REO Property............................................................      29
Reserve Fund............................................................      48
Reserve Interest Rate...................................................      36
Scheduled Principal Payments............................................      37
SDA.....................................................................      57
Securities Administrator................................................      26
Senior Credit Support Depletion Date....................................      38
Senior Enhancement Percentage...........................................      44
Senior Percentage.......................................................      38
Senior Prepayment Percentage............................................      38
Senior Principal Distribution Amount....................................      38
Senior Specified Enhancement Percentage.................................      45
Servicer Custodial Account..............................................      28
Servicers...............................................................      25
Servicing Fee...........................................................      31
Servicing Fee Rate......................................................      31
Shifting Interest Group.................................................       4
Shifting Interest Loan Group............................................       4
Shifting Interest Structure.............................................       4
Similar Law.............................................................      62
Six-Month LIBOR.........................................................      24
Stacked Group...........................................................       4
Stacked Loan Group......................................................       4
Stacked Structure.......................................................       4
Stated Principal Balance................................................      38
Stepdown Date...........................................................      45
Strike Rate.............................................................      47
Subordinate Percentage..................................................      38
Subordinate Prepayment Percentage.......................................      39
Subordinate Principal Distribution Amount...............................      40
Substitution Adjustment Amount..........................................      28
Supplemental Interest Trust.............................................      53
Supplemental Interest Trust Trustee.....................................      53
Swap Account............................................................      52
Swap Default............................................................      52
Swap Early Determination................................................      52
Swap Provider...........................................................      52
Swap Provider Trigger Event.............................................      52
Swap Termination Payment................................................      52
Targeted Overcollateralization Amount...................................      45
Telerate page 3750......................................................      36
Term Sheet..............................................................       7
Termination Event.......................................................      52
Trigger Event...........................................................      45
U.S. Person.............................................................      50
Unscheduled Principal Payments..........................................      37
Yield Maintenance Agreement.............................................      47
Yield Maintenance Agreement Payment.....................................      47
Yield Maintenance Class.................................................      47


                                       65



                          TRANSACTION PARTIES APPENDIX

                      BANC OF AMERICA FUNDING 2006-G TRUST

                MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-G

                                 THE TRANSACTION

          On the closing date the Sponsor will sell the Mortgage Loans to the
Depositor, who will in turn deposit them into a New York common law trust, which
is the Issuing Entity. The trust will be formed by a pooling and servicing
agreement, to be dated the closing date, by and among the Depositor, the
Servicer and the Trustee.

          The transfer of the mortgage loans from the Sponsor to the Depositor
to the Issuing Entity in exchange for the Certificates is illustrated below:



                 ---------

                  SPONSOR

                 ---------                         OFFERED
                   |  /|\                       CERTIFICATES                  -----------
                   |   |
MORTGAGE LOANS     |   |     CASH                                          -> UNDERWRITER
                   |   |                                                  /
                  \|/  |                                                 / -- -----------
                 ---------                                              / /      |  /|\
                                                                       / /       |   |
                 DEPOSITOR -------------------------------------------- /        |   |
                           <--------------------------------------------         |   |
                 ---------                          CASH                         |   |
                   |  /|\                                         OFFERED        |   |      CASH
MORTGAGE LOANS     |   |     ALL CERTIFICATES                  CERTIFICATES      |   |
                  \|/  |                                                         |   |
                 ---------                                                      \|/  |
                                                                              -----------
                  ISSUING
                   ENTITY                                                      INVESTORS

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


                                  AFFILIATIONS

          Bank of America, National Association, which is the Sponsor, is the
direct parent of the Depositor and is an affiliate of Banc of America Securities
LLC. There are no additional relationships, agreements or arrangements outside
of this transaction among the affiliated parties that are material to an
understanding of the Offered Certificates.

          U.S. Bank National Association ("U.S. BANK"), a national banking
association, will act as the trustee and the custodian under the Pooling and
Servicing Agreement.

          Wells Fargo Bank ("WELLS FARGO BANK"), which is the Servicer, the
Originator and the Securities Administrator, is a national banking association
and a wholly-owned subsidiary of Wells Fargo & Company.


                                      A-1



                            THE TRUSTEE AND CUSTODIAN

          U.S. Bank National Association, a national banking association, will
act as the trustee (in such capacity, the "TRUSTEE") under the Pooling and
Servicing Agreement. U.S. Bank is a national banking association and a
wholly-owned subsidiary of U.S. Bancorp, which is currently ranked as the sixth
largest bank holding company in the United States with total assets exceeding
$209 billion as of December 31, 2005. As of December 31, 2005, U.S. Bancorp
served approximately 13.4 million customers, operated 2,419 branch offices in 24
states and had over 51,000 employees. A network of specialized U.S. Bancorp
offices across the nation, inside and outside its 24-state footprint, provides a
comprehensive line of banking, brokerage, insurance, investment, mortgage, trust
and payment services products to consumers, businesses, governments and
institutions.

          U.S. Bank has one of the largest corporate trust businesses in the
country with offices in 31 U.S. cities. The Pooling and Servicing Agreement will
be administered from U.S. Bank's corporate trust office located at 209 South
LaSalle Street, Suite 300, Chicago, Illinois 60604.

          U.S. Bank has provided corporate trust services since 1924. As of
December 31, 2005, U.S. Bank was acting as trustee with respect to 54,019
issuances of securities with an aggregate outstanding principal balance of over
$1.5 trillion. This portfolio includes corporate and municipal bonds,
mortgage-backed and asset-backed securities and collateralized debt obligations.

          On December 30, 2005, U.S. Bank purchased the corporate trust and
structured finance trust services businesses of Wachovia Corporation. Following
the closing of the acquisition, the Wachovia affiliate named as fiduciary or
agent, as applicable, under each client agreement will continue in that role
until U.S. Bank succeeds to that role in accordance with the terms of the
governing instrument or agreement and applicable law.

          As of December 31, 2005, U.S. Bank (and its affiliate U.S. Bank Trust
National Association) was acting as trustee on 575 issuances of prime
mortgage-backed securities with an outstanding aggregate principal balance of
approximately $215,303,100,000.00.

          The Trustee will hold the Mortgage Files held by it in one of its
custodial vaults, which is located in Frederick, Maryland. The Mortgage Files
are tracked electronically to identify that they are held by the Trustee
pursuant to the Pooling and Servicing Agreement. U.S. Bank National Association
uses a barcode tracking system to track the location of, and owner or secured
party with respect to, each file that it holds as custodian, including the
Mortgage Files held as Trustee. As of December 31, 2005, U.S. Bank National
Association holds approximately 4,092,000 document files for approximately 450
entities and has been acting as a custodian for approximately 20 years. These
figures do not include files held in the former Wachovia sites. Such information
will be available upon completion of systems conversion, which is expected to
occur in September of 2006.

          In its capacity as custodian, the Trustee will be responsible to hold
and safeguard the Mortgage Notes and other contents of the Mortgage Files on
behalf of the certificateholders.

                                 THE ORIGINATOR

          All of the Mortgage Loans were originated by Wells Fargo Bank, N.A.
(in such capacity, the "ORIGINATOR").

WELLS FARGO BANK, N.A.

          Wells Fargo Bank is an indirect, wholly-owned subsidiary of Wells
Fargo & Company. Wells Fargo Bank is a national banking association and is
engaged in a wide range of activities typical of a national bank.

          Wells Fargo Bank originates or acquires various types of residential
mortgage loans, including the following:


                                      A-2



          (a)  Fixed-rate mortgage loans having original terms to maturity of
               approximately twenty years to approximately forty years, and
               which mortgage loans were originated pursuant to Wells Fargo
               Bank's underwriting guidelines for "prime" mortgage loans and in
               connection with the purchases of residences of relocated
               employees of various corporate employers that participated in the
               relocation program of Wells Fargo Bank and of various
               non-participant employers ("PRIME 30-YEAR FIXED-RATE RELOCATION
               LOANS");

          (b)  Fixed-rate mortgage loans having original terms to maturity of
               approximately twenty years to approximately forty years, and
               which mortgage loans were originated pursuant to Wells Fargo
               Bank's underwriting guidelines for "prime" mortgage loans and
               which were not originated in connection with any relocation
               program ("PRIME 30-YEAR FIXED-RATE NON-RELOCATION LOANS");

          (c)  Fixed-rate mortgage loans having original terms to maturity of
               approximately ten years to approximately fifteen years, and which
               mortgage loans were originated pursuant to Wells Fargo Bank's
               underwriting guidelines for "prime" mortgage loans ("PRIME
               15-YEAR FIXED-RATE LOANS"); and

          (d)  Adjustable-rate mortgage loans having original terms to maturity
               of approximately ten years to approximately forty years, and
               which mortgage loans were originated pursuant to Wells Fargo
               Bank's underwriting guidelines for "prime" mortgage loans ("PRIME
               ADJUSTABLE-RATE LOANS").

          From and including 1996 and through 2005, Wells Fargo Bank and its
affiliates and predecessors originated or acquired a total of $2.063 trillion of
residential mortgage loans, which include the types of mortgage loans listed
above as well as other types of residential mortgage loans originated or
acquired by Wells Fargo Bank and its affiliates and predecessors. The table
below sets forth for each of the periods indicated the number and aggregate
original principal balance of mortgage loans originated or acquired by Wells
Fargo Bank (other than any mortgage loans sold to Fannie Mae, Freddie Mac and
Federal Home Loan Banks or mortgage loans insured or guaranteed by the
Government National Mortgage Association, Federal Housing Administration or
Department of Veterans Affairs) for each of the different "asset types" set
forth in the table below:



                                            2003                        2004                        2005
                                 -------------------------   -------------------------   -------------------------
                                              AGGREGATE                   AGGREGATE                   AGGREGATE
                                               ORIGINAL                    ORIGINAL                    ORIGINAL
                                              PRINCIPAL                   PRINCIPAL                   PRINCIPAL
                                  NO. OF      BALANCE OF      NO. OF      BALANCE OF      NO. OF      BALANCE OF
          ASSET TYPE              LOANS         LOANS         LOANS         LOANS         LOANS         LOANS
------------------------------   -------   ---------------   -------   ---------------   -------   ---------------

PRIME 30-YEAR FIXED-RATE
   RELOCATION LOANS                1,812   $   844,941,789       861   $   405,719,632     1,250   $   636,020,072
PRIME 30-YEAR FIXED-RATE
   NON-RELOCATION LOANS          111,425    40,134,188,567    24,267     9,865,227,462    44,978    21,686,693,836
PRIME 15-YEAR FIXED-RATE
   LOANS                          29,622    10,106,128,064     5,394     2,560,373,384     4,536     2,430,641,359
PRIME ADJUSTABLE-RATE LOANS      142,930    56,515,937,239   125,454    54,089,704,631   113,744    53,072,900,484


          Mortgage Loan Production Sources

          Wells Fargo Bank conducts a significant portion of its mortgage loan
originations through loan production offices (the "LOAN STORES") located
throughout all 50 states, the District of Columbia and the territories of the
United States. Wells Fargo Bank also conducts a significant portion of its
mortgage loan originations through centralized production offices located in Des
Moines, Iowa, Frederick, Maryland and Minneapolis, Minnesota. At the latter
locations, Wells Fargo Bank receives applications for home mortgage loans on
toll-free telephone numbers that can be called from anywhere in the United
States. Wells Fargo Bank also provides information and accepts applications
through the internet.


                                      A-3



          The following are Wells Fargo Bank's primary sources of mortgage loan
originations: (i) direct contact with prospective borrowers (including borrowers
with mortgage loans currently serviced by Wells Fargo Bank or borrowers referred
by borrowers with mortgage loans currently serviced by Wells Fargo Bank), (ii)
referrals by realtors, other real estate professionals and prospective borrowers
to the Loan Stores, (iii) referrals from selected corporate clients, (iv)
originations by Wells Fargo Bank's Private Mortgage Banking division (including
referrals from the private banking group of Wells Fargo Bank and other
affiliated banks), which specializes in providing services to individuals
meeting certain earnings, liquidity or net worth parameters, (v) several joint
ventures into which Wells Fargo Bank, through its wholly owned subsidiary, Wells
Fargo Ventures, LLC, has entered with realtors and banking institutions (the
"JOINT VENTURES") and (vi) referrals from mortgage brokers and similar entities.
In addition to its own mortgage loan originations, Wells Fargo Bank acquires
qualifying mortgage loans from other unaffiliated originators
("CORRESPONDENTS"). See "--Acquisition of Mortgage Loans from Correspondents"
below. The relative contribution of each of these sources to Wells Fargo Bank's
origination business, measured by the volume of loans generated, tends to
fluctuate over time.

          Wells Fargo Ventures, LLC owns at least a 50% interest in each of the
Joint Ventures, with the remaining ownership interest in each being owned by a
realtor or a banking institution having significant contact with potential
borrowers. Mortgage loans that are originated by Joint Ventures in which Wells
Fargo Bank's partners are realtors are generally made to finance the acquisition
of properties marketed by such Joint Venture partners. Applications for mortgage
loans originated through Joint Ventures are generally taken by Joint Venture
employees and underwritten by Wells Fargo Bank in accordance with its standard
underwriting criteria. Such mortgage loans are then closed by the Joint Ventures
in their own names and subsequently purchased by Wells Fargo Bank or affiliates
of Wells Fargo Bank.

          Wells Fargo Bank may directly contact prospective borrowers (including
borrowers with mortgage loans currently serviced by Wells Fargo Bank) through
general and targeted solicitations. Such solicitations are made through direct
mailings, mortgage loan statement inserts and television, radio and print
advertisements and by telephone. Wells Fargo Bank's targeted solicitations may
be based on characteristics such as the borrower's mortgage loan interest rate
or payment history and the geographic location of the mortgaged property.

          A majority of Wells Fargo Bank's corporate clients are companies that
sponsor relocation programs for their employees and in connection with which
Wells Fargo Bank provides mortgage financing. Eligibility for a relocation loan
is based, in general, on an employer's providing financial assistance to the
relocating employee in connection with a job-required move. Although subsidy
loans are typically generated through such corporate-sponsored programs, the
assistance extended by the employer need not necessarily take the form of a loan
subsidy. Not all relocation loans are generated by Wells Fargo Bank through
referrals from its corporate clients; some relocation loans are generated as a
result of referrals from mortgage brokers and similar entities and others are
generated through Wells Fargo Bank's acquisition of mortgage loans from other
originators. Also among Wells Fargo Bank's corporate clients are various
professional associations. These associations, as well as the other corporate
clients, promote the availability of a broad range of Wells Fargo Bank mortgage
products to their members or employees, including refinance loans, second-home
loans and investment-property loans.

          Acquisition of Mortgage Loans from Correspondents

          In order to qualify for participation in Wells Fargo Bank's mortgage
loan purchase programs, lending institutions must (i) meet and maintain certain
net worth and other financial standards, (ii) demonstrate experience in
originating residential mortgage loans, (iii) meet and maintain certain
operational standards, (iv) evaluate each loan offered to Wells Fargo Bank for
consistency with Wells Fargo Bank's underwriting guidelines or the standards of
a pool insurer and represent that each loan was underwritten in accordance with
Wells Fargo Bank standards or the standards of a pool insurer and (v) utilize
the services of qualified appraisers.

          The contractual arrangements with Correspondents may involve the
commitment by Wells Fargo Bank to accept delivery of a certain dollar amount of
mortgage loans over a period of time. This commitment may be satisfied either by
delivery of mortgage loans one at a time or in multiples as aggregated by the
Correspondent. The contractual arrangements with Correspondents may also involve
the delegation of all underwriting functions to such Correspondents ("DELEGATED
UNDERWRITING"), which will result in Wells Fargo Bank not performing any
underwriting functions prior to acquisition of the loan but instead relying on
such Correspondent's representations


                                       A-4



and, in the case of bulk purchase acquisitions from such Correspondents, Wells
Fargo Bank's post-purchase reviews of samplings of mortgage loans acquired from
such Correspondents regarding the Correspondent's compliance with Wells Fargo
Bank's underwriting standards. In all instances, however, acceptance by Wells
Fargo Bank is contingent upon the loans being found to satisfy Wells Fargo
Bank's program standards or the standards of a pool insurer. Wells Fargo Bank
may also acquire mortgage loans in negotiated transactions under which the
mortgage loans may have been originated by the seller or another third party
according to underwriting standards that may have varied materially from Wells
Fargo Bank's underwriting standards.

                      MORTGAGE LOAN UNDERWRITING STANDARDS

WELLS FARGO BANK'S UNDERWRITING STANDARDS

          The following is a summary of Wells Fargo Bank's "general"
underwriting standards and the substantially less restrictive underwriting
criteria applicable to Wells Fargo Bank's "retention program."

          General Standards. Wells Fargo Bank's underwriting standards are
applied by or on behalf of Wells Fargo Bank to 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 underwriting standards that guide the
determination 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., 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. Wells Fargo
Bank's guidelines for underwriting 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. With respect to certain Mortgage Loans,
the originators of such loans may have contracted with unaffiliated third
parties to perform the underwriting process. Except as described below, the
Mortgage Loans will be underwritten by or on behalf of Wells Fargo Bank
generally in accordance with the standards and procedures described herein.

          Wells Fargo Bank 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 Wells Fargo Bank 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 which 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 a greater
latitude in the application of borrower debt-to-income ratios.

          With respect to all mortgage loans underwritten by Wells Fargo Bank,
Wells Fargo Bank's underwriting of a mortgage loan may be based on data obtained
by parties other than Wells Fargo Bank that are involved at various stages in
the mortgage origination or acquisition process. This typically occurs under
circumstances in which loans are subject to an alternative approval process, as
when Correspondents, certain mortgage brokers or similar entities that have been
approved by Wells Fargo Bank to process loans on its behalf, or independent
contractors hired by Wells Fargo Bank to perform underwriting services on its
behalf ("contract underwriters") make initial


                                       A-5



determinations as to the consistency of loans with Wells Fargo Bank underwriting
guidelines. Wells Fargo Bank may also permit these third parties to utilize
scoring systems in connection with their underwriting process. The underwriting
of mortgage loans acquired by Wells Fargo Bank pursuant to a Delegated
Underwriting arrangement with a Correspondent is not reviewed prior to
acquisition of the mortgage loan by Wells Fargo Bank although the mortgage loan
file is reviewed by Wells Fargo Bank to confirm that certain documents are
included in the file. In addition, in order to be eligible to sell mortgage
loans to Wells Fargo Bank pursuant to a Delegated Underwriting arrangement, the
originator must meet certain requirements including, among other things, certain
quality, operational and financial guidelines. See "The Originators--Wells Fargo
Bank, N.A.--Acquisition of Mortgage Loans from Correspondents" in the prospectus
supplement.

          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 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 Mortgage
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. A mortgage
verification involves obtaining information regarding the borrower's payment
history with respect to any existing mortgage the applicant may have. This
verification is accomplished by either having the present lender complete a
verification of mortgage form, evaluating the information on the credit report
concerning the applicant's payment history for the existing mortgage,
communicating, either verbally or in writing, with the applicant's present
lender or analyzing cancelled checks provided by the applicant. Verifications of
income, assets or mortgages may be waived under certain programs offered by
Wells Fargo Bank, but Wells Fargo Bank's underwriting guidelines require, in
most instances, a verbal or written verification of employment to be obtained.
In some cases, employment histories may be obtained through one of various
employment verification sources, including the borrower's employer,
employer-sponsored web sites, or third-party services specializing in employment
verifications. 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. Wells Fargo Bank accepts alternative methods of
verification, in those instances where 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 Wells
Fargo Bank to have been underwritten with "full documentation." In cases where
two or more persons have jointly applied for a mortgage loan, the gross incomes
and expenses of all of the applicants, including nonoccupant co-mortgagors, are
combined and considered as a unit.

          In general, borrowers applying for loans must demonstrate that the
ratio of their total monthly debt to their monthly gross income does not exceed
a certain maximum level. Such maximum level varies depending on a number of
factors including loan-to-value ratio, a borrower's credit history, a borrower's
liquid net worth, the potential of a borrower for continued employment
advancement or income growth, the ability of the borrower to accumulate assets
or to devote a greater portion of income to basic needs such as housing expense,
a borrower's Mortgage Score and the type of loan for which the borrower is
applying. These calculations are based on the amortization schedule and the
interest rate of the related loan, with the ratio being computed on the basis of
the proposed monthly mortgage payment. In the case of adjustable-rate mortgage
loans, the interest rate used to determine a mortgagor's total debt for purposes
of such ratio 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 evaluating applications for subsidy loans and buy-down loans, the ratio is
determined by including in the applicant's total monthly debt the proposed
monthly mortgage


                                       A-6



payment reduced by the amount expected to be applied on a monthly basis under
the related subsidy agreement or buy-down agreement or, in certain cases, the
mortgage payment that would result from an interest rate lower than the mortgage
interest rate but higher than the effective rate to the mortgagor as a result of
the subsidy agreement or the buy-down agreement. In the case of the mortgage
loans of certain applicants referred by Wells Fargo Bank's Private Mortgage
Banking 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. In evaluating an application with
respect to a "non-owner-occupied" property, which Wells Fargo Bank defines as a
property leased to a third party by its owner (as distinct from a "second home,"
which Wells Fargo Bank defines as an owner-occupied, non-rental property that is
not the owner's principal residence), Wells Fargo Bank 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 ratio. A mortgage loan
secured by a two- to four-family mortgaged property is considered to be an
owner-occupied property if the borrower 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. Wells Fargo Bank permits debt-to-income
ratios to exceed guidelines when the applicant has documented compensating
factors for exceeding ratio guidelines such as documented excess funds in
reserves after closing, a history of making a similar sized monthly debt payment
on a timely basis, substantial residual income after monthly obligations are
met, evidence that ratios will be reduced shortly after closing when a financed
property under contract for sale is sold, or additional income has been verified
for one or more applicants that is ineligible for consideration as qualifying
income.

          Secondary financing may be provided by Wells Fargo Bank, any of its
affiliates or other lenders simultaneously with the origination of the first
lien mortgage loan. Wells Fargo Bank or one of its affiliates may provide such
secondary financing in the form of a flexible home equity line of credit, the
available balance under which may increase on a quarterly basis by one dollar
for each dollar applied in payment of the principal balance of the first lien
mortgage loan during the preceding quarter (any such loan, a "HOME ASSET
MANAGEMENT(SM)ACCOUNT LOAN"). In addition, the available balance of such line of
credit may be eligible for increase on an annual basis by one dollar for each
dollar, if any, by which the value of the related mortgaged property has
increased over the prior year, as determined pursuant to a statistically derived
home price index. The payment obligations under both primary and secondary
financing are included in the computation of the debt-to-income ratio, and the
combined amount of primary and secondary loans will be used to calculate the
combined loan-to-value ratio. Wells Fargo Bank does not restrict a borrower from
obtaining secondary financing after origination of the first lien 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" used by Wells
Fargo Bank is the ratio, 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 may be based on an appraisal that was obtained by the
originator more than four months prior to origination, provided that (i) an
appraisal update 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 originated by Wells Fargo Bank that is
the result of the refinancing (including a refinancing for "equity take out"
purposes) 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 mortgage originations, Wells Fargo Bank currently obtains
appraisals through Valuation Information Technology, LLC (doing business as RELS
Valuation), an entity jointly owned by an affiliate of Wells Fargo Bank and an
unaffiliated third party.

          The appraisal of any mortgaged property reflects the individual
appraiser's judgment as to value, based on the market values of comparable homes
sold within the recent past in comparable nearby locations and on the estimated
replacement cost. The appraisal relates both to the land and to the structure;
in fact, a significant portion of the appraised value of a mortgaged property
may be attributable to the value of the land rather than to the residence.
Because of the unique locations and special features of certain mortgaged
properties, identifying comparable properties in nearby locations may be
difficult. The appraised values of such mortgaged properties will be based to a
greater extent on adjustments made by the appraisers to the appraised values of
reasonably similar properties rather than on objectively verifiable sales data.


                                       A-7



          Wells Fargo Bank originates mortgage loans with loan-to-value ratios
in excess of 80% either with or without the requirement to obtain primary
mortgage insurance. In cases for which such primary mortgage insurance is
obtained, the excess over 75% (or such lower percentage as Wells Fargo Bank 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.

          Except as described below, mortgage loans originated by Wells Fargo
Bank will generally be covered by an appropriate standard form American Land
Title Association title insurance policy, or a substantially similar policy or
form of insurance acceptable to Fannie Mae or Freddie Mac.

          Retention Program Standards. A borrower with at least one mortgage
loan serviced by Wells Fargo Bank may be eligible for Wells Fargo Bank's
retention program. Provided such a borrower is current in his or her mortgage
payment obligations, Wells Fargo Bank may permit a refinancing of one or more of
the borrower's mortgage loans that are serviced by Wells Fargo Bank or another
servicer 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
current total monthly debt obligation in relation to their monthly income level
does not exceed a certain ratio; Wells Fargo Bank may not obtain a current
credit report for the borrower or apply a new FICO 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 the mortgage loans which are refinanced under the retention program. A
borrower may participate in this retention program through a refinancing of one
or more of his or her existing mortgage loans by either replacing any such loan
with a new mortgage loan at a current market interest rate or, in the case of a
mortgage loan that had been originated or purchased by Wells Fargo Bank, by
executing a modification agreement under which the interest rate on the existing
mortgage loan is reduced to a current market rate.

          Wells Fargo Bank 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
150% of the original principal balance of the previous loan (up to a maximum new
loan amount of $400,000). Borrowers may be pre-approved under this program if
they have a satisfactory payment history with Wells Fargo Bank as well as a
satisfactory FICO Score. Wells Fargo Bank may waive verifications of borrower
income and assets under this program and may not impose any limitation on the
ratio of a borrower's current total debt obligation in relation to current
monthly income. A new appraisal will be obtained with respect to the residence
securing the new purchase money mortgage loan.

          Underwriter Discretion. During the second calendar quarter of 2005,
Wells Fargo Bank initiated a program designed to encourage its mortgage loan
underwriting staff to prudently, but more aggressively, utilize the underwriting
discretion already granted to them under Wells Fargo Bank's underwriting
guidelines and policies. This initiative was viewed by management as necessary
and desirable to make prudent loans available to customers where such loans may
have been denied in the past because of underwriter hesitancy to maximize the
use of their ability to consider compensating factors as permitted by the
underwriting guidelines. There can be no assurance that the successful
implementation of this initiative will not result in an increase in the
incidence of delinquencies and foreclosures, or the severity of losses, among
mortgage loans underwritten in accordance with the updated philosophy, as
compared to mortgage loans underwritten prior to the commencement of the
initiative.

                           SERVICING OF MORTGAGE LOANS

          Wells Fargo Bank (in its capacity as servicer, the "SERVICER") will
service all of the Mortgage Loans pursuant to the Pooling and Servicing
Agreement. The Servicer may perform any of its obligations under the


                                       A-8



Pooling and Servicing Agreement through one or more subservicers. Despite the
existence of subservicing arrangements, the Servicer will be liable for its
servicing duties and obligations under the Pooling and Servicing Agreement as if
the Servicer alone were servicing the related Mortgage Loans.

          Wells Fargo Bank, N.A. is an indirect, wholly-owned subsidiary of
Wells Fargo & Company. Wells Fargo Bank is a national banking association and is
engaged in a wide range of activities typical of a national bank. Wells Fargo
Bank, including its predecessors, has many years of experience in servicing
residential mortgage loans, commercial mortgage loans, auto loans, home equity
loans, credit card receivables and student loans. Wells Fargo Bank, including
its predecessors, has been servicing residential mortgage loans since 1974.
These servicing activities, which include collections, loss mitigation, default
reporting, bankruptcy, foreclosure and REO Property management, are handled at
various Wells Fargo Bank locations including Frederick, Maryland, Fort Mill,
South Carolina and other mortgage loan servicing centers. As of the date hereof,
Wells Fargo Bank has not failed to make any required advance with respect to any
issuance of residential mortgage backed securities.

          Wells Fargo Bank's servicing portfolio of residential mortgage loans
(which includes Prime 30-Year Fixed-Rate Relocation Loans, Prime 30-Year
Fixed-Rate Non-Relocation Loans, Prime 15-Year Fixed-Rate Loans and Prime
Adjustable-Rate Loans as well as other types of residential mortgage loans
serviced by Wells Fargo Bank) has grown from approximately $450 billion as of
the end of 2000 to approximately $1.005 trillion as of the end of 2005. The
table below sets forth for each of the periods indicated the number and
aggregate original principal balance of mortgage loans serviced by Wells Fargo
Bank (other than any mortgage loans serviced for Fannie Mae, Freddie Mac and
Federal Home Loan Banks; mortgage loans insured or guaranteed by the Government
National Mortgage Association, Federal Housing Administration or Department of
Veterans Affairs; or mortgage loans with respect to which Wells Fargo Bank has
acquired the servicing rights, acts as subservicer, or acts as special servicer)
for First Lien Non-Conforming, Non-Subprime Loans:



                                         AS OF                        AS OF                        AS OF
                                   DECEMBER 31, 2003            DECEMBER 31, 2004            DECEMBER 31, 2005
                              --------------------------   --------------------------   --------------------------
                                            AGGREGATE                    AGGREGATE                    AGGREGATE
                                            ORIGINAL                     ORIGINAL                     ORIGINAL
                                            PRINCIPAL                    PRINCIPAL                    PRINCIPAL
                               NO. OF      BALANCE OF       NO. OF      BALANCE OF       NO. OF      BALANCE OF
   ASSET TYPE                  LOANS          LOANS         LOANS          LOANS         LOANS          LOANS
--------------------------    -------   ----------------   -------   ----------------   -------   ----------------

FIRST LIEN NON-CONFORMING,
   NON-SUBPRIME LOANS         472,694   $141,120,796,584   553,262   $171,086,652,776   635,091   $218,067,611,101


          Servicing Procedures

          Shortly after the funding of a loan, various types of loan information
are loaded into Wells Fargo Bank's automated loan servicing system. Wells Fargo
Bank then makes reasonable efforts to collect all payments called for under the
Mortgage Loan documents and will, consistent with the applicable servicing
agreement and any pool insurance policy, primary mortgage insurance policy,
bankruptcy bond or alternative arrangements, follow such collection procedures
as are customary with respect to loans that are comparable to the Mortgage
Loans. Wells Fargo Bank may, in its discretion, (i) waive any assumption fee,
late payment or other charge in connection with a Mortgage Loan and (ii) to the
extent not inconsistent with the coverage of such Mortgage Loan by a pool
insurance policy, primary mortgage insurance policy, bankruptcy bond or
alternative arrangements, if applicable, waive, vary or modify any term of any
Mortgage Loan or consent to the postponement of strict compliance with any such
term or in any matter grant indulgence to any borrower, subject to the
limitations set forth in the applicable servicing agreement.

          Wells Fargo Bank's collections policy is designed to identify payment
problems sufficiently early to permit Wells Fargo Bank to address such
delinquency problems and, when necessary, to act to preserve equity in a
pre-foreclosure mortgaged property. Borrowers are billed on a monthly basis in
advance of the due date. If a borrower attempts to use Wells Fargo Bank's Voice
Response Unit ("VRU") to obtain loan information on or after a date on


                                       A-9



which a late charge is due, the VRU automatically transfers the call to the
collection area. Collection procedures commence upon identification of a past
due account by Wells Fargo Bank's automated servicing system. If timely payment
is not received, Wells Fargo Bank's automated loan servicing system
automatically places the Mortgage Loan in the assigned collection queue and
collection procedures are generally initiated on the 16th day of delinquency.
The account remains in the queue unless and until a payment is received, at
which point Wells Fargo Bank's automated loan servicing system automatically
removes the Mortgage Loan from that collection queue.

          When a Mortgage Loan appears in a collection queue, a collector will
telephone to remind the borrower that a payment is due. Follow-up telephone
contacts with the borrower are attempted until the account is current or other
payment arrangements have been made. When contact is made with a delinquent
borrower, collectors present such borrower with alternative payment methods,
such as Western Union, Phone Pay and Quick Collect, in order to expedite
payments. Standard form letters are utilized when attempts to reach the borrower
by telephone fail and/or in some circumstances, to supplement the phone
contacts. Company collectors have computer access to telephone numbers, payment
histories, loan information and all past collection notes. Wells Fargo Bank
supplements the collectors' efforts with advanced technology such as predictive
dialers and statistical behavioral software used to determine the optimal times
to call a particular customer. Additionally, collectors may attempt to mitigate
losses through the use of behavioral or other models that are designed to assist
in identifying workout options in the early stages of delinquency. For those
loans in which collection efforts have been exhausted without success, Wells
Fargo Bank determines whether foreclosure proceedings are appropriate. The
course of action elected with respect to a delinquent Mortgage Loan generally
will be guided by a number of factors, including the related borrower's payment
history, ability and willingness to pay, the condition and occupancy of the
mortgaged property, the amount of borrower equity in the mortgaged property and
whether there are any junior liens.

          Regulations and practices regarding the liquidation of properties
(e.g., foreclosure) and the rights of a borrower in default vary greatly from
state to state. As such, all foreclosures are assigned to outside counsel,
licensed to practice in the same state as the mortgaged property. Bankruptcies
filed by borrowers are similarly assigned to appropriate local counsel.
Communication with foreclosure and bankruptcy attorneys is maintained through
the use of a software program, thus reducing the need for phone calls and faxes
and simultaneously creating a permanent record of communication. Attorney
timeline performance is managed using quarterly report cards. The status of
foreclosures and bankruptcies is monitored by Wells Fargo Bank through its use
of such software system. Bankruptcy filing and release information is received
electronically from a third-party notification vendor.

          Prior to a foreclosure sale, Wells Fargo Bank performs a market value
analysis. This analysis includes: (i) a current valuation of the mortgaged
property obtained through a drive-by appraisal or broker's price opinion
conducted by an independent appraiser and/or a broker from a network of real
estate brokers, complete with a description of the condition of the mortgaged
property, as well as other information such as recent price lists of comparable
properties, recent closed comparables, estimated marketing time and required or
suggested repairs, and an estimate of the sales price; (ii) an evaluation of the
amount owed, if any, for real estate taxes; and (iii) estimated carrying costs,
brokers' fees, repair costs and other related costs associated with real estate
owned properties. Wells Fargo Bank bases the amount it will bid at foreclosure
sales on this analysis.

          If Wells Fargo Bank acquires title to a property at a foreclosure sale
or otherwise, it obtains an estimate of the sale price of the property and then
hires one or more real estate brokers to begin marketing the property. If the
mortgaged property is not vacant when acquired, local eviction attorneys are
hired to commence eviction proceedings and/or negotiations are held with
occupants in an attempt to get them to vacate without incurring the additional
time and cost of eviction. Repairs are performed if it is determined that they
will increase the net liquidation proceeds, taking into consideration the cost
of repairs, the carrying costs during the repair period and the marketability of
the property both before and after the repairs.

          Wells Fargo Bank's loan servicing software also tracks and maintains
tax and homeowners' insurance information and tax and insurance escrow
information. Expiration reports are generated periodically listing all policies
scheduled to expire. When policies lapse, a letter is automatically generated
and issued advising the borrower of such lapse and notifying the borrower that
Wells Fargo Bank will obtain lender-placed insurance at the borrower's expense.


                                      A-10



                          THE SECURITIES ADMINISTRATOR

          Wells Fargo Bank, N.A., a national banking association, will be the
Securities Administrator (in such capacity, the "SECURITIES ADMINISTRATOR")
under the Pooling and Servicing Agreement.

          Wells Fargo Bank is a national banking association and a wholly-owned
subsidiary of Wells Fargo & Company. A diversified financial services company
with approximately $482 billion in assets, 23 million customers and 153,000+
employees as of December 31, 2005, Wells Fargo & Company is a U.S. bank holding
company, providing banking, insurance, trust, mortgage and consumer finance
services throughout the United States and internationally. Wells Fargo Bank
provides retail and commercial banking services and corporate trust, custody,
securities lending, securities transfer, cash management, investment management
and other financial and fiduciary services. The Depositor, the Sponsor and the
Servicer may maintain banking and other commercial relationships with Wells
Fargo Bank and its affiliates. Wells Fargo Bank maintains principal corporate
trust offices located at 9062 Old Annapolis Road, Columbia, Maryland 21045-1951
(among other locations), and its office for certificate transfer services is
located at Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479.

          Under the terms of the Pooling and Servicing Agreement, Wells Fargo
Bank will be responsible for securities administration which includes pool
performance calculations, distribution calculations and the preparation of
monthly distribution reports. As Securities Administrator, Wells Fargo Bank will
be responsible for the preparation of all REMIC tax returns on behalf of the
Issuing Entity and the preparation of monthly reports on Form 10-D, annual
reports on Form 10-K and certain current reports on Form 8-K that are required
to be filed with the Securities and Exchange Commission on behalf of the Issuing
Entity. Wells Fargo Bank has been engaged in the business of securities
administration since June 30, 1995. As of March 31, 2006, Wells Fargo Bank was
acting as securities administrator with respect to more than $829,726,924,092 of
outstanding residential mortgage-backed securities.

          Wells Fargo Bank serves or has served within the past two years as
loan file custodian for various mortgage loans owned by the Sponsor or an
affiliate of the Sponsor and anticipates that one or more of those mortgage
loans may be included in the Issuing Entity. The terms of the custodial
agreement under which those services are provided by Wells Fargo Bank are
customary for the mortgage-backed securitization industry and provide for the
delivery, receipt, review and safekeeping of mortgage loan files.


                                      A-11